GEORGINA BEYER (NZ Labour--Wairarapa): I am very pleased to support the bill proceeding through its various stages in the House. I also look forward, particularly as a member of the Primary Production Committee, and deferring to the chairperson who spoke not so long ago, to helping to speed this legislation through the House because it is important for us.

As a result of the butter access problems encountered by the New Zealand Dairy Board over the past 3 years, the European Union and New Zealand officials agreed that it was desirable to clarify the rules governing imports under New Zealand's country-specific tariff quotas for butter and cheese. As a result, new detailed rules for the operation of the European Union tariff quotas for New Zealand butter and cheese have been established, and arrangements with the European Union permit New Zealand to export specified quantities of certain dairy products at a preferential rate of import duty.

The preferential tariff rate is of significant economic value to New Zealand. To be entitled to preferential rates the product must meet a detailed product description. An import monitoring arrangement certificate that certifies that the product meets the product description is required. As part of the package of new rules, the role of the issuing authority for important monitoring arrangement certificates will be transferred on 1 July 2000 from the Dairy Board to the New Zealand Government via the Ministry of Agriculture and Forestry.

There is a need for legislative change. The Dairy Industry Act does not provide for the issuing of official assurances such as important monitoring arrangement certificates. Given the recent history of the European Union butter trade, and in particular the large and retrospective claims for customs duties, it would not be prudent to proceed with issuing certificates without legislative backing.

There is a need to legislate for the exclusion of Crown liability. Such a provision would give some protection to the Crown in the event of any future claims for customs duty on products certified by the Ministry of Agriculture and Forestry in good faith, as compliant with European Union rules.

Further, legislation will enable certification and verification systems to be prescribed and supported by appropriate compliance and enforcement measures. This should reduce the risk of non-compliance and future claims.

The bill amends the Dairy Industry Act in order to provide a framework for the provision of official assurances. An official assurance is a general statement to a foreign Government that certain requirements or standards have been met. The key features of the bill include a new regulation-making power that provides for the setting up of a compliance programme, and an official assurance system to ensure that dairy produce destined for the export market meets the requirements of importing countries; exclusion of liability for the Crown where it provides official assurances in good faith; regulation-making powers that would enable the costs of providing official assurances to be recovered; and, increased penalties for breaches of the Act.

The bill has no direct policy relationship with the Dairy Industry Restructuring Act, which is designed to facilitate the formation of a dairy mega-cooperative. However, many of the bill's provisions are substantially similar to amendments provided in the Dairy Industry Restructuring Act, which also provides for the same issue of official assurances. To avoid any duplication of legislation the bill provides consequential amendments to the Dairy Industry Restructuring Act.

In conclusion, given the problems with large and retrospective claims for customs duties in the European Union butter trade we must legislate for the issue of certificates. The Dairy Industry Act needs amending. It makes no reference to the provision of official assurances; amendment is the only option. We must legislate for the exclusion of Crown liability to protect the Crown from future claims for customs duty on Ministry of Agriculture and Forestry certified products. The main responsibility for compliance rests with the industry, which is best placed to control and carry risks related to meeting compliance requirements. This ensures strong incentives for exporters to perform risk-management functions.

Legislation enables certification and verification systems to be prescribed and supported by compliance and enforcement measures. This should reduce the risk of non-compliance, and provides for increasing penalties to deter non-compliance. Not legislating could mean the loss of control for New Zealand and the European Union tariff quota.

It is imperative to move quickly. Not enacting the legislation by 1 July 2000 could mean an annual loss of $150 million dollars. The Dairy Board and the small number of firms affected by the legislation have been consulted and are supportive of the bill's proposals.