Natural Health Products Bill — First Reading 
Natural Health Products Bill — First Reading 
[Volume:675;Page:21385] 
Natural Health Products Bill 
First Reading 
Hon Dr JONATHAN COLEMAN (Associate Minister of Health) 
: 
 I move  
That the Natural Health Products Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Health Committee. In April 2009 National and the Green Party announced that we would work together to develop a New Zealand - based regulatory scheme for natural health products that are sold in New Zealand. We said then that our key objectives were to have a New Zealand - based scheme that is cost-effective and gives New Zealanders confidence that the natural health products they use are safe. We wanted a scheme that gives the public an assurance that the natural health products they use are true to label and can provide the health benefits claimed for them. We also wanted a scheme that would recognise that natural health products are generally low risk and that would be as simple streamlined and low cost as possible for industry and the Government. This bill achieves our objectives. 
We have worked effectively with a very wide range of stakeholders and their feedback has been incorporated in the final form of this bill. The bill will introduce for the first time in New Zealand risk-based regulation of natural health products. The bill will also for the first time allow industry to make legitimate claims about the health benefits of natural health products to those who use them. It will provide for a scheme that gives the public an assurance that the natural health products they use give them the health benefits claimed by the manufacturer or importer when used as directed and are safe and contain what the labels say they contain. 
The scheme enables product manufacturers and importers to gain market authorisation by self-certification against the scheme’s requirements. Product sponsors will use an online database to notify the regulator of products. The database will automatically accept the notification provided the product meets the scheme’s criteria which will be built into the online system. 
To provide certainty for the industry a list of prohibited ingredients and an open-ended list of ingredients that can be used in natural health products will be introduced. The bill will also provide a simple process for adding new ingredients to the list of those that can be used. 
Sponsors will be required to show evidence to support claims of the health benefits of their products. The regulator may audit this evidence and may randomly audit the information provided as part of a product notification and in response to complaints. The bill will provide for regulation-making powers to set labelling requirements manufacturing standards and standards of evidence required to make a claim of health benefit. It also enables the natural health products regulator to recognise the decisions of recognised authorities whether in New Zealand or overseas. 
This bill exempts export-only products from the requirements of the scheme. However if an exporter requires an export certificate from the regulator then it must meet the requirements of the scheme including product notification in order to obtain an official Government assurance. The New Zealand and Australian Prime Ministers have signed a statement of intent detailing their agreement to move to a joint New Zealand - Australia regulatory regime for therapeutic products including a joint agency the Australia New Zealand Therapeutic Products Agency. The New Zealand regulatory scheme for natural health products will sit alongside the agency. The Natural Health Products Bill will provide for a stand-alone scheme separate from legislation regulating other therapeutic products. The natural health products regulator will be in the Ministry of Health but separate from Medsafe New Zealand’s regulator for therapeutic products. 
This bill will provide for a robust scheme that gives the public assurance about the safety and efficacy of natural health products. The scheme will be straightforward and low cost for the industry which will for the first time be able to make legitimate claims about the health benefits of its products. I commend this bill to the House. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is a pleasure to take a call on the Natural Health Products Bill. It is difficult to sit on this side of the House and listen to discussions about this matter when we know that when in Opposition National continually played politics with this issue. 
Carmel Sepuloni 
: Who did? 
GRANT ROBERTSON 
: National continually played politics with this issue. This whole issue of regulation could have been resolved if National when in Opposition had been prepared to take a responsible approach to looking at this issue. Instead it became a political football. It is useful to refer here I think to an email from 13 August 2007. It is from Michelle Beckett who at that time was the executive director of Natural Products New Zealand. The email reports on a meeting with Tony Ryall which she described as “greatly pared down”. I am not quite sure what that means but she said that Mr Ryall “quite clearly previously indicated his inflexibility” on the issues related to natural products. Ms Beckett said that she and her colleagues left the meeting with a feeling that the natural products industry was “of little importance to the new leadership of the National Party”—that was Mr Key—“and that this sector is seen only as a political football to be leveraged to any political advantage regardless of the consequences to what has been a growing New Zealand export industry.” That is the truth. On this issue National has no credibility whatsoever. 
