Standards and Conformance Bill — First Reading 
Standards and Conformance Bill — First Reading 
[Volume:628;Page:1020] 
Standards and Conformance Bill 
First Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Standards and Conformance Bill be now read a first time 
. At the appropriate time I intend to move that the bill be referred to the Commerce Committee for consideration. 
The standards and conformance infrastructure supports the economy in many ways. Consumers both here and overseas increasingly require products or services that comply with standards or other specific requirements in terms of quality or performance. Obtaining independent confirmation that that has occurred has become increasingly important for business success and consumer confidence. The Government’s interest is in ensuring that risks to public health safety and the environment are minimised while facilitating innovation economic development and international trade. 
The technical amendments contained in this bill will amend two Acts: the Standards Act 1988 and the Testing Laboratory Registration Act 1972. The amendments are designed to ensure that international and domestic confidence in New Zealand’s standards and conformance infrastructure is maintained. Internationally norms and practices in the standards and conformance area have evolved and it is important that the Standards Act and the Testing Laboratory Registration Act keep up to date with those developments. 
The bill’s amendments will also improve the efficiency and effectiveness of the functions of both the Standards Council and the Testing Laboratory Registration Council. Looking first at amendments to the Standards Act 1988 in New Zealand the Standards Council through its operational arm Standards New Zealand develops and publishes standards that are agreed specifications for products processes performances or services. Internationally standards bodies are now producing a wider range of products. The amendments to the Standards Act will clarify and expand the scope of the council’s functions to include the preparation or recommendation of codes of practice handbooks specifications and other material produced by international standards bodies. 
 The bill will also extend the development of standards in a manner consistent with New Zealand’s international trade obligations to include minimising environmental risks and promoting social responsibility. A further amendment is also intended to improve the nomination processes for appointments to the Standards Council. 
Turning now to the proposed amendments to the Testing Laboratory Registration Act 1972 the Act provides for the establishment of the Testing Laboratory Registration Council. The council has in turn established an operational arm—International Accreditation New Zealand. This organisation assesses the ability of testing and calibration laboratories and inspection bodies to carry out conformity assessments on whether a particular product process performance or service complies with particular standards and technical regulations. On the other hand an organisation called the Joint Accreditation System of Australia and New Zealand was established by treaty between the Australian and New Zealand Governments in 1991. It provides for the accreditation of certification bodies—for example quality and environmental management systems and inspection bodies. 
A key purpose of the bill’s amendments to the Testing Laboratory Registration Act 1972 is to delineate the roles of International Accreditation New Zealand and the Joint Accreditation System of Australia and New Zealand in the market for accreditation services. As such the amendments to the Testing Laboratory Registration Act 1972 will clarify that the Testing Laboratory Registration Council does not have the ability to accredit certification bodies and confirm that the council does not have the ability to accredit inspection bodies. The amendments will also make the provision of certification services—currently undertaken by Telarc Ltd an operational arm of the council—discretionary rather than mandatory. It is important to remember that when Telarc Ltd began supplying this service there were no private sector providers. Now however a number of private sector providers have been established. 
This bill will help do much to improve the clarity efficiency and effectiveness of the functions of the Standards Council and Testing Laboratory Registration Council and to align them with international norms and practices. This is ahead of the major review of standards and conformance that will occur next year. I commend this bill to the House. 
PANSY WONG (National) 
: 
 Yesterday this Minister like other Labour commerce Ministers before her once again made warm fuzzy noises about cutting compliance costs especially for small businesses. Apparently one of the fantastic responses that cuts compliance costs is to ask the Ministry for Economic Development to look into ways to measure and publish the cost of compliance. Compliance costs are indeed being identified along with high tax and the employment laws as one of the major obstacles facing small businesses. But can we have confidence in the Ministry for Economic Development championing the ways that Government departments can measure and report compliance costs? Let us look at this legislation because I am sure it was put together by the Ministry for Economic Development and as required by all legislation it has to contain a compliance cost statement. 
