Hon DAVID CARTER (National) : I wonder whether the Minister could take a call relatively early in the debate. There has been an issue around Supplementary Order Paper 188, which has been tabled by the Māori Party and which concerns the independent review being made available before any decision is made to finalise and ratify the import health standard around honey. The Primary Production Committee was well aware of this issue, and it moved amendments through the select committee process that the select committee understood would mean that the bee-keeping industry would certainly have the satisfaction of an independent review prior to the law being enacted. The select committee, I think from memory, came up with a scheme whereby there was to be a 90-day period after enactment before this import health standard would be established, in which case it was hoped that the independent review would have been completed. As I understand it, the Māori Party has now moved an amendment that, in effect, tries to strengthen this particular amendment to make sure that that happens before the final enactment. It is also my understanding that, during the day and subsequent to a question answered by the Minister in the House within the last hour, a further amendment is being tabled by the Minister that will satisfy the concerns of the Māori Party. Therefore, to hasten the debate today, it would be helpful if the Minister would take a call and explain whether that amendment has actually been laid on the Table and whether it is available for us to peruse.

Hon JIM ANDERTON (Minister for Biosecurity) : I thought Supplementary Order Paper 194 had been laid on the Table, to be honest, but I have a copy here, which I will lay on the Table now. Perhaps I could help the Committee by just going through it quickly and making sure that a copy is available to members.

The Māori Party had tabled Supplementary Order Paper 188, which seeks to alter the period during which Australian honey may not be imported so that the period extends until 90 days after the independent review panel established under new section 22A—to be inserted into the Biosecurity Act by new clause 5A—becomes operational. The Supplementary Order Paper that the Māori Party has laid on the Table appears to be based on a misunderstanding about the independent review being offered to the National Beekeepers’ Association. The review being offered to the Beekeepers’ Association will commence as soon as possible. The Ministry of Agriculture and Forestry has already met with the Beekeepers’ Association to discuss aspects of the review, and both parties wish to see it proceed quickly. The review will be similar in nature to the independent review process that is to be developed under the new section 22A of the Biosecurity Act, but there is no reason to delay the review until that process is established. Therefore, there is no logical connection between the formation of an independent review panel under the new section 22A and the commencement of the 90-day period under clause 7A.

The Government is proposing an alternative Supplementary Order Paper, Supplementary Order Paper 194, which will ensure that the import health standard on honey is not validated until after the review process has been completed. The words to this effect are: “To omit this clause (lines 13 to 19 on page 4) [of clause 7A] and substitute the following clause:”—which I will lay on the Table. This new clause 7A, “Suspension of power to give biosecurity clearance”, states: “Despite section 7, no biosecurity clearance may be given under section 26 of the principal Act for any goods to which the Import Health Standard for the Importation into New Zealand of specified Bee Products from Australia, dated 2 August 2006 applies until the Director-General has—(a) received a report from an independent review panel set up in consultation with the National Beekeepers Association of New Zealand to consider the scientific evidence in dispute in relation to that import health standard; and (b) determined whether any amendment to that import health standard is necessary to achieve the purpose of Part 3 of the principal Act; and (c) publicly notified that determination.” The explanatory note states: “This Supplementary Order Paper [of the Government] amends clause 7A to provide that no biosecurity clearances may be given until an independent review panel has conducted a review, as provided for in paragraph (a), and the Director-General has made, and publicly notified, the necessary determination.”

This amendment, in the view of officials from the Ministry of Agriculture and Forestry and Biosecurity New Zealand whom I have discussed this with, deals more appropriately with the issue raised by the Māori Party than its original Supplementary Order Paper does. We recommend this amendment to the Committee.

SHANE ARDERN (National—Taranaki-King Country) : I thank the Minister in the chair, the Hon Jim Anderton, for his explanation, which does clarify the situation substantially. As he would be aware, the bee-keepers were very concerned that the proposed bill as it came back from the Primary Production Committee deliberately did not cover that matter off as clearly as it might have. But clearly there was an understanding within the select committee and from officials that what the Minister has outlined will, in fact, happen. So it is very good to see that that matter has been cleared up.

I will spend a couple of moments talking about some of the issues that are still outstanding. One of them is the whole issue of the pork import health standard. I understand that the industry has some grave concerns that the review process will not be in place simultaneously—I guess that is the way to put it—with the promulgation of the import health standard that is before Ministry of Agriculture and Forestry officials at this point in time. The industry would like an assurance that it will be given the opportunity to have access to the independent review process prior to its import health standard being given the green light by the director-general of the Ministry of Agriculture and Forestry. The select committee, once again, understands that the industry will be given that opportunity. The Minister might also want to indicate in the Committee whether he has any knowledge on that at this point, in order to clear up the matter of the import health standard for the pork industry—that is the importation of uncooked or unprocessed pork—and whether it will have the opportunity to go through the independent review process before its import health standard is confirmed. I understand that is the case, but the Minister may want to clear it up for the industry, as well. I know that Ministry of Agriculture and Forestry officials are talking with industry representatives at the moment.

The whole issue of import health standards is one that has gone reasonably well in New Zealand, except for the fact that there have been a few breaches. People can understandably draw conclusions on that and on whether or not the policing of the standards is robust. But to bring it into context, the officials advised the select committee—and I congratulate them on their fine work in the select committee and recognise their input into this process—that about 400-odd import health standards have been either put in place or ticked off in the last 4 or 5 years, and only two of them have been highly controversial. That is not a bad record and it puts things into context.

This legislation, in my view, and particularly this independent review panel, will go some way in giving those in that industry who feel as though they have not had a fair process, whomever they may be, when they trigger the controversial lever, as it were—and there have been only two of 400 in the last 5 years or thereabouts that have fallen into that category—the opportunity to go back to that independent review process. It will give them the opportunity to have their day in front of those whom the industry, and Biosecurity New Zealand in consultation, deem to be experts—those who know what they are talking about in this matter.

In setting up the independent review panel for the bee-keepers, it would appear to me that at least one or two of the people they recommend should be on that panel—and I presume one of them could be Dr Mark Goodwin, although I do not know; that is their decision. They may have someone else. I suspect that that will be the case. I do not necessarily mean that the view of that individual or his or her chosen people needs to be upheld, but it clearly would bring the independence that I think was the intent of the select committee—and, indeed, Parliament—if this bill is passed. It will make that process more transparent. I hope that will be the case; I suspect that that is where it is heading. I thank the Minister for his clarification earlier.

Hon JIM ANDERTON (Minister for Biosecurity) : I thank the member for that support. I heard the request about the pork industry’s import health standard and whether it will be subject to the same procedure as we are going through now for the Australian honey import health standard. The answer is yes, it will; it will be subject to exactly the same procedures we are going through now.

Dr ASHRAF CHOUDHARY (Labour) : There is no doubt that as New Zealanders travel widely around the world, as our trade increases, and as climate change happens, there are increasing risks to our biosecurity. There is no doubt about that. Clearly, the Government has to take the lead in protecting our plants, environment, and climate from these likely changes.

I will take up some of the challenges put forward by the Green Party and Māori Party, which are opposed to the Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill. I was surprised that we did not see any member from those parties actually taking part in the consideration of this bill at the Primary Production Committee. I wish they had actually taken part and had heard the submitters. A number of submitters, particularly those from the bee-keeping industry and pork industry, had very strong views about it; there is no doubt about that. The select committee heard all these views and took those concerns back to the officials from the Ministry of Agriculture and Forestry, the Environmental Risk Management Authority, and the Ministry of Foreign Affairs and Trade. We also took advice from Crown Law and the Legislation Advisory Committee. We were told clearly that because of the court case there was no way we could go ahead without making relevant changes to this bill. We have to make amendments so that we can make sure that some of these organisms coming in as passengers—or what I call stowaways—into the country can be better dealt with by the Biosecurity Act rather than by the Environmental Risk Management Authority and Hazardous Substances and New Organisms Act. In this case, the Environmental Risk Management Authority cannot do the kind of evaluation that the Ministry of Agriculture and Forestry people can do. These organisms do not come under the Hazardous Substances and New Organisms Act, which states that any intentionally imported new organism has to be dealt with by the Environmental Risk Management Authority.

The committee had about 50 submitters, and 15 of them wanted to be heard, which we did. In fact, we had additional meetings to deal with this issue, because there was a shorter time frame for us. The committee did an excellent job, particularly in proposing to set up a scientific panel. The Ministry of Agriculture and Forestry is supposed to do that as soon as the enactment of this bill happens. The panel can have people from overseas. I would suggest that there are not many scientists in New Zealand—perhaps one or two—who know a lot about honey. The panel might have to comprise some people from overseas. It is up to the Ministry of Agriculture and Forestry to look around for these scientific people to look into this issue.

Overall, this bill is a very good amendment to clarify what the Environmental Risk Management Authority can do and what the Biosecurity Act can do through the Ministry of Agriculture and Forestry people. I commend this bill to the Committee.

The CHAIRPERSON (Hon Marian Hobbs): Before the member begins, can we make sure we are talking about new clause 2A. I do not want us to take off into Part 1.

METIRIA TUREI (Green) : Yes, I was just about to clarify that. Thank you, Madam Chair. I will address new clause 2A and the Supplementary Order Paper in the name of Tariana Turia on new clause 2A. The Green Party was interested in the way this bill progressed through the select committee and was dismayed, as is obvious from my colleague Jeanette Fitzsimons’ second reading speech, at the extent to which I think we were misled about the true intentions of this legislation. In our view, it is designed to enable a much easier process for the recognition of an allowance of genetically engineered organisms into our country by providing that the Ministry of Agriculture and Forestry can deal with those kinds of organisms, where they are known, as the bill sets out.

I know we were told that this bill specifically excludes genetic organisms, and that there is a provision that does that. We also know, from previous drafts of the legislation and previous reports from officials, that it was originally intended for genetically modified organisms to be included and to be allowed through this process. We have absolutely no faith at all that this process provides any protection for New Zealand, for our biodiversity, or for our primary sector to be protected from genetically modified incursions if the Ministry of Agriculture and Forestry is the organisation that deals with these issues, rather than the Environmental Risk Management Authority, whose job it is to consider these things.

The Supplementary Order Paper concerning new clause 2A proposes a sunset clause, and we fully support that. We believe this legislation needs to be repealed at a defined date in the future, so that issues raised that were not properly canvassed through the select committee process can be properly canvassed through that process. It is clear, from the very short period of time that submitters had to make submissions on the bill, that it would have been very difficult for them to canvass all of those issues, particularly where there may have been some misinformation about the full intention or the likely intention of the ministry and the legislation. We agree that a sunset clause should be defined in the legislation so that it fails at a period in time, and that there is a requirement for the ministry to deal properly with these issues.

We are particularly concerned for the primary sector, because they all oppose this legislation. It is not often that the Greens and the primary sector agree on significant issues like this, but on this one we do. We fully support the primary sector’s concerns that if the ministry is left to deal with these organisms and to provide the proposals and processes to allow them into the country, the sector will be at serious risk of organisms that are known to cause risks to it.

Frankly, it is very surprising to see both the National Party and the Labour Party supporting legislation that will put our primary sector at risk, because this is what this legislation will do. Unless there is a clearly defined mechanism for ensuring this legislation fails at some point in the future, so that the work is done to provide the proper protections for the primary sector so that it is not subject to the kinds of risks that this legislation will allow, we are putting one of our major export earners at serious risk.

The Greens have concerns about other areas to do with the primary sector, as is well known. We do not want to see its destruction through poor environmental management—which is always our concern—or through incursions of organisms, through a process that fails to provide a proper precautionary system or to properly assess the risks of those organisms to that sector. It is amazing that National and Labour will be prepared to put that sector at such risk, with such little consideration for what is some kind of turf war, maybe, or some strange turf thing going on between the Ministry of Agriculture and Forestry and the Environmental Risk Management Authority. Why would the two older parties in this Parliament be prepared to put our primary sector at such risk?

Hon DAVID CARTER (National) : I will speak specifically to new clause 2A, the amendment proposed by the Hon Tariana Turia, but first of all I make a comment in response to the Green member Metiria Turei. She is correct that the Primary Production Committee received a large number of submissions that were initially opposed, but the amendments that have been developed through the select committee process go a long way towards satisfying the submissions received by the select committee. The select committee wanted some independence in the process, because it felt that the Ministry of Agriculture and Forestry was both judge and jury in finally determining import health standards. The select committee has delivered that with the amendments now before the Committee.

The second point I make is around the sunset clause proposed by the Hon Tariana Turia, and I thank her for the opportunity of meeting with her this morning to discuss this. The select committee considered the necessity of a sunset clause on the legislation, and would have proceeded with such a notion if it did not have confidence that it had got this legislation correct through the select committee process. The only time we would impose a sunset clause is if we did not think we had done a good enough job at the select committee. I think the select committee has done a very credible job. I think the interface between the two pieces of legislation, the Hazardous Substances and New Organisms Act and the Biosecurity Act, was clearly imperfect—as demonstrated by the Court of Appeal decision. I think the amendments as proposed before the Committee today greatly change the original bill as submitted to the House. I think the interface now properly reflects what Parliament intended when it passed those two pieces of legislation—the Biosecurity Act and the Hazardous Substances and New Organisms Act. It is my belief that a sunset clause is absolutely unnecessary, and on that basis the National Party will certainly not be supporting its proposition.

I conclude by making one other point—and the select committee commentary makes note of this. It is now within the Ministry of Agriculture and Forestry’s programme to consider a complete review of the Biosecurity Act, and that is appropriate. This is important legislation that should be above politics. It is important legislation that protects the biosecurity of this country, but it also allows the flow of goods into the country. We must achieve that balance. The correct review of the Biosecurity Act will occur under a time frame whereby negotiation and consultation will take place with stakeholders. That is the appropriate process, rather than this guillotine approach of a sunset clause. As I said earlier, a sunset clause would be suitable only if we did not have confidence that the legislation as presented back will more than satisfy the concerns of most of the industry.

Hon JIM ANDERTON (Minister for Biosecurity) : I speak quickly on the amendment to insert a sunset clause in the bill, as set out on the Māori Party’s Supplementary Order Paper. Firstly, with all respect, there is no need for this sunset clause. The amendments in the Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill do no more than ensure that the Ministry of Agriculture and Forestry’s longstanding role in managing the risks associated with new passenger organisms is maintained. It does not change anything over what the House originally believed was the practical situation in law. The bill will not lower the level of biosecurity protection for New Zealand, as the Ministry of Agriculture and Forestry will continue to carefully manage the risks in the same way it always has. There is no change required, because there is no change intended.

I turn to the Green Party member Metiria Turei’s comments. Firstly, when we are addressing ministries and we are suggesting that there is some kind of collusion of officials in Government departments to do something after the election, it would be a good idea to get its name right. There has not been a Ministry of Agriculture and Fisheries since 1995, but I have a statement here dated today from the Green Party suggesting the Ministry of Agriculture and Fisheries is doing something. There is no such ministry, and there has not been for 13 years. That is No. 1. It is not all that credible when one cannot even get the name of the ministry right.

The second thing is that there is no conspiracy possible here. The Green Party is suggesting that the officials in the Ministry of Agriculture and Forestry and Biosecurity New Zealand are somehow going to do something after the election, as though they are elected members who have some authority to change things after the election. They do not stand for election. That is why there are officials in a Government department. They operate under the mandate of the Government of the day. These officials serve this Government. They will equally loyally serve the next Government. If it is the same Government returned, then they will honour the policies of that Government. If it is a new Government, then they will honour those policies. I have been here long enough to know that that is a fact. Sometimes I wish it was not, but it clearly is. To suggest that the officials in the Ministry of Agriculture and Forestry and Biosecurity New Zealand are running around planning some kind of coup against the Government—whatever that Government might be—is simply ridiculous. That is some kind of mad conspiracy theory.

I suggest the Green Party gets a grip on reality. I ask its members to acknowledge the fact that this is a necessary, pragmatic change. The Green Party itself acknowledged the Court of Appeal decision. The Green Party said that the court’s decision may well make the administration of Biosecurity New Zealand virtually impossible. They said that and they said: “Well, that’s what our interpretation of the law is. If you want to change it so that you can actually have an effective biosecurity system, you will have to change it by parliamentary legislation.” That is exactly what we are doing. If there is a conspiracy here, it is a conspiracy between the Court of Appeal, the present Government elected members, the National elected members, and the officials in the Ministry of Agriculture and Forestry and Biosecurity New Zealand. Now, how likely is that? It is not very likely, I would suggest.

METIRIA TUREI (Green) : I do not know what Jim Anderton is talking about; those kinds of criticisms are ridiculous and pathetic, and they do not get us anywhere in the debate. This debate is about the protection of the New Zealand environment and of the primary sector from the incursions and damage that known organisms brought in as passengers on other kinds of goods or products may pose to those sectors, and about how to best manage and control the risks of those known organisms. I am aware that we are speaking about the commencement clause. The Greens support the proposal to impose a sunset clause on this legislation, because the public have not been made aware of those issues, which have been kept from the public on purpose.

I want to refer to some comments that were made by my colleague Jeanette Fitzsimons in her second reading speech in terms of the conspiracy theory proposed by Jim Anderton. We know that draft discussion documents were prepared in February 2006 and November 2006. So 2 years ago those documents were prepared about how to manage the control of these kinds of organisms. The Ministry of Agriculture and Forestry and the Minister have been waiting for an opportunity to bring this legislation forward. They found it in the court case, and they are using that as an excuse to do what they have been preparing to do now for at least 2 years. Those draft discussion documents of 2006 were entitled “Fixing problems in new organisms, including genetically modified organisms, unintentionally introduced in New Zealand”. What is meant by “unintentionally” is not “unknown”; what is meant is “not purposely or deliberately brought into the country”.

It is quite clear from those papers that the intention was always that genetically modified organisms should be included in this legislation. It is quite clear that they have now been excluded from this legislation, which has been in preparation for some years, because it is an election year and the Government knows that it simply cannot allow a process that would let known but unintentionally imported genetically modified organisms come into New Zealand through a very core process that is run by the Ministry of Agriculture and Forestry and not by the Environmental Risk Management Authority, which is responsible in law for managing these issues.

Of course, one can expect that once this bill has passed and the election is over, if Labour gets back into any kind of Government it will then have the opportunity to amend this legislation and allow the Ministry of Agriculture and Forestry to consider using a very poor, very low-risk assessment process for genetically modified organisms not deliberately brought in, but knowingly and unintentionally brought in as passengers on other imported goods. That was the intention when this legislation was first proposed in 2006. The policy behind this legislation was to enable genetically modified organisms to be brought into this country using the biosecurity legislation to allow them through.

Now the Government is using the issue to do with Paenibacillus alvei and the bee-keepers, and the court case surrounding that, as an excuse to bring in this legislation, knowing that if it gets back into power—and perhaps this is National’s intention too—it will then be able to modify the legislation in order to allow in genetically modified organisms. That is not a conspiracy theory; modifying the legislation in that way was proposed in the draft papers produced by the ministry responsible for this legislation. This is not some crazy conspiracy theory of Jim Anderton’s; this is his own ministry’s work and is clearly his and his ministry’s intention.

Again, I say the Green Party fully supports the clause that will kill this legislation dead in a defined period of time, so that the Government and the ministry have to work on a new set of provisions, and have to talk with the New Zealand public about their true intentions around genetically modified organisms. Otherwise this measure will sneak through under the public eye. That will mean that the public will not have a chance to truly know what is happening. There will be no transparent process, and no real opportunity to assess the risks of allowing Biosecurity New Zealand to do this—that is the problem.