National members have come to the House today with a bill and Labour will support its referral to a select committee because our position has been consistent. Our position has been that we want regulation in this sector. We want New Zealand companies to be able to develop their products and to grow their exports in an area that is undoubtedly a growth area. This all could have been done as part of a comprehensive arrangement that involved a trans-Tasman regulator and a comprehensive regulatory framework. It all could have been done 5 years ago if National had not used this industry as a political football. The Minister knows that. He knew when he introduced it that the credibility of his party was in tatters on this issue. 
A regulatory regime for natural products is a good thing. These products are used by many New Zealanders. It is important that we know that they are safe that they do what they say they will do and that consumers have good clear information about them. We also want to send this bill to a select committee so that the public can have a say on this issue so that they can understand what is being done here and so that the industry can ensure that the rules are both fair and also protect the health and safety of New Zealanders. We think that the health and safety of New Zealanders should come first but also we believe that New Zealanders need to have the ability to understand the products that are in front of them. 
We have some concerns about this bill. We have some concerns about the way in which this arrangement will work alongside as the Minister said the arrangements that are being put in place in terms of a joint regulatory framework with Australia. I refer to the regulatory impact statement for the bill which indicates that elements of the proposal being put on the table today by the Government will be problematic in terms of addressing a joint regulatory body. 
Government members are very keen to be able to say that they are supporting a New Zealand - based regulatory body for natural health products but the truth is that they have put into the arrangements with the Australians the same 5-year window that the Labour Government had in place in 2007 which will enable natural health products to become part of that wider trans-Tasman arrangement. Should that be the Government’s plan in the future then who knows where National will go on this issue. It has flip-flopped around so many times on this issue that it is quite difficult to know. But if it decides to go with a trans-Tasman arrangement that includes natural health products this regulatory impact statement is telling us that that may well be problematic. So we need to be very careful as we work through this proposal as to whether those problems are so great that it will actually provoke some difficulty in the future for New Zealanders. 
Another issue that I think all of us will be very keen to look at when we get into the select committee process on this bill is the question of cost. Associate Minister of Health Jonathan Coleman mentioned the issue in terms of cost. I will mention briefly two aspects to that issue. One of those is the question of cost to the country—the cost of setting up an independent regulator outside Medsafe. The Government on the other side of the House likes to trumpet that it has reduced bureaucracy and reduced costs in Government. Here we are setting up a new agency. We will be looking very closely at the best way in which such an agency can be set up and how it will be able to deliver its outcomes and be cost-effective at the same time. The other element of cost is the question of cost to the industry. Again I will make some reflection from the regulatory impact statement because it makes it clear that it is very difficult to work out what the cost of regulation will be on the industry particularly at a per-product level. The estimates that underlie this paper and give the reasons why it is a cost-effective solution are quite flimsy in many ways. In fact the regulatory impact statement says that all of the estimates in the papers that back up this bill are provisional. So it will be very important in this process to look at both the cost to the country in terms of setting up an independent regulator and also the cost to the industry itself. I think that both of those matters deserve a significant piece of work by the select committee. 
From the point of view of members on this side of the House we find it difficult to stand here and look at these issues without reflecting on what has happened in the past. This side of the House has always been committed to a regulatory regime that works for New Zealanders. We will support this bill to go to the select committee because we believe that regulation in this area is overdue and needed. But what we do not want to go through again is National’s flip-flopping on its position and playing politics with the natural health products industry. We look forward to the debate in the select committee and we want to make sure that all New Zealanders get a chance to have a say on it but we do not want to limit our options in the future for a trans-Tasman regulatory agency. 
