Standards and Accreditation Bill

Mr Chair, I promise not to mention the rugby—other than the mention I just made then. The Standards and Accreditation Bill, while sounding like a mundane piece of legislation, is actually a very important piece of legislation to ensure, I guess, standards so that the everyday things in life that we do are uniform and things work. As Labour’s minority report within the commentary on the bill has noted, Labour is not going to support this piece of legislation. We hold some major concerns, notably around the lack of independence of the new Standards Approval Board, which this piece of legislation provides for, and also because of the potential damage to our international reputation because of that lack of independence.

To point towards that international reputation, can I point to clause 7 of the bill, which talks about the functions of the New Zealand Standards Executive. If you would allow me to just read clause 7, which states: “(1) The functions of the NZ Standards Executive are—(a) to assume responsibility for New Zealand membership of international standards organisations, including the International Organization for Standardization and the International Electrotechnical Commission: (b) to ensure New Zealand attendance and representation at meetings of international standards organisations:”.

Throughout the select committee process, the Commerce Committee heard from a number of submitters who have a lot more experience in this field than I have—and, certainly, I think, more than anyone around the select committee table has—about the new structure and the loss of our international reputation. A structure that was outside a Government department, independent of the New Zealand Standards Council, is to be placed within the Ministry of Business, Innovation and Employment.

One of those submitters was a woman by the name of Diane Baguley, who has been a member of the joint New Zealand - Australia committee on standards for 20 years now. She is someone with immense experience in this area. If I could read a portion of her submission to the select committee, really to highlight the dangers of the path that this country will be going down if we change the structure of our standards formation, as we are going to do with this piece of legislation. Diane Baguley said in her submission that “I oppose the disestablishment of the Standards Council and Standards New Zealand. I do not consider that the provisions set out for the establishment of the standards function within MBIE can adequately control the risks associated with the new structure, whether to the management of standards development or the reputation of New Zealand in the international standards community.” I will just read that last bit out again, and that is around “the reputation of New Zealand in the international standards community.” She went on to say that “The model proposed in the Bill, if realised, might even be used as an example by countries without robust government systems, with undesirable results. New Zealand is well respected in the international standards community and an argument that ‘New Zealand does it this way’ could be influential.”

We would have hoped that maybe the Government members on the select committee may have fed some of this feedback from the submitters to the Minister, and maybe that is one question that I will pose to the Minister—whether they seriously did ponder whether the structure as it stands now was the correct one. The Ministry of Business, Innovation and Employment is becoming a rather large Government department, and whether or not it is making the right decisions needs to be questioned, given some of the recent headlines around that ministry. But, certainly, when we are looking at the functions of our Standards Council being morphed into the ministry, we certainly have some serious reservations about that.

I would like to draw on another submission presented to the select committee, and that was from another woman called Patricia Cunniffe, who is a consumer representative on standards committees both here in New Zealand and overseas. Her submission was in a similar vein to that of Diane Baguley. If I can take the opportunity to read her submission, she said: “I remain unconvinced that placing New Zealand’s national Standards body within MBIE will indeed ensure that the Standards system is viable and well-functioning, …”. The current bill is predicated on consumers being the recipients of standardisation, not participants. She went on to say that “Clause 3(a)(iii) gives one of the purposes of the Bill as being to: ‘protect the health, safety and well-being of the public, but gives no place for the public to define their own acceptable levels of health, safety and well-being.” So I think Patricia Cunniffe agrees with Diane Baguley, but takes things to another level in terms of the safety of the public. I guess this is just another example of the submissions to the select committee that I think throw up some serious reservations and concerns as to what the Government is doing with this piece of legislation.

It has obviously been a well-formed argument that New Zealand has a very strong reputation with some of these international organisations through some of our work with standards, and there is serious concern from some of our most experienced and expert people in the field as to whether or not we are doing the right thing here as well. I think that some of the motivation, or most of the motivation, for this piece of legislation is to ensure the financial viability of the standards process. I think, having listened to some of the concerns in the select committee, that that was a real concern for those in that sector already. We do not believe that the changing of the structure will go any way to ensuring that the financial viability of the standards process will be any better than it was previously. We would like to know whether the Minister in the chair, the Hon Paul Goldsmith, could clarify some of those issues. We would certainly be thankful to know whether or not more work has been done around that financial viability. I hope that the Minister in the chair will take a call.

There were also concerns from the industry around representation and also some concern around conflicts of interest and funding. I do note there has been some amendment during the select committee process around the potential for conflict of interest, and I think that is a good thing. As to whether or not it has gone far enough there is still a question mark, and maybe that is something the Minister can address as well. But I believe that there are people, especially those in our trades, who are very concerned about what the bill proposed at the beginning of the select committee process, and they might still share those concerns at the moment.