Hon JIM ANDERTON (Minister for Biosecurity) : We are away from new clause 2A, I know, but the speech has been given so I have no choice but to respond. Now we have the conspiracy theory to this point. These officials at the front of the Chamber have been waiting for the Court of Appeal to have a case that it makes a decision on, which presumably they knew in advance, and when the court makes that decision, they will strike. So this is their strike! But having struck now, they are going to strike again after the election! So which is it: are they striking now, or striking after the election in collusion with the Court of Appeal? This is not my mad scenario, I suggest to the member from the Green Party; it is what she is telling the Committee. This is lunacy, if anyone thinks about it for more than 5 seconds.

Here is the point. If this is so nefarious, so dangerous, and so bad, why is the member of that party letting it go for another 18 months? She should be fighting against it right here and now, to stop it now, and it should be so bad that it could not possibly last another 18 months. Think of all the terrible things this conspiracy is going to do in the next 18 months! If the member adheres to her principles, she would not want it in for 1 second, let alone 18 months. But she is saying 18 months is OK but longer is not.

An awful lot of damage can be done in 18 months, but here is the point. What is the law? Let us get down to it. Here is what members are invited to vote for. They are invited to vote for incidentally imported new organisms to have certain requirements around them or not. The definition of incidentally imported new organisms is under clause 10(2). It clearly does not include “(a) an essential or constituent part of those goods: (b) imported in or on the goods with the intention of concealing the presence of the new organism:”. That is, these are not allowed in. These are not allowed in.

Thirdly, what is not allowed in is a genetically modified organism—which the member has just told us is coming in. We are asked to pass a law that says it cannot, and the member is voting against it, so presumably she wants genetically modified organisms in here, because this law says they cannot come in. What is wrong with that? If there is something about “cannot come in” that the Green Party does not understand, if there is something about a genetically modified organism not being able to come in that the Green Party does not understand, here it is in writing. I did not make this up; it is here printed for everyone to see. There is no conspiracy; it is clear as day. Why cannot the Green Party read that? It is pretty logical; even I—as a relative layperson in the biosecurity area—can understand that a genetically modified organism is not allowed. That is what the bill says. We are inviting the Green Party to honour its own policy. I do not think that is a hard call.

The CHAIRPERSON (Hon Marian Hobbs): I call the Hon Tariana Turia, who I expect will talk on new clause 2A.

Hon TARIANA TURIA (Co-Leader—Māori Party) : I am inspired to speak after listening to the Minister who, in fact, brought the Green Party into Parliament. Now, it seems, he is being stung.

Hon Jim Anderton: I brought the Māori Party into Parliament too, actually.

Hon TARIANA TURIA: I would doubt that. The Māori Party put forward Supplementary Order Paper 188 in my name regarding the sunset clause because we are not convinced that the bill addresses the statutory gap that exists between the Biosecurity Act and the Hazardous Substances and New Organisms Act in approving the introduction of new organisms. The example of Australian honey is a classic example of why this Supplementary Order Paper is required.

Members will recall that the National Bee-keepers’ Association presented the case that Australian honey needed to get clearance under the Hazardous Substances and New Organisms Act due to the presence of a new organism, Paenibacillus alvei. As history now shows us, that position was supported by the Court of Appeal. However, as was reported by the Primary Production Committee, the Environmental Risk Management Authority is unable to carry out such an assessment on Paenibacillus alvei,because of both the limited provisions of the Hazardous Substances and New Organisms Act and the paucity of scientific data on the organism. Instead, this bill provides that clearance for the import of Australian honey will be assessed under the less stringent Biosecurity Act.

The Māori Party considers that the current statutory scheme is unable to address the biosecurity concerns associated with Paenibacillus alvei, and it is precisely because there is a lack of certainty around the risks associated with Paenibacillus alvei that a rigorous assessment process needs to be undertaken. We will not compromise on standards and just accept that because the risk cannot be categorically stated, it will be assumed to be OK. That is not the way to keep our bees or our country safe. We need to ensure that such important decisions are made using the very best information available about environmental risk, and if that information is not available, then research needs to be commissioned in order to establish the degree of risk. The Māori Party seeks to introduce a sunset clause of 18 months as a means of achieving the space and time needed to cover all the bases. We cannot afford to be complacent. We must not ignore the fact that many submitters expressed serious concerns over this issue to the Primary Production Committee.

Given that the bill simply overturns the Court of Appeal ruling that all new organisms imported into New Zealand must have prior approval under the Hazardous Substances and New Organisms Act regardless of whether they are imported intentionally or incidentally, it will allow Ministry of Agriculture and Forestry officials time for further thinking and work on a more robust process through which to assess incidentally imported new organisms, including the setting of minimum standards as suggested in the submissions of virtually all New Zealand’s primary producers. Although we accept that there is an urgent need for existing import health standards to be validated and for changes to be made to ensure that import health standards currently under consideration can be progressed, there is no corresponding need for urgency concerning the process by which import health standards will be considered in the long term.

The need for an urgent amendment to solve an existing problem should not create a situation that places our environment at risk of contamination, and we did urge all parties to consider and support our Supplementary Order Paper.

The CHAIRPERSON (Hon Marian Hobbs): I call the member Metiria Turei, and I plead with her to concentrate on new clause 2A.

METIRIA TUREI (Green) : Yes, Madam Chairperson, you are quite right to remind us of the clause we are debating. I do want to address some of the accusations made by the Minister, and particularly the kind of intellectual “pretzelism” that he is suggesting we engage in in order to justify not just the bill but the process that led up to it.

The Green Party does agree that there is some confusion here about who is responsible for dealing with these kinds of organisms, and the Government is quite right to look for mechanisms to deal with that confusion. The problem here is that the Ministry of Agriculture and Forestry has had a view about changes that it would like for itself in the Biosecurity Act, and it is not unknown for ministries and Ministers to be opportunistic about when they might try to make such changes. So I do not think it is in the least a surprise that legislation and policy that is prepared some years in advance might find themselves coming before the House when an opportunity to progress them makes itself available. That is not irrational; it is perfectly sensible. That is not a conspiracy; it is just a process one might expect from a Government that wants to present its policy.

The Greens are very concerned about the confusion as to who is responsible for dealing with known but unintentionally brought in organisms. That is what the bill is concerned with, and in fact that is what the Court of Appeal decision concerned itself with, as well. It concerned itself with known organisms, not unknown ones. The Court of Appeal did not concern itself with organisms one would not know could be brought in. So, for example, it is quite clear and obvious that Paenibacillus alvei is a known organism. It comes in with honey imports, so it is not brought in purposefully. It is brought in unintentionally, but it is brought in knowingly. The Minister, the ministry, and this legislation are purposefully trying to confuse the community on that difference, in order to justify why the Ministry of Agriculture and Forestry and the biosecurity legislation should have the responsibility for assessing those organisms, as opposed to the Environmental Risk Management Authority, whose job it is to assess new organisms that are brought into the country.

As I said, we agree there is some confusion, and we would have liked to see the Hazardous Substances and New Organisms Act amended to enable it to be made more clearly responsible—it can be responsible, actually, under the current law, but we would like it to state that more clearly—for known but unintentionally brought in organisms, rather than the Ministry of Agriculture and Forestry, whose tests for risk assessment are much, much poorer than those of the Environmental Risk Management Authority.

The Green Party is happy to support amendments to this legislation that it considers will make the legislation better, and that is why we are supporting the amendment to insert new clause 2A, to impose the sunset clause. It is why, in fact, we will be supporting one of the Minister’s own amendments, and later on in the debate, no doubt, we will get a chance to discuss that. The key here is that a great deal of confusion is being propagated by the Government in order to enable an organisation to approve knowingly brought in organisms at a much lower standard of risk assessment than that used by the Environmental Risk Management Authority, whose job it is to do that. I do not think it is right for the Government to convey that kind of, I guess, confusion to the public. I think the public have a right to know the real intention behind the policy and legislation. They have a right to know what the true impact of the legislation is, and they have a right to know what the future intentions of the Government might be in relation to that legislation, particularly where it may concern genetically modified organisms.

We know from the papers produced by the relevant ministries that there was an intention to allow GMOs to be brought in under legislation like this. It is proven, it is in the papers, and it is publicly available. People know that that was the intention. It is very difficult, then, to have any faith that this Minister, this ministry, or certainly this Government or National has any intention of not following that policy in the future when there is opportunity to make such changes.

Hon JIM ANDERTON (Minister for Biosecurity) : The public’s right to know—I agree with that absolutely. So let the public know this and let the representative of the Māori Party in this Parliament, Mrs Turia, know this too—and this addresses the issue of taking more time, extending this, and going on for quite a long time talking about it. Right now we have 500 import health standards that have been passed, and they cover somewhere around 4,000 or 5,000 individual commodities that are imported into this country, many of them from poor countries and many from rich ones. All those import health standards are now up for legal challenge—all of them—as I speak. In addition to that there are 200 current applications that cannot proceed because we are now subject to legal challenge on every single one of them. So the biosecurity system is paralysed now, as we speak. How does that work if we just continue doing that—if we take more time over this while the whole biosecurity system in New Zealand grinds to a halt? If Mrs Turia wants to know whether this would have any effect on Māori—and she is always interested in that, I am sure—she might like to know that the Proprietors of the Taharoa C Block supports this bill, as follows: “The Proprietors of Taharoa C Block is a Māori incorporation with business investments in New Zealand and Australia. Taharoa C Block—”

Hon Tariana Turia: I raise a point of order, Madam Chairperson. I do not recall at any point in the comments I have made today, which were general in nature, that I was representing the view of the Proprietors of Taharoa C Block Incorporation. In fact, I am not.

The CHAIRPERSON (Hon Marian Hobbs): I thank the member. That really is a point of debate, rather than a point of order.

Hon JIM ANDERTON: I tell Mrs Turia that the point I am making is that she is asking for delay in this bill, and that a Māori incorporation has written to the Primary Production Committee asking that because of its involvement in gaining approvals to import a new biofuel plant to help reduce New Zealand’s net greenhouse gas emissions, it has been directly impacted by the freeze on issuing import health standards. The point I am making is that this kind of paralysation affects everybody in New Zealand, including Māori. I would have thought that the Māori Party might know that, that it might be aware of those representations at the select committee level, and that it might take them into account when it is attempting to delay the implementation of this bill.

• The question was put that the amendment set out on Supplementary Order Paper 188 in the name of the Hon Tariana Turia to insert new clause 2A be agreed to.

Hon DAVID CARTER (National) : There are two significant parts to Part 1 that I want to refer to. One is an explanation around the insertion of new section 22A, “Process for independent review panel to be established”. First, I want to pick up on a comment that the Minister made earlier. It became evident during the Primary Production Committee process that somewhat in excess of 400 import health standards have been developed after discussion with various stakeholders. They have largely been accepted and we have moved on. Two are of significance and they were presented to the select committee. They were an import health standard for honey and an import health standard for the importation of some pork products. It became clear from listening to the submitters on those two import health standards that there was a lack of clarity and transparency around the process, whereby the import health standard was originally developed by the Ministry of Agriculture and Forestry, then opened for consultation, and consultation occurred. The ministry assured us that it took into account the submissions received from the various industries, and finally a decision was made and a process developed by which an import health standard was established.

In listening to those two particular industries, it became clear to the select committee that we needed a process whereby there was independence in the review, and that is what new section 22A in clause 5A has sought to establish and, I think, does so. It states that an import health standard is drafted by the Ministry of Agriculture and Forestry, then put out for consultation. The industry has a chance to feed that consultation back to the ministry, which then moves to finalise an import health standard. At that stage any disgruntled industry sector has the ability to call for an independent review panel to be established. The review panel will be independent of the Ministry of Agriculture and Forestry and it will have the difficult but important job of sorting out the correct balance between the scientific information presented and the information placed before the panel that lacks scientific rigour and is more for protection of a particular domestic industry. I think we have gone a long way with the establishment of that panel. I said in an earlier contribution, for the benefit of the Green Party, that I think it will find that most of the submitters who came before the committee will be well satisfied now that there is this new section 22A.

The second part of my contribution relates to Supplementary Order Paper 194 in the name of the Minister, the Hon Jim Anderton, that changes clause 7A. There was an issue around the finalisation of the import health standard for honey. We attempted, through the select committee process, to make sure that the benefits of this independent review panel would be received even prior to its establishment, so that the honey import health standard development would receive transparency, examination, and independence from the Ministry of Agriculture and Forestry. I am aware that following the report back from the committee some in the industry still lack trust that this process would be followed through and would occur in the time that the select committee set, which, in effect, is 90 days following the enactment of the legislation.

I congratulate the Minister on a further amendment now appearing that makes it absolutely categorically clear that no honey will come into this country until the import health standard has had the independent review panel process. I certainly hope that that will satisfy the valid worries and concerns presented to us by the bee-keeping industry. In defence of their concerns, I do understand that as an industry they are suffering greatly as a result of the incursion of the varroa bee mite. It has cost many bee-keepers tens of thousands of dollars and they are rightfully scared of any other disease that may arrive in this country. At the end of the day, the particular import health standard, and the process by which the new organism Paenibacillus alvei may or may not affect the viability of the industry, is something that must be sorted out on a basis of science and not on the basis of emotion.

ERIC ROY (National—Invercargill) : I will take a brief call on Part 1. I resisted the urge to climb into the debate occurring around new clause 2A, which I decided was probably better left unmassaged, shall we say. First, I acknowledge the Minister Jim Anderton for his involvement right throughout this—there was a briefing for our caucus members who were interested, prior to us getting into this—and for the way in which he accepted what was a unanimous series of decisions from the Primary Production Committee. I just say to the Minister rather wryly that quite a bit of wisdom and practical knowledge resides on that select committee and had he consulted us on the fisheries amendment legislation a little earlier we might well have come to a much easier road for him to pursue. We will just park that matter, but the point has to be made.

I am pretty happy with the result we have. It was, as I say, a unanimous decision and I share the concerns of those people who say that we certainly have a blockage. For those people who are concerned about what we have done, we have actually reverted to the practice since the Hazardous Substances and New Organisms Act 1996, but we have put in a layer of review for where there is concern. We have put in a level that gives an opportunity for those with serious concerns to have the decision scientifically peer reviewed by whoever is available internationally. I actually think we have strengthened the process and I do not understand the argument proffered previously in the debate—leaving aside the conspiracy stuff—that this has detracted from what we have done.

I think that the review panel has two impacts. It has a salutary impact upon those in the biosecurity section of the Ministry of Agriculture and Forestry who are tasked to make the decisions, because they know that if they do something that does not look right, or about which there is concern, there will be an immediate response and the likelihood of peer review. That is one thing. Then, for those who actually sit out there—and I made some comments in the debate on the second reading about this not being a get-home-free card for those people who want to use this as a non-tariff barrier—there are some quite prescriptive things that I will read into the record of the Committee just to make sure that that is not abused. The umbrella organisation has a mechanism that saves the litigious process of going as far as the Court of Appeal when the best science can actually make that assessment. So I think that is very positive.

I think there were two issues that the select committee needed to deal with. One issue was having this review process in place, and the other issue was the retrospectivity around the bee situation. I think they have had their day in the sun—their expression was quite clear. Again, I think there is further clarity on new clause 7A, which I hope actually takes away all those emails from people saying “by the enactment”, and “the 90 days”, and all that chronological stuff, which they did not understand even though we assured them it was the case—but there are not that many of them. Clause 7A talks about bee products being a special case, and that is going to be an issue that is given consideration. I am pleased to hear that that work is under way.

I make just one point—because I do not understand the science of this and in making this point I hope that it is considered by the review panel—and that is the issue around Paenibacillus alvei being a blockage, or taking out the marker of American Foul Brood, which is another alvei process. I think that needs consideration by that review panel, because I do not know whether that is good or whether it is bad, or whether it is a justifiable means to stop the importation of honey. But that is an issue, in my view, that the industry needs to give some consideration to. So I raise that in the hope that that is an issue that will be in the report.

The Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill is a good piece of work. I reiterate again the wisdom of the select committee in finding, in very short time, very practical solutions and for adding value to a bill that had to be passed. National supports the bill.

Dr ASHRAF CHOUDHARY (Labour) : I would like to take a brief call as a follow up to the issue of the review panel. I think it is very important to realise that the amendment is very important, because there is no research that suggests that this organism, Paenibacillus alvei, has any adverse effect. Clearly there is only one scientist in New Zealand who has suggested there is a potential problem, but there is no clear difficulty with this pathogen. The scientists in Australia are suggesting there is no problem with this pathogen, and in New Zealand there is only one scientist who knows a little bit about honey who is suggesting there is a potential problem—there is no clear defined problem in this case.

I am really delighted that it has been agreed that the director-general will set up a scientific review panel. I am really glad because, being a scientist myself, I believe it is important that this should be looked at closely, then if there is a problem at least we will have the time—a 90-day period—to sort this out. Otherwise at this stage there is no research that suggests that this pathogen is a problem for the honey industry, or the honey bee itself.

So with this brief call I want to make clear that I am really delighted that a scientific review panel has been set up to clarify this issue, because clearly at this stage there is no research to suggest this pathogen has any adverse effect. Thank you.

SHANE ARDERN (National—Taranaki-King Country) : Can I start by saying that I was a little bit fascinated with the earlier debate and exchange going on as well. I was reflecting on our good friend the Hon Jim Anderton’s time in the caucus with characters like Douglas, Bassett, and Prebble, and the old saying “jumping out of the frying pan into the fire” came to mind, because if wearing his pink shirt and tie cannot get him back in with the Greens I am not sure where to go from here on that. So we will come back to the Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill and talk about that.

Can I say thank you once again to the Minister because today he has clarified matters for some who had concerns, and my colleague Eric Roy touched on some of the emails we have received around that. I think this will allay their fears substantially, or it should do. Certainly the independent review panel, which is set up under this part of the bill, will give those in the future, as well as those currently seeking to alter, slow down, or change the course of import health standards, the opportunity to bring to that debate some independence—not only the fact that it is independent, but that it is seen to be independent, and I think that is probably the important part in regard to that.

The Court of Appeal case did throw up some interesting issues, and as the Minister rightly pointed out, with 500-odd import health standards currently in existence—about 400 import health standards that have been worked on, or agreed to, or other such, in the last 4 or 5 years—only two of them have been vigorously opposed and ended up with the Beekeepers Association of New Zealand taking the Court of Appeal case that bought about this bill. When one looks at it, the system actually is not as broken as that, as far as putting this together. I think the greater concerns—and I guess this is something for another day—is the upholding of some of those import health standards; there have been quite a few breaches.

So as my colleague the Hon David Carter said, one can understand the anxiety of industries such as the bee industry in regard to the independence or the robustness of import health standards, when they have been affected to the extent that they have by incursions such as the varroa bee mite. One can also understand the anxiety of the pork industry, which itself has had major problems with things like multi-systemic pig wasting disease, and other potential devastating diseases that have come through our borders despite the import health standards, and despite the best efforts by the Ministry of Agriculture and Forestry biosecurity. So having the ability for an independent review of any import health standard that could potentially affect our substantial exporters and importers is a sound move, and it gives that view of independence.

The further issue, I guess, that will always be thrown back at Ministers regardless of what Government persuasion they come from, is the issue of free trade. If one looks at some of the work that goes on in regard to establishing import health standards, without doubt there has to be robust scientific evidence that can be argued internationally, that can be peer-reviewed internationally, that is transparent, and that will stand up to that scrutiny. As a trading nation we leave ourselves very exposed to criticism of putting in place non-trade barriers if we do not do so.

So the independence of this independent review panel really will be something that, I guess, brings some further transparency to that debate as well and, in fact, could help rather than hinder with that international argument around world trade and the phytosanitary legislation and regulation that we put in place, so it is, I think, a good step forward.

