Hazardous Substances and New Organisms (Genetically ... fileSubstances and New Organisms Act 1996,...

Hazardous Substances and New Organisms(Genetically Modified Organisms)

Amendment Bill

Government Bill

Explanatory note

General policy statement

The amendments made by this Bill will allow time to put in placeresearch programmes and further amendments to the HazardousSubstances and New Organisms Act 1996, establish a BioethicsCouncil, and undertake other relevant work on issues in response tothe Report of the Royal Commission on Genetic Modification.

The amendments will restrict, for a period of 2 years, the considera-tion and approval by the Environmental Risk Management Autho-rity (the Authority) of applications to release genetically modifiedorganisms into the environment. The amendments will apply toapplications to import for release, or to release from containment,genetically modified organisms. However, exempt from the con-straint period are those applications to release genetically modifiedorganisms that provide direct medical benefits to human and animalhealth. The amendments will require these applications to provideadditional information showing that the organism cannot persistviably in the physical environment beyond the target organism. Theamendments will require the Authority to take into account thesafety, ecological effects, and relative efficacy of genetically modi-fied organisms.

The amendments will also require explicit, ongoing controls for allcontained field testing of genetically modified organisms. All of thechanges in the Bill are effective from 29 October 2001.

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Hazardous Substances and New

Organisms (Genetically ModifiedOrganisms) Amendment

Clause by clause analysis

Clause l is the Title clause.

Explanatory note

Part 1

Preliminary provisions

Clause 2 is the commencement clause. The Bill comes into force on

the day after the date on which it receives the Royal assent. How-ever, because of the terms of certain clauses, the amendments in the

Bill will have effect from 29 October 2001: see new sections 73A

and 738, inserted by clause 8, and clause 9.

Clause 3 provides for the expiry of clauses 5 and 8 on the close of29 October 2003.

Clause 4 provides that the purpose of the Bill is-

• to require the Environmental Risk Management Authority to

consider additional matters when considering applications in

relation to certain genetically modified organisms and, if it

approves the applications, to include controls for secure con-tainment and other matters; and

• to impose a restriction, from 29 October 2001 to the close of

29 October 2003, on the Authority considering or approvingapplications to import new organisms for release or to releasenew organisms from containment, if the new organisms aregenetically modified organisms; and

• to provide exceptions to the restriction; and

• to provide transitional provisions for approved applicationsrelating to certain genetically modified organisms.

Part 2

Release and field testing of genetically modified organisms

Clause 5 inserts new section 25AA into the principal Act to clarifythat Part V of the principal Act applies subject to new Part 5A,inserted by clause 8.

Clause 6 inserts new section 44A into the principal Act. The newsection applies to applications to field test new organisms in contain-ment if they are genetically modified plants or genetically modified

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animals. In deciding whether to approve or decline these applica-tions, the Authority must take into account the safety and any eco-

logical effects of the test and any alternative method of achieving theresearch objectives that is as effective as, or more effective than, thefield test.

Clause 7 inserts new section 45A into the principal Act. The new

section requires approvals to field test genetically modified plants

and genetically modified animals to include additional controlsrelating to the secure containment or destruction of reproductivestructures and heritable material (in the case of plants) and secure

containment and identification (in the case of animals).

Clause 8 inserts new Part 5A into the principal Act, comprising newsections 73A to 73G.

New section 73A defines terms used in the new Part. Restricted

period is a fundamental term in the new Part and is defined to mean

the period beginning on 29 October 2001 and ending on the close of29 October 2003.

New section 738 provides that the new Part applies to new orga-nisms that are genetically modified organisms.

New section 73C requires the Authority not to consider or grantapplications during the restricted period to import a new organismfor release or to release a new organism from containment. Excep-tions are provided for certain medicines under the Medicines Act1981 and the Agricultural Compounds and Veterinary MedicinesAct 1997.

New sections 73D and 73E apply to applications within the excep-tions in new section 73C and require additional matters in applica-tions and require the Authority to take into account additionalmatters.

New section 73F provides that no compensation is payable by theCrown for loss or damage arising from the restriction imposed bynew section 73C.

New section 736 provides that new Part expires on the close of 29October 2003.

Clause 9 is a transitional provision.