Another joint submission that came through the select committee process was from the Institution of Professional Engineers New Zealand, the Association of Consulting Engineers New Zealand, the Institute of Public Works Engineering Australasia New Zealand Division, and the New Zealand Institute of Architects—bodies that I do not think I would certainly have too many arguments with around the technical aspects of their work. Their joint submission said that “we believe industry consultation is vital to ensure the prioritised programme of work is appropriate. This will also ensure the continued buy-in and contribution by the key industry players” that wanted to ensure that “industry consultation be a mandatory requirement under the Bill.” I believe some of that may have been addressed, but I am not sure whether it has been addressed in its entirety. Hopefully, that is something that the Minister might be able to answer if he does decide to take a call during the Committee stage.

If I could just state the obvious and summarily go through some of the parts to begin my contribution tonight, we are looking at repealing and replacing the Standards Act and the Testing Laboratory Registration Act. We are told that we are looking to consolidate legislation—

The CHAIRPERSON (Hon Chester Borrows): I am sorry to interrupt the member, but the time has come for us to suspend for the dinner break.

Sitting suspended from 6 p.m. to 7.30 p.m.

Members, the House in Committee on the Standards and Accreditation Bill is resumed. Before the dinner break we were debating Part 1. Fletcher Tabuteau had the call, and he has 4 minutes and 35 seconds remaining, if he wishes.

💬 FLETCHER TABUTEAU: It would be my special delight to carry on speaking after dinner. What I had started saying was that the intent of this bill, when you look at it on paper, is wonderful. It says something to the effect that the New Zealand standards and accreditation system functions well, it meets the need of business, regulators, and consumers, and we are going to consolidate and conform and make it all work well. That sounds fantastic, but actually we are at a stage now where we have come to the Committee of the whole House, and despite good, respectful, and intelligent contributions from the public, from industry, and from experts, I would assert—and I will go through each part point by point—that the Government has not listened. It does not seem to have taken any of that good advice on board.

So we stand here today, and the meaning and the essential nature of this debate is so important tonight because the Government and its members need to hear that there are still issues. For example—and it was spoken of earlier—one of the key concerns centres around the lack of independence of the New Zealand Standards Approval Board and the renamed Accreditation Council. It was raised in the Commerce Committee. Many submitters spoke to the apparent lack of independence and they spoke about how it has been absorbed into the Ministry of Business, Innovation and Employment structure. Just as a commentary on the Ministry of Business, Innovation and Employment structure, it was a laudable goal to bring all these disparate parts together and try to create some synergies with this kind of superministry, but it is a disparate conglomeration of dysfunctional parts. If we add this to that Ministry of Business, Innovation and Employment structure, I do not think that you will—and I assert strongly that you will not—achieve what the Government sets out and puts down on paper.

There have been no substantial changes to the appointment process. This was raised many a time. I spoke on it myself. Members of the Opposition spoke on this repeatedly and said that the Minister has too much power. The Minister is in charge of the appointment of every single person on this board of this committee. It is not good enough. Ministerial appointments and the orders of council bypass the democratic process. New Zealand First asserts that we are bypassing the democratic process and we are not giving each and every New Zealander their say. There was a part in the legislation where it speaks about how the Minister can appoint on advice from the industry, but that is an option—it is not absolutely required. It is still too much power for the Minister. It is reflective of much of the National Government’s legislation of late, where more and more of the selection of panels, advisory committees, or boards are in the hands of the Minister and seem to bypass a good, reasonable, and fair democratic process in terms of selection and, therefore, in terms of representation.

We continue to be concerned about statements made by the regulatory impact statement that if the new body sat within the Ministry of Business, Innovation and Employment, there would be cost savings. Although the legislation speaks about recovering costs, actually, when you do the analysis of those parts, it is pretty hard for the Government to prove that. Yes, actually, it is in the legislation that we will recoup our costs, but it has not been proven. The analysis on the advice given still suggests that this Government actually is not creating efficiencies and it is—

💬 David Bennett: Why didn’t you vote for Ron?

💬 FLETCHER TABUTEAU: Ha, ha! You have thrown me, Bennett.

New Zealand First strongly believes that our much-valued international reputation regarding safe accredited standards for goods and services processes or practices will not be upheld. One of the submissions was from one of our Australian counterparts, and the Australian standards authority—excuse me if I have got the name wrong—spoke very clearly about clause 20 of the bill and how there was a lack of clarity in terms of understanding just what the legislation sets out to achieve. So we are being advised by comparable bodies, comparable groups, from our brother across the Tasman there, our cousin across the Tasman, and they are telling us that there is ambiguity in the legislation. They are suggesting that it needs to be tightened up.

