Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Act 2022

1: Title
This Act is the Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Act 2022.
2: Commencement
1: This Act, other than the provisions specified in subsection (2), comes into force on 1 June 2023.
2: Sections 9(1) and (2) 14 18 21 23(1) 24
3: Principal Act
This Act amends the Dairy Industry Restructuring Act 2001 2023-01-01 Dairy Industry Restructuring Act 2001 Sections 9(1) and (2), 14, 18, 21, 23(1), and 24 (see 2(2)) 2023-06-01 Dairy Industry Restructuring Act 2001 Date for all sections coming into force except for those specified in 2(2). See section 2(1)
1: Amendments to subpart 5 of Part 2
4: Section 72 amended (Overview)
Replace section 72(10)
10: Sections 135 to 139 contain general provisions.
5: Section 109L amended (New co-op’s obligations in relation to market in co-operative shares and to new co-op fund)
1: Replace section 109L(1)
1: New co-op must ensure that there are 1 or more market makers in co-operative shares who—
a: are designated a market maker under the market rules of the licensed market on which the co-operative shares are quoted; and
b: operate during the periods of operation of the licensed market on which the co-operative shares are quoted.
2: After section 109L(2)
3: In this section, market rules
6: New sections 109LA and 109LB inserted
After section 109L
109LA: New co-op must commission financial markets research and analysis about its performance
1: New co-op must commission, on an ongoing basis, financial markets research and analysis in respect of new co-op’s performance.
2: New co-op must ensure that the commissioned financial markets research and analysis—
a: is free from bias and independent of new co-op; and
b: provides credible analysis.
3: New co-op must make the commissioned financial markets research and analysis publicly accessible.
109LB: New co-op must keep list of financial markets research and analysis about its performance
1: New co-op must keep and maintain a list of financial markets research and analysis relating to new co-op’s performance.
2: New co-op must ensure that the list—
a: reflects a diverse range of financial markets research and analysis of new co-op’s performance (to the extent that the research and analysis is readily available); and
b: is regularly updated to maintain currency.
3: New co-op must make the list publicly accessible.
4: New co-op must ensure that the following are complied with in relation to each item of financial markets research and analysis on the list:
a: the item is a credible analysis of new co-op’s performance; and
b: the item is accompanied by information that describes the extent, if any, of new co-op’s involvement in the preparation of the item; and
c: the item is available to be accessed; and
d: the item is accompanied by information about how to access the item or a means of accessing the item.
5: New co-op may include in the list additional information that is not an item of analysis. Any additional information must be clearly identified in the list as additional information.
7: Section 109M amended (Restrictions on new co-op)
1: After section 109M(1)
1A: Despite subsection (1)﻿(c) and (d), subsection (2) does not apply to conduct by new co-op that—
a: restricts the exchange of co-operative shares for new co-op fund securities by setting a limit on the number of new co-op shares that may be exchanged for new co-op fund securities; or
b: prevents the exchange of co-operative shares for new co-op fund securities when a limit referred to in paragraph (a)
2: In section 109M(2)﻿(a) section 73(1) section 73(2)
3: In section 109M(2)﻿(b) section 73(2) section 73(1)
8: Section 118 amended (Offences)
After section 118(1)﻿(b)
c: fails, without reasonable excuse, to comply with the requirements of section 109LA
d: fails, without reasonable excuse, to comply with the requirements of section 109LB
e: fails, without reasonable excuse, to comply with the requirements of section 135A
f: fails, without reasonable excuse, to comply with the requirements of a notice given under section 150ZF(2)﻿(a), (b), or (c)
9: Section 134 amended (New co-op must pay levy)
1: In section 134(1) in each financial year for each financial year
2: In section 134(3) in each of those years for each of those years
3: In section 134(4)﻿(a)﻿(i) determinations and directions
4: In section 134(4)﻿(a)﻿(iii) determinations and directions
5: In section 134(4)﻿(b)﻿(ii) this subpart , or directions made under subpart 5A
10: New section 135A inserted (Dividends and retentions policy)
After section 135
135A: Dividends and retentions policy
1: New co-op must keep and maintain a dividends and retentions policy.
2: New co-op must make the policy publicly accessible.
