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GM Cabinet Paper 1: Overview


Office of the Minister of Agriculture

Chair
Cabinet Policy Committee

GOVERNMENT RESPONSE TO THE ROYAL COMMISSION ON GENETIC MODIFICATION: REPORT ON MANAGING THE EFFECTS OF GM ORGANISMS AND COEXISTENCE IN PRIMARY PRODUCTION - PAPER 1: OVERVIEW

Purpose

1. This paper is the first of two reporting on managing the coexistence of genetically modified (GM) and non-GM organisms in primary production. It provides a background to the concept of coexistence in differing systems of primary production, outlines the extent of GM production systems world-wide, and discusses how GM production could be applied within the framework of current New Zealand primary production. It provides additional context for the accompanying paper on five specific aspects of managing the coexistence of GM and non-GM organisms of particular relevance to New Zealand primary production identified by the Royal Commission on Genetic Modification.

Executive Summary

2. The general concept of coexistence is already well established in New Zealand primary production, with conventional, organic, and integrated pest management systems working successfully together. Applying different agricultural production methods requires sharing responsibilities between different producers. Overseas experience demonstrates that introducing any GM organisms into primary production systems needs a carefully considered and managed approach incorporating the needs and capabilities of the whole production chain. New Zealand's legislative framework for managing the use of GM organisms is in the process of being strengthened. Amending the Hazardous Substances and New Organisms (HSNO) Act to provide for conditional release of new organisms (including GM organisms) will provide an additional regulatory tool needed to achieve effective coexistence between GM and non-GM primary production.

Background

3. The major theme of the report of the Royal Commission on Genetic Modification was "preserving opportunities". The Royal Commissioners stated: "Our recommendations aim to encourage the coexistence of all forms of agriculture. The different production systems should not be seen as being in opposition to each other, but rather as contributing in their own ways to the overall benefit of New Zealand". In addition to conventional agriculture, the other production systems identified and defined by the Royal Commission were organic, those using integrated pest management, and genetic modification. The government endorsed the Royal Commission's approach and is "proceeding with caution while preserving opportunities" with using GM technology.

4. Cabinet directed officials to explore the work involved in developing coexistence frameworks as far as is practicable in the absence of releases of GM organisms, and to use that to complement the development of conditional release policy (CAB Min (01) 33/22). Cabinet subsequently directed officials led by MAF to investigate and report on the practicalities of five specific aspects of managing coexistence in New Zealand primary production (POL Min (01) 30/4; see paper 2).

5. This overview provides a context for the second paper that addresses specific issues for managing coexistence in New Zealand. It:
 describes and defines the concept of coexistence;
 relates the views of submitters and others consulted on coexistence;
 reviews the use of GM organisms overseas, and identifies problems that have arisen;
 examines the types of GM organisms that New Zealand is likely to use;
 reviews New Zealand's regulatory framework;
 examines how organic standards treat the use of GM organisms and the unintended presence of GM material; and
 explores how effective coexistence of GM and non-GM primary production could be achieved in New Zealand.

The concept of coexistence

6. Coexistence refers here to a state where different primary production systems, including non-GM systems such as organic production and conventional agriculture, and GM systems, are each contributing in their own way to the overall benefit of New Zealand while ensuring that their operations are managed so that they affect each other as little as possible. Coexistence does not mean that all forms of each production system must be occurring simultaneously or adjacent to one another. For example, a live GM vaccine to prevent animal disease might be approved and used before any applications for releasing a GM crop, and this situation would still represent coexistence.

7. Coexistence is not a new concept. It has essentially been occurring in New Zealand and overseas for many years between and within different non-GM production systems. For example, the organic production sector in New Zealand comprises a small group of growers and producers who produce for their markets alongside growers and producers who use products and methods forbidden in organic production. Another example of the coexistence concept in non-GM production is the production of high purity seeds for sowing where neighbouring farmers co-operate to minimise the movement of unwanted pollen from cross-pollinating crops that would lower the usefulness and value of the high purity seeds.

8. However, conflicts in managing non-GM production systems do arise. For example, spray drift or pesticide residues can be a problem where appropriate care is not exercised, and organic properties can sometimes act as a refuge for pests or weeds that adversely affect neighbouring properties. Likewise, neighbours do not always agree about how the isolation distances necessary for certified seed production should be achieved, and mediation is sometimes required. These problems do not mean that the concept of coexistence between different production systems is unworkable, but demonstrate that well-defined rights, responsibilities, and management are needed by all involved.

9. Coexistence of GM and non-GM production systems involves managing conflicting values, and also requires certain technical issues to be resolved. Some people object to the release of any GM organisms because of possible effects on New Zealand's "clean-green image" or because of cultural, spiritual or social concerns. These concerns are being considered elsewhere, e.g. establishing the Bioethics Council and work by the Ministry for the Environment and Treasury on the economic impacts of releasing GM organisms, reported on in another paper in the series “Government Response to the Royal Commission on Genetic Modification”. The technical issues are about preventing or minimising the physical transfer of material between GM and non-GM systems (e.g. pollen from a GM corn plant fertilising a neighbour's non-GM corn crop, the presence of GM pollen in honey, or non-GM pollen fertilising GM seed crops). This technical dimension is the focus of this and the accompanying paper.

