Executive Summary
Executive Summary
The Scope and Process of This Review
1. This review is concerned with the New Zealand standards and conformance infrastructure, which includes the standard-developing agency, two accreditation bodies, and two measurement bodies:
- Standards New Zealand (SNZ), the operating arm of the Standards Council; a Crown entity and the main body developing consensus-based Standards in New Zealand;
- International Accreditation New Zealand (IANZ) an operating arm of the Testing Laboratory Registration Council (TLR Council); an autonomous Crown entity which provides independent third-party accreditation of the competence of testing laboratories and inspection bodies;
- The Joint Accreditation System of Australia and New Zealand (JAS-ANZ), an international organisation set up by Treaty between Australia and New Zealand, which provides independent third-party accreditation of the competence of certification bodies and inspection bodies;
- Measurement Standards Laboratory (MSL) a unit of the Crown Research Institute Industrial Research Ltd; which provides for the use of uniform units of measurement of physical quantities and for the establishment and maintenance of Standards of physical quantities; and
- Measurement and Product Safety Service (MAPSS) a unit of the Ministry of Consumer Affairs, which has responsibility for legal trade measurement and enforces the Weights and Measures Act 1987.
2. The review also discusses the roles of conformity assessment bodies (private and public testing laboratories, inspection and certification bodies) and regulators (government agencies in a range of sectors) and their interactions with the infrastructure.
3. The overall objectives of the review are to:
- evaluate New Zealand's standards and conformance infrastructure against New Zealand's specific requirements and international trends and emerging new models;
- evaluate how the standards and conformance infrastructure can contribute to, and improve the competitiveness of, New Zealand suppliers of products and services, in the context of improved market access, innovation and quality; and
- identify any other issues that may need to be addressed in order to enhance the contributions made by the standards and conformance infrastructure towards achieving the government's objectives, including managing certain risks from imports.
4. This paper has been written to seek comment from stakeholders on New Zealand's standards and conformance infrastructure. It follows a preliminary report on the infrastructure and a separate review into the role New Zealand's standards and conformance infrastructure plays in encouraging innovation.1 After submissions on this paper are received and analysed, further work will take place to develop specific policies for the government's consideration.
5. This review forms part of the government's economic transformation agenda. Standards, accreditation and measurement play an important role in New Zealand's business environment and can be critical to business success. In many cases they also support government regulation. This work will be closely aligned to the wider Ministerial Review of Regulatory Frameworks which seeks to remove unnecessary regulatory constraints on economic growth and achieve continuous quality improvement of regulatory frameworks and processes.
6. This review focuses on the New Zealand infrastructure bodies, but it is important to note that for some New Zealand products and processes the functions of measurement, standardisation or accreditation may be carried out by non-New Zealand agencies. It should also be recognised that there are other government bodies that carry out activities around standards and conformance such as the Food Standards Australia New Zealand and the Ministry of Agriculture and Forestry. These bodies are not considered as part of the infrastructure in this review, although there is scope to consider how they interact with the five infrastructure bodies we have identified.
7. There is some discussion of resourcing issues in this paper. This is done without prejudice to future decisions made by government. Should the review recommend increased resourcing, this would require a separate process to be undertaken.
The Contribution of Standards and Conformance
8. A standards and conformance system can contribute to the objectives of managing health, safety and environmental risks, facilitating domestic economic development, and facilitating international trade. Each part of the standards and conformance system (the infrastructure, regulators and conformity assessment bodies) has a role to play in contributing to these objectives. Paragraphs 83-95 describe how the system supports each objective.
9. Management of health, safety and environmental risks are primarily in the regulated sector, where standards can support regulatory objectives, as an alternative to, or as a support for, legislative methods. Economic efficiency is facilitated as standards increase compatibility and economies of scale and aid consumer confidence. International trade is facilitated by minimising unnecessary differences between different jurisdictions' standards and conformance regimes.
10. Work to date has established that the New Zealand infrastructure is strong, well-respected and a major contributor to the government's objectives in standards and conformance. Its strength is necessary for the economic transformation goals the government has set. The Ministry of Economic Development is concerned to ensure the sustainability of the infrastructure and to address any gaps or areas where improvements can be made.
Drivers of Increased Standardisation and Internationalisation
11. Globally standards and conformance has become more important over time. There is demand by consumers for safer and higher quality products, resulting in raised minimum standards and a focus on best practice standards. The increased pace of technological change requires much more rapid development and amendment of standards and/or a shift to performance-based standards. Increased social and environmental concerns are another driver of standards and can lead to standards and conformance applying in areas of activity not previously covered.
12. Traditionally, each national economy has set its own standards and procedures (although the need for inter-operability drove an early international approach in the electrical and telecommunications sectors). As the levels of international trade have grown, so have the worldwide impacts of standards on trade. Trade liberalisation and lowered tariffs have seen the impact of non-tariff barriers to trade - such as standards and conformance - increase in importance. For a country with a small domestic market such as New Zealand, it can be argued that the minimisation of unnecessary barriers to trade is even more important.
