Chauvel Charles: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Chauvel Charles: Financial Service Providers (Pre-Implementation Adjustments) Bill — Second Reading In Committee 
[Sitting date: 22 June 2010. Volume:664;Page:11977. Text is incorporated into the Bound Volume.] 
CHARLES CHAUVEL (Labour) 
: 
 I want to take just a brief call to go into some more detail on the concerns adverted to by my colleague Lianne Dalziel earlier. Before I do so I remind the Committee of the whole House of the history of this legislative process. The two original pieces of legislation the financial services legislation and the financial providers registration legislation were enacted by the House in 2008. That process was beset by deadlines as this legislation has been. It would be a shame if given all the work that all parties and all members particularly those on the Commerce Committee have put into this legislation we were to fail to get it right at the last hurdle as it were. So I ask the Minister in the chair—I see it is the Hon Pansy Wong—whether she could address the two issues that have been raised with a number of parliamentarians in an email from Rae Nield. 
Rae Nield has sent this email to Simon Power Chris Finlayson Heather Roy Lianne Dalziel me and John Boscawen. I have made a copy available to the National Party backbenchers who serve on the Commerce Committee and to the officials so that they can be clear about the concern. I want to say before I address the two issues that Rae Nield has a very successful legal practice in this area and she submitted to the committee on each piece of legislation. We found her submissions helpful and found that they had force. If she is raising a concern at this stage we must take this last opportunity we have to address it; otherwise we would have to come up with specific amending legislation later in the piece. I signal on behalf of the Labour Party that if the Government needs to take a moment to address the issue—if there is a need to do some last-minute drafting—we will not put any obstacles in the way of that course being adopted or object to any leave application for that purpose. 
The two concerns are that the legislation as reported back from the committee may apply much more widely than intended; that instead of it being restricted to those industries contemplated by Financial Action Task Force on Money Laundering requirements it may go more widely than we intended as a result of the industry not being consulted properly because of the time frames I referred to earlier. There was mention of this point in the submissions to the select committee and at the time the select committee did say to the submitters who raised it that we certainly did not intend to do that. If we have done it inadvertently I think we need to address it. 
The remaining specific issue on this point is that despite the broad coverage of the two pieces of legislation inclusion within the regime is by regulating out not by regulating in. There is arguably still a degree of commercial uncertainty for those businesses that may have been incorporated. The examples in the message that we received are retailers with gift cards prepaid mobile phones and mobile phone billing services taxi billing services and other categories of financial services. Obviously the intention was not to embrace those categories of industry. They would be surprised to be included in this legislation and there is no obvious public policy benefit in including them. So although it appears that there is now provision to make regulations to detach registration from compulsory dispute resolution scheme membership which is in clause 33A and for completely exempting services or classes of service which is in clause 37B for registration and clause 79 for the disputes resolution scheme membership—and for dividing into separate classes clause 37B for registration—these will not in themselves necessarily provide for trader certainty. Traders caught in the broad definitions of the legislation are included unless exempted. They are exempted only if they are not covered by the Financial Action Task Force on Money Laundering as far as registration is concerned and only if the Minister is satisfied that the cost of compliance is unreasonable or not justified by compliance. 
We need to hear from the Minister in the chair whether the bill has inadvertently caught this broad group of traders because if it has most of them will not know it. If they do not know it they will not know that they need to apply for an exemption and the Minister then will not be able to say whether it is too costly for them to comply. 
The second concern that has been raised—and I would be grateful and I am sure the rest of the Committee would be too if the Minister could address this as well—is the issue raised by new section 49D in clause 38B. Under this provision which essentially relates to the binding nature of rulings in the dispute resolution scheme a complainant can apply to a District Court for a review of any final settlement and the dispute resolution service can apply for such a review but there is no provision for the respondent financial services provider to apply for a review. So although the District Court in question could amend a manifestly unreasonable provision it could do that only on the application of the complainant or the provider of the dispute resolution scheme. 
I think it is correct to point out that at least on its face that is a breach of the New Zealand Bill of Rights Act particularly section 27 which guarantees access to justice to every person—every person including obviously legal as well as natural persons. The other issue that is worth adverting to is if that is a breach given that it has come in the bill as it has been reported back from the select committee there will not have been a chance to have it vetted by the Crown Law Office and be the subject of a report from the Attorney-General as to inconsistency. 
If the respondent does not carry out a non-pecuniary order from the dispute resolution system it is committing a criminal offence incurring a fine of up to $200000. I think that shows how serious this potential breach is. I think that if the committee had been confronted with this point fairly and squarely it would have asked the officials to suggest an amendment and strongly urged the House to rectify the apparent error so that all parties to a disputed resolution order could go on to a District Court and have the alleged error heard and if proven rectified. 
Those are the two points that it would be helpful to hear from Pansy Wong on.