22 July 2010

In this edition:

MATTERS OF OPINION

"I'll get it home" - Hide pushes Regulatory Responsibility Bill
There may have been no burning ships to the rear, but Rodney Hide's claim that he will succeed in passing his proposed Regulatory Responsibility Bill has the desperate determination of an Hernán Cortés about to subdue Mexico. more...

IN POLITICS

Little stumps up
Labour President and EPMU head Andrew Little, has announced that he will be seeking the Labour nomination for New Plymouth to run against National incumbent Jonathan Young. more...

90 day trial period to be extended
In his address to the National Party faithful on the weekend, John Key announced the Government's proposed industrial relations policy and related amendments to the Employment Relations Act 2000 (ERA) and Holidays Act 2003. more...

PROGRESS OF LEGISLATION

IN THE WEEK AHEAD

 

IN COMMITTEE

IN OTHER NEWS

IN CONSULTATION

A Matter Of Opinion

"I'll get it home" - Hide pushes Regulatory Responsibility Bill

There may have been no burning ships to the rear, but Rodney Hide's claim that he will succeed in passing his proposed Regulatory Responsibility Bill has the desperate determination of an Hernán Cortés about to subdue Mexico.

Cortés had the better odds.  With minimal support at the Cabinet table and opposition from officials, Hide has a difficult road ahead.  It's not that the idea of quality regulation that has raised hackles.  It's more the quasi-constitutional approach to it and the simple fact that anything that puts additional hurdles in the way of Ministers and their officials is never going to be greeted with unconfined joy.

The proposed role for the courts is a case in point.  The idea that anyone who feels the principles of good regulatory and legislative practice have been breached should be able to apply to the courts for a Declaration of Incompatibility, cuts too close to the bone to Parliamentarians jealous of their discretion and wary of judicial activism.  It is not just Simon Power who subscribes to the view that "if you want to make policy get elected."

Also, while non-politicians may look upon the advent of Declarations of Incompatibility as a good thing, it seems anomalous that they should come in a Bill dealing with regulatory process and not in that more fundamental instrument of rights protection, the New Zealand Bill of Rights Act.

The same is true of the proposed property right.  Whilst for all practical purposes the New Zealand Bill of Rights Act may have no special status relative to other legislation, it is still the proper vehicle for rights protection and it is here that a property right belongs.

This is the problem with Hide's proposed Bill.  It reaches too far.  In appealing to the courts it ignores the potential for strengthening the role and powers of the Regulatory Review Committee.  In asserting rights, it attempts to effect what amounts to a constitutional change.  It is not that the objectives are undesirable, it is the means by which they are to be achieved.

This does not mean that the Bill should be dismissed. On the contrary, the principles of good regulation ought to be asserted if only for the pragmatic reason that too much Parliamentary time is taken up revisiting the costly mistakes of the past. Also, as hard as it may be to get things onto the statute books, it's even harder to get rid of them once they're there.

So, for those who have to deal with the unwelcome realities of poorly conceived and constructed legislation, Hide's proposals warrant close attention.

The Government is considering the proposed Bill and will be receiving submissions until 27 August. Anyone beset by issues of regulatory compliance may wish to make their views known.

The recommendations of the Regulatory Responsibility Taskforce and the draft Bill can be found here.

In Politics

Little stumps up

Labour President and EPMU head Andrew Little, has announced that he will be seeking the Labour nomination for New Plymouth to run against National incumbent Jonathan Young.

A strong contender to lead the Parliamentary wing and some would say Labour's next Prime Minister, Little's candidacy will be welcomed by many.  Others are said to be less happy - and for the same reasons. 

Little's potential strength as a leader, his appeal with the unions and his general credibility with business mark him out not only as someone to watch, but also as a threat to the aspirations of others.

Should he succeed in gaining the nomination against their opposition and in later wresting the seat away from National, he will be well-placed to make a rapid rise through Labour's ranks.  With Jonathan Young holding New Plymouth with a majority of only 105, Little has a very realistic chance of taking the seat, even in the face of National's solid polling.

