Regulatory impact statement

Executive summary

An ongoing part of the work programme for the Quality Regulation Review (the Review) is to identify potential legislative, regulatory, and administrative measures that could improve the implementation of regulatory frameworks. This aggregated regulatory impact statement identifies a range of areas where there are high compliance costs without commensurate benefits. It contains additional amendments to legislation and regulation to reduce these compliance costs.

Adequacy statement

The Ministry of Economic Development has compiled this aggregated regulatory impact statement and confirms that it is adequate according to the adequacy criteria.

Fisheries Act 1996

Status quo and problem

Commercial fishers are required to balance their catch with annual catch entitlement (ACE), as part of the quota management system (QMS). If, at the end of a fishing year, they have not acquired enough ACE to balance against their catch they will incur a debt in the form of an invoice for annual deemed values. End of year balancing (comparison of catch versus ACE) occurs approximately 20 days after the end of the fishing year. On the 15th day after the end of a fishing year, however, the ACE register is closed, meaning that fishers are no longer able to transfer ACE and their ACE holdings at that point in time become fixed.

The majority of fishers manage to balance their catch within the required timeframes. However, since the introduction of the ACE balancing regime in 2001 there have been a number of cases where, for various administrative reasons, planned ACE transfers have failed to take place. In these cases, such failures only surface after the ACE register has closed, at which stage fishers are precluded from making additional ACE transfers to rectify the errors. The fishers have then incurred an annual deemed value debt even though they had intended to comply with the law. In this type of situation most fishers have to pay the debt so as to prevent their commercial fishing permit from being suspended. Currently there are no provisions in the Fisheries Act 1996 (the Act) to allow this type of situation to be rectified.

In the absence of statutory authority, the Minister of Fisheries has progressed requests from fishers to seek relief from the position in which they have found themselves. For a case to be progressed the request for catch balancing relief must meet a set of criteria jointly approved by the Ministers of Finance and Fisheries. However, this is a protracted and cumbersome administrative process.

Objectives

To ensure that the catch balancing regime is fair, efficient, and effective.

Preferred option

The preferred option is to amend the Act to allow requests from commercial fishers for catch balancing relief to be considered by the chief executive of the Ministry of Fisheries.

Amendments to the Act would put in place—

• a limited ability for fishers to make a request to the chief executive for catch balancing relief and for the ACE transfer to be recognised after the 15th day following the end of a fishing year:

• a set of criteria that must be met before the chief executive can approve such a request.

Upon approval, commercial fishers would be considered to have balanced their catch against ACE despite the requirement for all ACE transfers to be registered before the close of the 15th day after the end of a fishing year.

These changes would remove the perception that the Government is revenue gathering by taking advantage of minor administrative errors and would introduce an element of fairness to situations where invoices for debts have been issued although the sustainability of a stock has not been threatened. It would mitigate the burdens of firms arising out of legislation.

Consultation

The New Zealand Seafood Industry Council and Commercial Fisheries Services Limited have both indicated their support for the proposal.

Ministry of Agriculture and Fisheries (Restructuring) Act 1995

Status quo and problem

Under the Ministry of Agriculture and Fisheries (Restructuring) Act 1995, the Ministry of Fisheries is required to charge all clients a penalty fee of 10% when they fail to pay their statutorily incurred debt within the time provided by the relevant enactment. This provision overlaps with the sanctions provided by the Fisheries Act 1996 when the same debt is not satisfied in the timeframe set by that Act.

The sanctions provided by the Fisheries Act 1996 in regard to unpaid levies (for example suspension of commercial fishing permit) have proven to be a greater incentive for levy payers to pay their debts within the required timeframes than the penalty fee provisions. Continuing to operate a double penalty regime is both inappropriate and unnecessary.

Objectives

To ensure that legislative frameworks are consistent and efficient.

Preferred option

The preferred option is to revoke section 18 of the Ministry of Agriculture and Fisheries (Restructuring) Act 1995. This would ensure that the penalty regime of the Fisheries Act 1996 achieves the legislative intent as clearly defined by that Act in a more efficient and fair manner.

Consultation

Treasury has been consulted on this proposal. It is also supported by Commercial Fisheries Services Limited.

