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If an industry organisation is not a legal entity in its own right, can it sign the Deed?
An organisation must be a body corporate to sign the GIA Deed. If an organisation that wants to sign the Deed is not currently a body corporate, it must become one before it can sign.
If you have questions about whether or not your organisation is a body corporate, or the appropriate structure and implications for your organisation, you should seek independent legal advice.
- Do you have to be a Commodities Levy Act organisation to sign the Deed?
No. You need to be a body corporate, but you do not need to have been established to administer a commodity levy.
3. How much is it going to cost an industry to be part of the GIA, and what are the consultation requirements?
The up-front costs of signing the Deed need not be great. Any additional cost will depend on how much the organisation is currently spending on biosecurity, and what it is spent on.
Initial costs related to the GIA fall into three areas:
a) Getting the agreement of industry members to sign the Deed and presenting this in a submission to the Minister for Primary Industries
b) Meeting the minimum commitments outlined in section 3.2 of the Deed
c) Funding the industry organisation’s involvement in Deed governance processes and attending the Biosecurity Forum
As a Deed Signatory, an industry organisation makes a future commitment to:
d) Cost share any biosecurity response that it benefits from starting from 1 July 2017
e) Pay its share for readiness activities agreed in any Operational Agreement signed.
An industry organisation must consult with its sector to be eligible to sign the Deed. This may have a cost associated with it – depending on how the industry organisation chooses to get this agreement. For instance, an industry organisation may decide to use a combination of existing engagement methods such as newsletters, field days, annual general meetings, conferences or regional visits by the organisation Board and executive to raise awareness of the Deed and seek feedback and approval from their members to sign it. Alternatively, it may decide that a formal vote is the best way to get a clear message from its members.
4. How do we work out if the benefits of being part of the GIA outweigh the costs?
The business case guide developed by the Secretariat, and the associated guidance on establishing the value proposition may help you to identify whether the Deed offers your industry sufficient value to sign it.
While an industry organisation may have reservations about paying for a response, being part of the decision-making process offers value – including taking part in decisions to initiate or cease a response. The Government can recover costs from non-signatories without involving them in decision making.
Industry organisations also derive value from knowing and understanding the biosecurity risks facing their sector, having confidence that the risks are being appropriately managed to reduce the chance of them entering NZ and having processes in place to reduce their impact if they do come in.
5. How can industry organisations limit the cost of being involved in the GIA?
The Deed provides a framework for joint decision making – meaning signatories pay only for the activities that they agree to. In addition, the Deed enables industries to set fiscal caps – which cannot be exceeded without the organisation’s agreement. The impact of an organisation reaching its fiscal cap in a response situation, and whether it would need to withdraw from the response, would need to be discussed and agreed by the signatories involved in the response.
6. Will low-value sectors be excluded from cost-recovery?
MPI’s view is that cost recovery will occur where it is equitable and efficient for MPI to recover costs related to readiness and response activities. MPI has expressed no view on thresholds (e.g. the annual value of an industry) for cost recovery, as the decision to cost recover will depend on the circumstances that relate to specific readiness and response activities, including decisions on whether such activities are undertaken.
7. At what stage will MPI recover costs from non-Signatories?
Cost recovery will occur once the cost-recovery framework is in place, and when MPI determines it is equitable and efficient to recover the costs of readiness and response activities from non-
Signatories. MPI is currently aiming to have the Framework in place by July 2016. It is intended that OAs will identify non-signatory beneficiaries and the portion of costs attributable to them.
8. What is a sector?
In the Biosecurity Act (section 100Y) a sector means:
a) a group made up of businesses that are engaged in one or more of the following activities:
o producing animals o producing animal products o harvesting animals o harvesting animal products o producing plants o producing plant products
o harvesting plants o harvesting plant products o processing animals, animal products, plans or plant products that have been produced or harvested
OR
b) a group of businesses that, although engaged in a different activities from any of those described above, would still benefit directly from readiness or response activities
It is up to the industry organisation to define the sector it represents.
One approach to defining a sector is to base it around common biosecurity concerns. This can help clarify the relationship between who is impacted (by a biosecurity risk, the decisions made), who pays and who makes the decisions. This will also identify which industry organisation is best placed to represent the sector.
Another approach is for a sector to include those who share the impacts of the same biosecurity risk. For example, the ‘meat’ sector could include both producers and the processors that are dependent on the supply of animals for their business, because they will both be impacted by a disease that disrupts the supply chain. Conversely, the grain and seeds industry is made up of growers and traders. Traders are able to redirect production to other plant species and reduce the impact of a pest or disease on a host plant.
9. Can we establish an organisation specifically for Deed purposes?
Yes. If you define your sector and there is no existing organisation that can or wants to represent the collective interests, then you can create one for Deed purposes. It will have to meet the same eligibility criteria for signing as any existing industry organisation does.
