Background
6. Following the 1999 election, the Ministry of Economic Development ("MED") carried out two rounds of consultation at the direction of Ministers to determine if and how a parallel importing ban would achieve the government's objectives of encouraging overseas investment in and promotion of New Zealand creative industries. The conclusion of those consultations, reported to Cabinet in 2001, was that there was no substantive evidence that a parallel importing ban would lead to decreased investment in the creative industries, with the possible exception of the film distribution industry. Consequently, following decisions by Cabinet [POL Min (01) 30/3, CAB Min (01) 35/5, POL Min (01) 33/8 and CAB Min (01) 38/6 refer], some narrow amendments to the Copyright Act 1994 ("the Act") were introduced by the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Act 2003 ("the 2003 Amendment Act"), implementing a limited ban on the parallel importation of films (for 9 months from first release). The 2003 Amendment Act also made some targeted amendments to the importation provision to address concerns in relation to copyright piracy, which arose during the consultation process.
7. The level of investment and innovation in creative industries continues to be an issue of significant importance to this government, and forms one of the main platforms of the Growth and Innovation Framework ("GIF"). In addition to the economic implications, there are important wider interests in the creative industries through their contribution to fostering New Zealand's national identity, promoting its image abroad and developing viable career paths in the cultural and creative sectors. As such, Cabinet also decided in 2001 that the wider issue of parallel importation should be kept under review and directed that a further report on the impact of parallel importing on the creative industries be provided by the end of 2004. To allow for more extensive consultation, an extension of time was granted by the Chair of the Cabinet Policy Committee to early August 2005.
8. To assist in this further review, MED commissioned a report from Network Economics Consulting Group PtyLtd ("NECG") to provide analysis on the costs and benefits of parallel importing and its economic impact on investment in, and promotion of, New Zealand's creative industries. MED also requested that NECG provide analysis of the Australian experience of parallel importing.
9. NECG contacted a number of key stakeholder groups in the preparation of its NECG report: Copyright Council of New Zealand Inc; Mallinson Rendel; New Zealand Retailers Association; Harper Collins Publishers (New Zealand) Limited; Penguin Books (NZ) Ltd; Interactive Software Association; Whitcoulls Group Ltd; Royal New Zealand Foundation of the Blind; Microsoft New Zealand Ltd; Auckland City Libraries; Lexis Nexis; Australasian Performing Rights Association; Dymocks Wellington; Screen Directors Guild of New Zealand; Books and More Lambton Quay; Information Technology Association of New Zealand; Motion Picture Distributors' Association.
10. The report was finalised in November 2004 and made available by MED to stakeholders for comment and to ensure that stakeholder views were accurately reflected. Responses were received from the Consumers' Institute of New Zealand and the Royal New Zealand Foundation of the Blind, both supporting the findings of the report. Given this limited feedback, an extended process was developed to seek feedback from the Recording Industry Association of New Zealand, Independent Music New Zealand, Booksellers New Zealand and Book Publishers Association of New Zealand.
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