Conservation Act 1987 and Reserves Act 1977

Status quo and problem

The Conservation Act 1987—

• (a)restricts the granting of concessions as permits to a maximum of 5 years without public notification, and requires that the intent to issue all licences is publicly notified. The notification process is expensive and time-consuming, and paid for by the applicant. In practice, many low-impact and small scale business proposals must be publicly notified in order to gain tenure longer than 5 years, or if a licence activity is involved:

• (b)does not explicitly state that the Minister of Conservation will decline to consider applications made for a concession while that concession opportunity is being tendered or is subject to other processes. From time to time the Minister tenders the right to apply for certain concession opportunities (or initiates other specified processes to invite or encourage applications). There is potential for parties to undermine the objectives of such processes, by applying while they are underway.

The Conservation Act 1987 applies to the granting of concessions for national parks, conservation areas, reserves vested in the Crown, and reserves controlled and managed by local authorities. However, reserves vested in administering bodies under the Reserves Act 1977 are governed by separate provisions in the Reserves Act 1977. One of those provisions, section 74, enables administering bodies to issue licences for certain purposes for up to 5 years. This imposes an unnecessary cost and administrative burden on both the administering body and the licensee.

Objectives

To ensure that the policy intent of the regulatory frameworks relating to the concession provisions of the Conservation Act 1987 can be implemented and administered in a manner that eliminates unnecessary compliance costs and minimises necessary compliance costs.

Alternative options

Options considered for resolving the duration and notification problem included—

• seeking more resources for additional processing capacity. This option would probably divert resources from higher priority work and would not address the underlying causal factors of this problem:

• raising processing costs to enable the purchase of additional resources. This would add cost to applicants and would only have a marginal impact on processing times or backlogs:

• using very simple consideration processes to speed up application processes. While this would speed up processes, it would also risk insufficient effects consideration and poor decision-making:

• changing the legislation to allow for permits and licences to be issued for periods up to 10 years without public notification. This is the preferred option.

The options considered to fix the contestable process problem included changing the legislation to require the Minister not to consider uninvited applications once a contestable process has commenced. This is the preferred option.

Preferred option

Amend the Conservation Act 1987 to—

• (a)allow permits to be granted for a term not exceeding 10 years, and so that licences up to 10 years duration are not notified unless the Minister considers the effects make notification appropriate (sections 17Z(2) and 17T(4)). The Minister is able to impose a condition on the concession requiring a review of conditions during the term in both cases.

• The duration and notification proposal will mainly affect activities without significant adverse effects such as some guiding operations. With respect to licences, the primary area of effect will be long-standing grazing licences. The amendments will enable the Department of Conservation (DOC) to transfer resources from repeated processing of short-term concessions into management planning and environmental monitoring. Small-scale, low-impact business proposals will be able to receive terms of up to 10 years without incurring the expense and additional time delays relating to public notification which can cost in excess of $1,000 plus GST. Businesses will receive greater certainty of investment. The proposal will reduce compliance costs as many businesses, particularly small owner-operator ones and farmers, will now only have to re-apply for their concessions every 10 years instead of every 5 years. The standard fee for each process is around $1,200 plus GST plus the applicant’s costs. Under other provisions of the Act, DOC is able to review concessions and make changes if circumstances change, including a change in a management plan or strategy, or where significant effects become apparent over time:

• (b)clarify that the Minister of Conservation will decline to consider applications for a concession from the point in time that a tender (or other) process has been launched. Both the Minister and tender applicants will benefit from greater certainty by knowing that third-party applicants are not possible once a tender (or other process) has commenced. Precluding the possibility of a process being derailed by applicants outside that process will protect the tenderers’ investment of time and money.

Amend the Reserves Act 1977 to allow for 10-year licences over vested reserves for the purposes in section 74(4) of the Reserves Act 1977. The amendment will reduce compliance costs as many businesses, particularly small owner-operators and farmers, will now only have to reapply for their licences every 10 years instead of every five years.

Consultation

The proposals for the Conservation Act 1987 have been discussed in some detail with a wide range of stakeholders (New Zealand Conservation Authority, Ministry of Tourism, Te Puni Kōkiri, Tourism Industry Association, Maori Tourism Council, Forest & Bird, Federated Mountain Clubs, Federated Farmers, and Te Runanga o Ngai Tahu).

There is a general consensus of support for the proposals. In the case of the duration and notification issue this support is subject to the development of improved guidance to decision-makers around classifying applications as low-impact, and the existence of a discretion to conduct mid-term reviews of concession conditions for 10–year non-notified concessions.

