India Free Trade Agreement Legislation Amendment Bill

Committee of the whole House

Thank you, Madam Chair. This is probably the most substantial part of this agreement, with a number of new clauses. I want to start with clause 38, with some of the interpretations. The first one, we didn’t actually get sufficient clarity within the committee stage.

CHAIRPERSON (Barbara Kuriger): Sorry, can you repeat which—

Oh, sorry. Clause 38, “Interpretation”, specifically focused on the interpretation for mānuka honey. I want to check: my understanding—I think the Minister for Trade and Investment has mentioned this previously as well—is that there is a free-trade agreement that’s been signed between Australia and India. I know that the term mānuka honey is highly contested when it comes to who owns the intellectual property of mānuka between New Zealand and Australia. In here and also in the free-trade agreement, it does specifically state “mānuka honey”. I want to check: does that mean in the context of the Indian market that New Zealand has the branding of mānuka honey but Australia doesn’t? Can I get that clarification from the Minister, first?

Committee of the whole House

There is a difference. When New Zealand honey arrives in India, it will be called mānuka honey; when Australia—it’s manuka honey, because they’ll pronounce it very differently. Our one sounds better, so people will want it. No, it doesn’t mean that there is protection for the name mānuka honey in that market. However, quite significantly compared to Australia, we have a very large quota with a significant tariff reduction. We are the only country in the world to get preferential access to the Indian market for honey and all of our honey is better than Australia’s honey, but it’s also more competitive because it has a halving of the tariff rate whereas the Australian free-trade agreement does not include honey. As far as protections of the name are concerned, it is not an intellectual property component of this part of the agreement.

Committee of the whole House

Thank you, Madam Chair. This is the part of the bill that we’re told will be separated out under a separate piece of legislation. I guess this is an area where there’s been a lot of excitement about the free-trade agreement—

CHAIRPERSON (Barbara Kuriger): Just for clarification, this bill will be split into two parts, but we’ll be debating those two parts together when we do the readings afterwards.

Thank you. The purpose, of course, of Part 4 is to set up a quota management regime for apples, kiwifruit, and mānuka honey. The question to the Minister for Trade and Investment is: why not hops, pears, other honey, and avocados? It is a list of just three, which has been a huge disappointment to some other areas, so the question is a legitimate one. I’m not trying to relitigate the negotiations, but I think people need to know, given this is the opportunity in the House as to why we don’t have other areas, particularly around horticulture in this clause.

Committee of the whole House

Because there’s no quotas there, just as there is not a quota system being set up for lamb; because there is no quota required for lamb. There is no quantitative restriction under the free-trade agreement for those other products, but in as far as the three that we’re talking about in clause 4, there is a quota and that quota goes in. Kiwifruit, as an example, has a duty-free quota, a tariff-free quota for kiwifruit, an amount; the only country in the world to have received that. Outside of that quota, there is no quantitative restriction. Sell as many as we want and the tariff rate is halved; it’s not a zero-tariff rate.

Committee of the whole House

Sorry—just a clarification. As I say, it’s a slightly wider explanation as to the pushback, and, indeed, I understand the Minister for Trade and Investment’s point about the quotas, but these are other valuable export crops that—is the Minister saying that there will be no tariffs on hops, pears, other honey, or avocados, or indeed, what was the point of contention in those areas?

Committee of the whole House

No, I’m saying that Part 4 deals with three things and sets up a quota regime for them, just as Part 1 dealt with some dairy products only, and so the scope of Part 4 is mānuka honey, it’s apples, and it is—

CHAIRPERSON (Barbara Kuriger): Kiwifruit.

Oh, how could I forget kiwifruit from Te Puke? I’ll say it three times—kiwifruit, kiwifruit, kiwifruit.

Committee of the whole House

Thank you, Madam Chair. A couple of quick questions from me. On clause 38, the interpretation section for this Part, I’m just curious about whether a quota holder could be someone to whom a quota is transferred— so not the original grantee but someone who it’s transferred to—and if that’s the case, whether they would be covered by that definition.