That was clause 20, but all parts of the bill—for example, in clause 3 we are replacing the word “public” with “individuals”, and it has been discussed. It was about a definition and it was about accountability and it was bringing it down, literally, to the individual so that we knew what we were trying to achieve. What is the “public”—what does that mean—whereas if we are dealing on an individual basis, we have some clarity; we have some understanding. There was a lot of debate around the definitions used in the legislation, in clause 4(1). So, for example, “accreditation” is a term that was essential to the purpose of the bill, but “testing” and “testing laboratory” are adequately defined in other pieces of legislation. So there is redundancy in the legislation and it just adds to the confusion, because actually the bill itself is confusing as a whole.

The next clauses, clause 4(2) and clause 17, talk about conflicts of interest. The proposed amendments would target those with a personal conflict that was so large as to have a real bearing on the carrying out of the undertaking as a board member, as a committee member, or in the expert role, but I think what we should do here and what we acknowledge is that the approach taken in clause 17 as introduced could have cast its net more broadly than intended and may have excluded some experts with knowledge crucial to the standards development committee. So although we applaud on the one hand the recognition that there is definitely the possibility of a conflict of interest, and it needs to be addressed, the definition in the legislation is actually perhaps too broad, it was suggested, and, actually, experts themselves might be considered as being defined as having a conflict of interest, so they would not be able to contribute to the discussions as per relevant standards.

It was recommended in clause 16A, which requires nominees to declare any personal interests at the time of nomination, that this could be part of the solution—provide more detailed functions of the committee chairperson so that you understand exactly where the conflict of interest might lie. Those were just some suggestions presented to the select committee. Again, there does not seem to have been any movement and there does not seem to have been any attempt to listen to the advice provided. It was recommended that clause 7 would require the Standards Executive work programme to be published to make clear that access to archive standards, so that there was access to the standards so that we would see what the decision-making process was. It is technical but, in terms of your standards and accreditation, how else are you going to go back and understand what it is that has come before and what it is that you are trying to achieve? Clause 20—

It is with absolute pleasure that I rise to follow Mr Tabuteau, after that rather professorial dissertation. I would like to talk right at the moment, as we are on Part 1, about this issue around independence. I am drawn back to paraphrasing Daniel Patrick Moynihan, who noted—and I will paraphrase so as not to bring the Chair into this debate—that the member is entitled to his own opinion, but he is not entitled to his own facts. The facts are very simple around independence. Both the Standards Approval Board and the Standards Executive are granted statutory independence under this proposed amendment.

I would draw members’ attention particularly to clause 7(2) for the Standards Executive, and I will go to that clause and read, for their edification, that in the discharge of their duties, and in the functions of the New Zealand Standards Executive: “In performing the functions referred to in subsection (1)(a) to (j), the NZ Standards Executive must—(a) act independently; and (b) have regard to–(i) the value of standards: (ii) the legitimate use of standards: (iii) the importance of maintaining expert input into the standards development process:”. Similarly, in clause 12(2): “The Board must act independently in undertaking its functions under subsection (1).”

So members opposite can talk about independence until the cows come home. The fact of the matter is that both the Standards Approval Board and the Standards Executive are conferred with statutory independence under this bill. Parliament cannot confer any greater independence than that. Having worked in the private sector, I can tell you, Mr Chair—because it is you, and other members present—that, actually, co-locating in an office is not necessarily conducive to the collaboration that a private organisation might want to see. I have worked for multinationals. If you want to actually foster collaboration, it is not achieved simply by putting people in the same building. So we confer independence on the people who need it most. They will work in an organisation for reasons that support—and I will now go back to Part 1 of this bill—why we are actually making these changes.

I draw members’ attention back to clause 3, the purpose of this bill: “The purpose of this Act is to—(a) make provision for standards and conformity assessment systems in New Zealand that—(i) are consistent with international practice; and (ii) facilitate trade; and (iii) protect the health, safety, and well-being of individuals.” Why are we bringing this function or these groups into the agency or environment of the Ministry of Business, Innovation and Employment? Because that is the agency that is tasked with business development and helping us to understand how we can help businesses position themselves to grow in and outside New Zealand. It actually makes sense. If you are going to have standards that are going to help us to conform and to sell our products both in New Zealand but particularly offshore, then actually having businesses working with the ministry that is tasked with helping to build innovation, scientific progress, and business development outside New Zealand makes extremely good sense. It makes extremely good sense to have these functions in the ministry.