The fact is that it was necessary and the issue has been well canvassed. I think the Minister said that something like 200 potential new import health standards were in the system after the Crown Law Office handed out its findings that were going to be either held up or potentially held up. No exporting country can continue with that kind of uncertainty, so clearly this is a sound move in terms of moving forward with the whole argument around import health standards, how they are set up, and how robust and how scientific the evidence is that they are based on. So with those comments, I support the passing of this legislation.

Hon JIM ANDERTON (Minister for Biosecurity) : I would like to thank the members of the Primary Production Committee for their constructive engagement here. I want to answer just a couple of points raised about the work of the review panel. I am advised that Biosecurity New Zealand has discussed with the National Beekeepers Association of New Zealand that the future review should cover whether Paenibacillus alvei could mask the diagnosis of American foul brood. So that is already on the agenda.

Also Biosecurity New Zealand discussed with the National Beekeepers’ Association the review that looked at whether there is any evidence that Paenibacillus alvei caused disease or was a food safety issue. We can find no evidence of that at the moment. Finally, Biosecurity New Zealand has invited the National Beekeepers’ Association to work with it and to suggest issues that the association would like the independent review panel to consider as part of its work.

I do not think there can be any doubt that there is goodwill towards working this issue through. The scientific evidence should stand on its own merits. I do not have any fear about that, and the sooner there is a complete acceptance of the evidence base of our biosecurity system by all New Zealanders the better, because that is what it is meant to achieve. We are proud of our biosecurity system, because in many countries the only science that is engaged in is political science. That does not have much to do with evidential science. New Zealand can be proud of its biosecurity system in terms of its scientific evidence base. This bill will go a long way towards assuring people there are independent checks when there is any doubt, and that has to be good for us all.

• The question was put that the amendment set out on Supplementary Order Paper 194 in the name of the Hon Jim Anderton to clause 7A be agreed to.

• Amendment agreed to.

The CHAIRPERSON (Hon Marian Hobbs): The amendment set out on Supplementary Order Paper 189 in the name of the Hon Tariana Turia is out of order because it is inconsistent with a previous decision of the Committee.

• Part 1 as amended agreed to.

Hon DAVID CARTER (National) : I will take a brief call on the commencement date and also to concur with a comment made earlier by the Minister about the urgency for this legislation. I thank the Minister for, having now received the report back from the Primary Production Committee, being prepared to move the bill through the House as quickly as possible.

There was urgency around this legislation. I think it would be fair to say that the select committee remained to be convinced of its urgency as we started the deliberation, but then when we saw a letter from Crown Law that quite categorically told the Ministry of Agriculture and Forestry that it should not issue any new import health standards nor should it amend any other import health standards, there was clearly a situation whereby trade at our borders was being slowed quite considerably or halted. That required very urgent action by the Minister, and I congratulate him on doing that.

I shall give the Committee an example. New Zealand has had a regular trade of horses with Australia that has existed for many, many years. During the latter part of last year, Australia had a serious outbreak of equine influenza that caused the Ministry of Agriculture and Forestry to act quite quickly and correctly to stop the further importation of horses from Australia. To move from that situation required an amendment to a well-established import health standard.

It would have been the ministry’s intention to move that amendment through, to have an amended import health standard, and to allow the recommencement of the equine trade between Australia and New Zealand, provided, of course, that the authorities were completely satisfied that we were not about to introduce equine influenza into New Zealand.

The Crown Law opinion made it absolutely clear that the process of developing the amended import health standard could not be progressed further unless we managed to change this legislation. That is a very practical example of the need for urgency around the legislation.

The select committee received a number of submissions from members of the equine industry who said they actually do not understand the issue around the import health standard with regard to the importation of honey, or the import health standard situation around the importing of pork. But they desperately needed the recommencement of this equine trade between the two countries, which is worth many hundreds of millions of dollars. They were a group of submitters who made a very strong case to the select committee for urgency on the issue to be required.

I speak completely in support of the title, clause 1, and of an urgent commencement date, clause 2, with regard to this legislation.

Dr ASHRAF CHOUDHARY (Labour) : Aleikum salaam. I take this brief call. As has been said earlier, this bill was necessary. The Primary Production Committee had to rather hurriedly consider the bill; although I would not like to call the consideration urgent, it was hurried.

Clearly, there was an issue for the industry in terms of trade. As has been said by the previous speaker, there was an issue about the trade of horses between New Zealand and Australia. So this bill was necessary.

The select committee was sort of blamed by some submitters for the hurried consideration of the bill. Clearly, this bill was required because of the court case. The Ministry of Agriculture and Forestry had received advice from Crown Law that this bill was necessary. The bill was referred to the select committee and we did a great job in having additional sittings to get the bill through. We heard 15 submitters and we came up with some amendments. Hopefully the bee-keepers are happy with the amendments. It was important that the bill be done in that time frame.

We had advice from the Minister of Foreign Affairs and Trade, as well, to make sure that our overseas trade did not suffer as a result of this bill. With that, I commend this bill.

METIRIA TUREI (Green) :Tēnā koe, Mr Chairperson. I want to refer to two issues. The National member talked about the importation of horses, which I will refer to, and I will also refer briefly to the Department of Conservation and its involvement in the Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill.

First of all, I reiterate the Green Party’s concern, which is evidenced in the papers prepared by the ministry in 2006, that the original intent of this legislation was to allow for the importation, or the bringing into New Zealand, of genetically modified organisms. It is very good to have heard the National Party refer to the issue of importing horses, because the equine flu vaccination is a genetically modified vaccination. It is a living genetically modified virus, and there is no permission to enable it to be introduced into our country. That would be the responsibility of the Environmental Risk Management Authority. If someone wanted to bring that vaccine into New Zealand, that person would have to go through the Environmental Risk Management Authority process. If someone wanted to do that, it would be the first living genetically modified organism released at large into New Zealand and our environment.

That raises very serious concerns. The New Zealand public do not want to see these organisms released into our environment. It is quite right that the Environmental Risk Management Authority would be the organisation that would assess it. But under this bill, if a horse were imported into the country and that horse had been vaccinated with this living genetically modified virus vaccine, then it would be an unintentional importation of an organism and would come under the definition in this legislation. It would be perfectly legal for the Ministry of Agriculture and Forestry to allow for the importation of that genetically modified, known but incidental, passenger organism into this country.

Where would the risk assessment sit? Well, it would sit with the Ministry of Agriculture and Forestry and with the biosecurity agencies. What criteria do those organisations use to assess these kinds of organisms? Well, they do not have a precautionary principle. They do not have the rigorous scientific process that the Environmental Risk Management Authority has, which is set out in the Hazardous Substances and New Organisms Act. They would be able to assess it according to their own criteria, which are at a much lower level and are much more risk-happy assessment criteria. We could have the first living genetically modified organism at large in our country as a result of this legislation.

One wonders what the National Party’s interest is in supporting this bill. It concerns me greatly. I wonder whether it is because National is quite interested in the racing industry. One might want to reflect back to 2005, when there was a very good relationship between the National Party and the racing industry at that time. Some of that relationship was exposed later, after the election. So is this interest part of that relationship? Is that why the National Party is quite OK with legislation that will allow, in law, potentially, for this organism to come into the country as a passenger organism?

It is a very worrying issue, and I think the New Zealand public have the right to have some concerns about it. I know the Minister is likely to stand up and say that the bill excludes genetically modified organisms. What he will not tell the public is that in 2006 the papers that were prepared around this issue specifically allowed for this legislation to include and allow for the importation of GMOs, and that that was the policy position of this Labour Government in 2006.

What has changed? Well, it is election year—that has changed. We all know that New Zealanders will not accept the introduction of GMOs into our country, because we know the risks that those organisms will have to our biodiversity, to our threatened species, and to our primary production sector, which is, as the Minister is so pleased to repeat, such a major part of our economy. Yet the two old parties in this House are prepared to risk that major part of our economy. The Minister himself is prepared to do that for this legislation.

Hon JIM ANDERTON (Minister for Biosecurity) : I always like to think that members of this House, by the time they get here, would be inclined to let the facts get in the way of their prejudices. The facts are that New Zealand’s biosecurity system already, on a daily basis, allows animals—horses, dogs, cats; animals of a whole variety—

Shane Ardern: Human beings.

Hon JIM ANDERTON: —human beings, actually—to be vaccinated. If the tests show after quarantine periods that the vaccine is no longer alive, then those animals are allowed into New Zealand. If we did not do that, we would be erecting a non-tariff, non-scientific barrier to trade, and immediately we—this country of 4 million in the South Pacific—would be standing against the 6,000 million to 7,000 million people everywhere else that we want to trade with. And guess who would erect non-tariff barriers against us? They all would, immediately. Why? Because 65 percent of our entire exchange earnings are earned from the primary sector of New Zealand, and every country in the world fears us because we are so efficient and so productive in those areas. If any members in this Chamber want to know what would happen if that occurred, they just have to look at the situation in some Second and Third World countries, because that is what would happen to us, at a rate of knots.

One cannot have the most important base of one’s whole economy put at risk by the mumbo-jumbo jingoistic slogans we have heard today—that is what they are. The science of the situation tells us there is a problem here that we need to solve by law. We are solving it in a proper way, and what we get is conspiracy theories about the Court of Appeal and the officials in Biosecurity New Zealand. According to the conspiracy theories, members from both major parties in the House, aided and abetted by me—I have actually been in Opposition with most of them all my life, as a matter of fact—have somehow got together to conspire. Well, it is nonsense.

Let me say this. We have a situation right now where our biosecurity system, which is at the core of our agricultural base, is actually paralysed. We cannot move anything in here; we cannot even guarantee that the import health standards that allow people to bring stuff in now could not be challenged in court today, tomorrow, or the next day and eliminated. If that started to happen, our international reputation as a science-based biosecurity economy would go right out the window.

That may not be of any moment to people who have never yet been in Government, but I can tell members that it is different once the responsibility of being in Government is on a member, and when that member has to make the calls that will strike at the livelihood of hundreds of thousands of New Zealanders overnight. That might not worry the Green Party, but it worries the heck out of me, and I know it worries the heck out of a lot of other members in this Chamber.

I am pleased to see that members of the Primary Production Committee—led by the Hon David Carter—who have spoken in the Chamber today, and the overwhelming majority of members of this Committee, are seized with that urgency. I applaud those members for that, and I look forward to this bill having the most urgent passage that is possible.

METIRIA TUREI (Green) :Tēnā koe. Well, there we have it. The Minister Jim Anderton has exposed the primary reason for the Government’s support for the Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill, and why it has been brought forward, which is that it is to do with trade relationships with other countries. What he is really saying here is that New Zealand has signed up to international trade agreements, which means that we are not able to exercise the level of border control that the New Zealand public believes is crucial to protecting our country from incursions of other organisms from overseas that may put our economy and our environment at risk.

What he said in this last little speech of his was that trade barriers are a major concern for him. Therefore, he will propose legislation that will open up our borders to known organisms that could pose a serious threat to our environment and to our economy.

Mr Anderton talks about the value of these trade processes to the country, but he is not reminding the Committee or the public at this time that one of the main threats of these kinds of organisms is to our primary sector—to our farming sector, our horticultural sector, our forestry sector, and potentially even our fishing sector and aquacultural sector. Those are industries on which our country relies, and we are obligated to protect them to the maximum extent possible. We rely on those industries to a very large extent for the economic well-being of this country.

That has always been the Green Party’s position. That is why we have always opposed the introduction of GMOs into this country. That is why the Greens have strongly promoted environmental measures to protect our environment, so that the land on which our primary sector is based, and the water on which our primary sector is based, is healthy and clean and can continue to support those sectors well into the future, for my grandchildren and great-grandchildren and for all of our grandchildren and great-grandchildren.

At the same time as we are trying to protect our economy and our environment from these incursions, the Labour Government, along with the National Party, is supporting legislation that gives control and decision making over known organisms that could cause serious risk to our country to an organisation, a ministry, that has a very low risk-assessment process.

The Labour Government, along with the National Party, has diverted the law. The Government has an alternative. It does not have to give this power to biosecurity agencies; it could give this power to the Hazardous Substances and New Organisms Act and the Environmental Risk Management Authority, which is designed to deal with these issues. The authority has a precautionary principle and the scientific, rigorous processes in place to deal with known passenger organisms.

But, no, it has chosen not to take the most rigorous approach. It has chosen not to provide the maximum level of protection to our environment and to our economy. Instead, it has given the power to biosecurity agencies, which have a much lower risk-assessment threshold.

We know, for example, that environmental organisations that are part of the Government have said that this bill will not protect our environment. In January of last year the Department of Conservation said that it did not support the proposal. The department said that the legislation would reduce the quality of risk assessment, would expose New Zealand to greater risk from new organisms, would create an inconsistent system, and is an unwarranted relative to the problem the Government was trying to solve.

One of our principal organisations for the protection of our environment, for the protection of our biodiversity, and for the protection of our threatened native species has said that this bill will pose a risk to that environment and to those species. The Department of Conservation did not support this legislation. It did not make a submission, and we might like to ask why. Is it that the Department of Conservation was not allowed to? Why did it not make a submission on this legislation?

We know that there is not support from the Government’s own environmental agencies that are responsible for protecting our environment from these kinds of incursions. We know that the Government in 2006 intended for this legislation to allow for GMOs to be introduced. And we know that there is some kind of connection between National and the racing industry, so perhaps that is why National is supporting this legislation.

Hon JIM ANDERTON (Minister for Biosecurity) : I was not going to take another call, but the member has accused those who are supporting this bill of misleading the public. She says that the Department of Conservation made submissions that opposed the bill, and asks whether we would like to explain why. I tell the Committee that the member and the Green Party were supplied with the following email, which I will read out. I suggest to Ms Turei that when a member gets up in this Chamber, that member should at least balance what he or she says with some facts. Here is the email that the Green Party was supplied with, from the Department of Conservation: “Notwithstanding the assertion in the article”—the article on the Stuff website—“that ‘the Department of Conservation had been cut out of the consultation at Cabinet level’, the Department of Conservation is in fact satisfied that it was consulted on this matter in 2006-07, and more recently on the draft bill and Cabinet papers. Our early view in 2006 was that there was insufficient justification, given the information to hand, to warrant the proposed changes. That context changed with the National Beekeepers’ Association court case. DOC acknowledged the legal advice MAF had received on the risk MAF faced, and that Cabinet has agreed to the need for legislative change. DOC was consulted on the draft bill, proposed some changes that were accepted, and is satisfied that the draft bill intends to address the immediate legal issues faced by MAF.”

If the member has had that email—and I know the Green Party has—I ask why on earth she has not acknowledged it here instead of going on in the tirade way she did. I do not think that is a particularly honest way of debating. If the member knows the content of the email, she should have acknowledged it here. This is the truth: the Department of Conservation has been consulted and has acceded to this bill because the department knows that the legislation is necessary because of the court case. That should at least be acknowledged as being the facts of the matter by Ms Turei.

METIRIA TUREI (Green) : Mr Anderton did not finish reading that email. I have a copy of the email here with me, and there is a final paragraph that I am sure is available to him; I know I have it. It states: “DOC also expressed the view in 2006”—that long ago—“that the Biosecurity Act should have minimum standards, and that the precautionary principle be applied within it, as does the HASNO Act. The Biosecurity Act currently lacks the transparency and certainty that the principles and such criteria provided in HASNO, and this poses risks. DOC still holds this view”—I have this email from 11 March—“and wishes to see this issue addressed in the future.” That is what the Minister failed to read out in the Chamber just now.

Why did he do that? It may well be that the Department of Conservation agrees that it was consulted. It is clear that the department was obviously asked the question about the legislation. The department says that, and we have information about it. But the department did not make a submission on the legislation, and it reiterated that it retains concerns that the Biosecurity Act does not have the provisions or principles in place to provide adequate protection of our environment.

It is all fine and well for Mr Anderton to make comments about consultation, but he is not telling the public the fact that it is our environment and our economy that are being put at risk, and that the Government department responsible for the protection of our environment, in particular, has said that a risk is posed, and that that risk has not been addressed in this legislation. So I am asking the very serious question here about how much risk we are prepared to put our environment at, for the purpose of preventing the trade agreement problems this Government has because it was part of signing a trade agreement that prevented us from having controls that would protect our environment.

If the Government signs agreements that stop us from putting in place those protections, then that is its responsibility. It is not a conspiracy; it is just the truth. It is the Government’s responsibility, and the Government has failed the country. Now it is imposing on the country legislation that has been put through the House in a very speedy way, that denies a proper public and transparent process—because there was not time for people to read and understand the legislation and to make proper submissions on it—and that does not even have one of the Government’s own key departments involved in this bill by making a submission so that we can see the bill’s full impacts on our natural environment.

There is no excuse here. Mr Anderton, the Government, and the National Party, which is supporting the legislation, have no excuse for the risk they are putting our environment at. I reiterate that this is not just about the environment; this is about our economy, because our economy is dependent on our environment. We all know that. That is why the community works so hard to clean up our waterways, and why we work so hard with farming communities and urban communities to clean up their environment. We know how dependent we are on it.

Yet at the same time that the community is doing this work and prioritising a clean environment that we can rely on, the Government, with its friends the National Party, is putting legislation through a hurried process that lacks public transparency and puts the very environment and economy at risk.

There is no excuse for that. No amount of talking about trade issues or trying to accuse the Greens of conspiracies will change the fact that this legislation puts our environment and our economy at risk, and the Labour Government and the National Party are supporting that risk.

The Greens have supported the changes to this bill that we think will make it better, because that is a responsible thing to do. We will be opposing this legislation because of the risk it poses to our environment and our economy and because it prevents New Zealanders from truly having a say on the real issues here. Thank you, Mr Chair.

SUE MORONEY (Labour) : I will take just a brief call to support the title and commencement date as proposed in the Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill. Yes, our economy is dependent on our environment. It is also dependent on trade, on the ability of organisms and livestock to move between countries, and on our ability to be able to import and export.

It is for that reason that I stand to support the commencement date, particularly, and also to applaud the Primary Production Committee on the very quick and thorough work it has done in looking at this bill so that it can proceed and so that this legislation can be put in place quickly.

I was present when the Proprietors of Taharoa C Block, a Māori corporation, talked with the Prime Minister about the importance of being able to import the particular plant it needed to go into a very important and successful biofuels venture it is working on. I have listened carefully to what the previous speaker, Metiria Turei from the Green Party, has argued. I really do not believe that people who have worked with the environment for many, many decades—people who have at their basis the understanding of the importance of our land and the spirituality of that land, being the people who are concerned with this particular Māori corporation—would ask the Prime Minister to see to the speedy resolution of this issue if they believed that our environment would be at risk as a result.

So I can stand up and happily support the commencement date of this bill. We need this legislation to be put in place quickly. That was reinforced by people in the Waikato area and beyond, in relation to the importance of some of the issues they are working on. I support what previous speakers have said about the importance to the equine industry—in particular, the horse breeding industry—of not having things frozen unnecessarily while we address the unforeseen consequences of a court case that I do not think anyone in this country saw coming.

We had this situation before us. We have acted promptly. I believe that that is what New Zealanders would want to occur, because we are a country that is reliant on the freedom of movement in that way. We needed to deal with this matter urgently and we have done so. I congratulate the Minister and also the members of the select committee on dealing with it in a quick and thorough way.

Dr RICHARD WORTH (National) : There is nothing too difficult about this bill, but it does have significant implications for local authorities. I say “nothing too difficult”, because it comprises only five clauses. The two most significant points about the bill are that it is to insert a definition of “local authority” and then provide for an exemption in respect of local authority debt-raising.