Comments from consultation on the coexistence of GM and non-GM production systems in New Zealand

10. A number of meetings and hui were held for discussions about "conditional release" as part of public consultation on amendments to the HSNO Act co-ordinated by the Ministry for the Environment. The views of the public were sought on GM and non-GM coexistence issues. MAF reviewed relevant literature and consulted other affected parties directly. A summary of submissions to MAF and comments from hui is attached (Annexes 1 and 2).

11. Opinion across New Zealand is divided over whether coexistence between GM and non-GM production is possible here. Some feel that it can be achieved by using appropriate management systems, minimising the transfer of material between GM and non-GM systems, and establishing practical upper limits for the unintended presence of GM material in non-GM systems, and vice-versa. They note that similar limits currently apply with other production conflicts (e.g. high purity seed production, spray drift).

12. Others believe that coexistence is not possible or desirable because there could still be a detectable level of GM material present in non-GM systems. These people feel that New Zealand's marketing image will be damaged by the release of any GM organisms (see below), and that the costs of managing coexistence will fall on people who are not benefiting from GM technology, or are not comfortable with it.

13. The primary producer groups most concerned about the use of GM organisms in New Zealand are the organic growers and the beekeepers. These producers, along with many individual and environmental group submitters, felt that non-GM products would be harmed both generally by the presence of any GM crops grown in New Zealand (image contamination), and specifically by the unintended presence of any GM material in products being sold as non-GM (physical contamination). They were concerned also about possible adverse effects to people or the environment from any GM organisms released to the environment. Many submitters and participants at hui were concerned about who would pay for any economic loss if GM material is found in products that are supposed to be non-GM. Hui participants commented that education and information is needed about the implications, risks and benefits of coexistence for Māori.

14. Many in the cropping industry believe that coexistence between GM and non-GM production is possible, although they would not currently choose to use GM crops themselves for market reasons (e.g. no consumer demand in target markets, or the GM crops currently available have no net advantages for local production).

15. Analysis of submissions indicated that the most widely acceptable regulatory mechanism for managing coexistence would be to place controls on releases where needed, and to ensure that any controls are enforced.

Uses of GM organisms in primary production

16. Products derived from the contained use of GM micro-organisms have been used world-wide, including in New Zealand, for more than a decade (e.g. as medicines and pharmaceuticals). Some GM animals have also been produced, under contained conditions, in New Zealand and overseas, for research purposes or to produce pharmaceutical products. There have been tens of thousands of field trials of GM plants (including some trees) in many different countries since 1986, mainly for research and as part of pre-commercial development. Some of these have been in strictly contained conditions (e.g. in New Zealand), and others are effectively limited releases (e.g. farm-scale trials in the United Kingdom). However it is the GM commodity crops that have been widely grown commercially in several overseas countries that have highlighted the major coexistence issues to date.

17. World-wide the area under GM crops has expanded from only very small plantings in 1996 to 58.7 million ha (an area about twice the size of New Zealand) in 2002. This is predicted to increase further in 2003 . The uptake is not uniform across countries because specific GM crops are only grown where conditions make it feasible (e.g. climate or presence of a particular pest). In 2002, almost all GM crops (99% by area) were grown in only four countries: USA, Argentina, Canada and China, with the USA being by far the largest GM crop producer (66% of global area). Another 12 countries (Australia, Chile, Colombia, Honduras, India, South Africa, Romania, Mexico, Bulgaria, Uruguay, Indonesia, and Spain) grew smaller areas of GM crops. The main GM crops were soybean, corn, cotton and canola modified for herbicide tolerance or insect resistance1. The rate of adoption of GM crops in some countries has been described as "the highest for new technologies by agricultural industry standards" .

18. Different countries have taken different approaches to managing GM organisms and crops. Essentially three main regulatory approaches can be identified. In the USA, GM products are regulated under existing laws, on the basis that it is the characteristics of the organism that determine its risk (e.g. insect-resistant corn). GM commodity crops are not usually kept separate from non-GM crops of the same type during production or processing. The European Union (EU) takes a different approach where regulation is triggered by the process of how GM crops are produced (i.e. they have specific legislation for GM organisms, for example GM corn). Other countries have regulations, or are establishing regulations, based on either one of these approaches, or some mixture of them. Brazil is a country that has banned the commercial use of GM crops and has benefited from marketing itself as a non-GM producer. Notwithstanding this approach, Brazil now has large areas of illegal plantings of GM soybeans reportedly growing in southern districts. These plantings appear to have arisen from seeds smuggled across the border from Argentina . These plantings may compromise the ability of Brazilian producers to continue to market their products as non-GM. This demonstrates that a robust regulatory system, the necessary infrastructure, and appropriate enforcement procedures are essential for effectively managing the use of GM organisms.

