Smokefree Environments and Regulated Products (Vaping) Amendment Bill

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Smokefree Environments and Regulated Products (Vaping) Amendment Bill

Government Bill

222—1

Explanatory note

General policy statement

This Bill amends the Smoke-free Environments Act 1990 (the Act) to bring the provisions of the Act up-to-date and to ensure that all regulated products (tobacco smoking products, herbal smoking products, smokeless tobacco products, and vaping products) are adequately covered.

The concept of a “regulated product” is introduced to incorporate the broader scope of products regulated under the Act. It is intended to provide flexibility so that the amended Act can more readily incorporate reduced-harm products that may come along in future, including those which may not be anticipated at present (in contrast to the significant amendments that have been necessary to incorporate vaping and vaping products).

The Bill aims to take a balanced approach to the regulation of vaping and smokeless tobacco products. It acknowledges that vaping and smokeless tobacco products are less harmful than smoking and that they may help some people to quit smoking. At the same time, it reflects concerns about children’s and young people’s access to and use of these products.

To protect children and young people from the risks associated with vaping and using smokeless tobacco products, the Bill extends many of the existing provisions of the Act to vaping products and heated tobacco devices (the tobacco component of smokeless tobacco is already regulated).

Part 1 of the principal Act is amended to prohibit vaping and the use of heated tobacco products in legislated smokefree areas (ie, indoor workplaces, early childhood centres, and schools).

New Part 2 of the principal Act extends, to the extent applicable, the existing restrictions on the advertising, promotion, sale, and distribution of tobacco products to all regulated products. This includes placing restrictions on—

  • the sale, and supply in a public place, of vaping products and heated tobacco devices to people under the age of 18 years:

  • inducements and rewards associated with vaping products and heated tobacco devices, for example, discounts and loyalty points (with some exemptions for specialist vape retailers).

However, the Bill also recognises that smokers need support and advice to successfully switch to a much less harmful product. It, therefore, exempts vaping products from some of the provisions that apply to tobacco products. It enables all retailers to display products in-store, in contrast to requirements that require tobacco products to be out of the public’s sight.

In addition, the Bill makes a distinction between specialist vape retailers and generic retailers, such as dairies, supermarkets, and service stations. The Bill enables specialist vape stores to be approved as such by the Director-General of Health. The Bill allows an employee of an approved vape store to give advice and recommendations about vaping products to a customer within that place of business. It also enables approved vape stores to—

  • allow customers to vape within the store for the purpose of sampling products before purchase:

  • give discounts, loyalty points, etc:

  • sell vaping products without any restrictions on flavours:

  • use the words “vape” and “vaping” in their trading name.

In addition, the Bill allows—

  • public health messages approved by the Director-General of Health:

  • registered health practitioners and other specified health workers to give advice and recommendations about vaping products to patients or clients to support them to switch, thereby reducing the harm to their health caused by smoking.

New Part 3 of the principal Act applies provisions enabling standardised packaging requirements to be set in regulations for all regulated products. The intent is to set tailored requirements for different product types that acknowledge their different risk profiles.

This Part also retains the existing prohibitions on the import for sale, distribution, etc, of tobacco products suitable for chewing or any other oral use (eg, snus).

New Part 4 of the principal Act sets out new provisions to regulate the safety of vaping products and smokeless tobacco products. This recognises that, while they are less harmful than smoking, they are not risk-free. This Part is intended to also be suitable for regulating the safety of any products that may be newly regulated in future.

The Bill requires manufacturers and importers to notify a vaping or smokeless tobacco product to the Ministry of Health before marketing it and to certify that the product meets any applicable standards. The notification system is to support rapid follow-up and remedial action should any safety issues arise with a product or product part.

Other provisions in the Bill enable product safety requirements to be set by regulations, require manufacturers and importers to report adverse reactions, and enable the Director-General of Health to issue product recalls, suspend and cancel product notifications, and issue warning statements about products.

Flavours may be used to attract children and young people to vape or use smokeless tobacco products, however, they also seem to be an important factor in supporting smokers to switch. The Bill allows generic retailers to sell only the flavours that are set out in Part 1 of new Schedule 2 (ie, tobacco, menthol, and mint). There are no flavour restrictions on approved specialist vape retailers (other than any prohibited flavour). The list of flavours in the schedule will be able to be amended over time by regulations. The Bill also prohibits the use of colouring substances in vaping liquid as data does not support their safe use.

The product safety regime set out in new Part 4 will be cost recovered from the regulated industry, consistent with Treasury’s Guidelines for Setting Charges in the Public Sector. The Bill enables fees and levies payable to be prescribed by regulations.

