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Endnotes

[1] Royal Commission on Genetic Modification Report of the Royal Commission on Genetic Modification (Wellington, 2001) 2.

[2] Royal Commission on Genetic Modification, above n 1, 328.

[3] Simon Terry and others Who Bears the Risk? Genetic Modification & Liability (2 ed, Chen Palmer & Partners and Simon Terry Associates Ltd, Wellington, 2001); Charles River Associates Review of Chen, Palmer & Partners and Simon Terry Associates, Who Bears the Risk (Charles River Associates (Asia Pacific) Ltd, Wellington, 2001); Mark Christensen and Paul Horgan "Genetic Modification: The Liability Debate" (unpublished, 2001) <http://www.lifesciencenz.com/Repository/020118_ liability.pdf>.

[4] Genetically modified organism is defined in the Definitions section below, paras 11_13.

[5] Royal Commission on Genetic Modification, above n 1, 366.

[6] We will also follow the Royal Commission in its use of the term "genetic modification" rather than "genetic engineering". However, we acknowledge that some prefer "genetic engineering" because it can be seen as more specific than "genetic modification".

[7] The Royal Commission's Terms of Reference defined a genetically modified product as including "every medicinal, commercial, chemical, and food product that (while not itself capable of replicating genetic material) is derived from, or is likely to be derived from, genetic modification". See Royal Commission on Genetic Modification, above n 1, 364, 366.

[8] Simon Terry and others Who Bears the Risk? Genetic Modification & Liability (2 ed, Chen Palmer & Partners and Simon Terry Associates Ltd, Wellington, 2001) 14.

[9] Terry, above n 8, 14.

[10] Royal Commission on Genetic Modification Report of the Royal Commission on Genetic Modification (Wellington, 2001) 55.

[11] Royal Commission on Genetic Modification, above n 10, 57.

[12] Royal Commission on Genetic Modification, above n 10, 311.

[13] Royal Commission on Genetic Modification, above n 10, 311.

[14] Some of these are discussed in Royal Commission on Genetic Modification, above n 10, 33_38.

[15] Agriculture and Environment Biotechnology Commission Crops on Trial (2001) <http://www.aebc. gov.uk/aebc/crops.pdf> 30.

[16] Mäori concerns about genetic modification are, of course, not limited to the impact on their cultural beliefs.

[17] Bevan Tipene-Matua "Mäori Aspects of Genetic Modification" (Background paper to the Royal Commission on Genetic Engineering) <http://www.gmcommission.govt.nz/publications/ Maori_Bevan_Tipene-Matua.pdf> 4.

[18] Tipene-Matua, above n 17, 3_4.

[19] Hazardous Substances and New Organisms Act 1996, s 8; Resource Management Act 1991, s 8.

[20] See also Hazardous Substances and New Organisms Act 1996, s 5(b); Biosecurity Act 1993, ss 57(1)(c)(v), 72(1)(c)(v).

[21] Tipene-Matua, above n 18, 1, 15.

[22] Article 1, Directive 2001/18/EC of the European Parliament and of the Council on the deliberate release into the environment of genetically modified organisms, 12 March 2001.

[23] The Agriculture and Environment Biotechnology Commission was set up in June 2000 with a remit to provide the UK government with independent, strategic advice on developments in biotechnology and their implications for agriculture and the environment <www.aebc.gov.uk>. The Liability Sub Group intends to publish a report on liability issues at the end of 2002.

[24] Agriculture and Environment Biotechnology Commission Draft Animals and Biotechnology Report AEBC/01/20 (February 2002) <http://www.aebc.gov.uk/aebc/aebc0120.pdf> 7_8.

[25] Donald MacKenzie International Comparison of Regulatory Frameworks for Food Products of Biotechnology (2000). Prepared for the Canadian Biotechnology Advisory Committee Project Steering Committee on the Regulation of Genetically Modified Foods. <http://www.agbios.com/ articles/2000350-A.pdf> 56.

[26] The Finance and Expenditure Committee reporting on the Hazardous Substances and New Organisms (Genetically Modified Organisms) Amendment Bill 2001 (175_2) stated that (3_4):

We are informed that it is a natural process for bacteria to share genetic material through [horizontal gene transfer]. This occurs whether or not the bacteria are genetically modified ... We were also informed that there is no scientific basis for a view that the DNA in GM organisms is more or less likely to be subject to [horizontal gene transfer]. There is also no reason to believe that bacteria modified by [horizontal gene transfer] from GM plants and animals would have any greater or lesser impact on the environment than bacteria modified with genes from non-GM plants and animals.

