Inquiry into the principles determining whether delegated legislation is given the status of regulations

Transcription

1 Inquiry into the principles determining whether delegated legislation is given the status of regulations Report of the Regulations Review Committee Forty-seventh Parliament (Richard Worth, Chairperson) June 2004 Presented to the House of Representatives

2 Contents Recommendations 3 Introduction 3 Role of Regulations Review Committee 5 Legislative categories 5 Principles applying to delegation of lawmaking powers 5 Jurisdiction to examine regulations 6 Role should be to assess substance rather than form 9 Responding to difficulties with the definition 11 Options 13 Recommendations 16 Conclusion 16 Appendix A 18 Appendix B 19 Appendix C 22 Appendix D 23 Appendix E 25 2

3 INQUIRY INTO DELEGATED LEGISLATION I.16E Inquiry into the principles determining whether delegated legislation is given the status of regulations Recommendations The Regulations Review Committee recommends to the Government that: 1. it amend the definition of regulations in the Regulations (Disallowance) Act 1989 and the Interpretation Act 1999 in line with the definition of legislative instrument as set out in the Australian Legislative Instruments Act the amendment to the Regulations (Disallowance) Act 1989 should include provisions that relate to the establishment of a register of legislative instruments as set out in the Australian Legislative Instruments Act Introduction The Regulations Review Committee of the 46th Parliament initiated an inquiry in June 2001 into the principles determining whether delegated legislation is given the status of regulations. We resolved to continue the inquiry in September The inquiry was an opportunity for us to address some fundamental issues about delegated legislation. We are concerned that it is not always clear why a particular instrument is classified as a regulation, as a deemed regulation, or given no particular status meaning that it falls outside our jurisdiction. Consequently, an instrument may not be classified as a regulation but we may consider that it ought to fall within our jurisdiction. As a result, the inquiry focused on two key issues. First, we examined the current principles that apply to the delegation of lawmaking powers and sought to update and consolidate them. Second, we looked at current problems with the classification of delegated legislation and options for addressing these. Inevitably, the latter issue required us to carefully consider the scope of our jurisdiction. In many respects, the inquiry is a continuation of work completed by the Regulations Review Committee of the 45th Parliament in its report on deemed regulations. 1 We echo that committee s statement about why there is a need for effective scrutiny of what has become an increasingly complex area of lawmaking: 2 Effective parliamentary scrutiny of delegated legislation is especially important in a mixed member proportional representation electoral system because the executive 1 Regulations Review Committee Inquiry into instruments deemed to be regulations An examination of delegated legislation, AJHR, I.16R. 2 Ibid, pp

4 INQUIRY INTO DELEGATED LEGISLATION decisions of a minority government may not reflect the views of a majority of the House It is important to remember that while Parliament has delegated the authority to make delegated legislation it has not relinquished its ultimate lawmaking responsibility. Terms of reference The terms of reference for our inquiry were to examine: the principles that determine whether delegated instruments of a legislative character are given the status of regulations the principles to be considered when primary legislation delegates lawmaking powers whether there are delegated instruments of a legislative character that are not subject to the scrutiny of the Regulations Review Committee whether those instruments ought to be subject to the scrutiny of the Regulations Review Committee and, if so: - whether the definition of regulations in section 2 of the Regulations (Disallowance) Act 1989 ought to be amended accordingly, to include some or all of these instruments, or - whether the Standing Orders setting out the committee s functions ought to be amended accordingly, to enable the committee to examine delegated legislative instruments that fall outside the definition of regulations. For the purposes of this report we have considered the first and second terms of reference together, and the third and fourth terms of reference together. This is because the first two relate to the theory or jurisprudence surrounding the classification of delegated legislation. The third and fourth terms of reference are linked because they represent the practical consequences of the way delegated legislation is classified in New Zealand and the problems associated with this classification. Status of instrument critical The underlying question of the inquiry relates to determining the status of an instrument, that is, whether it is a regulation or not. This is significant because if an instrument is a regulation, as defined by the Interpretation Act 1999 and the Regulations (Disallowance) Act 1989, it is subject to the following: presentation to Parliament within 16 sitting days of being made (section 4, Regulations (Disallowance) Act 1989) printing and publication requirements in the Acts and Regulations Publication Act 1989 scrutiny by the Regulations Review Committee disallowance by the House (section 5, Regulations (Disallowance) Act 1989) automatic disallowance following the giving of a notice of motion in the House (section 6, Regulations (Disallowance) Act 1989) These requirements apply only to an instrument that is defined as a regulation. 4