Some of us who are a little bit older will remember those days when a number of local authorities in New Zealand issued local government stock, and the Auckland City Council was certainly to the fore in that. That day will come again with the passage of this change to the Securities Act—legislation that National supports. At a time when the Blue Chip group has collapsed and the fortunes of finance companies in New Zealand generally continue to tumble in quite a disastrous way for small investors, local authority paper is likely to be well received by retail investors.

Local government faces a real challenge at the moment in managing the current bulge of infrastructure development whilst maintaining local authority finances on a reasonable footing. Local government has embarked on the most significant programme of capital works undertaken since the postwar boom in the development of the roading network. If we look at local authorities’ long-term plans, we see that local authorities are undertaking approximately $30.8 billion in capital works in the 10 years to June 2016. Virtually all of this expenditure is to fund either network infrastructure—roads, sewage disposal, water schemes—or community infrastructure, which includes things like libraries, sports grounds, and stadia. That is actually more than double the level of capital expenditure in the period from 1995 to 2004.

It is also significant that there is a significant degree of front-loading in the capital works programme and that about 50 percent of the funding needs will be required between now and 2009. Infrastructure assets have long lives, and borrowing helps to spread the cost of this infrastructure over the life of the asset so that today’s ratepayers are not subsidising future ratepayers.

Mark Blumsky: Intergenerational.

Dr RICHARD WORTH: As Mr Blumsky has just this moment said to me, it is about intergenerational equity.

In 1998 changes were made to the law that made it very difficult for councils to issue debt securities, and only the Auckland City Council issued debt securities to the public after that. It issued $120 million in March 1999 and $68.2 million in February 2001. The hope is that that will now change and that an opportunity has been given to investors to access quality debt.

I will talk for a moment on the benefits of this legislation. There are really three. The first is local authority access to capital. The second is investors’ access to quality debt. The third, perhaps more generally, are some market-wide benefits that will flow. When the Local Government Amendment Act (No 3) was passed in 1996, there was a failure to recognise the practical implications of accessing public money. Effectively, that change made it too onerous for local authorities to access public money for two reasons.

The CHAIRPERSON (H V Ross Robertson): This debate is on the title clause.

Hon Lianne Dalziel: I raise a point of order, Mr Chairperson. I would like to help clarify the situation. If we were having one wide-ranging debate across this very small bill of five clauses, then obviously that would be the way to accommodate what the member is doing. Otherwise, I take a point of order and say that the member is outside the scope of the clause 1 debate. I guess I am very much in the Committee’s hands, as is the Chair, but I would be happy to seek the leave of the Committee that we take a single wide-ranging debate to cover the whole of the bill and have it put as one question.

Dr RICHARD WORTH: I am happy to accommodate the comments the Minister has made.

The CHAIRPERSON (H V Ross Robertson): The Committee is the master of its own destiny. The Minister has sought that we have one wide-ranging debate. Is there any objection to that course of action being taken? There is no objection.

Dr RICHARD WORTH: As I was saying before the Minister made her comment, there are really three issues of significance in the context of this bill and its title. I was making a comment with reference to the passage of the Local Government Act and the consequences of that legislation. The Act increased issuance costs with the requirements to produce a prospectus. But more significantly it created a really insurmountable hurdle, as all the councillors were required to sign a prospectus. If there were a councillor who had been elected perhaps on the basis of reducing council borrowing, he or she would find it very difficult to sign the prospectus for the raising of additional debt. That is why all local authorities opted to issue debt on the wholesale market with just one public issuance of local authority debt.

Now the reinstatement of the exemption will provide a much more feasible business case for local authorities to access public money. That is particularly relevant with these infrastructure plans that I have already referred to. Generally, the market provides a premium of around 10 to 15 basis points for retailable debt. If we apply that to the estimated borrowing of $30.8 billion, it equates to a saving of approximately $30 million to $46 million to local authorities.

The second point is that there will be investor access to quality debt by removing the particular requirements that have existed to date. That will provide retail investors with access to high-quality debt instruments. That is particularly important at the moment, when finance companies have come under such critical and close scrutiny. Providing a broader range of investment-grade credit is an important initiative in improving the overall quality of products for New Zealand investors.

The final thing I will talk about for a moment is the market-wide benefits. If local authority debt is available to retail investors, it will create more accurate pricing of junk bonds and other high-yielding debt products. Having local authority debt available for the investing public continues to broaden the range of debt products available for retail investors. With more quality debt products in the market, retail investors will be able to easily compare their investment options and price them accordingly. It is for those reasons—and, in particular, in the context of infrastructure demands that are placed on local authorities providing services to the community—that National supports this legislation.

Hon PAUL SWAIN (Labour—Rimutaka) : This is one of those seemingly strange occasions when everybody in the Committee supports the Securities (Local Authority Exemption) Amendment Bill, so we will talk it out endlessly, probably down to closure. Many of the reasons for that relate to the importance of the legislation, but I suppose also it is to give us a little time to organise ourselves for the maiden speech from our colleague Su’a William Sio, which is coming up next. I think my job is to try to provide a little light entertainment—

Dr Richard Worth: Warm-up.

Hon PAUL SWAIN: —to warm up the crowd, I think it is called; and significant the crowd is, and it is lovely to see them all—before the maiden speech and the pearls of wisdom from our new colleague who is coming in very shortly. I am looking forward to hearing them. I am sure they will be far superior to the pearls of wisdom that people are about to hear from me.

I will make a couple of comments about what the previous speaker, Dr Richard Worth, said. We both agree that this is important legislation in order to be able to encourage investment within the local authority scene. He talked about local government stock. I remember the days when we had hospital bonds and local government bonds. They were a good way for people to invest in local authorities. He actually mentioned two dates that I thought were quite significant: 1996 and 1998. He said that unfortunately the Government at the time—I think that is what he said—did not take into account the full consequences of the legislation that came into force in those years, which meant that in the end it made it much more difficult for local authorities to access investment.

The member forgot to say—and it is important for me to remind him of this—that it was a National Government that did that. The member nods; he is saying yes. I do not want to labour the point, because I think—

Hon Member: He made a mistake.

Hon PAUL SWAIN: It was just a little mistake. But I think that in one moment in time one can see that a National Government created difficulties for local government investment, and a far-reaching, long-sighted, Labour-led Government is enabling local authorities to get into investment strategies once again. I could talk a lot about the vision of the two parties—probably outside the scope of the bill—but I will not, because I thought the member gave a good speech and it would be churlish for me to remind people of the differences between short and long-term vision. It would not be appropriate to do that when we are debating a bill that we all agree with.

As the member said, the legislation is about creating investment opportunities. And he is right to say it will apply mainly to things like transport infrastructure, where there are long-term investments. Lots of investment funds are looking for good investment opportunities. We have seen all the difficulties that happen with some of the short-term Blue Chip - type arrangements. So here are good opportunities for people to make investments in local authorities.

Hon Dr Michael Cullen: Red chippy, not blue chippy.

Hon PAUL SWAIN: Blue chippy, not Blue Chip, the Minister of Finance said. That is not one of his better interjections.

Hon Dr Michael Cullen: I said “red chippy”.

Hon PAUL SWAIN: Oh, I see—“Red chippy, not blue chippy.” That is not one of his better interjections. If I keep talking a bit, maybe he can think of something a little funnier to say. It is very, very difficult to make a speech such as this without humorous interjections, so I hope that the member will interject in a more humorous tone in a minute.

The member over there, Richard Worth, was right when he said this bill is about investment in local authorities. Members might ask what the bill does. It lowers the compliance cost for local authorities to issue debt securities. That is a good thing, and it will help local authorities as they try to move forwards. In particular, the problem is that they now have front-loading infrastructure projects at a time when investment funds are looking for more long-term advantages. The bill helps to lower compliance costs by releasing some of the obligations and requirements of the Securities Act, and that is important. A couple of important things it does are to ensure that two local authority - elected people may sign off a financial statement, not the full council, but that they are all still liable for the accuracy of the statement.

• Progress reported.

• Report adopted.

GORDON COPELAND (Independent) : I will take just a brief call on the Securities (Local Authority Exemption) Amendment Bill, and I begin by congratulating Dr Richard Worth. He set out a very eloquent and very complete analysis of the bill and its importance. It is actually a very important bill. As Dr Worth said, it is a very short bill but its ramifications are quite dramatic.

Before I go on to speak on the bill, I think I should respond to the contribution of the Hon Paul Swain, who correctly pointed out that the problem we are fixing probably has its roots in the time of the National Government of 1996 to 1999. I say to the Minister that it is now 2008, and if Government members protest too loudly about their great vision of getting things fixed in their country, then I say to them that it has taken a great deal of time. It has taken far too long to fix this problem. I just want to bring a bit of balance to that political issue.

I want to make a slightly different link, as well. At the time this bill was being considered by the Commerce Committee we were also talking about housing affordability. I wonder whether the very, very large development levies would have been levied on new homeowners by local councils in this country if this bill had been enacted much earlier. As Dr Richard Worth has said, we have actually, unintentionally, I believe, shut off the ability of mum and dad ratepayers to invest in stock issued by their own local council.

I remember the days when, for example, the Nelson City Council or the Lower Hutt City Council could go to its own ratepayers, tell them there was a bond issue coming up, and ask whether they would like to buy some stock. Many households of every portfolio, large and small, always had a fair proportion of their investment in local body stock. Bringing that to an end was a tremendous mistake, with ramifications not just for the funding of local authorities.

I will refer back to the development levies just to make this point. The development levy is actually a levy on the new homebuyer, and it therefore makes housing affordability worse. It makes housing less affordable. The right way, in my view, to fund new infrastructure such as sewerage works and roading works is—as Dr Richard Worth has pointed out, and Mark Blumsky has also mentioned it in this connection—through long-term intergenerational debt, so that it is repaid over a 30 or 40-year period. That is the traditional way it has been done in New Zealand, and removing that opportunity really was a great mistake. I agree with the comments that have been made that removing that opportunity has also forced a lot of mum and dad shareholding, ratepaying investors to get into junk bonds with finance companies like Blue Chip, with very, very sad consequences.

I look forward to the passage of this bill. I wholeheartedly endorse it, and I hope we will see a return to the good old days when ratepayers—mum and dad investors—had the opportunity to put some of their money into their own local council bonds. That really is intergenerational finance in another sense, is it not? Those people who are older and better off and who have some spare cash are actually funding—physically and necessarily funding—the infrastructure that is coming on board for the next generation of homeowners and the next generation of citizens. That is the way things should be.

Hon LIANNE DALZIEL (Minister of Commerce) : I will take just a brief call in the Committee stage of the Securities (Local Authority Exemption) Amendment Bill to thank members for their contributions to the debate. I understand that my colleague the Hon Paul Swain made reference to the time frame for the repeal of the previous exemption that existed in the securities legislation for local authorities. I think that to say it has taken a long time to put it back ignores another reality, which is that I do not think that when the Government of the day actually removed the exemption it believed that the consequences would be as significant as they were. In fact, it really was not until this Government set up a Central / Local Government Forum that was able to talk about the issues facing local government that we realised that this issue was one that had been of concern to local government.

So the issue was able to be brought to the table, and the Prime Minister undertook, as soon as it was brought to her attention, to take it to the relevant Minister, who was me as the Minister of Commerce. We set about bringing about this legislative change quite quickly once we had got it on to the legislative timetable. In fact, we announced this change last year, and here we are on 1 April seeing the bill through virtually its final stage. There is only one more stage to go this week. The bill will be passed by the end of the week, and I know that many local authorities are looking forward to this legislative change.

I appreciate the Commerce Committee’s work as well, because this bill does not reinstate exactly what existed before. I think it would be a mistake for people to think that we have not modernised the framework so that it is now more in line with what one would expect in this environment.

I have made the point in more than one of the contributions I have made on this bill that it is very timely to have quality debt products available for those whom I would describe as not being sophisticated investors. We have seen people who believed they were investing in a secure product, sometimes because it involved land—for some reason, people think that buying an apartment off the plans is somehow a secure investment—without having the proper checks and balances in place. This bill puts a good product back on the market, which enables those investors to feel some confidence in that regard.

That being said, local authorities will not be able to give guarantees unless the product is Government guaranteed, so those particular issues need to be addressed as well. Unless the product is guaranteed under the Public Finance Act, local authorities will not be able to say that it is, but it certainly is a lot more secure than some of the investments we have seen people investing their hard-earned money in.

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

Hon PAUL SWAIN (Labour—Rimutaka) : When I last rose in this Chamber I began a speech in the Committee stage of the Securities (Local Authority Exemption) Amendment Bill. I looked up and saw that the gallery was packed and I thought that it was in anticipation of my rendition of a speech about local authorities being able to issue debt. After I sat down I realised that it was nothing to do with me; it was to do with our colleague Su’a William Sio, who was making his maiden speech—and a fine speech it was, too. I have now had to lower my sights again and say that although I am sure the securities issue was interesting for the people in the gallery, it is an important issue for local authorities.

Before the dinner break we heard a little bit of history from the National list member Richard Worth.

Hon Darren Hughes: Oh!

Hon PAUL SWAIN: He often provides a little history.

Hon Darren Hughes: A pre-dinner speech.

Hon PAUL SWAIN: It was, and it was quite an interesting little speech.

Hon Judith Tizard: In the absence of policy.

Hon PAUL SWAIN: The Minister is right; it was in the absence of policy, and history is really a poor substitute for policy, but never mind. The member talked about the fact that these amendments were brought about because a previous Government in 1996 and 1998 made some changes that made it difficult for local authorities to issue debt securities. This was in the days when we all knew about local council bonds and health board bonds, etc.

But then the Minister in the chair, the Hon Lianne Dalziel—generously, I thought, because there was some accusation that we criticised the National Party for doing it, so how come it has taken us so long—indicated that really it was not until the Local Government Forum, which the Prime Minister chairs and which I have had the good fortune and pleasure to go to on many occasions. It is a great partnership—

Hon Judith Tizard: Co-chair.

Hon PAUL SWAIN: In my time the Chair of Local Government New Zealand, Basil Morrison, co-chaired the forum with the Prime Minister. It was at one of these functions that the issue of the problems that local authorities had with trying to issue debt securities was raised. I think the Minister said that from about the point when the issue was raised to the point we are at today is a little over 12 months, so I congratulate the Minister on that.

The issue is really about local authorities trying to fund large and expensive infrastructure projects. [Interruption]

The CHAIRPERSON (H V Ross Robertson): Cellphones are not permitted to be switched on in the Chamber. Will members please switch them off. I am sorry to interrupt the honourable member.

Hon PAUL SWAIN: That is all right; I thought it was a bit of light relief. I was saying that the issue is about local councils being able to issue debt securities, particularly on projects that are enormously expensive. Of course, with the issue of bonds and so on drying up, more and more councils were left to try to fund projects out of income, and it meant that that kind of opportunity was not possible.

This bill tries to set down some rules. First, it exempts local authorities from the full disclosure requirements of the Securities Act. This is primarily because people know that local authorities are pretty secure investments, in the sense that there are elected people who are accountable and there is a rateable income that people can work through. It is all very transparent and open. The projects themselves need to be done and are required to be done, and people can invest with some degree of certainty at a time when the whole question of investment is before the public. We do not need to dwell on the Blue Chip type of example, but people are looking for a little more certainty.

Hon Darren Hughes: A red chippy.

Hon PAUL SWAIN: Yes, a red chippy from Rimutaka will hopefully be my successor. I apologise to Dr Cullen because I did not get his joke at the start—it was far too subtle for me—but I do now and I formally apologise to him for that.

Local authorities do not have to follow the full disclosure regime under the Securities Act, but some important things do need to be done. We have added a few more subclauses just to give the matter a little bit of certainty, which include things like when local authorities are issuing their financial statements they need to refer to the last audited annual financial statements in the investment statement they distribute when issuing debt security. The last audited financial statement from a council needs to be part of the investment statement. The Commerce Committee, which I must say was ably chaired by Gerry Brownlee, added a number of other requirements.

We also looked at some other issues. For example, when Governments issue debt, the Minister himself or herself is not criminally liable. Local authorities rightly said “Well, what about us? We are in a similar situation.” The select committee spent some time on that matter, and in the end we decided we would not apply that general rule to local authorities. For a start, there are a lot more checks and balances within the central government system. It was also felt that Ministers of the Crown are in a very different situation because they have significantly more reporting and accountability requirements. I felt that Local Government New Zealand and others made a reasonable point with their submissions, and we spent some considerable time on them.

There was another issue in relation to the problem of who signs the financial statement. We said that rather than having all councillors sign the financial statement—and that would mean there would be a power of veto and that an important project may not go through as a result of one councillor vetoing it—that, as is in the Act, two people need to sign the financial statement. Of course, if everyone were not collectively responsible then we would not get two people signing it, because those two people would be liable. What will happen is that two people sign the document and all the councillors are then criminally liable for the accuracy of the content of the investment statement. So if a particular councillor opposes a project, he or she could vote against it but it would not stop the project. The councillor would be required to ensure, to the best of his or her ability, that the accuracy of the investment statement is correct.

Chris Tremain: Is this a reselection speech?

Hon PAUL SWAIN: No, it is not, actually. I am very pleased to tell the member who is interjecting that it is not. If he listened carefully he would know why it is not. I can tell the member that I am a shadow of my former self. In the 1990s I was much more pithy, witty, and sharp.

Chris Tremain: Perhaps it’s an attempt at local government, then.

Hon PAUL SWAIN: No, no, although of course one never says never.

Hon Judith Tizard: My father was elected for the first time into local government in 1983.

Hon PAUL SWAIN: There we go—his first time in local government was in 1983.

Hon Judith Tizard: To the district health board.

Hon PAUL SWAIN: Well, there we are, you see; there is hope for us all. I thank Chris Tremain for his confidence in me but it is nothing to do with that. I am attempting to try to point out some of the vagaries of this legislation.

As I was saying, a councillor needs to make sure that the investment statement is accurate. Of course, the question will be “Well, look, if I did try and it wasn’t accurate, am I criminally liable?”. There will be checks and balances along the way and I presume that as long as minutes are recorded that people will make sure there is outside advice and help. That raised the question of compliance costs. The reality is that in this legislation the most important thing is that compliance costs are lowered. I think there will be more certainty in the legislation for local authorities to raise funds for their projects.

One issue that was not raised at the Commerce Committee, which I was just thinking about before, was uptake. Perhaps I can ask the Minister in the chair, Darren Hughes, about it. I know he has extensive knowledge of this issue—probably coming from a more statistical background. We know that he is the fount of all wisdom and knowledge in that particular area. I hope there is an opportunity for the Minister to take a call, so that I can ask the officials a question via him. One of the questions I did not ask the officials at the select committee—I came a bit late to the select committee, not physically, but just because I was appointed late to it, and I do not know whether this question was asked—was what work had been done by local authorities to suggest what the uptake would be when this legislation is passed. I think that would be interesting to know.

Everyone says that this legislation will make things easier and better. We can all sit here and say “Yes, let’s pass the legislation”, but I suppose the question really is what work has been done to get some sort of an idea about when it is passed what the likelihood is of its actually being taken up, and relatively quickly. That is something that presumably I probably should have asked Local Government New Zealand when it came to the select committee, but I hope there is an opportunity for the Minister to take a call. Then again, the Minister might not want to take a call because he might think it is obvious and would not want to waste the time of the Committee explaining something to me that he can explain later on.