The proposal for amending the Reserves Act 1977 was developed by Local Government New Zealand in conjunction with the Department of Conservation. There has been no formal public consultation on the proposal relating to the Reserves Act 1977. The Ministry of Economic Development and the Department of Internal Affairs were consulted over the Local Government New Zealand proposal and supported it.

Hazardous Substances and New Organisms Act 1996 (HSNO Act)

Status quo and problem

Thirteen problems have been identified with the HSNO Act. These are—

• (a)section 19 limits the ability of the Environmental Risk Management Authority (ERMA) to delegate its decision making powers to those specified in section 19(2). However, ERMA frequently makes a variety of relatively minor, technical, or administrative decisions that arguably involve an exercise of the decision-making power. Without the ability to delegate, significant administrative costs and time delays are involved for both businesses and regulators in making these decisions; and

• (b)there are 3 issues associated with the assessment of non-genetically modified new organisms (non-GMOs)—

  • currently the HSNO Act does not distinguish between low-risk and other non-genetically modified new organisms as it does for genetically modified organisms (GMOs). As a result, the Act does not allow for rapid assessment (and delegation to “any person”) of any application to import low-risk non-GMOs into containment, or develop them in containment, whereas it does so for applications to develop or import low-risk GMOs:

  • a different situation exists for field tests in containment. Instead of allowing non-GMO field test applications to be rapidly assessed (and so delegated), these applications cannot be notified. However, non-GMO developments and imports into containment (both arguably less likely to be of significant public interest than a field-test) may be notified if ERMA, in accordance with the HSNO Act, “considers that there is likely to be significant public interest” in the application:

  • applications for conditional release (with controls) of low-risk non-GMOs are not treated consistently with applications for full release (without any controls) of low-risk non-GMOs, which may be rapidly assessed if certain statutory conditions are met. Applications for conditional release (with control), however, cannot be rapidly assessed even though the concerns around the risks of such releases could be satisfactorily met by the imposition of control; and

• (c)an application to import or manufacture a hazardous substance for release under section 28 must be publicly notified under section 53, unless has been rapidly assessed and approved under section 28A. However, experience has shown that many hazardous substance release applications that do not meet the criteria for rapid assessment are routine and attract very few public submissions. Mandatory public notification can result in delays and costs to the applicant that are disproportionate to the risks posed or the benefits of public participation; and

• (d)section 82(4) requires a test certifier to refuse to issue a test certificate where he or she considers on reasonable grounds that any matter does not comply with the relevant requirement. Therefore, where locations are not in full compliance with the relevant HSNO requirements, a location test certificate cannot be issued until a test certifier revisits the premises and reassesses the outstanding compliance matters. This may result in substantial additional expenses to businesses, including operations being suspended while the non-compliances are resolved, even when the non-compliances may be considered “minor or technical”; and

• (e)section 82A(1) requires ERMA to keep and maintain a register of test certificates issued by test certifiers under the Act. The Act restricts access to the register to certain purposes. However, while section 82A(4) expressly allows searches where necessary to prevent or lessen a serious and imminent threat to public or individual health and safety, searches cannot be readily undertaken by the Fire Service in particular (not an enforcement agency under the Act), or by any HSNO enforcement agency, for emergency and response planning purposes; and

• (f)some substances with Part 5 specific individual approvals may also be controlled under generic group standards. Therefore, reassessment of a Part 5 approval may also impact on a group standard. At present there is no mechanism to account for these affected group standards, other than conducting a separate full group standard amendment process. Under the current provisions, this would require separate reassessment and group standard consultation processes with the consequent cost, potential confusion, and inconsistencies.

