Appendix 2: Legislation
Competition Law
Commerce Act 1986
The Commerce Act promotes economic efficiency and enhances consumer welfare by protecting the process of competition. It prohibits anticompetitive behaviour and mergers and acquisitions, and allows price control to be introduced where competition is limited or likely to be lessened.
As an independent body, the Commerce Commission is responsible for making certain quasi-judicial decisions, and enforcing the Act in the High Court. There is also a right of private action to the courts for most offences. The Minister, either directly or by Order in Council:
- May transmit statements of government economic policy to the Commission. The Commission must have regard to these statements when exercising its statutory functions.
- May impose price control or require the Commission to enquire into the need for price control on specified goods or services.
- Appoints members of the Commission and may terminate appointments in limited circumstances.
- Lays the Commission's annual report before Parliament.
Regulations can be made covering forms, fees and procedures.
Intellectual Property
Intellectual property is a generic term for various rights the law (both statutory and non-statutory) accords to protect economic investment in creative effort. There are seven intellectual property statutes. Two provide rights automatically, while the other five grant or extend property rights by way of registration systems.
The statutory responsibility for registering industrial property (patents, trade marks, plant variety rights and designs) lies with Commissioners appointed under the State Sector Act. The Deputy Secretary of the Ministry's Business Services branch holds these positions. The Deputy Secretary will also become the Registrar of Registered Geographical Indications if the Geographical Indications (Wine and Spirits) Registration Bill is enacted.
Copyright Act 1994
The Copyright Act is designed to promote investment in artistic creativity and intellectual effort by providing exclusive rights to the creators of original works. Copyright comes into existence automatically and applies to original creations such as literary, musical and artistic works, sound recordings, films, broadcasts and computer software. To encourage the use and dissemination of intellectual effort, the duration of copyright protection is limited, generally to 50 years after the creator's death or 50 years from the time the work is made or first publicly available.
The Copyright Tribunal determines disputes about the granting, entitlement to, and operation of, copyright licences. The Minister is responsible for recommending the appointment of members of the Tribunal.
Patents Act 1953
The Patents Act is intended to promote innovation by creating incentives to invest in research and development in new products and processes. It does so by providing for a 20-year exclusive property right to be granted in exchange for disclosure of the invention. The Act also regulates the patent attorney profession.
Regulations may be made on such matters as fees, forms and procedures, and regulating the keeping of the registers of patents and patent attorneys.
Trade Marks Act 2002
Trade marks provide consumers with low-cost information about products and their origins. The Trade Marks Act encourages manufacturers to invest in the quality, innovation and reputation of their brands by providing for an exclusive right to use a mark in relation to specified goods to be granted.
Regulations may be made covering such matters as fees, forms and procedures, and regulating the keeping of the register of trade marks.
Designs Act 1953
The Designs Act aims to promote innovation and creativity by creating incentives to develop designs for manufactured articles that have visual appeal. The Act provides copyright protection for up to 15 years.
Regulations may:
- provide for excluding from registration articles that are primarily literary or artistic in character
- be made on such matters as fees, forms and procedures, and regulating the keeping of the register of designs.
Layout Designs Act 1994
The Layout Designs Act aims to promote innovation by automatically providing copyright-type protection to original layout designs for integrated circuits. The need to provide such protection arose mainly from the availability of peeling-off reverse-engineering techniques that can be used to reveal, layer by layer, the circuit layout used to produce the chip.
Orders in Council may designate convention countries to which reciprocal layout design protection will be afforded.
Plant Variety Rights Act 1987
The Plant Variety Rights Act encourages investment in the development of new plant varieties by providing for proprietary rights to be granted to breeders and developers for 20 or 23 years. The grant of a plant variety right gives the exclusive right to sell and collect any royalties on seed or reproductive material of the variety.
The Commissioner of Plant Variety Rights has statutory responsibility for granting plant variety rights.
