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The Organic Products Bill, which is currently at the Select Committee stage, proposes to introduce a regime to regulate claims made by businesses that products are organic (known as making an “organic claim”). The Bill establishes a framework for the development of regulations and national organic production standards as well as processes that businesses must follow to obtain approval to make an organic claim.
Current regulation of organic products
Currently, there is no specific legislation that regulates organic products in New Zealand. However, businesses that label or market products using the term ‘organic’ must comply with the Fair Trading Act 1986. The Fair Trading Act prohibits a person from making false, misleading or unsubstantiated representations about goods or services in trade. Accordingly, businesses that make organic claims must be able to substantiate that the product is in fact ‘organic’. This is generally done by showing that the product was produced in accordance with one of the private standards which have developed in the absence of specific legislation. Inconsistency between private standards can result in confusion for consumers and businesses around which organic practices provide an adequate basis for organic claims.
Introducing the Organic Products Bill
Rather than defining the term ‘organic’, the Bill proposes to address this issue by enabling regulations to prescribe mandatory organic standards in respect of products or classes of product labelled or marketed as organic. Products covered by an organic standard could not be described as an organic product unless the product complies with the standard. Accordingly, whether adequate substantiation for an organic claim exists would generally depend on the requirements of the organic standard for the product.
The Bill anticipates that the organic standards will regulate each step of the supply chain, including the production, preparation and processing of organic ingredients, components or products as well as all aspects of their handling (including storage, packing, labelling, transport, and wholesale). The Government has indicated that the initial focus will be on the development of regulations and standards for organic food, beverages, and plant and animal products, with regulations and standards for other products to be introduced at a later stage.
Generally, only persons who are approved ‘operators’ could describe a product as an organic product. Similarly, only persons or entities who had successfully applied for ‘recognition’ could carry out functions and duties relating to organic compliance. Certain exceptions would apply in both cases.
Another intended purpose of the Bill is to facilitate international trade in organic products. The Government is of the view that the Bill will align the regulation of organic production in New Zealand with its major trading partners, who increasingly expect comparable regimes from their own trading partners. The Bill also contains restrictions on the import and export of products described as organic products unless certain criteria are met.
Where to from here
The Bill has progressed through its first reading and has been referred to the Select Committee for examination. The Select Committee report may include recommendations on changes to the Bill which would then be debated on in its second reading.
If you would like further information about the proposed changes, or how the Bill may affect your business, please get in touch with our Business Advice Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