I know there are those in this House including my colleague Sue Kedgley who feel very strongly about what a trans-Tasman regulatory agency might mean to New Zealand’s sovereignty and our ability to make decisions. I respect that view. It has been consistently held by Sue Kedgley. My own view is that there are benefits for New Zealand in a trans-Tasman agency and benefits for those who wish to export their natural health products. I do not want to see an overly bureaucratic regime but I do think the future of these kinds of regulatory arrangements lie in trans-Tasman arrangements that protect New Zealand’s sovereignty. That is completely possible and the benefits for New Zealand and New Zealand consumers of access to more information more expertise and more markets for our exporters are good benefits. I think they deserve to be investigated while ensuring that New Zealand sovereignty is protected. We will support this bill to go to the select committee but with the reservations that I have outlined. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It is a pleasure to take a very short call on this important and timely Natural Health Products Bill. It is great that National has been able to work with the Greens to finally get this bill into the Parliament. 
I must say that this is a very important area. The natural health products registry estimated that in 2011 there will be a billion dollars worth of exports—$150 million worth of manuka honey. It is important that these products are safe and that any regime makes sure there is no harm. I think it is important that people understand the regulatory impact statement and also are aware that there will be a 5-yearly review. 
Finally there are some challenges that will be important for the select committee to grapple with. Firstly there is the definition of what natural health products are. They are defined in the bill among other things as bringing a health benefit and that implies that there will need to be some degree of proof. Other challenges include the Wai 262 claims and also of course how we fit in with the trans-Tasman arrangements. 
There will be some very interesting challenges for the select committee to grapple with. I believe that this is a timely and highly worthwhile bill. It has had its genesis over 20 years according to the regulatory impact statement and I commend it to the House. 
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you very much for the opportunity to speak to the Natural Health Products Bill. The choice of words—the use of the word “timely”—by the previous speaker Dr Paul Hutchison was very interesting. 
Hon Steve Chadwick 
: Timely! 
KRIS FAAFOI 
: It is quite laughable because we have wasted 5 years in this Parliament while the National Party when in Opposition was flapping its arms around and saying that a trans-Tasman agreement on this issue was bad evil and what have you. We have wasted 5 years then when National came into office in 2008 it cosied up to the Greens and all of a sudden this bill was the best thing we have ever seen. So when Mr Hutchison says that this bill is timely I tell him we could have been dealing with this legislation 5 years ago. But National decided to play politics with it. I reiterate the words of Michelle Beckett the executive director of Natural Products New Zealand which my colleague Grant Robertson mentioned earlier: “The National Party is using this as a political football to be leveraged to any political advantage.” To now say that this bill is timely is just quite laughable. 
However having said that Labour will support the bill to the select committee. But we do that with a number of reservations. Our reservations echo a number of the concerns that were picked up by the Ministry of Health in its regulatory impact statement. One of those concerns was around the inadequacy of the scheme to be rigorous enough and therefore to be up to date with international best-practice and the robustness of the scheme in terms of being able to guarantee that the products were safe and true to their claim. The concern also was whether it had been recognised by some of our trading partners and whether it would be up to that level of scrutiny. We believe that in sending the bill to the select committee we can try to iron out some of those concerns raised in the regulatory impact statement. 
There is also some concern in that statement about the small amount of information that is known about natural health products. We think that if we are going to introduce a regulatory framework we need to know the size of it. We need to know what is going on within the industry. We need to get an idea as Grant Robertson said earlier of the costs involved in bringing in these regulations and also some of the constraints that may be put on the Ministry of Health as it polices these regulations. On that aspect we welcome the proposal to phase in some of the regulations to collect information and also to see what products are out there in the market at the moment and to figure out what kinds of fees and levies can be charged over time. As we say there will be significant costs within this bill to make sure that it achieves what it should achieve and what we hope it will achieve. 