19. Of the countries growing GM crops, most also have expanding areas of organic production. This includes the main countries growing large areas of GM crops (the USA, Argentina, and Canada), as well as many countries growing smaller commercial areas or field trials of GM crops (e.g. Australia, Brazil, Bulgaria, Chile, China, France, Greece, Honduras, India, Indonesia, Mexico, Netherlands, Portugal, Romania, South Africa, Spain and Uruguay). World-wide, Argentina (area 227 million ha) is the second largest producer of GM crops (11.8 million ha), but also has the second largest area (3 million ha) of certified organic production. The main market for both Argentina's organic products and its GM products is the EU. For example, in 2001 Argentina exported 192 tonnes of its total organic honey production of 245 tonnes to the EU, which represented a 53% increase on their 2000 export figures. Argentina's process for approving the use of GM organisms considers on a case by case basis any effects on existing export trade. For example, it has only approved GM soybean and maize varieties that are approved in the EU, but has granted approvals to a wider range of GM cotton varieties, as it does not export cotton to the EU. This has minimised the risk of Argentina's significant trade in soybean and maize products being affected by unapproved GM products appearing in its exports to the EU. Some US industry bodies are now pursuing a similar strategy for the EU market. One State in Australia (Tasmania) has approved research trials of GM poppies but has decided not to grow commercial GM food crops for the next 5 years. Similarly, New South Wales grows extensive areas of GM cotton, but is now indicating it will not grow commercial GM food crops. These decisions have been taken to reflect a perceived marketing advantage.

Unintended presence

20. The main problem with coexistence to date relates to the unintended presence (either illegal or unwanted) of GM material in products that are supposed to be non-GM. This particularly arises in the plant products. There is no tolerance at any level, in any country, for illegal or unapproved foods. For example, GM "Starlink" corn, which was approved for animal feed but was still being assessed for safety in food, was found in USA food products in September 2000 . The incident highlighted the impracticality of a split approval process without well-developed and accepted segregation and isolation management systems. Furthermore, this raised questions of who was responsible for the event, and who was to pay for compensation . Similarly, in a separate recent incident in the USA, GM corn engineered to produce a pharmaceutical protein in field trials was found in non-GM soybeans held in a silo, and destined for food use. The contamination was due to field trials in the previous season and was discovered before the soybeans were marketed. However, the absence of specific health-related regulations for GM organisms containing a medical product meant that proceedings were commenced against the manufacturers of the GM corn under the USA Plant Protection Act . The parties agreed that the manufacturer would pay a civil penalty of $250,000 and reimburse the US Department of Agriculture $3 million for the cost of destroying 55 acres of surrounding corn and 500,000 bushels of stored soybeans.

21. The issue does not only involve the unintended presence of unapproved GM organisms, but also involves the unintended presence of approved GM material in foods and other crops. Some countries have established tolerance levels for approved GM material. Roundup Ready herbicide-tolerant soybean seeds are grown widely in the USA, and have been approved for use in foods and feed in the EU. The EU has adopted a law that establishes a maximum of 1% inadvertent presence of approved GM varieties in non-GM shipments. However, soybean growers, processors and exporters in the USA (where more than 70% of soybeans are GM) are finding that their stocks of non-GM soybeans can contain significant levels of GM material (in one case, 14% GM) . As a result, they have had difficulty delivering non-GM soybeans to meet niche EU non-GM markets (although the US is still the main exporter of soybeans to the EU). Because soybeans are self-pollinating, the presence of GM material most likely resulted from the physical mixing of GM and non-GM soybeans, and not production of hybrid plants through cross-pollination. This highlights the importance of understanding the range of issues associated with growing particular crops and establishing proper segregation practices during planting, harvesting and transport.

22. These examples from overseas experience illustrate the need for three essential elements for achieving effective coexistence of GM with non-GM production systems:
 a robust regulatory approach that protects the environment and the safety of people and communities by preventing or managing adverse effects, and makes clear where responsibilities for managing and enforcing any conditions lie;
 a case-by-case approach, that incorporates the specific characteristics of each GM organism, and its likely use; and
 a "whole of production chain" approach to address any identified concerns from seed production and follow-up paddock management to post-harvest handling, management and distribution.

New Zealand's regulatory framework for managing GM organisms and GM foods

23. The fundamental principle underlying regulation in New Zealand is that only GM organisms and GM foods that are considered safe will be allowed to be grown commercially or sold. Only after safety has been addressed is choice considered.

24. New Zealand's comprehensive regulatory framework for managing the use of GM organisms and GM foods comprises two statutory regulatory bodies (the Environmental Risk Management Authority (ERMA; regulating new organisms, including GM organisms); and Food Standards Australia New Zealand, (FSANZ; regulating the safety and labelling of GM foods)). Both ERMA and FSANZ require a mandatory, cautious, case-by-case, premarket assessment of safety before any GM organism or food can be used or sold in New Zealand. A GM food that is also a living organism (e.g. a GM potato) requires approval from both bodies before it can be marketed in New Zealand.

25. Another essential element of the existing regulatory system is the Fair Trading Act 1986. This prohibits false and deceptive conduct in trade. If a producer makes a claim about the properties of a product (e.g. GM-free), this claim must be true or the producer may be committing a breach of the Act.

26. The HSNO Act, which guides ERMA, reflects two underlying principles for managing new organisms: safeguarding the life-supporting capacity of air, water, soil and ecosystems; and the maintenance and enhancement of the capacity of people and communities to provide for their own economic, social, and cultural wellbeing. The HSNO Act requires caution to be used in managing adverse effects where there is scientific and technical uncertainty about those effects. Furthermore, an application for releasing a new organism (including a GM organism) must be declined where the new organism is likely to cause any:

 significant displacement of any native species;
 significant deterioration of natural habitats;
 significant adverse effects of human health and safety;
 significant adverse effects to New Zealand's inherent genetic diversity; or
 disease, be parasitic, or become a vector for human, animal or plant disease, unless that is the purpose of the importation.

