50th Annual General Meeting of NZ Chemical Industry Council AGCARM

New Zealand Association for Animal Health and Crop Protection
Wellington

The modern world is no place for the environmentally complacent. Up until the last decade or so New Zealanders had been fairly reckless with their environment: we had to improve our practises and must continue to do so. There is a growing perception of a gap between New Zealand's claim to be a "green" producer and the evidence we have about actual environmental performance. I've been discussing possible strategies to nip scepticism of New Zealand's environmental commitment in the bud with a number of industry groups recently. There are several elements:

legislative,
objectives set by Government,
industry initiatives and codes,
funding under the PGSF.
Today I will focus on a legislative element. TThe Government pashe Hazardous Substances and New Organisms Act was passed last year. It replaced a raft of statutes which were inadequate to the task of meeting public concern and were riddled with gaps and overlaps in the management of hazardous substances and new organisms. It also set up a very powerful new agency called the Environmental Risk Management Authority.

The HSNO legislation was designed to do several things:

to take explicit account of the environment in managing all hazardous substances -- something which AGCARM members (unlike many other industries dealing with hazardous substances) are already familiar with,

to update the decision-making processes and criteria for introducing new organisms to New Zealand's island ecology,

to provide the legislative tools for the community to control genetic manipulation.
These latter two elements are important because New Zealand still earns much of its living from biological production - most of it from species not native to New Zealand. We've made errors before introducing species that have become pests which suggests caution, but we don't want to over react and miss out on opportunities in the field of biological control.

Genetic manipulation, over the long term, will prove to be an essential aid in keeping New Zealand competitive. Consumers demand high quality, blemish free produce with reduced chemical residues. We have to innovate. As the long title of your organisation says, the core business of this body is animal health and crop protection. It may well be that to achieve this quality of produce many of these traditional chemical products will disappear. Genetic manipulation both for producing a new generation of protection products or for the modification of crops or the organisms associated with them to resist disease will be one of the ways ahead.

The Act recognises that there are risks associated with introducing new species, as there are with managing hazardous substances. There may also be very substantial benefits. The HSNO Act contains explicit recognition of the fact that these risks and benefits exist and that they need to be managed. It is no longer acceptable to be careless, yet, being overly cautious could delay new environmentally and commercially superior solutions. It's a balancing act with conflicting messages whispered into either ear: ``it's better to be safe than sorry'' on one side, and ``fortune favours the brave'' on the other.

HSNO seeks to manage risk on two levels.

It explicitly provides for thresholds to be set for hazardous substances below which the Act does not apply because the community does not require explicit regulation. This is a realistic and sensible approach not found in older New Zealand systems or in many other jurisdictions. It is a conscious decision to get past the ``all chemicals are bad'' syndrome and recognise that they are part of our everyday lives. These cut-offs or thresholds are part of the regulations development process about which I know chemical industry council your members are providing active feedback. Having said that I think it must be made clear that I expect most of the chemical products of AGCARM members to be caught by the Act. After all most crop protection products are specifically designed to kill some organism or group of organisms in the environment (as are many animal health products). This clearly means such substances will be classed as ecotoxic.

The HSNO Act requires that a decision-making methodology be developed, approved by the Government and applied consistently. This methodology will apply both to the assessment and setting of controls on hazardous substances and to decisions about new organisms. The Environmental Risk Management Authority has been given this task. A rigorous and consistent approach will be essential if the authority's determinations are to be authoritative.
New Zealand will become one of the first countries in the world to go about setting standards in fully public hearings and give members of the public the right to request reviews. The Act embodies the principles of transparency and public participation.

This will represent a significant change for the agrochemical industry, as much of the complex business of assessing these substances has historically taken place out of the public limelight. However this has, as you will be only too aware, resulted in public concern and protest about these assessments. Over the years I have lost count of the letters which have crossed my desk voicing these protests.

The transparency embodied in the Act should allow these debates to be had "up front" with the best possible information. This does mean having good information about the substances being assessed. As technology improves, making chemicals and biocontrols more sophisticated, it is reasonable to expect corresponding attention being paid to analysis of the environmental effects of a hazardous substance or new organism.

As new scientific information becomes available the reassessment procedures in the Act will be used to re-evaluate approvals for hazardous substances. Of course this applies equally to new scientific information which shows that substances were not as hazardous as first thought. In some cases reassessment could be used to relax the constraints on the substance in question. The tools the Act provides, including the methodology and the regulations, need to be as well designed as possible.