• Furthermore, while section 67A of the HSNO Act allows ERMA to amend a Part 5 approval of its own motion if it considers that the alteration is minor or technical, there is no equivalent provision for group standards. Such alterations to a group standard therefore require the full amendment process which is excessive for these situations; and

• (g)the HSNO Act contains limited cost recovery provisions. The Ministry of Agriculture and Forestry, the enforcement agency for new organisms under the HSNO Act, can recover the costs associated with HSNO Act containment approvals under the Biosecurity Act 1993, because the costs primarily relate to functions empowered by the Biosecurity Act 1993. However, costs associated with controls on newer types of release approvals (outside containment) cannot be recovered under the Biosecurity Act 1993 without recovery being empowered under the HSNO Act. As a result such costs are currently recovered by MAF’s baseline funding. This legislative gap does not provide any incentives to develop an efficient monitoring system for the holders of the approvals for various releases of new organisms to minimise these costs they incur; and

• (h)sections 147(3) and 148(b) provide for additional matters relating to the effectiveness of the HSNO Act that ERMA must include in its Statement of Intent (SOI) and annual report. Experience has shown that this involves significant repetition of information already provided in a more comprehensive way elsewhere in the SOI or in ERMA’s annual monitoring report, which is a requirement of the annual output agreement with the Minister and is publicly available. The duplication required by these sections results in unnecessary costs being incurred for no additional value, and diverts scarce resources away from other regulatory activities; and

• (i)under section 82C, ERMA is currently empowered to revoke on certain grounds approved filler and handler test certificates issued by test certifiers. However, the Authority cannot revoke other types of test certificates, primarily location and stationary container test certificates, or revoke certificates when criteria for which the certificate was issued are no longer met by the certificate holder; and

• (j)responsibility for enforcement of the HSNO Act requirements for new organisms and hazardous substances falls onto separate agencies (Ministry of Agriculture and Forestry (MAF) and primarily Department of Labour (DoL), respectively). Considerable efforts have therefore gone into aligning enforcement by these 2 agencies under the HSNO and Biosecurity Acts, and under the HSNO and Health and Safety in Employment Acts, respectively. However, inconsistencies remain in the respective statutory timeframes to lay information under these pair of Acts. These inconsistencies create problems in the use of the enforcement provisions of these Acts, leading to the HSNO enforcement provisions being underused; and

• (k)the HSNO Act provides for incorporation by reference of standards, requirements, or recommended practices of international organisations. It allows the incorporation of standards, requirements or recommended practices of international organisations or documents or other materials that are too large or impractical to be printed as part of the regulations. The material incorporated is “fixed” in the form it was in at the time of incorporation as the Act does not provide for amendments or updates to such material; and

• (l)the HSNO Act provides that only HSNO inspectors may inspect for compliance under HSNO. DoL, Maritime New Zealand, and the Civil Aviation Authority (CAA) enforce both the Health and Safety in Employment (HSE) Act 1992 and the hazardous substances part of the HSNO Act in places of work. The powers of entry and inspection are similar under the 2 Acts, but the differences are enough to create a high risk of compromising any eventual enforcement action (ie, if HSE powers are used for HSNO matters and vice versa). To avoid that risk, HSE inspectors typically make separate visits to the same workplace for HSE and then for HSNO matters; and

• (m)the CAA is responsible for enforcement of the hazardous substances part of HSNO for aircraft and for aerodromes. As aerodromes are also the responsibility of DOL under the HSE Act, they face duplicate inspections regarding hazardous substances by DOL under the HSE Act and by CAA under the HSNO Act; and

• (n)because of the current wording of the HSNO Act, it is difficult to refer to certain preferred standards of a “national” rather than “international” organisation. It creates unnecessary confusion as certain overseas organisations such as BSI British Standards might be considered a national organisation of the UK.

Objectives

The overall policy objective is to ensure that the policy intent of the HSNO regulatory frameworks can be implemented and administered in an efficient manner that eliminates unnecessary compliance costs and minimises necessary compliance costs.

Preferred options

• (a)It is proposed to remove the specific limitation on the delegation of “decision-making powers” in section 19(1)(b), while retaining the specific delegations listed in section 19(2) in their current form (along with the additional delegations proposed below). This will enable ERMA to delegate technical and administrative decision-making powers to its chief executive, other agency staff, or other persons, while retaining significant delegations in the form expressly allowed in the Act. The variety of technical and administrative decisions is such that their delegation cannot be readily covered by either a generic statement in section 19(2) or a list in a schedule of delegations. In accordance with standard legal principles, ERMA would still retain the ultimate responsibility for any delegation. It would therefore have to take all the usual precautions when considering when, to whom, and on what conditions a delegation should be made, and would also continue to monitor the delegations it makes.

• Such amendment will provide ERMA with greater flexibility and will enable greater efficiencies for both it and industry in making decisions on these matters.