Then my second question is in relation to clause 43. This is the quota management system itself, and new subclause 2 has three powers: one is a directive power, so this is the power to specify the allocation methodology, and the other two—paragraphs (b) and (c)—are permissive. Paragraph (b) is “may require the quota manager to publicly notify [some] information:”, and it sets that information out; and then paragraph (c) is, “may specify any other technical and administrative requirements for operating the quota management system.”

I’m just curious why those two additional powers, paragraphs (b) and (c), aren’t also directive and whether there’s—I imagine, in relation to paragraph (b), there might perhaps be some privacy requirements that are in play, but I can’t work out why the directive power isn’t there in relation to paragraph (c). So if the Minister for Trade and Investment could …

Committee of the whole House

Madam Chair, thank you. The reason that we’re doing this, where the Ministry for Primary Industries (MPI) will set up and manage this quota management system, is because the debate earlier in the day around Part 1, under the Dairy Industry Restructuring Act (DIRA), is well established and has been functionally working for a period of time. In as far as these three products are concerned, we don’t have another piece of legislation as significant or as long running, and so MPI has already consulted with the sector about how we might do this and manage it, and this is now setting that up for them to manage.

My advice is that, on the questions the members have, it is lining up closely to the DIRA Act rather than recreating it, reinventing it, doing it anew, and moving it over so that we can ensure that those who want to export will get a quota cheap and fairly, are treated equally, and that the system can work well but very quickly. In as far as a transfer concerned, yes, it is possible to transfer it. If somebody receives a quota and they can’t use it for a reason, they can pass it to somebody else of course. They must notify the regulator—in this case MPI—but they don’t need permission to do that. That will be possible with apples, and it will be possible with mānuka honey, but, of course, it won’t be for kiwifruit because we have a single desk, and there is only one organisation that is able to export kiwifruit on behalf of kiwifruit growers.

Committee of the whole House

Thank you, Madam Chair. Look, I’d just like to go to clause 38. It’s in the interpretation here, and it’s of “enforcement officer”. It was an area that the Foreign Affairs, Defence and Trade Committee spent quite a bit of time on, effectively changing from “inspection officer” to “enforcement officer”, and it relates to the Search and Surveillance Act 2012.

I guess I’m asking the Minister for Trade and Investment how we’ve got to this point of recommendations from the select committee to make the changes, but is the Minister happy with the changes as directed, and the fact that we have now an enforcement officer rather than an inspection officer and that they have the power to go in to find whatever information they need when it comes to enforcing the conditions of any quota? It is quite critical, and there were views that some of the proposals were overzealous and we’ve eased off on those. But the question to the Minister is: is he comfortable and can he explain how this will be rolled out?

Committee of the whole House

Madam Chair, yes, I am. “Enforcement officer” is an established term under the Search and Surveillance Act 2012, and, therefore, it is used and copied across from that. It’s already defined elsewhere rather than creating a new one, which would need a definition, and, therefore, it’s lining up legislative definitions.

Committee of the whole House

Thank you, Madam Chair. Just referring to the “Interpretation” in clause 38, and we’ve got a list of these interpretations around “kiwifruit”, “kiwifruit vine”, “mānuka honey”, and so on. We’re just wondering here, from the Minister for Trade and Investment, whether or not, in terms of us being worried about incursions into the usage of our intellectual property, and I mean that in the wider sense in the sense, that we have a whole lot of tacit knowledge and knowledge built up within the industries about how we produce some of the best kiwifruit in the world, as one example. Another example is all the fantastic work that Plant and Food Research did in relation to Psa-V virus, which almost devastated our whole crop.