Only after these minimum standards are met will a new organism be considered for release (either conditionally or without controls).

27. The scope of the HSNO Act is broad and includes the economic costs, risks, and benefits of each application. The proposed new conditional release category (CAB Min (03) 4/3) will allow ERMA to impose conditions that may be used to prevent, minimise or manage any risks identified during risk assessment and before a new organism is released in New Zealand. Conditional release could be used for example to specify:
 where a crop or animal is to be located;
 the conditions under which it could be grown and used; and
 what kind of monitoring of environmental impacts needs to be carried out.

28. The government has agreed to amend the HSNO Act to impose a new strict liability rule and civil penalties on those not complying with the HSNO Act (CBC Min (03) 3/16). The government is also considering further amendments to the HSNO Act so that it more appropriately reflects the Treaty of Waitangi relationship. These amendments aim to strengthen New Zealand's regulatory framework to provide better capacity to protect the environment and the health and safety of people and communities, by preventing or managing the adverse effects of hazardous substances and new organisms, including GM organisms.

29. In addition, the government has agreed to extend the present power under the HSNO Act to make regulations to avoid or mitigate the adverse effects of hazardous substances on the chemical, or physical nature of the environment or to avoid or mitigate damage to the environment or harm to people, to include conditionally released organisms (CAB Min (03) 4/3). At the same time, it decided to amend the HSNO Act to explicitly provide for the addition or removal of organisms, or groups of organisms displaying specific risk characteristics, to Schedule 2 [Prohibited new organisms]. These are additional mechanisms through which the government could establish measures relating to achieving effective coexistence if there was a need to do so.

Organic sector standards

30. A key issue for achieving effective coexistence of GM and non-GM production in New Zealand is to ensure that the requirements of organic and other non-GM producers are clearly understood and accommodated in any future use of GM in New Zealand.

31. The organic sector in New Zealand in 2001/2002 generated about $140 million worth of produce, split into $70 million from domestic sales and $70 million from export returns. The premium for this produce over the value of comparable conventional produce (i.e. net value) amounted to about $40 million. The organic sector has expanded rapidly from a low base and its net value now represents approximately 0.3% of New Zealand's gross agricultural production.

32. Organic products are generally certified on the basis of how they are produced, rather than the characteristics of the products themselves. An exception is organic honey that in New Zealand must be produced at a specified distance from crops produced by conventional agriculture, and annually tested to verify zero content for a number of chemicals. Although GM organisms, and products derived from them, are expressly prohibited from use in organic production world-wide, the New Zealand organic rules are currently silent on the unintended presence of GM material in organic products, as are those of Japan and the USA. The EU organic production regulations provide for the implementation of a threshold for the unavoidable presence of GM material in organic products, but this has yet to be developed. A number of submitters appear not to have realised that organic standards are production standards, believing that organic producers will lose their certification if products are found to contain any unintended GM material. While the unintended presence of GM material may not automatically affect organic certification, in practice it may affect marketability if a producer is marketing GM-free products. The practical effects of this are further explored in paper 2 (e.g. see section on bee-products).

Effective coexistence of GM and non-GM production in New Zealand

33. New Zealand has a comprehensive regulatory framework in place to address risks to people and the environment from GM organisms and GM foods. However, New Zealand has so far only faced limited challenges to its ability to achieve effective coexistence of GM and non-GM production. These include managing contained field trials of plants and animals and, more recently, the unintended presence of unapproved GM seeds in imports of non-GM seeds. Managing unapproved GM seeds is an international issue that will become increasingly complex, challenging and expensive as more GM seeds are approved for use overseas. It will also become more complex if, in future, ERMA were to approve only selected lines of GM varieties and MAF needed to distinguish approved from unapproved seeds of the same crop type at the border. MAF will monitor and review international responses taken by our trading partners on this and other relevant issues in order to assure best practice in achieving effective coexistence in primary production. For example, the EU is currently undertaking studies in this area, and Australia has recently announced research into looking at the effectiveness of separating specific GM from non-GM crops relevant to their situation and tracing them through the supply chain.

34. Looking ahead, the most likely use in New Zealand for GM organisms in primary production in the short term is the ongoing contained use of GM animals for research or pharmaceutical production, and GM plants in contained field trials. After the constraint on applications to ERMA for releases to the environment expires in October 2003 there may be applications to ERMA for the agronomic and environmental evaluation (rather than immediate commercial release) of GM onions and GM potatoes modified for herbicide tolerance or insect resistance, respectively. Later, there may be applications for release of some pasture species with specific traits such as bloat resistant clovers or ryegrasses with improved feed characteristics, again for evaluation purposes, and possibly some animal vaccines.

35. The mix of crops likely to be considered for use in New Zealand in the near future is therefore very different from the strong emphasis overseas on GM commodity crops (e.g. GM soybeans, GM corn), because our climate, market needs, and crop industry are different. Problems with commodity grain crops in other countries, particularly where there are few market incentives to segregate GM from non-GM production, do not necessarily translate to similar problems here. Our farming systems are different and farmers here are accustomed to managing segregation and tracking products in different situations (e.g. high purity seed production, organic production, and meat products to meet overseas market access requirements). New Zealand also has the advantage of being able to set in place a regulatory regime for achieving effective coexistence before GM crops are introduced, unlike some countries that have already commercialised GM crops. Officials expect that many GM organisms considered for commercial use here would likely be high value, and there would be strong market drivers to keep these isolated and segregated from non-GM crops. Furthermore, the indications are that only a few applications to ERMA are likely in the medium term, and mostly for agronomic or environmental evaluation.

