Dairy Industry Restructuring Amendment Act 2020

1: Title
This Act is the Dairy Industry Restructuring Amendment Act 2020.
2: Commencement
1: Sections 20 21 23 24 25 26 27 28 30
2: So much of Part 3 of Schedule 2 own supply regulation 3
3: The rest of this Act comes into force on 1 June 2021.
3: Principal Act
This Act amends the Dairy Industry Restructuring Act 2001 principal Act 2021-06-01 Dairy Industry Restructuring Act 2001 see s 2(3) 2023-06-01 Dairy Industry Restructuring Act 2001 see s 2(1) — Sections 20, 21, 23, 24, 25, 26, 27, 28, and 30
1: Main amendments to principal Act
4: Section 4 amended (Purpose)
Replace section 4(e)
e: provide for the regulation of matters relating to the core database, including its management; and
5: Section 5 amended (Interpretation)
1: In section 5(1) Access Panel constitution
a: in the case of a company within the meaning of section 2(1) of the Companies Act 1993
b: in the case of any other entity, the documents or instruments that form the constitution of the entity entity
a: a company or other body corporate:
b: a corporation sole:
c: in the case of a trust that has—
i: only 1 trustee, the trustee acting in their capacity as trustee:
ii: more than 1 trustee, the trustees acting jointly in their capacity as trustees:
d: an unincorporated body (including a partnership) farm gate milk price intended manager section 65B kilograms of milk solids manager of the core database
a: DairyNZ Limited; or
b: an entity appointed by regulations made under section 65A
c: the Crown, if the management of the core database has reverted to the Crown under section 68 section 65A organic milk previous manager section 65A raw milk
a: means untreated milk from a cow; and
b: includes untreated organic milk; and
c: includes any other milk of a kind that is not excluded by paragraph (d)
d: does not include—
i: milk or a component of milk from a cow if the milk or component is produced under special conditions by, for example, the use of specialised herd selection, specialised farming practice, specialised feeding practice, or new technology; or
ii: colostrum total cost of milk
a: getting a sum by adding together all payments to which all the following apply:
i: the payment is made by new co-op or any body that is an interconnected body corporate of new co-op; and
ii: the payment is made to a shareholding farmer; and
iii: the payment is for the raw milk that the farmer supplies to new co-op or any body that is an interconnected body corporate of new co-op in a season; and
b: deducting from the sum—
i: the total organic milk premium for the season; and
ii: the total winter milk premium for the season total organic milk premium total winter milk premium winter milk
2: In section 5(1) core database core database
a: information provided to the manager of the core database under—
i: the Herd Testing Regulations 1958
ii: any regulations made under section 62; and
b: information provided to a previous manager under any of the things referred to in paragraph (a)
c: information provided to a previous manager or an intended manager under regulations made under section 65C
3: In section 5(1) panel
4: In section 5(1) approved restructuring day qualifying company qualifying products or services
6: New sections 5A and 5B inserted
After section 5
5A: Status of examples
1: An example used in this Act is only illustrative of the provisions to which it relates. It does not limit those provisions.
2: If an example and a provision to which it relates are inconsistent, the provision prevails.
5B: Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1
7: Subpart 4 heading in Part 2 replaced
In Part 2, replace the subpart 4
4: Management of core database
8: Section 43 amended (Overview)
1: Replace section 43(1) and (2)
1: Section 43A
2: Sections 48 to 52 contain provisions relating to the constitution and corporate form of LIC.
2A: Sections 62 to 65D
a: herd testing:
b: the provision of information to the core database:
c: access to the core database:
d: disclosure of information by the manager of the core database:
e: the appointment of the manager of the core database and the naming of an intended manager:
f: the regulation of a previous manager or an intended manager of the core database.
2: In section 43(3) 69 68
9: Cross-heading after section 43 repealed
Repeal the cross-heading after section 43
10: New section 43A inserted (Manager of core database must retain database)
After section 43
43A: Manager of core database must retain database
1: The constitution of the manager of the core database must be read as requiring the manager to retain the core database.
