Simpson Grierson – 2018 set to be a big year for public law and regulation.
The Labour-led government is creating momentum, with new legislation, significant regulatory and social sector reviews and some key policy changes.
Elsewhere in public law, technology is creating new pressures for government and highlighting the need for some (overdue) changes. Closely related to this, there is also an increased focus on accountability and transparency.
Looking across these changes, here are our top eight public law and regulatory trends to watch in 2018.
1. An ambitious legislative agenda – with some teething problems
The Government has introduced, in very short timeframes, a raft of new Bills covering areas with complex social and economic implications. The list includes legislation focusing on:
- child poverty reduction, with the Child Poverty Reduction Bill proposing to require governments to set three and 10-year targets on child poverty reduction, and provide updates in each Budget;
- upholding the proportionality of political party representation in Parliament, under the Electoral (integrity) Amendment Bill (aka the ‘Waka Jumping Bill’);
- decriminalising medicinal use of cannabis;
- reforming employment law by regulating pay and conditions across industries (for more information, see our employment team’s FYI here);
- amending the Overseas Investment Act 2005 to restrict overseas investment in residential land, and to bring forestry rights into the scope of the regime;
- amending the State Sectors Act and Crown Entities Act to provide for greater integrity and accountability in the management of the State services (including chief executive pay levels);
- amending the Education Act 1989 to remove the provisions relating to National Standards and the partnership school model (among other things).
The Bills are now before select committees for further consideration, and many are still open for public submissions. Given National’s high proportion of membership (with more seats on committees than any other single party), it will be interesting to see if Opposition MPs can exert their influence on some of the more divisive Bills.
The busy agenda and short timeframes promised for enacting new legislation has created some problems for the system charged with bringing the law into force.
Recently, for example, the Primary Production Committee took the unusual step of notifying interested parties that it is seeking an extension of a report back on the Racing Amendment Bill, because it is awaiting a reply from Racing Minister Winston Peters.
In the education sector, the Parliamentary Counsel Office recently advised Cabinet that the tight turnaround time for drafting the proposed Education Amendment Bill meant that the Bill would likely require corrective amendments during the select committee consideration.
Given these challenges, we encourage organisations affected by any of these Bills to keep a close eye on developments and be ready to engage with the law reform process as and when necessary. We can assist with submissions or advise on the impact of the proposed changes.
2. A year of review and inquisition
In addition to new legislation, a vast number of inquiries and reviews have been announced – 39 in all in the Government’s first five months in office.
Foremost amongst these (and promised as part of the Government’s 100-Day Plan) is the Royal Commission of Inquiry into child abuse in State care. Headed by former Governor General Sir Anand Satyanand, the Royal Commission will have a wide scope to cover abuses committed in the 50 years from 1950 to the end of 1999. Consultation on draft Terms of Reference is currently underway and is expected to take around three months to complete. The Inquiry itself is expected to begin considering evidence in mid-to-late 2018.
Other inquiries and reviews in the works include:
- a Ministerial inquiry into mental health, led by former Health and Disability Commissioner Ron Paterson;
- a review of New Zealand’s insurance contract law (for more details, see our recent FYI here),
- a public inquiry into the drivers of local government costs and its revenue base;
- a Government inquiry into the fuel pipe outage at Marsden Point; and
- a review of the procedures and organisational culture at the New Zealand Human Rights Commission.
Scale is likely to be a serious issue for the Government if these pending inquiries and reviews are as ambitious as the recent inquiry into water contamination in the Hawke’s Bay. If future inquiries make similarly wide-ranging recommendations, a battle of priorities will loom.
3. Going for Zero – Policy change for Carbon and Climate Change
Climate Change Minister James Shaw has indicated that public consultation on a future Zero Carbon Bill will likely begin at the end of May, and has set up an online registration process for individuals and organisations who are interested in being part of the Government’s consultation on what the Bill should look like.
It is expected that the Bill will be introduced into parliament by October, and that an independent Climate Change Commission will be formally established to oversee the legislation.
While the idea of a Zero Carbon Act and independent Commission should attract broad support, a number of difficult questions will need to be resolved. This includes how the regime should operate and where the respective responsibilities of government and Commission should lie.
To this end, a report published by Parliamentary Commissioner for the Environment Simon Upton is a timely and useful indicator of what businesses should expect to be included in any proposed legislation. It includes nine recommendations on what the Commissioner sees as some of the more critical elements for the legislation and ensuring a credible Commission is established, including setting effective carbon budgets and a process for climate change adaptation. New Zealand is one of only a small number of OECD countries not to have developed a national adaptation strategy.
4. Privacy – overdue reform but does it go far enough?
This year, privacy should be at the top of every boardroom agenda. Overseas, the controversial use of personal information is firmly in the headlines.
At home, the long-awaited Bill to reform New Zealand’s 25-year-old Privacy Act has finally been introduced into Parliament. The Bill replaces the Privacy Act 1993, as recommended by the Law Commission’s 2011 review of that Act, and is intended to promote people’s confidence that their personal information is secure and will be treated properly in an increasingly digitalised economy.
Among the changes introduced are:
- strengthened cross-border data flow protections;
- stronger investigation powers (the Privacy Commissioner will be able to make binding decisions on complaints about access to information and issue compliance notices);
- a new mandatory reporting regime for data breaches; and
- new criminal offences.