11: Sections 140 to 146 and cross-heading above section 140 repealed
Repeal sections 140 to 146
12: Section 148 amended (Commission input)
In section 148(2) section 145 section 150ZF
2: Other amendments
13: Section 5 amended (Interpretation)
In section 5(1) personal information section 7(1) of the Privacy Act 2020 publicly accessible
14: Section 150B amended (Certain assumptions do not detract from purpose of subpart)
In section 150B
2: Subsection (1)
15: Section 150D amended (Milk Price Panel)
In section 150D(3)﻿(a) price carried out by the person or persons engaged under section 150EA
16: Section 150E amended (Appointment of members of panel)
1: Replace section 150E(1) and (1A)
1: New co-op must appoint—
a: 2 members nominated by the Minister to the panel; and
b: a chair of the panel nominated by new co-op who has been approved by the Minister; and
c: 2, 3, or 4 more members to the panel; and
d: an additional member nominated by the Minister if the chair is a member nominated by the Minister.
1A: Members appointed on the nomination of the Minister must be appointed on the same terms and conditions as other members appointed by new co-op to the panel.
2: After section 150E(2)
2A: New co-op must ensure at all times that the chair does not have a meaningful association with new co-op or with a shareholding farmer, for example, the chair must not be—
a: a sitting director of new co-op, a member of new co-op’s Co-operative Council, or a current panel member appointed by that council; or
b: a relative of a person described in paragraph (a)
c: an associated person or an employee of a person described in paragraph (a)
2B: The obligation in subsection (2A)
a: is in addition to the obligation in subsection (2); and
b: applies regardless of how a position or relationship referred to in subsection (2A)﻿(a) to (c)
3: In section 150E(3) (1A) or (2) (1), (1A), (2), or (2A)
17: New section 150EA inserted (Calculation of base milk price)
After section 150E
150EA: Calculation of base milk price
1: New co-op must engage 1 or more persons to calculate a base milk price that will enable the panel to perform its function under section 150D(3).
2: New co-op must ensure that a person—
a: is engaged to provide the service for a term of no more than 6 consecutive seasons; and
b: is not re-engaged to provide the service until at least 4 seasons have passed since the end of their previous term.
3: New co-op must ensure that a person it engages to provide the service—
a: is independent of new co-op; and
b: operates at arm’s length in relation to new co-op when providing the service.
4: The requirements in subsection (2)
5: In this section,— arm’s length
a: do not include elements that parties in their respective positions would usually omit, if the parties were—
i: connected or related only by the transaction or dealing in question; and
ii: acting independently; and
iii: each acting in their own best interests; and
b: do not omit elements that parties in their respective positions would usually include, if the parties were—
i: connected or related only by the transaction or dealing in question; and
ii: acting independently; and
iii: each acting in their own best interests key personnel
a: a director, partner, trustee, or senior manager of the entity who has a role in providing the service; and
b: senior personnel engaged by the entity for the purpose of providing the service service subsection (1)
6: If, without reasonable excuse, new co-op contravenes subsection (1), (2), or (3)
18: Section 150I amended (Commission’s report)
After section 150I(1)
1A: To avoid doubt, a report under subsection (1) may include the extent to which the way new co-op uses an assumption described in section 150B(1)
19: New section 150JA inserted (Milk price manual review information to be published)
After section 150J
150JA: Milk price manual review information to be published
1: New co-op must make all non-sensitive information publicly accessible within 20 working days after the date on which the Commission makes its final report publicly available under section 150J.
2: In this section, non-sensitive information
a: commercially sensitive; or
b: subject to legal professional privilege; or
c: personal information.
20: Section 150L amended (New co-op must provide Commission with milk price manual and other information)
In section 150L(b) setting of the base milk price milk price manual
21: Section 150P amended (Commission’s report)
After section 150P(1)
1A: To avoid doubt, a report under subsection (1) may include the extent to which the way new co-op uses an assumption described in section 150B(1)
22: New section 150QA inserted (Base milk price calculation review information to be published)
After section 150Q
150QA: Base milk price calculation review information to be published
1: New co-op must make all non-sensitive information publicly accessible within 20 working days after the date on which the Commission makes its final report publicly available under section 150Q.
2: In this section, non-sensitive information
a: commercially sensitive; or
b: subject to legal professional privilege; or
c: personal information.
23: Section 150T amended (New co-op must provide Commission with certain information)
1: In section 150T 1 July 15 June
2: In section 150T
2: New co-op must, no later than 5 working days before 15 September in each year, provide to the Commission the panel recommendations described in section 150D(3)﻿(c) in relation to the setting of the base milk price.
