The Primary Production Committee has examined the Agricultural Compounds and Veterinary Medicines Amendment Bill and recommends by majority that it be passed with the amendments shown.

The bill seeks to amend the Agricultural Compounds and Veterinary Medicines Act 1997 (the ACVM Act). The bill as introduced would extend from 5 to 8 years the maximum period of protection for confidential information given in support of an application to register an innovative trade name product. It would also expand the scope of data protection to include confidential information given in support of applications to register non-innovative trade name products and uses.

The bill would amend the Hazardous Substances and New Organisms Act 1996 (the HSNO Act) to ensure it remains aligned with the ACVM Act in protecting data relating to innovative products. It would also amend the Medicines Act 1991, to ensure that the definition of confidential information in that Act remains consistent with the ACVM Act.

This commentary covers the main amendments we recommend to the bill. It does not cover minor or technical amendments.

For data provided with applications to register innovative trade name products, the bill as introduced would leave the base level of protection at 5 years after an application is decided, but would enable the period to be extended to a maximum of 8 years through the registration of new uses for the product. We recommend amending clause 6, new section 74B, to extend the base level of data protection from 5 to 10 years. We note that increasing data protection to 10 years could reduce competition during the protection period. However, it should lead to greater competition in the medium and long term, as it would lead to more product registrations.

We do not recommend data protection in excess of 10 years. This period should be long enough for most registrants to recover the costs of generating the data.

We recommend amending clause 6, new section 74E, to allow data provided with applications to register non-innovative trade name products, including reformulations, to be protected for 5 years after the application is decided. The bill as introduced would allow 3 years’ protection. We accept that 3 years may not be long enough for registrants to recover the costs of developing data. We consider that 5 years of data protection would both promote registrations and encourage competition. Any extension beyond 5 years might adversely affect competition for ACVM users.

The bill as introduced would allow for data provided with applications to register new uses for non-innovative products to be protected under the principal Act when the new use enables a product to be used on an additional animal or plant species. We consider that the definition of “new use” in the bill is too narrow.

Therefore, we recommend amending clause 6, new section 72(1), so applications could qualify for data protection if they seek to vary one or more conditions on an ACVM registration to permit change in the purpose for which an agricultural compound can be used, how or when the agricultural product is applied, or the withholding period for the product. We also recommend that the term used in the bill to describe these applications be amended to reflect this change.

On occasion, the Ministry for Primary Industries (MPI) may need to reassess a product (or group of products) that is or are already registered. This could occur, for example, if concerns are raised or new information becomes available that is different from the information available when a product is first registered.

There is no existing protection for data provided when products are being reassessed. This means that suppliers have little incentive to supply data as part of the reassessments process, which could lead to users needing to fund a reassessment in order to retain products in the New Zealand market. We consider it desirable to provide some protection and therefore recommend inserting clause 4A to amend section 29(3), and clause 4B to amend section 30. This would allow data supplied in support of reassessments under the principal Act to be protected for 5 years.

We recommend amending new section 74A(1)(a) to clarify that confidential data may be disclosed to officials within MPI. The bill as introduced would require the Director-General to take reasonable steps to ensure he or she “does not disclose” confidential information. This could be interpreted as prohibiting the Director-General from disclosing confidential data to officials within MPI who need the data to process the application.

We also recommend amending new sections 55(3) and (4) of the HSNO Act to ensure that confidential data provided is protected even if it differs from the data provided under the principal Act or the Medicines Act. This would be consistent with the way that data protection under the HSNO Act currently operates.

The bill as introduced would limit the period of data protection where no decision is made on an application to 5 years for innovative applications and 3 years for other applications. We note that as applications will be approved, declined, or withdrawn well within these time limits, these provisions are unnecessary.

Therefore, we recommend removing proposed new subsections 74B(4), 74D(4), 74E(4), and 74F(4) which relate to time limits on data protection where no decision is made on an application.

We recommend various amendments in Schedule 1 to update cross-references in the principal Act and to delete redundant cross-references.

We also recommend some amendments in Schedule 2 relating to the HSNO Act to improve clarity and to ensure that any data protection existing at the time of enactment is maintained.