5 INQUIRY INTO DELEGATED LEGISLATION I.16E Role of Regulations Review Committee The Regulations Review Committee is a specialist select committee appointed at the beginning of each Parliament. The House has an interest in monitoring the use of regulation-making powers to ensure they are being exercised within the limits Parliament intended. The Regulations Review Committee examines all regulations and regulationmaking powers in bills, investigates complaints about regulations, and performs other functions so that regulations are subject to effective parliamentary scrutiny and control. Unlike the 13 subject select committees, the Regulations Review Committee does not examine matters of policy. It carries out technical scrutiny of regulations on behalf of the House, in accordance with a number of grounds listed in the Standing Orders. 3 The committee has a tradition of working in a non-partisan manner and by convention is chaired by an Opposition member. It tries to reach a consensus view across party lines on the business it considers. Legislative categories Before we discuss the substance of the inquiry, it is useful to briefly canvass the three general categories of legislative instrument. For the purposes of our report we define these as follows: primary legislation: Acts of Parliament secondary legislation: regulations tertiary legislation: other instruments. Whether a particular piece of delegated legislation should be classified as a secondary or a tertiary instrument is not always clear. There will be examples of instruments that are delegated directly under primary legislation that we define as tertiary legislation in this report. Distinction between secondary and tertiary legislation Secondary legislation is subject to the requirements discussed on page 4 of this report. None of these requirements apply to tertiary legislation. Tertiary legislation covers a plethora of instruments such as bylaws, codes of practice, standards, guidelines, notices and directions. These instruments may be authorised specifically under an Act of Parliament or may arise through executive administration as departmental guidelines and manuals. Tertiary legislation is not subject to the same processes of scrutiny as secondary legislation. In particular, the Regulations Review Committee does not examine tertiary legislation. Principles applying to delegation of lawmaking powers The general principles that apply to the delegation of lawmaking powers are already well established. When delegating lawmaking powers, the following should apply: primary legislation should contain matters of principle and policy secondary legislation should be confined to matters of implementation and detail. 3 See Appendix B. 5

6 INQUIRY INTO DELEGATED LEGISLATION Other principles that have developed from this fundamental position can be found in a number of reports and sources. We considered it would be helpful to agencies involved in the development of legislation to set out a summary of these principles in this report. This summary is attached as Appendix E. Moving from principles to practice Currently, delegated legislation can be classified into three categories. The first category comprises traditional or statutory regulations that are made by the Governor-General by Order in Council under a regulation-making power in a statute. The second category comprises instruments that are commonly referred to as deemed regulations. These are instruments that are deemed in a statute to be regulations for the purposes of the Regulations (Disallowance) Act Such instruments may be specifically excluded from the application of the Acts and Regulations Publication Act This means that although the instruments are subject to the scrutiny of the Regulations Review Committee and disallowance, they do not have to be published in the Statutory Regulations Series or to be drafted by the Parliamentary Counsel Office. Deemed regulations can be seen as a subset of regulations. The third category of instruments comprises those that are neither traditional nor deemed regulations but may be of a lawmaking character because the instrument may define a right or obligation, lay down general rules, or regulate conduct. These instruments are not subject to parliamentary scrutiny or publication requirements. 4 The classification of instruments referred to above generally reflects the principles that apply to the delegation of lawmaking powers. While the principles may be well established, there are difficulties at times with their application. The classification of instruments does not appear to be always determined on a principled or consistent basis. The Chief Parliamentary Counsel told us: 5 As always, the difficulties come with application. Many cases are straightforward and the answer is obvious. In others, it is not clear cut and the classification decisions will not be easy or always the right ones. As we will discuss in the remainder of this report, there are significant difficulties in the way delegated legislation is classified in New Zealand. This concern is typified by the comment from the Legislation Advisory Committee that the current position is highly confusing and that variability in practice provides less than optimum protection for the public. 6 This conclusion is a cause for concern and lies at the heart of this inquiry. Jurisdiction to examine regulations Our jurisdiction is derived from a mix of parliamentary procedure and statute. The Standing Orders state that the Regulations Review Committee examines all regulations. 7 4 Submission from the Chief Parliamentary Counsel, paragraph Submission from the Chief Parliamentary Counsel, paragraph Submission from the Legislation Advisory Committee, p Standing Order 377(1). 6