However, the Committee also heard submissions that horizontal gene transfer may not occur naturally at all, or that, if it does, it has minimal impact. Also, the fact that horizontal gene transfer does not occur often may serve to hide the long-term impacts of gene flow from genetically modified crops (see Agriculture and Environment Biotechnology Commission Looking Ahead (December 2001) <http://www.aebc.gov.uk/aebc/horizon_scanning_

report.html>).

[27] Commentary from the Finance and Expenditure Committee reporting on the Hazardous Substances and New Organisms (Genetically Modified Organisms) Amendment Bill 2001 (175_2) 18_19.

[28] This possibility was discussed by the Agriculture and Environment Biotechnology Commission, Environmental Liability Development Group in their meeting of 18 January 2002, <http://www.aebc. gov.uk/aebc/liability_meetings_180102_minutes.html> 1.

[29] Donald MacKenzie, above n 25, 4. See also the statements supporting the validity of the "product-based" approach, 56.

[30] Commission of the European Communities "Proposal for a Directive of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage" COM (2002) 17 final, 2002/0021 (COD) (Brussels, 23 January 2002) Art 3.

[31] Hazardous Substances and New Organisms Act 1996, s 2A; Biosecurity Act 1993, s 2.

[32] Food Act 1981 and A18 of the Food Standards Code 1987.

[33] Medicines Act 1981, s 3.

[34] Agriculture and Environment Biotechnology Commission, above n 28, 5.

[35] (1866) LR 1 Ex 265 (Ex Ch) affirmed in (1868) LR 3 HL 330.

[36] Stephen Todd (ed) The Law of Torts in New Zealand (3 ed, Brookers, Wellington, 2001) 142.

[37] Stephen Todd "Liability issues involved, or likely to be involved now or in the future, in relation to the use, in New Zealand, of genetically modified organisms and products" (Submission to Royal Commission on Genetic Modification) 14_18.

[38] Todd, above n 36, 10.

[39] Todd, above n 36, 11.

[40] Cambridge Water v Eastern Counties Leather [1994] 2 AC 264; Hamilton v Papakura District Council [2000] 1 NZLR 265 (CA) and [2002] UKPC (28 February 2002) (PC).

[41] AG v PYA Quarries Ltd [1957] 2 QB 169, 184 per Romer LJ (CA) cited in Stephen Todd (ed) The Law of Torts in New Zealand (3 ed, Brookers, Wellington, 2001) 535.

[42] Todd The Law of Torts, above n 36, 542.

[43] AG v Abraham and Williams Ltd [1949] NZLR 461 (CA).

[44] For example, Health Act 1956, ss 29_35; Crimes Act 1961, s 145; Summary Offences Act 1981, ss 32_38; Resource Management Act 1991, ss 322, 323, 326_328 cited in Todd The Law of Torts, above n 36, 536.

[45] Todd The Law of Torts, above n 36, 535.

[46] Stephen Todd, above n 37, 11.

[47] (1866) LR 1 Ex 265 (Ex Ch) affirmed in (1868) LR 3 HL 330.

[48] Todd, above n 36, 12.

[49] Justine Thornton "Genetically Modified Organisms: Developing a Liability Regime" [2001] 6 Env Liability 267, 269.

[50] Royal Commission on Genetic Modification Report of the Royal Commission on Genetic Modification (Wellington, 2001) 317_318.

[51] Todd, above n 37, 10_14.

[52] Hazardous Substances and New Organisms Act 1996, s 3.

[53] Hazardous Substances and New Organisms Act 1996, s 2.

[54] Hazardous Substances and New Organisms Act 1996, s 27.

[55] Biosecurity Act 1993, s 2.

[56] Biosecurity Act 1993, ss 57(1)(c), 72(1)(c).

[57] Resource Management Act 1991, ss 314, 322.

[58] Resource Management Act 1991, s 314(d).

[59] For medical misadventure see Injury Prevention, Rehabilitation, and Compensation Act 2001, ss 32_34. For work-related harm see Injury Prevention, Rehabilitation, and Compensation Act 2001, s 30. See generally, Stephen Todd above n 37, 7_8.

[60] Royal Commission on Genetic Modification, above n 50, appendix 1, 53.