24: Section 150U amended (Draft Commission report)
1: In section 150U(1) 15 August 1 August
2: In section 150U(2) 1 September 15 August
25: New sections 150UA to 150UD and cross-heading inserted
After section 150U Directions relating to Commission reviews
150UA: Commission may give directions in relation to reviews
1: The Commission may, by notice, direct new co-op to do 1 or more of the following in the manner specified in the notice:
a: take any action in relation to a matter referred to in any of the following reports:
i: a report made under section 150I:
ii: a report made under section 150P:
b: publish any information requested by or provided to the Commission as part of a review under section 150H or 150O (whether or not the information is actually provided to the Commission).
2: A direction must state—
a: the date by which, or period within which, the direction must be complied with; and
b: the reasons for which it is given.
3: New co-op must comply with a direction given under this section.
150UB: Criteria for giving directions
1: The Commission may only give a direction that is consistent with the purpose set out in section 150A.
2: A direction under section 150UA(1)﻿(b) subsection (1)
3: A direction under section 150UA(1)﻿(b) sections 150JA and 150QA
a: commercially sensitive; or
b: subject to legal professional privilege; or
c: personal information.
150UC: Process for giving directions
1: Before giving a direction (the proposed direction
a: make the proposed direction and the reasons for the proposed direction publicly available; and
b: consult new co-op about the proposed direction (including the Commission’s reasons for giving the proposed direction); and
c: have regard to any submissions or evidence provided by the persons consulted.
2: If the Commission gives a direction, it must provide the direction to new co-op.
3: After providing the direction to new co-op, the Commission must make the direction, and the Commission’s reasons for giving the direction, publicly available.
150UD: Amendment and revocation of directions
1: The Commission may amend or revoke a direction—
a: on its own initiative; or
b: at the request of new co-op, if the Commission is satisfied that new co-op has provided the Commission with evidence of reasonable grounds to amend or revoke the direction.
2: A direction may be amended or revoked in the same way in which it may be made, except that section 150UC(1)
26: Section 150V and cross-heading repealed
Repeal section 150V
27: New subpart 5B of Part 2 inserted
After section 150V
5B: Enforcement
150W: Jurisdiction of High Court
The High Court may hear and determine the following matters:
a: applications for orders under section 150Y
b: proceedings for recovering pecuniary penalties under section 150Z
c: applications for injunctions under section 150ZC
d: actions for damages under section 150ZD
150X: Meaning of relevant provision
In this subpart, relevant provision
150Y: Court may order new co-op to comply with direction
The court may, on application by the Commission, order new co-op to comply with a direction given under section 150UA
150Z: Pecuniary penalties
1: The court may, on application by the Commission, order a person to pay to the Crown a pecuniary penalty if satisfied that the person—
a: has contravened a relevant provision; or
b: has been involved in a contravention of a relevant provision.
2: The maximum amount of a pecuniary penalty under subsection (1)
a: for contravention of section 150UA or 150Y
b: for any other contravention, the same as the amount that applies under section 80 of the Commerce Act 1986.
3: Despite section 150ZF
4: In this section and section 150ZB involved in a contravention
a: has attempted to contravene the provision; or
b: has aided, abetted, counselled, or procured any other person to contravene the provision; or
c: has induced, or attempted to induce, any other person, whether by threats or promises or otherwise, to contravene the provision; or
d: has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by any other person of the provision; or
e: has conspired with any other person to contravene the provision.
150ZA: Defences for person in contravention of relevant provision
1: In any proceeding under section 150Z A
a: A’s contravention was due to reasonable reliance on information supplied by another person; or
b: both of the following apply:
i: A’s contravention was due to the act or default of another person, or to an accident or to some other cause beyond A’s control; and
ii: A took reasonable precautions and exercised due diligence to avoid the contravention.
2: For the purposes of subsection (1)﻿(a) and (b)﻿(i) another person
150ZB: Defences for person involved in contravention of relevant provision
1: This section applies if—
a: a person ( A
b: another person ( B
2: In any proceeding under section 150Z
a: B’s involvement in the contravention was due to reasonable reliance on information supplied by another person; or
b: B took all reasonable steps to ensure that A complied with the provision.