36. Given the different characteristics of GM organisms and how they are used, there will need to be different approaches for achieving the effective coexistence of GM and non-GM production. For example, large animals can be contained in location by fences and are able to be electronically "tagged" so that they can be identified and retrieved should they escape, or to prevent entry to the food chain where this was a condition of release. With plants, pollen movement is the most difficult issue because while it can be minimised, pollen transfer cannot be ruled out completely in all circumstances. Managing pollen is usually a species-specific issue. For example, male-sterile lines of GM crops, or crops that are harvested before they flower (e.g. GM onions or GM carrots), will not release large quantities of pollen to the environment. Pollen from different plants moves different distances according to its characteristics (see paper 2). Furthermore, non-sexually compatible crops cannot cross-fertilise each other (e.g. GM potatoes alongside non-GM apples), and so would not pose a marketing concern from a pollination perspective. The key to effective coexistence of GM and non-GM production is a cautious case- by-case assessment of the risks and benefits of each specific application for using a GM organism. This is the approach taken by ERMA.

37. Any controls imposed by ERMA and FSANZ have to be practical and enforceable. New Zealand has addressed managing the unintended presence of approved GM material in the context of labelling of GM foods. The FSANZ standard regulating GM foods allows no more than 1% inadvertent presence of approved GM ingredients in non-GM foods without requiring GM labelling, but only where manufacturers have used their best efforts to avoid GM ingredients. This provision recognised the practical realities of the food production chain when foods derived from different sources pass through the same production lines, and the limits of reliable testing for GM material in foods. There is no tolerance for unapproved GM foods under the FSANZ standard. Manufacturers must seek information about the GM status of the foods they are using and ensure they can validate the claims they make when marketing non-GM foods.

38. For GM organisms, ERMA will be able to impose controls (by the setting of conditions) to prevent or manage any adverse effects identified during ERMA's risk assessment. The decision-making framework set out in the HSNO Act means that if ERMA determined that any risks identified were unacceptable, or could not be satisfactorily mitigated by controls, or the benefits did not outweigh the risks, it could not approve the application.

39. It is possible that some non-GM or GM producers may wish to produce to standards of their choice, as their specific markets demand, additional to any controls imposed by ERMA. If producers then wanted to make a claim about the properties of their product (e.g. GM-free), this claim would be covered by the Fair Trading Act, and could be challenged under this Act if the claim could be verified as misleading. Therefore, while the producers will not have to test all of their products to demonstrate the truthfulness of their claims, they would need to be confident that no third party could prove their claims false. This is the approach taken with other marketing claims (e.g. foods free of pesticides or heavy metals).

Conclusion

40. The general concept of coexistence is already well established in New Zealand primary production, with conventional, organic, and integrated pest management systems working successfully together. Coexistence requires sharing responsibilities between different producers. Overseas experience demonstrates that introducing GM organisms into primary production systems needs a carefully considered and managed approach incorporating the needs and capabilities of the whole production chain to ensure that all opportunities are preserved. New Zealand has a rigorous legislative framework in place to manage the possible use of GM organisms and their products in its production systems, and it is in the process of being further strengthened. The government's recent decision to amend the HSNO Act to include a new conditional release category will provide an appropriate regulatory framework to enable GM and non-GM agriculture, horticulture and forestry to effectively coexist in New Zealand. Both non-GM production (including organic production) and GM production will provide new opportunities for New Zealand primary production. The key to maximising the benefits from each is to ensure the effective regulation and management of these types of production to allow their productive coexistence. MAF will continue to monitor international developments relating to achieving effective coexistence of GM and non-GM production systems, and assess their implications for New Zealand.

41. In summary, officials believe that coexistence of GM and non-GM production systems will be effective in New Zealand by proceeding carefully, and rigorously examining each use of a GM organism on a case-by-case basis within the context of New Zealand's comprehensive regulatory framework. This overview provides the context for the accompanying paper that examines in detail five specific issues important for managing coexistence in New Zealand that MAF was directed by government to investigate.

Consultation

42. The following departments and agencies were consulted: Department of Conservation; Ministry of Consumer Affairs; Ministry of Economic Development; Ministry for the Environment; Ministry of Foreign Affairs and Trade; Ministry of Health; Ministry of Justice; Te Puni Kōkiri (Ministry of Māori Development); Ministry of Research, Science and Technology; Department of the Prime Minister and Cabinet; The Treasury; and ERMA New Zealand.

43. In addition, MAF presented aspects of its work at meetings and hui to participants interested in "conditional release" as part of public consultation on amendments to the HSNO Act coordinated by the MfE, and consulted other affected parties directly. Several written submitters and all hui expressed strong dissatisfaction with the process and timelines for consultation.