I will turn back for one moment, because real-world examples are fantastic things. I am just going to return very briefly to the issue of independence. Within the Ministry of Business, Innovation and Employment, where the Standards Executive will reside, we see today three extremely good examples. We have the Official Assignee, we have the Registrar of Companies, and we have the Commissioner of Patents. All three are independent bodies, through statutory independence, that reside in the Ministry of Business, Innovation and Employment. Not a single member opposite—and not a single submitter—raised any question as to the real independence of those bodies, albeit they reside in the same ministry that this bill would have the Standards Executive go into. Again, if you just look at simple evidence—the member is entitled to his own opinion, but he is not entitled to his own facts. Thank you.

Put simply, the problem that we were supposed to address with this bill was a lack of funding. That was the issue that came up again and again at the Commerce Committee. It was an issue that officials acknowledged was significant in the setting of standards and so on. It was a question that was legitimate to ask. But what we got, and what we have, with this bill is the answer to another question: what structure would make it look like we are doing something without addressing the real issue—the real funding issue? That is what we have got here in this bill. We have the answer to a different question—to a problem that may not even have existed in the first place.

We have heard members opposite saying defensively that just because you bring an organisation inside another organisation it does not mean that it loses its independence. That was the argument that we have just heard from Brett Hudson, the member opposite. We did not hear why you should bring it inside another organisation. We just heard that somehow when you bring one organisation under the purview of another, it does not hamper its independence. Well, I think that man—to paraphrase someone else—doth protest too much. I think that here we are in this Chamber debating a few sideshows when we avoid the real issue of funding that sits at the basis of the future of good standards and accreditation in this country.

Many of the submitters whom we had in front of us in the select committee expressed concerns about risks from the change in the model. Of course, there were concerns about being within the Ministry of Business, Innovation and Employment. We know from recent weeks that the culture that the Minister is setting within the Ministry of Business, Innovation and Employment may not be in the interests of many business people in this country. I refer, of course, to the details that have come up about the expensive $70,000 sign out the front, and so on.

The CHAIRPERSON (Lindsay Tisch): No, no—

This is germane to my argument, and I will come back to it, but I will try to make it clear so that I do not stray too far from the bill. This is about whether or not that department is independent enough and acting in the interests of those whom it is supposed to be serving. It is clear that the Minister has set a tone for that department that is about the interests of the big end of town. It is about $260,000 sun decks, it is about $140,000 TV screens, and it is about $76,000 reception desks.

The CHAIRPERSON (Lindsay Tisch): Order!

The Minister has sent a message that he is concerned with the big end of town. Those who would have standards and accreditations granted that are relevant and interesting for New Zealand businesses are often smaller businesses—those who are trying to grow in the economy, those who are trying to diversify our economy, which is desperately needed in an economy that is under threat from being too commodity-focused and from not having enough diversity and enough other industries to share the burden of growing our economy, which leaves it all to the primary sector. So we do need businesses to be thriving.

Part of what we learnt at the select committee, and part of what those who came and gave their time and wisdom—those who were involved in the standards and accreditation process—said to us was that, actually, one of the most important things is that we have representation in international fora where international accreditation and standards are agreed. When those standards are agreed, they can be agreed in the interests of some countries or in the interests of other countries, naturally enough. One example that was brought up in the earlier stage of the debate was a simple power switch in the wall that you charge your phone with or that you plug your heater into. That could be said to be in an international standard at some stage in the future. If there is a debate about that, who stands to gain from a particular standard that is set? It is probably the country and the manufacturers in that country that win the battle about what the standards or accreditation should look like—the ones who have the existing patents and the existing abilities, structure, and so on to manufacture those devices in that particular way.

Up until now, New Zealand has enjoyed a particularly good international reputation by virtue of having many hard-working people who have served on international committees to ensure that New Zealand standards are a part of that debate, so that New Zealand industries can compete in the international market because the standards are set in such a way that New Zealand businesses can compete. So it does seem important that we continue to have that international representation in the standards and accreditation - setting process. In the select committee, when these concerns were raised, I have to say that I was not comforted that in the new model there would be sufficient emphasis placed on maintaining those international connections, on having the strong international voice in that standards-setting process. It was something that came up again and again, and it seemed that the focus had shifted, and it was more about efficiency gains within the ministry and so on.

The previous speaker brought to our attention this idea that they should be acting independently. Well, I would like to read from a couple of paragraphs further down in the same bill, the one we are debating. In Part 1 here, clause 8(1), it says: “The NZ Standards Executive may delegate to any employee of the Ministry any of his or her powers, or the performance of his or her functions or duties, under this Act or any other enactment.” I want to ask how that would work in practice. What we see there is a ministry that, as we already know, I think, is under the thumb, under the micro-management of Steven Joyce, who chooses the colours and layouts of the documents he prints. We have officials there, who of course want to keep their Minister happy, but who are likely to have delegated tasks that include carrying out functions that the Minister would like to see in the standards and accreditations. That statutory independence is not as easy to guarantee when you have the employees in a ministry as a subset of the ministry carrying out these tasks, rather than a truly independent, industry-led body.