Hon DARREN HUGHES (Deputy Leader of the House) : I had not intended to take a call, but I am happy to indulge the member for Rimutaka, the Hon Paul Swain, who has raised some very interesting issues before the Committee regarding the Securities (Local Authority Exemption) Amendment Bill. What I would say to the member is that this bill is driven entirely by a desire to remove a lot of the administrative inefficiencies that have previously applied to local government under the securities legislation.

Dr Richard Worth: Administrative inefficiencies! It is about getting more debt security for local government.

Hon DARREN HUGHES: It is a pleasure to welcome Dr Worth to the debate, because I understand he took a call before dinner, and he has come back after dinner and will continue to speak on the bill, I am sure.

The whole drive of why the Government has introduced this bill to the House and brought it before the Committee this evening is to try to make sure it is easier for local government to make use of these measures but without having to go through—

Dr Richard Worth: What administrative inefficiencies?

Hon DARREN HUGHES: There are several administrative inefficiencies that local government currently has to go through, and if the member had been paying attention during the select committee process he would be aware of them. I am sure he will recall that his own local council, the Auckland City Council, his own regional council, the Auckland Regional Council, Local Government New Zealand, the Society of Local Government Managers, the Property Council of New Zealand, and the New Zealand Exchange all submitted to the Commerce Committee around these very issues and that is what the committee, of which he is a member, has reported back to Parliament.

I come back to the point raised by the Hon Paul Swain: what will be the uptake by local government in the initial period if, indeed, this bill of five clauses is passed through the Committee stage tonight by majority vote in the House? I have consulted the officials and there is no direct answer for the member at the moment, but I am happy to supply his office with that information when it becomes available, because I know he will be interested to see it. It seems to me—

Hon David Parker: It’s millions.

Hon DARREN HUGHES: Given that we have only 73 territorial local authorities it might be a little shy of that figure, but I do think there will be some enthusiasm, particularly regarding infrastructure projects.

Mr Swain outlined the easier access that local government will have to—

Hon David Parker: Intergenerational equity!

Hon DARREN HUGHES Intergenerational equity, I am sure, will be an argument debated around community boards and council tables all around the country as people try to work out how they want to fund their local infrastructure projects. Of course, as we all know in this Chamber, there are always many more projects we would like to see in our communities than there is money available, particularly through the National Land Transport Fund. So local government, in terms of its own share and its own contribution, will be looking to find mechanisms for ways in which it may raise capital and cash in order to pursue these projects.

To assist Mr Swain, a big project in our own region—the greater Wellington region, where his constituency of Rimutaka is situated, and my own constituency of Otaki is located—is Transmission Gully, which is a 27 kilometre stretch of road, presumably costing around $1 billion, although we will not have the numbers for that until May. If central government is able to put up its proportion of the share for how much it would like to pay for a roading option like that, and there is money available through either a public-private partnership or tolling, but the critical green light is some local government involvement through some funding commitments, I say to Mr Swain that it may well be that the bill currently before the Committee tonight is a way in which local government could meet its obligations if it intended to do that.

As I mentioned, the bill is a short one. It has only five clauses. I have already given the Committee the list of organisations that submitted on the bill when it was before the Commerce Committee. There were really only five issues that came out of the committee’s deliberations and they affect only one clause. The clauses remain unchanged, with the exception of clause 5, which is the meat of the bill, for want of a better description, and that is where the committee has made its changes. As Mr Swain said, criminal liability in clause 5 was of huge interest and concern to councillors. They saw themselves in the same position as Ministers of the Crown who approach these issues. The Commerce Committee has made its recommendation, and the Government has picked that up in its progression of this bill through its second reading and now the Committee stage.

I turn to the issue of two councillors signing. The select committee made quite a—[Interruption]

Dr Richard Worth: More misery.

Hon DARREN HUGHES: Oh, the member has been to a caucus meeting today. He is stuck in time again. If I were going to the same meetings as that member, I would be worried about getting exemptions for security purposes as well, in that regard, for Dr Worth.

Dr Richard Worth: Tell us something new.

Hon DARREN HUGHES: Oh, there is a lot that is new to tell the member. For example, many members of his caucus do not support the climate change policy, which could cause some difficulty—

Dr Richard Worth: About the bill.

Hon DARREN HUGHES: Oh, I see. So it is not such a broad, wide-ranging debate after all, as the Chairman advised us at the beginning of this process. We were told it was going to be a wide-ranging debate. Dr Worth is freely interjecting on me while I am trying to explain parts of this bill. But when the tough questions come back, he does not want to talk about it. In fact, since the time that interjection started he has scurried from the second row, back to the third row, and he is hiding there under his desk.

But I do want to touch on this issue of the number of councillors required to sign these proposed requirements.

Dr Richard Worth: Two.

Hon DARREN HUGHES: Dr Worth is quite right. There was some discussion at the Commerce Committee on this very point. It may well be that a council with 10 or 12 members may spend some time debating whether it wants to make full use of the provisions in this bill, consult the community and receive a green light for it because it was to be attached to a project very much supported by that community. But there might be one or two councillors voting against it, as is their absolute right, and who would be errant in the sense of the majority decision if we are requiring every single councillor to sign up, in the same way that we might require a full board of directors to have a unanimous view. It is not practical to require a whole council to sign up. So providing the council has voted and it can be clearly shown in its minutes that, yes, there was a majority decision for the council to embark on that course of action, then under clause 5 the requirement is for only two councillors to sign the investment statement. So I think that does clear up the issue. That was the background to that issue, under clause 5. I know the Property Council, in particular, had issues that it wanted to raise on that matter when it came before the Commerce Committee. Therefore, with those remarks particularly directed to the comments made by Mr Swain, at the moment this is all I want to contribute to the Committee stage of the Securities (Local Authority Exemption) Amendment Bill.

SUE MORONEY (Labour) : I appreciate having the opportunity to contribute to the Committee stage of the Securities (Local Authority Exemption) Amendment Bill, which the Committee has agreed to have a wide-ranging debate on, rather than to debate it part by part or clause by clause. This bill is easy to debate in a wide-ranging way, because it is a big picture bill. This Labour-led Government is committed to strengthening the way in which councils may operate and serve their constituencies. It looks as though the Commerce Committee received very fine submissions from Local Government New Zealand and from some of the larger local authorities, and they urged the House to support this approach. The bill will reduce compliance costs for local authorities and will give them greater ability to fund long-term investments, such as infrastructure.

Under this Labour-led Government we have seen significant improvements in the funding of infrastructure, and certainly my own area in the Waikato is a very fine example. Work has started on many of the roading projects and that will make a big difference to economic development in the region. Additional Government funds have also come from the Joint Officials Group process. We see the effects of Government funding accelerating that infrastructure development and all that it means for the economic development of our region. The region is absolutely booming.

A similar disclosure exemption used to exist for local authorities, but it was repealed in 1996—by the previous National Government, I believe. That was done in order to subject local authorities to a thing called a level playing field, where they would compete with private companies. In those days the market was the best tool that National could think of in Government. It was not our Government, of course; I want to be very clear that this did not happen under a Labour-led Government, but under the previous National Government. Its mantra was “the level playing field” and “the market is the only thing that determines what shall go on in this country”. National sat on its hands and let the market run rampant over everything, basically, in the 1990s.

However, the exemption does not take into account the differences in legal frameworks between companies and local authorities. This bill seeks to redress the fundamental mistake that was made by the National Government in 1996 when it did not recognise the fundamental differences in the legal frameworks between private companies and of local authorities. This Labour-led Government understands that the current provisions of the legislation impose unnecessary compliance costs on local authorities and prevent local authorities from raising capital in an effective manner.

The bill amends the Securities Act 1978 to exempt local authorities from the full disclosure requirements of that Act when issuing debt securities. It does that because the level of disclosure required from local councils under the original Act was burdening them with unnecessary compliance costs. Local Government New Zealand clearly outlined that issue in its submission to the select committee. The original Act required all councillors to sign off on a prospectus, essentially requiring the unanimous agreement of a council to a project or to issue debt to fund the project. That does not happen with any other council decision, I would say. This legislation was getting in the way of the normal democratic procedures that take place on pretty much every other decision that a council might make on behalf of its constituencies, because in this case the legislation required a unanimous decision. So the changes, which are intended to allow an exemption from these provisions, will reduce compliance costs by easing the process for local authorities to offer securities to the public.

This bill will provide a valuable source of alternative funding for infrastructure assets. It will also provide investors with options to expand their investment portfolios. That is a positive move for the investment market.

Without further ado, I am very happy to stand and contribute to this debate in the Committee stage. I was not on the select committee, but I feel certain that it would have given due consideration to the very fine submissions that came in on the bill. It is good to see the wide-ranging level of support in the Committee for this positive move, because this bill recognises that the whole mantra around the “level playing field” was nonsense and that there are differences between private companies and local authorities. Finally, this bill has come forward to put things right.

Hon DAVID PARKER (Minister of State Services) : The reason that we have the Securities Act is to protect the interests of investors so that investors have adequate information upon which to judge risk. That is relevant because, obviously, if one is facing a higher risk, then one ought to seek a higher rate of return, and in many cases if one fully appreciates the nature of the risk when making an investment, then one may decline to make it. We can see the importance of appropriate Securities Act disclosure very clearly in the current environment, where there have been finance company collapses, and where the information disclosure that is required to be given to people who are thinking of investing in finance companies is absolutely essential for them to be able to assess risk properly.

This bill recognises that there are some entities for which the additional information disclosures are not necessary because of their size. An obvious example is the Crown. The Crown issues Government stock and other securities, and because the Crown is probably just about the best debtor that one can have, given the tax base of the Crown, the assets of the Crown, the ability to levy taxes, and the reputation that the Crown has for meeting its debt, the Crown is obviously seen as a very good bet by investors.

The next tier down, in terms of institutional size and the ability to repay moneys loaned to it, is local government. Most local government entities are very large and they at times have the need to borrow money. It is necessary that they have a practical set of rules under the Securities Act that they have to deal with.

Until now, local authorities have been faced with the same set of rules as have applied to private company borrowers, and those private company borrowers have had to meet the full rigours of Securities Act disclosure, including information statements, full prospectus, and the related company accounts. This has meant that borrowing by local authorities has become more administratively expensive for those local authorities. As a consequence, rather than issuing local government stock directly to people who were wanting to invest money in local government stock, much in the way in which they have traditionally invested in Government stock, local authorities have not availed themselves of the issuances of debt securities through the Securities Act route because it has been a bit complicated.

There are good reasons why councils ought to, at times, borrow money. Many infrastructural projects have a lifetime measured in many, many decades. For example, once in 50 years it might be necessary to upgrade sewerage infrastructure or stormwater infrastructure—or to build a new motorway, as the Minister in the chair, the Hon Darren Hughes, has mentioned. The assets that are built have a useful economic life that could be five decades and it would be inappropriate to put the full cost of that particular project on to the ratepayers who happen to be ratepayers in the year that these things are built. It is appropriate to spread the cost of those expensive infrastructure assets over a number of years, and the way in which a council often does that is by borrowing the capital sum required for the project and repaying it over a long period of years, often decades, in order to achieve some matching of the cost against the ratepayers who benefit from that investment. Of course, borrowing enables local authorities to do just that.

So the purpose of this legislation is to recognise the reality that it is appropriate at times for local authorities to borrow money through the issuing of local government stock, as used to happen, recognising that in this instance local authorities are more akin to the Government than they are to private enterprise, and to reflect that in the Securities Act settings that apply to them. That is what this bill achieves, and I recommend it to the Committee.

Dr RICHARD WORTH (National) : We are being treated to an unusual event tonight, and the unusual event tonight is that the Labour-led Government is in disarray and panic. We have heard a series of speakers on the Government side saying nothing of consequence at all, and saying it with an apparent sincerity, which I do not accept, and with an apparent earnestness, which I do not accept. That makes us wonder what in fact is happening behind the scenes in this Government.

We know that the Order Paper is very short. We know that this is a short bill; it has five clauses. We know that the points have been thoroughly canvassed, yet a string of speakers, two of whom are Ministers, have spent a substantial amount of the Committee’s time talking about aspects of the bill. So let me talk about an aspect of the bill that has not been spoken of at any great length. It concerns an issue that Mr Copeland and I both raised in the earlier contributions we made, and it is this issue of junk bonds against the type of debt security offered by local government. I made the point, and he has followed up on it, that local government securities, at a previous time, were popular securities, well removed from the junk bond class.

We have a situation in New Zealand at the moment with Blue Chip. With these finance companies, there are, for many investors, huge tensions, huge difficulties, and huge losses. I would just express the hope, in that context, that the Commerce Commission and the Securities Commission, which are well resourced, take the steps that are appropriate to be taken in pursuing those who have been responsible for setting up these schemes or their implementation. What is the relevance of that to this bill? It is a very easy linkage. What this bill will offer, when enacted, is a security pathway that will be attractive to, I guess, what one might call mum and dad investors. So I invite you, Mr Chairperson, to close down this debate so we are not treated to more of these games of vexatious play that the Government, for some unknown reason, has embarked upon.

DAVE HEREORA (Labour) : I take the opportunity to have a short call on the Securities (Local Authority Exemption) Amendment Bill. I just want to remind the previous speaker that, simply, the intention surrounding this bill is to lower compliance costs. At the end of the day, that is exactly what the bill is designed to do. The Government is committed to strengthening the way in which councils may operate and serve their constituencies. The bill will reduce compliance costs for local authorities, as well as allow them greater ability to fund long-term investments such as infrastructure.

As a member of the Commerce Committee, I think it is important to talk about some of the submitters who came to us and some of the comments they raised. Submissions were received from the Auckland City Council, the Auckland Regional Council, Local Government New Zealand, the New Zealand Society of Local Government Managers, and the Property Council. These submitters raised about five main issues with us. One in particular was the criminal liability aspect. Submitters said that councillors should be exempted from criminal liability, because they are similar to a Minister of the Crown who is not criminally liable in such circumstances. I suppose that the committee in raising that issue gave some serious consideration to submitters’ concerns surrounding that.

The other issue was the proposed requirement that only two councillors sign an investment statement, and the fact that that may lower investment confidence. That, again, was designed to lower compliance costs. In respect of indemnities in insurance, submitters said that local authorities should be exempt from sections 61 and 61B of the Securities Act. In respect of trustees, submitters said that local authorities should be exempt from the requirement to appoint a trust of the debt security, as is the case for the Crown, the Reserve Bank, the National Provident Fund, and the Housing New Zealand Corporation.

I thought it was important to highlight some of the issues those submitters had raised with the committee, and to reiterate that the level of disclosure required for local councils under the original Act was burdening them with unnecessary compliance costs. The original Act also required all councillors to sign off on a prospectus that essentially required unanimous agreement in council for a project or for issuing debt to fund a project. Again, I just reiterate that the whole intention of this bill, and the commitment from this Government, is to lower compliance costs. Kia ora.

GORDON COPELAND (Independent) : I want to take just a brief call on the Securities (Local Authority Exemption) Amendment Bill. I simply say that if the Government speakers—and we have now had quite an array of them—are determined to run a filibuster on a bill that has the unanimous support of the House, then I would like to sow the thought in their minds that it might be appropriate to move that the House rises early so that we can all get on with something else. I do not think it is necessary for us to sit here and have repetitious speeches covering the ground that has already been covered adequately by Dr Richard Worth and others.

• Clauses 1 to 5 agreed to.

• Bill to be reported without amendment presently.

CHRISTOPHER FINLAYSON (National) : There are five issues I want to consider in Part 1, which deals with a number of very important matters. The first issue will be the meaning of the term “communication work”, the second issue will be the position of persons known as “educational resource suppliers”, the third issue will be the parallel importation of films, the fourth issue will be the position of Internet service providers, and the fifth issue is known as the “section 88” issue. Earlier in the day the Minister very kindly provided me with the Supplementary Order Paper on which she has set out the amendments she proposes. What I will do, as I go through the various issues I wish to discuss, is touch on the amendments that she wishes to make.

The first issue is the new definition of “communication work”. I refer back to my first reading speech in which I talked about the development of the Copyright Act since the first Statute of Anne in 1712. The first type of work that was protected was literary work, and over the years different types of works have been given protection; for example, dramatic works, musical works, film, and, most recently—many years ago, actually—the introduction of provisions to deal with protection of broadcasts and cable programmes.

In a sense this bill is very important because it tries to pick up terminology that is appropriate to the Internet age. When the Copyright Act 1994 was passed it was either the dawn of the Internet or just before it, and, of course, in the 14 years since, the Internet has become established as a fundamental part of the way we all do business. So the issue the Commerce Committee was faced with was to try to look for a term that would be—[Interruption]

The CHAIRPERSON (H V Ross Robertson): Would the member who has a cellphone on please turn it off.

CHRISTOPHER FINLAYSON: I will go back to the dawn of the Internet age and simply say that the aim—and it is a perfectly reasonable thing to do—has been to find a term that is technology-neutral, because, as far as possible, copyright needs to be expressed in broad terms, to take into account the march of technology. That is what has happened here. It is proposed that the terms “broadcast” and “cable programmes” will be deleted, and throughout the Copyright Act there will be reference to the new term, “communication work”. The verb “to communicate” is also defined. I have never been totally convinced that the move to this particular terminology is necessarily the best move, but I have to advise the Committee that National will not oppose this change. It is one of the many matters that will need to be looked at again when there is, hopefully, a full review of copyright law in a few years’ time.

The concern I have had—and I acknowledge that the Supplementary Order Paper tries to address this issue—is what appears to be the creation of a new property right to reward the making available of a work. Under the previous law, and for various categories of copyright work, some level of creative activity was required before copyright protection could be conferred. As I said, I think the Supplementary Order Paper tries to address this issue by deleting the phrase “making available by a communication technology”, so that “communication work” will now mean the transmission of sounds, visual images, or other information. If the changes introduced by the Minister’s Supplementary Order Paper address my concern, then so much the better, but I just have my doubts about whether it will.

I would point out one other minor point on this issue to the Minister. I do not know whether the Supplementary Order Paper actually changes the meaning of the word “communicate”, which will still mean “to transmit or make available by means of a communication technology”, and for good order and consistency perhaps that needs to be altered, as well.

The second issue I wish to discuss concerns the new definition of “educational resource supplier”, and perhaps the best way of dealing with this issue is to talk about section 48 of the Copyright Act, which provides the educational exemption in relation to certain categories of work—in this case, broadcasts and cable programmes. As I said, when the amendments are passed, we will be dealing with recording by educational establishments of communication works. Clause 28 will change section 48 to provide for that, but it also introduces this additional term of providing some protection for educational resource suppliers as well as for educational establishments. This was a matter that I do not think was looked at by the Commerce Committee, but I can say that the National Party understands why the Minister is seeking this amendment through her Supplementary Order Paper and we will support that; it seems to make perfect sense.

So, moving along then, I come to the next issue, which is that of parallel importation. This is a rather important one. Section 35 of the Copyright Act deals with the issue of secondary infringement of copyright, and one way in which one can infringe copyright is by importation. So, for example, if one brings in a film, that can be called parallel importation and can attract copyright infringement.

Clause 18(2), as amended by the Minister’s Supplementary Order Paper, attempts to amend section 35 so that there will be infringement of copyright in a film to which subsection (6) applies—that is, the existing subsection (6)—if a person imports a copy of a film into New Zealand within 9 months of its first being made available to the public, and knows that the film is imported into New Zealand and is being made available to the public; if the person seeking to import the film is not the licensee of the copyright in New Zealand; and if that person imports the film into New Zealand other than for that person’s private and domestic use. That is the proposal that has been put forward in the Minister’s Supplementary Order Paper. The National party understands that and will support it. Section 35(6)(b) of the principal Act refers to films that are “produced principally for the cinematic release, or copy of that film,”, so that is the category of work one is dealing with. So that matter can be resolved satisfactorily.

