Hudson Brett: Standards and Accreditation Bill — Second ReadingText is incorporated into the Bound VolumeHudson Brett: Standards and Accreditation Bill — Second Reading[Sitting date: 19 May 2015. Volume:705;Page:3409. Text is incorporated into the Bound Volume.]BRETT HUDSON (National): It is an absolute joy to rise in support of the Standards and Accreditation Bill in its second reading particularly so because we have heard some very divergent views tonight. There has been a lot of sound rational argument from this side of the House from people whom I was fortunate enough to sit on the Commerce Committee with but I have to say that I am not completely certain that members on the other side were actually at the same hearings that I was at. Along with the submissions we heard we also got a very extensive set of reports from the Ministry for Business Innovation and Employment and it really strikes me that the two members opposite who have spoken to date just really either did not read or did not grasp those reports.I will get to that but before we get there I think it is important to remind ourselves of why we are even looking at this bill because we are not creating legislation for the sake of it. This forms part of this Government’s plan to grow the New Zealand economy through our Business Growth Agenda particularly the parts that are about structures processes and supports to help businesses grow and to compete both at home and indeed abroad. Standards improve the effectiveness safety and reliability of many goods and services that are used by consumers and businesses every day throughout our economy. The proposed changes are aimed at ensuring that our standards system is well functioning and is meeting the needs of today and into the future.In particular in supporting our Business Growth Agenda there are two key points. Firstly a well-managed standards system builds innovation by facilitating the creation and diffusion of technology by codifying technical excellence. Secondly the changes that we are proposing support exports by preserving New Zealand’s connections to international standards organisations and ensuring that international expectations are met.Let us for a moment just turn to what the key changes of this bill are. Firstly we are proposing a new standards board with statutory independence that will be responsible for reviewing and approving standards. Likewise we are proposing a Standards Executive again who is statutorily independent who will be independent of the organisation that he or she resides in but will be based—to help foster collaboration in alignment with the growth plans across our economy and particularly with the building and construction sector—within the Ministry of Business Innovation and Employment. But they will like the board have statutory independence. In addition we will have independent standards development committees. Those committees will include industry and technical experts consumer representatives and regulators. We will also amend the Copyright Act to ensure that we both protect intellectual property within New Zealand and particularly as one speaker noted we will continue to work with Standards Australia which raised a very very important point with us during the select committee hearing.In the select committee hearings we received 21 submissions 13 of which we heard in person or by teleconference and a number of issues were raised. I would like to cover some of those. The issue of independence—raised by many—was that by having these functions particularly the Standards Executive residing within the Ministry of Business Innovation and Employment somehow that might lead to undue influence from the ministry on them and erode their true independent nature. Well quite frankly there is nothing more powerful in terms of independence that this Parliament can confer on any individual or anybody than statutory independence which is precisely what both the standards board and the Standards Executive will have under the proposed legislation.Even more important than that simple piece of legislative fact is evidence. I have spent over 20 years prior to entering Parliament in corporate company environments the commercial world and the information and communications technology business and most of those years were with fairly large companies or multinationals. I can tell you that if you want to do your level best to make true collaboration or influence tougher then put someone in the same large company with a separate reporting line. It is as tough as you can imagine to get quite the level of cooperation and collaboration that that company and its shareholders would like. That is a bit flippant but if you were to ask these businesses out there in the commercial world they would agree. They are of such a size and a complexity that they need to have the structures they have but they would be the first to admit that those structures cause challenges when it comes to working together effectively for the one objective that that company might have. So that experience for one would say that actually putting the Standards Executive in the Ministry of Business Innovation and Employment does not actually immediately mean that there is any erosion of their independence at all.But even more important than the anecdotal experience of one member of this House how about the real-world example of the Ministry of Business Innovation and Employment itself? Within the ministry we have three other individuals or groups in the same situation. We have the Registrar of Companies we have the Commissioner of Patents and we have the Official Assignee—each of them with their independence each of them resident within the ministry and not a single suggestion has come from a member of this House or anyone submitting that their residence within the ministry has in any way compromised their independence. The facts of the real-world situation show us with absolute clarity that the mere fact they are resident within the ministry does not automatically mean that there is any erosion of independence. When I have been hearing the members opposite speak and thinking of the examples I just cited—to paraphrase Daniel Patrick Moynihan they are entitled to their opinion but not their own facts.Another problematic area that was raised from the submitters was stakeholder representation. This is being met through the appointment of relevant individuals to standards development committees. Within that there was a question of conflicts of interest particularly if you have people from the industry serving on these committees. The argument and the way the bill is currently structured is that if you wish to have the best possible standards development committee for the standard that is being developed or reviewed then you need the flexibility to appoint the very best and most experienced of people from a range of areas. It could be academic. It could be industry. It could be consumer. There is any number of groups and individuals that might be relevant for a particular standard. So in actual fact by incorporating the flexibility we have we actually allow for the committee to comprise the best possible members while giving the Standards Executive in particular in proposing those people the ability to manage conflicts of interest.We need industry experts on board—people with real-world working knowledge around the standards that they are creating or that they may be reviewing. If you have a blanket restriction simply for instance if they happen to be an owner of a company that might be seen to benefit in some way from a standard because it is in that industry or in the case of the masters of the people opposite—the Council of Trade Unions—who said that even if you were an employee of a company in the industry you should be excluded then all you are really doing is constraining the quality of experience that you can actually have on the committee. You are basically setting yourself up for suboptimal standards to be created. It is quite stunning that it was even mooted in the first place.The other one that those members raised was that stakeholders should nominate members of the standards development committee. Well again a flexible and better way of addressing that is that by making the Standards Executive have to engage with industry and stakeholder groups to identify suitable experts it allows for the most relevant the most appropriate people to be on board. We can ensure that they will engage with those groups because in order for a standard to be approved or amended the standards board must approve it. The standards board is required—this is from the departmental report—“to have regard to the importance of ensuring that … membership constitutes a balanced representation of … interests relevant to the proposed draft standard.” So just because the Standards Executive can propose the members of the committee the governance role of the board ensures that if the standard is to be approved the executive will have to engage with the right groups whether they are industry whether they are consumer representatives—no matter who they might be.I will finish up with the objections raised by Standards Australia. It raised an issue: 82 percent of current New Zealand standards are jointly developed with Australia and New Zealand and the rules as they were drafted would harm their intellectual property. So what we have done is made sure that that intellectual property will be preserved and our links with Standards Australia will continue. I commend this bill to the House.