Now, this is all knowledge that we have that we now seem to be giving away. We now seem to be behind that whole idea, and we’ve got this narrow definition here around the genus, but we’re not taking account of everything else that has gone into decades of investment in this particular crop. I’d just like the Minister to assure us that New Zealand Inc. can preserve that knowledge, that tacit knowledge, and its understanding of what we’re doing here, because we are giving away cultivars, seeds, and the opportunity for a similar incursion such as SunGold (Gold3) in China.

Committee of the whole House

Well, Madam Chair, I think the member’s question is a genuine one, but it is very, very broad from the scope of this. I’ll try my best to stay within the scope to answer. This is a free-trade agreement; it’s not a give something away agreement, and so the definitions allow us, in this section, to set up the distribution of the quota for people to send kiwifruit to India at a zero-tariff rate, and thereafter, the tariff rate is higher. But I suppose, should the exporter want to buy the kiwifruit from a grower, put it through a pack-house, put it on a ship, pay to get it to India, and then give it away, then that would be their business. They’re not compelled to, but, generally, I find that our kiwifruit exporter does a very good job of record returns in New Zealand.

The member is absolutely wrong in one thing he said. He said that New Zealand kiwifruit is generally or often the best in the world. He’s wrong because it is the best in the world—it is called kiwifruit. It is not Chinese-fruit, and it’s not Chilean-fruit, and it’s not something else.

💬 Steve Abel: I mean, I think it is Chinese-fruit. It used to be Chinese gooseberry.

CHAIRPERSON (Barbara Kuriger): It used to be, when I grew up.

That’s right. But interestingly, I went down to the supermarket in Rotorua the other day, and I spent a long time in a long queue waiting to buy Chinese gooseberries, and there weren’t any. I bought kiwifruit instead and paid well for it. The point that I’m making here is that New Zealand has exported kiwifruit all around the world, and they do it very, very well.

There have also been decisions on the part of the owners of the plant variety—it’s not the Government; it’s the owners of the plant variety—to export that to parts of the world where they grow themselves. That is a decision they have made; it’s not one the Government is in. Therefore, for that to happen, the owners, which are the kiwifruit growers themselves, need to vote and to vote in favour of doing that, and that is separate from the Government. But for that to happen, it is governed by legislation, which is the legislation that sets up the equivalent of the exporting body. Nothing is being given away. We’re not compelled to do those sorts of things, and so on.

But the intellectual property of New Zealand kiwifruit is guaranteed in New Zealand and in New Zealand legislation, as it is in other agreements around the world. In the case that somebody somehow gets hold of a New Zealand kiwifruit variety and cultivates it and they’re doing so outside of permission or a licence, then the owner of that variety has the ability and the right to go and enforce their rights in another country and to seek prosecution, and the New Zealand exporting body, Zespri, has done that to great effect. This does not give anybody the right to take something or send it away. It doesn’t alter that, and should kiwifruit growers in New Zealand want to cooperate in any country in the world, there is a dedicated function under legislation for them to be allowed to do so, but it is not automatic.

Committee of the whole House

Thank you, Madam Chair. I want to carry on with this particular line of questioning. I agree with the Minister for Trade and Investment that when we’re looking at the quota management system it’s different from the Kiwifruit Action Plan, the Apple Action Plan, and the honey action plan—is it the mānuka honey action plan? No, it’s not mānuka honey; it was the third action plan anyway. It doesn’t matter; it wasn’t what I was going to ask about anyway.

I do want to check—the question around the G3 variety is a really important one. I guess under this particular bill, if we introduce a quota management system, we’re going to be seeing more exports of kiwifruit, and, in the bill, kiwifruit is simply defined as the fruit of the kiwifruit vine. It doesn’t define “species” or even define “subgenus” in this case. So if anyone has a licence to it, they could potentially get to export it. Gold kiwifruit or red kiwifruit? No, they can’t export any of that; only green kiwifruit. So maybe this question first: is it just the green kiwifruit?