90 day trial period to be extended

In his address to the National Party faithful on the weekend, John Key announced the Government's proposed industrial relations policy and related amendments to the Employment Relations Act 2000 (ERA) and Holidays Act 2003.

Most significant among the proposed changes is the extension of the 90-day employee trial period from businesses with 20 or fewer employees, to businesses of any size.  The proposal follows evaluations of the 90-day policy by the Department of Labour in October 2009 and May 2010.  The Department found that 74% of employees appointed under the policy retained employment beyond the 90 days, while 40% of employers stated they would not have hired a new employee if the 90-day policy was not in place. 

Other proposed changes to the ERA seek to improve the operation of the Employment Relations Authority to minimise frivolous and vexatious claims, promote the use of mediation and increase the scrutiny of claimants by allowing the Authority to conduct cross-examination.  A further ERA amendment would require union representatives to obtain the consent of employers before entering workplaces.

Employers, Key said, will not be able to unreasonably withhold consent.  The new arrangements are intended only to deal to deal with exceptional situations where union engagement has been provocative or disruptive.  The proposals are also intended to address workplace safety and productivity issues associated with unscheduled union visits.

Turning to the proposed changes to the Holidays Act, employees will be able to "cash up" one of their four weeks of annual leave.  That option will not be entirely discretionary, as employers will be able to decide whether they will allow cashing up.  Employees will also be able to negotiate with their employer to transfer public holidays to another day, in order to celebrate cultural or religious customs not classified as statutory holidays. 

The final proposed change is to enable employers to require proof of sickness or injury from employees suspected of "pulling a sickie".  This has come in response to the marked increase in absenteeism in some industries, most notably the meat industry where the mean days lost to sickness have increased at peak pay periods from three to five days.  The requirement must be communicated within three days of the sick leave being taken, and the employer must pay the employee's costs of obtaining proof (such as paying for a doctor's visit).

A Bill amending the ERA and Holidays Act is expected to be introduced later this year.  While the Government has stated the Holidays Act changes are expected to be implemented in July 2011, it has yet to set down a date for the ERA reforms, stating that an enactment date will be announced as the Bill progresses through Parliament.  Given the contentious nature of some of the reforms, it is likely the Government will want to implement any changes before election year in 2011.

Progress Of Legislation

New Bills

New Zealand Productivity Commission Bill  
Type of Bill: Government
Member in charge:  Name missing - was it Hide?
This Bill would establish the New Zealand Productivity Commission, with the purpose of improving productivity in both the public and private sectors. See the above article for further detail. 

 

Open for submissions

Bill

Select Committee

Submissions close (2010)

Report due (2010)

Education Amendment Bill (No 2)

Education and Science

6 August

1 November

Hamilton City Council (Parana Park) Land Vesting Bill

Local Government and Environment

30 July

16 December

Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Bill

Local Government and Environment

30 July

16 December

 

Submissions not yet called

Land Transport (Driver Licensing) Amendment Bill
Marine Reserves (Consultation with Stakeholders) Amendment Bill

Submissions closed

Bill

Select Committee

Report due (2010)

Arms Amendment Bill (No 3)