The most important thing about this bill is the health and safety of New Zealanders. It has been noted that a lot of these natural health products claim to have quite significant therapeutic qualities or benefits. When looking through some of the information around this issue I was quite surprised what little regulation and oversight there is at the moment of some of the ingredients that go into some of these natural health products. Since the legislation that currently polices this area was introduced in 1985 quite a significant amount of additives have come into existence which are going into these products. I think we need to make sure there is significant oversight. Given the nature of some of these things—we are talking about pills tablets syrups and powders which all claim to have some positive effect on health—it is surprising that we have little oversight. It is again a little disappointing that we could have done this 5 years ago but it was not done especially when we consider the ailments or illnesses that some of these products claim to treat. We are looking at conditions like arthritis and psoriasis and some of these products even go into manuka honey which of course has some therapeutic qualities I am told. But I guess when we are looking at some of these very serious illnesses and the nature of some of these products we need public scrutiny of the ability of this bill to meet its purpose. That is why Labour will be supporting it to the select committee. 
SUE KEDGLEY (Green) 
: 
 The Green Party is delighted that the Natural Health Products Bill which will set up a stand-alone natural health products regulator within the Ministry of Health is before this House. Instead of lumping in natural health products with medicine and food the bill sets up a system for the regulation of natural health products as a separate low-risk category of product. 
The bill which the Green Party has helped to negotiate with the Government has been a long time in gestation. I do not intend to dwell on the past but just for the record I will point out why I believe that the regulatory system we have come up with in this bill is a vast improvement on the proposal previously before this House which was to regulate natural health products through a heavy-handed trans-Tasman regulator. The natural health unit that we are setting up will be located here in Wellington not in Canberra. It will be staffed by New Zealanders not by Australians and we will retain our sovereignty over it. Grant Robertson said he believed that New Zealand could have retained its sovereignty through the trans-Tasman regulator but let me assure New Zealanders that we could not under the previous scheme. Basically all regulations were delegated to an official based in Canberra and we had no ability to exercise our sovereignty. 
The scheme we have come up with is a low-risk regulatory scheme that is appropriate for the low-risk nature of natural health products. It is not a heavy-handed regime as was previously proposed. There will be a relatively straightforward system for approval. An online database for products and ingredients used in other countries with recognised regulatory schemes will be automatically recognised. If a natural health company has its products already approved in Australia those products will be automatically approved here as Australia will be recognised under our scheme as an approved overseas regulator. There will be an open-ended list of ingredients not a so-called permitted list as exists in Australia. The problem with the Australian permitted list is that if an ingredient is not on its list it would be an illegal product. We do not want to see a situation whereby natural herbs that have been used for millennia—for example traditional herbs in New Zealand—could be deemed to be illegal. 
We are effectively setting up a disapproval system such as what exists in countries like the United States by which there will be a presumption that new products coming to the market are acceptable unless the regulator has reason to be concerned. This is very different from the onerous approval process for new ingredients that exists in Australia where an applicant has to undergo an extensive and expensive process to prove that a new ingredient is safe. Many companies have said that the Australian system is so expensive they cannot afford to bring new and innovative products on to the Australian market. That system discourages innovation and we do not want to see that happening here. 
The practice of rongoa Maori will be exempt from the bill as it is a taonga of Maori and should be governed for and by Maori according to tikanga. Products made for consumers and low-risk products like homeopathy products will also be exempt. The Green Party wanted to have a clause in the legislation to recognise the Treaty and we will still be seeking to amend the legislation to include such a clause. We also want to see dedicated Maori representation within the new regulatory body provided for in the legislation. 
We are pleased that the Government will fund the costs of regulatory policy advice compliance and monitoring and start-up costs. When we began work on the bill our aim was to set up a scheme that protected consumers and ensured that products were safe and true to label but that was not so onerous that it would put a whole lot of natural product businesses out of business. I think we have achieved that and I am delighted that the bill is strongly supported by the natural health industry. It is a flourishing industry with about 450 companies and we want to ensure that the industry continues to flourish. 