2: Subsection (1)
a: the Minister and the manager of the core database agree in writing that the subsection no longer applies; or
b: the manager of the core database is the Crown.
11: Section 61 and cross-heading above section 61 repealed
Repeal section 61
12: Section 62 amended (Regulations relating to herd testing and provision of information to core database)
1: In section 62(e) LIC for entering into the core database the manager of the core database for entering into the core database
2: In section 62(f) LIC the manager of the core database
13: Section 63 amended (Regulations relating to access to core database)
1: In section 63(1)﻿(a), (b)﻿(ii), (c), (h), and (j) and (5) LIC the manager of the core database
2: In section 63(1)﻿(g) LIC’s the manager of the core database’s
3: In section 63(4) LIC The manager of the core database
14: Section 64 amended (General regulations relating to herd testing and core database)
1: In section 64(a)﻿(i) LIC the manager of the core database
2: In section 64(b) LIC’s the manager of the core database’s
15: Section 65 amended (Regulations requiring disclosure of information by LIC)
1: In the heading to section 65 LIC manager of core database
2: In section 65(a) LIC the manager of the core database
3: In section 65(a)﻿(i) and (ii) LIC’s the manager’s
16: Section 65A replaced (Regulations relating to dairy industry entity other than LIC)
Replace section 65A
65A: Regulations appointing manager of core database
1: The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations appointing an entity to manage the core database.
2: The Minister may make the recommendation only if—
a: the core database reverts to the Crown under section 68
b: the existing manager of the core database asks the Minister in writing to make the recommendation; or
c: the existing manager has changed, or the Minister considers it likely that the existing manager will change, its constitution in a way that the Minister considers may compromise its suitability as manager of the core database; or
d: the Minister considers that the existing manager has failed, or is at risk of failing, to—
i: comply with this Act or any regulations made under sections 62 to 65; or
ii: manage the core database in a way that the Minister considers satisfactory.
3: The Minister must,—
a: before making a recommendation under subsection (2)﻿(c)
b: before making a recommendation under subsection (2)﻿(d)﻿(ii)
4: An appointment under subsection (1)
5: The appointment of an existing manager ends when an appointment under subsection (1)
6: A failure to comply with subsection (3)
65B: Regulations naming intended manager of core database
1: The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations naming an entity as the intended manager of the core database.
2: The Minister may make the recommendation only on the written request of the entity.
65C: Regulations for previous manager or intended manager of core database
1: This section applies if 1 or both of the following apply:
a: regulations are made under section 65A
b: regulations are made under section 65B
2: For the purposes of this section, the provisions referred to in subsection (3)
3: The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations for all or any of the following purposes:
a: the purposes described in—
i: section 62(e) and (f):
ii: section 63(1)﻿(a), (c), (g), (h), and (j):
iii: section 64(a):
iv: section 65:
b: providing for audits of compliance with regulations made under paragraph (a)﻿(i) to (iii) and for matters related to the audit, including the auditor’s powers:
c: prescribing offences for the breach of, or non-compliance with, regulations made under paragraph (a)﻿(i) to (iii):
d: prescribing penalties not exceeding $20,000 for any of those offences:
e: providing that a person is liable for damages for any loss or damage caused by that person’s contravention of regulations made under paragraph (a)﻿(i) to (iii).
4: If regulations are made, or to be made, under this section for the purpose described in section 63(1)﻿(j), section 63(2) to (7) applies—
a: to the previous manager or intended manager as if it were the manager of the core database; and
b: to the regulations as if they were made, or to be made, under section 63.
5: If regulations are made under this section for a purpose described in section 65, sections 66 and 67 apply—
a: to the previous manager or intended manager as if it were the manager of the core database; and
b: to the regulations as if they were made under section 65.
