Regulatory Impact and Compliance Cost Statement: Amendments to Biosecurity (Ruminant Protein) Regulations 1999

Statement of the nature and magnitude of the problem and the need for government action

New Zealand livestock is entirely free from bovine spongiform encephalopathy (BSE), scrapie and all other transmissible spongiform encephalopathies (TSE). The purposes of the Biosecurity (Ruminant Protein) Regulations 1999 (the Regulations) are:

  • To prohibit the feeding of ruminant protein in any form, composition, or admixture to ruminants because of the risk of amplifying and spreading TSEs, such as BSE, by doing so.
  • To require operators to prepare, register and implement ruminant protein control programmes.
  • To manage the risk to New Zealand of an outbreak of a TSE.

The problem with the regulations arose from practical experience in using the regulations, the need for cost recovery, a recommendation from the Regulation Review Committee, the need to implement recommendations relating to international standards and submissions from the public.

The following problems are experienced with the regulations:

  1. The categorisation of the offences as absolute liability is inappropriate and does not allow an offender to present any defence.
  2. The regulations result in Ministry of Agriculture & Forestry (MAF) incurring administrative costs from the registration and assessing of ruminant protein control programs required by the regulations. MAF’s average administration cost of assessing new programmes and registering 25 ruminant protein control programmes for the year 2002/03 were $3300.
  3. Uncertainty of whether the regulations provide for or prohibit the irrigation of wastewater derived from premises used for the slaughter and rendering of ruminants has led to the withholding of two resource consents for irrigation and one known challenge in the Environment Court.
  4. The regulations do not state the international standard level of insoluble impurities allowable for tallow to be excluded from the definition of feed. This creates uncertainty.
  5. The regulations do not state that highly processed ruminant products, accepted as safe in international trade, can be used for feeding to ruminants animals.
  6. The regulations do not state that food or food by products for humans, re-designated for use as animal feed, must be labelled to indicate the class of animal to which they may be fed.

Statement of the public policy objective(s)

The public policy objective is to ensure the regulations conform to legal technical and international requirements needed to prohibit the feeding of ruminant protein to ruminants, to manage the risk to New Zealand of an outbreak of a transmissible spongiform encephalopathy (TSE) and ensure that appropriate cost recovery provisions are in place.

Statement of feasible options (regulatory and/or non-regulatory) that may constitute viable means for achieving the desired objectives

Status quo

  • The offences prescribed in the Biosecurity (Ruminant Protein) Regulations 1999 (the regulations) include absolute liability offences.
  • The regulations do not include cost recovery provisions to allow MAF to recover its administrative costs of registering and assessing ruminant protein control programmes.
  • The regulations while not preventing irrigation of waste water do not state that irrigation is not prohibited, leading to challenges to the practice in the Environment Court.
  • The regulations do not specify that products (including tallow) accepted by the OIE as safe in international trade, can be excluded from the definition of feed in the regulations.
  • The regulations do not regulate food or food by products for humans that may contain ruminant protein and are re-designated for use as animal food.

The retention of the current regulations would not meet the public policy objective.

Amend the Biosecurity (Ruminant Protein) Regulations 1999 (preferred option)

Under this option the regulations would:

  • Provide that all absolute liability offences in the regulations be categorised as strict liability offences.
  • Provide that the cost to an operator of registering or assessing a ruminant protein control programme, or its amendment or replacement, would be the cost of the time taken for a biosecurity adviser to take those actions. The charge out rate of a biosecurity adviser is specified in the Biosecurity (Costs) Regulations 2003, and is $130 per hour.
  • Clarify that the irrigation of pasture, by spray or other means, with wastewater derived from premises used for the slaughter and rendering of ruminants, is not prohibited by the regulations. Such irrigation must be subject to the following standards (already being met):
    1. float material and sediment must be removed from wastewater;
    2. wastewater must be screened to a level that would allow spray irrigation;
    3. the pasture must not be grazed, or harvested for ruminant feed, at times when the foliage is visibly contaminated with any slaughter wastewater or wastewater residues; and
    4. the supplier, applicator and farmer (ruminant owner) or forage harvester must take all steps necessary to achieve the purposes of the regulations.
  • Provide that the feeding of rennet, dicalcium phosphate (with no trace of protein or fat), peptides with a molecular weight of less than 10,000 Dalton, tallow (maximum level of insoluble impurities not exceeding 0.15 percent by weight) and derivatives made from this tallow, and amino acids, are excluded from the regulations.
  • Extend the current labelling requirements to food for humans that has been re-designated for use as animal feed.