• (b)It is proposed to—

  • (i)amend the HSNO Act to enable the rapid assessment of applications to import into containment, develop in containment, field-test in containment, and conditionally release low-risk non-genetically modified new organisms, including the ability to delegate these rapid assessments (consistent with existing rapid assessments), and the provision or development of the appropriate criteria for rapid assessment; and

  • (ii)amend section 53 of the Act to give ERMA the discretion to publicly notify any application to field-test a non-genetically modified new organism and to not be required to notify an application to conditionally release a non-genetically modified new organism, when that application has been rapidly assessed.

• This option will improve consistency in how applications are processed by enabling applications to import, develop, or field-test non-GMOs in containment to be treated consistently with each other and with applications to import or develop low-risk GMOs in containment (in terms of rapid assessment of low risk organisms and the discretionary notification of other applications); and by enabling applications for conditional release of low-risk non-GMOs to be treated consistently with applications for full release of low-risk non-GMOs.

• The proposal will reduce application costs and shorten application times for industry, where pre-determined conditions set in the Act or in regulations are met. In doing so, these amendments will ensure the extent of assessment and the balance between risk and cost/benefits is appropriate for different application types and match the risks posed by non-GMOs, thereby ensuring sufficient assessment while minimising any unnecessary regulation.

• Some distinction will remain between non-GMO and GMO field tests. Rapid assessment is not available for any GMO field test applications and all GMO field-test applications must be publicly notified. The proposed discretionary notification of other higher risk non-GMO field-test applications (not possible at present) will be on the same statutory basis as other discretionary notifications—“likely to be significant public interest”. Enabling such discretionary notification will tighten the requirements for higher risk non-GMO field tests in recognition of the range of possible non-GMO field-test applications, although not to the extent already required for GMO field-tests.

• This option is consistent with the recent recommendation of the Primary Production Committee.

• (c)It is proposed that ERMA be given both the discretion to publicly notify those hazardous substance applications under section 28 that do not otherwise qualify for rapid assessment and the ability to delegate the applications that are not publicly notified (or rapidly assessed) to its chief executive. The discretion to publicly notify will be exercised on the same basis as existing provisions for certain new organism applications in section 53(2), ie, whether ERMA considers there is likely to be significant public interest.

• These proposals will simplify and improve the efficiency of the assessment process for appropriate applications to import or manufacture hazardous substances.

• (d)It is proposed that test certifiers have the discretion to issue a location test certificate on a provisional (or conditional) basis where they consider the non-compliance with the relevant HSNO requirements to be due to minor or technical issues. The provisional certificate would state the outstanding matters, the time within which they would need to be rectified, and the manner of evidence required to demonstrate rectification. A normal location test certificate would then be issued once the test certifier is satisfied that the matters are no longer outstanding. This proposal will allow operations to continue lawfully while action is taken to ensure full compliance.

• (e)It is proposed that the purposes for which an approved person may search the register be extended to include emergency and response planning purposes. The Fire Service would be able to search the register for that purpose, under delegation from an approved person (in accordance with section 82B), as would all HSNO enforcement agencies, including those local authorities that have enforcement roles as per section 97. These provisions will enable relevant parties to fully utilise the test certificate register as an efficient means of minimising potential threats to public health and safety in a more timely and effective manner.

• (f)It is proposed to enable joint consideration of common changes to Part 5 hazardous substance approvals and group standard approvals established under Part 6A, including the option of adapting the group standard amendment process to the Part 5 reassessment process, as appropriate to the extent of the change, and to provide an equivalent to section 67A for minor or technical changes to group standards. These proposals will remove the need for separate reassessment and group standard processes and reduce the consequent cost, the potential for inconsistencies, and the potential confusion for industry.

• (g)It is proposed to amend section 97A of the HSNO Act to enable the enforcement agency responsible for the enforcement of the new organisms provisions of the HSNO Act (MAF) to use the cost recovery provisions of the Biosecurity Act 1993, including the cost options (section 135), levies (section 137), and regulations (section 165(1)(s)) to recover costs of performing HSNO functions in regard to new organism releases. The existing Biosecurity (Costs) Regulations 2006, with any necessary amendments, could then be used for cost recovery. This will be consistent with existing recovery of costs for performing HSNO functions in regard to new organism containment approvals. This cost recovery model is more appropriate to the development of an efficient monitoring system for the holders of the approvals for various releases of new organisms, as the costs are more readily identified.

