Regulatory Systems (Primary Industries) Amendment Bill

Members, so now the House is in committee on the Regulatory Systems (Primary Industries) Amendment Bill. I’ll just give the Minister a moment to come into the chair. We start with the debate on Part 1. Part 1 is the debate on clauses 3 to 25, “Amendments to Agricultural Compounds and Veterinary Medicines Act 1997 and secondary legislation”, and Part 1 of Schedule 4. The question is that Part 1 stand part.

Point of order, Madam Chair. I seek leave for all provisions to be taken as one question.

Leave is sought for that purpose. Is there any objection? Yes, there is.

Thank you, Madam Chair. Given that there are many changes to this piece of legislation, albeit some minor and technical, we do think it’s a good idea to traverse and ask some of the questions of the Minister, particularly for those people at home who will be completely glued to their televisions, wanting to know what we are doing in this space.

So my first question to the Minister is with regard to Part 1, clause 4(3), which replaces section 2(2) with (2)(a), (b), (c), and (d), where it says “(2) The Governor-General may from time to time, by Order in Council, for the purposes of this Act, (a) declare any substance, mixture of substances, or biological compound to be an agricultural compound; or”—and then it goes on to (2)(c), where it says “declare any entity to be a pest; or (d) declare any entity not to be a pest.” So my first question is: what criteria will be used to determine whether an entity is or is not a pest, or was once a pest but no longer, or was never a pest but is going to be a pest?

The other question I have for the Minister is with regard to new clause 4A, where we amend section 9, “Application for registration”, where it states “Subsection 1(b) does not apply to a substance, mixture of substances, or biological compound that is exempt from registration as an agricultural compound under section 8A for a limited period of time.” Can the Minister describe for the House or those watching at home under what circumstances or why a substance, mixture of substances, or biological compound may be exempt from being registered as an agricultural compound? If it’s not an agricultural compound by reason of the exemption, what might a substance or mixture of substances or biological compound be classified as instead?

Thank you to the Chair. My question is also around clause 4 and section 2, which is the “Interpretation” section. I’m particularly interested in whether the Minister can help us by giving some examples of what the newly defined agricultural compounds would be that are involved with “(ix) mitigating adverse impacts on the environment; or (x) mitigating emissions that contribute to climate change;”.

My apologies, I don’t have the principal legislation in front of me, but I’m assuming that what happens with clause 4—section 2 amended, and new section 2(1)—is that now there will be a type of agricultural compound that relates to the mitigation of adverse impacts on the environment, and another one on mitigating emissions. As I’m reading this blind at the moment, if the Minister could give some examples and explain why it is that they should be within this agricultural compounds and veterinary medicines regime, I think that would be helpful.

Look, thank you very much. Again, on Part 1 and the issue of inhibitors, which is a new area of science in our products that many people across agriculture are looking to for—they might see them as magic bullets, but they certainly see them as part of the progress in terms of reducing emissions from agriculture. So it is a little bit confusing. In clause 2(2), “Subpart 3 of Part 1 comes into force 12 months after [the rest of the bill] … under subsection (3).”, and it ends the one-year transition supporting amendments to include inhibitors under the Agricultural Compounds and Veterinary Medicines Act 1997 (ACVM) and its secondary legislation.

I understand the complexities, and this really was sparked by—I think it was—Bovaer, or it was a compound developed in Europe mainly for indoor farming systems, but there was talk of it being very useful. Indeed, one of the processing companies in New Zealand had approved it in principle, but the process through the ACVM Act had not been completed—and indeed, actually, the company hadn’t applied for it.

So the question I have for the Minister is—of that particular inhibitor we know the case study, but how many more others are likely to come through? Indeed, do these changes protect farmers, processing companies, and exporters from the risk that we saw in the past, from dicyandiamide, where it ended up being in the supply chain? These regulations are critical. I think the exemptions in this piece of legislation are designed to, I guess, create some competitive tension and some innovation in the system. But I do need to know, or we should hear from the Minister, as to whether we’ve got the right protections in place to ensure proper scrutiny and that exemptions under registration work positively for farmers in the long term, not just open up a commercial opportunity that puts the whole export sector at risk. I look forward to that answer.

I want to just move on to the “Renewal of registration” piece at the moment—new section 22A, for the Minister—where it talks about the decisions to grant an application for renewal or a new registration. Whilst I understand that there would be reasons, perhaps, why a renewal wouldn’t happen, for clarity, though, I want to know—because, obviously, when you go through the process of renewing a registration, depending on what it is, it can be quite time consuming, and there can also perhaps be a bit of cost to it. I wanted to ask the Minister, under new section 22B, “Decision on application for renewal”, where the director-general may or may not grant an application made under new section 22A “if the Director-General is satisfied that—” X, Y, Z—but it does go on to say that “If the Director-General is not satisfied that the requirements in subsection (1)(a) or (b) have been met, the Director-General must refuse to grant the application and the registration expires”.