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Organisms (Genetically ModifiedOrganisms) Amendment Explanatory note

Regulatory impact and compliance cost statement

Statement Of problem and need for action

It is important that no applications to release genetically modifiedorganisms are made during the period in which changes are made tothe Hazardous Substances and New Organisms Act 1996, and whilepolicy work and research into the social, economic, and environ-

mental impacts of genetically modified organisms is undertaken. Alaw change is therefore required to ensure that no applications of thissort are made and assessed.

Statement of the public policy objective

The primary objective is to allow time to undertake a work pro-gramme in response to the Report of the Royal Commission onGenetic Modification before any consideration is given to an appli-cation to release a genetically modified organism into the environ-

ment. This cautionary approach further ensures that the environment

and health of New Zealanders are not exposed to any unacceptablerisks. The work will enhance the management of genetic modifica-tion activities under the Hazardous Substances and New Organisms

Act 1996 and provide the Government with further information

about the environmental, social, and economic impacts of geneti-cally modified organisms in New Zealand.

Statement of options for achieving the desired objective

Non-regulatory options

A voluntary moratorium on applications to field test (with exemp-tions) and release genetically modified organisms has been in placefor the past 18 months while the Royal Commission on GeneticModification was undertaking its inquiry and for a period beyond

while the Government considered the report.

Under the voluntary arrangement, an application could have been

lodged and the Authority would have been obliged to consider it.

This option does not provide the required level of assurance that no

applications for release will be made and assessed.

Regulatory options

The preferred option is to amend the Hazardous Substances andNew Organisms Act 1996 to ensure that-

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Explanatory note



. no application to release a genetically modified organism willbe considered by the Authority; and

. if field test applications are made, certain discretionary prac-tices relating to controls on the test will be mandatory.

In this way, contained field test research can continue under strictconditions.

Statement Of the net benejit Of this proposal

The benefits of amending the Act include-

• ensuring that for a period of 2 years no applications areconsidered or approved to release genetically modified orga-nisms; and

• ensuring that approved contained field tests have a range ofspecific controls placed on them; and

• as a precautionary measure, protecting further the health of

people and the natural environment until changes are made to

the Hazardous Substances and New Organisms Act 1996 and

information is gathered.

The costs include the following matters:

• with regard to the requirement to provide additional compara-tive information about a medicine over the next 2 years, therewould be significant compliance costs that could adverselyaffect the health of New Zealanders during this period bydecreasing the registration of new medicines. However, thereare no known pending applications to release a medicine thatis a genetically modified organism; and

• the restricted period may create uncertainty for investors andresearchers about whether or when genetically modified orga-nisms will be able to be commercialised in New Zealand.

There may also be flow-on effects, with a reduction inresearch capability and in contained research work. The sizeof the impact is unclear, but industry groups indicate that theproposed restrictions will not create a significant impact atthis stage; and

• if part of our competitive advantage relies on the commercialapplication of genetically modified organisms, there is a riskthat other countries could get a head start in the use of such

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organisms developed overseas and thereby secure a competi-

tive advantage over New Zealand, as the organisms may not

be trialled and could not be used (released) in this country.

It should be noted that no applications to release genetically modi-fied organisms covered by the restriction are expected in the nearfuture.

Business compliance cost statement

Sources of compliance costs

Restricted period and exempt release applications

The Bill primarily seeks to restrain certain activities (consideration

of applications to release genetically modified organisms) under theHazardous Substances and New Organisms Act 1996. Compliancecosts relate to the additional information required for applications to

release genetically modified organisms that are not covered by therestricted period.

Contained field testing

It should be noted that the majority (but not all) of the proposedamendments to the field test provisions are making explicit and

mandatory what is to a large extent current (albeit discretionary)practice about setting controls under the Hazardous Substances andNew Organisms Act 1996. For those requirements that mandate the

existing discretionary requirements, the Bill has no compliance cost

implications. For the new requirements relating to field tests, therecould be compliance costs associated with a requirement to be ableto retrieve or destroy plant material from the field test. This would bethe case if the threshold for meeting this amendment were higher

than current practice.