7 INQUIRY INTO DELEGATED LEGISLATION I.16E This obligation is not as wide as it might appear. The Standing Orders specify that regulations are defined as those instruments that are regulations for the purposes of the Regulations (Disallowance) Act This definition is problematic for a number of reasons, because it: mixes conceptual and terminological approaches to classification creates anomalies of classification means the name of the instrument may not flag the significance of its contents requires the effect of the instrument to be specified in statute. We discuss each of these reasons below. Understanding these issues allows us to answer the substantive question posed by the third term of reference. Mix of conceptual and terminological approaches The definition mixes the conceptual and terminological approaches to classification. The conceptual approach is one where the character of an instrument determines its status. This is illustrated in paragraph (b) of the definition, 9 which states that certain types of instruments are classified as regulations on the basis of whether they vary or extend the scope or provisions of an enactment. The terminological approach describes the classification of the instrument by reference to a list. This is illustrated in paragraph (a) of the definition, which states that instruments are regulations if they are named as regulations, rules, or bylaws made under an Act by the Governor-General in Council or by a Minister of the Crown. There are advantages and disadvantages with both approaches. The use of the terminological approach provides certainty in that a named instrument will have the status of a regulation. However, it also means that an incorrectly named instrument that may exhibit all the characteristics of a lawmaking instrument and ought to be classified as a regulation, will not be subject to the usual consequences of being defined as a regulation. In contrast, the conceptual approach provides flexibility and allows the character or substance of the instrument to determine whether it is classified as a regulation. However, the consequence of this flexibility is a loss of certainty over the precise status of an instrument. This mix of approaches is significant to our inquiry. The confusion created by the definition means we cannot pick up any instrument and be sure of its status without careful analysis. Put simply, neither the Acts and Regulations Publication Act 1989 nor the Regulations (Disallowance) Act 1989 is conclusive in answering the fundamental question of what is a regulation? It is also worth noting that there is no published authoritative or comprehensive list of regulations. 8 Standing Order 3. The full definition is set out in Appendix C to this report. 9 See Appendix C. 7

8 INQUIRY INTO DELEGATED LEGISLATION Anomalies of classification The nature of the instrument is not always reflected in its classification, which creates anomalies. For example, under section 5A of the Misuse of Drugs Act 1975, the Minister of Health may by notice approve laboratories for the purposes of the Act. Notices are deemed to be regulations for the purposes of publication and disallowance. By contrast, notices under section 22(1A) prohibiting the importation or supply of pipes or utensils related to controlled drugs are deemed to be regulations for the purposes of disallowance only. Under section 22(1) of the Act, the Minister may prohibit the importation, manufacture, production, procuring, possession, supply, administration, or other use of any specified controlled drug, either absolutely or subject to such conditions as the Minister thinks fit for any specified period not exceeding 1 year. These notices are not regulations for the purposes of publication or disallowance. 10 There does not seem to be a consistent connection between an instrument that defines rights or obligations, thereby classifying it as having a lawmaking character, and the subsequent requirements of disallowance and/or publication. By way of further illustration, we have also had difficulties with the definition in terms of assessing whether a complaint to us falls within our jurisdiction. 11 These types of anomalies and difficulties are undesirable. Our core function is to provide scrutiny and control of the lawmaking powers that Parliament has delegated to the executive. These lawmaking powers are to be distinguished from the administrative acts of the executive, such as ministerial appointments or approvals. As we discuss later in this report, we do not need to scrutinise instruments of executive action. 12 Naming of instrument hides significance Delegated legislation comprises a myriad of different instruments. However, the descriptions and wording, particularly in the title of the instrument, can hide the significance of the lawmaking powers it contains. The way an instrument is described may not assist the reader in assessing its status. For example, an order can be used for an administrative, legislative, judicial, or prerogative act. 13 The Legislation Advisory Committee told us: 14 [t]here seem to be no clear conventions governing which name is appropriate in a particular case. It is not apparent that the different names are terms of art, or that they designate a difference in kind. Our concern is that by implication, an instrument that otherwise exhibits all the characteristics of a regulation may fall outside our scrutiny because of the way it is named. 10 Submission from the Chief Parliamentary Counsel, pp See the Activities of the Regulations Review Committee during 2001, 2002, I.16J, p. 47. This details a complaint regarding the Deer Farming Notice (No 4) See also the report of the Regulations Review Committee Complaint regarding Fisheries (Declaration of New Stocks Subject to Quota Management System) Notice (No 2) 2002, 2003, I.16C. 12 See p Regulations Review Committee, Proposals for a Regulations Bill, AJHR, Volume XI, p Submission from the Legislation Advisory Committee, p. 2. 8