The next issue is a very important one and was the subject, as I understand it, of extensive submissions to the Commerce Committee and of extensive debate in that committee. It concerns the position of Internet service providers. I am referring to the amendments contained in clause 53 of the bill.

Perhaps a little background is required, and I hope that people do not think I am going on and on. But the point is that there needs to be the provision of what are often referred to as Internet service provider safe harbours. Some jurisdictions have made it plain that safe harbours for Internet service providers were meant to ensure that development of Internet-based business would not necessarily be chilled by the threat of liability for copyright infringement; it was done in various ways in the United States, for example, prior to the implementation in 1988 of the equivalent US statute. Case law had established a number of broad principles confirming Internet service providers’ immunity from secondary forms of copyright infringement, and I think that the same applied basically to the European Union commerce directive.

We have taken a slightly different route from other jurisdictions. It seems to me that the new regime, created by clause 53, has created a new statutory tort, and that is quite a different way of dealing with the issue. In the United States, Australia, and the European Union, equivalent provisions limit the scope of liability. In contrast, what we have here—and I refer particularly to new section 92C(2), inserted by clause 53—is a provision stating that the Internet service provider does not infringe copyright in the work by storing the material unless certain things occur, which are set out in the bill.

Again, I do not know whether this is necessarily the right model, but the National Party has had a good close look at it. We will not oppose what the department has come up with for the purpose of this bill. I still do not think that new subsection 92C(4), in clause 53, is required. It seems to preserve the right of the copyright owner to seek injunctive relief against the Internet service provider. In my opinion—and I have always maintained that this is largely redundant—there is no need for this provision if the Internet service provider is already to be liable for copyright infringement.

So that is the regime that has been established. I have my doubts as to whether it is the right regime but we will go along with it.

There have been a number of amendments. The Minister knows, and I certainly know, that we have all had approaches from various commercial entities, as a result of which the Minister has come up with a number of amendments. We will support those. The first makes some changes to new section 92A, and I need not go into that in any great detail. We support what is being done there. Essentially, it is putting back into place what had been there before the bill went to the select committee.

The second issue concerns section 92C, where there is to be the addition of new subsection (2A) about the sorts of things that a court may take into account when determining whether there will be liability for the Internet service provider. I think that that amounts to an improvement over what the select committee said, so we will support that. The third issue concerns the requirements of the notice of infringement, in section 92CA, and I think those changes are fine. The amendment means that a notice to be served must—“(a) contain the information prescribed by regulations made under this Act;”—and of course that has not yet happened—“and (b) be signed by the copyright owner …”. So we can understand that those improvements will be desirable.

We also agree that section 92CB should be deleted, because I always thought that it was rather heavy-handed and went too far. So they are the changes for Internet service providers, and I can advise the minister that we will support her Supplementary Order Paper because we think those changes are quite helpful.

The final issue I want to touch on—and I know that Mr Copeland will wish to speak about this—concerns section 88 of the Copyright Act, which deals with the reception and transmission of broadcast in a cable service programme. There are three positions before the Committee. The first, as I understand it, is the Government’s position, which is to repeal section 88 in its entirety. The second, as evidenced by the majority of the select committee, is to keep section 88 as it is at least until there can be a full review of the Act. The third is Mr Copeland’s amendment, which deals with cable television operators’ right to rebroadcast free-to-air television. As I understand it, Mr Copeland’s amendment seeks to extend section 88 to satellite broadcasters like Sky.

National supports the status quo and believes that the various operators can probably come to a commercial arrangement once their existing contracts expire in a couple of years, so I do not think that we are too happy with that amendment, and we will not be supporting it. I know that the amendments proposed in the Minister’s Supplementary Order Paper are of a technical nature, but I think that they improve the legislation, and that is why the National Party will support them. I have a couple of things to say about various aspects of Part 2, and I thank you, Mr Chairman, for the opportunity to have one call on these issues. I will leave it there.

GORDON COPELAND (Independent) : I want to speak exclusively to clause 49 in Part 1, which, as Chris Finlayson has mentioned, is all to do with the new provision in section 88 of the Copyright Act. The Commerce Committee has, by a majority, reinstated section 88 of the Copyright Act 1994 and, as I read the Minister Judith Tizard’s amendment on Supplementary Order Paper 193, I see that the Government may now also have come to that position. I am sure the Minister will take a call to clarify that matter for me if I am wrong.

As Mr Finlayson said, the amendment in clause 49 is to reinstate the existing position—to allow the reception and retransmission of broadcast in a cable programme service. However, to do that it was necessary to add new subsection (4) in order to preserve a number of technologically specific terms from the 1994 Act that will not be used elsewhere when the Act has been amended.

My Supplementary Order Paper 154 will amend section 88 to allow the recommunication of free-to-air television and other kinds of unencrypted communication works to include broadcast by satellite in addition to cable. In other words, it is simply to modernise the provisions of section 88 to take into account the technological upgrades and improvements from cable to satellite that have occurred since 1994.

I must say that I am very surprised to hear the announcement tonight for the first time that National members will not be supporting my Supplementary Order Paper. I guess that it just reinforces again that in some areas they are not a very progressive outfit, because everyone in this Chamber but they would probably know that satellite communication is the mode now used for pay-as-you-view television, which was formerly exclusively on cable in 1994. I think that for National members to just say that they do not agree with my amendment without giving any rationale is typically weak in the extreme.

My amendment will do the following things. First of all, it is consistent with the Government’s aim of encouraging the uptake of digital television. It will facilitate the recommunication of free-to-air television on digital, satellite, and other means. It is also consistent with the Government’s aim of making publicly funded programmes shown on free-to-air television channels as widely available as possible. I wonder, as a point of diversion, whether those running the new TVNZ 7, which commenced broadcasting on Sunday with The Kingmaker Debate, will find it very strange that the audience for that will be very limited because people have not yet got the right box to put on their TV sets to see that programme. I cannot see how that could possibly be consistent with the Government’s aim of making television in New Zealand as widely available as possible. Obviously, if it is to be made as widely available as possible, then it should be able to get into as many homes as possible. That is what is happening under the present arrangements, as free-to-air programmes are rebroadcast over, say, the Sky network, or by TelstraClear and domain streaming on the Internet, so that as many people as possible can see those programmes.

My amendment is also consistent with improving the coverage of free-to-air television, as digital satellite recommunications in particular are able to reach into areas where traditional terrestrial communication is very difficult. That particularly applies to a number of areas in New Zealand. I think of Northland, where the majority of people living there are Māori. At the moment they get their TV, be it Television New Zealand (TVNZ) or TV3, through the Sky platform. Potentially this bill, which is old-fashioned and is limited to cable only, will bring that to an end. The existing provision for copyright holders to establish licensing schemes for recommunication will also be retained.

Those are the bare bones of my amendment. It does not, as some have claimed, require TVNZ to provide free retransmission of a programme to, say, Sky or TelstraClear, although, of course, TVNZ is perfectly free to do so. TVNZ has a commercial incentive to do so, as, by enlarging its viewer audience, at the same time as it boosts its ratings it boosts its advertising revenue, which—as its representatives confirmed to the select committee—flows directly from its ratings. Therefore, the larger the audience is, the larger the bill, and the larger the advertising revenue will be. So TVNZ already has a very significant commercial imperative from which it would want to drive this.

TVNZ programmes continue, by the way, to be rebroadcast in their entirety; it is not as if TVNZ or TV3 lose the ownership of those programmes. Every part of a programme, including all the advertising associated with it, is rebroadcast. It is all rebroadcast in its entirety and the ownership of that programme and all the advertising and advertising revenue from it continues to belong to the originator of the programme, be it TVNZ or TV3.

So it is quite wrong to say that my Supplementary Order Paper will compel channels to provide those programmes free of cost or even compel them to provide them under certain conditions. It will not. Rather, channels are able to establish a licensing scheme for the recommunication of their works. The licensing scheme will cover retransmission. Therefore, any person wishing to retransmit will have to do so by the terms of that scheme and will have to pay any fee prescribed. That is just normal, straightforward copyright law. All the statutory provisions needed for such licensing schemes are already provided in the Copyright Act. They allow the copyright owner or any person acting as agent for the copyright owner to establish a scheme, tariff, or other arrangement for the licensing of copyright works. This scheme simply has to set out the situations in which the operator of the scheme is willing to grant copyright licences and the terms on which copyright licences will be granted in those situations. To provide some oversight, terms of proposed operating licence schemes can be referred by the operator or a prospective licensee to the Copyright Tribunal for review. The tribunal would consider whether the scheme and its conditions were reasonable. A person who has been refused a licence under a licensing scheme may also refer the matter to the Copyright Tribunal.

I trust that that further information will assist to clarify the situation. Clearly, if TVNZ or any other free-to-air broadcaster should establish such a licensing scheme, then copyright is fully protected. I suspect that TVNZ, not to mention perhaps Mr Finlayson and the National Party, has not actually grasped that central reality, although I am very surprised at Mr Finlayson’s comments, because until very recently I was assured that National did grasp that reality and would, therefore, be supporting my Supplementary Order Paper. But, not for the first time in my experience, those members have suddenly decided today to do something rather different.

Just to be clear about the matter, if we refer to my Supplementary Order Paper 154, we see that subsection (3) of the proposed section 88 specifically states: “This section does not apply if or to the extent that licences authorising the reception and immediate recommunication of a communication work and any work included in the communication work are available to the person under a licensing scheme and the person carrying out the recommunication knew that fact.”

I say in simple terms that I know of no reason why my Supplementary Order Paper would not be acceptable to the entire television industry in New Zealand. It is an attenuation of a normal process, and I have yet to fathom or obtain any reason for, or explanation of, why it should not happen. Sadly, sometimes this Committee in its haste or maybe even for political reasons tends to miss the point. I think I am likely to find when the vote is taken on my Supplementary Order Paper that that situation sadly applies tonight in relation to this particular matter. Thank you.

DAVE HEREORA (Labour) : Kia ora, Mr Chair. I take the opportunity to take this call in the Committee stage of the Copyright (New Technologies) Amendment Bill. There was one particular area that as a member of the Commerce Committee I took interest in, which was the provisions relating to educational establishments, how libraries could be using that material for the use of students, and how those issues were formulated.

Before I talk about that I just want to recapture some of the intentions surrounding the bill. Of course, the bill is amending the Copyright Act 1994 and promotes a legal framework that guides the protection and use of copyright material. Obviously, that is of major interest within Māoridom at this point in time, which is watching very carefully how those protections may proceed in the future. The bill is part of a wider reform process to ensure that our intellectual property legislation is up to date, relevant, and takes account of international developments. It will also ensure the effective operation of the Copyright Act in the face of emerging technologies.

The bill creates a more flexible framework for technology to operate in the Copyright Act by redefining certain terms contained in the Act to make them more technologically neutral. The main provisions of the bill address concerns regarding the scope of the definition of copying; give a copyright owner a technology-neutral right to control distribution, including email, peer-to-peer, and other digital forms of communications; and introduce a definition of Internet service provider. There is also a range of provisions that limit Internet service provider liability for copyright infringement in appropriate circumstances. Therefore, it clarifies and amends the exceptions to copyright owners’ inclusive rights, particularly in relation to fair dealing, library, archival, educational use, and time shifting; updates the technologically specific language currently used; and introduces the communication right for performers so they can maintain a fair commercial return.

I thought it was important just to revisit some of the values and principles surrounding the intention of the bill. I now move to the issue I raised earlier, in terms of the new provisions relating to educational establishments. The Act provides a number of specific exemptions under certain sections for educational establishments to copy works. These provisions are currently written in technologically neutral terms and allow the permitted activities to be undertaken by digital means. Clause 24 of the bill, amending section 44, is designed to clarify the conditions under which an educational establishment can supply copies of works in a digital form, including restricted remote access via the Internet to authorised students, with supply of copies consequent to the permitted copying. Clause 25 adds a new section 44A to enable educational establishments to basically store websites electronically for educational purposes for a limited period of time, linked to the duration of a period of time for which they are relevant to the teaching of the relevant course. This exemption would enable access to Internet material that is subsequently changed or deleted and has ongoing significance for teaching purposes but the exemption would be subject to the adequate identification of the material and the course for which it is stored.

The select committee amendment under clause 24 clarifies that copies of works in digital format made under section 44 can “be communicated to a person who is a student or other person who is to receive, … or has received, a lesson that relates to the work.” Ideally, under clause 25, it also clarifies the conditions under which an educational establishment would be allowed to store pages from a website under the new section 44A. In particular, the section was amended to make the requirement to identify the author dependent on the author’s identity being known. Often, the authorship of works available on the Internet is unidentifiable. Therefore, requiring authors to be identified in every case is unrealistic. Clause 25 is also amended by deleting in section 44A(1)(b)(iv) the requirement that an educational establishment must identify “the course of instruction for which material is stored;”. Such a requirement was identified by the committee as being impractical, given that the website material copied may be stored for use in many courses.

Issues raised with the new educational establishment provisions are that copyright owners would like to see clause 24, amending section 44, to add new limitations on the ability of educational establishments to copy material for educational purposes. For example, they consider that section 44 should not permit the whole of a work to be copied for educational purposes. That is quite important, because if that is the case, then under any circumstances without a licence—furthermore, where part of a work is permitted to be copied—the portions of the work that may be copied for educational purposes under this exemption should be further limited. In effect, copyright owners would like schools to pay more for using works protected by copyright. That was the issue raised by some of the submitters. Conversely, educational establishments would like to see the scope of section 44 expanded by removing some or all of the existing restrictions under which a work may be copied for educational purposes without a licence from copyright owners. In effect, schools would like to pay less for using copyright material.

Quite frankly, the response in relation to the aim of the bill was not to review or change the existing balance between the rights of copyright owners and access for educational establishments; rather, it was to ensure that this balance is maintained in a digital environment. I thought it was important just to revisit again that issue, because it is important that we do not lock up our libraries and institutions into having to reduce the amount of information they can rely on to provide for our students. Kia ora.

DAIL JONES (NZ First) : I was not on the select committee when the submissions were being heard—I was not even a member of Parliament at the time—so my knowledge of the select committee process is non-existent. But I have taken the opportunity of reading the second reading speeches, which have been very, very helpful. I must also thank Mr Finlayson for his very detailed, helpful, and informative viewpoint on the Copyright (New Technologies) Amendment Bill itself and on Supplementary Order Paper 193.

New Zealand First wants to make sure that it keeps up with technology. Someone was not sure whether the Internet had come into existence in 1994. I think in 1994 we were probably all still using Commodore 64s and just moving to using more updated IBM computers and suchlike. There has been a remarkable explosion of technology in the last 13 or 14 years. Some of us have even come to grips with things like iPods of various descriptions. I am told—and after reading the second reading speeches I know—that I am even possibly committing an offence when I put a CD on to my iPod. That might not be legally allowed. Well, it is about time we had some legislation that brings matters up to date.

There has been criticism of the bill to the effect that more could have been done. That is always the case with legislation; more always can be done. But usually when we try to do more and more, the bill tends to languish in the Minister’s office for longer and longer, and nothing ever actually happens. Half a loaf is better than no bread at all. It is very interesting to read the legislation and to see how matters have been brought up to date.

The issue of the proposed amendment by Mr Copeland has been raised. New Zealand First will not be supporting Mr Copeland’s amendment. Effectively, New Zealand First will be supporting the bill as it has been reported back. We will be supporting the amendments. It all makes sense, and if I was in any doubt at all, I am not now, thanks to Mr Finlayson’s comments.

Hon JUDITH TIZARD (Associate Minister of Commerce) : I thank members of the Committee for the very constructive approach that has been taken to what is—as Mr Dail Jones said—rather delayed legislation.

This legislation affects myriad interests of both New Zealanders and people internationally who are owners and users of copyright that may have been created or is available in New Zealand. It is a vast, three-dimensional jigsaw that has huge effects on a range of people whom we may be able to predict, but also sometimes on people whose interests are not predicted in this legislation. I think it is useful that we try to take a very non - party-political approach to this legislation, and I compliment the Committee and the select committee on the attempts that have been made to get to grips with this very technical, difficult, and conflicting legislation.

I particularly want to thank Chris Finlayson. I thought his contribution was very constructive. In the second reading of this bill he called for a full review of the Copyright Act, and I reiterate my point that because of the complexity of the issue and the vast number of people and interests involved, this legislation—this whole area—has to evolve. People’s ordinary lives, businesses, innovations, and research depend on our being predictable in this area, whatever we do.

The first issue that Chris Finlayson raised related to the new term “communication work”. The new category of “communication work” would not create protections for transmissions regardless of any creative input, because as in any other type of copyright the work is still required to be original. The current definition in the bill reported back by the select committee would extend protection to signals that carry content in interactive or on-demand communications, but that was an unintended consequence, which is addressed by Supplementary Order Paper 193. I hope that reassures Chris Finlayson on that particular issue.

My colleague Dave Hereora made a very useful contribution relating to the new area of “educational resource supplier” in Supplementary Order Paper 193, and I agree that this is akin to what we understand libraries had done in the past and will do in different ways in the future. Where there are electronic or digital communications, programmes, or creations of whatever sort, it is necessary for our schools, universities, and research institutes to have access to those. Increasingly, they are available only in digital format; they are not available in book form. One of the people who has been consulted on this legislation said that in his particular area of research anything in a book is probably 10 or 15 years out of date, anything in a magazine is probably 3 or 4 years out of date, and papers on the Internet are the only way of keeping current in his field. We have to recognise this, in terms of teaching our new curriculum and making sure that New Zealanders have access to the most recent innovations, thoughts, and projections. The new category of “educational resource supplier” makes it clear that the intermediary may be a company or an organisation that is not in the first instance what we understand to be a library.

Supplementary Order Paper 193 deals with a range of other issues, and I will deal with those more specifically. In terms of the limitations around protections for Internet service provider organisations—those that provide Internet supplies—there had to be a provision and a process whereby information that was put up on the Internet in breach of copyright law could be taken down. I recognise the Green Party’s concern. Its members were particularly concerned about the issue of the use of copyright material in fair comment and/or satire or parody. We have been very happy to give an undertaking to Nandor Tanczos, the Green spokesperson in this area, that we will conduct a review looking at what happens particularly in Australia, which has recently changed its legislation to come into line with that of the United States, I think as a result of its relatively new free-trade agreement with the US. The Australian legislation makes provision for a specific exemption for copyright infringement for the purpose of parody and satire. I understand that it follows the US law. There is currently no specific exemption in the United Kingdom, although there is a recommendation to create an exception to copyright for the purpose of caricature, parody, or pastiche, and that was made in the 2006 UK Gowers Review of Intellectual Property. The US has a more general “fair use” exception, which would probably mean that in most situations parody and fair comment would not amount to a breach of copyright. We want to look as these examples carefully, and any amendments required to implement any changes arising out of that review, which I assure members across the Chamber will be a public discussion, can be included in the next proposed amendment to the Copyright Act. As I have already indicated, this bill is one of a series as we evolve copyright, and the specific issue that so far we have agreed to include in that legislation is around the commissioning rule. I hope that that may give some reassurance to the Green Party on that issue.

The Green Party members’ concern around format shifting more generally was that they wanted to see video content included. We have made a policy decision not to do that. I think it is generally agreed across the film and video industry in New Zealand that it would prefer more protection. We recognise, as Dail Jones said, that like much of the advanced world much of New Zealand has moved on to forms of reproduction for music and/or video or films in some cases where format shifting is necessary. But we do not think it is useful to say that people may make or pass on digital copies, because of the economic damage that can so easily be done. As we saw, one unscrupulous employee of a post-production house took a copy of Sione’s Wedding. Huge economic damage can be done to film makers, who in New Zealand are pretty vulnerable; they do not have the back-up of big studios or big profits from earlier films. No matter how much we would like to believe otherwise, New Zealand film—having made an extraordinary difference to our tourism industry, for example—has not yet got the economic robustness to cope with the sort of damage that can quickly be done by the ability to transmit digital copies.

