Heatley Phil: Animal Products (Dairy Products and Other Matters) Bill — Second Reading 
Heatley Phil: Animal Products (Dairy Products and Other Matters) Bill — Second Reading 
[Volume:624;Page:19007] 
PHIL HEATLEY (National—Whangarei) 
: 
 I would like to continue my speech by giving thanks to those submitters to and members of the Primary Production Committee who worked with David Carter our chairperson and me on the Animal Products (Dairy Products and Other Matters) Bill. We had just a small number of submissions but they were substantial because this legislation affects a substantial industry in this country—the dairy industry. I acknowledge in particular the Dairy Companies Association of New Zealand which was able to brief the select committee on the minutiae of this bill. Officials had covered that to some degree for us but they had not foreseen some of the consequences of passing this legislation. 
For example the Dairy Companies Association of New Zealand pointed out an issue around the testing of operations inside dairy factories and dairy sheds. Regulation 8(3)(c) of new schedule 6 inserted by schedule 2 is: “(c) to enable a person to do whatever is necessary or desirable to respond to a finding that a residue in dairy material or product is unsafe or suspected to be so.” Members will recall that this bill is all about quality standards and food safety not just in New Zealand but internationally so for the bill to empower any person to do what is necessary or desirable to respond to a finding of a residue is quite an interesting point. The association was quite concerned that that is quite a broad power; it is a power that gives any individual huge responsibility. It was those types of submission that were of significant use to us. 
This bill will come into force with the National Party’s support because it updates the Dairy Industry Act of 1952 that currently regulates the dairy industry in relation to trade in dairy products and to food safety issues. Food safety administration in New Zealand as it is overseas has moved a long way since 1952 over half a century ago. International trends international rules and multilateral arrangements and agreements have to be adhered to. They were not foreseen in 1952 and we need to do something now. This bill facilitates the entry of the dairy industry into a climate of inter-country negotiations in relation not just to dairy products but to the offspring products that we do not necessarily equate with the dairy industry yet that originate from it. 
The committee took great interest in the fact that there was a call from the industry to make sure that there is a legislative platform not only for Government to Government agreements but for access requirements across trade barriers so that trade can occur between those seeking market access and those receiving goods from our country—that is to say that official assurances can be given even if no Government to Government agreement exists. The reason for that is that traders particularly those in the dairy industry are often outstripping or moving well ahead of the bureaucrats. Those negotiating Government to Government agreements or multilateral agreements where more than two Governments are involved often take many many years whereas marketers—particularly those in the dairy industry who are so proactive—are often well ahead in terms of marketing their products into countries where Governments have not reached agreement at all. So there is in this bill the ability for a lower level agreement to be made through official Government assurances even when some formal multilateral arrangement is not in place. 
There was a call from the industry and we in the National Party acknowledge it that the Director-General of Agriculture and Forestry should not be able to issue notices specifying the requirements to be met in relation to animal material or products that are to be exported—in other words to make assurances to other countries that those goods are OK and that they have been given the thumbs up in terms of quality standards—and that those notices should not be put forward by any Government to another Government before there is consultation with the industry. We thought that that was a good call from the industry because the industry particularly dairy companies around New Zealand could provide the checks and balances necessary to make sure that all market access requirements and food quality standards are met. 
The bureaucrats may not necessarily have had that information. However officials put to us that there are particular reasons why consultation at that level of detail is not necessary. The main reason is that the turnaround time for consultation with the industry every time a Government wants to make assurances to another country would prohibit trade and involve the industry in the minutiae of negotiations. We would have the issue of having to do a deal and close it because we are trading product—it is a competitive environment; we have to get on with the job—when the industry guys are demanding some sort of consultation procedure. The committee accepted for the good of “New Zealand Incorporated” and for the dairy industry as a whole that that should not happen. 
As I say there are four main reasons for that. The first is that there is often an urgent nature around the resolution of Government to Government agreements so that access is gained to a particular market at a particular time through that short window of opportunity. That is the first reason. Secondly minor or technical changes mean that the increased costs of consultation not just in terms of time but in terms of money resources and people make it completely unnecessary—where there is small detail around the fringes why would anyone have to consult with a whole industry? The third reason is that many negotiations are restricted and confidential and consultation would mean opening up those confidences to the wider industry. A Government to Government agreement that might involve just one particular dairy company or strategy within that company would be opened up to the view of competitors. That is often sensitive information and it would be inappropriate to do that. The fourth reason is that the New Zealand Food Safety Authority undertakes consultation with the industry on a continuing and regular basis anyway. It knows where the expertise is so why would it need to go back to the industry at every step of a Government to Government negotiation? 
Those are the reasons why the National Party has supported the status quo in the bill—not to go back to the industry time and time again through a negotiation but rather to ensure that the industry is standing right beside Government officials during the period of the negotiation and that officials are well briefed beforehand. We support that view. If we recognise the ability of the dairy industry historically to get into markets overseas and to make a success of that we must always include that industry when we are involved in marketing strategies particularly at the higher level Government to Government agreements. 
There are also issues around cost recovery in transition whereby levies have been paid historically under the previous Act and are not necessarily rolled over into this bill and around whether they should be refunded. We would like to address those issues during the Committee stage because we have some concerns that levies will be charged twice from the industry and ask whether that is fair. I would be interested to hear members’ points of view on that matter during the Committee stage before the National Party presents any amendments. It is doubtful that we will do so but that might possibly be the case. National commends this second reading of the bill to the House.