65D: Duration of regulations for previous manager or intended manager of core database
1: Regulations made under section 65C
a: the regulations are revoked earlier; or
b: the Governor-General by Order in Council confirms that the regulations will remain in force.
2: If an Order in Council is made under subsection (1)﻿(b), the regulations remain in force until they are revoked.
17: Section 66 amended (Information to be supplied to chief executive)
1: In section 66(1) and (3) LIC or any other dairy industry entity nominated by the Crown to manage the core database The manager of the core database
2: In section 66(2) LIC or any other dairy industry entity nominated by the Crown to manage the core database the manager of the core database
3: In section 66(2) LIC’s or that other dairy industry entity’s the manager’s
18: Section 68 replaced (Database if LIC wound up)
Replace section 68
68: When management of core database reverts to the Crown
The management of the core database reverts to the Crown if—
a: the Minister and the manager of the core database agree under section 43A(2)﻿(a) section 43A(1)
b: a liquidator or interim liquidator is appointed for the manager of the core database under Part 16 of the Companies Act 1993
c: an administrator is appointed for the manager of the core database in respect of a voluntary administration under Part 15A of the Companies Act 1993
d: a receiver is appointed in respect of all or substantially all of the property of the manager of the core database; or
e: a statutory manager is appointed for the manager of the core database under Part 3 of the Corporations (Investigation and Management) Act 1989
f: the manager of the core database is removed from the register of companies kept under section 360(1)﻿(a) of the Companies Act 1993
g: the manager of the core database is liquidated, wound up, or dissolved or otherwise ceases to exist.
19: Section 69 repealed (Herd Testing Regulations 1958 deemed to have been made under this Act)
Repeal section 69
20: Section 71 amended (Statement of principles)
Replace section 71(b)
b: new co-op must accept applications by shareholding farmers to supply it with milk:
21: Section 72 amended (Overview)
1: Replace section 72(1)
1: Sections 73 to 85 describe the obligations of new co-op if it accepts applications from new entrants and shareholding farmers to supply milk, as shareholding farmers.
2: Repeal section 72(3)
22: Section 73 amended (New co-op must accept application)
Replace section 73(3)
3: New co-op must notify the applicant, within 15 working days of receipt of the application,—
a: of its acceptance of the application; or
b: of its rejection of the application under section 94 or 95.
3A: Further provisions relating to the exceptions are in—
a: section 94 (the first exception):
b: section 95 (the second exception).
23: Cross-heading above section 73 amended
In the cross-heading above section 73 must may
24: Section 73 replaced (New co-op must accept application)
Replace section 73
73: New co-op’s obligations relating to applications by shareholding farmers and discretion to accept new entrants
1: New co-op must accept an application to increase the volume of milk supplied as a shareholding farmer to new co-op that is made by a shareholding farmer in an application period.
2: New co-op may, in its discretion, accept or decline an application made in an application period by a new entrant to supply milk to new co-op.
3: In exercising its discretion to accept or decline an application to become a shareholder, new co-op must have regard to—
a: the effect of its decision on the ongoing viability of the farm to which the application relates, if new co-op had a supply agreement in respect of the farm at any time in the previous season; and
b: the land-use opportunities available to the applicant.
4: New co-op must notify the applicant of its decision on the application within 15 working days of receipt of the application.
5: Sections 136 to 139 specify—
a: how an application may be given; and
b: when an application is made.
25: Section 74 amended (Commencement and terms of supply)
Replace section 74(1)
1: If new co-op accepts an application under section 73
26: Section 81 amended (Requirements applying to co-operative shares for applications in application period)
1: In section 81(1) is required by section 73 to accept accepts under section 73
2: In section 81(3) is required to accept accepts
27: Section 87 amended (Effect of capacity constraint notice on supply)
1: In section 87(1) is required to accept accepts
2: In section 87(3) is required to accept accepts
28: Sections 94 to 96 and cross-heading repealed
Repeal sections 94 to 96
29: Section 106 amended (No discrimination between suppliers)
After section 106(4)
5: In its terms of supply, but subject to subsections (1) to (4), new co-op may provide for differential pricing for milk based on any matters specified in the terms of supply, including, but not limited to, matters that relate to animal welfare, food safety, health and safety, employment conditions, the environment, climate change, and sustainability.
