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Dairy Industry Restructuring Amendment Bill (Consistent) (Sections 21 25(c)) [2007] NZBORARp 21 (19 July 2007)

Last Updated: 2 January 2019

Dairy Industry Restructuring Amendment Bill

19 July 2007

Attorney-General

LEGAL ADVICE

CONSISTENCY WITH THE NEW ZEALAND BILL OF RIGHTS ACT 1990: DAIRY INDUSTRY RESTRUCTURING AMENDMENT BILL

1. We have assessed whether the Dairy Industry Restructuring Amendment Bill (the Bill), (PCO 7967/10) is consistent with the New Zealand Bill of Rights Act 1990 (the Bill of Rights Act). We understand that this Bill will be considered by the Cabinet Legislation Committee at its meeting on 26 July 2007.

2. In our view, the Bill appears to be consistent with the rights and freedoms affirmed

in the Bill of Rights Act. In reaching this conclusion, we considered potential issues of consistency with section 21 (right to be free from unreasonable search and seizure) and section 25(c) (right to be presumed innocent until proved guilty). Our analysis of these potential issues is set out below.

PURPOSE OF THE BILL

3. The Dairy Industry Restructuring Act 2001 assigned export rights to certain regulated dairy markets exclusively to the New Zealand Dairy Board for fixed periods. These initial allocations are due to expire progressively between June 2007 and December

2010. The Crown is required to reallocate rights to export to these designated markets as they become available.

4. The purpose of this Bill is to establish a new allocation mechanism by which the export rights can be reallocated. This Bill removes export restrictions for some markets and allocates rights to other markets to multiple participants. The Bill states that the new allocation framework will allow a wider group of dairy processors to participate in exporting to these markets and provide future certainty to the industry.

ISSUES OF CONSISTENCY WITH THE BILL OF RIGHTS ACT

Section 21: right to be free from unreasonable search and seizure

5. Section 21 provides the right to be secure against unreasonable search and seizure.

There are two limbs to the section 21 right. First, section 21 is applicable only in respect of those activities that constitute a "search or seizure". Second, where certain actions do constitute a search or seizure, section 21 protects only against those searches or seizures that are "unreasonable" in the circumstances.

Entry powers without a warrant

6. New section 29C (Power of entry without search warrant) of the Bill provides that the chief executive or a person authorised by the chief executive may enter any place (other than a dwelling-house or marae) for the purpose of monitoring and ensuring compliance with the rules for the allocation of export licences to multiple participants for designated markets. The powers of the chief executive and the authorised officers include inspecting and examining anything at that place which relates to the obligations and duties under the Act, questioning an eligible

participant, and requiring the production of documents. We consider that clause 29C constitutes a power of search and seizure for the purposes of section 21 of the Bill of Rights Act.

7. The allocation of export licenses to eligible participants is subject to the rules in Schedule 5B. The purpose of the entry and inspection power is to enable authorised persons to enter and inspect premises to ensure compliance with these rules. The power may be exercised whether or not there are grounds to believe the requirements of the Act have been complied with.

8. We consider the entry and inspection powers in new section 29C are reasonable and, therefore, consistent with section 21 because:

• The purpose of the inspection is limited to ensuring compliance with the rules in

Schedule 5B (new section 29C(1));


29C(1));


Search powers

9. New sections 29H (Issue of search warrant) and 29I (Requirements when executing warrant) of the Bill provide for powers of entry under a search warrant. The powers include investigating and examining anything at that place that relates to the obligations and duties under the Act; questioning an eligible participant; and requiring the production of documents. We consider these clauses create a power of search and seizure for the purposes of section 21 of the Bill of Rights Act.

10. We consider the powers of entry and investigation in new sections 29H and 29I are reasonable and therefore consistent with section 21 because:

Power to require information

11. The requirement to produce documents under statutory authority constitutes a search for the purposes of section 21 of the Bill of Rights Act. New section 29F requires eligible participants to provide relevant information or documents to the chief executive upon request.

12. We consider the requirement is reasonable and therefore consistent with section 21.

The purpose of new section 29F is limited to determining and monitoring compliance with the rules relating to the allocation of export licenses to eligible participants in Schedule 5B.