9 INQUIRY INTO DELEGATED LEGISLATION I.16E In our view, this is not a rational basis for determining whether an instrument is subject to scrutiny and/or disallowance. Statutory description of instrument s effect may not be clear At present, individual statutes may specify the effect of a particular instrument. This is necessary because without such provision, the status of the instrument would be unclear. The empowering provision may state that the instrument is a regulation for the purposes of either: the Regulations (Disallowance) Act 1989; or the Regulations (Disallowance) Act 1989 but not the Acts and Regulations Publication Act 1989; or both the Regulations (Disallowance) Act 1989 and the Acts and Regulations Publication Act 1989; or the Acts and Regulations Publication Act 1989; or the Acts and Regulations Publication Act 1989 but not the Regulations (Disallowance) Act There are over 80 current statutes incorporating over 130 separate provisions that make reference to regulations in one of the above five ways. 15 Around 75 percent of these provisions fall within the first two categories. Regulations that are subject to both the Regulations (Disallowance) Act 1989 and the Acts and Regulations Publication Act 1989 make up around 20 percent, with the remainder subject to publication requirements only. Some Acts have multiple provisions that may include more than one of the above possibilities. 16 There are a number of variations in the way these five options are expressed. One further variation provides that an instrument is not a regulation for the purposes of the Regulations (Disallowance) Act These are typically found in statutes that detail an affirmative resolution procedure. 17 The fact that there are so many instances of an Act specifically providing that a particular instrument is a regulation for the various purposes listed above suggests that the definition of regulations in the Regulations (Disallowance) Act 1989 may be too narrow. Role should be to assess substance rather than form In our view, the answer to the question posed by the third term of reference is yes. Because of the difficulties detailed above we consider that there is a range of instruments of a legislative character that are not subject to our scrutiny. We have been given a number of examples of instruments that could be classified as legislative in character but that do not 15 Figures are based at the time of making this report. There are 10 other bills either before select committees, or on the current order paper, that also make reference to an instrument s status under either the Regulations (Disallowance) Act 1989 or the Acts and Regulations Publication Act For example the Civil Aviation Act 1990, the Animal Welfare Act 1999, and the Education Act See the Misuse of Drugs Act 2000 and the Dog Control Act

10 INQUIRY INTO DELEGATED LEGISLATION fall within the definition of regulations and are not subject to disallowance or parliamentary scrutiny. These instruments include: 18 guidelines and standards issued under section 130 of the Mental Health (Compulsory Assessment and Treatment) Act 1992 instructions on the operation of enrolment schemes under section 11G of the Education Act 1989 prescribed examinations and qualifications under section 44(2) of the Law Practitioners Act While we cannot state exactly how many instruments escape our scrutiny, it is clear that not all delegated instruments of a lawmaking character are subject to our overview. We can be certain that there is confusion surrounding the interpretation of the definition of regulations in the Regulations (Disallowance) Act 1989 and therefore the precise status of a particular instrument. If we are unable to adequately scrutinise the relevant delegations authorised by Parliament because of theoretical distinctions or simple semantics, as detailed above, then we are failing in our core duty of protecting Parliament s interests. Parliament has not given away its supervisory responsibilities in delegating its lawmaking powers. We ought to be able to examine instruments by reference to their substance rather than by their form. Therefore, we turn to the fourth term of reference, which invites us to consider whether such instruments ought to fall within our purview and how this might be achieved. Some submitters expressed concern that we are seeking in some way to extend our jurisdiction to cover all delegated legislation. In particular, the Ministry of Agriculture and Forestry considered that widening our jurisdiction to include all instruments of a delegated legislative nature would be immensely resource intensive. 19 Others questioned what would be achieved by extending our scrutiny in this way. The Department of Conservation was even more blunt. It told us there needs to be a point where departments can get on with the work Parliament has entrusted to them 20, and further, that: 21 The risk of broadening the jurisdiction of the Regulations Review Committee is that individuals who already have access to an Ombudsman or who can seek judicial review to complain about departmental conduct will have another avenue to tie up departmental time and resources. Those with unmeritorious complaints absorb almost as much departmental time (or more) as those whose claims may have merit. The department would still have to prepare a substantive report to answer any allegations that are made as a result of unmeritorious complaints. We are not advocating that all delegated legislation fall within our jurisdiction. It would not be practical or sensible for a Regulations Review Committee to consider all instruments, since there are many of an entirely administrative nature, such as ministerial appointments or approvals. These are not the type of instruments over which Parliament ought to be 18 Submission from the Chief Parliamentary Counsel, p Submission from the Ministry of Agriculture and Forestry, p Submission from the Department of Conservation, p Ibid, p

11 INQUIRY INTO DELEGATED LEGISLATION I.16E maintaining close scrutiny through a select committee. They are at a level of administrative detail where the responsibility for them rests entirely with the entity that makes them. We also wish to make it clear that we are not advocating that our jurisdiction be expanded to cover legislation such as bylaws made by local authorities. Our interest is in addressing those inconsistencies within the present model that may prevent us from scrutinising relevant instruments of a lawmaking character. Responding to difficulties with the definition It appears that the definition of regulations set out in the Regulations (Disallowance) Act 1989 may arbitrarily restrict our scrutiny function, and this is of fundamental concern to us. Set out below are suggestions from three key submitters, namely the Legislation Advisory Committee, the Chief Parliamentary Counsel, and the New Zealand Law Society. We also discuss the model recently adopted by the Australian Federal Parliament. We also considered comments from the Joint Standing Committee on Delegated Legislation, Western Australia, 22 and the report of the Scrutiny of Acts and Regulations Committee of the Parliament of Victoria, Australia, on the effectiveness of the regulation-making system in that state. 23 Regulations should have certain characteristics The Legislation Advisory Committee recommends that regulations should have a number of specific characteristics, including that the Parliamentary Counsel Office drafts them. The Legislation Advisory Committee considers that delegated legislation that lacks these characteristics should not be called regulations. The term deemed regulations should not be used. If any person makes a request about any other delegated legislation, the Regulations Review Committee should have the power to scrutinise it and Parliament the power to disallow it. Legislative character rather than designation should define jurisdiction The submission from the Chief Parliamentary Counsel proposes that the committee s jurisdiction to review should apply to delegated legislation that is, instruments that are legislative in character, regardless of how they are designated. The Regulations (Disallowance) Act 1989 should be amended so that it applies to delegated legislation, and its title changed to reflect a change in scope. This approach is based on the principle that Parliament should review legislation made by the executive and other agencies in the exercise of powers that Parliament delegates. The name of the committee should be changed to reflect the change in scope of its review function. The Acts and Regulations Publication Act 1989 should require publication of traditional regulations and rules made by the Governor-General in Council and the other instruments to which the Act applies in the Statutory Regulations series. The Act should be concerned 22 Submission from the Joint Standing Committee on Delegated Legislation, Western Australia, p Scrutiny of Acts and Regulations Committee, Victoria, Australia, Inquiry into the Subordinate Legislation Act 1994, September