Transitional provisions for contained field tests

If an approved application is captured by the transitional provisions,it means that the Authority must review the approval, possibly

decline the application (which means the owner of the genetically

modified organism must stop the field test and dispose of the organ-ism), or include additional controls, or substitute controls, or both,

on the approval. No compensation is payable by the Crown to an

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Explanatory note



applicant for any loss or damage arising from the enactment oroperation of this proposed change. However, the Government hasannounced its intention for the law to apply from 29 October 2001,so any applications are made with knowledge of this intent.

Parties likely to be affected

The parties likely to be affected by the changes in the Bill areindividuals and organisations wishing to apply to the Authority tofield test or release a genetically modified organism. Likely appli-cants include-

• biotechnology industry involved in research and possiblereleases of genetically modified organisms; and

. Crown Research Institutes; and

• pharmaceutical and animal health companies; and

. primary production industry groups involved in genetic modi-fication research; and

• universities.

Estimated compliance costs of the proposal

Because of the varying size and nature of field tests, the fact that thechanges involve providing information, and the timeframe withinwhich this statement has been prepared, useful quantitative esti-mates are not available. Qualitative breakdowns of the likely com-pliance costs are:

• For an application to release a genetically modified organ-ism that is a medicine, information must be includedshowing that the genetically modified organism cannotpersist viably in the physical environmental beyond thehuman or organism that is subject to treatment. The likelyincreased information burden is low to moderate. It is pos-sible that some applications may already include some of thisinformation (for example, the information may be provided toshow that the organism is unable to establish an undesirableself-sustaining population-see section 37(a) of the Act). Ifthis information could not be provided, the applicant wouldprobably be advised (in pre-application discussions withERMA) to not submit the application. Furthermore, there are

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no known pending applications to release a genetically modi-fied organism in the near future, so the actual increase in

compliance costs may be zero.

• The Authority must take into account the safety, ecologi-cal effects, and relative efficacy of the genetically modifiedorganism as a medicine, new medicine, or veterinary

medicine. This will be in addition to the current provisions inthe Hazardous Substances and New Organisms Act 1996 andmarks a departure from the assessment process, in that com-parative efficacy assessments are not undertaken for any othertypes of application made under the Act. Comparative assess-

ments are also not a requirement for the approval ofmedicines under the Medicines Act 1981 or the AgriculturalCompounds and Veterinary Medicines Act 1997. This will be

a source of compliance costs for applicants. The likely costs

would depend on the level of detail required by the Authority.At the least, it could involve including stand-alone, publiclyavailable information but, at the most, it could require newresearch. These are speculative estimates.

• Transitional provisions. If the transitional provisions cap-ture an application, the applicant will incur compliance costsby way of time and resources needed to participate in thereassessment of the approval, possible loss of time and invest-

ment if the approval is subsequently declined, or time andresources taken for additional controls to be placed on the test.There are no applications for field testing currently beingassessed by the Authority but, depending on the time it takes

for the proposed amendments to be enacted, it may be pos-sible for an application to be lodged and approved during thetransitional period. The Government has announced its inten-

tion for the law to apply from 29 October 2001 so any applica-

tions are made with knowledge of this intent.

Longer term implications of the compliance costs

There are no significant long-term implications of the compliancecosts, except that some of the amendments that incur compliancecosts are ongoing and will have implications for costs of doingresearch.

Explanatory note



Level of confidence of compliance cost estimates

The estimates are qualitative and provide an indicative assessmentof the areas likely to be affected and the costs likely to be involved.

Overlapping compliance requirements

There are no overlapping compliance requirements.

Steps taken to minimise compliance costs

Many of the amendments reflect current practice under the Hazard-ous Substances and New Organisms Act 1996.

The Government has announced its intention to pass this law, sofuture applicants will be aware of the implications of making anapplication, particularly in the transitional period.

It should be noted that there are also proposals being developed toreduce compliance costs for low-risk applications that will bedeveloped in the near future.

Consultation

Government agencies: Consultation has taken place with theNew Zealand Customs Service, Department of Conservation,Department of Prime Minister and Cabinet, Ministry of Agricultureand Forestry, Ministry of Consumer Affairs, Ministry of EconomicDevelopment, Ministry for the Environment, Ministry of ForeignAffairs and Trade, Ministry of Health, Ministry of Justice, Ministryof Research, Science and Technology, the State Services Commis-sion, Te Puni Kokiri, the Treasury, and the Environmental RiskManagement Authority.