30: Section 107 amended (Regulation of supply contracts for raw milk)
Replace section 107(1)
1: If new co-op accepts applications from new entrants, it must offer them contracts for milk supply as shareholding farmers for 1 season.
31: Section 115 amended (Regulations relating to milk)
1: After section 115(1)﻿(f)﻿(i)
ia: periodic returns of milk solids bought from, or sold to, other persons:
2: After section 115(1)﻿(f)
fa: prescribe entities and persons who may certify raw milk as organic milk; and
fb: prescribe any matter that is authorised to be prescribed for the purposes of the definitions of raw milk and winter milk in section 5(1); and
32: Section 134 replaced (Levy regulations)
Replace section 134
134: New co-op must pay levy
1: New co-op must pay, in each financial year, a levy to the Minister that is determined in accordance with regulations made under subsection (2)
2: The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations—
a: specifying the amount of the levy, or method of calculating or ascertaining the amount of the levy, on the basis that the costs estimated under subsection (4)
b: including in the levy, or providing for the inclusion in the levy of, any shortfall in recovering those actual costs (including, without limitation, providing for a reconciliation of the levy against the levy that would have been payable had the calculation used the actual costs and invoicing new co-op for the amount under-recovered from it as part of the levy):
c: refunding, or providing for refunds of, any over-recovery of those actual costs:
d: specifying 1 or more financial years or part financial years to which the levy applies:
e: providing for the levy amount to be specified in the Gazette
f: providing for the payment and collection of the levy:
g: requiring payment of the levy for a financial year or part financial year, even though the regulations may be made after that financial year has commenced:
h: exempting or providing for exemptions from, and providing for waivers of, the whole or any part of the levy.
3: The regulations may provide for the levy to apply, and be calculated in respect of, 1 or more financial years (with the levy being collected in each of those years from new co-op).
4: In calculating estimated costs for the purposes of subsection (2)﻿(a)
a: may include—
i: the cost of making determinations; and
ii: the cost of enforcing this subpart or subpart 5A; and
iii: the cost of enforcing determinations in the High Court; and
iv: over-recoveries or under-recoveries of actual costs; and
v: the cost of conducting reviews under subpart 5A; and
b: must exclude—
i: the cost of taking other proceedings in the High Court, or defending proceedings against the Commission in the High Court; and
ii: the cost of investigations that are not related to complaints or determinations made under this subpart; and
iii: the cost of providing input for the reports under section 147
c: must calculate and deduct the total amount of application fees likely to be received.
5: The Minister must consult with new co-op and the Commission before making a recommendation under subsection (2)
6: The amount of unpaid levy is recoverable in a court of competent jurisdiction as a debt due to the Crown.
33: Section 145 amended (Application of Commerce Act 1986 provisions)
1: After section 145(a)
aa: sections 74A to 74C (provisions relating to undertakings):
2: After section 145(l)
la: section 100A (stating case for High Court):
34: New sections 147 to 150 and cross-heading inserted
After section 146 Regular reports on operation of subparts 5 and 5A
147: Minister must require regular reports
1: The Minister must require regular reports from the chief executive on whether this subpart and subpart 5A should be retained, repealed, or amended.
2: The Minister must require the first report no earlier than 4 years after the commencement of the Dairy Industry Restructuring Amendment Act 2020 and present the report to the House of Representatives no later than 6 years after commencement of that Act.