Committee of the whole House

To be allowed to grow kiwifruit in New Zealand, you must purchase a licence to do so. You don’t have the permission to export it. It goes back to, in this case, Zespri—they are the exporter. So if the member decides to grow G3 kiwifruit in his own home and he hasn’t got a licence, he is breaking the law—I know he wouldn’t do that. If he buys a licence and he wants to take himself overseas to sell it, he is not able to do so. The export body is Zespri in that case.

As far as a cultivar is concerned and the quota to export kiwifruit itself, it could well be G3, it could be green, or it could be something else. This doesn’t define it. It doesn’t say what kiwifruit should be exported for consumption. It is for the exporter to make that decision, as they do. As an example, they often export a lot more green kiwifruit to Japan because it is more desirable to Japanese consumers and they pay more for it than they may somewhere else.

CHAIRPERSON (Barbara Kuriger): Dr Lawrence Xu-Nan—is this a clarification?

Committee of the whole House

Yes. I think that is really helpful, but let’s say Zespri, the exporter, is able to export different varieties of kiwifruit—their choice; they go for a decision with their members. We know that the cheaper variety gets exported and gets cultivated. What mechanisms would there be for us to be able to challenge not just India but any country?

CHAIRPERSON (Barbara Kuriger): The Minister is actually just agreeing with what you’re saying, so maybe we could clarify that.

Committee of the whole House

I can clarify. If we move away from kiwifruit, for example—hypothetically; just an example—and think about grapes and wine, the wine is exported; the grape is not. In this case, it is the kiwifruit to eat that is exported; it is not the variety, it is not the right to grow it, it’s not the right to do anything else. It’s a little bit like if the member goes to a shop tomorrow morning and buys a can of Coca-Cola, he’s able to consume it but he does not own the Coca-Cola recipe or the ability to produce Coca-Cola. I would recommend he doesn’t drink Coca-Cola; I would recommend he eats kiwifruit because I come from Te Puke.

Committee of the whole House

Thank you, Madam Chair. I am on clause 44, “Review of quota allocation decisions”. This is a question about the scope of this clause and whether a broader scope was considered. Clause 44(1) allows for a review of a decision not to grant a quota allocation or to grant a specific amount. I’m wondering whether the Minister for Trade and Investment considered third-party challenges to grant a full amount or to grant a partial amount in terms of a quota allocated—so almost a challenge to that by a third party. Is that done, or is that done in relation to other free-trade agreements?

The second part of my question is in relation to clause 44(2), which restricts what an applicant may seek a review of in terms of a quota manager’s decision. So they can seek a review of the decision itself but they can’t seek a review of the allocation methodology, if you like. I just wondered if the Minister has considered a situation where the allocation methodology is substandard and why that individual would not be able to seek a review of the methodology itself, understanding that that individual could still bring a judicial review, potentially, but that’s at considerable cost and considerable time. So if there was something woven into this review mechanism, it would be much more accessible to an individual. And the way in which the Minister could have done that is through a high-bar threshold where it was about a significant flaw in the methodology itself as opposed to a small technical one allowing a complaint in that regard.

Committee of the whole House

An individual can seek a clarification and challenge an allocation they got—I think that’s right—but not the system overall. The member is right in that if somebody is worried about the system overall, there is an opportunity for a judicial review, and although that feels heavy-handed, it happens from time to time, but, as far as a review of the process for allocation is concerned, there is the ability for ministerial review.

However, before the regulation is put in place, there is consultation with the sector about what it should look like and how it would work and so on, and that feedback is taken on board when the quota allocation system is set up, and that system has to be followed fairly and properly. But this is not the first time this has happened. There are quotas across the board in a number of areas—and we’ve had the conversation about the Dairy Industry Restructuring Act, which is there to govern dairy production but also quota allocation. So, in essence, for kiwifruit and for apples and also for mānuka honey, the quota allocation system replicates or mirrors closely quota allocation systems used elsewhere in New Zealand, albeit that when we get industry feedback through consultation, there can be changes made.