[61] Royal Commission on Genetic Modification, above n 50, 328. See also Mark Christensen and Paul Horgan "Genetic Modification: The Liability Debate" (unpublished, 2001) <http://www. lifesciencenz.com/Repository/020118_liability.pdf> 11: "the existing liability regime is capable not only of dealing with, but also of guarding against, actual and potential adverse effects from the use, development and release of GMOs".

[62] Todd, above n 36, 9.

[63] Simon Terry and others Who Bears the Risk? Genetic Modification & Liability (2 ed, Chen Palmer & Partners and Simon Terry Associates Ltd, Wellington, 2001) 88.

[64] Directorate-General for the Environment White Paper on Environmental Liability COM (2000) 66 final 9 February 2000 <http://www.europa.eu.int/comm/environment/liability/el_full.pdf> 18.

[65] Terry, above n 63, ii.

[66] Terry, above n 63, 28.

[67] Charles River Associates Review of Chen, Palmer & Partners and Simon Terry Associates, Who Bears the Risk (Charles River Associates (Asia Pacific) Ltd, Wellington, 2001) 3.

[68] Charles River Associates, above n 67, 3.

[69] Charles River Associates, above n 67, 3.

[70] Submissions from ERMA to the Royal Commission summarise the competing arguments (p 32):

Philosophically, there are two approaches that can be taken to the issue of liability in this regard. The first is to argue that by creating the HSNO framework ie requiring those wishing to develop, test or release GMOs to obtain a formal approval, the State is effectively relieving those people of liability for unexpected results. The nation as a whole takes the risk. The previous Minister for the Environment, Hon Simon Upton, has referred to this as "socialisation of risk". The second approach is to argue that the intervention of the State through the regulatory process notwithstanding, those wishing to develop, test or use GMOs are most likely to gain any immediate benefits from that, and also can reasonably be expected to have good knowledge (perhaps better than the regulator) of the risks. It is therefore not unreasonable that the operator should retain some liability.

Cited in Terry, above n 63, 26.

[71] Royal Commission on Genetic Modification Report of the Royal Commission on Genetic Modification (Wellington, 2001) 311.

[72] Justine Thornton "Genetically Modified Organisms: Developing a Liability Regime" [2001] 6 Env Liability 267, 272.

[73] Chris Clarke "Update Comparative Legal Study" Study Contract No 201919/MAR/B3 <www. europa.eu.int/comm/environment/liability/legalstudy.htm> 26.

[74] Mark Christensen and Paul Horgan "Genetic Modification: The Liability Debate" (unpublished, 2001) <http://www.lifesciencenz.com/Repository/020118_liability.pdf> 7.

[75] American Law Institute Restatement of the Law _ Torts: Liability for Physical Harm (Basic Principles) Tentative Draft No 2 (2002) 95.

[76] ERM Economics Economic Aspects of Liability and Joint Compensation Systems for Remedying Environmental Damage: Summary Report (March 1996) <http://www.europa.eu.int/comm/ environment/liability/el_full.pdf> 45.

[77] BGBl 1 1990, 1080, s 34. See also the Austrian Gene Technology Law (BGBl 510/1994) s 79d, which has the same provision.

[78] Royal Commission on Genetic Modification, above n 71, 318.

[79] Omer Brown II Nuclear Liability: A Continuing Impediment to Nuclear Commerce (The Uranium Institute 24th Annual International Symposium 1999) 2.

[80] Thornton, above n 72, 267, 273.

[81] The plaintiff may face difficulties even identifying the responsible defendant. One possibility for easing the difficulty of linking a GMO to a liable defendant would be to require genetic markers to be placed in all GMOs. See AB Endres "GMO: Genetically Modified Organism or Gigantic Monetary Obligation? The Liability Schemes for GMO damage in the United States and the European Union" (2000) 22 Loy LA Int'l & Comp L Rev 453, 487.

[82] Chris Clarke, above n 73, v.

[83] ERM Economics, above n 76, 44.

[84] Article 9, Commission of the European Communities "Proposal for a Directive of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage" COM (2002) 17 final, 2002/0021 (COD) (Brussels, 23 January 2002) 42.

[85] Chen Palmer & Partners suggest that force majeure, in the sense of natural disasters such as earthquakes, tsunamis, civil strife and so forth, should be an absolute defence to liability. They also suggest a defence of contributory negligence. See Simon Terry and others Who Bears the Risk? Genetic Modification & Liability (2 ed, Chen Palmer & Partners and Simon Terry Associates Ltd, Wellington, 2001) 86, 88.