We see the statement identifies that this legislation will incur compliance costs because two accreditation bodies will be reduced to one and the organisations that were previously registered by International Accreditation New Zealand will now have to be registered with Joint Accreditation System of Australia and New Zealand. According to the compliance cost statement the size of the compliance costs that will be incurred by the bodies that shift their accreditation from one organisation to the other will depend on how much confidence the new accreditation organisation Joint Accreditation System of Australia and New Zealand has in the previous accreditations that were undertaken by International Accreditation New Zealand. 
The compliance cost statement also points out that there may be some confusion in the market because of these changes. Therefore it states it is not possible to quantify the size of the compliance costs. But the Ministry for Economic Development claims that it will take on the task of writing to the organisations that will be affected by the changes and that somehow that will clarify the issue and remove any confusion. Well the Ministry for Economic Development obviously has huge confidence in its letter-writing ability. I have never known any business owner to suddenly say he or she is no longer confused because a letter from the Ministry for Economic Development has outlined all the changes. That is why one can have no confidence in the commitment in this Minister and the minority Labour Government she belongs to to tackle creeping compliance costs. In fact business owners continue to complain nowadays that they can feel the tentacles of this Labour Government interfering in various parts of their businesses. 
National members will support this legislation going on to the select committee process. We look forward to meeting the advisers especially those from the Ministry for Economic Development and to testing their ability to demonstrate that they can indeed champion the measurement of compliance costs given they have actually at this stage put an abysmal effort into furnishing the business compliance cost statement contained in this bill. 
Let me turn to the provision in this bill that concerns the transfer of the accreditation function from International Accreditation New Zealand to Joint Accreditation System of Australia and New Zealand. On the face of it to reduce two accreditation operations into one seems to be a sensible move. However we have learnt from the explanatory note of the bill that various organisations have expressed concerns because the new body Joint Accreditation System of Australia and New Zealand actually charges higher fees than International Accreditation New Zealand. Whatever happened to economies of scale? We are now telling the bodies that have to get accreditation that they will have to pay higher fees for no obvious benefit. 
Apparently the consultation process threw up another observation: there are concerns about the lack of client services in Joint Accreditation System of Australia and New Zealand compared with International Accreditation New Zealand. That is a classic case of businesses being asked to pay more and get less. That sounds to me like a very Labour business persona—one pays more and gets less. I look forward to quizzing the officials and advisers during the select committee’s deliberation on the bill as to why businesses are to pay higher fees for fewer services. Apparently the officials actually took up those concerns and they reckon they have solved the problem by including a transitional provision in the bill. The transitional provision includes the measure that the advisers will write to Joint Accreditation System of Australia and New Zealand asking it to review its fees and also to take the concerns expressed by businesses into consideration. Well I do not think that is good enough. I think basically the advisors have to ask Joint Accreditation System of Australia and New Zealand for a fee scale and to justify why its fees are higher than those of International Accreditation New Zealand. Unless businesses can be convinced they are receiving more services I cannot see why the Government should pass legislation to force businesses to pay more for fewer services. So that is another provision we will take up and seek answers on from the officials. 
The functions of the Standards Council will also be affected by this legislation. According to section 10(1) of the Standards Act the primary functions of the council were originally: “… to develop standards and to promote encourage and facilitate the use of standards in New Zealand with the object of—(a) Improving the quality of goods and services having regard to economy in their production or supply; or (b) Promoting standardisation in industry trade or commerce; or (c) Encouraging and facilitating industrial development trade or commerce; or (d) Promoting public or occupational safety health or welfare.” This bill seeks to expand those functions by having to include the objectives as outlined in clause 7(1) of “minimising environmental risks” and “promoting social responsibility”. 
Alarm bells should start to ring when sweeping statements like those are to be included. I want to know whether the Minister has in mind a ban on plastic shopping bags in supermarkets in order to minimise environmental risk. When the Greens want such solutions to become policy they at least are upfront about it but the Labour Government always insists upon a quango to do the work it does not tell the public about. 