Committee of the whole House

The Minister for Trade and Investment will appreciate that I’m trying to establish that plant varieties that are bred and born in New Zealand will not be shared that easily through this legislation. However, it can be in their own intellectual property framework, which goes back to the Act in 2001, where a farmer shall be deemed to be entitled to save, sow, use, resow, exchange, share, or sell his farm produce, including seed varieties that are protected under that Act. Before that Act came into force, India had no plant variety protection. Also, we have the problem with the International Union for the Protection of New Varieties of Plants, which the Minister will be well accustomed to. You see where I’m going with this—article 14A3(5)(B) commits New Zealand to help India enhance India’s regulatory framework, particularly in areas of plant variety rights and intellectual property protection, to enable the introduction of high-value, globally developed intellectual property and protected plant varieties into India.

Can the Minister assure the committee that the operative purpose of that statement is not to share those protected plant varieties that we have developed here in New Zealand?

Committee of the whole House

There is nothing in this agreement or in this legislation that compels you to share in that way, and I can be very clear that the cooperation programmes the member has been talking about do not involve the transfer of any protected varieties or protected commercial know-how. It doesn’t involve any transfer. In the case of kiwifruit, the only plant material supplied from New Zealand will be open-source roots, plants that are not protected by plant breeders’ rights and can be bought by anybody around the world. In terms of the definition the member read out around the ability for farmers to sow and so on, in the case of kiwifruit it is different. It has its own Act of Parliament and there are plant variety rules and protections around that.

Should a plant variety owner, in this case Zespri, decide it wants to do something in Japan, Singapore, the United Kingdom, or India, they make that decision for themselves, and they would consider what protection there could be in the market they’re putting their product into. But there’s nothing in this agreement that compels them to do that, nothing that encourages them to, nothing that forces them to. It is a commercial decision that the owner of the plant variety, in this case Zespri, would make. And as I mentioned earlier in the discussion, for them to do so, the legislation is very, very clear about needing to get the agreement of the growers, who are also the owners of the cooperative.

Committee of the whole House

Thank you, Madam Chair. Part 4 here is quite extensive, and deals with, as we’ve said before, quota management provisions. There are a number of clauses here, I’m not going to go through them all, but they cover everything from conflicts of interest, setting it up, review provisions when the quota is allocated and people don’t agree—all of that—and that’s all great. I asked questions around why some species were left out, but anyway, that was part of the negotiations.

I just want to raise an issue and a question for the Minister. Under the biosecurity provisions in this piece of legislation, there are no dispute settlement provisions, from recollection. So in allocating quota and the right of access, if India, or indeed New Zealand—and the reverse—was to say, “Sorry, we’re going to block the entry of these goods,” even though they might have been under quota, for biosecurity reasons. I would just asked the Minister: what does he see as a pathway through a dispute like that, that would affect all the goods covered under quota management? That has been, not under anything here, but it has been under logs, of course—

CHAIRPERSON (Barbara Kuriger): It would be good if you actually would bring it back to here.

I mean, I can go clause by clause if you wish, but I’m just, I’m talking—

CHAIRPERSON (Barbara Kuriger): I think what you’re talking about is actually broader than the—

It’s in Part 4, and it’s around quota—

CHAIRPERSON (Barbara Kuriger): Yeah, but if you can point us to the specific clause with the question, because it’s seems to be—

“Quota manager may gather information”—Subpart (4), clause 53. I guess if the quota manager is looking at issues around biosecurity—I think the Minister probably understands what I’m getting at—it’s an explanation for the wider public around something that could make all of this redundant, because we could have an intervention that puts all this good work to waste.

Committee of the whole House

I can speak broadly, because there is a broad explanation, but it doesn’t affect the quota. Biosecurity is important to all nations, extremely important to New Zealand. As we know, we don’t import eggs into New Zealand from anywhere, because of a biosecurity risk. That doesn’t mean that the tariff rate for eggs doesn’t go to zero, but there is a separate consideration as to whether or not things can be imported.