Regulations may be made covering such matters as fees, forms and procedures, and regulating the keeping of the register.
Geographical Indications Act 1994
The Geographical Indications Act provides consumers with accurate information about the geographic source of goods (for example, wine or olives) by providing a system for registration of geographical indications, within New Zealand and internationally, and prohibiting false indications of a geographic origin.
Insurance
Seven statutes regulate insurance markets. Their main purpose is to provide adequate safeguards for insurance policy holders in order to protect their investments from dishonesty or negligence, and to encourage reasonable risk taking. They also provide frameworks for adequate corporate governance and, in some cases, prudential supervision.
Accident Insurance Act 1998
This Act provides for the regulation of residual private accident insurance once workplace accident insurance has been underwritten. The Ministry is responsible only for Part 8 of the Act, which establishes the regime for the registration and prudential supervision of accident insurers.
Insurance Companies (Deposits) Act 1953
This Act requires general insurers to post a deposit in the form of approved securities with the Public Trust Office before they can undertake insurance business, including underwriting, in New Zealand. The Act also requires general insurers who have made a deposit with the Public Trust Office to file annual audited financial statements.
Insurance Companies (Ratings and Inspections) Act 1994
This Act applies to insurers, except captive insurers, carrying out general and fire insurance in New Zealand. The Act requires general insurers to obtain and maintain a rating of claims-paying ability from an approved ratings agency. The Registrar of Companies is responsible for approving ratings agencies on recommendation from the Insurance Council of New Zealand. Currently there are two approved ratings agencies: Standard & Poor's and AM Best.
The Act also provides the Registrar with inspection powers should he/she deem it necessary to assess further the insurers' ability to pay their outstanding claims.
Life Insurance Act 1908
This Act provides for the regulation of life insurance companies. It applies to companies that provide products that include life insurance or annuities products, including the re-insurance of these products. This Ministry is responsible for Part 1 of the Act, which relates to life insurance companies. Part 2, which regulates life insurance policies, is administered by the Ministry of Justice.
Life insurance companies must forward their audited financial statements to the Ministry. The Government Actuary can, if he/she thinks fit, report to the Minister of Commerce. The Minister is required to present that information to Parliament annually.
The Minister also has the power to ask a court to appoint a judicial manager where he/she feels that a company is in difficulty and will be unable to meet its obligations to policyholders. The Minister has powers to prohibit the transaction of business by the entity for whatever period of time he/she thinks fit if non-compliance with the Act continues for more than three months.
Superannuation Schemes Act 1989
This Act requires superannuation schemes to be registered with the Government Actuary. The Government Actuary will register the scheme provided the criteria are met and the documents stated in the Act are received.
The trustees of a superannuation scheme act as prudential supervisor and the Act imposes fiduciary duties on them. The Government Actuary is also responsible for monitoring the superannuation market and enforcing the Act.
Mutual Insurance Act 1955
This Act provides for a mutual association wishing to provide insurance to its members to be established and regulated. This legislation is effectively redundant as no associations are registered under this Act.
Marine Insurance Act 1908
This Act regulates insurance contracts specific to marine losses.
Financial Markets
The purposes of the statutes listed under this heading are to provide for effective information disclosure, with the aim of promoting investors' effective decision-making and capital markets' efficient functioning.
Investment Advisors Disclosure Act 1996
This Act regulates the provision of investment advice by requiring those who give advice to make certain disclosures. These disclosures are divided into two categories:
- Mandatory disclosure: information that must be provided to everyone to whom advice is being given. It includes such things as convictions for dishonesty, bankruptcy, and prohibitions from taking part in managing a business and money handling procedures.
- Request disclosure: investors may request disclosure of such things as qualifications and experience, details of remuneration and any advantage the advisor may gain from giving advice.
The failure to comply may result in the advisor being ordered to cease giving advice, a court injunction, or being ordered to disclose information in any civil action taken against the advisor.
Securities Act 1978
This Act regulates the offering of securities to the public. It also establishes the Securities Commission.