Financial Implications

44. There are likely to be increased costs of enforcement as the number of approvals for conditional release increase.

Human Rights

45. There are no human rights implications associated with this paper.

Legislative Implications

46. The passing into law of the pending amendment to the HSNO Act, to include the “conditional release” category, is essential for managing the effective coexistence of GM and non-GM agriculture, horticulture and forestry.

Regulatory Impact and Compliance Cost Statement

47. This is not required for this paper because there are no legislative implications.

Publicity

48. There is likely to be public interest in the content of both coexistence papers. It is recommended that the papers be released and posted on relevant websites, along with the decisions made by the government.

Recommendations

49. It is recommended that the Committee:

1. note that different non-GM production systems have been successfully working alongside each other in New Zealand and overseas for many years, but that some problems do arise;

2. note that organic products are generally certified on the basis of how they are produced, and not on the characteristics of the products themselves;

3. note that most countries growing GM crops also have expanding areas of organic production;

4. note that the main problem encountered with achieving effective coexistence of GM and non-GM production systems overseas relates to the unintended presence (either illegal or unwanted) of GM material in products that are supposed to be non-GM;

5. note that New Zealand has a comprehensive and integrated regulatory framework for managing risks to the environment and people from GM organisms and GM foods, and addressing marketing claims;

6. note that the government's decision to amend the HSNO Act to include a new conditional release category will allow ERMA to impose controls where appropriate on released GM organisms to manage any identified risks, and that compliance with any controls will be further strengthened with the new statutory civil liability rule and civil penalties;

7. note that the government has also decided to add additional mechanisms (powers to make regulations for conditionally released organisms, explicit provision for adding or removing new organisms from the prohibited organism list) to the HSNO Act that will allow the government to establish further measures to achieve effective coexistence if there was a need to do so;

8. note there are indications that there would be only a few applications to ERMA to release GM crops in the short to medium term, and these will likely be mostly for agronomic or environmental evaluation;

9. note that there would be different approaches to achieving effective coexistence for different GM organisms ranging from vaccines to animals to plants.

10. note that individual producers will be able to produce to standards of their choice, additional to any controls imposed by ERMA, as their specific markets demand;

11. agree that effective coexistence of GM and non-GM production can be achieved in New Zealand by proceeding carefully and rigorously examining each use of a GM organism on a case-by-case basis within the context of New Zealand's comprehensive regulatory framework; and

12. direct officials led by MAF to continue to monitor international developments in achieving effective coexistence of GM and non-GM production systems, assess their implications for New Zealand, and report back by 31 October 2004 on any issues needing further government decisions.


Hon Jim Sutton
Minister of Agriculture

Encl.
ANNEX 1: SUMMARY OF SUBMISSIONS TO MAF ON HOW "CONDITIONAL RELEASE" MAY ASSIST IN ACHIEVING COEXISTENCE

1. Process

MAF received 86 submissions on its presentation document. MAF also reviewed 102 substantive submissions forwarded by the Ministry for the Environment (MfE) . These submissions commented on Chapter 4 ("Conditional release") of the public discussion document on amendments to the HSNO Act, and contained information related to coexistence.

MAF officials read each submission and identified the key points. These were entered into a database, and sorted by main topics raised. The summary below outlines the major issues identified. An external review of the completeness and accuracy of a draft of this summary of submissions was carried out. The reviewer's report is attached.

2. General

The submissions came from diverse sources including:
 individuals;
 Māori community;
 religious groups;
 district councils;
 organisations involved in the organics industry, such as Organic Products Exporters of New Zealand, and The Bio Dynamic Farming and Gardening Association;
 agricultural and biotechnology industry groups, such as Federated Farmers, the National Beekeepers Association, and the Life Sciences Network;
 environmental organisations, such as Greenpeace, GE-Free Northland, and Forest and Bird Protection Society;
 research organisations, including Crown Research Institutes and universities;
 Green Party; and
 Sustainability Council.

Most submissions were high-level and focussed on the (im)practicality of coexistence. There were 17 submissions that commented substantively on a code of practice for separation distances between GM and non-GM crops, and 1l submissions commented in detail on nation-wide networks. Three submissions commented on the GM crops that New Zealand was likely to grow in the future.

2.1 Consultation process

Eleven submissions to MAF complained strongly that the time given for submissions was inadequate and inconsistent with genuine consultation. One submitter was concerned that a lack of time to undertake the required research and policy development will result in an inadequate regulatory framework.

2.2 Practicality of coexistence

More than two-thirds of the submissions to MAF, nearly half the number forwarded to MAF from MfE, and the form submission text, stated or implied that coexistence was not possible. These submissions came largely from individuals, environmental groups, and organic industry bodies. The major points made were that:
 it was impossible to prevent contamination (as shown by overseas experience);
 the organic and beekeeping sectors would be damaged if any GM material was found in their products;
 New Zealand's clean-green image would be damaged; and
 there could be adverse effects on people and the environment arising from any releases of GM organisms.

Several submitters felt it was essential that liability and legal issues be clarified before any coexistence is allowed. The need to ensure a holistic approach that took account of coexistence issues throughout the growing and marketing chain was also raised by several submitters.

Nine submissions to MAF, and three submissions forwarded to MAF from MfE, stated or implied that coexistence was possible. These were almost exclusively from the agricultural and biotechnology industry groups or Crown research bodies. Several submitters noted that many of the systems required to achieve coexistence were already in place in the cropping sector, but that a case-by-case approach was needed to consider appropriate controls.