12 INQUIRY INTO DELEGATED LEGISLATION with prescribing a specific method of publication for a significant type of delegated legislation. Rise of tertiary legislation means more checks and balances necessary The New Zealand Law Society made a detailed submission outlining its concern over the shift away from the traditional model of primary and secondary legislation, and the emergence of a new layer of tertiary instruments. The Law Society considers important constitutional protections, such as Cabinet scrutiny, as well as the scrutiny and drafting by the Parliamentary Counsel Office, mean that further checks and balances should be put in place, including that: the Parliamentary Counsel Office should be responsible for drafting all delegated legislation and should oversee the drafting of deemed regulations by nongovernmental organisations tertiary legislation should be directly authorised by Parliament rather than through the regulations delegating lawmaking authority all tertiary legislation should be brought within the definition of regulations the definition of regulations should be changed and brought into line with the definition as proposed in the Australian Legislative Instruments Bill 24 the committee s jurisdiction should be expanded to include supervisory control over all forms of delegated legislation the committee s membership should be expanded to 12 members and be formed into two subcommittees Australian statutory response to delegated legislation issues In coming to our conclusions on how we might best address the concerns about the classification of delegated legislation, we have also looked closely at the Commonwealth of Australia s recently enacted Legislative Instruments Act There are a number of key aspects to the Act. First, the Act defines a legislative instrument as an instrument of legislative character that is or was made under a delegation of power from Parliament (section 5(1)). 25 Section 5(2) goes on to state that an instrument has legislative character if it determines or alters the content of the law rather than applying the law in a particular case, and if it affects a privilege or interest, imposes an obligation, or creates, varies, or removes a right. In effect, all instruments that are registered will be legislative instruments (section 5(3)) and where an instrument has both legislative and administrative characteristics it will be deemed to be legislative (section 5(4)). Sections 7 and 9 detail those instruments that are not legislative instruments. Second, the Act establishes a Federal Register of Legislative Instruments to act as a repository of Commonwealth legislative instruments, explanatory statements and 24 Enacted as the [Australia] Legislative Instruments Act 2003, No. 139, See Appendix D. 12

13 INQUIRY INTO DELEGATED LEGISLATION I.16E compilations. 26 The Register is significant because if an instrument is not on the register, it is not enforceable. Further, all registered legislative instruments, subject to some exceptions, must be tabled within 6 sitting days of being made (section 38(1)). If this requirement is not met, the instrument ceases to have effect immediately after the last day for it to be so laid (section 38(3)). Importantly, where there is uncertainty, the Attorney- General can issue a certificate stating whether a particular type of instrument is a legislative one (section 10). There are other significant aspects to the Act, notably, to: encourage rule makers to undertake appropriate consultation before making legislative instruments improve public access to legislative instruments enhance mechanisms for parliamentary scrutiny and the sunsetting of legislative instruments. 27 Options We consider there are three possible responses to the issues we have identified in this report. We have set these out below, along with our reasons for endorsing or rejecting them. No change The first response is not to change anything. The rationale behind this is that any change may create more problems than it solves. For example, change in itself may create further uncertainty and would require substantive amendments to legislation and/or the Standing Orders. At present, where there is uncertainty the precise status of an instrument can readily be stated in any enactment. We do not consider it appropriate to retain the status quo. In our view we should have jurisdiction over instruments of a lawmaking character in order to ensure adequate parliamentary scrutiny of delegated legislation. While the current definition may have been considered satisfactory in the past, it now appears that an increasing number of instruments fall outside its ambit. This is clearly demonstrated by the fact that there are now over 80 statutes that make reference to instruments that are to be treated as regulations under the Regulations (Disallowance) Act There is a growing body of instruments that fall outside the general definition of regulations. There is no complete list of all the instruments that are regulations. The issue is, then, what is the best mechanism for implementing change. As we discuss below, the two options we have identified involve amending the Standing Orders, or amending the legislation. 26 [Australia] Legislative Instruments Act 2003, section Section 50 provides that legislative instruments automatically cease to be in force 10 years after they were made. 13