I believe that the Green Party has made the legislation better—considerably better—by our involvement in helping to negotiate the bill. We have worked closely with officials and listened to submitters and I think we have an improved regulatory system. This demonstrates the value of small parties like the Green Party having an input into the policy and legislative process. It implements the promise we made before the last election that we would work with whoever was in Government to try to progress key issues that we thought were important such as natural health care. It is satisfying that having led a campaign to defeat the previous trans-Tasman regulatory scheme which we thought was heavy-handed and undermined our sovereignty we have been able to work constructively on what we think is a much better alternative. 
More and more New Zealanders are turning to natural health products to keep themselves well. The Green Party strongly supports natural health care. Indeed I believe that we are the only party in the House that actively supports natural health care and wants to see it integrated into mainstream health. We worked with Labour during the last term of Government and secured funding for a small unit to investigate how natural health care could be integrated into mainstream health but I believe sadly that that work has virtually been suspended over the last few years. The Green Party wants to see in New Zealand what exists in other countries overseas: traditional health care like acupuncture and naturopathy being recognised and accepted throughout our health system. We want to see natural health practitioners working alongside nurses and doctors using whatever treatment is judged to be most effective and to see natural remedies and treatments being offered in public health organisations and hospitals. 
This may sound radical but I remind members that many policies that we have advocated and that have been dismissed as being radical at the time are now widely embraced in this House and by the public: climate change peak oil capital gains taxes and many others. So I hope that our vision for natural health care being implemented into the health system will in time be accepted by this House. 
Finally I will say that some have questioned why we need any regulatory scheme at all given the low-risk nature of natural health products. The reality is that more and more natural health products are imported into New Zealand and some are imported from countries with a poor safety record. So it is important that importers in particular know that we have a regulatory scheme that requires every product sold in New Zealand to be safe and true to label. The other thing is that the law needs updating. The present law means that making claims is illegal and it does not cover many products. We hope that this bill will be widely supported and will progress rapidly through the House. We will be listening very keenly to submitters on the bill at the Health Committee. Thank you very much. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker Roy. Kia ora ano tatou katoa. I will take a brief call to voice the support of the Maori Party for the exclusion of natural health products and rongoa from the new trans-Tasman agency to regulate medicines medical devices and new medical interventions. We are pleased that the traditional practices of healers and the natural products they rely on for rongoa will not be included in the requirements of the joint regulatory scheme for therapeutic products. We say it is pretty good news for Maori that the plants used in rakau rongoa do not come under the jurisdiction of the new controls. To be clear: this Natural Health Products Bill does not impact on rongoa Maori except when it is mass produced and sold. That means that as Sue Kedgley said the framework for rongoa is not being dictated by Government. Basically if rongoa was being put on the commercial market then we would want exactly the same standards applied to it as for any other commercial product. 
A strong and sensible regulatory scheme will ensure quality and safety again as Sue Kedgley alluded to for both consumers and manufacturers alike. The public should be and can be confident that products are safe and are true to what has been stated on the label. I did not realise this but there are about 450 companies that supply natural products to the New Zealand market. We noted a positive comment from a group called Natural Products New Zealand. It stated: “Regulation that allows the industry to inform and protect New Zealand customers and at the same time facilitates innovation and export growth is desperately needed.” That is a good line to at least start on in advancing the debate. It is a positive line that opens up the door to discussion as many speakers have said this afternoon. 
Finally Dr Paul Hutchison mentioned Wai 262. That is an important kaupapa for us. We are mindful of the importance of settling the Wai 262 claims before proceeding to the final stages of this bill. We hope the select committee process will enable sufficient time for the representatives of the Wai 262 claimants and rongoa practitioners providers and consumers to put forward their submissions on this issue in order to address issues to do with indigenous flora and fauna. That includes obviously intellectual and cultural property rights. We look forward to the debate as this bill moves forward in particular in respect of the Wai 262 claim—obviously the report was released only a month or 6 weeks ago. Thank you very much. Ka nui te mihi. 