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Hon Marian Hobbs

Hazardous Substances and New Organisms(Genetically Modified Organisms)

Amendment Bill

1 Title

Part 1


Commencement

Expiry

Purpose

Government Bill

Part 2

Release and field testing of geneticallymodified organisms

5 New section 25AA inserted

25AA This Part subject to Part 5A

6 New section 44A inserted

44A Additional matters to be con-

sidered for certain field tests


45A Containment and other con-

trols required for certain fieldtests

Contents

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9

New Part 5A inserted

Part 5A

Restrictions on approving

certain applications

73A Interpretation

73B Application

73C Authority must not consider

or approve certain applica-

tions during restricted period73D Additional information

required for certain

applications

73E Additional matters Authoritymust consider for certain

applications

73F No compensation

73G Expiry

Transitional provision

The Parliament of New Zealand enacts as follows:

1 Title

(1) This Act is the Hazardous Substances and New Organisms(Genetically Modified Organisms) Amendment Act 2001.

(2) In this Act, the Hazardous Substances and New OrganismsAct 19961 is called "the principal Act . 511996 No 30

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Part 1 cl 2



Part 1


2 Commencement

This Act comes into force on the day after the date on which itreceives the Royal assent.

3 Expiry

Sections 5 and 8 expire on the close of 29 October 2003.

4 Purpose

The purpose of this Act is-

(a) to require the Environmental Risk Management Autho-rity (the Authority) to consider additional matterswhen considering applications in relation to certaingenetically modified organisms and, if it approves theapplications, to include controls for secure containmentand other matters; and

(b) to impose a restriction, from 29 October 2001 to theclose of 29 October 2003, on the Authority consideringor approving applications to import new organisms forrelease or to release new organisms from containment ifthe new organisms are genetically modified organisms;and

(c) to provide exceptions to the restriction; and(d) to provide transitional provisions for approved applica-

tions relating to certain genetically modified organisms.

Part 2

Release and field testing of geneticallymodified organisms

5 New section 25AA inserted

The principal Act is amended by inserting, before section 25,the following section:

"25AA This Part subject to Part 5A

This Part applies subject to Part 5A."

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Organisms (Genetically ModifiedOrganisms) Amendment Part 2 cl 7


The principal Act is amended by inserting, after section 44,the following section:

"44A Additional matters to be considered for certain field

tests 5

"(1) This section applies to an application to field test a new

organism in containment if the new organism is-"(a) a genetically modified plant; or

"(b) a genetically modified animal.

"(2) In deciding whether to approve or decline an application, the 10

Authority must take into account-

"(a) the safety and any ecological effects of the field test;and

"(b) any alternative method of achieving the research objec-tives that is as effective as, or more effective than, the 15

field test.

6.

(3) The matters referred to in subsection (2) are in addition to thematters referred to in section 45."


The principal Act is amended by inserting, after section 45, 20the following section:

"45A Containment and other controls required for certainfield tests

"(1) An approval under section 45 to field test a new organism thatis a genetically modified plant must include controls to ensure 25that,-

"(a) if any reproductive structure on or above the ground

contains pollen, seeds, or other heritable material, the

material is securely contained, or removed and

destroyed, before the material is capable of being 30released:

"(b) when the field test is complete, any tubers, bulbs, rhi-

zomes, or other heritable material from the organismbeneath the ground is-

"(i) removed and either securely contained or 35destroyed; or

"(ii) destroyed without being removed:

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Part 2 cl 7



"(c) any reproductive structure or heritable material fromthe organism required for research purposes is securelycontained:

"(d) any reproductive structure or heritable material fromthe organism that is transported is transported in securecontainment:

"(e) all material associated with the test is capable ofbeing-"(i) removed; or

"(ii) destroyed without being removed.

"(2) An approval under section 45 to field test a new organism thatis a genetically modified animal must include controls toensure that the animals and their offspring-

"(a) are securely contained; and"(b) can be identified."

8 New Part 5A inserted

The principal Act is amended by inserting, after Part V, the

following Part:

"Part 5A

"Restrictions on approving certain applications

'73A Interpretation

In this Part, unless the context otherwise requires,-

"medicine and new medicine have the same meaning as insection 3 of the Medicines Act 1981

"restricted period means the period beginning on 29 October

2001 and ending on the close of 29 October 2003

"veterinary medicine has the same meaning as in section2(1) of the Agricultural Compounds and VeterinaryMedicines Act 1997.