Gordon Copeland spoke about the issues around the right to replay free-to-air television, and I thank the Committee, and the select committee before it, for the consideration that has been given to that. At present it can be dealt with commercially. I am very opposed to enshrining any right to rebroadcast. I agree with Mr Copeland that as a Government and as New Zealanders we desire to see New Zealanders having the greatest access to the greatest amount of information, but I think the idea that we could enforce a commercial right over an unwilling seller would be abhorrent. So I am opposed to the extension that Gordon Copeland’s Supplementary Order Paper would give to section 88, and I recognise that this is an issue that members will have to deal with in greater detail when we get to the point where there is a clear choice about the way that free-to-air television should be rebroadcast in a digital format.

I thank members for their serious comment on this bill. We have several more parts to consider, so I will leave my comments at that. I am very happy to have a debate in this Chamber tonight on this legislation. One of the healthier things we do in the House is to deliberate when people are trying to find a way forward, rather than coming in here with predetermined views that are sometimes, as Mr Copeland bewailed, political. Of course, politics is how we do things in this House, rather than shooting each other, and I think that is a good thing.

GORDON COPELAND (Independent) : I want to take a brief call in response to the further comments from the Associate Minister of Commerce, Judith Tizard, in relation to my Supplementary Order Paper 154, which I gave a very full—I think—and complete explanation on earlier to members. She has said that she is deeply opposed to any extension of the current section 88—namely, I guess, from cable to satellite—but without actually giving any background or rationale for her position. In that respect she is at one with Mr Finlayson, who likewise gave no rationale or explanation as to why he believes that my Supplementary Order Paper on section 88 is misplaced.

I think that is a rather disappointing standard of debate on a serious matter. The questioning that the Commerce Committee subjected Television New Zealand (TVNZ) to in relation to this issue, when it came to the select committee for its financial review, subsequent to the second reading of this bill, was quite complete and detailed. It was absolutely clear to all of us in the select committee that TVNZ was under the complete misapprehension that my Supplementary Order Paper obliged it in all circumstances to allow its programmes to be retransmitted by, say, Sky or TelstraClear for free. That was the whole objection. We pointed out that, no, TVNZ would get an extra revenue stream from it because of the higher ratings and the higher audience numbers, and both the chairman and the chief executive agreed with that. They said “That’s right, we do. We get an extra revenue stream.” We explained that the ownership of the programme remains with them at all times because it is being retransmitted only—there is no transfer of ownership, it is still theirs, and all the advertising revenue is still theirs. They agreed with that. But they had no understanding at all that my Supplementary Order Paper proposed an alternative—namely, a licensing scheme under which they would be able to charge a fee to Sky or TelstraClear. They had no understanding of that, at all.

So I am disappointed that their misunderstanding, which is factually incorrect, seems to have somehow conveyed itself to the members of both Labour and the National Party, who, on the basis of this complete misunderstanding, have said they are not going to vote for the Supplementary Order Paper, but that at some time, when they get round to it, they will look at the whole matter. What is going to change between now and the future? I have no idea. Really, I just want to say I am rather disappointed that such a superficial result has come about. There has been no justification or explanation as to why the particular view against my Supplementary Order Paper, which is sane and reasonable, has got to the point where people have decided it is not workable, and that, somehow, the issue needs to be reviewed in the future. I think that is the ultimate cop-out. We hear time after time “It is too complex. We will do it later.” No, it is not complex; it is very simple and we should be doing it now.

Dr JONATHAN COLEMAN (National—Northcote) : In response to Mr Copeland’s comments about his Supplementary Order Paper 154 I say that National members will not be supporting it because Television New Zealand (TVNZ) and the free-to-air broadcasters all have a particular business model under which they operate their businesses. Let us face it, they are commercial businesses. They are in competition with Sky, they are in a commercial battle and a war with it, and National members are pretty confident that the two parties are going to be able to reach a commercial arrangement without Government interference. That is the whole point of our not supporting Supplementary Order Paper 154.

We could take it further than that. If a person runs a business with a certain business model and wants to have control over—if it is in the broadcasting sphere—the content, that person wants to be able to say: “Look, this is my content. I am in charge of where it goes and how it is distributed.” Why on earth would it be fair for commercial rivals to be able to take that content and distribute it from their own platforms? Whatever we might say are the perceived benefits for TVNZ, TV3, et al. through that arrangement, we have to say that the content is their intellectual property and it is their right to distribute it as they see fit. We have two broad commercial groupings here. We have Sky on the one hand and the commercial free-to-air broadcasters on the other hand. It is in both of their best interests for Television One, TV2, and TV3 to be available on the Sky platform, and the heavy hand of Government regulation is not needed to make that come about. I think we can be perfectly confident that those two groupings are going to reach a commercial arrangement without the Government once again getting involved with its sticky fingers and turning this into a regulatory mess.

That is the crux of the argument. The free-to-air channels have control over whom they broadcast to and on what platforms they are carried. They should have that right and we are confident that a perfectly workable arrangement will be reached between the free-to-air broadcasters and Sky television that will enable those channels to stay there. There is a common misconception—I say to Mr Copeland—that just because something is free to air it is—

Hon Judith Tizard: It’s free!

Dr JONATHAN COLEMAN: —free. No, it is actually intellectual property that is owned by the people who broadcast it. Their business model is predicated on advertising revenue and on control of their signal, and just because the content is produced and is out there does not mean someone should be able to pinch it. Take the converse argument: how would people who had a pay television model like it if suddenly the free-to-air broadcasters could pinch their signal—say, they pinched Sky Sport and put it on FreeView? There would of course be a huge hue and cry.

So I think we have to leave them to sort it out. I think it will be sorted out, and I think it would be very unlikely that Television One, TV2, and TV3 were taken off Sky, because that would not be in anyone’s interest in the long term.

MARTIN GALLAGHER (Labour—Hamilton West) : In speaking on Mr Copeland’s very valid Supplementary Order Paper, I find myself in the somewhat unusual position of agreeing with the previous speaker, Dr Coleman, in terms of the concept he has put up. The logic of it—to explain it really slowly—would be that we would have a situation whereby FreeView could go in and grab Prime Television and suit itself.

In terms of a commercial model—of intellectual property—it is very obvious what the previous speaker said. Because it is “free view” and free-to-air, yes, there is a commercial model. Some of the “free view” will certainly consist of so-called public service channels and community channels. Other parts of “free view”, in the sense of the free-to-air bit, will very much consist of commercial businesses that are using FreeView as a platform but are being paid for, in terms of commercial reach, through advertising, sponsorship, and other means. They as a broadcasting business—just as with public television—should choose which platform to use. I agree with Dr Coleman in the sense that I think some of those issues will be sorted out commercially. There will be a point where appropriate arrangements are made.

I am not sure whether the previous speaker would agree with me on this, but I was reading somewhere in one of the papers about the so-called FreeView Plus model. Frankly, why should Sky or anyone else just be able to beam in from wherever and be the only pay TV model in town, subject obviously to FreeView offering the vast majority of its channels in terms of the free-to-air model?

And what do we mean by the free-to-air-model? We mean that it has either New Zealand On Air funding, etc. or advertising funding and is broadcasting appropriately. But certainly there could be a FreeView Plus model whereby FreeView might want to charge for certain products in the future. That, again, would be a degree of healthy competition between that particular consortium and Sky.

Obviously, if we look at regional television we see that we certainly want to encourage it. Stratos, for example, is now taking a range of regional television and putting it up on the platform. We certainly want to have a situation whereby those regional operators, subject to financial assistance to get up on the satellite platform or on to terrestrial television, should ultimately be able to make the choice.

For example, I was with David Bennett the other day, being interviewed by tvCentral, which covers the Waikato and the Bay of Plenty. It is based in Matamata, and it is an amazing story, dare I say it, of incredible enterprise and a lot of faith and hope. It is a regional television channel that is now providing for us in the Waikato and Bay of Plenty a genuine family-viewing product.

Quite frankly, in terms of tvCentral’s mix and its product, it ultimately, I say to Mr Copeland, should have the choice, the business choice, as to whether to negotiate with Sky and go up on that particular platform. An equivalent example would be a situation with Burger King and KFC. Burger King could come in and say it likes the product of the outfit down the road, and just grab the patent, the product, and reproduce it.

So without further ado I say that although I certainly respect the sincerity of Mr Copeland and the point of view he puts forward, we on this side of the Committee—and I think this is reflected in the Minister’s view—could not support that particular Supplementary Order Paper for the simple reason that the broadcaster itself should have the ultimate choice, relatively speaking, as to which platform to go on.

• The question was put that the amendments set out on Supplementary Order Paper 193 in the name of the Hon Judith Tizard to Part 1, and the following amendment in her name to clause 36, be agreed to:

to omit from new section 56A(1)(d)(i) “and” and substitute “or”.

• Amendments agreed to.

The CHAIRPERSON (Hon Clem Simich): The amendment set out on Supplementary Order Paper 154 in the name of Gordon Copeland to clause 49 is out of order because it is inconsistent with a previous decision of the Committee.

• Part 1 as amended agreed to.

Dr RICHARD WORTH (National) : The Copyright (New Technologies) Amendment Bill, which National supports, is in two parts. The first part has a number of amendments to the first part of the Copyright Act, and Part 2 is concerned with amendments to Parts 6 to 11. I want to spend the short time I have in talking about technological protection measures, or “TPMs” as they are called in the industry.

Before I do that, though, I just make the comment that it is scarcely satisfactory that a Supplementary Order Paper that touches this and a number of other issues has been delivered to us to see just today. It is not easy to pick up complex legislative change and to be satisfied that what has been proposed by the draftsmen is in fact truly appropriate in the particular context of copyright law. I say that because this is not perfect legislation. I think we would all acknowledge that, and that is why I welcomed those in the Chamber who spoke about something akin to the provisions included in the Evidence Act that would require the Government to carry out a review within a specific time frame to see this legislation improved. This is piecemeal legislation. It is certainly better, but it is not as good as it might be.

If I talk about technological protection measures, the starting point is clearly clause 89. There, a number of new sections—sections 226 to 226J—are substituted. Perhaps I should start by talking about technological protection measures in a more general way. They are a means to combat the ease of unauthorised reproduction and distribution that digital technology provides. Examples of technological protection measures include the content scrambling system used by DVD manufacturers to control the types of devices and software that can access a DVD’s content, and the digital rights management systems used in software to control the copying and distribution of content files. If we look at what the law is, we see that the Act allows copyright owners to take action against people who supply or manufacture devices, means, or information specifically designed to circumvent technological protection measures. This applies only to technological protection measures that prevent copyrighted material from being copied.

The bill before us tonight will extend this right by allowing copyright owners to take action in respect of devices, means, or information, where circumvention could enable infringement of all exclusive rights, not just the right of copying. An example of that is that the bill will include infringement of the communication right that extends to webcasting. The act of circumventing the technological protection measure will not itself be prohibited, and the offence provision introduced in the bill for commercial dealing in circumvention devices, means, and information is intended as an additional deterrent for such activity. There are also new provisions to enable the actual exercise of permitted acts where technological protection measures have been applied.

It is, of course, a reality that in the online world, protected works can be copied perfectly, instantaneously, and in multiple copies. They are then disseminated around the world with the click of a key, so it is critical for copyright owners to be able to use technological protection measures to implement the terms and conditions of use that consumers have paid for, and to protect their works against such easy and unauthorised copying. The World Intellectual Property Organization treaties therefore contain a provision requiring that technological protection measures be given effective legal protection against circumvention, and it is right to say that a number of groups are concerned that the way in which the bill has been reported back from the select committee—and I will come to the impact of the Supplementary Order Papers in a moment—will mean that New Zealand will diverge from what other countries have been doing in this area. I would say that that is most undesirable. Those groups go so far as to say that if the bill is enacted as reported back by the select committee, it will not provide any meaningful protections for technological protection measures or any legal certainty regarding enforcement.

My take on what the particular concerns are, are really these. The concerned groups say, first of all, that the definition of a technological protection measure is poor. The critical thing, of course, is to protect access control. For example, if a person can gain access from a subscription, one has to be able to deny access if the person is not paying the subscription. They are also concerned about the definition of prohibited circumvention devices, and I think a minor change is needed to make the current formulation more acceptable. Then there is the very vexed and tricky question of the knowledge element for prohibited conduct. In the bill as reported back by the select committee, liability for trafficking in circumvention devices—which, as the legislation makes clear in the definition provisions, get around technological protection measures—is contingent on establishing knowledge and intention that the device will be used to infringe property rights. Those may be very difficult elements to prove.

Then there is the issue of exceptions from prohibitions, which is dealt with in new section 226D in clause 89. Those interested groups, which I think are genuine, are concerned that the regime is too permissive and would undermine the legal protection itself. So we had, just as one example, a submitter saying that the bill as amended would be inconsistent with the requirements of the World Intellectual Property Organization treaties and would make our law different from Australia’s. I think there is a concern that the industry does not want a black market in these devices and there is a case for a controlled approach like Australia’s.

I will turn briefly to the Supplementary Order Paper itself, which I have criticised because it came so late in the day. It cannot be good practice in a parliamentary democracy that we have seen in the course of an afternoon a number of amendments to this legislation. They are not textual amendments; they are actually substantive amendments across a range of fronts. I note in connection with Supplementary Order Paper 193, which is the Government’s Supplementary Order Paper, that there is clarification of the extent to which the rights of a technological protection measure issuer, under new section 226B, impinge on the exercise of a permitted act or the undertaking of encryption research. There is also clarification of new section 226E as to who may undertake encryption research.

So there we have this legislation. One is reminded of the curate’s egg—good in parts; not so good in other parts. I express the hope that when there is a change of Government in the next period, it will be a priority of the new Government that this legislation will be looked at more critically and in a more holistic way to produce a better outcome.

Hon MARK BURTON (Labour—Taupo) : I am interested in the final comment made by Dr Worth. I suspect that this legislation will not last another century. It will probably need revisiting before that time, when he predicts there will be a change of Government. In the meantime I think there is much to do with the matter before the Committee.

I think we should remind ourselves that the purpose of the technological protection measures provisions is to give copyright owners a more comprehensive right relating to the protection of technological protection measures in response to technological developments and, travelling with that, the increased risk of piracy of copyright works in the digital environment. Central to this legislation is a recognition of the fundamental shift and change that have taken place in technologies. Copyright owners are increasingly using technological protection measures as a practical means to protect their copyright and, of course, to assist in the development of new business models.

The Act currently allows—and I think Dr Worth made some reference to this—copyright owners to take action against persons who supply or manufacture devices, means, or information that are specifically designed to circumvent the copy protection and that are intended to be used to make infringing copies or copyright works. The copyright owner will have the ability to take action in respect of devices, means, or information where circumvention could enable infringement of all the copyright owners’ exclusive rights, not just copying. This is cognisant of the increasing importance of the rights of communication and the necessary incentives for the provision of online and digital services.

Clause 89 inserts into the Copyright Act new section 226C, which I do not think Dr Worth visited. The section is a criminal offence provision in limited circumstances where there has been large-scale commercial dealing in circumvention devices, information, or services, and is intended to provide a necessary deterrent. Dr Worth made passing reference to new sections 226D and 226E, which enable the actual exercise of permitted acts where technological protection measures have been applied. The provisions provide a person wishing to exercise a permitted act who does not himself or herself have the ability to circumvent, with the option of seeking assistance from the copyright owner or certain trusted organisations—so-called qualified persons. A “qualified person” means a prescribed library, an archive, or an educational establishment.

There were a number of Commerce Committee amendments that I will not go into in any detail at this time. But I am sure that as we progress through our consideration of this part there will be some discussion of those amendments and I may take another call to add to that general discussion.

CHRISTOPHER FINLAYSON (National) : My call on this part will be relatively brief because Dr Worth has dealt in some detail with technological protection measures, but there are two issues that I want to raise. As we know, and both speakers have referred to it, the bill deals with technological protection measures but it limits the scope of these measures to those that protect established rights of copyright owners and, as the report of the Commerce Committee says, it specifically excludes the so-called access controls. That is an issue that we may need to revisit at some stage in the future. It is a very interesting issue.

It is perhaps necessary for the record to distinguish between the two types of technological protection measures. Technological protection measures that protect the traditional prerogatives of copyright owners are largely uncontroversial, and these are the ones we are dealing with tonight. They are measures that protect against activities that are traditionally part of the copyright—for example, reproduction, distribution, public performance, and the like. Technological protection measures that control access to a work are much more controversial. This type of technological protection measure is particularly important for musical works, for example, the enjoyment of which does not necessarily implicate the established rights of the copyright owner.

The commentary to the select committee report states: “We consider that the principal Act is not intended to protect access-control technologies that are used to price-discriminate or control the geographical distribution of works to the detriment of users in New Zealand.” However, it is interesting to note that the copyright laws of the United States and also, I think, of Australia, include provision for access-control technological protection measures in addition to the traditional ones I have referred to tonight. It is possible that this will be an issue that we have to revisit at some stage in the future if necessary to bring our law into line with that of Australia and the United States. That is the first point I wanted to make.

The second point is a matter that picks up on what Dr Worth said about eleventh-hour amendments. I said that I was grateful to the Minister for providing this material to me in the morning, but there is an issue that I wonder whether she will need to talk to her officials about because I have been studying it closely for the last couple of minutes and I am just a little bit worried about it. The bill adopts a fairly standard definition of technological protection measures. In the United States in recent times, as I understand it, there has been divergent case law as to whether, if one misuses another’s password, that could amount to circumvention of a technological protection measure. As I understand it, password protection is now a standard mechanism accompanying the marketing of copyright-protected works. I have taken a good look at the definition of technological protection measure circumvention device. It means a device or means that is primarily designed for the purpose of enabling or facilitating the circumvention of a technological protection measure, and then of course there is the Minister’s amendment. I will read it as if the Minister’s amendment has been included “and has only limited commercially significant application except for its use in circumventing a technological protection measure”.

Now, the officials may know better than me, but from just looking at the words of those provisions I do not know that misusing someone else’s password will be caught by that form of words. It may be necessary to try to clarify this point tonight. I am sorry that this matter has come to my attention only this afternoon, but I have a problem with it and I wonder whether it should be addressed, given that password protection is a standard mechanism accompanying the marketing of copyright-protected work. Perhaps we need to try to deal with that issue tonight.

DAVE HEREORA (Labour) : I also want to comment on the technological protection measures, just to recap the three main points surrounding that. The purpose was to extend the current technological protection measure provisions so that technological protection measures protect all exclusive rights under copyright—not just copying—and also provide an offence for commercial dealing in technological protection measures, circumvention devices, means, and information, and contain provisions to enable users to seek assistance from trusted institutions such as libraries and educational establishments, and to break technological protection measures in order to exercise permitted acts under Part 3 of the Act.

The key changes made to the technological protection measures at the Commerce Committee were to clarify that technological protection measures are designed for purposes other than the protection of copyright, for example, zoning on DVDs to enable market segmentation is not protected, and the provisions to enable users to seek assistance from trusted institutions were simplified so that a user no longer needs to apply to a copyright owner before he or she seeks assistance from a trusted institution. There is also a new ability for the class of trusted institutions to be extended by Order in Council. These amendments were made on the recommendation of the specialist advisers to the Commerce Committee.