[86] Royal Commission on Genetic Modification, above n 71, 320.

[87] New Zealand Law Commission Tidying the Limitation Act (NZLC R61, Wellington, 2000) cited in Royal Commission on Genetic Modification, above n 71, 320_321.

[88] Stephen Todd "Liability issues involved, or likely to be involved now or in the future in relation to the use, in New Zealand, of genetically modified organisms and products" (Submissions to the Royal Commission on Genetic Modification) 22.

[89] Chris Clarke "Update Comparative Legal Study" Study Contract No 201919/MAR/B3 <www.europa. eu.int/comm/environment/liability/legalstudy.htm> iii_v.

[90] Article 1, Commission of the European Communities "Proposal for a Directive of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage" COM (2002) 17 final, 2002/0021 (COD) (Brussels, 23 January 2002) 36.

[91] Environmental damage includes biodiversity damage, water damage, and land damage that creates serious harm to public health as a result of soil contamination. See Article 2(18), Proposal for a Directive on Environmental Liability, above n 90, 38.

[92] Annex I, Proposal for a Directive on Environmental Liability, above n 90, 50.

[93] These duties are subject to a number of defences discussed above n 90, para 92.

[94] Article 4(1), Proposal for a Directive on Environmental Liability, above n 90, 40.

[95] Article 5, Proposal for a Directive on Environmental Liability, above n 90, 41.

[96] Article 11, Proposal for a Directive on Environmental Liability, above n 90, 43.

[97] Article 6, Proposal for a Directive on Environmental Liability, above n 90, 41.

[98] Article 16, Proposal for a Directive on Environmental Liability, above n 90, 45.

[99] Proposal for a Directive on Environmental Liability, above n 90, 17.

[100] Simon Terry and others Who Bears the Risk? Genetic Modification & Liability (2 ed, Chen Palmer & Partners and Simon Terry Associates Ltd, Wellington, 2001) iv. Compulsory insurance is required in Germany (BGBl 1 1990, 1080, s 36) and Austria (BGBl 510/1994, s 79j). See also Article 12 of the European Convention on Civil Liability for Damage Resulting from Activities Dangerous to the Environment 1993 (ETS 150) which compels signatories either to require individuals to carry adequate liability insurance or make payments into national compensation funds. Like the European Proposal for a Directive on Environmental Liability it focuses on environmental harm in general but includes the production, handling or release of GMOs in the definition of dangerous activities (Art 2(1)(b)). As at 11 March 2002, Cyprus, Finland, Greece, Iceland, Italy, Liechtenstein, Luxembourg, Netherlands, and Portugal had signed the Convention.

[101] R Balkin and J Davis Law of Torts (Butterworths, Sydney, 1991) 7.

[102] Charles River Associates Review of Chen, Palmer & Partners and Simon Terry Associates, Who Bears the Risk (Charles River Associates (Asia Pacific) Ltd, Wellington, 2001) 6.

[103] Charles River Associates, above n 102, 7.

[104] Phone conversation, 22 March 2002.

[105] Parliamentary Commissioner for the Environment [IP70] Submissions to the Royal Commission 14.

[106] Parliamentary Commissioner for the Environment, above n 105, 15. The Royal Commission received confirmation of these views from the Insurance Council of New Zealand (see Royal Commission on Genetic Modification Report of the Royal Commission on Genetic Modification (Wellington, 2001) 321 and fn 21, 405).

[107] Mr Alan Simpson, UK Hansard 15 November 2000, 356, column 941.

[108] Rob Edwards "Farmers Told GM Crops Are `Too Dangerous to Insure'" The Sunday Herald (Scottish Media Newspapers Ltd) 10 March 2002.

[109] Swiss Re "Genetic engineering and liability insurance: The power of public perception" (1998) 10.

[110] Insurance Council of Australia, submission to Mr Ian Dundas Committee Secretary House of Representatives Standing Committee on Primary Industries and Regional Services 4 November 1999 cited in Greenpeace [LE 2 IP82] Submissions to Royal Commission 7.

[111] James Boyd "A Market-Based Analysis of Financial Assurance Issues Associated with U.S. Natural Resource Damage Liability" (Resources for the Future, 10 October 2000) <www.europa.eu.int/ comm/environment/liability/insurance_us.htm> 58.