So I think that this is a legitimate concern to raise, and it is one that was raised again and again and again by people in the industry, those people who have been involved in the standards and accreditation - setting process up until now. Members opposite may say that they know better—that they know better—than those who were involved in standards and accreditation - setting up until now. Some of those who came to speak to us had been involved in the industry, and had served it over decades. But I would say to members opposite that if they think that they know better and do not even have to take those considerations into account, then they are showing just how out of touch they have become on that side of the Chamber. That is what we see here.

Once again, also, we see here something that was designed as a cost-cutting measure, as well, without an eye to the bigger picture, without saying: “How does this reflect upon us in the international setting? How does this forward our international interests? How does this grow our exports?”. We know that the Ministry for Business, Innovation and Employment is not meeting the Government’s target of 40 percent of our GDP as exports. In fact, under Minister Joyce it started around 32 or 33 percent; it is now down around 27 percent, and it is projected to drop further. I would suggest it is not the ministry that is at fault; it is the micro-managing Minister, who has this programme going on, then wants to select the pamphlet colour, then wants to turn the document round, then wants to reword his own text. My heart goes out to the officials who have to work with that Minister, who is proving to be ineffective but is also chasing things down the wrong track. Here we have an example where we have had plenty of advice from the public, plenty of advice from experts that we should do things a certain way, but the Government has blocked its ears and said: “We know better, we are going to do it our way, and bother the public and those pesky people who work in the industry.”

So my submission is that what we have here is the answer to a problem that does not really exist. That problem is around funding; it was not with the structure. That is what we heard from submitters, and in fact we had additional risks within the new structure. One of the points I have not raised yet is that there is no worker or consumer representation in the new structure—again, something raised repeatedly by submitters and given no convincing response from officials. Again, my heart went out to the officials, because one could see they had their riding instructions. They were given a clear picture of how things should be, and it was very difficult to come up with legitimate explanations as to why it should be that way.

So this is a bill that we will oppose. We do value input from the industry. We value having New Zealand on the international stage setting those standards, helping to shape the future of the world markets—those markets that we want to be competitive in. Goodness knows that under this Government exports are plummeting as a proportion of GDP. We need it to be going in the opposite direction, and we believe we need to actually get alongside industry instead of always knowing better than industry. I do not know why members on that side of the Chamber hate business, but they seem to persist with telling business that it is wrong.

An extraordinary contribution from the previous member there, Dr David Clark. It has been an interesting debate.

I think it might be helpful just to go back and just outline the rationale for the changes proposed by this legislation. If we go back to 2012, the standards and conformance infrastructure review identified that the Standards Council, as it was, was not financially sustainable over the medium to longer term, that the development of standards was not as responsive as it could have been to the needs of firms, regulators, and consumers, and that there was much potential to strengthen the contribution of standards to the Government’s desired outcome in the areas particularly around innovation, productivity, international trade, and safety. So officials considered, and the Government was persuaded, that three underlining problems were constraining the existing model.

They were, first, tensions existing between the Standards Council’s statutory function of developing standards and promoting standards and standardisation throughout the economy—the difference between being a focused service-delivery organisation and an advocacy organisation. The second area was the distance from Government inherent in a Crown entity model, making it difficult for the Standards Council to maintain its relevance, visibility, and credibility within other parts of the Government. We saw that other parts of the Government were not using the standards to quite the extent that they could have. Also, finally, there were difficulties of a small, stand-alone organisation with a limited client base to achieve the flexibility and the scalability required in a dynamic environment. So those were the things that we were dealing with or concerned about, leading into the legislation.

We have heard a lot of talk from some members around whether the new proposals would be sufficiently independent, and absolutely they will be independent. The New Zealand Standards Executive and the Standards Approval Board are required to act independently under this new legislation when undertaking their functions. The board will indeed make decisions based on transparent criteria outlined in the bill, and the balanced standards development committees, comprising experts from relevant sectors, are required to be used to develop the actual standards. So you still retain the experts from industry to help develop standards, but the New Zealand standards system will continue to operate in accordance with international expectations and directives from the International Organization for Standardization and from the International Electrotechnical Commission.

So I do not have any doubts at all. If you look around the world, there are all sorts of arrangements. Some countries have their standards systems developed within a Government agency and some are stand-alone, so I think there is a lot of overblown talk about New Zealand being completely out of sync. There are lots of different ways that this is done, and this way the idea is to have the New Zealand Standards Executive operating within the Ministry for Business, Innovation and Employment.