• (h)It is proposed to remove the 2 additional reporting requirements in sections 147(3) and 148(b). This proposal will improve the cost and administrative efficiency of the statement of intent and annual report processes by reducing duplication, without adversely impacting on their quality, and enable more efficient use of resources for other regulatory activities.

• (i)It is proposed to—

  • (i)extend ERMA’s power to revoke test certificates to all test certificates; and

  • (ii)extend the grounds for revocation under the HSNO Act to include where the criteria for which the certificate was issued are no longer met.

• (j)It is proposed—

  • (i)for offences involving hazardous substances, to change the current time to lay charges from 120 working days to 6 months (from when the offence became known), and allow the District Court to extend the 6–month period, consistent with the HSE Act; and

  • (ii)for offences involving new organisms, to change the time to lay charges to 2 years from when “the matter of the information arose”, consistent with the Biosecurity Act 1993.

• These measures will help integrate the use of the enforcement provisions of these Acts, leading to the HSNO enforcement provisions being fully used.

• (k)It is proposed to allow for amendments to or updates of material incorporated by reference to take effect on notification in the Gazette. Regular updating of material incorporated by reference in the Act will reduce the complexity of the HSNO controls framework and the resulting confusion for users. This should allow ERMA to reduce efforts to accommodate revisions to such material and increase its efforts to advise and assist users on actual compliance with the HSNO controls.

• (l)It is proposed to provide that HSE inspectors who are also HSNO inspectors may inspect for compliance under both Acts during the same visit to a workplace. This will reduce compliance costs for business by enabling 1 visit from 1 inspector under both Acts. There will also be efficiency gains to Government by enabling 1 inspector to carry out 2 enforcement roles.

• (m)It is proposed to remove the responsibility of the CAA for enforcing the HSNO Act in aerodromes, so that aerodromes become the responsibility of DOL as places of work under both the HSE and HSNO Acts (the CAA will retain responsibility for aircraft). This will provide clarity and consistency for businesses and mean fewer visits, which will reduce compliance costs for business. An estimated 160 aerodromes are affected. There will also be efficiency gains to government from combined inspection visits.

• (n)It is proposed to amend section 141A of the HSNO Act to allow reference to standards, requirements or recommended practices of national (as well as international) organisations.

Consultation

All the HSNO amendment proposals were developed in consultation with ERMA and the respective agencies. The consultation in relation to each of the preferred options above is set out below.

• (a)This proposal is based on the practical experience of ERMA and informal comment by industry.

• (b)The Primary Production Select Committee, in the report on its investigation into plant imports, recommended allowing the Authority “to delegate its power to conduct rapid assessments relating to the importation into containment of low risk [here non-GM (genetically modified) new plant] organisms”. This was based on submissions to the committee by a range of stakeholders in the plant import industry. To the extent that low-risk criteria are stated in regulations, consultation on the criteria for low risk non-GMO imports, developments, and field-tests would occur during the development of those low-risk regulations.

• (c)This proposal is based on practical experiences of ERMA.

• (d)This proposal is in response to concerns raised by both test certifiers and businesses.

• (e)This proposal is based on practical experiences of ERMA.

• (f)This proposal is based on the practical experience of ERMA and concerns expressed by industry as to the relationship between Part 5 approvals and group standards.

• (g)The purpose of this proposal is simply to empower the use of the Biosecurity Act 1993 cost-recovery tools. This proposal is consistent with a Cabinet direction to MAF to report on how HSNO-related costs might be recovered (POL Min (04) 24/10 refers). Consultation over specific proposals for cost-recovery would be undertaken as those proposals are developed.

• (h)This proposal is based on the practical experience of ERMA.

• (i)This proposal is based on the practical experience of ERMA.

• (j)This proposal is supported by DoL and MAF.

• (k)There has been no formal consultation, but industry has frequently expressed concerns over material incorporated by reference being out of date.

• (l)The Ministry for the Environment (MfE) consulted on the inspection proposal as part of the public consultation process for the Hazardous Substances and New Organisms (Approvals and Enforcement) Amendment Bill. Thirty submitters commented on it, 63% in favour and 37% opposed. Those in favour noted the proposal’s simplification, consistency, and efficiency gains. Those opposed were concerned about the misuse of powers of entry, or preferred 1 piece of legislation or 1 enforcement body only.