Hon STEVE CHADWICK (Labour) 
: 
 I rise to take a quick call. I am absolutely gobsmacked today at the flip-flop in politics. It is interesting that Minister Coleman is leading this and is keeping Tony Ryall’s hands away from the introduction of the Natural Health Products Bill today. I will start by quoting Mr Ryall in 2006 when he led a campaign to undermine the Labour approach at that time. It began much earlier in 2002 with an inquiry. He said that the agency that would regulate health care products which we all agreed was required would be “costly restrictive and unnecessary”. Well is that not funny? 
I congratulate Sue Kedgley in the House today on having her bill before the House today. I call it her bill. 
I do not believe for a minute that National is tolerating the process of this low-cost regulator. We know that the Minister of Health has completely flip-flopped and he has done that under the leadership of John Key who confused the public at the time. John Key was right behind Labour’s legislation at the time but then he suddenly changed. That was because Tony Ryall went to him after a cross-party meeting and said: “For politics pull your support for what Labour is proposing.” and he was so spineless that he pulled his support. That confused both the industry and the public at the time. 
Everyone in this House knows that we had an inquiry. That was a valuable process. We all reached the conclusion that we agreed that these products needed to be regulated. We were moving on this. But I say to the Greens that I have some cynicism that once we have this bill through National Ministers through the trans-Tasman relationship will move to fold this regulatory agency into the Australian agency. Mark my words. I may not be around to see that happen but that is exactly what National wants to do. Those members know that it is more cost-effective they know that they would have a pan-regulator that would cover the Pacific Asia and New Zealand. That is what they want to do. This bill is just a little bit of pandering to the Greens to get their support. 
I congratulate Sue on the bill. We will support its referral to a select committee. It will be interesting to hear from the industry. It will be interesting to hear about the costs to the industry of having a stand-alone regulator. We have heard that there will be a cost of $1.1 million to set up the regulator $1.8 million for operating costs and then $36 million every year to maintain it. So let us just watch what it costs the industry which will have to pay fees to license their products. Therefore let us hear from the industry on that basis. 
Dr Paul Hutchison 
: You’re scaring the public again. 
Hon STEVE CHADWICK 
: No we do not scaremonger actually; we wear our hearts on our sleeves. We always wanted to move with a regulator. This country has lost 5 years of economic benefits that it would have had from having a regulator. We were moving on it and it was canned by National. 
We will monitor the costs we will monitor the industry responses we will monitor the way that this regulator is set up and we will be watching very closely what happens with our trans-Tasman partnership. We support this bill’s referral to a select committee. We look forward to those responses. 
CARMEL SEPULONI (Labour) 
: 
 Just following on from the Hon Steve Chadwick I will add to what she was saying about the flip-flopping from members opposite. The plans to establish a trans-Tasman therapeutic products agency is a staggering display of flip-flopping by the National Party. We have seen so much of that in this term of the National Government. National has flip-flopped on the issue of natural health products which led to a 5-year delay—as Steve Chadwick has said—in the planned creation of a trans-Tasman therapeutic products agency. This is something that when National members were in Opposition they were totally against and it is typical of how the National Party has played politics with the issue. 
This was exemplified by Michelle Beckett the executive director of Natural Products New Zealand who stated that the National Party sees the natural products sector only as a political football to be leveraged to its political advantage. 
Dr Paul Hutchison 
: Who wrote this speech? 
CARMEL SEPULONI 
: I say to Mr Hutchison that that is what Michelle Beckett said. The Government’s flip-flopping is astounding. When we look back we see that Tony Ryall told Parliament in 2006 that a joint agency would be costly restrictive and unnecessary. 
I will not go on because I think my colleagues have done us justice. We support this bill; we just do not appreciate the inconsistencies from that side of the House that keep occurring. Aside from the general politicking that has surrounded this bill Labour believes that supporting it going through to a select committee will allow it the due process it deserves and the opportunity for New Zealanders to have a say. Thank you very much. 
Bill read a first time.  
Bill referred to the Health Committee.