Will the new arrangements be financially sustainable? Well, absolutely. The bill strengthens the current cost-recovery model for standards by providing a fee-setting and cost-recovery framework for the standards, and I think that is very important. The bill provides for the full life-cycle costing of standards, including the development, the approval, the maintenance, and the access to standards. So the New Zealand Standards Executive and those commissioning the standards can negotiate a balance between upfront development and approval costs, and ongoing access and maintenance costs. So that is the core of what this bill is about—trying to establish a more financially sustainable system. On that basis, I think it makes absolutely good sense. Thank you.

Well, I think everything that the Minister has just said right now has actually confirmed why Labour is opposing this bill and has some fundamental problems with it. What I did not hear the Minister do tonight was address what lies behind his Supplementary Order Papers 90 and 96 on Part 1—what the rationale is for them and what he is trying to achieve. I am hoping that during the debate tonight we are actually going to hear a bit about that, because when you put a Supplementary Order Paper on the Table and you expect it to be taken seriously, then you should be able to get up and talk to what its purpose is and how it is going to enhance the bill—this bill that we see as being fundamentally flawed—and try to give us an explanation as to whether it improves the bill in some way.

We have a fundamental problem with this bill—and can I say, and I think I said it in the second reading, that when we went into this process it seemed like a reasonably straightforward bill. It had gone through a process of review. We were not expecting there to be controversy around it. But every single professional body that came before us in the Commerce Committee—and I did not hear the Minister refer to any of them in his speech just now—had some serious issues with this. The serious issues were around the lack of checks and balances within the bill by removing the Standards Council and absorbing it into the great whale of the Ministry of Business, Innovation and Employment—absorbing it into a big Government department and its checks and balances—and by the potential for the watering-down of standards rather than the strengthening of standards.

We could talk until the cows come home about the lowering of standards generally by this Government, but what it is attempting to do here is fundamentally driven by the attempt to save money. That is one of our major problems with the bill. The Minister admitted it himself when he just got up. He read directly from the departmental report about what it said. In the regulatory impact statement, at paragraph 22 under “Problem Definition”—which is what my colleague David Clark was referring to—what was the problem that this was trying to fix? One of the main issues was that “the Standards Council is not financially sustainable over the medium to longer term …”. We do not have an issue with that as being a problem, but the way to fix it is to look at how to strengthen the body and ensure that there are checks and balances, rather than to absorb it into a great big Government agency that has its own problems and where there are lots of questions around decisions that are being made.

The standards body is a fundamentally important role that goes to our international reputation. It goes to our ability to maintain our credibility across industries like electrical engineering and building and construction. For buildings that could be affected by major events, we have to be able to stand up to international scrutiny on such things, and things like water safety and a whole lot of other issues.

There was a troop of submitters who came before the select committee and gave very, very strong, credible evidence as to why they had serious issues with the direction that the Government was taking with this piece of legislation. We sat there and thought: “Well, you know, they’ve got a point.” Unfortunately, despite our concerns, and despite the concerns that were raised over and over again about this—they fell on deaf ears. That goes back to what the intention was—what was the real intention behind this legislation? Was it to try to ensure that there was a strong, credible body that was independent?

And you talk about independence—you know, the member over there got up and talked about the fabulous independence. Well, checks and balances within a Government agency, when you absorb an entity like that—there are significant issues that have not been addressed. Our big concern is that we are going to see a watering-down of standards, a lowering of standards. There is a question around whether or not the standards that are being developed are standards that are being developed according to an agenda rather than being driven by the entity itself. I would like to hear the Minister get up and say whether his Supplementary Order Papers on Part 1, clauses 10 and 13, are relevant to that argument, whether they are going to strengthen those checks and balances, and, if so, how.

In the regulatory impact statement the concern was raised that some stakeholders had indicated that there was a risk that experts may no longer be willing to participate on standards development committees, given their perception that the independence of standards would be eroded under the proposed changes. We consider that experts will continue to have incentives to participate. However, the actual impact is uncertain. The regulatory impact statement was produced before we had the stream of submitters before the committee. When they did come before the committee, we were still unsure as to whether those independent experts would still continue to have incentives to participate, how they would feel about continuing to participate, and what those impacts were going to be.

If you are proposing to create a new entity within a Government agency, then there has got to be a really careful process gone through in doing that, and you need to take the stakeholders with you. Unfortunately, in this process that has not happened, and we have ended up with a situation where the Government is pushing this legislation forward. It seems to be largely driven by a desire to cut costs.

We have got concerns around independence. We have got concerns around the probity, and also around what kind of review mechanism there is going to be as to whether or not this new system is actually going to be working. I would not mind the Minister answering that question, as well. What is built into the legislation around providing a review to show that the legislation is working as it says it is intended to, rather than as is expressed by the concerns of those who submitted?