[112] Agriculture and Environment Biotechnology Commission, Environmental Liability Development Group Minutes, 20 December 2001. <http://www.aebc.gov.uk/aebc/liability_meetings_201201_ minutes.html> 2_3.

[113] Terry, above n 100, 39_40.

[114] Terry, above n 100, 41.

[115] Terry, above n 100, iv. We note that this occurs often in everyday life motivating individuals who are risk-adverse to obtain first-party insurance.

[116] In Germany plaintiff recovery is limited (Act on Genetic Engineering BGBl 1 1990, 1080, s33) and in Austria there is compulsory insurance with capped liability (Gene Technology Law BGBl 510/1994, s79j cited in AB Endres "GMO: Genetically Modified Organism or Gigantic Monetary Obligation? The Liability Schemes for GMO damage in the United States and the European Union" (2000) 22 Loy LA Int'l & Comp L Rev 453, 475.

[117] Omer Brown II "Nuclear Liability: A Continuing Impediment to Nuclear Commerce" (The Uranium Institute 24th Annual International Symposium 1999) 2.

[118] Public Citizen "The Price Anderson Act: The Billion Dollar Bailout for Nuclear Power Mishaps" (10 October 2001) 2.

[119] Charles River Associates above n 102, 6.

[120] RFV Heuston and RA Buckley Salmond and Heuston on the Law of Torts (20 ed, Sweet & Maxwell, London, 1992) 27_28.

[121] Terry, above n 100, iii.

[122] Royal Commission on Genetic Modification Report of the Royal Commission on Genetic Modification (Wellington, 2001) 323.

[123] Some argue that failing to require insurance would in fact constitute an implicit subsidy by the public of the genetic modification industry. See Terry, above n 100, 41.

[124] Mark Christensen and Paul Horgan "Genetic Modification: The Liability Debate" (unpublished, 2001) <http://www.lifesciencenz.com/Repository/020118_liability.pdf> 9.

[125] Although the use of "catastrophe bonds" (financial instruments issued and traded on capital markets) and reinsurance could partly alleviate this problem. See Terry, above n 100, v.

[126] Terry, above n 100, 38.

[127] Resource Management Act 1991, s 108(2)(b).

[128] Royal Commission on Genetic Modification Report of the Royal Commission on Genetic Modification (Wellington, 2001) 323.

[129] Royal Commission on Genetic Modification, above n 128, 323.

[130] Royal Commission on Genetic Modification, above n 128, 322_323.

[131] Christensen and Horgan, above n 124, 8_9.

[132] The Gene Technology Act 2000, s 62(3) states that:

Licence conditions may also include conditions requiring the licence holder to be adequately insured against any loss, damage, or injury that may be caused to human health, property or the environment by the licensed dealing.

[133] Royal Commission on Genetic Modification, above n 128, 323.

[134] Royal Commission on Genetic Modification, above n 128, 324.

[135] Royal Commission on Genetic Modification, above n 128, 324.

[136] Bruce Yandle "Rules of Liability and the Demise of Superfund" in Roger Meiners and Bruce Yandle The Economic Consequences of Liability Rules: In Defense of Common Law Liability (Quorum Books, New York, 1991) 143, 143_144.

[137] Justine Thornton "Genetically Modified Organisms: Developing a Liability Regime" [2001] 6 Env Liability 267, 273.

[138] The Brussels International Convention on Civil Liability for Oil Pollution Damage (1969).

[139] ERM Economics Economic Aspects of Liability and Joint Compensation Systems for Remedying Environmental Damage: Summary Report (March 1996) <http://www.europa.eu.int/comm/ environment/liability/el_full.pdf> 43.

[140] ERM Economics, above n 139, 43, 45.

[141] Under the European Commission's Proposal for a Directive on Environmental Liability (which is not limited to damage caused by genetic modification), if no operator can be held liable, or the operator has insufficient funds, member states must adopt all necessary measures to ensure preventive or restorative measures are financed. See Art 6, Commission of the European Communities "Proposal for a Directive of the European Parliament and of the Council on environmental liability with regard to the prevention and remedying of environmental damage" COM (2002) 17 final, 2002/0021 (COD) (Brussels, 23 January 2002) 41.

[142] Justine Thornton "Genetically Modified Organisms: Developing a Liability Regime" [2001] 6 Env Liability 267.