If we take an example of mangoes, under this agreement the tariff rate for mangoes will fall to zero. But India or any other nation wouldn’t automatically have a right to send mangoes to New Zealand, unless we were sure there would not be a biosecurity risk to New Zealand as a result. There’s a separate regime that considers that away from trade, and so on.

In the case that New Zealand, hypothetically, had a quota system for the importation of chicken from, say, Australia—and we had that set-up and they were managing it as this legislation is setting up for kiwifruit in the other direction—and bird flu arrived in Australia, as it did a short while ago, we would still have the ability to stop products from coming into New Zealand because of a risk, irrespective of the quota.

Of course, that would mean the quota would not be filled for the period of time, perhaps of a year, that there was a restriction. And then, ultimately, whether Australia thinks that is a purposeful or not—or the right thing to do—is separate from the trade agreement, because it comes to biosecurity. It’s extremely important that New Zealand has that in place, as other countries do, but, of course, a decision around biosecurity has to be proportionate. As the member will remember, from probably his first day in Parliament, when we could not export apples to Australia, because they said there was a biosecurity risk, we challenged in other ways and eventually we won that case. And, of course, the day afterwards, when we were able to export apples from New Zealand to Australia, not only did the Australian apple industry not collapse; Australians, for once, had good apples.

Committee of the whole House

Thank you, Madam Chair. I want to start by just asking the Minister for Trade and Investment about clauses 44 and 49 regarding regulations. Has the Minister considered at what point those regulations would be determined or be approved as part of that process?

I do want to focus on clause 50 in terms of what the quota manager is able to do regarding export certificates. It does list the criteria of why they would cancel the export certificate, but I want to check in terms of the process. The process is either to suspend or cancel, and then, in clause 51, the person may seek a review of that decision. But during that review period, I’m guessing that the certificate that is issued is either suspended or cancelled—that being the first question.

The next question is whether there has been consideration of, rather than suspending or cancelling—has there been a warning system in other areas: you give a warning and say, “You need to do this, but we’re not going to suspend it or cancel it.” It just seems like we’ve kind of gone immediately to suspension and cancellation, and then giving them the ability to review. So I just want to check if that warning system has been considered.

Committee of the whole House

Well, it says “may”; it doesn’t say “must”. So the quota manager may cancel, suspend, or refuse, should they wish. It provides avenues for enforcement where there’s non-compliance by an exporter. Generally, the quota manager—in this case, the Ministry for Primary Industries—works very closely with exporters. It’s in New Zealand’s best interests to make sure that our exports are able to travel overseas. We don’t have a quota manager there saying, “I want to cancel this one without any warning because I don’t want apples to be exported.”

Of course, we’re setting the system up so we can export within the 45,000-tonne quota that we’ve received. The member will know and be very proud that New Zealand is the first country in the world to get a quota for apples, with the reduced tariff rate. No one else in the world had got that previously. I think now the EU might have, but, of course, not in competition to New Zealand, because they have a different season to us, so they won’t compete with us. They will compete with Indian apple producers because the season is the same, more or less, in India.

The point of this is that it is within our interests for the exports to happen—we want them to—and that’s why we negotiated a free-trade agreement. But where an exporter is not meeting their export certificate circumstances or requirements, then it provides us with the avenue to enforce.

CHAIRPERSON (Barbara Kuriger): I’m just going to take a couple more quick questions, because we have had a select committee here, and I just want to say to Dr Xu-Nan that your questions around the timing of regulations probably fits better with the commencement clause.

💬 Dr Lawrence Xu-Nan: OK. Sure.

CHAIRPERSON (Barbara Kuriger): Yeah. But I’ll just take a call from Vanushi Walters.