The Act outlines disclosure requirements for issuers wishing to offer securities to the public. These requirements relate to equity, debt and participatory securities, as well as interests in superannuation schemes, unit trusts and contributory mortgages. Also, when offering securities, issuers must prepare a registered prospectus and provide investors with an investment statement. An investment statement is intended to provide the prudent but non-expert investor with certain key information to assist them in making investment decisions.
The Minister has responsibility for recommending to the Governor-General the appointment of members to the Securities Commission.
Securities Markets Act 1988
This Act prohibits insider trading and contains disclosure requirements for substantial security holders and directors and officers of public issuers, and a continuous disclosure regime for public issuers. The Act establishes a co-regulatory regime for securities exchanges where exchanges act as the front line regulators of their markets, with the Securities Commission having a supervisory role.
The Act also regulates the market for dealing in futures contracts and gives the Securities Commission additional powers to authorise futures exchanges.
Sharebrokers Act 1908
This Act provides for the registration of stock exchanges in New Zealand. (There has only been one stock exchange in New Zealand since 1981.) It also provides for District Court judges to licence sharebrokers. The Minister of Commerce is responsible for advising the Governor-General on certifying rules by Order in Council.
Takeovers Act 1993
This Act establishes the Takeovers Panel and outlines the framework for devising, recommending and enforcing the Takeovers Code. The Code came into force in 2001. It applies to companies that have a listing agreement with any registered stock exchange, and companies with 50 or more shareholders plus assets of $20 million or more. The Governor-General appoints members of the Panel on the recommendation of the Minister of Commerce.
Unit Trusts Act 1960
This Act regulates how unit trusts operate. In particular, it specifies managers' and trustees' qualifications and roles, and unit trusts' specific reporting requirements. For instance, in order for a unit trust to be promoted to the public, a prospectus must be published, a bond must be paid and the Registrar of Companies must have approved the trust deed.
The supervisory authority for unit trusts lies with the Minister of Commerce through the Registrar of Companies. The Minister's approval is required if an entity other than a trustee corporation is to act as trustee. Requests for approval of this nature are rarely made.
Corporate Governance
The purpose of the corporate governance statutes is to define the relationships between directors, managers and owners of businesses in a way that lowers contracting costs and promotes effective accountability within firms.
Companies Act 1993
This Act describes the basic requirements for incorporating, organising and operating companies. It defines the relationships between companies and their directors, shareholders and creditors, sets out the duties of directors and provides for the protection of shareholders and creditors against the misuse of management powers. It provides procedures for realising and distributing the assets of insolvent companies. It also outlines the powers and duties of the Registrar of Companies, which include registering and inspecting documents.
Co-Operative Companies Act 1996
This Act provides a mechanism for shareholders to carry on business on a mutual basis. It provides for cooperative companies to be registered and regulates the relationship between cooperative companies and their shareholders. It also modifies the application of the Companies Act 1993 to co-operative companies.
Financial Reporting Act 1993
This Act requires issuers of securities to file financial statements prepared in accordance with generally accepted accounting practice and to give a true and fair view of their affairs, prescribes financial reporting requirements for other entities, and gives legal force to accounting standards approved by the Accounting Standards Review Board. The Ministry administers the register and the Minister recommends to the Governor-General the appointment of members to the Board.
Partnership Act 1908
This Act defines partnership relationships and sets out the rules for determining when a partnership exists. It also regulates the relationship of partners to one another and to third parties, and provides for the dissolution of partnerships.
Building Societies Act 1965
This Act sets out the purposes, functions and general powers of building societies. It provides for them to be established and incorporated and regulates the relationship between them and their members. The Act also provides for building societies' administration and provides a procedure for their dissolution.
Friendly Societies and Credit Unions Act 1982
This Act establishes the Registrar of Friendly Societies and Credit Unions and assigns functions and powers to the Registrar and Government Actuary. It provides for the registration of Friendly and other Societies (including working men's clubs and benevolent societies). It also provides for credit unions' registration and prudential control.