In addition to provisions related to the regulation of vaping products and smokeless tobacco products, the Bill—

  • allows for an assessment tool to be provided in regulations to support a determination of whether a space within a premise, such as a bar, is an open area (where smoking is allowed) or an internal area (where smoking is prohibited). This aims to provide clarity to business owners and enforcement officers:

  • enables allowable content for manufacturers’ price lists to be set out in regulations to prevent price lists from being used for promotional purposes:

  • repeals the provision that allows an exemption from the Act’s advertising and sponsorship prohibitions for multi-national sporting events—a provision that is out-of-date.

The Bill is drafted to commence on the day after the date that it receives the Royal assent. Transitional provisions are provided to give time for existing businesses to adjust, as follows:

  • 6 months from Royal assent for the prohibition on sale by a generic retailer of a vaping product or smokeless tobacco product containing a flavour other than a permitted flavour:

  • 6 months from Royal assent for a manufacturer or importer to notify a vaping or smokeless tobacco product.

Departmental disclosure statement

The Ministry of Health is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact assessment

The Ministry of Health produced a regulatory impact assessment on 7 January 2019 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.

Clause by clause analysis

This Bill amends the Smoke-free Environments Act 1990 to enable the Act to regulate vaping products in the same manner (to the extent applicable) as tobacco products. For that purpose, the term regulated product (which means a tobacco product, vaping product, or herbal smoking product) replaces most references to tobacco product in the Act. Many provisions that applied to tobacco products will now also apply to vaping products and herbal smoking products.

Parts 2, 2A, and 3 of the Act are replaced with new Parts 2 to 5. New Parts 2, 3, and 5 carry over most of the provisions currently in Parts 2, 2A, and 3, but they are revised, updated, and restructured.

New Part 4 contains provisions that apply to vaping products and smokeless tobacco products sold in New Zealand. Manufacturers and importers of those products must not sell the products unless the products have been notified in accordance with new Part 4. New Part 4 also imposes obligations on retailers of vaping products and smokeless tobacco products.

Clause 1 is the Title clause.

Clause 2 provides that this Act comes into force on the day after the date on which it receives the Royal assent, except for—

  • the restrictions on the visibility of regulated products (other than vaping products) from the place of business, which come into force 1 month after the Act receives the Royal assent (see new section 36 as inserted by clause 26):

  • the following provisions (as inserted by clause 26) which come into force 6 months after the Act receives the Royal assent:

    • new sections 59 to 62, which requires manufacturers and importers of vaping products and smokeless tobacco products to notify the product before sale in New Zealand:

    • new section 63(2), which prohibits retailers (other than specialist vape retailers) from selling vaping products that contain a flavour that is not listed in Part 1 of new Schedule 2):

    • new section 73, which requires the Director-General to establish a database for the purpose of new Part 4.

Part 1Amendments to Smoke-free Environments Act 1990

Clause 3 provides that this Part amends the Act that was previously called the Smoke-free Environments Act 1990 (the principal Act).

Clause 4 renames the principal Act as the Smokefree Environments and Regulated Products Act 1990.

Key definitions

Clause 5 amends the interpretation section to insert new terms, enable current terms to apply to regulated products, and replace the definition of open area. A summary of important new terms and their meanings is set out in the table below:

TermItems covered or meaning
heated tobacco producta smokeless tobacco product with a device that uses, or facilitates the use of, heat to aerosolise nicotine from tobacco leaf directly
smokeless tobacco producta tobacco product intended to be used without ignition or combustion
regulated producttobacco product, vaping product, or herbal smoking product
to vapeto inhale using a vaping device or a heated tobacco product
vaping device

a device that—

  • aeorosolises a substance (or mixture of substances) by heating it for the purpose of inhalation through a mouthpiece; and

  • is sold as a complete unit or to be assembled from individual components

vaping productvaping device, vaping substance, 1 or more components of a vaping device, or any package containing 2 or more of those items
vaping substancea substance or mixture of substances intended to be aerosolised with a vaping device

The term open area is redefined to mean a part of any premises that is not an internal area as determined in accordance with any criteria or means prescribed in regulations. The definition of internal area is repealed.

Clause 6 amends the purposes of this Act (set out in new section 3A) to apply to regulated provisions and to include the prevention of normalisation of vaping and the regulation of the safety of vaping products and smokeless tobacco products.

Clause 7 relates to transitional, savings, and related provisions.

Part 1 of the principal Act contains prohibitions and restrictions relating to smoking in workplaces and public areas. Clauses 8 to 20 amends those prohibitions and restrictions to apply also to vaping (whether through a vaping device or a heated tobacco product). The changes to Part 1 include—

  • providing that a purpose of Part 1 is to prevent the normalisation of vaping (clause 9):

  • prohibiting vaping in workplaces, schools, early childhood education and care centres, aircraft, passenger service vehicles, certain travel premises, licensed premises, restaurants, casinos, and certain gaming machine venues (clauses 10 and 13 to 20):

  • enabling an employer to permit vaping in employment vehicles if certain conditions are met (clause 11):

  • enabling an employer to permit vaping by patients or residents in rest homes and care institutions if certain conditions are met (clause 12).