• (m)There has been no formal public consultation, but a working group including business representatives considered this proposal in 2005 and recommended to MfE that this transfer occur.

• (n)The issue is identified based on recent experience of MfE with regulatory amendments.

Design Act 1953

Status quo and problem

If design registration renewal fees are not paid within the time prescribed under the Design Act 1953, the registration lapses and the design passes into the public domain. The Act does not provide for the lapsed registration to be restored. A design cannot be reapplied for when its registration lapses as the design will no longer be novel (novelty is a criterion for registration of a design). This can cause undue hardship where the design owner intended to pay the renewal fee, but through some error or omission the fee was not paid.

Objectives

The public policy objective is to ensure that the policy intent of the regulatory frameworks relating to design registration requirements can be implemented and administered in a manner that eliminates unnecessary compliance costs and minimises necessary compliance costs.

Preferred option

Amend the Design Act 1953 to provide that where a design registration has lapsed due to an unintentional non-payment of a renewal fee, the design registration can be restored on payment of the registration fee. The main impact will be that it will ensure that owners of registered designs have an opportunity to restore their design rights if they have lapsed through errors or oversights, which must be taken within the period prescribed in regulations. They will therefore not lose the exclusive rights to exploit a design that are granted by the registration of a design right, and will have a greater chance of recovering their investment in developing the design. Those holders of design registrations who apply to restore their registrations will incur compliance costs in making the application, which are not considered to be substantial.

Consultation

Consultation has been undertaken with the New Zealand Institute of Patent Attorneys, which is supportive.

Gas Act 1992

Status quo and problem

Feedstock gas is gas used as a raw material in a manufacturing process, such as the production of methanol. Section 3(2)(d) of the Gas Act 1992 specifies that nothing in the Gas Act applies to “any gas used as a feedstock, excluding any gas being reformed for use as a gaseous fuel”. This wording was intended to exempt feedstock gas from the Act’s safety provisions, as safety of feedstock gas was covered under the Health and Safety in Employment Act 1992.

Part 4A of the Gas Act was added in 2004 to provide for the effective governance of the gas industry. The Gas Industry Company Limited is the industry body that can recommend regulations and rules under Part 4A to the Minister of Energy. As section 3(2)(d) was not altered at the time, it could be interpreted as exempting all users of feedstock gas from any rules or regulations made under Part 4A. There is no evidence of any intention to exclude feedstock gas from the governance regime. Significant consequences of such an exclusion could include that it may not be possible to enforce the terms of a gas emergency management plan against industry participants using feedstock gas, which would impact upon security of gas supply and the generation of electricity. Also, some industry participants may be treated differently than others in respect of such things as open access to pipelines, consultation, and liability to pay the Gas Industry Company Limited’s levy. The resulting lack of clarity could create unnecessary uncertainty for some gas industry participants.

Objectives

The objective is to create certainty that any regulations and rules that the Gas Industry Company Limited can recommend under Part 4A of the Gas Act 1992 will cover gas used as a feedstock, which, in turn, will ensure various Government objectives for the gas industry are achieved.

Preferred option

Amend the Gas Act 1992 to clarify that feedstock gas is covered by the gas governance regime in Part 4A. This would avoid any ambiguity around whether users of feedstock gas are subject to rules and regulations made under Part 4A, while retaining sufficient flexibility to exempt feedstock gas from those rules and regulations if required. The initial policy intention of section 3(2)(d) would be unaffected from a safety perspective, because safety of feedstock gas would continue to be covered by the Health and Safety in Employment Act 1992. The Gas Industry Company Limited would benefit from certainty in regard to many of the regulations and rules that it can recommend on various arrangements, especially those related to gas emergency arrangements.

Consultation

No formal consultation with the industry has been undertaken. The Gas Industry Company Limited brought this issue to the attention of the Minister of Energy. MED officials have been working closely with the Gas Industry Company Limited on the matter. The Gas Industry Company Limited’s understanding is that all gas industry participants, including those that take gas for feedstock purposes, consider themselves to be bound by any regulations or rules made under Part 4A of the Gas Act 1992. Therefore, it is expected that the likely response from the industry would be supportive of this amendment because it provides certainty across the industry.