14 INQUIRY INTO DELEGATED LEGISLATION Amendment to the Standing Orders The second response would be to change the Standing Orders in order to adopt a different or wider definition of regulations. At present the definition of regulations in the Standing Orders is aligned with the definition in the Regulations (Disallowance) Act If the definition in the Standing Orders is amended this would allow us the flexibility to examine the delegated legislation we consider ought to be scrutinised. The risk with this approach is that it would create two types of instruments: those subject to our scrutiny (a wider class) those subject to disallowance (a narrower class). At present, parliamentary control of delegated legislation has two elements: scrutiny by the Regulations Review Committee and disallowance (either by the House or after the giving of a notice of motion in the House). These two controls would diverge if the definition of regulations in the Standing Orders and the Regulations (Disallowance) Act 1989 are allowed to differ. If these two controls diverge, we would be able to report to the House, drawing attention to any regulation under our jurisdiction on any of the grounds in Standing Order 378, but only regulations as defined by the Regulations (Disallowance) Act 1989 would be subject to disallowance. Although the disallowance procedure has been rarely exercised in New Zealand, it is nevertheless a significant sanction on executive lawmaking. It seems to us that it would be confusing to have some instruments that are subject both to our scrutiny and to disallowance, and others that are subject to our scrutiny but not to disallowance. It would seem anomalous that marginal instruments, which are likely to be covered by any extended definition, would escape potential disallowance. This approach may simply increase the uncertainty that already exists about an instrument s status. There is merit in amending the Standing Orders to adopt a different or wider definition of regulations. This would allow us to scrutinise instruments of a lawmaking character that would otherwise fall outside our jurisdiction. Further, we would be able to discuss our concerns with the Government department or agency involved and to report to the House accordingly. We do not, however, consider an amendment to Standing Orders is the best solution to the issues we have identified. As we stated above, it would create an unhelpful split between instruments we would only be able to scrutinise and report on under Standing Orders, and those instruments that would be subject to both our scrutiny and disallowance. If our recommendation for legislative change discussed below is not accepted, we would then consider seeking changes to the Standing Orders by way of sessional order. Legislative change The third response is some form of legislative change. Both the Chief Parliamentary Counsel and the New Zealand Law Society endorse this approach. The question is whether legislative change should be confined to amending the existing relevant statutes the Acts and Regulations Publication Act 1989 and the Regulations (Disallowance) Act 1989 or whether a new statutory framework should be created. 14

15 INQUIRY INTO DELEGATED LEGISLATION I.16E The Chief Parliamentary Counsel suggests that the Regulations (Disallowance) Act 1989 might be amended to apply to delegated legislation, with the term delegated legislation meaning: 28 regulations within the meaning of section 2 of the Acts and Regulations Publication Act 1989 an instrument made under an Act of Parliament that states the law by creating, varying, or removing legal rights, obligations, duties, privileges, or immunities an instrument that is required to be treated as a legislative instrument for the purposes of the Regulations (Disallowance) Act The Law Society believes that the definition should be changed in its entirety, and should be brought into line with the definition of legislative instrument as proposed in the then Legislative Instruments Bill. The Australian Legislative Instruments Act 2003 (formerly the Legislative Instruments Bill) as finally enacted represents a new approach to classification of instruments of a lawmaking character. It makes the character of an instrument the test, and provides certainty as to an instrument s status by requiring rapid tabling and insertion on to a register. The Act further clarifies those specific instruments that are not covered and provides for the Attorney- General to rule on whether an instrument should be on the Register if there is doubt. Recommendation for legislative change We consider that the most effective way to deal with the concerns we have raised is by change to the definition of regulations in legislation. In our view, the Australian Legislative Instruments Act 2003 provides the most coherent model for such change. In particular, we consider that the Act s approach to classification ensures that there is certainty over the status of any instrument. We do not expect to follow the Act in every respect, as it covers a number of other issues that are not dealt with in this report. Our key focus is on the provisions that relate to the definition of a legislative instrument and the mechanisms for bringing such instruments within the definition. In our view, there are sound policy reasons for bringing the New Zealand legislation into line with its Australian equivalent. In particular, we refer to the Closer Economic Relations Treaty with Australia, in which issues of trans-tasman harmonisation are increasingly significant. We are also concerned that we may increasingly encounter situations where different standards of scrutiny may apply to delegated legislation that affects both countries. For example, we recently considered aspects of the agreement between New Zealand and Australia for the establishment of a joint scheme for the regulation of therapeutic products. One of our concerns was that the proposed rules and orders, although lawmaking in character, would not appear to fall within the definition of regulations under the Regulations (Disallowance) Act The position would appear to differ in Australia, however, because the Legislative Instruments Act 2003 will focus on the legislative 28 Submission from the Chief Parliamentary Counsel, p