So, therefore, Labour cannot continue to support this bill. We are at a loss as to what added value the amendments in the Supplementary Order Papers are going to add. We would like to hear from the Minister on that. We look forward to hearing his explanation.

I find it quite surprising that Mr Hudson and the Minister in the chair, the Hon Paul Goldsmith, have stood up and talked about independence in the way they have. I want to clarify that there is a difference between independence and competence. I am not suggesting that those who are going to be appointed will not be competent, but I am suggesting that they will not be independent. I point to clause 6: “The chief executive must appoint a suitable employee of the Ministry to be the NZ Standards Executive.” Immediately, the New Zealand Standards Executive is beholden to the chief executive officer. He is an employee of the ministry.

Under the “Functions of the NZ Standards Executive”, in clause 7(3), it says: “In performing the functions … the NZ Standards Executive must … act under the direction of the Minister and the chief executive.” To me, that does not suggest in any way, shape, or form that this is an independent position or a person who has been given a mandate to act independently. It actually states in the legislation that they must act under the direction of the Minister and the chief executive. As mentioned, I am not saying that this person will be incompetent in any way, shape, or form—in fact, they will probably be highly competent—but independent? No, I do not buy that. What I would also like to talk about is the fact that this New Zealand Standards Executive may in fact delegate authority to anyone within the ministry, as well. Again, that just flies in the face of what constitutes independence.

What I would like to talk about briefly, though, is the New Zealand Standards Approval Board. The board is the governance role of this whole process. Clauses 11 and 12 talk about the functions of the board, but first of all I want to go to schedule 1, which talks about the appointment of board members. The Minister in the chair said that absolutely there will be experts in this field, and therefore there is nothing to worry about. Well, in schedule 1, clause 1(2) it says: “The Minister must only appoint a person to be a member of the Board who the Minister considers has adequate skills and experience to perform the functions of the Board …”. The English language is wide and varied and there are many words that we can use that describe a person’s competency, expertise, or experience, and “adequate skills” is not one of those. To me, the term “adequate skills” does not denote expertise in any way, shape, or form.

The other thing I would like to say is that when we look at the nomination of board members—this is schedule 1, clause 2(1)—it says: “If the Minister considers it appropriate, he or she may invite public or private nominations before appointing a member to the Board.” So, again, I do not know at what point in time, or how, we quantify what “appropriate” is, but the other thing this actually says is that the Minister may in fact shoulder-tap someone and say: “Come along, I want you to put forward your nomination to be a board member of the standards authority.”, and that is not independent in any way, shape, or form. I will go back to the point: it does not mean that the person may be incompetent, but if there is a private process where someone is being shoulder-tapped by the Minister, I think that flies in the face of what constitutes independence. If we do not get this right in terms of independence, then all it does is it devalues the work that the standards authority and the standards board undertake, because if there is a perception of cronyism—and I do not use that word lightly—then, even if it does not exist, the ability of this board to gain the credibility needed will be greatly diminished, and that will be a real shame.

The other thing, if I go to clause 3 in schedule 1, is: “The Minister appoints or reappoints a member of the Board, and a chairperson of the Board,”. So, again, this is not independence; this is the Minister determining who is on this board and who is chairing this board—so, who has the most powerful position. Clause 4 in schedule 1 says: “The acts of a person as a member or chairperson of the Board are valid even though”—sorry, this is another thing that I do not quite get, and I am not too sure where this leads from. Clause 4 in schedule 1 actually says that if a person on the board has been elected or nominated through an appointment process that is defective, then they are still able to sit on that board. I am not too sure how that comes about or where, again, is the independence, let alone the validity or the mandate, because the board is a very important part in terms of this whole process.

The board has the ability to “approve or decline proposed New Zealand Standards:”, to “adopt or decline … other standards organisations’ standards [as standards for New Zealand]”, to “approve or decline modifications to New Zealand Standards:”, to “advise the Minister on any matter referred to the Board …”, to “advise the Minister on the currency of New Zealand Standards,”—I mean, you get the point. What I am actually saying here is that the board has a very important role to play, and yet the legislation says that the board members have to have only “adequate skills”. I am hoping that what the Minister is going to do is stand up and let me know, or give a feel for, what the definition of “adequate skills” is.

I will go back to a point that I often make in this Chamber, and that is that we are held up in the global market place as a country that stands for something, a country that has really robust processes around our standards, around our export quality, etc., etc. If we do not get this right, then what we end up with is a devalued brand where people begin to question the efficacy of what we stand for. That is why this is so important. And the shame of all this is that, as Ms Curran alluded to earlier, as a Parliament we have the mandate, and we actually have the responsibility, to get this right.

