Finlayson Christopher: Unsolicited Electronic Messages Bill — First Reading 
Finlayson Christopher: Unsolicited Electronic Messages Bill — First Reading 
[Volume:628;Page:1044] 
CHRISTOPHER FINLAYSON (National) 
: 
 The National Party supports the first reading of this bill which as the general policy statement says implements the Government’s decisions on the regulation of electronic messages known as spam. It is modelled on the Australian Spam Act 2003 although interestingly there does not appear to be a definition of spam. The preferred terminology is “unsolicited commercial electronic message”. 
I will shortly outline my understanding of the problems with spam but first a brief note about the source of the term. Webopedia says that the generally accepted version is that the word comes from the Monty Python song with the lyrics: “Spam spam lovely spam wonderful spam.” Like the song spam is an endless repetition of worthless text—somewhat like the inane contributions in this House by the member for Otaki. Another school of thought maintains that it comes from the computer group lab at the University of Southern California which gave it the name because it has many of the same characteristics as spam the tinned meat: nobody wants it or ever asks for it; no one ever eats it—indeed it is the first item to be pushed to the side when eating the entrée—and sometimes it is actually tasty like 1 percent of junk mail that is rarely useful to some people. 
Whatever the origins of the term there is no doubt as the Minister said that spam is a curse to the modern world. It causes great disruption to individuals businesses and the Government. It can be sent to millions of recipients at a time worldwide. Indeed I recall a tsunami of spam email that arrived in from Germany one afternoon earlier this year—there must have been about a thousand emails in my in-box in the space of a couple of hours. That volume of spam can threaten the effectiveness and efficiency of electronic communication and legitimate online businesses—although I note that the bill will not prevent that kind of extraterritorial spamming. There are many categories of spam as we know and as adverted to by the member for Whangarei the most common categories are the Nigerian financial scams. There is also pornography— 
Phil Heatley 
: At least you can make money out of them! 
CHRISTOPHER FINLAYSON 
: Pornography? Keep quiet. There are also promotions for dubious health products. Perhaps most disturbingly there is also an emergence of spam that carries a virus. I am no computer whiz and therefore have little understanding of the technical means by which spam can be sent although I understand that it costs virtually nothing to spend spam and that it is very easy to send large volumes—as the Germans would tell us. That has led to hundreds of millions of spam messages being sent around the world on a daily basis. Indeed it has been said that the cost to Australian business is substantial—around $900 per employee per year and I have no doubt it is much the same here. It can cause a loss of productivity damage to reputation and a loss to customers of business opportunity so obviously something needs to be done. Hence the need for legislation prohibiting the sending of unsolicited electronic messages of a marketing nature. That is why the National Party supports the aims of the bill although along with much legislation these days it does seem to be very prescriptive and in my view some parts are unnecessary. Perhaps the select committee could take a close look at those parts. 
Part 1 contains the preliminary provisions including extended definitions of electronic messages and commercial electronic messages. Those provisions are modelled on section 6 of the Australian Act. I think that non-inclusive definitions are preferable given the rate of technological change in the modern world and the same comment may apply to other definitions in the definitional section. I hope the select committee will look at that. Clause 8 is a very important clause. It deals with the application of the legislation. The bill once enacted will extend to a person who engages in prohibited conduct outside New Zealand if that conduct contravenes the provisions of the bill and if the offender is either an individual who is resident in New Zealand or an organisation that carries on business or activities in New Zealand. But the legislation can have no extraterritorial effect on foreign spammers. 
Part 2 is the very heart of the legislation. The Minister has outlined the key provisions of clause 9 which provides that a person must not send or cause to be sent an unsolicited commercial electronic message that has a New Zealand link and the onus of showing that the recipient consented to receiving such a message will rest on the person who sent it. Clause 10 prohibits a person from sending or causing to be sent a promotional electronic message that has a New Zealand link to any person who has opted out of receiving such messages. Clause 11 requires that every commercial electronic message and promotional electronic message that is either sent or has a New Zealand link must identify clearly and accurately the person who authorised the sending of the message and must include accurate information about how the recipient can readily contact the person who authorised the message. Clause 13 sets out the defences that can be relied on by a person who either sends an electronic message or causes such a message to be sent. As with other affirmative defences the onus of proof is on the person who seeks to raise the defence. 
I will not deal with subparts 2 and 3 which I think the Minister has dealt with. Subpart 4 will doubtless be of interest to service providers and I expect that the select committee will receive submissions on that subpart. The service provider does not send an electronic message cause one to be sent or contravene third-party breaches simply because it provides a telecommunications service that enables such messages to be sent. Clause 21 is a very important clause. It sets out who is deemed to have authorised the sending of such a message and who is deemed to have sent such a message. It could be that those clauses will require close and careful analysis at the select committee deliberation. 
I want to focus on Part 3 which contains the enforcement provisions. The bill effectively creates a new statutory cause of action that is a bit like the Fair Trading Act’s causes of action. A civil liability event will be a breach of the key prohibitions in Part 3 to which I have just referred and clause 23 sets out what the response to the civil liability event will be. I have no particular concerns with subparts 2 and 3 of Part 3 which deal with the obligations of the service provider and the powers of the enforcement department. 
I do however have a few comments to make about subpart 4 which deals with the powers of the High Court. I wonder whether it is really necessary to specify that the court may grant performance restraining and interim injunctions. That seems to me to be a prescriptive way of stating the obvious—namely that the High Court can grant prohibitory mandatory and interim injunctions which is something the court has done from time immemorial. Why do we not simply rely on the existing law? I also wonder whether it is wise to attempt to define for the purposes of this legislation the circumstances where such injunctive relief may be granted. In the case of interim injunctive relief courts are well used to applying what is often referred to as the American Cyanamid test of a serious issue to be tried in balance of convenience while also considering the issue of overall justice. That test is a broad flexible test that would cover the kinds of situations contemplated by this legislation so the select committee may want to consider whether those clauses are necessary. I think it best not to have suigeneris provisions of that kind unless they are strictly necessary but rather to rely on the general law. 
Clause 41 deals with undertakings as to damages and in fact that clause alters the general law. With every application for an interim injunction under the High Court rules for example the applicant must give an undertaking as to damages. In a case involving the Commerce Commission in 1987 the commission argued that it should not be required to give an undertaking but the court held otherwise saying the fact that the commission was performing a public duty did not in the absence of legislation obviate the requirement to give an undertaking. As far as I am aware this legislation is the first time an enforcement agency seeking injunctive relief will be exempted from giving an undertaking and I think that issue needs to be closely looked at by the select committee. The other relief clauses generally appear to be unexceptional providing as they do for pecuniary penalties compensation and damages and sometimes for all three. 
As with the Commerce Act and the Fair Trading Act one does not rely on the general provisions of the Limitation Act 1950 but there are specific limitation provisions—namely a 2-year period within which proceedings in the High Court need to be commenced. That would appear to be a sensible period for that kind of infringing behaviour. So I support the bill in its first reading. I hope that the select committee will look at the issues I have raised and at others that will doubtless be raised through other submissions.