Incorporated Societies Act 1908
This Act makes provision for the incorporation of societies that are not established for the purpose of pecuniary gain. It also sets out the powers of such societies, regulates the relationship between societies and their members, and provides a process for their dissolution.
Industrial and Provident Societies Act 1908
This Act provides for industrial and provident societies to be incorporated. It also sets out the powers of industrial and provident societies, regulates the relationship between them and their members, and provides a process for their dissolution.
Insolvency Statutes
The insolvency statutes cover both bankruptcy for individuals, which can arise for business or consumer-related reasons, and corporate insolvency. They aim to balance the interests of creditors and debtors and provide for orderly insolvency processes. As noted under the corporate governance heading, the Companies Act 1993 is the main vehicle for corporate insolvency.
Insolvency Act 1967
This Act describes the criteria and processes for entering into and being discharged from bankruptcy, the obligations imposed on bankrupts and the disabilities associated with bankruptcy. It sets out the jurisdiction and powers of the High Court and the Official Assignee, who has responsibility for administering the affairs of people who become bankrupt.
Receiverships Act 1993
This Act codifies the common law in relation to receivers. It sets out what qualifications they must have, the circumstances in which receivers may be appointed, their powers, duties and liabilities, and provides for the High Court to supervise their activities.
Corporations (Investigation and Management) Act 1989
This Act allows the Registrar of Companies to obtain information and investigate the affairs of a corporation to ascertain whether it is in danger of failing. If necessary, a statutory manager may be appointed to run the company. It also provides limited scope for the Governor-General, acting on advice from the Minister of Commerce, to place corporations under statutory management. However, statutory management can only be invoked on the Securities Commission's recommendation and only where the corporate collapse is caused by fraud or recklessness and where conventional procedures would be ineffective.
Other Business Law Statutes
Personal Property Securities Act 1999
This Act came into force on 1 May 2002. It provides uniform rules in relation to the giving and taking of security interests in all forms of personal property other than land. More specifically, it:
- provides rules for determining disputes between those with competing interests in personal property
- establishes a centralised, national personal property securities register
- sets out default rules for the enforcement of security interests in personal property other than consumer goods
Mercantile Law Act 1908
This Act consolidates the law relating to mercantile trade and commerce. It defines mercantile agents, who are agents having authority to sell, consign, buy or raise money on the security of goods.
Carriage of Goods Act 1979
This Act regulates the liability of carriers when carrying goods on behalf of others and defines the basic rights of carriers. It also implies a warranty on the part of the contracting party that the goods are fit to be carried and stored, and that all enactments relating to the consignment for the carriage of goods have been complied with.
Sale of Goods Act 1908
This Act consolidates the law relating to the sale of goods to the public. It outlines the basic requirements of contracts for selling goods and the conditions and warranties associated with selling them. The respective rights and remedies of buyers and sellers are also covered by this Act.
Sale of Goods (United Nations Convention) Act 1994
This Act gives the United Nations Convention on Contracts for the International Sale of Goods the force of law in New Zealand. The Act establishes the UN Convention in this area as a code in New Zealand.
Trade Remedies
Dumping and Countervailing Duties Act 1988
The Dumping and Countervailing Duties Act protects New Zealand industry from injury caused by dumped or subsidised imports. It allows duties to be imposed on goods sold in New Zealand at less than the normal price in the country of export, or subsidised by an overseas government, if the dumping or subsidy is causing injury to an industry in New Zealand or a third country.
The Chief Executive of the Ministry of Economic Development is responsible for carrying out investigations. The Minister:
- makes final determinations on whether there is dumping or subsidisation causing injury
- may impose or terminate antidumping or countervailing duties
- may determine a new rate or amount of antidumping or countervailing duty
- may require a refund of antidumping or countervailing duties in certain circumstances
- terminates investigations in certain circumstances
Temporary Safeguard Authorities Act 1987
This Act protects New Zealand industry from extraordinary or unforeseen circumstances where imports increase to such an extent and in such a way as to cause or threaten serious injury to a domestic industry.