Vaping in approved premises of specialist vape retailer exempt

Clause 21 inserts new sections 14 and 14A.

New section 14 is new and exempts from Part 1—

  • a person who vapes in any approved vaping premises of a specialist vape retailer; and

  • the specialist vape retailer who allows the person to vape in those premises.

New section 14(2) requires specialist vape retailers to take all practicable steps to prevent people under the age of 18 years from entering the retailer’s approved vaping premises. A retailer who fails to take those steps commits an offence punishable by a fine not exceeding $5,000 or $10,000 if the retailer is a body corporate.

A person who sells vaping products from retail premises may apply under new section 14A to the Director-General for approval as a specialist vape retailer. The Director-General must not give approval unless satisfied that—

  • the retail premises for the sale of the vaping products are a fixed permanent structure; and

  • at least 85% of the person’s total sales are or will be from the sale of vaping products; and

  • any requirements in regulations have been met.

Clauses 22 and 23 amend sections 15 and 17 respectively as a result of the broadening of the Act to apply to regulated products.

Clauses 24 and 25 make minor and consequential amendments to sections 17A and 18.

Clause 26 replaces Parts 2 to 3 with new Parts 2 to 5.

New Part 2: Restrictions on advertising, promotion, sale, and distribution of regulated products

The provisions in new Part 2 are taken from sections 21 to 32AA, 36, and 36AAB of the Act. They are widened to apply to regulated products and restructured as follows:

  • subpart 1 contains restrictions on the advertising of regulated products:

  • subpart 2 contains restrictions on sponsorship and related activities involving the use of a regulated product trade mark or a related company name:

  • subpart 3 contains prohibitions relating to the supply and distribution of regulated products:

  • subpart 4 contains prohibitions relating to inducements and rewards involving regulated products:

  • subpart 5 restricts the visibility of a regulated product from the place from which it is sold:

  • subpart 6 contains requirements relating to point-of-sale and Internet-sales health information or warnings:

  • subpart 7 prohibits the sale, delivery, and supply of regulated products and toy regulated products to people younger than 18 years:

  • subpart 8 contains provisions relating to the sale of regulated products by way of automatic vending machines.

The offence provisions in section 36 are incorporated into the individual sections to which the offence relates. The monetary penalty for an offence remains unchanged for tobacco products and will be shared by herbal smoking products. However, if the offence involves a vaping product or a smokeless tobacco product, the monetary penalty is no more than a third of the penalty for an offence involving a tobacco product.

Additional exemptions from advertising prohibition

New section 24 carries forward the current exemptions from the advertising prohibition and includes the following new exemptions:

  • a public health message approved by the Director-General:

  • the display, in accordance with regulations, of vaping products in any retail store or on any Internet site:

  • the provision, in accordance with regulations, of information relating to vaping products in any retail store or on any Internet site:

  • the giving of advice and recommendations by specialist vape retailers about vaping products in the approved vaping premises:

  • advice or messages given by suitably qualified health workers to an individual for the purpose of supporting the individual to switch from smoking to vaping.

Prohibition on visibility of regulated products does not apply to vaping products

New section 36 carries forward the requirement in section 23A that sellers of regulated products must not allow the product to be visible from outside the place of business or from any area inside the place of business to which the public have access. The requirement, however, does not apply to vaping products. Other situations in which the requirement does not apply are carried forward in new section 36(3) and (4).

New Part 3: Packaging, labelling, and constituents of regulated products

New Part 3

  • requires the standardised packaging of regulated products:

  • requires regulated product packages to display messages and information required by regulations:

  • prohibits the labelling or advertising of regulated products as suitable for chewing or any other oral use:

  • restricts the quantities or amounts in which certain regulated products are packaged for sale:

  • regulates the constituents of regulated products and provides for testing of those constituents (annually and as required by the Director-General).

New section 52(1)(c) is new. It prohibits the sale of regulated products (other than cigarettes and loose tobacco) in a package containing less than the prescribed number for that product.

New section 53(3) (which is carried forward from section 29) prohibits the labelling or advertising of regulated products as suitable for chewing or any other oral use. Oral use is defined in new section 53(4) to mean the absorption of the product primarily through the oral mucosa.

New Part 4: Regulated products that must be notified

Part 4 is new. Its purpose is to regulate the safety of vaping products and smokeless tobacco products (defined as notifiable products).

The key requirements for a notifiable product (key requirements) are as follows:

  • the product must not contain a prohibited ingredient (declared by the Director-General):

  • the product must not contain a prohibited flavour (listed in Part 2 of new Schedule 2):

  • if the product is, or contains, a vaping substance, it must not contain a colouring substance (see new section 66).

