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Electricity Industry Bill (Consistent) (Sections 14, 21, 25(c)) [2009] NZBORARp 78 (10 December 2009)

Last Updated: 28 April 2020

10 December 2009

ATTORNEY-GENERAL

LEGAL ADVICE

CONSISTENCY WITH THE NEW ZEALAND BILL OF RIGHTS ACT 1990: ELECTRICITY INDUSTRY BILL

1. We have considered whether the Electricity Industry Bill (PCO 13986/9.5) (‘the Bill’) is consistent with the New Zealand Bill of Rights Act 1990 (‘Bill of Rights Act’). We understand that this Bill is likely to be considered by the Cabinet Legislation Committee at its meeting on Thursday, 10 December 2009.

2. We have concluded that the Bill appears to be consistent with the Bill of Rights Act. In reaching that conclusion, we have considered the issues of consistency of the Bill with ss 14, 21, and 25(c) of the Bill of Rights Act. Our analysis is set out below.

Purpose of the Bill

3. The Bill seeks to improve competition in the electricity market and improve security of supply by improving the governance arrangements for the electricity industry; providing for specific regulatory improvements to be made; and making improvements to the overall structure of the sector. The Bill does this by replacing subpart 2 of Part

14 and Part 15 of the Electricity Act 1992 and the Electricity Industry Reform Act 1998. It also makes minor amendments to a number of other Acts.

Section 14: Freedom of Expression

4. Section 14 of the Bill of Rights Act affirms that everyone has the right to freedom of expression, including the freedom to seek, receive, and impart information and opinions of any kind and in any form.

5. Clause 16(1) of the Bill provides that no member of the Electricity Authority may (when acting as a member of the Authority) represent, or promote the interests or views of, any organisation to which the member belongs, or any particular industry participant or group of industry participants.

6. Arguably, cl 16(1) limits the freedom of expression of Authority members by preventing them from advocating for a particular point of view. In practice, cl 16(1) appears unlikely to prevent Authority members from expressing an opinion; however, for completeness we have considered whether the limitation can be justified under s 5 of the Bill of Rights Act. Section 5 permits the rights and freedoms affirmed in the Bill of Rights Act to be subject to such limitations as can be justified in a free and democratic society. A limitation may be justified where:

• the provision serves an important and significant objective; and

• there is a rational and proportionate connection between the provision and that objective.

7. We understand that the purpose of cl 16(1) is to preserve the independence of Authority members. The Authority plays a significant role in the regulation of the electricity industry and we therefore consider its independence to be a significant and important objective.

8. We also consider the limitation on freedom of expression to be rationally and proportionately connected to that objective. Promoting the views of another organisation or industry participant would appear to compromise the ability of the Authority to carry out its functions, which require a degree of neutrality. The limitation is proportionate because it only applies when members are acting in their capacity as Authority members. We have therefore concluded that cl 16(1) does not unduly limit the freedom of expression affirmed in s 14 of the Bill of Rights Act.

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

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

There are two limbs to the s 21 right. First, s 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, s 21 protects only against those searches or seizures that are "unreasonable" in the circumstances.

Inspection regime

10. To achieve the objectives underlying the Bill it was considered necessary to implement a regulatory inspection regime. We have considered whether the powers that are conferred by this regime may give rise to an issue of inconsistency with s 21 of the Bill of Rights Act.

11. Under the regime – which is set out in cls 21 and 50 to 54 of the Bill – the Authority may require industry participants to provide information, permit their officers and employees to be interviewed, allow access to premises, and provide all other assistance to enable the Authority to carry out its functions and exercise its powers. We consider that powers provided by this regime constitute powers of search and seizure for the purposes of s 21 of the Bill of Rights Act.

12. The purpose of the entry and inspection regime in ss 50 to 54 is to enable authorised persons to enter and inspect premises to ensure compliance with the requirements of the Electricity Industry Participation Code. The power may be exercised whether or not there are grounds to believe the industry participant has complied with the requirements of the Code.

13. In determining whether the search and seizure powers are consistent with s 21, we considered the following factors and safeguards that are contained in the Bill:

• The inspection power is limited to specific purposes set out in the Bill;

• Authorised officers may only enter at a reasonable time (cl 51(2)(c)); and

• For an inspection requiring access to a home prior consent by the occupier or a search warrant is required (cl 52(5));

• The manner in which the inspection must be exercised is clearly set out and contains additional safeguards (such as the authorised person must give reasonable notice of intention to enter any premises (cl 52(2)), produce, on first entering the premises and if requested at any time, evidence of authority to enter (cl 52(3)); and leave a written notice of the inspection if they are unable to find anybody in charge of the premises (cl 52(4)); and

• While a person is not excused from providing information on the grounds of self- incrimination, such information is not admissible in civil or criminal proceedings against that person (cl 53).

14. In light of the restrictions and safeguards outlined above, we consider that the inspection powers set out in the Bill do not appear to be prima facie inconsistent with s

21 of the Bill of Rights Act.

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

15. 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. We have identified several strict liability offences in the Bill. These offences give rise to a prima facie issue of inconsistency with s 25(c) because the accused is required to prove (on the balance of probabilities) a defence to avoid liability; whereas, in other criminal proceedings an accused must merely raise a defence in an effort to create reasonable doubt. This means where the accused is unable to prove the defence, then he or she could be convicted even though reasonable doubt exists as to his or her guilt.

16. We have identified the following offences as being strict liability offences:

• Clause 34 (offence of failing to register as an industry participant);

• Clause 106 (offence of failing to prepare or publish audited financial statements);

• Clause 114 (offence of failing to comply with regulations relating to charges for line functions services).

17. It can be a justifiable limit in terms of s 5 of the Bill of Rights Act to place such an onus on to a defendant where the defendant is voluntarily involved in a regulated activity such as here.1 The point was noted with possible approval but not decided in R v Hansen [2006] NZCA 59; [2007] 2 NZLR 1.2 Here, the matters of excuse in respect of the failure to comply with regulatory requirements in the Bill are likely to be peculiarly within the knowledge of the person concerned.3

18. The penalty for committing an offence under cl 106 is a fine on summary conviction not exceeding $200,000. The penalty for committing an offence under cl 114 is a fine

1 See for example R v Wholesale Travel Group [1991] 3 SCR 154 (Supreme Court of Canada) and AG v

Malta (ECtHR, App 1664/90).

2 See paragraphs [43], [66] and [227].

3 See, for example, Sheldrake v Director of Public Prosecutions [2004] UKHL 43; [2005] 1 AC 264.

not exceeding $500,000. Although these fines cannot be considered to be at the lower end of the scale, they do not appear to be disproportionate. The penalties reflect the potential harm that may arise as a result of failing to comply. The level of penalty must be sufficient to act as a deterrent for industry participants in individual cases, as well as to deter systemic conduct which could have an effect on wider consumer confidence in the industry. This reflects the gravity of such a breach.

19. For those reasons we conclude that no issue of inconsistency arises in relation to these strict liability offence provisions.

Conclusion

20. This advice has been prepared by the Public Law Group and the Office of Legal Counsel. We have reached the conclusion that the Bill appears to be consistent with the rights and freedoms affirmed in the Bill of Rights Act.

Jeff Orr

Chief Legal Counsel

Office of Legal Counsel

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 Electricity Industry 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.