International commitments

International commitments and human rights are forces that affect why, how and when regulation is made, or is not made, and the scope of regulation. As another part of this toolkit shows, international agreements and influences can be ‘triggers for action’, which lead to regulation. The body of international law including relevant treaties, declarations, rules and instruments is vast and this part of the toolkit does not purport to summarise international law. Rather, here you can find examples of how various matters of international law (and, in the next folder - of human rights) have been analysed and applied in the research of the New Zealand Law Foundation Regulatory Reform Project which forms the underlying data of this toolkit.

  • Susy Frankel, Meredith Kolsky Lewis, Chris Nixon and John Yeabsley “The Web of Trade Agreements and Alliances, and Impacts on Regulatory Autonomy” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). Since the advent of the World Trade Organization (WTO), the number of free trade agreements (FTAs) has steadily increased.[1] All trade agreements limit national regulatory autonomy to some degree; however, since the formation of the WTO in 1995, FTAs have become broader in scope and increasingly address more and different types of "behind the border" regulation, including, for example, consumer safety regulation and public health measures. This new role of FTAs has led to concern about whether it is in a country's interest to allow such incursions into regulatory policy. The counterbalance to that concern is that greater global connectedness will improve world welfare in the long run. Moreover, there are typically direct gains accruing to citizens of countries that seek to take advantage of international standards and institutions.[2] Trade agreements operate on political, economic and institutional levels. Crucially, a trade agreement – to be durable – must be viable on all these levels. In other words, it has to be acceptable politically; institutions have to be able to interpret and apply trade rules consistently; and it has to be economically coherent over the long run. As trade agreements encompass new areas, the issues become more complicated. This chapter examines, from legal and economic perspectives, how some of the issues and challenges brought about by an increasingly complex web of trade agreements and alliances, impact on regulatory autonomy. The primary example we use to illustrate this phenomenon is the pursuit of the extension of the term of patents.

  • Chris Nixon and John Yeabsley “The Challenges and Opportunities of Conformity in the Wider Asia – Pacific Context: Tiny Steps on a Long Road” in Susy Frankel (ed) Learning from the Past Adapting to the Future: Regulatory Reform in New Zealand (LexisNexis, 2011). Fortunately for the New Zealand focus on economic regulation, one of the areas that have been avoided in the development of Asian preferential and free trade areas has been a reliance on bureaucratic processes and systems (relative to the European Union, for instance). From our perspective it has been an advantage for the region to focus on economic integration rather than political union. In this respect, minimising any standards regime that firms have to deal with will assist in the integration process. So the promotion of regional standards that sit between national and international standards adds a layer of unnecessary complexity, and one that we would struggle to influence. Our take from this is that we should favour a system that, at least in principle, applied the fewest number of standards in its operations. This suggests that New Zealand should be looking to a spectrum of flexible agreements on standards that could be put in place (from harmonisation through to mutual recognition). Where mutual recognition agreements are in place – possibly in regions with lower quality institutions or where special provisions are required to cope with local conditions – care will be needed to ensure that a consensus exists on standards equivalence, specifically, that minimum levels are required for each standard.[78]

  • Chris Nixon and John Yeabsley “Australia New Zealand Therapeutic Products Authority. Lessons from the Deep End of trans-Tasman Integration” in Susy Frankel (ed) Learning from the Past Adapting to the Future: Regulatory Reform in New Zealand (LexisNexis, 2011). There are both demand and supply-side advantages of the FSANZ process for New Zealand. The demand side advantages are mainly to do with improved trade facilitation. Common food standards reduce trade transaction costs not only for trans-Tasman exporters but also for third country exporters. This reduces costs for businesses and makes them more competitive in third country markets. The most important supply side advantage is that this arrangement improves efficiency and quality of the regulatory system. This has two impacts. First, in the domestic market, consumers are protected since New Zealand has access to Australian expertise and facilities (a skills and scale impact). The improved capability has the impact of delivering a regulatory service at least cost and improves the science that can be applied to standards formulation. This increases assurance to New Zealand consumers regarding third country imports, since the risk analysis is consistent with Codex,[19] and it simplifies compliance costs for food companies. Secondly, for importing nations, high food standards mean that they can have confidence in the quality and integrity of food and the systems that govern its production. Increased quality assurance means that they can spend less time regulating the trade, thereby enhancing the chances of further imports for New Zealand and Australian companies.