Temporary Safeguard Authorities are independent bodies that investigate requests for safeguard actions. A Temporary Safeguard Authority carries out the inquiry and reports its findings to the Minister on whether urgent action is needed to protect the industry, and the nature of the protection considered appropriate. The Minister:
- appoints suitable people to act as temporary safeguard authorities and requests them to undertake inquiries
- lays requests for safeguard actions in the House and publishes them in the Gazette
- may cause a statement of government policy to be transmitted to the Authority
This Act is currently being reviewed to ensure it is fully effective in providing for urgent safeguard action in accordance with WTO rules.
Tariff Policy
Tariff Act 1988
The Tariff Act protects goods made in New Zealand by providing authority to levy, collect and pay import duties in accordance with rates specified in the Tariff. After a six-year tariff freeze, tariff rates will begin reducing again from 1 July 2006. Following a comprehensive tariff review in 2003 a unilateral tariff reduction programme has been set down for the period 1 July 2006 to 1 July 2009, at which stage tariffs on clothing, footwear and carpet will be 10%, and tariffs on all other goods, which are still dutiable, will be at 5%. Around 95% of New Zealand's imports by value are already duty-free.
Tariff nomenclatures and rates appear in Part I of the Tariff (The Standard Tariff). Part I can be changed by Order in Council. Concessions appear in Part II of the Tariff. The Minister has the discretion to approve, amend or withdraw concessions in accordance with Part II. The Minister also has the power to revoke, suspend or amend Part I Tariff statistical keys.
There are regulation-making powers in relation to certain aspects of duty drawbacks, and fee-setting for concessions.
Imports and Exports (Restrictions) Act 1988
The Imports and Exports (Restrictions) Act provides Orders in Council to prohibit imports and exports that would be contrary to the public interest.
The Minister has the power, consistent with any conditional prohibition order, to require an import or export licence or permit to be presented before goods can enter or leave New Zealand. Regulations can be made as may be necessary or expedient for giving effect to, or administering, the Act. Current regulations implement controls that give effect to New Zealand's international obligations under the Basel, Waigani, Rotterdam and Stockholm conventions.
Standards and Conformance
Standards Act 1988
This Act provides for the continuation of the Standards Council. The Council is to have no more than 12 members, of whom not more than eight are ministerial appointments. A variety of professional organisations and associations are specifically identified in this Act as nominating bodies for these appointments (for example, Institution of Professional Engineers New Zealand, Federated Farmers, Chambers of Commerce, etc). The Standards Council is a Crown entity and has statutory responsibility, through its operational arm, Standards New Zealand, for overseeing the development and adoption of standards and standards-related products. It also promotes, encourages and facilitates the use of standards in New Zealand.
Testing Laboratory Registration Act 1972
The Testing Laboratory Registration Act 1972 provides for the Testing Laboratory Registration Council, a not-for-profit Crown entity with appointed representatives, to be established. The Council promotes good quality assurance and through its operational arm, International Accreditation New Zealand, accredits conformity assessment bodies such as testing and calibration laboratories and inspection bodies.
The Standards and Conformance Bill 2005, introduced in Parliament in June 2005, amends both of these Acts in order to clarify and adjust some of the functions of the Standards Council and the Testing Laboratory Registration Council.
Trans-Tasman Mutual Recognition Act 1997
The Trans-Tasman Mutual Recognition Act provides for the recognition in New Zealand of regulatory standards adopted in Australia regarding goods and occupations.
Repeal Acts
- The Companies Act Repeal Act 1993
- The Cornish Companies Management Repeal Act 1994
- The Clerk of Works Act Repeal Act 1992
- The Quantity Surveyors Act Repeal Act 1992
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