Many submitters identified that a key issue for coexistence was resolving the level of contamination that was acceptable in non-GM systems. Those who thought coexistence was not possible generally sought absolute freedom from any presence of GM material whereas those who thought coexistence was possible thought that low levels of unintended presence could not be completely avoided, but could be managed. Submitters from a diverse range of organisations (including environmental groups, district councils, producer groups, and research organisations) identified that the concept of regional exclusion zones should be further explored or established for their areas. This issue is included in the MfE summary.

2.3 Māori views

The submission to MAF from Te Runanga o Ngai Tahu, who hold statutory status as the representative voice of Ngai Tahu Whanui, opposed the granting of any application for developing GM organisms or releasing them into the environment, except where Te Runanga are satisfied with the impact on social and cultural concerns related to Whakapapa, Kaitiakitanga and Rangatiratanga. Te Runanga o Ngai Tahu also stated they still feel it has not been given the opportunity to understand the impact genetic modification, particularly cross-species modification, will have on its social, cultural and environmental concerns. Similar concerns were expressed in three submissions forwarded by MfE. The submissions noted the need for Māori to be involved in decision-making processes.

3. Industry code of practice for separation distances between GM and non-GM crops

3.1 General comments

Submitters who thought coexistence was not possible had no confidence that any separation distances (buffer zones) were practical. Particular concerns were:
 the probability that at least some pollen grains could be found at large distances from their source (especially wind-blown pollen),
 the threat to existing requirements for no GM contaminants in organic systems,
 the large distances that could be foraged by bees and other insects,
 uncertainty about liability for damage or losses, and
 the inability of producers to keep GM contaminants out of non-GM seed stocks.

Submitters believing that coexistence was possible generally felt that separation distances should be established through the ERMA process on a case-by-case basis, and may not necessarily need a code of practice.

3.2 Could the code be based on the current certified seed production code?

Agricultural and biotechnology industry groups and research bodies, including AgriQuality, Life Sciences Network and the Association of Crown Research Institutes, generally supported developing a mandatory code of practice based on the existing voluntary seed certification scheme. However, AgResearch noted that existing certification does not demand 100% purity and this may cause problems in terms of consumer guarantees.

Organic producers and those believing coexistence was not possible were adamant that the existing scheme was not suitable because it did not demand absolute purity, and any scheme must be mandatory. Some submitters in this group, including the Green Party and Greenpeace, noted that allowing contamination at anything above the technical limit of detection was unacceptable. VegFed and Life Sciences Network noted that the existing voluntary seed certification scheme was successful because both parties had the financial incentives to reach an agreement, but for GM crops such incentives may be absent.

3.3 Would a register of plantings need to be maintained?

Almost universally, submitters commenting on this topic (including individuals, environmental groups, agricultural and biotechnology industry groups, and research groups) agreed that a register of plantings must be maintained. The purpose of the register would need to be carefully defined. Suggested purposes included assisting with the monitoring of effects and compliance with any conditions of release, minimising the likelihood of contamination, addressing liability and insurance issues, facilitating access to international markets by ensuring traceability systems are in place, and assisting prospective buyers (including land purchasers) with purchasing decisions. One submitter suggested that the level of detail and access to the information on the register would depend on its purpose. They also suggested that MAF or AgriQuality should maintain the register.

3.4 Who will ensure compliance?

Out of the ten submitters that directly answered this question, three submitters suggested that MAF would be an appropriate agency for auditing compliance with conditions imposed on applicants because of its biosecuity expertise. However, some submitters questioned MAF's ability or funding to perform the function. Alternative suggestions were that enforcement bodies from central or local government appointed under the HSNO Act, Agriquality or some other verification agency, or DoC (for GM organisms deployed on land administered by them) could be used.

3.5 Who would pay?

Submitters generally favoured either developers or users bearing the costs of deploying GM crops (user pays). One submitter suggested that third parties should pay some of the costs where a major benefit occurs to them.

3.6 Should compliance under conditional release be mandatory, but voluntary where there is unconditional release?

Submitters generally agreed compliance should be mandatory under conditional release, at least initially. One submitter suggested this could be revised as more knowledge becomes available. One submitter noted that unconditional release would have no controls, therefore compliance is not an issue in that case.

4. Nation-wide networks for facilitating coexistence and requirements for a mediation service

4.1 How practical is it to develop a nation-wide network in advance of any crops being released?

Federated Farmers noted that information-sharing networks could assist with the introduction of GM crops and play a role in developing robust codes of practice. Wrightsons suggested the need for a network would depend on the number of conditional releases. The National Beekeepers Association noted that excellent communication between beekeepers and land users would be required.

One personal submitter thought a network would be impractical because GM organisms could not be contained. GE Free Nelson noted that even a nationwide network would find it impossible to ensure co-operation.

4.2 Would this network be comprised of representatives of all interest groups?

The Association of Crown Research Institutes submitted that any network should have stakeholders from national bodies, and the initiative should come from stakeholders rather than government, although government may wish to offset the initial costs of developing an accord. Federated Farmers suggested that networks may develop of their own accord among industry participants, but more formal networks involving all interested parties would need external impetus. Wrightsons suggested that the networks should comprise existing groups, especially for facilitation or training. The Organic Products Exporters of New Zealand submitted that input from stakeholders should be funded.