"73B ApplicationThis Part applies to new organisms that are genetically modi-fied organisms.

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"73C Authority must not consider or approve certain

applications during restricted period"(1) If an application that subsection (2) applies to is made to the

Authority during the restricted period (whether before or afterthe commencement of the Hazardous Substances and New Orga- 5

nisms (Genetically Modified Organisms) Amendment Act 2001), the

Authority-"(a) must not consider the application; and

"(b) must not approve the application; and"(c) must return the application, and any fee accompanying 10

it, to the applicant as soon as practicable.

"(2) This subsection applies to the following applications:I.

Ca) an application to import a new organism for release:"(b) an application to release a new organism from

containment. 15

"(3) However, subsection (2) does not apply to the following

applications:

"(a) an application to import a new organism for release or

to release a new organism from containment if the

organism is- 20"(i) a medicine or new medicine-

"(A) to which the Minister of Health has given

his or her consent or provisional consentunder section 20 or section 23 of the

Medicines Act 1981; or 25

"(B) that is the subject of a clinical trialapproved by the Director-General ofHealth under section 30 of that Act; or

"(ii) the subject of an application to register the organ-ism under section 9 or section 26 of the Agricul- 30tural Compounds and Veterinary Medicines Act

1997 and the organism will be a veterinarymedicine used for therapeutic or prophylacticpurposes:

"(b) an application under section 47 of this Act. 35

"73D Additional information required for certain applications"(1) This section applies to an application-

"(a) referred to in section 73C(3)(a); and

"(b) made during the restricted period.

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Part 2 cl 8



"(2) An application must include information demonstrating that

the new organism, and any inseparable organism, that theapplication relates to cannot persist viably in the physicalenvironment beyond the human being or animal that is subjectto treatment.

"(3) The information referred to in subsection (2) is in addition to

other information required by or under this Act.

"73E Additional matters Authority must consider for certain

applications

"(1) This section applies to an application-"(a) referred to in section 738(3)(a); and

"(b) made during the restricted period.

"(2) In considering whether to approve or decline an application,

the Authority must take into account-

"(a) the safety and ecological effects of the new organism;and

"(b) the efficacy of the new organism as a medicine, newmedicine, or veterinary medicine compared to

medicines, new medicines, or veterinary medicines thatare used to treat the same condition.

"(3) The matters referred to in subsection (2) are in addition to the

matters that the Authority is required to take into account byor under this Act.

"73F No compensation

No compensation is payable by the Crown to any person for

any loss or damage arising from the restriction imposed bysection 73C.

"73G ExpiryThis Part expires on the close of 29 October 2003."

Transitional provision

This section applies to an approval issued by the Authorityif-

(a) the approval was issued in the period beginning on

29 October 2001 and ending on the close of the day

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before the date on which this Act receives the Royalassent; and

(b) had this Act been in force when the approval wasissued, sections 44A and 45A of the principal Act wouldhave applied to the approval. 5

(2) The Authority must review the approval within 5 workingdays after the commencement of this Act.

(3) The Authority must cancel the approval if, after reviewing theapproval, it decides that, had section 44A of the principal Actbeen in force when it considered whether to approve or 10decline the application, it would have declined theapplication.

(4) If the Authority cancels an approval under subsection (3), theowner of the organism must, within the time specified by theAuthority,- 15

(a) stop the field test of the organism; and

(b) dispose of the organism in accordance with the controls

as to disposal in the approval.

(5) The Authority must include additional controls, or substitute

controls, or both, if, after reviewing the approval, it decides 20that,-

(a) had section 45A of the principal Act been in force when it

approved the application, it would have included in theapproval controls relating to the matters referred to inthat section: 25

(b) had section 44A of the principal Act been in force when itapproved the application, it would have included in theapproval different controls.

(6) Controls added or substituted under subsection (5) applyimmediately. 30

(7) No compensation is payable by the Crown to any person forany loss or damage arising from the enactment or operation ofthis section.

Prke code: 3

Wellington, New Zealand: Published under the authority of theNew Zealand Government-2001 4374VIO

28-NOV-01175barl

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