Some of the concerns raised by the public were that that provision did not protect technological protection measures that controlled unauthorised access, that the provisions are out of step internationally, and that the knowledge requirement for the offence of commercial dealing in technological protection measure devices means it would be very difficult for a prosecution to be maintained. Those concerns were not directly linked to the select committee amendments. However, the previous concerns raised similar issues. Although some other countries provide broader protections for technological protection measures that restrict access, these provisions have generally been put in place in order to meet obligations under free-trade agreements with the US, as with Australia. The knowledge requirement in the offence provision is an important safeguard, given the level of penalty that a breach of the provision could give rise to. I thought it was important just to revisit that issue and to raise it this evening. Kia ora.

Dr JONATHAN COLEMAN (National—Northcote) : I will take a relatively short call on Part 2 of the Copyright (New Technologies) Amendment Bill, but first I will just follow up on what Dr Worth was saying. He was saying that should there be a change of Government—which of course there will be—we will have to revisit this legislation. Then the Hon Mark Burton said that the legislation would be revisited but gave a different set of reasons. I think that both had some elements of truth in what they were saying, in that the pace of technological change will really mean that copyright legislation—anything pertaining to the digital world—will have to be revisited on a pretty regular basis. Within a few short years a lot of this stuff—if it is not obsolete—certainly will not be up to date with current technological developments.

In the debate on Part 1 we talked about the issue of content shifting with regard to music. But the reality is that those issues now equally pertain to content shifting with regard to video. If one looks out there, one sees that there is a whole generation of people who are now watching their television very much along the lines of the iPod model. They are using programs such as LimeWire to download the latest television shows from America, to watch programmes such as Desperate Housewives, or Lost, and watch them on demand, when they want to watch them, and where they want to watch them. So the old model of broadcasting really is in its last days. It will not be long—it will be a matter of a couple of short years—before we are going to have Internet television widespread throughout New Zealand. What we need now is a broadband infrastructure that allows that to be provided. This bill, really, should have given an opportunity to future-proof some of the legislation in anticipation of some of the technological changes that we will see. So I would have to say, unfortunately, that a lot of this stuff is almost on the verge of becoming obsolete now.

Speaking about another thing, I was at a public meeting last night in my electorate, in Glenfield, and we were discussing the council district annual plan. There was a guy there with a hand-held video camera who was videoing the whole procedures. Fortunately I was not speaking, because when people nowadays have a video on one, one wonders what is coming next. But I can tell members that if that video went on YouTube last night I do not think there would have been too many hits on it—it was pretty dry stuff. It was talking about waste sewerage systems through North Shore City. I went up to this guy and said to him: “What are you doing?”. He said: “Look, I can’t speak now; I’m actually making a movie.” I do not know how this stuff will appear, but I suspect this gentleman was probably making some sort of documentary on local government. It will have been made with a hand-held camera, and I would say that it will be on YouTube pretty soon. When we look at clause 77, “New section 172 substituted”, we see that it talks about infringement by use of illicit recording made without a performer’s consent. This is obviously covering commercial performance, but the point I would make—and I think we are all probably going to face it in this election campaign—is that we are in an environment now where whatever we do or say is on video, potentially. It could be on YouTube, and basically there could be a need for legislation in the future to give guidance in some of these circumstances. The general point is that a lot of this stuff could be obsolete in a very short time, or at the very least we would need further legislation.

Another point is that we have been talking about technological protection measures. That is a measure that obviously needs to be in the bill. Talking about content shifting from musical formats, it will be interesting to see whether manufacturers start building technological protection measures into commercially sold CDs, and then what the implications will be for people who try to override those and shift content from their CD player on to their iPod. I am saying that there will constantly be evolving technological developments that will throw up new situations that, I think, will need to be addressed by this Parliament. It is certainly the area of digital technology and copyright law that I believe will keep this Parliament, the officials, and certainly anyone involved in those industries, intellectually and practically engaged for quite some time. So there may well have been a reason for these Supplementary Order Papers arriving early this morning, but it is a shame that they did. I think we will see a lot more change in this area of law over the years to come.

Hon JUDITH TIZARD (Associate Minister of Commerce) : Again, I thank members for their mainly constructive views. Some of us are prepared to say that when this Labour-led Government is re-elected, I am sure, with the excellent support of parties that we have, we will happily go on with the evolutionary process. I am sure that the National Party in Opposition will find something constructive to do, but we look forward to that process. I genuinely thank members for their constructive approach on the Copyright (New Technologies) Amendment Bill.

It is always regretful that at times, particularly because of the technical nature of this sort of legislation, Supplementary Order Papers cannot be produced too far ahead of time. We obviously have to go through a process of Cabinet considering any change to earlier agreed policy. Then we have the select committee process—and the Commerce Committee expressed some frustration at the technical nature of this legislation. I would argue that it is technical legislation because it is about a range of interests that sometimes compete. I agree with Dr Jonathan Coleman that we are attempting in this legislation to make it as technology neutral as possible so that we do not have to go on changing legislation because of assumptions that have been made in earlier times—like the use of film work or authors of work. We have in this legislation introduced the new idea of a communication work rather than a book, an article, a film, or whatever the earlier legislation may have covered.

I remember when the House considered the major amendment to the Copyright Act in 1994 and 1995 up to the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which set up the World Trade Organization. We spent endless hours debating terms like “mixed media works”, and if we could have all of those hours back, I think many of us would be very grateful. We now realise that we cannot guess how technology will change in the future, or, indeed, how people will use technology in the future. To the greatest extent we can, we are trying to streamline and teflon-coat this legislation so that no matter what the nature of the content or the process is, the copyright protection will override that.

I thank Dr Richard Worth for his examination of the area of technological protection measures, as I do the Hon Mark Burton, whose contribution was very useful. I make the point that there are already technical protection measures on things like commercial CDs and to a large extent the market has seen that off. People did not buy the CDs that had anti-copy protection, partly because many people found it very difficult to play them in mobile reproduction—I am trying not to use particular names—in things like iPods and MP3s and sometimes in people’s cars. Those CDs would not play; they would skip. People would go back to the retailer and complain that the CDs did not work. I think that has seen off the attempt to put anti-copying technological protection measures on commercial CDs of music. But that does not mean that people will not go on trying to adapt, evolve, and invent new ones.

One of the points that the Commerce Committee considered around the whole area of technological protection measures was access—and Dr Richard Worth’s comments are pertinent in this area, where he was saying that we were perhaps not exactly following what other countries were doing. Well, part of the reason is that we think there is an important issue that copyright protection, overall, which in New Zealand covers from the death of the author plus 50 years—in Australia it is from the death of the author plus 70 years—be made infinite by the use of a technological protection measure. We are very concerned that access can be given in a reasonable way. We do not want to have technological processes that mean New Zealanders in the future may not be able to access things that are important to them. We have the exceptions that include areas of research, and the open-source community makes it very clear that its concern is the ability to get into the back-end—particularly of software—so that they can see how it is done but also so that they can make better protections against viruses, worms, and other attacks on our systems or our information.

There is a need for research and a need for protection of devices and systems, but there is also the exception provided where there is good reason. For example, there was an issue that was brought to me by a teacher of the blind who works through the Royal New Zealand Foundation of the Blind. Her point was that every other child in New Zealand was able to get the last Harry Potter book at 1 minute past 11 on, I think, 26 July last year but if one happened to be blind, one had to wait for some months for either a Braille copy, or an audio or video copy. The teacher and the children involved were perfectly prepared to pay for a copy as everybody else did when buying a copy of that very popular book. In New Zealand we have access to a substantial range of works for people who are sight-impaired, and, of course, with the older generation living longer, we have more and more older New Zealanders who never learnt Braille but who are becoming sight-impaired. It is really important, particularly for things like newspapers, magazines, and that sort of work, as well as published books, that we have the widest access. I look forward to the day when we will have an international agreement where people with sight disabilities can access that. But in the meantime I think it is perfectly reasonable that, having made an attempt to acquire a copy of a textbook, another book, a magazine, or a newspaper, people wanting to access it in a digital form that can be used by people with disabilities can do so.

We have been consulting very broadly with the Royal New Zealand Foundation of the Blind to look at all of those issues, and I want to pay a particular compliment to Mary Schnackenberg who is policy and research person at the foundation. She has been urging us on in this and the ministry is now taking a very proactive approach at international level, particularly the World Intellectual Property Organization. For example, at a recently held Standing Committee session of that organisation we made an intervention to support future work and further work on the issue of importing accessible copies from other countries. I would urge anyone who is talking with representatives of other countries to urge this work on. I think it is of huge benefit to New Zealanders with sight disabilities and also more broadly. In the meantime, the ability to legally circumvent technological protection measures may be necessary for people to get access to a digital copy, so that that can then be translated into Braille or other forms available for them.

I thank members for this. I think this debate has been very useful. The issues that Chris Finlayson raised that he was concerned about are being discussed by the officials and we will get a reply before this part finishes. Thank you.

MARTIN GALLAGHER (Labour—Hamilton West) : I realise that the evening is moving on, but I want to briefly compliment the Minister Judith Tizard on a very good and appropriate contribution. I pick up the point Dr Coleman made about the notion of Internet television, which presumably comes via an Internet service provider. I note that Supplementary Order Paper 193 “clarifies that an Internet service provider who knows or has reason to believe that material posted on the ISP’s website infringes copyright is liable if the ISP does not delete or prevent access to the material as soon as possible after becoming aware of it. A factor in determining whether an Internet service provider knows or has reason to believe that material infringes copyright is whether the Internet service provider has received an infringement notice …”, etc., etc.

Obviously, what speakers have alluded to, and I certainly do, is that any legislation will try to accurately forecast the current situation and what is ahead of us. I think of the days, dare I say it, when vinyl records were replaced by CDs. We now have DVDs. I have one little complaint in terms of DVD manufacturers, and that concerns the zones they have. The other day my mother bought a DVD in good faith to send to her sister in Britain—I think it was about Warbirds over Wānaka. She could not play the DVD, because it had a different zone. So we get into this whole issue. How is that different from buying a book, providing one buys a book in a bookshop in New Zealand, whereby we are paying, as part of that retail price, the price of the copyright, the intellectual property right of that book, and then we send it as a gift? In the end I guess manufacturers will determine that. Now there are “world mode” DVD players. The issue, frankly, is that we do not really have the right to go down to the market and buy a pirated DVD that has been copied in a backyard shed, then post it over and we all go home, in terms of trade and in terms of selling that intellectual property right—that creativity, if you like.

In terms of Internet television, under this Government we have seen the fantastic development of TV6 and TV7, which have been included on the FreeView platform. They are two extensions that have been rolled out that are growing public television. In addition to Television One, TV2, TV6, and TV7, if I could just talk about the Television New Zealand stable, increasingly important in terms of its product is, of course, that Internet connection, whereby one goes on to the TVNZ website. There are a lot of—what are those downloadable things—

Hon Judith Tizard: Podcasts.

MARTIN GALLAGHER: That is it; thank you—what a good Minister! Through a podcast we can watch a particular programme, such as Agenda—I saw the wonderful Helen Clark on that programme the other day—or we can go on the Hillary Clinton website overseas. The issue around that is that this legislation is part of the international context of intellectual property rights in terms of international agreements to make sure that the intellectual property right of each of those broadcasts is protected.

What that means, for example, is that Television New Zealand, through, say, an Internet service provider, cannot just pirate some programme from overseas unless it has actually purchased the rights to that programme. The Internet is now another form of broadcast of Television New Zealand, to use that as an example.

I strongly commend what I think is a very good and appropriate Supplementary Order Paper, and I thank the officials most sincerely for their work. This is a constantly moving target, and we do our best at this point. It is not to say that, 2 or 3 years out, we are not going to have to revisit this bill. That is the nature of the area we are working in at the moment.

Hon JUDITH TIZARD (Associate Minister of Commerce) : I had foreshadowed that the officials were working on a response to Christopher Finlayson’s very useful question about whether simple passwords could be considered a technological protection measure. I think that in most cases they are considered to be an access control.

The definition of a “technological protection measure” focuses on conduct that is linked to the infringement of copyright and it includes access controls that might be linked to that infringement. So the general issue is whether the intent is to infringe copyright. Of course, in some cases, the theft of a password is that, but there is also the issue that most of us have passwords that are so blindingly obvious, they do not provide a particularly high level of security. I know that the information technology services at Parliament recently required people in the Parliamentary Service and Ministerial Services to have much more complex passwords. I have to say that with my BlackBerry it takes me longer to get the jolly thing open than it does to read the message, quite often.

The whole issue around technological protection measures and whether access control is a technological protection measure is clarified by Supplementary Order Paper 193, which states that technological protection measures will not be protected if they control only non-infringing activities through an application of an access control. I hope that reassures Chris Finlayson. I acknowledge the issue he raises, which occurred to him only this evening, as he received the Supplementary Order Paper only this morning. I assure the Committee that I was urging the earliest preparation of that Supplementary Order Paper so that it could be given proper consideration.

We are also in the process of developing another copyright bill, which will be particularly focused on the commissioning rule. In that bill we will have the opportunity to address some of these issues, if there is a problem. I thank the honourable member for raising that issue. I hope that he is reassured, because I am.

• The question was put that the amendments set out on Supplementary Order Paper 154 in the name of Gordon Copeland to Part 2 be agreed to.

• Amendments not agreed to.
• The question was put that the amendments set out on Supplementary Order Paper 193 in the name of the Hon Judith Tizard to Part 2 be agreed to.

• Amendments agreed to.

• Part 2 as amended agreed to.

CHRISTOPHER FINLAYSON (National) : I can be relatively brief on these clauses. This is very important legislation, and I think that Mr Gallagher is right when he says it will become more important in the years to come. The first copyright Act, as I said, was that of the Statute of Anne in 1712, and of course the last substantive amendment to New Zealand law was the 1994 legislation, which basically followed, insofar as copyright was concerned, the 1988 Act from the United Kingdom. But there is the very real question, when we come to have a good look at the legislation, as to whether the United Kingdom model should continue to be the model we adopt, particularly given the fact that so much of the copyright law of that country now includes material that has come from the European Union, or whether we should look further afield to United States models, the Singaporean model, or the Australian model. Those are very important questions.

As I said, copyright law was initially designed to protect literary works, but now we have to deal with the Internet age—the digital age, Internet applications, and so on. So copyright law is very important legislation. It is legislation that I think needs to be systematically and comprehensively reviewed on a regular basis. I know we cannot do that for every piece of legislation, because otherwise a tight and tough legislative timetable would become even worse than it is now. But it was with that in mind that the subcommittee that dealt with the Evidence Bill in 2006 urged the Government to incorporate the provision that is now in section 202 of the Evidence Act 2006, which provides for a mandatory periodic review of the operation of the Act, I think every 5 years. That is a very good way of looking at some legislation. The legislation we are dealing with here is too important to allow it to go off the boil, because then one is required, by way of amendment, to insert into a bill concepts that may sometimes be completely different from those already in the legislation, and the process of amendment can undermine the structure of the legislation.

So I am heartened that the Minister has said—and indeed the report of the Commerce Committee on the bill states—that the Ministry of Economic Development will be reviewing this legislation in 5 years’ time to ensure that copyright law is keeping pace with technological advances. Of course, the Minister has foreshadowed another copyright amendment bill in the next period to deal with the commissioning rule. I imagine it will also deal with issues related to artists’ royalties, and so on.

We have come a long way, even in 20 years. I can recall that the first copyright case I did was in the late 1980s. It was based on the 1962 Act. It was an interesting case, all about whether a fellow called Hughie Green had the copyright in the format of a talent quest programme called Opportunity Knocks. When the Privy Council biffed out his appeal, I recall that the Daily Mail, I think it was, said “Opportunity flops—or flip-flops”. The reality of the matter is that the 1962 Act was designed for a set of events or a set of issues that we really are a world away from.

Hon Mark Burton: Didn’t Hughie Green’s programme actually start in the 1960s?

CHRISTOPHER FINLAYSON: I think that it did; indeed, it did. The issue was whether Television New Zealand had breached copyright by taking the format of the programme. There would be an introduction, like “Mark Burton, opportunity knocks”, and then there would be an interesting thing called the clapometer, and so on. It was all very interesting, but it is a million miles away from the copyright issues we are dealing with today.

However, I tell the Committee that Mr Green did say to me that format protection would be a huge issue. He said that we should look 20 years hence, when most of what was on television would in some way be a format programme, and I think he was quite right about that. I know attempts have been made in the United Kingdom to deal with the issue of format protection.

There we have it. Copyright is a hugely important issue, and it is one that is too important for it to become the subject of party politics. Certainly, notwithstanding the fact that we received the Minister’s Supplementary Order Paper fairly late in the day, we have tried to engage in the debate in a sensible and principled way, because this issue is too important to engage in party politics on. If members of the commercial community had concerns as a result of the hearings in the Commerce Committee, then they needed to be dealt with, and that is why the Minister’s Supplementary Order Paper has been taken on board by the Opposition. Thank you.

MARTIN GALLAGHER (Labour—Hamilton West) : I will take just a brief call to say for the benefit of the people who are listening to and viewing this debate tonight that I did love the previous speaker’s reference to 1712. Wow, there we go. I am sure that in 2012 it will be roughly time for a further review—300 years; there we go. I am someone who struggles sometimes with the different technologies. I remember the tape recorder we had even before the cassette—the reel tape recorder—and now the Minister tells me about podcasts and iPods. It is a bit sad perhaps that I should have to ask our Minister in the chair, the Hon Judith Tizard, about these things. But again this legislation is about a very interesting issue. It concerns our young people and the transmission of music, and whether we have the appropriate protection for what we would call the corner record store—the DVD store, the retailer—and the producers. We have to find out how to work through some of those vexed issues, given that to be able to copy is quite easy.

In summary, I would say that this legislation really stresses the fact that intellectual property plays a major role in moving towards a knowledge-based economy. Supporting research and development is critical in achieving an economic transformation, and I do not think that we should underestimate the critical importance of this bill. Personally I want to thank very much the individual members, from all parties, of the Commerce Committee for the tireless work they have done over many, many hours in order to help the rest of us to get our heads around what is, frankly, a very important issue. It is an important issue for this Parliament, but it is certainly also important for our nation and our economy. Thank you.

Hon JUDITH TIZARD (Associate Minister of Commerce) : I assure Christopher Finlayson that this process is about ongoing review. It is not necessarily the case that any particular part of the Act will be left for 5 years. There are issues around the Rugby World Cup in 2011 and around protecting the right of the organisers of that merchandise. There are a whole lot of other issues.

I compliment the copyright industry generally. It is now actively working to police what it does to protect and assert its rights and it has employed excellent people like Tony Eaton to assist in that. We are getting very good feedback. I would actually say that the consultation is almost continuous now. I know that the Copyright Council met today. We will get feedback, and there will be more legislation. There is no question of that, because as long as human beings are innovative they will find ways around any law protecting anything like copyright material.

I thank members of the Committee for their enthusiasm on this issue and assure them that there will be more of it.

• Clause 1 agreed to.
• The question was put that the amendment set out on Supplementary Order Paper 193 in the name of the Hon Judith Tizard to clause 2 be agreed to.

• Amendment agreed to.

• Clause 2 as amended agreed to.

• Clause 2A agreed to.

• Bill to be reported with amendment presently.

• House resumed.

• The Chairperson reported the Biosecurity and Hazardous Substances and New Organisms Legislation Amendment Bill with amendment, and that the Committee divided it into two bills; the Securities (Local Authority Exemption) Amendment Bill without amendment; and the Copyright (New Technologies) Amendment Bill with amendment.

• Report adopted.