Another provision I want to question concerns the definition of “social responsibility”. On what criteria is it based and who will decide what constitutes social responsibility under this legislation? If that term is well-defined why is it not included in the Consumer Guarantees Act 1993 or the Fair Trading Act 1986? After all those Acts seem to be even more relevant to that requirement than this bill is. I wonder how many types of children’s toys will pass the social responsibility test. We look forward to the officials coming up with guidelines and examples at the select committee. 
The last point I want to raise—the ultimate concern—is that this bill includes another sweeping statement whereby the Minister can interfere. Apparently the Minister can simply ask the Standards Council to take on any other function not in contradiction with its objective. But as we know the council’s objective is very wide. So although we support this bill going to the select committee we look forward to putting it under very robust scrutiny. 
MARYAN STREET (Labour) 
: 
 I rise to speak to this bill not requiring my full 10 minutes because it is very straightforward. It is in fact much more straightforward than the previous speaker would understand. I wish to underscore a couple of points about the bill perhaps for the benefit of the previous speaker. 
It is very clear that the infrastructure of this country requires updating in order to comply with international standards norms and practices. The updating that this bill contains—that is amendments to the Standards Act 1988 and the Testing Laboratory Registration Act 1972—is not of the dramatic order that the previous speaker suggested. If there are concerns then surely they will be addressed at the select committee. But I would like to pick up on one of the previous speaker’s points and that is the point about compliance costs. 
There is a statement in the explanatory note of the bill that talks about business compliance costs but the purpose—and I am sure it will become blindingly obvious during the course of select committee submissions—is that because we are going to be correcting an anomaly in the current provisions we will be moving to reduce compliance costs. We cannot have two bodies responsible for accreditation. We need to have one. Hence the move towards the Joint Accreditation System of Australia and New Zealand. 
Australia moved to use that system some time ago and we are doing the same as Australia. I think that the bogey of business compliance costs the member raised is mythical and it will be up to submitters I suppose to demonstrate during the select committee process the extent of those costs. It has been said that it is not possible to quantify them so I will be interested to hear just how detrimental these administrative changes will be. 
Fundamentally it is essential that our standards and the infrastructure that underpins health standards specifications for products testing of products and safety and environment standards are protected by this updating of current legislation. I look forward to addressing that matter at the select committee deliberation. 
CHRIS AUCHINVOLE (National) 
: 
 I rise to support the Standards and Conformance Bill going to the select committee. With reference to the last speaker I tell her that she should read page 9 of the explanatory note headed “Statement of consultation undertaken”. The paragraph headed “Stakeholder consultation” states: “They wanted to see effective transitional provisions included in the legislation and noted that the proposal will result in increased direct costs to them as a result of higher accreditation fees charged by JAS-ANZ.” 
Maintaining confidence in our standards and in the conformance of the same with their associated infrastructure is very very important to New Zealand and to New Zealanders. We are known to be a people and a country that both holds to high standards and conforms to high standards. There is also a high expectancy that the organisations and infrastructures responsible for being guardians of those standards will fulfil the required task. Occasional breaches of standards—some of which have had truly tragic results—always serve to emphasise the expectancy the population has of our standards. So this is not a light matter; it is very very serious. I would like to think that it is not just a New Zealand characteristic but that it is fundamental to the way we live. I would like to think that certainly in a political perspective it is a National Party characteristic to have high standards—and I think we saw a demonstration of those in the result we were told of this morning. 
It is also a National Party characteristic to have high behavioural patterns that reflect those standards. National is the party that demonstrates those things in so many ways: in the conduct of the recent campaign in the preparation and delivery of policy in the training and inclusion of new candidates and indeed in the induction of new MPs into caucus and into the House. The standards and conformance of this side of the House I think can be considered to be exemplary. If only I could look across the Chamber and feel that the same occurs on the other side of the House. Those members seem not to have the same level of enthusiasm energy and dynamism that is on constant display on this side of the Chamber. 
Sitting suspended from 1 p.m. to 2 p.m. 
CHRIS AUCHINVOLE 
: To continue and I do not intend to use the full allocation of my remaining 7 minutes— 
Hon David Carter 
: Oh I bet you will. 