What I would like to know from the Minister is if the criteria or requirements haven’t been met, will there be, or was there, consideration given to perhaps allowing someone just a bit of leeway of time to get whatever it might be in order, or does it just get declined and then they have to complete or start the whole process all over again? Is there a cost to that, or would there be a time limit set, whereby they can look to reapply and ensure they’ve got everything in order? Just for a bit of clarification, I think that would be helpful. Thank you.

Thank you. On this question as well—and hopefully the Minister will answer us on Part 1—

Hon Todd McClay: I haven’t had a chance—you keep asking questions!

Hon RACHEL BROOKING: I welcome you to stand up, so I will keep this short for you, Minister. I’m looking forward to you answering the question about what I was asking about in terms of the definitions clause, talking about mitigation of adverse effects and mitigating emissions. We’ve heard from Damien O’Connor about the inhibitors, and clause 14 has the definition of “inhibitor”. There is a change, at clause 14, to the regulations with the phrase “inhibitor”, which links back to those things that mitigate the adverse effects. If you can comment on what the change here is doing, that would be lovely.

Madam Chair, thank you, and colleagues, thank you for those questions. A lot of this, I know, was traversed or covered during the select committee, but important that we bring it here. At a higher level, I’ll give the explanations, the assurances that are required, and I apologise if I don’t get them in the order that they came out in.

In as far as, I think, Jo Luxton was talking about pests—was that you, Jo? Yeah. The bill does not amend that. It is in the existing Act, so it doesn’t make any change at all. It’s just the way that it’s listed where the other change is, it keeps pests there. There is no change to the legislation as a result of this bill. The definition of what’s a pest and how it’s considered and how it’s dealt with remains the same as under the existing law. So that doesn’t change.

Damien O’Connor talked a little bit about some of the inhibitors and proof of safety and will it have an impact upon exports and so on—very, very important points. What the legislation does and says is that in some cases there are products that don’t need to be regulated or can’t be registered, and this will now allow that to happen, but it doesn’t speak to how you register. That’s a separate piece of legislation. This is merely recognising that there will be compounds of things that may well be used overseas, or, you know, those who want to bring them and use them in New Zealand—they don’t have the ability to. For instance, there’s not the ability to get permission to have a trial for some of these things, or not the ability to seek registration for new compounds—and he’s mentioned inhibitors. In effect, this means it will be possible to register, but the process to go through to seek registration and proof that they are not harmful in any way to production in New Zealand—or elsewhere—doesn’t change by that Act. That remains elsewhere in other Acts.

Then, finally, in as far as—where are we—new sections 22A and 22B, inserted by clause 6, are concerned, around the Agricultural Compounds and Veterinary Medicines legislation, the Act does not provide for renewing trade name product registrations that have expired. Instead, applicants are required to undertake the necessary process of completing a new application. The amendment through this bill provides for renewals where registration details are current and the product remains compliant with conditions of approvals of registration, reflecting how the Ministry for Primary Industries is addressing the problem through administration. Ultimately, if the product registration was valid, the information is still there, its authorisation can be renewed without having to go through the whole full process again. I think this is something that keeps the level of protection that is required in all of these areas, because it doesn’t alter it. It just actually takes away what is viewed as unnecessary bureaucracy but doesn’t weaken protection under law.

Look, thank you, Madam Chair. I appreciate the Minister’s response to some of that. I’m not trying to be overly dramatic here, but I guess the Minister refers to the secondary process whereby these inhibitors, for example, will have to go through the Agricultural Compounds and Veterinary Medicines Act 1997. They’ll be registered. Farmers will know about them in the pipeline.

As we saw with Bovaer, there was groundswell of demand from the primary sector to get access to these new goods. I guess the question to the Minister is to give us an assurance that the process of approval will indeed remain robust, because I think it is critical.

Then, the one other issue around continued registration of a trade name—you know, things do move forward quite quickly, and so there is an expiry date for a reason, and then just rolling over the registration seems, on the face of it, to be sound. But the question might be that because New Zealand farmers and horticulturists are very innovative and they push the boundary sometimes on the use of chemicals in particular—there is a lot of off-the-label use, which I don’t want to expose unnecessarily but to say that once a product is in the system, the temptation to use it off-label, and in a world that is increasingly focusing on residues—we just need to have from the Minister, and I’m sure he probably will, but I think it would be important for him to say, that, actually, the approval process, the monitoring, and the re-registration will require a scrutiny of the systems to make sure they’re up to date with what is an ever-increasing international level of monitoring.

I just want to recognise the Hon Damien O’Connor’s support of Groundswell there! He said there was a “groundswell of support”, and I think he meant he “supports Groundswell”. He got it the wrong way around.