10. What happens if two potential Deed Signatories define their sector in a way that overlaps?
The industry organisations signing the Deed must represent the interests of a defined sector. Where there is the potential for industry organisations to overlap in their sector definitions the organisations should work together to identify a solution that is mutually agreeable.
There are several models for representation that a sector could consider, such as:
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Forming a separate organisation to undertake wider biosecurity activities including the GIA
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Nominating an existing organisation within the sector to sign the Deed
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Establishing a separate organisation to represent the sector under the GIA
If two organisations with an overlapping sector apply to the Minister to sign the Deed at the same time, the Minister will consider both applications to determine which will represent which portions of a sector. The Minister may decide to not approve one or both organisations.
If an organisation’s application overlaps with an existing Signatory’s sector, the Minister will take this into account when making a decision.In either case, the Minister will consider the proportion of an industry the organisation is representing, the efforts the organisations have made to come to an alternative arrangement, and the reasons behind the separate applications.
11. For industry organisations that represent a range of crops can the organisation sign for some crops but not others?
Yes. An organisation needs to define the sector it intends to represent and establish mandate for that sector in order to sign the Deed.
12. Can an industry organisation represent more than one sector?
Yes. The industry organisation will need to demonstrate it has mandate to represent each sector if it wants to represent more than one sector.
An industry organisation can only represent industry sectors for which it has obtained mandate and has had an application approved by the Minister, as per the requirements in the Biosecurity Act. This means that while an industry organisation will only need to sign the Deed once, it will typically need to make separate applications to the Minister for each sector it wants to represent (Note: A single application could be made for multiple sectors). The industry organisation can only represent additional sectors once the applications have been approved by the Minister and gazetted. .
The industry organisation’s rules and constitution will determine how it consults with its members when deciding to represent additional industry sectors.
13. What (engagement and reporting) mechanisms support gaining and demonstrating mandate?
The Biosecurity Act does not specify the use of any specific consultation or reporting methods.
Industry organisations are best placed to know what communications and consultation methods work given the structure and makeup of their sector. They have a range of consultation and communication tools available to them, including road shows, field days, conferences, regional discussion forums and AGMs.
Industry organisations can use existing communications and consultation channels to elicit the views of their members. But in planning engagement and reporting, an industry organisation should be mindful that its application to the Minister must address the requirements outlined in Part 5A, section 100ZA of the Biosecurity Act. The industry organisation must provide adequate evidence of its engagement with the sector and their approval.
14. What level of evidence do you require to show we have consulted sector participants?
The application to the Minister must include evidence of having consulted the sector on the matters required in s 100ZA of the Act, and the outcomes of the consultation.
The application should include the feedback received from sector participants, an analysis of this feedback and a clear explanation of how this feedback has been taken into account by the organisation.
Appropriate evidence includes:
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Consultation plan, or an outline of who was consulted and how they were consulted, and the matters they were consulted on
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Consultation documents or the specific proposal sector participants were asked for feedback on
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The feedback received and the organisation’s analysis of and response to it
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Meeting minutes
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Voting or referendum results
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Presentations
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Records from Q&A sessions
Where consultation is through a meeting, be sure to capture the key points in presentations, the number of attendees and their feedback during and after the meeting. Record questions and responses as this will provide evidence of industry member support or otherwise. Actions to address concerns might also be discussed and agreed at meetings.
15. How do you show mandate? Is a vote of members required?
A vote to demonstrate mandate is not required – unlike the agreement requirements for a commodity levy which specify that a vote is needed. Each industry organisation will know how best to engage with its members and demonstrate their collective agreement to signing the Deed.
However, a vote is a simple and unequivocal way of identifying the level of support to sign the GIA, and can be useful in demonstrating that an industry organisation is representative of a sector. Other options open to industry organisation include:
Written documentation is very useful when providing evidence in an application, therefore it is advisable to make records and minutes of sector meetings and road shows where the GIA and representation is discussed as part of the consultation process.
16. What percentage of the sector needs to support the industry organisation proposal to sign the Deed? What constitutes a reasonable proportion of sector participants?
There is no absolute number attached to the percentage of sector members that must agree to the proposal to sign the Deed.
The Minister will consider the proportion of the sector that supports the proposal, both as a percentage of the total number of producers, and the percentage of value of production.
The application to the Minister should explain the level of support within the sector, the concerns sector participants have raised during the consultation, and how the industry organisation has or will address any concerns to reduce them to an acceptable level.
To illustrate levels of support, industry organisations can draw parallels between measures of support (e.g., voting rates, attendance at meetings) for the GIA with the results on other consultation or decision-making process.
17. What if only a small proportion of sector participants respond to a consultation or questionnaire? Is silence or non-response taken as support?
No. Non-response or silence will not be taken as indicating support. It is important that the application to the Minister clearly states the response rate in terms of proportion of businesses in the sector as well as percentage of the industry’s total production. This will allow the Minister to determine whether he or she is satisfied that the organisation represents the interests of the sector.