CHRIS AUCHINVOLE 
: I will try my best; all right let us do that. As I was saying before lunch the standards and conformance of people on this side of the House can only be described as exemplary. If only Opposition members could look across the House to see the same enthusiasm—I am searching for enthusiasm but I see none—energy and dynamism that is on constant display on this side of the House. The present Government and the cross-bench MPs of its attendee parties get to look across at a whole new batch of MPs—budding future leaders of a high standard and conformance a mature group of mid-career MPs and a fine front bench in the full flower of activity—compared with the view that we have of a sad group of members who have gone to seed in desperate need of weeding pruning and replanting. Indeed one has even heard those members described somewhat uncharitably as “the complete dried arrangement”. But that is not the case on this side of the House. 
But as I said earlier there are concerns with this bill which is a serious matter. It is a very important bill. One of the concerns we have which was mentioned by a previous speaker is the addition of two new objectives which the Standards Council develops and promotes. They are “minimising environmental risks” and “promoting social responsibility”. I have serious concerns that the inclusion of these seemingly well-intentioned objectives will be of concern to many. These objectives in the hands of the present Government will almost inevitably impact on the activities of individuals and groups through regulation by stealth. Promoting social responsibility smacks of voluntary codes until such time as people do not comply after which regulations will be imposed to introduce compulsion. The breadth of possibilities open to bureaucrats under such phrases as “minimising environmental risks” and “promoting social responsibility” is very very broad. 
One of the reasons this bill is being introduced is to try to tighten some of the descriptions that are used in clause 12 which is critical of the breadth of intent. But it almost sounds like a pre-glasnost socialist creed or perhaps something from the darker days of social revolutionary change in parts of Asia. I shudder to think what could be included under “minimising environmental risks” and “promoting social responsibility”. 
In all though we support this bill going to a select committee where its concerns and intentions can be thoroughly considered and thoroughly examined and people can express their views on the bill in detail. 
NANDOR TANCZOS (Green) 
: 
 The Green Party supports this bill going to a select committee but we do so with a word of caution. On the face of it the bill seems entirely innocuous—and in fact it probably is—but we are also aware that it is being introduced under urgency in this House just before the Christmas break and within an international context of tension over how Governments should assess and regulate risk in relation to industry and laboratory standards. 
The aim of the bill is to ensure that the functions of the Standards Council and the Testing Laboratory Registration Council are aligned with international norms and practices. That seems to be an admirable intention but what do we mean when we talk about international norms? Are we talking about the norms of Europe when Europe is taking an increasingly cautionary approach towards chemical and biological risk or are we talking about the norms of the United States of America when according to some US commentators the US has become increasingly paralysed by a deliberate industry strategy of manufactured uncertainty? The concern is that the approach of the joint accreditation system of Australia and New Zealand which this bill will lock into place may well follow in the footsteps of the United States given the very strong identification with US policy that currently dominates Australian politics. It will be of no surprise to members of this House that once again New Zealand’s status in that body is not that of an equal and sovereign nation but is more akin to a slightly favoured federal state. New Zealand would be bound by this legislation to implement the decisions that the Australians by their superior voting power choose. 
Why should that concern us? Let us look at what is actually happening in the United States in relation to regulation. In December 2000 its Data Quality Act was enacted quietly as 27 lines in a giant Budget bill. The Act charged the Government to create procedures to ensure and maximise the quality objectivity utility and integrity of scientific information and statistics disseminated by federal agencies. So dozens of US Government agencies now struggle to translate that language into thousands of pages of quality control guidelines 
That would appear to be a laudable objective but the problem is that the bill has opened the door to a massive industry onslaught on the regulations governing hazardous chemicals in the United States and United States industry has adopted a self-proclaimed policy of using doubts and uncertainty to paralyse its regulatory agencies. By using shonky science and poorly implemented replication studies—which as a result of their poor implementation fail to support primary research—and by using blanket denials industry has managed to stave off regulation on the basis that the scientific evidence is contested. Members have only to turn their minds to the very deliberate strategy of the tobacco industry internationally which has used shonky science and poor replication studies in order to confuse the link between smoking and ill health. Well the Data Quality Act takes that kind of deception to a whole new level because it allows US companies and industry to take court action in order to contest the quality of scientific information thus hamstringing the ability of industries to regulate by locking them up in legal logjams. As a result regulatory agencies have become paralysed in the United States. 