This bill before us doesn’t deal with the issues that he mentions. It only says that something is possible. It doesn’t say how it will happen in another piece of legislation. More broadly, his point is a very important one. New Zealand’s an export nation. We produce very high-quality, safe food the world wants. Our regulatory systems are better than many. In fact, they stand up to scrutiny all over the world. We see, from time to time, when something may inadvertently get into a supply chain, that it is found, often by the processor, and they take action quickly. They too, as do all New Zealanders involved in food production, understand the importance of the rules and regulations that back up the claims that we make overseas. This legislation doesn’t change that at all. It merely says that there will continue to be evolutions of things that may well be advantageous for farmers and food producers to have in New Zealand. His request about whether or not the system of verification—ensuring it is fit for purpose and won’t harm food production in New Zealand—remains, I would hope, across successive Governments into the future, that remains an absolute priority.

I’ll give one more example of why I think this is very important. Damien O’Connor is correct that there will be a number of products from around the world that aren’t developed in New Zealand that farmers may want available to them to help them meet their obligations to reduce emissions. As an example, in Australia, they have innovative products that help them reduce emissions in their dairy herd. We shouldn’t be in the place where they’re not available to New Zealand, because it puts us at a disadvantage. It puts up cost, and it takes away a tool that farmers may use. However, that they have, in Australia, accepted a product for use in the production of milk is not a reason for us to automatically accept it here in New Zealand. The reason for that is we have a greater trade consequence if there is an issue than Australia would. The reason for that is we export the majority of the milk and dairy protein we produce. Australia consumes the majority that they produce, and if there was an adverse effect, it would not have the same impact upon their trade around the world and access to markets as it would for New Zealand and to the detriment of New Zealand dairy farmers.

I would argue that our regulatory system of looking at new products to become available in New Zealand is, to some degree, more rigorous—I’m not saying that in Australia it isn’t rigorous—than other countries’. It is by necessity, because of what we produce in our trade profile. There are times when the companies who want to import it, or the processors or the farmers themselves, are frustrated that it takes longer than they would hope it might or think it should so that they can have a level playing field with, say, Australia or the European Union. To them, I say, I understand, but we work as fast as we can so we can give the assurance, because, actually, we are a trading nation. I think the points that Damien O’Connor is making, around ensuring that our regulatory system makes decisions almost to the point of being more cautious than sometimes others would be, is not unreasonable for us to expect to be recognised in legislation.

Again, this legislation doesn’t change that. It merely says that there are compounds that are available and that they might want to use in New Zealand. They can be registered, but they will have to go through the process of verification through other pieces of legislation. This doesn’t alter that. It doesn’t make it easier. It doesn’t make it harder. It merely says it is possible for them to be registered.

Sorry to go back to this point about the mitigation of the environment and of emissions and in relation to inhibitors, but is the Minister saying—is the point here—that an application can be made, and those are new criteria, being the environment and the reduction of emissions, but there are no changes to the overall regulatory process? That’s just what I’m trying to work out—what the hook is.

Sorry, I guess what I was saying is that the process isn’t weakened, but, yes, they are in addition. Yes.

Thank you, Madam Chair. I just wanted to draw the Minister’s attention to new section 76A, inserted by clause 11, with regard to the director-general, subsection (8) where it says, “In addition to complying with the Legislation Act 2019, the Director-General must, if the Director-General considers it practicable, cause a notice that is secondary legislation to be brought to the attention of persons likely to be affected by it by notice or publication in any newspaper or trade journal, or by any other practicable means”. What is the Minister’s thinking with regard to what does it mean if the director-general “considers it practicable”? What does “practicable” mean in this particular situation? What criteria must the director-general use to consider whether it’s practicable or not practicable?

The other thing I wanted to ask about, and it might seem a bit silly and a bit strange, but under subsection (10) it says, “The Director-General must—(a) notify the persons affected by the notice individually in writing, whether by post or facsimile”. Do we still have faxes? I don’t know, and I just wanted to check on that as well. It might seem small and trivial, but if we’re updating the legislation, we may as well update it properly. Thank you.

Yes, we’ve found a fax machine. In essence, it describes the ability to provide the information. More broadly, elsewhere in Government, I don’t think there’s a body of work that says, “How do we most easily update the way that we must communicate things?” Rather, if you look in legislation, it prescribes it, and when we go back, there are some bits of legislation that say, “It has to be by telex or a registered letter” or so on. In the end, I am advised that as long as it is provided to the person—and it can be by written letter or facsimile, which can have a broader implication than that—then it still works within the Act. But you are right—there are not many fax machines left anymore.

Part 1 agreed to.

Part 2 Amendments to Animal Products Act 1999 and secondary legislation made under that Act