I know in these sorts of circumstances that Labour is always willing to work with the National Government in the select committee process to ensure that the processes and the legislation governing such an important area are done in a way that gains credibility not only for our Parliament and our country but for us on the international stage. It is such a shame that the Government did not take up the opportunity for all MPs to work together to get this right. In fact, yesterday, I think, I spoke on a bill for environmental reporting standards where, again, the Labour Opposition offered a way through where the Government could work with Labour to come up with something that was a robust and responsible piece of legislation.

The thing is that I actually believe that the people of New Zealand expect us to work together. We are not here to get in the way of the Government when we are putting forward this sort of legislation, because we understand how important this legislation is. We are not not supporting this because we do not believe that standards are important. We think standards are incredibly important, but we will never support legislation where we think it is not the right thing to do. So to the Minister in the chair I would like to say that this is a real missed opportunity.

Some of the wording in this bill greatly concerns me. When Mr Hudson stood up and said: “Of course these people are going to act independently”, I think that is a little naive, with all due respect, because if you are beholden to the Minister for your appointment, or if you are beholden to the chief executive officer of the Ministry of Business, Innovation and Employment for your appointment, then you are going to undertake the sort of direction that the Minister or the chief executive officer puts on the table and purports to represent. That is the concern I have. It could have been better, it should have been better, and it is a shame it is not. Thank you very much.

Thank you very much for the chance to take a second call on Part 1 of the Standards and Accreditation Bill. I would like to take just a few moments to respond to some of the comments made by the Minister. With this bill, you get the distinct feeling that the Government is taking a “burn the village to save the village” approach, because the Minister said, in some of his remarks, that one of the concerns about why the changes in this bill needed to be made is that the Standards Council lacked visibility, and that is one of the reasons why we need to make the changes and the structural changes within the council.

The Government’s recipe for curing that lack of visibility within the New Zealand Standards Council is to morph it into the Ministry of Business, Innovation and Employment—probably the biggest Government department in New Zealand. The Ministry of Business, Innovation and Employment engulfed about five or six different ministries, and currently it has a reputation for not necessarily managing its money very well. Morphing the process, the body, and the structure of the current New Zealand standards process into the Ministry of Business, Innovation and Employment is the Government’s solution to that problem. Well, I do not think that makes sense. I do not think that makes sense to people on this side of the Chamber, and it does not make sense to a number of the very, very experienced industry organisations that came and gave submissions on this piece of legislation.

One of the interjections from across the Chamber was in response to our argument about the independence—or lack of it—in this bill, and it was to read the legislation. And to give Mr Hudson his due, there is provision—fleeting provision—in this bill to give a degree of independence to the New Zealand Standards Executive. But what happened during the select committee process was that we had a number of submitters come through—a lot of them industry people—and their voice, their concerns about independence, has been completely and utterly ignored. I think that is really important, given that we thought that the Government members on that select committee might listen to those submitters—that they might take those messages back to the Minister and say: “Hey, we may have got it wrong here, Minister. A lot of the industry submitters are saying that this is not the right thing to do. We may have to rethink the structure.”

So we may have expected some Supplementary Order Papers to amend the bill wholeheartedly, but that is not in front of us. The two Supplementary Order Papers that we have in front of us are purely technical ones changing very small technical details within the bill. So I think that it is appropriate, in this Committee stage, for members on this side of the Chamber to give those organisations within the industry their voice, to make sure that we can flag that they have said this is the wrong thing to do. I would like to take one example, and that is the New Zealand Building Industry Federation—an organisation that I hope the Government would have listened to, in its concerns about this bill. In the opening comments of its submission, the Building Industry Federation said: “The intent of the Government to move Standards setting from an independent body with a high level of private sector governance input to one administered by the Ministry of Business, Innovation and Employment (MBIE) was not greeted with enthusiasm by many in the building industry.” If I were in the National Government and the New Zealand Building Industry Federation had said that in the opening line of its submission on this bill, I would be a little bit concerned. It is not a small organisation, and it covers a very important function in our country, so I would be a little bit concerned by its opening remarks.

Then we get to its comments around independence. Mr Hudson has said that, yes, the bill does cater for independence, but let us look at the reality of what may be the case within the Ministry of Business, Innovation and Employment. I think that this was a very brave submission for the Building Industry Federation, because it went on to say in its submission that with the New Zealand Standards Executive, the: “International best practice has historically been to allocate the Standard-setting function to industry. The required technical expertise is principally found within the ranks of day to day practitioners within the sectors to be covered. Further, Standard-setting should not be subject”—

I move, That the question be now put.