Law and Order

26 November

Child and Family Protection Bill

Justice and Electoral

11 August

Christ's College (Canterbury) Amendment Bill

Government Administration

17 September

Commerce Commission (International Co-operation, and Fees) Bill

Commerce

25 November

Copyright (Infringing File Sharing) Amendment Bill

Commerce

22 October

Courts and Criminal Matters Bill

Law and Order

19 November

Education (Freedom of Association) Amendment Bill

Education and Science

30 September

Electoral (Finance Reform and Advance Voting) Amendment Bill

Electoral Legislation

6 November

Electoral (Disqualification of Convicted Prisoners) Amendment Bill

Law and Order

21 October

Electoral Referendum Bill

Electoral Legislation

22 October

Employment Relations (Rest Breaks and Meal Breaks) Amendment Bill

Transport and Industrial Relations

29 October

Employment Relations (Workers' Secret Ballot for Strikes) Amendment Bill

Transport and Industrial Relations

21 October

Fair Trading (Soliciting on Behalf of Charities) Amendment Bill

Commerce

9 December

Franklin District Council (Contribution to Funding of Museums) Amendment Bill

Local Government and Environment

29 October

Local Government Act 2002 Amendment Bill

Local Government and Environment

4 November

Marine Reserves Bill

Local Government and Environment

30 December

New Zealand Public Health and Disability Amendment Bill

Health

19 November

Rugby World Cup 2011 (Empowering) Bill

Government Administration

22 December

Sale and Supply of Liquor and Liquor Enforcement Bill

Justice and Electoral

1 October

Sale of Liquor (Objections to Applications) Amendment Bill

Social Services

30 September

Search and Surveillance Bill

Justice and Electoral

29 October

Securities Trustees and Statutory Supervisors Bill

Commerce

24 September

Social Assistance (Future Focus) Bill

Social Services

30 July

Sustainable Biofuel Bill

Local Government and Environment

29 July

Tariff (New Zealand-Hong Kong, China Closer Economic Partnership Agreement) Amendment Bill

Foreign Affairs, Defence and Trade

29 July

Television New Zealand Amendment Bill

Commerce

29 October

Trans-Tasman Proceedings Bill

Justice and Electoral

29 July

 

Bills Awaiting Second Reading

Bills that have recently been reported back to the House from a Select Committee are in bold and the Select Committee reports on these Bills are linked.

Antarctica (Environmental Protection: Liability Annex) Amendment Bill
Aquaculture Legislation Amendment Bill (No 2)
Children, Young Persons, and Their Families Amendment Bill (No 6)
Dog Control Amendment Bill (No 2)
Electricity Industry Bill
Electricity (Continuance of Supply) Amendment Bill
Human Assisted Reproductive Technology (Storage) Amendment Bill
Inquiries Bill
Insurance (Prudential Supervision) Bill
Limitation Bill (Report of the Justice and Electoral Committee)
Māori Trustee and Māori Development Amendment Bill
Oaths Modernisation Bill
Patent Attorneys Bill
Patents Bill
Privacy (Cross-border Information) Amendment Bill
Private Security Personnel and Private Investigators Bill
Public Health Bill
Public Works (Offer Back of and Compensation for Acquired Land) Amendment Bill
Radio New Zealand Amendment Bill
Rail Network Bill
Regulatory Responsibility Bill
Reserves and Other Lands Disposal Bill
Statutes Amendment Bill (divided into 47 bills.  See also SOPs 125, 126, 127, 143 and 148)
Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill
Therapeutic Products and Medicines Bill
Trade (Safeguard Measures) Bill
Trade Marks (International Treaties and Enforcement) Amendment Bill
Trustee Amendment Bill
Whanganui Iwi (Wanganui (Kaitoke) Prison and Northern Part of Wanganui Forest) On-account Settlement Bill  

Bills Awaiting Third Reading

Cultural Property (Protection in Armed Conflict) Bill
Gambling Amendment Bill (No 2)
Infrastructure Bill
Motor Vehicle Sales Amendment Bill
Ngāti Apa (North Island) Claims Settlement Bill
Residential Tenancies Amendment Bill (see also SOPs 110 and 120)
Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill (see also SOPs 105, 144)

Acts Assented

47 Acts divided from the Statutes Amendment Bill:

Animal Welfare Amendment Act 2010
This Act amends the way in which offences relating to the ill-treatment and neglect of animals are prescribed.  It increases the maximum penalty for the wilful ill-treatment of animals from three to five years' imprisonment, or a fine not exceeding $100,000 for an individual or $500,000 for a body corporate.  For other ill-treatment offences, the Bill increases the maximum penalties to imprisonment for 12 months (up from six months).  It also creates a new offence of reckless ill-treatment of an animal, which carries maximum penalties of three years' imprisonment or fines of $75,000 or $350,000.  

Courts (Remote Participation) Act 2010
This Act enables greater use of audio-visual links in New Zealand courts.

Financial Advisers Amendment Act 2010
This Act was divided from the Financial Service Providers (Pre-Implementation Adjustments) Bill, and makes a broad range of major amendments to the Financial Advisers Act 2008.  The Bill was also amended by SOP 146.