Weights and Measures Act 1987

Status quo and problem

Liquefied Petroleum Gas (LPG) is supplied in 3 forms:

• sold by weight in liquid form, in pressurised LPG cylinders (eg, in large (45 kg) cylinders delivered to consumers by truck or dispensed to smaller cylinders for barbecues, etc, or in small disposable canisters); and

• sold by volume in liquid form (eg, through dispensers to motor vehicles); and

• sold by energy content (or possibly by volume) in gaseous form (eg, in low pressure LPG distribution networks—referred to as reticulated gas).

The Ministry of Consumer Affairs was approached by a gas retailer regarding proposed new arrangements for supply of LPG from cylinders through pipes to consumers, the third of the forms listed above. It was intended that the quantity supplied would be measured by a meter set in the system and the consumer invoiced on the energy content of the LPG—the same approach as is used for reticulated natural gas.

The arrangement for the supply and metering of LPG through pipes to consumers currently falls under the jurisdiction of both the Weights and Measures Act 1987 and the Gas Act 1992. The requirements of these Acts are different and would result in restrictively tighter controls being in place for LPG gas than any other gas sold by the same means. There is no logical reason for this tighter control.

New Zealand does not currently have a type approval or initial verification capability for gas meters that would meet the requirements of the Weights and Measures Act 1987. Industry adherence to this Act for LPG meters would therefore incur substantial compliance costs.

The intention of the Weights and Measures Act 1987 was that the measurement of gas reticulated through pipes was to be excluded. The proposed new arrangement for the supply of LPG was not considered at the time this Act was written.

Having 2 pieces of legislation controlling this supply arrangement has created confusion for the industry.

Objectives

The public policy objective is to resolve the confusion and reduce compliance costs caused by having 2 pieces of legislation control the supply of LPG in gaseous form, through pipes for industry, consumers, and regulators.

Preferred option

Amend the Weights and Measures Act 1987 to remove the control of LPG in gaseous form. This realigns the Act with its original intended jurisdiction.

The main impact will be reduced compliance costs and decreased uncertainty for LPG suppliers. The proposal will reduce business compliance costs by eliminating the need for the LPG industry to comply with the requirements of 2 Acts when supplying LPG, in the gaseous form, through pipes. It also eliminates the requirements under the Weights and Measures Act 1987 for type approval and initial verification of gas meters in addition to the requirements of the Gas Act 1992. Together, this represents a substantial reduction of business compliance costs while maintaining appropriate standards and control.

The jurisdiction of the 2 Acts will be clarified for the regulatory agencies involved in their administration.

Implementation and review

The Weights and Measures Act 1987 is reviewed on an ongoing basis, as issues arise.

Consultation

The problem was identified as the result of an inquiry from an LPG supply company, which supports the proposal. The Energy Safety Service (which administers the Gas Act 1992) and the Measurement and Product Safety Service (which administers the Weights and Measures Act 1987) jointly developed the proposal. Consultation has been undertaken with the LPG Association of New Zealand, which supports the proposal. No formal public consultation has been completed because the proposed amendment is of a minor nature and will have no perceivable effect on the general public.

Companies Act 1993

Status quo and problem

In 2006 the requirement for 2 classes of companies to file audited financial statements with the Registrar of Companies was removed from the Financial Reporting Act 1993. The 2 classes of company are—

• companies that have 25% or more overseas ownership, providing they do not exceed at least 2 of the following 3 criteria: annual revenue of $20 million, total assets of $10 million, and 50 full-time equivalent employees; and

• New Zealand incorporated companies that are subsidiaries of a New Zealand incorporated company that is an immediate subsidiary of an overseas incorporated company.

The intention was to remove the requirement for these companies to have their financial statements audited. It is not clear whether this has been achieved, as the Companies Act 1993 requires such companies to appoint an auditor. Requiring these companies to have their financial statements audited would impose an unnecessary cost, as there is no rationale to have entities’ filing and auditing requirements out of alignment.

Objectives

To ensure that the policy intent of the audit and filing requirements in the Financial Reporting Act 1993 and the Companies Act 1993 can be implemented in a manner that eliminates unnecessary compliance costs.

Preferred option

Amend the Companies Act 1993 to make it clear that the 2 classes of company are not required to appoint an auditor or have their financial statements audited. The 2 classes of company will benefit from no longer being required to incur the cost of having their financial statements audited.

Consultation

A number of lawyers and accountants requested that this amendment be made and have been consulted on it.