The bill as introduced does not contain any transitional provisions, instead relying on the default rules in the Interpretation Act 1999. This could create uncertainty regarding the effect of the bill. We recommend amending clause 4 (new section 2A and new Schedule 3) to insert new Schedule 1 in the principal Act. The new schedule would include transitional provisions to clarify that after the amendments came into force:

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  the existing law would continue to apply in relation to existing applications and previously registered products

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  new use applications made in respect of innovative products would be eligible for data protection.

This bill takes the frame that the industry’s right to commercial sensitivity outweighs the rights of users and the community’s right to know and understand what the compounds are that they are using, or are being used in their environment and food chain. Health statistics, supported by research, suggest considerable risk from agrichemicals. Aotearoa New Zealand needs fewer pesticides and more transparency. This bill promotes the opposite, and the Green Party cannot support it.

This bill intends encouraging more pesticides and other agricultural compounds through increased data protection. Increased data protection means less public transparency about product ingredients, and has been amended since the first reading to an even greater increase in data protection and now meets the data protection requirements of the Trans Pacific Partnership Agreement (TPPA).

“Industry stakeholders” who called for this bill say that they will not go to the expense and effort of registering new products, or register more uses for existing trade name products, if there is a risk their work will be undone by making the data available to competitors.

New pesticides had 5 years of data protection under the old Act and the bill, as introduced, intended an extension of the agrichemical companies’ confidentiality or data protection on new compounds year by year from 5 years up to 8 years. Stakeholder submitters, including the New Zealand Law Society, called for a further extension of data protection that also met the TPPA’s 10-year requirement.

The 5-year data protection period was portrayed as deterring companies from registering products, which would in turn, theoretically, cost users because of a lack of competition between compounds and brands. However, since 2008, ahead of this change, 1,100 new ACVM compounds were registered and just 239 cancelled or expired, and industry sectors such as in horticulture, could themselves apply for registration of a new use, if its value was considered high enough to them but not to the pesticide manufacturers.

The Ministry for Primary Industries (MPI) or the Environmental Protection Authority (EPA) could also instigate a reassessment themselves, that might allow wider use of a generic compound if such a public good was accepted. Compulsory compensation from other firms to the original registrant/data-holder for the cost of providing the data required for other firms, could have been an option rather than data being hidden.

In considering widening the use of existing products, a 2009 Covec report said, “The fact that most innovative agricultural compounds were eligible for a 20-year period of patent protection meant that a five year period of data protection did not appear to have a significant impact on the registration of new products.”

And, “Companies’ apparent reluctance to carry out the extra testing to add other uses to innovative compounds for the New Zealand context is therefore more likely to reflect the small size of the market, rather than lack of data protection.”

We heard that the reformulation of products (non-innovative) may have apparent advantages; however, the Green Party believes increased data protection is more likely to lead to monopoly by the large corporates but with longer periods of secrecy about the contents of their products. Industry wants new uses and formulations to have data protection and for longer. The Green Party does not. Many additives (adjuvants—such as surfactants, penetrants, and stabilisers) are not currently identified, yet can be as toxic as the principal ingredient or act in a synergistic manner, further exacerbating risk.

Many companies are currently able to afford the cost of a new (innovative or non-innovative) application. New product registrations have averaged 180 per year for the past five years, and yet very few of the more than 3,000 different products registered for sale have been reassessed or removed.

MPI’s Regulatory Impact Statement focused on the cost of products to industry and at no time considered the externalities of pesticides and other agricultural compounds, the cost to the environment, or to human and animal health. MPI will be leaving most of that responsibility to the EPA under the Hazardous Substances and New Organisms provisions, which also will not give the wider community the full list of ingredients of new formulations.

Currently MPI and the EPA appear to mostly rely on applicant-generated data, and focus on the principal ingredient, and appear to disregard independent peer-reviewed and published research. This suggests a lack of capacity for robust analysis of environmental and community health risks from product formulations being applied for, and is not the appropriate setting for an extension of data protection for an industry known for products causing significant community and environmental harms.