The relevance of that situation to this debate is the concern that we do not open the door to a similar manipulation of regulations in this country inadvertently. If we turn to the bill and look at new section 10(2)(ca) inserted by clause 7(2) we see that the provision allows the Standards Council to recommend specifications other than standards. We have to question what the aim of that provision actually is because as the explanatory note tells us those specifications will not be subject to the same “consultation requirement in section 10(3)” that attaches to standards—because the requirements are not standards; they are specifications. I think that that should make members of this House sit up and take notice and they should ask what the purpose is of doing that. Is it a way of avoiding that consultation? 
Perhaps that is being all too suspicious and perhaps this is a totally innocuous if not laudable bill so the Green Party will support the bill going to a select committee. But we are simply using this speech to alert members to the very significant issues that arise in the process of looking through the specific details of this bill and to alert members on the committee the bill goes to that they should pay attention to the significant hidden barbs that might well be buried in the small bill before them. 
Hon BRIAN DONNELLY (NZ First) 
: 
 I want to take a brief call to say that New Zealand First has carefully looked at the bill and we consider it to be worthy of our supporting it to a select committee. It is a good example of cooperation between ourselves and our Australian cousins. It certainly supports New Zealand’s trade health safety and environmental objectives. It creates economies of scale. 
I have only one reflection to make which is that this legislation has the potential to be a springboard that helps advance the Pacific Plan in terms of extending some of its provisions to our Pacific neighbours many of whom struggle to find the capacity within their own sovereign borders for this type of accreditation system. I just put that out as a teaser for people to think through but as I said New Zealand First will support the bill going to a select committee. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 It makes an interesting change for this House to be focusing its attention on standards. Indeed at first we thought the bill was about addressing the proposed code for parliamentarians which the member for Manukau East the Assistant Speaker Ross Robertson is putting forward to the Standing Orders Committee. Across the Chamber the honourable member for Rodney also referred to the need for ethical behaviour. 
Standards are something we have a great passion for in the Maori Party. We are firmly committed to contributing to a high standard of behaviour in this House and to ensuring that members agree to work together treat each other with respect and act with integrity. Without even looking at the bill we were happy to promote conformance with acceptable social standards of behaviour compliance with practices and values that promote mutual respect and harmonious relationships. It does however always pay to look at the detail of the bill in order to identify what standards we are talking about. The standards in this bill are specific to the trade health and safety of the environmental world of which the Standards Council and the Testing Laboratory Registration Council are key elements. They are standards and specifications in relation to health disabilities business environment and building. They are standards that provide a basis for consistent and acceptable minimal levels of quality performance safety and reliability. The Standards Council develops standards for goods and services while the Testing Laboratory Registration Council assures everyone that the standards are being met. 
So how does this legislation apply? How will it apply? Indeed can it apply? Can it make a difference to the standards of goods and services? When we were looking for a topical example yesterday we found the case of a festive taxi driver who was fined for attempting to spread Christmas cheer. The Hamilton driver known simply as “Butch” says he was banned from work after disobeying the taxi uniforms policy by wearing a Santa hat. Butch told the press that he was ordered to remove the offensive headgear earlier this month but refused and got a fine of $50. I guess that is a case of standards being applied to the most extreme degree. It is important to maintain standards and it is something that we in the Maori Party are committed to but that is probably a case of carrying a good thing too far. 