13. The roles of third-party accreditation and traceability in measurement have also grown in importance as the sources of imports become more diverse. The ability to rely on conformance of products from overseas is important to New Zealand, both to ensure that all products meet regulatory requirements and to support fair competition. New Zealand businesses are also significant importers of components, as part of global supply chains.
14. From an export perspective, international recognition and acceptance of New Zealand's accreditation and other infrastructure is essential. Where the accreditation of a conformity assessment body is internationally recognised, this reduces duplicate requirements and speeds up compliance times significantly. New Zealand is also party to a range of Mutual Recognition Agreements, Free Trade Agreements and Closer Economic Partnerships and regulator-to-regulator agreements or co-operations. These provide frameworks for co-operation and negotiating arrangements that reduce technical barriers to trade and build the confidence overseas trading partners have in the New Zealand infrastructure. See paragraphs 180-200 on accreditation issues.
Regulation and Standards and Conformance
15. Rapidly changing technology and international regulatory practices are creating demands for more flexible safety regimes modelled on performance based outcomes rather than specific and highly prescriptive requirements. This calls for regulatory regimes that are consistent with international best practice and that deliver cost effective safety and performance outcomes.
16. Whilst recognising that governments employ technical regulations (mandatory standards) to achieve legitimate objectives, the World Trade Organisation's Agreement on Technical Barriers to Trade (the TBT Agreement) provides that technical regulations should not be more trade-restrictive than is necessary to fulfil a government's legitimate objective.
17. In New Zealand, the use of the standards and conformance infrastructure by regulators is variable and it is possible that there is some efficiency that can be gained by a greater awareness and use of the infrastructure. The impact of domestic regulations on export sectors of the economy can be significant. New Zealand generally has regulatory regimes that rely heavily on suppliers' declarations of conformance whereas many of New Zealand's trading partners place more emphasis on pre-market approvals. Co-ordination of the different strategies to ensure compliance is an important aspect of trade facilitation.
18. Some regulators are very aware of their impact on export markets (agriculture is a significant example). Others may not see that they have a role or even a mandate to consider the impact of their regulatory regime on New Zealand's export sectors. This paper asks what the role of standards and conformance should be in supporting quality regulation. See paragraphs 217-236 for regulation issues.
Alignment of the New Zealand Infrastructure
19. Currently there is a range of relationships between the infrastructure bodies, but only one (relatively infrequent) forum for all five bodies to meet. When Australia first comprehensively reviewed its standards and conformance infrastructure, it was found that many issues developed as a result of individual organisations responding to change without a shared commitment to strategic directions.2 Risks may be better managed and opportunities maximised if the New Zealand infrastructure is more closely aligned.
20. The role of the Ministry of Economic Development (MED) could also potentially evolve. Currently it is responsible for regulatory issues in trade negotiations, and, on behalf of the Minister of Commerce, the Ministry also manages the Crown's ownership interests in some of the infrastructure bodies. This paper, however, points to options where MED could take a more active coordinating role. See paragraphs 106-126 for governance and alignment issues.
21. One area where greater alignment could improve both the efficiency and effectiveness of the system is information provision. Better information exchange between the infrastructure bodies, between regulators and the infrastructure, and with clients, could be achieved. A range of options for this are discussed under the heading of information as well as in the section on regulation. See paragraphs 127-139 for information issues.
The Ability of the Infrastructure to Respond to Growing Complexity
22. Where New Zealand standards and conformance services have been established they are well regarded internationally. Looking to a more complex future, however, it is necessary to ask whether the New Zealand economy will be sufficiently large to fund, of itself, the full range of standards and conformance services necessary for economic prosperity.
23. This paper generally takes the view that New Zealand can rise to these challenges. Some of the answers will lie in working closely with other governments in the international community. New Zealand will also need to be innovative and focused on meeting future challenges in standards and conformance. See paragraphs 166-179 for measurement issues.
24. The current funding principles applied to the standards and conformance infrastructure are that measurement is a core public service activity, funded through the science infrastructure and consumer affairs. There is a public interest in establishing standards and accreditation bodies, but as with many other Crown entities, government expects these agencies to fund themselves by charging fees. See paragraphs 54-63 for funding issues.
25. Standards development is supported by voluntary contributions of time and knowledge, sponsorship and publication charges. Standards which are directly in support of regulatory (public interest) outcomes are expected to be funded out of the Crown Vote of the government agencies responsible for the applicable regulation. For businesses, participation in standards development is voluntary, but purchasing and complying with Standards and regulations are a cost of doing business.
26. This document raises questions about the implications of the current model for prioritisation of standards development, adequate participation of stakeholders in the standards process and the ability of New Zealand to influence the development of international standards. See paragraphs 142-165 for standards issues.
Submissions
27. Stakeholders are encouraged to make submissions to this review. Specific examples and evidence are particularly helpful. Comment is particularly welcome on:
- whether the issues identified are correct;
- what the relative importance is of the different issues;
- what the positive and/or negative effects of the options proposed might be; and
- any other options which you think might usefully address the issues in this area.
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