  • Chris Nixon and John Yeabsley “Australia New Zealand Therapeutic Products Authority. Lessons from the Deep End of trans-Tasman Integration” in Susy Frankel (ed) Learning from the Past Adapting to the Future: Regulatory Reform in New Zealand (LexisNexis, 2011). (a) Structure The structure of the ANZTPA was designed to be set up under the 2003 Treaty and once ratified would have been implemented through Acts of Parliament in each country.[25] Importantly, a single set of rules made by the Ministerial Council and technical orders by the Managing Director would direct the operations of the ANZTPA. This meant that there would be complete harmonisation between Australia and New Zealand in therapeutics regulation. This was a step further than the FSANZ approach whose scope was confined to a standards writing body. Also, unlike the FSANZ, the ANZTPA was to be overseen by a two member Ministerial Council comprising the Minister of Health in New Zealand and the Australian Minister of Health. According to ANZSOG,[26] the ANZTPA was also designed to have a five-member board. At the time, this was seen (in New Zealand) as an advance over FSANZ because New Zealand would have an equal voice when it came to developing policy. As a legal entity, the ANZTPA would have been enshrined in legislation of both countries. It would have been directly accountable to the New Zealand and Australian ministers and to each Parliament. The aim was to have common regulatory outcomes and have authority to set regulations in both countries regarding reviews and appeals. The importance of the ability to exercise a ministerial “voice” meant that there was a focus on “accountability” mechanisms within the ANZTPA regulatory regime. These included parliamentary scrutiny of the rules and orders developed within the ANZTPA, and the procedures for the review of regulatory decisions. Both Parliaments had access to planning, financial and corporate information with the aim of this relatively full disclosure to enable each Parliament to determine how the organisation was performing.

  • Susy Frankel and Megan Richardson “Trans-Tasman Intellectual Property Co-ordination” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). Indeed, the provisions that enable the prevention of registration of culturally offensive trade marks are not confined to Māori objections, although Māori objections are expressly mentioned in the relevant provision.[34] Thus the difficulty with maintaining a culturally offensive provision that extends only to New Zealand, in the context of a single trans-Tasman trade mark regime, is not that it is only relevant to some trade marks, but the same basis for exclusion does not exist in Australia.[35] A trade mark may be found offensive in New Zealand but be registered in Australia, causing offence to a significant number of those in New Zealand (and possibly in Australia as well, given the number of New Zealanders living there). Thus, unless Australia is prepared to recognise cultural offensiveness as a ground for refusing registration, then any trans-Tasman single trade mark regime will most probably have to be less than 100 per cent harmonised. Culturally offensive trade marks will continue to not be registered in New Zealand and, as mentioned above, there is not any and is unlikely to be any political will to change this.[36]

  • Richard P Boast and Susy Frankel “Defining the Ambit of Regulatory Takings” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). Internationally, one of the most contested aspects of regulatory takings is where a private investor can take direct legal action against governments for economic loss.[33] The extent of the ability to sue might depend on what property rights can be compensated at domestic law, but a foreign investor may have other rights. What those other rights are depends on whether the country has entered any investment agreements and what rights investors have under any agreements; in particular, whether those agreements include any rights in addition to remedies at domestic law, such as investor-state arbitration. Investor-state arbitration allows the investor to take a state to arbitration to recover for expropriation or other types of so-called taking of assets, as defined under the relevant investment agreement. Action before domestic courts would be limited to any property rights found in the relevant domestic law. Thus, investor-state arbitration potentially gives greater options and consequently more expansive property rights to foreign investors. While better rights for foreign investors are not necessarily unusual, it seems that in New Zealand at least, there has not been a thorough discussion about why that should be so. Rather, it seems this is a policy that has arisen by default.

  • Daniel Kalderimis “Regulating Foreign Direct Investment in New Zealand –Further Analysis” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). It is proposed that New Zealand should actively seek to harness the connections and know how provided by FDI in order to grow high-value export and outward direct investment (ODI) businesses, especially in the Asia Pacific region. This objective is distilled from the following propositions: (1) New Zealand does not have a coherent and integrated FDI policy. New Zealand's FDI regime essentially consists of screening rules subjecting investments in some resource sectors – sensitive land and fishing quota – to a national benefit test (the NBT), combined with occasional incentives offered by the government. (2) New Zealand's key investment problem is not insufficient FDI, but insufficient ODI. As a distant, small, export-oriented economy, the main advantage of FDI is in creating spillover benefits[5] to assist New Zealand businesses to internationalise and move up the value chain. In this way, FDI has a distinctive potential advantage over other forms of financing. (3) In this way, FDI spillover benefits are particularly important for exportable industries (such as food production) and less important for non-exportable industries (such as energy production).[6]

Human rights concerns

Human rights obligations should affect why, how and when regulation is made, or is not made, and the scope of regulation. The body of domestic and international human rights law is vast and this part of the toolkit does not purport to summarise it. Rather, here you can find examples of how various human rights issues have been analysed and applied in the research of the New Zealand Law Foundation Regulatory Reform Project which forms the underlying data of this toolkit.