Regulations

Climate Change (Eligible Industrial Activities) Regulations 2010
Climate Change (Pre-1990 Forest Land Allocation Plan) Order 2010
Commodity Levies (Winegrapes) Order 2010
Customs and Excise (Rules of Origin for Malaysia Free Trade Agreement Goods) Amendment Regulations 2010
Double Taxation Relief (Belgium) Amendment Order 2010
Local Government (Infringement Fees for Offences: Waikato Regional Council Navigation Safety Bylaw) Amendment Regulations 2010
Local Government (Tamaki Makaurau Reorganisation) Mayoral Electoral Expenses Regulations 2010
Penal Institutions (Dunedin Prison) Revocation Notice 2010
Securities Act (PGG Wrightson Finance Limited) Exemption Notice 2010
Takeovers Code (A2 Corporation Limited) Exemption Notice 2010
Takeovers Code (Infratil Limited) Exemption Notice 2010
Tariff (Malaysia Free Trade Agreement) Amendment Act 2010 Commencement Order 2010

In The Week Ahead

This week the House returns from a two week recess.  The Governor-General Bill will receive its first reading, the Residential Tenancies Amendment Bill will be passed, the Electricity Industry Bill will receive its second reading, and the Infrastructure Bill will likely be passed.  The Food Bill, the Legislation Bill and the Arts Council of New Zealand Toi Aotearoa Bill should also each receive their first readings.

In Committee

Select Committees have been largely dormant with the House in recess.

Electoral Legislation Committee  

The Committee has been hearing submissions on the Electoral Referendum Bill and the Electoral (Finance Reform and Advanced Voting) Bill.  Submissions on the former emphasised the need for a wholesale review of MMP to be undertaken before asking people to vote on it.  On the latter Bill, Andrew Geddis spoke to the Committee, and submitted that he wanted to see a fixed election date, greater clarity on whether something was an election advertisement, and that there should be limits to what promoters could spend. Other concerns raised by submitters on the Electoral (Finance Reform and Advanced Voting) Bill were the inconsistency between restrictions on television / radio advertising and other types of election advertising, and the need for the Electoral commission to be provided with powers to ensure compliance.

In Other News

Ministry of Justice to review claim of right defence

Justice Minister Simon Power has announced the Government will move to either amend or repeal the claim of right defence, which was successfully invoked by three defendants who damaged government property at Waihopai spy base in April 2008. 

The defence can be used to avoid criminal liability for a number of property offences.  Typically, defendants will have a proprietary interest in the damaged property.   Defendants need to establish that they believed (even mistakenly) that the act causing the damage was lawful; in other words, that they had a "claim of right" to cause the damage.  The prosecution then faces the burden of proving that the defendant does not have a claim of right.

In most cases, the prosecution's burden is not an issue, as the defendant will have a proprietary interest in the property, and the prosecution will need to show that the defendant did not genuinely believe that the damaging act was lawful.  However, the Waihopai case was unique because the three defendants did not have an interest in the spy base.  Rather, they argued that damaging the base was lawful because they sought to protect Iraqi civilians who they believed were being harmed by intelligence relayed through the base.  This made it very difficult for the prosecution to prove beyond reasonable doubt that the accused did not genuinely believe their actions were lawful.

Consequently, a preliminary report from the Ministry of Justice recommends five options for the Government.  The first option is repeal of the defence.  The remaining four options are to amend the defence by shifting the burden of proof to the defendant; adding a "reasonableness" element to the defendant's belief; adding a property interest requirement to invoke the defence; or amending existing offences which have claim of right as an element.  Any amendments are likely to align with overseas trends in applying the defence.  A reform or repeal option is likely to be selected in October this year.

Government backs down on mining Schedule 4 land

Ministers Gerry Brownlee and Kate Wilkinson have announced that the Government will not remove any land from Schedule 4 of the Crown Minerals Act for the purposes of further mineral exploration or extraction.  For the past eight weeks the Government has undertaken a consultation period, receiving 37,552 submissions on its discussion paper.  The overwhelming majority of submitters were opposed to the proposal to remove 0.2 percent of land from Schedule 4 to allow for mining on those sites. 

