Community Management of GMOs

Issues, Options and Partnership with Government

Executive Summary

1. This report investigates options for local authority management of genetically modified organisms (GMOs), and follows the preparation of an interim opinion by Dr Royden Somerville QC.

2. The use of GMOs is controlled at the national level by the Hazardous Substances and New Organisms Act (HSNO). It was Government's intention at the time this act was developed that HSNO would define national minimum standards and local authorities would be free to set stricter standards to apply within their territories. This option remains open to local government through use of the Resource Management Act (RMA).

3. Such action would be part of a partnership between local authorities and central government with respect to GM activities. Rather than either having exclusive responsibility, management of GMOs would be shared - as first envisaged.

Sources of Risk

4. The activities of principal concern to local governments are those involving the outdoor use of GM organisms.

5. A leading economic risk is the difficulty in preventing GM production from causing trace contamination in non-GM crops. High levels of consumer resistance to GM foods in Europe and the wealthier Asian nations have led to market rejection of conventional foods due to trace GM contamination.

6. Key environmental risks include: effects on non-target species, invasiveness and reduced biodiversity. There is also uncertainty with respect to the effect of GMOs on soil ecosystems and effects arising from the use of plants to produce pharmaceuticals and other materials.

Uncertainty of Outcomes from ERMA Process

7. HSNO establishes the legal framework for assessments by the national regulator, the Environmental Risk Management Authority (ERMA). This provides for minimum national standards to be set for GM activities.

8. The act invests a great deal of discretionary authority in ERMA and sets remarkably few limitations on the outcomes it can deliver. From a local authority perspective, this results in uncertainty on two levels:

• Whether ERMA will agree with and act on certain concerns held by local governments; and
• Whether ERMA will exercise the same degree of caution as would local governments in managing those risks it agrees need to be addressed.

9. One area of concern is that HSNO makes the exercise of precaution a matter for ERMA's discretion. Precaution is an option, not a requirement. ERMA states that it would be acting legally if it did not exercise caution.

10. A further area of concern is financial liability in the event of harm being caused. If an agent making use of GMOs has inadequate financial resources to cover environmental damage resulting from its activities, the burden will tend to fall on local government.

11. Under HSNO, an agent using GMOs is not liable for harm caused as long as it obtains and abides by an ERMA consent. Nor does HSNO require ERMA to ensure that an applicant is financially fit and so able to pay compensation should harm result.

Setting Controls Under the RMA

12. Should a local authority determine that particular risks were of concern to its community and that it wished to ensure certain outcomes as a result of this, then it can take action using other statutes. Of the existing statutes available to local government, the RMA offers the most durable, binding and well targeted instrument for regulating the outdoor use of GMOs. The relevant RMA provisions are not in conflict with those of HSNO and the two statutes can operate side by side.

13. The RMA provides a firm foundation for district councils to apply a precautionary approach in regulating the outdoor use of GMOs. The courts have ruled that a precautionary approach is inherent in the act. The RMA also provides a mechanism to address liability and compensation concerns. A community can put in place a liability regime requiring those engaging in a GM release to pay compensation for harm caused by an approved release.

14. Under the RMA, the appropriate scope for evaluation of GM concerns is the outdoor use of GMOs, and in particular field trials and releases, expressly including: genetically modified food crops, trees, animals, and pharma crops.

15. Not all categories of GMO use need be regulated with the same degree of precaution. This may result in two or more different sets of rules in order to group and match similar categories of risk with the appropriate controls.

16. Such rules can be argued to be efficient and effective in terms of RMA section 32 on at least two grounds:

• ERMA can not be relied on to provision against particular risks.
• Local authorities may reasonably wish to set higher standards for controls than ERMA sets. There is no legal barrier to councils setting higher standards than those specified by ERMA under HSNO.

17. Advice from Government questioning the likelihood of meeting the section 32 test did not adequately investigate these grounds.

18. Through its statements, Government has given the impression that HSNO and the ERMA process are extremely stringent - a "gold-standard" of regulation. However, at the same time, it has explicitly declined to set enforceable principles and standards that would provide surety that stringency would be the outcome of the regulatory regime. The result is a significant gap between expectations and the legal requirements. The setting of rules by local government such that selected community determined outcomes are assured can be an efficient and effective response.

HSNO Reform

19. The broad alternative to use of the RMA is for local government to press for the amendment of HSNO. The rationale for this is to provide a simpler means for local government to achieve the same regulatory effect as is currently available to it under the RMA. Reform should be made on two levels and provide for:

• The ability for local authorities to issue policy statements on GM activities under an amended HSNO, such that ERMA would be required to accommodate these policy statements in its decisions;
• The option to examine individual applications in tandem with ERMA assessments and, if required, to set stricter controls to apply within a local authority's district.

20. The proposal is for local authorities to have the opportunity, but not the obligation, to work in tandem with ERMA. Such reforms would provide a more direct means of achieving the desired outcomes set by a community, while also giving an explicit statutory route and greater certainty to ERMA applicants. LGNZ is the party best placed to investigate amending HSNO and advancing proposals to Government.

Next Steps

21. A next stage of work will involve local authorities studying the risks to the region and at the same time drafting control options if the analysis suggests these are required. This process does not commit a council to implement such controls but it is the next step towards such an outcome. It would bring before a council information on the scope and severity of the risks at the same time as detailing the options for their control and the factors relevant in deciding between the options. Such work is required irrespective of whether the statute that would be used is the RMA or an amended HSNO Act.

22. A key part of this process would involve examining the outcomes a council wishes to see and determining which can be expected to be delivered by ERMA and which it wishes to ensure are delivered through its own initiatives. Ideally, this work would be done as part of a joint project between Northland local authorities. The analysis would provide a common resource base for councils to work from and assist the evolution of a uniform region-wide approach.

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