3: The Minister must require any subsequent report no earlier than 4 years after presentation of the previous report to the House of Representatives, and present the report to the House of Representatives no later than 6 years after presentation of the previous report to the House of Representatives, unless subsection (4) or (5)
4: If a Bill is introduced into the House of Representatives to amend this Act in the 6 years before the Minister is required to present a report under subsection (3)
a: require a report no earlier than 4 years after the commencement of that enactment or (if different provisions come into force on different dates) the earliest date on which any provision of the enactment commences (the commencement date
b: present the report to the House no later than 6 years after the commencement date.
5: If the Bill is withdrawn, lapses with the dissolution or expiry of Parliament, or is defeated, the Minister must—
a: request the report no earlier than 4 years after the withdrawal, lapse, or defeat of the Bill; and
b: present the report to the House of Representatives no later than 6 years after the commencement date.
148: Commission input
1: The Minister may, in consultation with the Minister responsible for the Commerce Act 1986, require the Commission to provide input for a regular report under section 147
2: In providing any input to the report as required by the Minister, the Commission may exercise the powers specified in section 145.
149: Terms of reference for report to be published
1: The terms of reference for a report under section 147
2: The Minister must publish the terms of reference on the Ministry’s Internet site.
150: Limits on effect of report and response
1: The Crown is not bound by a report under section 147
2: Sections 147 to 149
a: create any rights or protections in relation to any person or group of persons; or
b: confer any rights or protections on any person or group of persons.
35: Section 150C amended (Setting of base milk price in way that is consistent with certain principles)
After section 150C(2)
3: For the purposes of subsection (1)﻿(b), any estimate of the return on capital must be made applying the capital asset pricing model.
4: For the purposes of subsection (3)
a: traded in significant quantities in globally contested markets; and
b: characterised by uniform technical specifications.
5: In subsection (4) asset beta
36: New section 150CA and cross-heading inserted
After section 150C Farm gate milk price
150CA: Provisions relating to farm gate milk price
1: For the purposes of this subpart, new co-op may pay a farm gate milk price that differs from the base milk price.
2: New co-op must publish as soon as practicable after it determines the farm gate milk price for any season, on new co-op’s website in an electronic form that is publicly accessible, a notice that—
a: states both the farm gate milk price and the base milk price for that season; and
b: explains why the farm gate milk price differs or does not differ from the base milk price (as the case may be).
37: Section 150E amended (Appointment of members of panel)
1: After section 150E(1)
1A: New co-op must appoint 1 member of the panel who is nominated by the Minister, and the appointment must be on the same terms and conditions that apply to members appointed under subsection (1).
2: In section 150E(3) subsection (1A)
38: Section 156 repealed (Gift duty and taxation in respect of Livestock Improvement Corporation Limited)
Repeal section 156
39: New Schedule 1 inserted
Insert the Schedule 1 Schedule 1
2: Consequential and other amendments
40: Consequential amendments to principal Act
Amend the principal Act as set out in Part 1 of Schedule 2
41: Amendments to regulations
1: Amend the Dairy Industry (Herd Testing and New Zealand Dairy Core Database) Regulations 2001 Part 2 of Schedule 2
2: Amend the Dairy Industry Restructuring (Raw Milk) Regulations 2012 Part 3 of Schedule 2 2021-06-01 Dairy Industry (Herd Testing and New Zealand Dairy Core Database) Regulations 2001 2021-06-01 Dairy Industry Restructuring (Raw Milk) Regulations 2012 see s 2(2) —NOT Schedule 2 Part 3 of “definition of own supply in regulation 3 of the Dairy Industry Restructuring (Raw Milk) Regulations 2012” as at 7/8/20 it is compiled 1–June–2024. (PJ 7/8/20) 2024-06-01 Dairy Industry Restructuring (Raw Milk) Regulations 2012 see s 2(2) —ONLY Schedule 2 Part 3 of “definition of own supply in regulation 3 of the Dairy Industry Restructuring (Raw Milk) Regulations 2012” is compiled (PJ 7/8/20)
42: Revocation of Herd Testing Regulations 1958
The Herd Testing Regulations 1958 2021-06-01 Herd Testing Regulations 1958