  • Mark Bennett and Joel Colón-Ríos “Public Participation in New Zealand’s Regulatory Context” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). A minimum supply of electricity services is clearly essential to a decent life and full participation in modern New Zealand society, and this raises concerns about universal service – the requirement to ensure a minimum level of access at a certain cost and standard of supply, even if providing that service is not economically desirable.[18] Regulation has historically been concerned with the pursuit of the universal service goal.[19] This is reflected in the obligation on electricity distribution companies to maintain their connections to isolated customers even if this is economically unattractive.[20] It also relates to the prevention of disconnection. Beyond these basic universal service concerns, the ideas of affordability and fuel poverty are more contested,[21] because the definition of the minimum basic need that is necessary for a decent life and social participation in any particular society may be seen as subjective and not susceptible to economic analysis.[22] These concerns must be discussed from a moral/political point of view, in terms of ideas such as distributive justice, human rights, and social solidarity.[23] In this vein, the United Kingdom energy regulator must "have regard to the interests of the disabled and chronically sick, of pensioners, of individuals with low incomes, and of those living in rural areas".[24]

  • Petra Butler “Rights and Regulation” in Susy Frankel (ed) Learning from the Past Adapting to the Future: Regulatory Reform in New Zealand (LexisNexis, 2011). (c) The duty to provide essential services Utilities which have been privatised around the world include electricity, gas, and water (access to drinking water as well as a sewerage system).[57] Those utilities are important to lead a life in dignity and health. The relevant rights the state is required to promote and to protect in respect of these utilities are found principally in the ICESCR and include, for example, the right to health,[58] the right to food and drinking water,[59] and the right to an adequate standard of living.[60] In some situations the right to life might also be relevant.[61] When delivering essential services, the duty to respect human rights means that the state is responsible for ensuring the enjoyment of human rights relevant to the particular service.[62] If a state privatises a service, then any agreement with the private service providers must be structured so that it is consistent with relevant human rights norms. The state must stipulate accountability measures for the private service providers and benchmarks for measuring their performance with the contracts. If the private sector provider fails to deliver its contractual obligations, then the state must take immediate steps to maintain access to the service. In order to meet its obligation to protect its citizens from human rights violations the state is required to ensure that vulnerable groups are given special protection. One of the means to achieve this is by regulating the particular industry and thereby setting standards which help to protect citizens from human rights violations. The state’s duty to promote requires the state to adopt positive measures that enable and assist individuals and communities to enjoy their rights.[63] In addition, the state has an obligation to assist when individuals or groups are unable to realise their rights by their own means.[64]

  • Petra Butler “When is an Act of Parliament an Appropriate Form of Regulation?” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). Why an Act of Parliament, rather than regulation from the Executive, should determine the scope of the impact of regulation on human rights, is analysed in this paper. The author uses a comparison between German and New Zealand law to highlight that the intensity of the infringement on human rights that is the pivotal point in this regulatory decision. German Law was chosen as a comparison because there much jurisprudence and academic analysis has been dedicated to deciding when an Act of Parliament is an appropriate form of legislation. The paper puts forward four principles called a ‘threshold test’ as a means to help identify whether to regulate with an Act of Parliament or not. The author uses the regulation of the Internet, because of its wide spread effects on society, as an example to test this threshold.. The example assesses the significance of an infringement, the discretion for Parliament to widen the powers of the executive, the scope of subsidies and benefits in relation to budgets and the powers of any autonomous government body in relation to regulatory issues of the Internet. The author concludes that the application of the threshold to the Internet does highlight the need for an Act of Parliament when regulating in ways that infringe human rights.

  • Dean Knight and Rayner Thwaites “Administrative Law through a Regulatory Lens: Situating Judicial Adjudication within a Wider Accountability Framework” in Susy Frankel and Deborah Ryder (eds) Recalibrating Behaviour: Smarter Regulation in a Global World (LexisNexis 2013). The animating idea is that the courts' interpretation and application of the principles is accepted by the legislature as correct, and that the legislative debate is on how to respond to the fact of incompatibility as conclusively determined by the court. The prospects for debate of such a form are unclear. It has been said of New Zealand that:[107] The idea that anything, even judicial views on what individual rights demand of society, should get in the way of an elected Parliament's law making role simply does not get much traction in our thinking about the constitution ought to work. Related issues can be addressed by turning from the nature of the debate to its consequences. The intention is that a court's opinion on whether the legislation so conforms will have political consequences. Here the political conditions in which those comments are received are critical. The Taskforce's case for the declaratory mechanism is predicated on it providing "meaningful consequences in the event of non-compliance" with the regulatory principles.[108]