Committee of the whole House

My question is on clause 45, so this is on the return of a quota allocation. Essentially, it allows a quota manager, where an allocation has been returned in part, to reduce the quota allocation for year 2. But it doesn’t explicitly point to a right of the quota holder to provide the circumstances of why they’re having to return that portion of the quota allocation. So subclause (3)(b)(iii) does allow the quota manager to use discretion not to reduce a quota allocation in year 2 if they’re satisfied that there are exceptional circumstances. But, again, I would expect that there would be a pre-emptive right to be able to present those circumstances so that it’s not after the case that someone has to make a complaint. So I was just wanting clarification on that.

Committee of the whole House

Madam Chair, thank you. The detail gets set out in regulation, rather than primary legislation, because, mainly, if you change it, it’s easier, therefore, to change. It would be more flexible or specific in regulation; this merely sets up the ability to do so.

It is important that when one thinks that where somebody has a right to a quota because of export history and they may not use it and they choose not to, they will still have the ability every second year to have a right to the quota again, based on previous history. It gives the regulator, the administrator, or quota manager the ability to say, “You haven’t used it. Therefore, is it fair or reasonable that we give it to you again if there wasn’t a good reason not to?”, and also the ability to say, “Well, there are exceptional circumstances where we would allow you to still have a new quota.” There may have been a weather event, for example, that meant that that grower or exporter didn’t have a crop to export that year, but the following year they would, and so it wasn’t purposeful, or something like that.

What we’re seeing in other areas is that often exporters may look to get quota and not use it so that there is not the competition in the market against other New Zealand exporters, and whilst I can understand that from a business point of view, it is not something that would be viewed as acceptable in as far as having negotiated access for New Zealand, where we want the export of the product to take place. So it allows there to be an ability for the quota manager to consider these sorts of things. If it gets set out in regulation, of course there has to be a process where if somebody is affected by this, they have the ability to seek appeal or a change.

Committee of the whole House

Thank you, Madam Chair. I refer to clause 55, “Quota manager must manage conflicts of interest”, which is quite a critical area here. A recommendation came from the Foreign Affairs, Defence and Trade Committee to eliminate the ministry—well, eliminate from what?

It says, “This section applies to the following parties … a quota manager, other than the Ministry:”. The proposal put to the select committee was to not have the ministry subject to scrutiny over possible conflicts of interest, and I guess the question to the Minister is this. I know that there is the Public Service Act and there are other kinds of obligations on public servants, but this is a small country and I think the select committee decided that we should take out the exclusion for the ministry. So the question to the Minister is this: is he comfortable now that his ministry will be subject to the scrutiny over possible conflicts of interest?

When it comes to quota management in areas such as we are speaking of here, there are not thousands and thousands of people with the knowledge and experience, and it is possible that there may be conflicts of interest. So the question to the Minister is whether he is happy now that within his department, these things will be managed appropriately to ensure that there’s a fair and balanced allocation of the quota and then ongoing management—because they are two separate things.

Committee of the whole House

Yes, I am. The ministry has scrutiny through other parts of legislation. They have—as across all ministries—through the Public Service Act the ability to manage conflicts of interest internally with those who may be employed in a ministry, but the ministry has scrutiny upon it also through this House and through Parliament. I would expect that at the Foreign Affairs, Defence and Trade Committee and maybe the Primary Production Committee, at a given point in time in the future, this member and others will have the ability to question in detail the application and processes around the running of the quota system and the sharing or distribution of the quota.

There are many areas where there is scrutiny of our ministries and their roles. The individuals themselves get dealt with internally, but the ministries also take this seriously. I am comfortable with where we have landed with this part.

CHAIRPERSON (Barbara Kuriger): Dr Lawrence Xu-Nan—but you look a bit like you’ve just got a follow-up question here? OK, yeah.

Committee of the whole House

The Hon Damien O’Connor may have a follow-up question.

CHAIRPERSON (Barbara Kuriger): He’s ceding to you, if you want, the follow-up. Otherwise, I’m going to go to Dr Xu-Nan.