Statement of the net benefits of the proposal, including the total regulatory costs (administrative, compliance and economic costs) and benefits (including non-quantifiable benefits) of the proposal, and other feasible options

Government

  • The administration costs incurred by MAF from assessing and registering ruminant protein control programmes can be cost recovered. This cost recovery is consistent with the principles of the Biosecurity Act.
  • The labelling requirement for food for humans re-designated for animal feed will enhance New Zealand's status as a country taking measures to remain entirely free from BSE, scrapie and all other TSEs.
  • No additional enforcement costs would arise from the changes to the regulations.

Industry

  • The proposed re-categorisation of offences would allow a person who has committed an offence, to present a defence.
  • The clarification that wastewater can be used for irrigation of pasture will remove challenges to the Environment Court. Irrigation of wastewater encourages pasture growth and is the least cost means of disposing of wastewater.
  • Clarification that the regulations do not apply to highly processed products will make the regulations consistent with international standards and enhance the use and value of those products.
  • Approximately 25 businesses are likely to be affected by a cost recovery fee for registering and assessing ruminant protein control programmes. Costs are based on the charge out rate for a biosecurity adviser of $130 per hour. This compliance cost will be further discussed in the Business Compliance Cost Statement (BCCS).
  • The cost of the additional labelling requirement for food re-designated as animal feed will be a cost to the business. This cost would be much cheaper than the alternative of dumping the food to be re-designated in a land fill. The compliance cost associated with labelling is discussed in the BCCS.

Economy

  • The national benefit from the amendments is to enhance the ability of the regulations to safeguard New Zealand's TSE-freedom.
  • The technical changes proposed in the regulations would reduce uncertainty resulting in more efficient domestic use of products from rendering and enhance their export value.

Statement of consultation undertaken

MAF circulated a discussion document to 240 stakeholders, 26 submissions were received from renderers, animal feed, pet food and fertiliser manufacturers, meat and dairy producers, processors and exporters and land care groups. The results of consultation were as follows:

  • Most submissions agreed with the change in the offence provisions from absolute to strict liability but there was concern among some that there may be reduced care among some members of the animal feed industry. As a consequence MAF was asked to seek to increase the level of penalty in the Act. MAF will consider amending the Act when an opportunity to amend is available.
  • Most submissions accepted the charge for registering and assessing ruminant protein control programmes but considered that the meat industry and meat producers are the primary beneficiaries of the programmes.
  • The proposal to clarify that irrigation of wastewater is not prohibited by the regulations was supported. Further regulation was requested to cover other slaughter waste but MAF is reluctant to regulate these low risk areas.
  • The proposed exemptions for highly processed ruminant products and protein free tallow were supported.
  • The proposal to extend labelling to food waste re-designated as animal feed was made by submitters and MAF has included this proposal in the regulations.

The Ministry of Health, Ministry of Fisheries, Department of Conservation, and the Treasury were consulted and agree with the proposals.

Business Compliance Cost Statement

The cost of learning and understanding the regulations are compliance costs for all affected by the regulations. A $130 per hour cost recovery fee will apply to registering and assessing ruminant protein control programmes. The additional labelling requirements will result in the following compliance costs: management time to develop a system of labelling and train staff to label the food products re-designated as animal food.

The cost recovery fee will be incurred by the 25 feed millers and renderers, the size of firms will vary from very large public companies to small owner operator firms. It is not known how many restaurant owners and food manufacturers will wish to re-designate food as animal feed and therefore be required to label the animal food accordingly.

Cost recovery fees for registering new ruminant protein control programmes will be $390 to $650 depending on the size of the business and information provided in the application. Cost recovery of assessing existing ruminant protein control programmes will be approximately $65 per annum. These costs are based on the charge out rate for a biosecurity adviser of $130 per hour. Management time required by a restaurant or food processor to develop a labelling system and train staff to apply labels may take one or two hours. The costs are not known.

Those subject to the changes in the regulations will be informed by means of industry association newsletters and consultative committee meetings. Information will also be placed on the MAF web site.

Page last updated: 30 April 2008