Sales & Marketing

20 Mar 2008

Public Health Bill & Food

The Public Health Bill is a major legislative reform which reviews and updates the Health Act 1956. The public submissions period closed on 7 March.

The purpose of the Bill is to improve, promote, and protect public health in order to help attain optimal and equitable health outcomes for Maori and all other population groups (clause 3). There is nothing controversial about that. But what is controversial is the attempt to manage by legislation the risks of non-communicable diseases such as cancer, diabetes and cardiovascular disease. There are two main provisions in the Bill which relate to non-communicable diseases. These are Part 3 and clauses 374(r) and (x). Here, we briefly outline these provisions and discuss how and why they are causing concerns to the food industry.  

Part 3 - Code of Practice and Guidelines

Essential features

Part 3 of the Bill gives the Director-General of Health the power to issue a Code of Practice or Guidelines to a sector on a particular activity to reduce an associated “risk factor” (clause 81). "Risk factor" is defined broadly and includes any thing or substance that may over time increase the incidence of non-communicable diseases (clause 79). The Codes or Guidelines may be in relation to any activity including how food is produced, its ingredients and how it is sold or advertised (clause 83).

Impact on market competition

While the Codes or Guidelines are not enforceable, the Bill provides incentives such as the opportunity for organisations that comply to advertise (clause 85), win awards (clause 86) and be preferred by Crown entities and Government departments (clause 86(f)). As such, any Codes or Guidelines are expected to significantly affect market competition.

Inconsistency with current legislation

More importantly, the Codes or Guidelines issued under Part 3 can and are likely to overlap with existing legislation. All food sold in New Zealand is already comprehensively regulated in terms of the ingredients, the way they are labelled and advertised and the claims that can be made. Food is regulated by Parliament made law (such as Food Act 1981, Fair Trading Act 1986, Consumer Guarantees Act 1993), self-regulation Codes (Code for Advertising Food and Code for Advertising to Children) and trans-Tasman Codes (Australia New Zealand Food Standards Code) having the force of law, to name a few. Under clause 84 the Director-General is not barred from issuing Codes or Guidelines that are inconsistent with or may undermine existing laws. Instead the Director-General must only “endeavour to avoid” overlap.

Too much discretion

Despite the potentially serious impact on market competition and current legislation, the powers and discretion given to the Director-General, when issuing Codes or Guidelines, are broad. The Codes or Guidelines can be issued if the Director-General simply has “reason to believe” that these Codes or Guidelines will reduce a risk factor (clause 81). At the same time, Part 3 is silent as to any objective or valid evidence that the Director-General must take into account when making a decision.

Consistency with purpose of the Bill

The Bill was designed to achieve, among other things, effective management of risks to public health (clause 3(2)(a)) and a structure that provides for appropriate risk assessment (clause 3(2)(b)). Also, it was to ensure a response that is in proportion to the nature and seriousness of the risk to public health (clause 3(3)(c)).

Part 3 in its current form, however, seems inadequate to achieve effective Codes or Guidelines. A solution may be to narrow down the Director-General's discretion so that a Code of Practice or Guidelines can be issued only when the Director-General "is satisfied" that it will in fact reduce a risk factor. Relevant matters that must be considered can also be specified. These could include, amongst other things:

• the science underpinning the subject of the Codes or Guidelines;
• the cost (monetary and non-monetary) of implementation relative to the likely benefits of introducing the Codes or Guidelines;
• the extent to which the Codes and Guidelines are likely to meet the objective of reducing or assisting in a reduction of risk factors; and
• the extent to which the sectors affected support the Codes of Practice and Guidelines.

Inadequate Consultation

The Director-General must, in general, take into account the importance of involving communities and sectors in performing his or her functions under the Bill (clause 80). However, the consultation clause in Part 3 only requires the Director-General to consult whom he or she considers to be "representative of the sector" (clause 82). This means the Director-General can alone determine who the "sector" is. In addition, each sector may within it have wide-ranging interests and concerns that may not be easily distilled or reconciled into unified messages from the sector. Clause 82 overlooks this situation. As such, the current provision on consultation seems inadequate.

Clauses 374(r) and (x) - Regulation

Clause 374 gives power to the Governor-General to make Regulations at any time for, among other things:

• (r) the prohibition or regulation of the importation, manufacture, packing, or sale of any thing likely to introduce or increase a risk to public health; and
• (x) reducing, or assisting in reducing, risk factors (within the meaning of clause 79) associated with, or related to, non-communicable diseases.

The term “risk to public health” is not defined in the Bill.

The result of the width of the language is that the Government of the day is given the powers to make potentially far-reaching Regulations. There is currently no requirement for consultation when making Regulations. Therefore, a drastic yet possible scenario is a Government banning the sale of butter or full fat milk one day without any public debate or parliamentary debate. Under clause 374, such Regulation is possible since butter or full fat milk are "likely to introduce or increase the risk to public health" or banning of it is "likely to reduce risk factors related to non-communicable diseases". These are unintended but possible consequences under the Bill. The best way to prevent these consequences would be to expose such proposals to the full consultation, openness and debate associated with Acts of Parliament. 

However, if the power to make Regulations is to remain, then at least revisions similar to those found in clause 75 of the current Bill and section 112ZF(2) of the Health Act 1956 seem appropriate - that is, before a regulation is made, the Governor-General must be satisfied that appropriate consultation has been carried out, including (without limitation):

1. adequate and appropriate notice of the intention to make the Regulations; and
2. a reasonable opportunity for interested persons to make submissions; and
3. adequate and appropriate consideration of any submissions received.

Conclusion

With the public submissions to the Health Select Committee having now closed, many (especially from the food industry) will be following closely the final shaping of the Public Health Act in relation to non-communicable diseases.

The non-communicable disease provisions in the Bill may be altogether unnecessary in relation to food. Arguably the existing food laws adequately protect the public from consuming any addictive, noxious and dangerous substance without compromising the public's choice to make an informed decision. Alternatively, because of the serious implications, namely, significant impact on market competition or possible introduction of Codes, Guidelines or Regulations that cut across existing law, the power to introduce them should rest with Parliament alone.

If, however, the Select Committee decides that it is appropriate for the Director-General and the Governor-General to issue Codes, Guidelines or Regulations, one would hope that the relevant provisions ensure that any Codes, Guidelines or Regulations issued are fair and effective. That is clear is that adjustments to the Director-General’s and the Government's discretion and introduction of a more transparent process (including better inclusion of the industry in the debate) are necessary to produce the anticipated outcomes.

Authors

Peter Stubbs

Partner - Corporate & Commercial

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Craig Nelson

Senior Associate - Corporate & Commercial

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