Committee of the whole House

Yeah, I’ve got a follow-up, and it’s just off to the Minister for Trade and Investment—and thank you for his assurance on that. The other one is that the Minister has the ability to conduct an audit, and, basically, at the other end of the scale, we opened up the Minister’s discretion to intervene where he thinks he or she would think that there’s something wrong. So I guess a comment from the Minister on how that will be managed is probably something of interest, as well.

Committee of the whole House

Well, the ability to audit is an important one. If it’s not set in the legislation, it can’t happen, and if a Minister, for a range of reasons, may decide he wants to make sure that the quota system has been running well and properly as a result of the legislation setting it up, then I think that’s important.

I mean, it’s not quite the same, but if you think about some of the levy bodies, there is a process that they go through to set their levy and it’s very, very clear in legislation for that body, but, often, a Minister will have the ability to look at that and make determinations as to whether they agree or not that it has actually met the requirement in the legislation. In this case, a Minister’s ability to have an audit is, I think, a very, very good idea. The circumstances in which that may happen may well vary, but it will be a tool that future Ministers can consider.

CHAIRPERSON (Barbara Kuriger): Lawrence Xu-Nan is just going to round us off nicely now.

Committee of the whole House

Thank you, Madam Chair. I do have a few questions regarding clause 62, “Powers of search and seizure to investigate offence”. Again, this was something where, although it was discussed, the Foreign Affairs, Defence and Trade Committee didn’t have full agreement on it.

Now, Minister, you mentioned before in terms of, for example, non-compliance when it comes to export certificates and all of those things. One of the issues here is that there is no way for an issuing officer or enforcement officer to investigate for areas of non-compliance without getting a warrant, which then also means that there are some inconsistencies between this legislation and other comparable legislation around this. We did have a conversation around whether the wording before of a warrantless search was too severe and we said that something needs to be kind of softened, but I guess the first question to the Minister is: how then would an enforcement officer or an issuing officer investigate for non-compliance if the only way for them to do that is to have a warrant which requires there to be some suspicion that the person is non-compliant?

Committee of the whole House

This is only one tool. There are many ways that they engage and have the ability to do that, but where a search warrant may be required to search under the law—and this is under Part 4 of the Search and Surveillance Act 2012—it aligns with that power. It has the ability to do so, and it merely dictates what can happen. It allows for a search warrant in the circumstances of a search of a place in order to copy documents and seize computer systems or data storage devices, but there is often ongoing engagement with exporters before this, and this is just one of the powers.

There’s another part to this. It says that the search must be exercised with regard to the culture of any place the enforcement officer enters. If we take again, hypothetically, where a search warrant is issued to go to a church that has products in it, and so on, one may assume that at a time of worship, it may not be enforced, but at another time it may well could be.

Committee of the whole House

I move, That debate on this question now close.

A party vote was called for on the question, That the motion be agreed to.

Ayes 67

New Zealand National 48; ACT New Zealand 11; New Zealand First 8.

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14; Te Pāti Māori 4; Ferris; Kapa-Kingi.

Motion agreed to.

A party vote was called for on the question, That Part 4 be agreed to.

Ayes 93

New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.

Noes 28

Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.

Part 4 agreed to.

CHAIRPERSON (Barbara Kuriger): We come now to Schedule 1AA.

A party vote was called for on the question, That Schedule 1AA be agreed to.

Ayes 93

New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.

Noes 28

Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.

Schedule 1AA agreed to.

A party vote was called for on the question, That Schedule 1 be agreed to.

Ayes 93

New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.

Noes 28

Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.

Schedule 1 agreed to.

A party vote was called for on the question, That Schedule 2 be agreed to.

Ayes 93

New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.

Noes 28

Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.

Schedule 2 agreed to.

A party vote was called for on the question, That Schedule 3 be agreed to.

Ayes 93

New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.

Noes 28

Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.

Schedule 3 agreed to.

Committee of the whole House

Clauses 1 and 2

CHAIRPERSON (Barbara Kuriger): Members, we come now to clauses 1 and 2, the debate on “Title” and “Commencement”. Lawrence Xu-Nan had a question about commencement.