The Government has also agreed to continue with its proposal to add 14 areas totalling 12,400 hectares of land to Schedule 4.  In addition, in the future all areas given classifications equivalent to current Schedule 4 areas, including national parks and marine reserves, will be automatically added to Schedule 4. 

Although backing down from proposals to mine the sensitive conservation land contained in Schedule 4, Gerry Brownlee insists that huge potential remains to extract New Zealand's mineral wealth.  The Government has decided to undertake an aeromagnetic survey of non-Schedule 4 land in Northland and on the West Coast of the South Island as alternative areas for mineral exploration and extraction.

For further information on this, click here to view Russell McVeagh's Mining Update that was released today.

Productivity Commission Bill introduced

Last week the New Zealand Productivity Commission Bill was introduced into Parliament, which establishes the New Zealand Productivity Commission and sets out its functions and powers.  This Bill has been driven by Regulatory Reform Minister Rodney Hide, and forms part of his broader regulatory reform agenda.  The Commission was part of the National-ACT confidence and supply agreement signed after the 2008 election, and Budget 2010 confirmed that the Government will provide $2.4 million in 2010/11 for the Commission, rising to $5 million in 2012/13.

The Commission will be an independent Crown Entity with internal investigative capacity and a mandate to undertake inquiries and regulatory reviews.  It will be an alternative source of independent policy advice on opportunities to improve economic performance through addressing constraints and exploiting opportunities.  Its primary functions will be to hold inquiries and conduct reviews of regulatory regimes on referral by the responsible Minister, and its secondary functions will be to undertake and publish its own research and promote public understanding of productivity-related matters.  The Commission will be headed by three or four Commissioners, and will have approximately 20 staff.  It is expected to cooperate with its Australian counterpart, the Australian Productivity Commission, on matters of mutual interest. 

The Productivity Commission will be able to assess the performance of the Commerce Commission, and could have a prominent role in the development of regulatory frameworks, which should reduce the need for the Commerce Commission to continue the policy advocacy role it seems to have assumed.  The Productivity Commission will ensure the Government receives independent and objective advice with a focus on all sectors. 

Reserve Banks fund

A new five-year Funding Agreement ratified by Parliament today ensures the Reserve Bank has resources for its existing and expanded roles, while reflecting tight control of underlying costs, Governor Alan Bollard said.

Unlike other Government agencies, the Bank’s operating expenditure is funded from income from investments under a five-year funding agreement between the Minister of Finance and the Governor, reflecting the Bank’s operational independence.

The current Funding Agreement, signed in April 2005 and varied in April 2008, expired at the end of June 2010.  The new Funding Agreement sees the Bank’s operating expenditure increase from $46.9 million in 2009-10, to $47.8 million in 2010-11, and then increasing to $56.4 million by the final year, 2014-15.

Dr Bollard said the increase in expenditure reflects additional responsibilities Parliament has given, or is in the process of giving, to the Bank, as well as the initial stages of an upgrade of New Zealand’s bank notes, and the establishment of an office in Auckland.

“The Bank has been given responsibility for the prudential regulation of non-bank deposit takers, and, if legislation passes, will shortly take on responsibility for prudential oversight of insurers.  We also have a new role to play in anti-money laundering and countering the financing of terrorism,” Dr Bollard commented.

“The new Funding Agreement provides for the early stages of an upgrade of New Zealand’s bank notes, which will be 15 years old by the end of the agreement.  A new small office is also being established in Auckland to ensure on-going provision of key banking and market services in the event of a natural or infrastructure crisis in Wellington.”

Dr Bollard said the new five-year Funding Agreement has been negotiated in an environment of considerable scrutiny.  The Bank was required to demonstrate value for money and tight control of underlying costs.

You can read the Funding Agreement here.