16 INQUIRY INTO DELEGATED LEGISLATION character of an instrument. In Australia the proposed rules and orders may fall within the standard legislative regime that will apply to promulgation, publication, and parliamentary scrutiny of legislative instruments, but in New Zealand, special provision will have to be made for these matters. Until now, New Zealand and Australia have taken a similar approach to the classification of delegated legislation. In particular, in both countries the primary legislation has had a terminological definition of instruments, and there are similar requirements for parliamentary scrutiny and disallowance of regulations. Australia has now made a fundamental shift in approach in defining legislative instruments. We would expect there to be a careful examination of any divergences with a view to assessing whether our legislation should move in the same direction as Australia. Should the Government accept our recommendation to amend the Regulations (Disallowance) Act 1989 and the Interpretation Act 1999, we suggest that it may be appropriate to include this in a future Statutes Amendment Bill. In our view, this step should be seen as non-controversial, as the change we have proposed is included to enhance proper scrutiny of delegated legislation by Parliament. Recommendations 1. We recommend that the Government amend the definition of regulations in the Regulations (Disallowance) Act 1989 and the Interpretation Act 1999 in line with the definition of legislative instrument set out in the Australian Legislative Instruments Act We recommend that the amendment to the Regulations (Disallowance) Act 1989 should include provisions that relate to the establishment of a register of legislative instruments as set out in the Australian Legislative Instruments Act Conclusion Without doubt, Parliament is the supreme lawmaker. But Parliament is far from being the only lawmaker. Parliament delegates its lawmaking powers and its delegations are exercised almost continuously. Every year over 400 regulations 29 are made, compared with the hundred or so Acts passed by Parliament. There is no evidence of any reduction in delegated lawmaking. Indeed, through globalisation, the increasing influence of international agreements and agencies and harmonisation of national laws we are increasingly subject to common standards across a wide range of issues. The daily lives of New Zealanders are affected by the requirements of delegated legislation more often than by the broad policies and principles laid down in Acts of Parliament. The rules we obey while driving to work, the cost of a birth certificate, and the choice of information we find on food labels are all requirements in delegated, not primary, legislation. 29 Including regulations in the Statutory Regulations Series and deemed regulations. 16

17 INQUIRY INTO DELEGATED LEGISLATION I.16E Our role is to scrutinise the exercise of the delegation of lawmaking powers on behalf of Parliament. We cannot perform that function if instruments of a lawmaking character escape Parliament s scrutiny and control. This report is intended to highlight these issues and propose options to address this problem. 17

18 INQUIRY INTO DELEGATED LEGISLATION Appendix A Committee procedure The Regulations Review Committee began the inquiry in the 46th Parliament in June We resolved to continue the inquiry in September The original inquiry was not carried forward at the conclusion of the 46 th Parliament and therefore required a new resolution of the Regulations Review Committee of the 47 th Parliament to commence the inquiry. Committee members Richard Worth (Chairperson) Dianne Yates (Deputy Chairperson) John Carter Lianne Dalziel Stephen Franks Dail Jones David Parker H V Ross Robertson Committee staff Debbie Angus, Legislative Counsel Michael Wilkinson, Clerk of Committee Carol Brown, Parliamentary Officer (Committee Support) 18

19 INQUIRY INTO DELEGATED LEGISLATION I.16E Appendix B Standing Orders 184 and 377 to Establishment and life of select committees (1) The following select committees are established at the commencement of each Parliament: (a) (b) the Officers of Parliament Committee, the Privileges Committee, the Regulations Review Committee and the Standing Orders Committee 377 Functions of Regulations Review Committee (1) The Regulations Review Committee examines all regulations (2) A Minister may refer draft regulations to the committee for consideration and the committee may report on the draft regulations to the Minister. (3) In respect of a bill before another committee, the committee may consider (a) any regulation-making power, (b) any provision that contains a delegated power to make instruments of a legislative character, and (c) any matter relating to regulations, and report on it to the committee that is considering the bill. (4) The committee may consider any matter relating to regulations and report on it to the House. (5) The committee investigates complaints about the operation of regulations, in accordance with Standing Order 379, and may report on the complaints to the House. 378 Drawing attention to the regulation (1) In examining a regulation, the committee considers whether it ought to be drawn to the special attention of the House on one or more of the grounds set out in paragraph (2). (2) The grounds are, that the regulation 19