One of the bill’s key achievements will be to improve the efficiency and effectiveness of the Standards Council and the Testing Laboratory Registration Council. In thinking around how that will apply there can be no more dramatic an example than what was termed the “unfortunate experiment”—the results of the Gisborne inquiry into the National Cervical Screening Programme. In 1990 when the programme was launched the scheme was initiated without any performance standards in place. Ten years later when the Gisborne inquiry was called for there were no standards no performance indicators and little ongoing monitoring and evaluation. If members recall the Gisborne inquiry revealed that only 32 percent of the smears in which Gisborne laboratories detected abnormalities were marked as high-grade. In other words 68 percent were missed. What does that mean in real terms? It means that 616 women had missed high-grades 577 women who were referred for colonoscopy were diagnosed with cancer after May 1999 and nine women died from cervical cancer. That is the level of crisis that provides the context for demanding improvements in standards. 
What the Gisborne inquiry found was ample evidence of an unacceptable level of under-reporting. It found very poor standards at Gisborne laboratories which lacked both internal and external quality control. It found that Dr Bottrill had failed to gain accreditation for his laboratory and worst of all there was a severe lack of monitoring and evaluation of the laboratory performance which meant that Dr Bottrill’s under-reporting went undetected. Had those contracting with cytology laboratories understood and adhered to the importance of quality assurance then the requirement for laboratories to be independently accredited by the Testing Laboratory Registration Council would have been enforced. There is no question that there are serious issues with the standards and conformance that operated with the National Cervical Screening Programme. The Maori Party will continue to raise questions about the programme particularly why more Maori women have developed and died from cervical cancer than non-Maori women. In the year 2000 the death rate for Maori women was 8.1 for 100000 but for non-Maori women the death rate was only 1.9 for every 100000. Why is that the case? If we are really going to get serious about standards why should we not set in place standards that mean something and under which Maori should enjoy at least the basic minimum that non-Maori do? 
That example brings me to another point about the bill. The majority of standards are developed in partnership with Standards Australia. The function of registering certification bodies comes through the Joint Accreditation System of Australia and New Zealand which was established by a treaty between the Australian and New Zealand Governments in 1991. The bill aligns the functions of the Standards Council and the Testing Laboratory Registration Council with international standards and conformance norms and practices. It does that in essence by transferring the authority of our body the Testing Laboratory Registration Council to the joint Australian and New Zealand body the Joint Accreditation System of Australia and New Zealand. Although that is good in terms of lining ourselves up with international standards we have to look at the other side. The context of the bill is the Government’s programme of strengthening the trading relationships between New Zealand and Australia and with other countries that conduct conformity certification programmes which is yet another example of our own autonomy—our sovereignty—being compromised in an attempt towards a closer relationship with Australia. A transfer of authority to another body lessens our own Government’s sovereignty and the ability to determine domestic standards and conformance. 
The Maori Party must also ask the question about whether the Government has consulted with its Treaty of Waitangi partner before signing trans-Tasman agreements. Earlier today I spoke about the importance of the Treaty as a foundation of our constitution. As I said then the Treaty is our primary document. It is deeply philosophical and it is the appropriate document for Aotearoa at this time. It also guides us in all matters of domestic and international negotiation as indeed it should in this bill today. I also need to advise the House that there are many indigenous nations who look at the Treaty of Waitangi as a model for their nations. 
So we ask the House whether tangata whenua will be specifically consulted in developing and recommending specifications to minimise environmental risks and promote social responsibility as proposed in the Standards and Conformance Bill 2005. Or will there be two different standards as demonstrated by the figures from the Gisborne inquiry? I remind the House of the difference in the death rate from cervical cancer in the year 2000: 8.1 for every 100000 Maori women and 1.9 for non-Maori. As my colleague Nandor Tanczos also reminded us this morning there are two standards for the use of language in this House. Te reo which is an official language of Aotearoa is accorded an inferior position in comparison with English. Na reira Nandor Tanczos tena koe e whakapuaki mai i o whakaaro ki te Whare nei tena koe. 
[ 
And so thank you Nandor Tanczos for disclosing your thoughts to this House; thank you. 
] 
Social responsibility is surely about taking responsibility for the outcomes for all in Aotearoa ne?No reira tenatatou. 
Bill read a first time. 
Bill referred to the Commerce Committee.referred to Commerce Committee