18. How do you consult across a sector with thousands of members?
Industry organisations are in the best position to know what works in consulting with their sector. We suggest you build on your proven communications channels for the purpose of gaining mandate to sign the Deed. Bear in mind the outcomes you need from the consultation – in particular that you need to provide evidence that you have met the requirements in the Biosecurity Act.
19. How do we know we have followed a process that is robust enough for the Minister to accept?
Contact MPI early to discuss the approach you plan to use and maintain contact with MPI throughout the process to monitor progress as you consult with your members and to analyse the outcomes of the engagement in writing up your application.
MPI understands that each industry organisation and sector is unique, and will provide advice that takes this into account.
MPI’s advisers are available to review the engagement strategy with industry, both before and during the consultation period. They can advise on approaches that are likely to be acceptable to the Minister. The processes to demonstrate eligibility are untested and over time there will be more clarity around the Minister’s considerations and decisions. For this reason, industry organisations are encouraged to keep in touch with MPI advisers to ensure that new information from experience with the process is fed into their engagement with members and the resultant submission.
20. Why do we need to consult with sector participants?
The Biosecurity Act requires it for a number of reasons:
a) It will protect your industry organisation and the individuals who will represent your organisation in joint decision-making for biosecurity readiness and response
b) It will ensure that the people who are making decisions have the authority to do so
c) Industry members will know and understand what the Deed commits them to and what arrangements will be in place to meet those commitments
21. My organisation was set up to represent grower interests around biosecurity. Don’t I already have their mandate to sign the Deed?
Not necessarily. The engagement with an industry organisation’s members on the establishment and operation of the organisation may go a long way towards achieving mandate. However, there are specific commitments in the Deed that will require explicit agreement of sector participants – particularly around joint decision-making and cost-sharing – that may go beyond the initial role of the organisation. Nearly all industry organisations pre-date the Deed and their original mandate is likely to need reviewing and updating to accommodate the Deed commitments.
Industry organisations need to ensure that sector participants understand what the Deed specifically means for them and the commitments that will be made on their behalf – even though it is the industry organisation that signs the Deed. The industry organisation signs the Deed for the collective interests of its sector.
22. I have briefed my members (sector participants) on the Deed in newsletters, at AGMs, grower meetings – why do I need to do more to meet consultation requirements?
The Minister needs to be satisfied that the members of industry organisations fully understand what signing the Deed means for them and agree to the representation arrangements being proposed. The consultation process enables an organisation to obtain this agreement and demonstrate it to the Minister, and show that the statutory requirements have been met.
23. How can we describe our funding plan when we don’t know what our costs are going to be because we haven’t developed an Operational Agreement?
The funding plan can be described at a high level and could be based on securing the funds to a specific spending limit, such as a fiscal cap for responses. Whereas, the development of an operational agreement to undertake specific readiness activities [co-funded with MPI] could be described as occurring through the industry organisation’s annual business planning and budgeting processes (including approval process) given that the cost to undertake specific readiness activities would be known quantities once an Operational Agreement has been negotiated.
The plan should outline how you will go about securing or accessing funds, not just the options you have for doing so.
If you are considering establishing a Biosecurity Act levy to fund some or all of your Deed commitments, the required engagement with your members to secure their approval to establish the levy can be undertaken as part of your Deed mandate engagement or as a separate process after signing the Deed. Some industry organisations are proposing a staged approach to securing mandate to sign the Deed and the required funding. You should take into account whether you need the alternative funding arrangements for the GIA that are enabled by the Biosecurity Act.
24. We don’t have a levy in place yet, but we are working towards it. How advanced does a levy plan need to be to satisfy the Minister?
It would be sufficient to state the intent to progress a Commodity Act or Biosecurity Act levy that would include the ability to use monies to fund specific GIA obligations, such as fund readiness activities negotiated under an Operational Agreement. This intent should be a reflection of consultation that has occurred with an organisation’s members regarding funding arrangements, and not just a statement made by the organisation’s Board.
In general, a Biosecurity Act levy is preferred over a Commodity Act levy, particularly for funding response commitments. The Biosecurity Act levy would need to be in place by 1 July 2017 when cost-sharing for responses starts. The Biosecurity Act levy would need to have a maximum rate that would be sufficient to repay the maximum amount of a loan within ten years in the event that an industry organisation requires and is granted a Crown loan, though the Biosecurity Act levy could have a zero rate until a response occurs. Note that Crown loans are available as a last resort and therefore will be subject to a number of requirements, including that all other reasonable options were exhausted.
Some industries may already have a Commodity Act Levy in place that includes a specific provision to use the money for biosecurity activities and/or the purposes for which the levy money may be used are sufficient to include GIA activities e.g. readiness and response activities. This would need to be stated during consultation and in the application to the Minster.
25. Who can I talk to?
For more advice from MPI on demonstrating eligibility to sign the GIA Deed, contact the MPI contact for GIA operational matters on our Contact page.