20 INQUIRY INTO DELEGATED LEGISLATION (a) is not in accordance with the general objects and intentions of the statute under which it is made: (b) trespasses unduly on personal rights and liberties: (c) appears to make some unusual or unexpected use of the powers conferred by the statute under which it is made: (d) unduly makes the rights and liberties of persons dependent upon administrative decisions which are not subject to review on their merits by a judicial or other independent tribunal: (e) excludes the jurisdiction of the courts without explicit authorisation in the enabling statute: (f) contains matter more appropriate for parliamentary enactment: (g) is retrospective where this is not expressly authorised by the empowering statute: (h) was not made in compliance with particular notice and consultation procedures prescribed by statute: (i) for any other reason concerning its form or purport, calls for elucidation. 379 Procedure where complaint made concerning regulations (1) Where a complaint is made to the committee or to the chairperson of the committee by a person or organisation aggrieved at the operation of regulation, the complaint must be placed before the committee at its next meeting for the committee to consider whether on the face of it, the complaint relates to one of the grounds on which the committee may draw a regulation to the special attention of the House. (2) The person or organisation making the complaint is given an opportunity to address the committee on the regulation unless the committee agrees by unanimous resolution not to proceed with the complaint. 380 Affirmative resolution procedure (1) Any notice of a motion that the House approve a regulation under any statute stands referred to a select committee. The notice of motion is allocated by the Clerk to the most appropriate select committee for consideration. (2) The committee must report to the House on any notice of motion, which has been referred under this Standing Order, no later than 28 days after the day on which the notice of motion was lodged. (3) No motion to approve a regulation may be moved until (a) after the committee to which the notice of motion was referred reports, or 20

21 INQUIRY INTO DELEGATED LEGISLATION I.16E (b) 28 days have passed since the day on which notice of motion was lodged, whichever is the earlier. 21

22 INQUIRY INTO DELEGATED LEGISLATION Appendix C Definition of regulations in the Regulations (Disallowance) Act 1989, section 2 Regulations means (a) Regulations, rules, or bylaws made under an Act by the Governor-General in Council or by a Minister of the Crown: (b) An Order in Council, Proclamation, notice, Warrant, or instrument, made under an enactment that varies or extends the scope or provisions of an enactment: (c) An Order in Council that brings into force, repeals, or suspends an enactment: (d) Regulations, rules, or an instrument made under an Imperial Act or the Royal prerogative and having the force of law in New Zealand: (e) An instrument that is a regulation or that is required to be treated as a regulation for the purposes of the Regulations Act 1936 or Acts and Regulations Publication Act 1989 or this Act: (f) An instrument that revokes regulations, rules, bylaws, an Order in Council, a Proclamation, a notice, a Warrant, or an instrument, referred to in paragraphs (a) to (e). 22

23 INQUIRY INTO DELEGATED LEGISLATION I.16E Appendix D [Australia] Legislative Instruments Act 2003, sections 5 and 6 Section 5, Definition a legislative instrument (1) Subject to sections 6, 7 and 9, a legislative instrument is an instrument in writing: (a) (b) that is of a legislative character; and that is or was made in the exercise of a power delegated by the Parliament. (2) Without limiting the generality of subsection (1), an instrument is taken to be of a legislative character if: (a) (b) it determines the law or alters the content of the law, rather than applying the law in a particular case; and it has the direct or indirect effect of affecting a privilege or interest, imposing an obligation, creating a right, or varying or removing an obligation or right. (3) An instrument that is registered is taken, by virtue of that registration and despite anything else in this Act, to be a legislative instrument. (4) If some provisions of an instrument are of a legislative character and others are of an administrative character, the instrument is taken to be a legislative instrument for the purposes of this Act. Section 6, Instruments declared to be legislative instruments Without limiting the generality of subsection 5(1), each of the following instruments is, subject to sections 7 and 9, a legislative instrument: (a) an instrument: (i) (ii) made in the exercise of a power delegated by the Parliament before, on or after the commencing day; and described as a regulation by the enabling legislation; (b) an instrument, other than a regulation: (i) made in the exercise of a power delegated by the Parliament before the commencing day; and 23

24 INQUIRY INTO DELEGATED LEGISLATION (ii) required to be printed and sold as a statutory rule under subsection 5(1) of the Statutory Rules Publication Act 1903 as in force at any time before the commencing day; (c) an instrument: (i) (ii) made in the exercise of a power delegated by the Parliament before, on or after the commencing day in an Act providing for the government of a non-selfgoverning Territory; and described in that Act as an Ordinance or as a rule, regulation or by-law made under such an Ordinance; (d) an instrument made in the exercise of a power delegated by the Parliament before the commencing day and, in accordance with a provision of the enabling legislation: (i) (ii) declared to be a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901 as in force at any time before the commencing day; or otherwise able to be disallowed under Part XII of the Acts Interpretation Act 1901 as in force at any time before the commencing day; (e) a Proclamation made before, on or after the commencing day under enabling legislation. 24