4.3 Would it be better to establish networks on a regional basis when there is a regional interest in growing a specific crop?

There was little comment on this topic. Life Sciences Network suggested that agreed and suitable local arrangements between growers would be encouraged, but that each local arrangement would need to stand on its own. One personal submitter also supported regional networks, but only after GE-Free regions had been established.

4.4 What are the requirements for a mediation service?

There were a range of views about the need for and usefulness of a mediation service. Two of the twelve submitters who commented on this topic, both of whom were personal submitters, supported establishing a new mediation service. These submitters saw the role of the mediation service as either to provide information, or to negotiate GE-free regions. Four submitters opposed to the release of GM organisms saw little point in a mediation service. The Green Party asked why would organic producers participate? Federated Farmers and Life Sciences Network thought that a service for handling disputes would be necessary, but were not convinced a new body was needed because there are already mechanisms for doing this. Wrightsons noted that it was unclear what a mediation service would do until specific regulations were in place, but at a minimum it should be a mechanism for neighbours to report risks and issues. AgResearch suggested the service may have to deal with multiple GM growers in one area, or farmers using different production systems side-by side.

5. What GM crops is New Zealand most likely to grow and when?

Federated Farmers suggested that in the next five years there could be interest, depending on market demand, in growing:
 USA multiplication ryegrasses
 bloat resistant clover
 "non-seeding" ryegrass
 high yield milling wheat
 herbicide tolerant crops

GE-Free Nelson suggested that pharm crops were most likely in future. One submitter noted that the USA was not growing GM potatoes anymore and asked where was the market demand for GM crops?
ANNEX 2: SUMMARY OF COEXISTENCE HUI NOTES (Joint hui with MfE)

In October and November 2002, MAF and MfE held six hui, at which issues for Māori in terms of conditional release and coexistence were discussed. The following issues were raised in relation to the implementation of coexistence, and the consultation process:

Consultation processes

Hui participants expressed strong dissatisfaction with the process and timelines for consultation.

Treaty of Waitangi and Māori engagement

Hui participants considered that the partnership relationship of the Treaty of Waitangi needed to be reflected in the process.

A majority of hui participants expressed the view that Māori want to be active and effective participants in the development of GM policy and legislation. Some hui asserted the need for greater input on the implications for Māori on the establishment of buffer zones.

Information and education to Māori

It was noted that education and information was needed by Māori in terms of the ERMA processes and applications. Some participants felt they could not support GM, owing to a lack of appropriately targeted information regarding implications for Māori.

Māori land tenure

At the Gisborne hui, concern was expressed that any policy/legislation/regulations surrounding coexistence needs to take into account potential impact between coexistence policies and existing Māori land structures and responsibilities, as defined under the Te Ture Whenua Māori Act. This may include analysis of issues related to the establishment, monitoring and management of buffer zones on multiple-owned Māori lands. It was also suggested at the Gisborne hui that Trustees of Māori land will need to know the content of the active GM organism, in order to be able to participate in the management and monitoring of the buffer zones.

Coexistence

Participants identified potential benefits and concerns. There was some support to explore the potential benefits for farming. This included the possibility of gaining a market edge on beef and/or lamb production; and growing pine trees without pollen to restrict pollution of water ways. It was also noted that potentially, GM could reduce herbicide and pesticide use.

Māori organic participants felt that buffer zones will not work and that contamination is a matter of time. Concern was also expressed over potential effects on the organics overseas markets, and NZ’s ‘clean, green image’. The Whanganui hui noted that some of their runanga and iwi had established policies declaring their land “GE-free, stating they are “pro-tikanga, not anti-science”. In terms of medical benefits, there were mixed views, with discussion on possible advantages and disadvantages.

Buffer zones

Māori engagement was a significant issue with participants wanting an opportunity for Māori input into the development of policy, management and decision making processes over buffer zones. Concerns included who will pay for establishing buffer zones, and protection of waahi tapu by kaitiaki (guardians) within the buffer zones. Hui participants queried whether there were implications for Māori in establishing buffer zones on Māori individual, multiple-owned lands administered on the owners’ behalf (under Te ture Whenua Māori/Māori Land Act). It was also felt that any GM material released needed to be sterile; and that, should waahi tapu exist in the buffer zones, these areas should be protected.

Liability issues surrounding buffer zones and coexistence

Concern was expressed regarding who would be liable and accountable if GM contamination were to occur.

Compliance and regulations surrounding coexistence

The Auckland hui felt that MAF should have this role, with the view that Local Government should not have responsibility for enforcement. Concern was expressed as to whether penalties under HSNO were a sufficient deterrent. Some participants noted that there were “huge issues of safety, liability, accountability and transparency” to be addressed regarding coexistence.

Mediation service

Some participants were open to regional networks being considered as a form of mediation service to be used when disputes arose in relation to the establishment of coexistence. These could be based at the marae and/or hapu level, respecting kaitiakitanga. Hui noted that any form of mediation needed to be inclusive of processes inherent in tikanga Māori in terms of dispute resolution; and that the mediation procedures in place within the jurisdiction of the Māori Land Court be considered in terms of developing proposals. Other concerns included who would pay for the service; and the establishment of a process or appropriate means of resolution, should voluntary mediation not resolve the issue.

ENDS

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