Obligations of manufacturer and importers

A manufacturer or an importer of a notifiable product (notifier)—

  • must not sell a notifiable product in New Zealand unless the product has been notified and complies with safety requirements prescribed in regulations for the product:

  • must be a New Zealand resident or a company registered in New Zealand:

  • must, before notifying the product, ensure the product complies with—

    • its product safety requirements:

    • the key requirements:

    • any applicable requirements in regulations:

  • must notify the product in the manner described in new section 62 (providing false or misleading information, without reasonable excuse, is an offence punishable by a fine not exceeding $400,000):

  • must advise the Director-General of any adverse reaction to the product (failure to advise, without reasonable excuse, is an offence punishable by a fine not exceeding $400,000):

  • must renotify the product if the product undergoes a significant change as defined in new section 65.

Obligations of retailers

Retailers of notifiable products must not sell—

  • a notifiable product in New Zealand that has not been notified:

  • a notifiable product that does not meet its product safety requirements:

  • a notifiable product whose notification has been cancelled or suspended:

  • a vaping product containing a flavour that is not listed in Part 1 of new Schedule 2 (however, specialist vape retailers may sell vaping products containing any flavour except a prohibited flavour).

A retailer who, without reasonable excuse, does any of the above commits an offence and is liable to a fine not exceeding $400,000 in the case of a large retailer, or $50,000 in any other case.

Specialist vape retailers who sell vaping products that contain a flavour that is not listed in Part 1 of new Schedule 2 must sell that product only from their approved vaping premises or their Internet site.

Director-General’s powers

The Director-General may—

  • declare a substance to be a prohibited ingredient if satisfied that the substance is unsafe for use in a notifiable product:

  • require a notifier to provide information relating to the safety of the product:

  • issue a public warning if the Director-General has reasonable grounds to believe that the product’s continued availability poses a risk of harm to people:

  • if satisfied that the product’s continued availability poses an unacceptable risk of harm to people,—

    • issue a public statement to that effect; and

    • by notice, require the notifier to arrange for the product to be recalled (failure to comply with the notice, without reasonable excuse, is an offence punishable by a fine not exceeding $400,000):

  • suspend a product notification for 1 month or cancel it if the Director-General—

    • has reasonable grounds to believe that the continued availability of the product poses an unacceptable risk of harm to people; or

    • has reasonable grounds to believe the notifier has given false, misleading, or incomplete information in the product notification or when required under new section 68; or

    • has reasonable grounds for concern because of new information about the safety of the product; or

    • has reasonable grounds to believe that the product contains a prohibited ingredient, prohibited flavour, or a colouring substance.

New Part 5: Regulations, enforcement, and other matters

New section 74 provides an outline of new Part 5.

Subpart 1: Regulations

New sections 75 to 80 enables the Governor-General to make regulations for specified purposes. Those purposes include—

  • making regulations that are expressly contemplated by the Act:

  • making regulations for administrative matters (such as forms, notices, and records):

  • making regulations specifying requirements relating to the standardised packaging of regulated products:

  • making regulations relating to notifiable products (including the prescribing of product safety requirements):

  • making regulations imposing fees and levies.

Subpart 2: Infringement offences

New sections 81 to 84 relate to infringement offences. An infringement offence means an offence against any of new sections 33(4), 37(3), 38(3), 39(2), 40(2), 41(2), 42(3), 43(4), 46(4), 50(2), and 53(3). The maximum infringement fee is $2,000 for an offence against new sections 37(3), 38(3), 40(2), 41(2), 42(3), 43(4), 46(4), and 50(2). If the offence relates to new section 33(4), 39(2), or 53(3), the maximum infringement fee must be at least $5,000 but no more than $10,000.

Subpart 3: Enforcement officers

New sections 85 to 93

  • provide for the appointment of enforcement officers by the Director-General:

  • protect enforcement officers from civil and criminal liability:

  • provide enforcement officers with powers of entry and inspection:

  • enable an enforcement officer to require a person to provide identifying information in specified circumstances:

  • enable an enforcement officer to apply for a search warrant:

  • provide safeguards relating to the powers of entry and inspection and the power to require information:

  • require enforcement officers to identify themselves when exercising certain powers:

  • specify offences for intentionally obstructing, hindering, or resisting enforcement officers and providing false or misleading information.

Subpart 4: Annual returns and reports

New section 94 contains annual reporting requirements for manufacturers and importers of regulated products and specialist vape retailers.

Schedules

Clause 27 and Schedule 1 provides for transitional and savings provisions.

Clause 28 inserts new Schedule 2, which specifies flavours that may be contained in a vaping product sold by any retailers and provides for any prohibited flavours.

Part 2Amendments to other enactments

Clause 29 and Schedule 3 provide for consequential amendments to other enactments.