We are keenly tracking the progress of the reforms, and over the coming months we will be discussing important areas of focus in regular updates (the first of which can be read here).
Elsewhere in the privacy sphere, we have been seeing upwards trends in damages awards for privacy breaches, not only in the Human Rights Review Tribunal but also earlier on in the complaints process (with the Office of the Privacy Commissioner recently reporting that nearly half of its cases are being closed through settlements).
With increasing delays and backlogs in the Human Rights Review Tribunal, indications are that aggrieved persons and organisations alike will increasingly look to early resolution through the Privacy Commissioner’s office – so much so that the Privacy Commissioner has recently released guidance as to the “value” of a complaint, monetary or otherwise (including anonymised examples of recent settlement figures). The guidance will be a very useful resource for organisations responding to privacy complaints.
5. ‘Big data’ and cloud computing to be a focal point
The rise in use of ‘big data’ technologies will continue to present both opportunities and challenges for business and in government in 2018.
In anticipation of this, the Government has recently outlined its priorities across digital technology, media and open government. In addition to modernising the Privacy Act to reflect the way new technologies have changed how personal information is used, the Government has signalled that the establishment of a Chief Technology Officer and Ministerial advisory group is at the top of its list. It has also pledged to review and update a range of other legislation to include the wider effects of digitisation, and introduce a Digital Bill of Rights that will integrate with existing cornerstone legislation such as the Bill of Rights Act, the Crimes Act, the Privacy Act and surveillance legislation.
In terms of developments abroad, the United States Supreme Court recently heard oral arguments in a key cloud computing case (United States v Microsoft), concerning the execution of a US search warrant to access personal information held by Microsoft in an Irish data centre.
This case will examine the cross-border reach of law enforcement agencies and how data protection laws are interpreted, applied and developed.
It could potentially have significant implications, including for individuals and companies in New Zealand.
Read the New Zealand’s Privacy Commissioner’s warning here.
We await the United States Supreme Court’s decision with interest.
6. Stronger protections for whistleblowers may be in the works
The Government has recently announced that it is reviewing the protections offered by the Protected Disclosures Act 2000 – the so-called “whistleblower” legislation, designed to encourage people to report serious wrongdoing in their workplaces by providing protection to them when they “blow the whistle”. The current legislation is often not fit for purpose and accordingly, not often used.
As part of its review, we expect the Government will be looking at introducing penalties for retaliation against whistleblowing, rewards and compensation for whistleblowing, whether people who blow the whistle on wrongdoing to the media should be protected, and what body could oversee whistleblowing complaints.
An initial discussion document is expected to be put out for public consultation in the coming months.
The review follows a number of high-profile misconduct cases within New Zealand public sector organisations that have led to some suggesting that the law may not be working as effectively as it could, and lags behind international practice in a number of key areas. This prompted the States Services Commissioner, Peter Hughes, to release model standards last year for state sector agencies to follow when employees raise issues of suspected wrong-doing.
7. Proposed changes to NZBORA inconsistency declaration powers
If the government has its way, senior courts will soon have an express statutory right to declare inconsistencies between legislation and the New Zealand Bill of Rights Act 1990 (NZBORA), to better hold Parliament to account.
Cabinet has recently agreed in principle to amend NZBORA to specify that senior courts can make declarations of inconsistency.
So far, this is no more than some recent judicial decisions have permitted. A recent example is the litigation involving serial litigant Arthur Taylor, where the High Court made a declaration that a provision in the Electoral Act 1993 preventing all prisoners from voting was inconsistent with the right to vote protected by NZBORA. In 2017, the Court of Appeal upheld that decision on appeal, commenting that in some situations a declaration of inconsistency may be necessary “… to emphasise that the legislation needs reconsidering or to vindicate the right.” Leave to appeal has been granted by the Supreme Court.
What is new, however, is that, in the event of a declaration of inconsistency, Parliament will be required to reconsider the relevant legislation. Parliament would then have the option to either amend or repeal the law, or to retain the status quo.
This further step may be of more practical significance than statutory confirmation that the declaratory power exists. However, whether Parliament will be responsive to declarations of inconsistency remains to be seen.
8. Increased accountability and transparency for public sector organisations
The Government is also considering law changes to control top public sector pay, in response to concerns about the upwards trajectory of chief executive remuneration levels, and the growing gap between staff wages and chief executive pay.
The State Sectors Act and Crown Entities Bill, introduced in February this year, will amend the State Sector Act 1988 and the Crown Entities Act 2004 to provide for greater integrity and accountability in the management of the State services. The proposed changes will include:
a requirement for boards of statutory entities to obtain written consent from the State Services Commissioner before finalising the employment conditions and remuneration of chief executives (or any subsequent amendments to them);
expressly enabling the Commissioner to apply a code of conduct to an statutory entity’s board and board members; and
amendments to promote greater consistency in the manner in which inquiries and investigations are conducted by the State Services Commissioner across government.
The Bill is currently before the Select Committee for further consideration.
The move comes after State Services Commissioner recently began identifying crown entity boards who chose not to follow State Services Commission advice with respect to the chief executives’ remuneration, warning them that this information could inform Ministers’ decisions about the tenure of board members.
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