3: For the purposes of subsection (2)﻿(a) another person
150ZC: Injunctions
1: If the court is satisfied, on application under subsection (2)
2: An application may be made by—
a: the Commission, if the application relates to the contravention of any relevant provision:
b: any other person, if the application relates to the contravention of subpart 5 or regulations made under section 115.
150ZD: Actions for damages
1: Every person (other than the Commerce Commission) is liable for damages for loss or damage caused by that person engaging in conduct that constitutes a contravention of subpart 5 or regulations made under section 115.
2: Sections 82(1) and 82A of the Commerce Act 1986 apply to actions for damages under this section.
150ZE: Miscellaneous
1: In determining an appropriate penalty under section 150Z
a: for a contravention of subpart 5 or regulations made under section 115, the purpose and principles of subpart 5, as expressed in sections 70 and 71; and
b: for a contravention of subpart 5A, the purpose of subpart 5A, as expressed in section 150A; and
c: the nature and extent of the contravention; and
d: the nature and extent of any loss or damage suffered by any person because of the contravention; and
e: any gains made or losses avoided by the person in contravention; and
f: whether the person in contravention has paid an amount in compensation or taken other steps for reparation or restitution; and
g: the circumstances in which the contravention or other act or omission took place (including whether it was intentional, inadvertent, or caused by negligence); and
h: any previous contraventions of a similar nature; and
i: any other relevant matter.
2: The standard of proof in proceedings under this subpart is the standard of proof that applies in civil proceedings.
3: In any proceedings under this subpart, the Commission, on the order of the court, may obtain discovery and administer interrogatories.
4: Proceedings under this subpart may be commenced within 3 years after the matter giving rise to the contravention arose.
5: If conduct by a person constitutes a contravention of 2 or more provisions of subpart 5 or 5A, proceedings may be instituted under this subpart against that person in relation to the contravention of 1 or more of the provisions, but no person is liable to more than 1 pecuniary penalty under this subpart for the same conduct.
150ZF: Application of Commerce Act 1986 provisions
1: The following provisions of the Commerce Act 1986 apply in respect of this subpart and subparts 5 and 5A with all necessary modifications:
a: sections 15 to 17 (proceedings of the Commission):
b: sections 74A to 74C (provisions relating to undertakings):
c: sections 77 and 78 (lay members):
d: section 79 (evidence not otherwise admissible):
e: section 88 (general provisions relating to granting of injunctions):
f: section 88A (when undertakings as to damages not required):
g: section 89 (other orders):
h: section 90 (conduct by employees or agents):
i: section 98 (Commission may require person to supply information or documents or give evidence):
j: section 98A (power to search):
k: section 98G (relating to warrants, etc):
l: section 99 (powers of Commission to take evidence):
m: section 100 (powers of Commission to prohibit disclosure of information, documents, and evidence):
n: section 100A (stating case for High Court):
o: sections 101 and 102 (notices):
p: section 103 (offences):
q: section 104 (determinations of Commission):
r: section 106 (proceedings privileged):
s: section 106A (judicial notice):
t: section 109 (Commission may prescribe forms).
2: For the purpose of carrying out its functions and exercising its powers under a relevant provision, the Commission may, in addition to exercising its powers under section 98 of the Commerce Act 1986, by notice in writing, require new co-op—
a: to do either or both of the following, at the time and place specified in the notice, if the Commission has reason to believe new co-op may have information relevant for that purpose:
i: prepare and produce, or supply to the Commission, documents and information in relation to any matter specified in the notice:
ii: answer any questions in relation to any matter specified in the notice; and
b: to have prepared and to produce, or to supply to the Commission, at the time and place specified in the notice, an expert opinion from an appropriately qualified person, or from a member of a class of appropriately qualified persons, as determined by the Commission in relation to any matter specified in the notice; and
c: to provide any or all of the following:
i: a written statement that states whether or not new co-op has complied with relevant provisions:
ii: a report on the written statement referred to in subparagraph (i)
iii: sufficient information to enable the Commission to properly determine whether relevant provisions have been complied with:
iv: a certificate, in the form specified by the Commission and signed by at least 1 director of new co-op, confirming the truth and accuracy of any information provided under this section.
150ZG: Additional proceedings
Proceedings brought under this Part are in addition to any proceedings brought under any other Act.
28: Schedule 1 amended
1: In Schedule 1, clause 5(3) sections 140 to 146 sections 150W to 150ZG
2: In Schedule 1
a: insert the Part set out in the Schedule
b: make all necessary consequential amendments.