Your industry is I believe uniquely placed in that it is used to complex approval process and to providing detailed information about the substance it seeks to have approved. I therefore do not share the view that the Act will somehow impose strictures which will make life intolerably difficult for groups like AGCARM. On the contrary, the history of agrochemical approvals you can draw on here and elsewhere in the world makes you extremely well placed to operate under the new regime.

I strongly recommend you provide considered and specific comment on the discussion document which ERMA will be circulating for comment in the near future.

ERMA is an agency which will come to the forefront of public attention as a lightning rod for community concerns about hazardous substances. Making the most of your opportunity for input at this stage will ensure not only that your voice is heard but that the considerable expertise in your member organisations is applied to making the methodology workable in practice.

A well devised methodology is necessary to assist ERMA to deal satisfactorily with the question of `risk'. No special weight is given by the Act to the three guiding considerations: environmental, cultural and economic. It is the methodology that will guide ERMA as to where to find the balance.

The management of risk is as much an art as it is based on science, involving value based on technical information that is frequently incomplete. At the bottom, it involves judgements about just how risk averse we are when it comes to the risks posed by hazardous substances or new organisms.

An absolutely libertarian, free-market approach would say that the State has no role in arriving at collective assessments of risk aversion - every citizen should apply his or her prudential standards and out of those millions of discreet judgements a socially derived norm will spontaneously emerge.

We have not taken that laissez faire approach. Rather, in promoting this legislation we have implicitly signalled the view that there is a minimum level of risk aversion in the community that means we do not want to expose ourselves to an unlimited range of risks, and that that sentiment is best captured through a regulatory system that imposes a uniform standard of acceptable risks.

Where personal hedonism or convenience is involved New Zealanders tend to be careless of risk (as with vehicle emissions or junk food). But where government agencies or companies (especially big ones) are involved, we are often extremely risk averse. Through public pressure, substances used by chemical companies to combat unwanted plant and insect species are becoming more and more pest specific and less and less toxic. But never has opposition to anything remotely resembling a `chemical' been more all pervasive.

Deciding what constitutes an acceptable risk is fraught with difficulty and influenced frequently by contradictory attitudes. It highlights the necessity of having a clear methodology in place to form the basis on which ERMA can function.

Without one, there is a danger that important tools available to those charged with protecting New Zealand's biosecurity could well be disabled through public concern. Yet it would be foolish voluntarily to bind our hands and leave the country defenceless against pest incursions.

I want to assure you the establishment of ERMA will not usher in a period of extreme caution. It will set up a permanent methodology to weigh up risks and benefits. The benefits carry as much weight as the risks.

The other major job to be done to bring the HSNO Act into force is completing the necessary regulations. I have already referred to the fact that the council Association is working closely with the Ministry for the Environment in developing these.

The HSNO Act is 'effects based' so the regulations will be drafted in terms of managing the risk from substances with particular types of effect. They will not specify the technologies to be used to achieve the level of risk management acceptable to the community. That is the job of those like yourselves whose business depends on these substances.

Regulations will be the primary tool of the ERMA in setting those acceptable levels of risk management as the end result of an assessment.

So it is important that you continue to do two things;

actively assist in the design of the performance based regulation being developed under the Act,

continue to document your best practices so that they can be used to help in this design and in codes of practice developed under the Act (or statements of the technical means available to achieve the performance specified in regulation).
The Council's Responsible Care programme is an excellent case in point. The documentation is impressive. The programme has also begun to develop ways to ensure compliance with the standards of risk management expected. I am aware that AGCARM has been an active participant in programmes and documentation such as the GROWSAFE users Code of Conduct and training programme and the Agrochemical Distributors accreditation programme and manual. These are precisely the sorts of initiatives which are required.

New Zealand is a trading nation. We can't ignore the voice of the market. There are real market place advantages to be gained from being able to verify, through good practice and regulation, the clean, green environment which is the backdrop for our production systems. At the same time, competing in world markets requires acccess to the latest technologies.

The bottom line for ERMA is to balance these two impulses: to facilitate the use of new substances and organisms when the benefits can be demonstrated and the risks managed, and to protect the environment from risks which cannot be sustained or justified. It's a system where all parties will have an opportunity to participate and they will have a clear idea of what is expected of them.

I wish you well in your deliberations over the remainder of your annual meeting and conference.