General policy statement
Demand for organic products has grown markedly in recent years in New Zealand and overseas with the global market now worth over $116 billion annually. In 2017, New Zealand’s organic industry was worth $600 million. Organic claims are credence claims that consumers cannot independently verify. As a result, production rules that reflect organic production are important tools for all participants in the system and are widely use internationally by all of our key trading partners.
The Organic Products Bill proposes a regime to regulate organic claims and the businesses that make them. The Bill’s objectives are to—
increase consumer confidence in purchasing organic products:
increase certainty for businesses making claims that their products are organic (organic claims):
facilitate international trade in organic products.
These objectives and how the Bill will achieve them are discussed below.
Increased consumer confidence
Under the current framework, New Zealand businesses that make organic claims can choose whether or not to be certified to one of a range of private standards with different requirements. This can create inconsistency in organic claims and confusion for consumers.
The Bill will create consistency amongst organic claims and decrease consumer confusion by enabling mandatory requirements to be set for—
any product sold, labelled, or represented as organic whether it is imported, domestically produced and sold, or exported; and
each step along the supply chain, including the production, preparation, and processing plus all aspects of handling (including storage, packing, labelling, transport, and wholesale).
Increased business certainty
Under the current legislative framework, businesses are required to substantiate organic claims and make sure these are not misleading, which can create uncertainty for businesses who make organic claims. It is unclear what organic practices would be acceptable to consumers, regulators, or trading partners and what evidence they need to demonstrate that they comply with organic production requirements.
The Bill will create certainty for businesses wanting to make organic claims by enabling requirements for organic production to be made in regulations. The Bill also enables administrative regulations to be set as to how to demonstrate compliance. The Bill enables recognised entities (third party agencies recognised by the relevant ministry) to check organic businesses before approval, and on an ongoing basis for compliance.
Facilitating international trade
Countries that regulate organic production are increasingly expecting comparable regimes from their trading partners. Currently, the Ministry for Primary Industries runs a voluntary export programme, the Official Organic Assurance Programme, which enables exporters to access specific organic markets that require assurance.
The Bill will further facilitate New Zealand to negotiate new and more secure access in organic markets by increasing government oversight of the sector regarding what is produced here and exported. Part 3 of the Bill also contains requirements for exporters. These measures are likely to—
increase trust with trading partners; and
improve New Zealand’s ability to negotiate better market access; and
state New Zealand’s position on organics and allow us to defend it internationally.
Special features of the Bill
The Bill enables any relevant ministries to become responsible for the regulation of organic products relevant to their mandate, including the development of organic production standards and the administration, monitoring, and enforcement of associated regulatory requirements. The Ministry for Primary Industries will be the administering department for the Bill.