In Consultation

New

Who

What

By when… (2010)

Biosecurity New Zealand

Draft import health standard for sand tiger sharks (Carcharias taurus) from all countries

13 August

Department of Building and Housing

Dam Safety Review

14 August

Code Committee for Financial Advisers

Second draft of the Code of Conduct for Authorised Financial Advisers

21 July

Electricity Commission

Draft 2010 Statement of Opportunities

6 August

Ministry of Fisheries

Proposed 2010-11 In-Season Review of the Total Allowable Catch for the Coromandel Scallop Fishery

28 July

2010 Review of Sustainability Measures, and other Management Controls for Selected Deepwater Stocks

4 August

Amended Application for Kura Te Au / Tory Channel Mataitai Reserve

20 August

Food Standards Australia New Zealand

Food derived from Insect-resistant and Herbicide-tolerant Cotton Line GHB119

16 August

Inland Revenue Department

Interest repayments required as a result of the early repayment of a financial arrangement - deductibility

13 August

Dispute resolution process

20 August

Marine Fender Systems - Draft Depreciation Determination

31 August

Standards New Zealand

Radiocommunications equipment used in the UHF citizen band radio service

10 September

Guards and patrols

16 September

 

Current

Who

What

By when… (2010)

Biosecurity New Zealand

Draft import health standard on the issuance of import health standard for bovine semen and embryos

2 August

Further consultation on the American Foulbrood National Pest Management Strategy

6 August

Draft import health standard for zoo lizards and zoo lizard hatching eggs from Australia

11 August

Commerce Commission

Draft decisions on input methodologies: electricity distribution services

6 August

Draft decisions on input methodologies: gas pipeline services

6 August

Input methodologies and individual price-quality path for Transpower

6 August

Department of Conservation

Kauri National Park proposal

tbc

Draft Guidelines for Aircraft Access for Canterbury Conservancy

Ongoing

Ministry of Consumer Affairs

Consumer law reform discussion paper

30 July

Ministry of Economic Development

Proposed variation to Telecom's Operational Separation Undertakings

23 July

Electricity Commission

Normal frequency - generator asset owner performance obligations

30 July

Frequency keeping cost allocation

30 July

Part D of the Electricity Governance Rules 2003 - Metering

20 August

Ministry for the Environment

Draft regulations for reporting landfill methane emissions under the NZ Emissions Trading Scheme

23 July

Ministry of Fisheries

Proposed harvest management measures to support the introduction of KBB3G and KBB4G to the quote management system on 1 October 2010

23 July

Review of sustainability measures, deemed values and other management controls for the 2010/11 fishing year

26 July

Review of sustainability measures for all Kahawai stocks

13 August

New Zealand Food Safety Authority

Poultry Code of Practice

23 July

Review of the Food (Tutin in Honey) Standard 2008

30 July

Proposals to amend the New Zealand (Maximum Residue Limits of Agricultural Compounds) Food Standards 2010

4 August

Food Standards Australia New Zealand

Nutrient reference values (NRVs) in the Australia New Zealand Food Standards Code

30 July

Inland Revenue Department

GST - legal services provided to non-residents relating to transactions involving land in New Zealand

23 July

Making tax easier discussion document

23 July

Privacy Commissioner

Proposed amendment to the Credit Reporting Privacy Code 2004

13 August

Reserve Bank of New Zealand

Corporate governance for registered banks

27 August

Securities Commission

Review of Securities Law - replacing the Securities Act 1978 and the Securities Markets Act 1988

20 August

Standards New Zealand

Safety of information technology equipment

23 July

Industrial, scientific and medical equipment - radiofrequency disturbance characteristics

28 July

Bond performance of structural adhesives for timber

28 July

Records management - physical storage

28 July

Structural design actions

3 August

Radiofrequency fields

9 August

Underground fire hydrants

16 August

Technical management programs for medical devices

19 August

Electrical hazards on metallic pipelines

20 August

Safe working on or near low-voltage electrical installations and equipment

23 August

Takeovers Panel

Parts 1 to 5 of the Takeovers Code

30 July

New Zealand Transport Agency

Puhoi to Wellsford highway

26 July

Treasury

Regulatory Responsibility Bill

27 August

 

This publication is included in Russell McVeagh's website : www.russellmcveagh.com

This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact:

TIM CLARKE - Partner
Ph 04 819 7532
tim.clarke@russellmcveagh.com

DOUG BAILEY - Consultant
Ph 04 819 7572
doug.bailey@russellmcveagh.com

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