13. In addition, in light of the monitoring regime provided for in the Bill, new section 29F is less of an intrusion into the expectations of privacy than a power of entry (under new sections 29C and 29H). We understand that it is intended that the power to require information and documents will be used as a precursor to the more invasive powers under new sections 29C and 29H. We also note that the chief executive may only request relevant information and documents.

Section 25(c): right to be presumed innocent until proved guilty

14. Section 25(c) of the Bill of Rights Act affirms the right to be presumed innocent until proved guilty. This means that an individual must not be convicted where reasonable doubt as to his or her guilt exists; therefore, the prosecution in criminal proceedings must prove, beyond reasonable doubt, that the accused is guilty.

15. Strict liability offences give rise to an issue of inconsistency with section 25(c) because the accused is required to prove (on the balance of probabilities) a defence; whereas, in other criminal proceedings an accused must merely raise a defence in an effort to create reasonable doubt. This means, where an accused is unable to prove the defence, that he or she could be convicted even though reasonable doubt exists as to his or her guilt.

16. The Bill contains one strict liability offence. Clause 11 (Offences) amends section 31 of the Dairy Restructuring Act 2001 to include a new offence for providing a false

declaration in relation to milk data collection. By virtue of section 32 of that Act the offences contained within section 31 are strict liability offences. Where an issue arises, a provision may nevertheless be consistent with the Bill of Rights Act if it can be considered a reasonable limit that is justifiable in terms of section 5 of that Act. In our view, justification for strict liability provisions can occur where: the offence relates to a public welfare regulatory regime rather than truly criminal behaviour;

the information sought is 'peculiarly within the realm of the defendant'; and the penalty for breach is at the lower end of the scale.

17. The objective behind the offence is to ensure that export rights are allocated based on accurate data. Each company will have to make a declaration about the volume of milk solids it collects (in a particular season or seasons) to determine how large a portion of export rights that company will receive. Without a sufficient deterrent, a company might submit a false declaration to gain a larger portion of export rights. The offence is designed to provide an effective deterrent against fraudulent declarations. We consider these to be significant and important objectives. The export rights at issue are potentially very valuable, as they generally involve a reduced tariff rate.

18. The offence has been cast as a strict liability offence to ensure that the onus is on

the participants to meet their obligations under the Bill. The information required to absolve the defendant participant is a declaration of the volume of milk solids collected by each company and is commercial information specific to each company. This information is not readily accessible by an external party on an auditable basis.

19. The penalties imposed by clause 14 of the Bill are a maximum fine of $200,000 and/or a term of imprisonment not exceeding 3 months. The penalty reflects the significant potential benefits that an entity could stand to gain by submitting a false declaration of milk solids collection.

20. It is also relevant that the offence in clause 14 can be considered as a regulatory offence, as opposed to a truly criminal offence. The offence aims to ensure compliance with the regulatory framework established in the Bill.

22. In our view, clause 14 constitutes a justified limitation on the right to be presumed innocent as affirmed by section 25(c) of the Bill of Rights Act.

Conclusion

22. We have concluded that the Bill appears to be consistent with the rights and freedoms contained in the Bill of Rights Act.

Melanie Webb

Manager, Ministerial Advice

Office of Legal Counsel

Margaret Dugdale
Manager, Bill of Rights/Human Rights
Public Law Group

In addition to the general disclaimer for all documents on this website, please note the following: This advice was prepared to assist the Attorney-General to determine whether a report should be made to Parliament under s 7 of the New Zealand Bill of Rights Act 1990 in relation to the Dairy Industry Restructuring Amendment Bill. It should not be used or acted upon for any other purpose. The advice does no more than assess whether the Bill complies with the minimum guarantees contained in the New Zealand Bill of Rights Act. The release

of this advice should not be taken to indicate that the Attorney-General agrees with all

aspects of it, nor does its release constitute a general waiver of legal professional privilege in respect of this or any other matter. Whilst care has been taken to ensure that this document is an accurate reproduction of the advice provided to the Attorney-General, neither the Ministry of Justice nor the Crown Law Office accepts any liability for any errors or omissions.


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