The Nation: BusinessNZ CEO Kirk Hope

On Newshub Nation: Simon Shepherd Interviews BusinessNZ CEO Kirk Hope

Next year, Kiwis will be asked to vote yes or no on legalising the recreational use of cannabis.

If it’s a yes, what will that mean for your workplace?

Some businesses are concerned there’s no way of testing whether someone is high and they could be lumped with extra liability for workplace accidents.

Simon Shepherd put this to Business New Zealand chief executive Kirk Hope.

Simon Shepherd: Currently, if I turn up to work and you thought I was stoned, what would my employer do?

Kirk Hope: You’d probably be tested, so the challenge, I think, with legalisation is you’ve got to treat it like alcohol, because it’s an illegal drug. But then you need to find a test which tests from not whether you’re positive or negative for the drug, but actually whether you’re impaired by the drug, and that’s a much, much harder thing to test for, actually.

Right. So is there concern amongst employers that there isn’t anything which can say, ‘Test me if I’ve got cannabis in me or whether it’s actually impairing me at work’?

That’s exactly right — whether it’s impairing you or not. Because you could say, for example, the current test would work like this — you might have smoked a joint 30 days ago; that turns up in the test, but you wouldn’t be impaired by that 30 days later — you may be, but it’s unlikely that you’d be impaired. So what you really need is something that reflects the risks that might be taking place in the workplace.

Okay. Well, before we get on to that, you said that, you know, why can’t we just manage it the same way that employers manage alcohol at the moment?
Yeah, again, because I think it’s the timeframe. So, a blood test for alcohol will be a relatively short blood test, and an impairment test is pretty obvious — you’ve got a breathalyser, for example, and some very clear measures about what impairment would look like for any given individual. You don’t really have that with marijuana.

Okay.
And I think that’s part of the challenge. And I think, in general, business doesn’t really have a view about legalisation of marijuana, but businesses are very concerned about how they might manage some of these risks.

All right. If I am stoned at work and I cause an accident, who is liable?

Well, the employer is likely to be liable because of strict liability, and some of the challenges— hence their nervousness under the reasonably comprehensive now health and safety laws that we have.

Yeah, okay.

So, again, that’s driving businesses to say, ‘How will we manage this?’

So, yeah, if the business is liable, even though I as an employee have caused it, what changes does the business community want to protect them from that? Do they want changes?

Well, so, some of the things that this could lead to is saying, ‘Actually, we ban… We don’t want any drugs or alcohol in the workplace,’ or not even in the workplace, but, ‘We can’t have people in the workplace who have taken drugs,’ and that will change people’s lifestyle choices, and if marijuana is a legal drug, that’s a lifestyle choice that a person is choosing and is allowed to make under the law. It’s going to be pretty hard, I think, for employers to manage that particular… the social context within which they’re going to have to say, ‘Well, you can’t come in, because if you cause an accident, we’re in trouble.’

Yeah, so do you need a change in the health and safety laws to say that if somebody has marijuana in their system, it’s up to them to make the choices to whether they’re going to come into work? How are you going to…? Well, how can you regulate this?

Yeah, look, I mean I think, firstly, the nation’s got to vote on this.

Yeah.

And that’s still a wee way away.

But these are some of the ramifications you have to look at now.

Yeah. So, there is some development work going on in terms of impairment testing — so shorter term impairment testing — which would, I mean, I would imagine, look much like a marijuana version of a breathalyser test, so it would at least give you some idea about how impaired someone might be. But again, that is also a little way off. So in the interim, I think employers are worried about the prospect that they’ll have to manage this without some of those testing and regimes available.

Could you not implement things like they have in Canada, where the military says that if you’re going to turn up for work, it has to be eight hours before you’ve consumed, say, a joint, if you’re on general duties. If you’re going out on an exercise, it has to be 24 hours. Could employers say that to their employees?

Yeah, look, I mean, that’s a possibility. But again, what you want to be able to do is say, ‘Okay, that person suggests that they haven’t taken a drug for 24 hours, but their work performance doesn’t look particularly good.’ And then you want to be able to say, ‘Are you under the influence? You’re under the influence and impaired.’

Yeah, so, if you have drug testing in the workplace, doesn’t that create a culture of mistrust, though?

Well, not really, because if— bear in mind, businesses that are using those sorts of tests are usually pretty high-risk workplaces. We’re talking factories, heavy construction, things like that, where, actually, you don’t want your workmates to be impaired, because that will, in all likelihood, be endangering your life.

Okay. Let’s just move on to business confidence. It hasn’t seemed to be so low since the end of the global financial crisis. Why is that?

Well, look, I think that what businesses have been dealing with is actually a really large raft of policy changes, and quite quickly. Bear in mind it’s only been, really, two years since the government was elected, and there was the instant, I think, chilling effect of the oil and gas ban — don’t really want to talk about that. We could, but there have been a raft of other policy changes, which have essentially created additional costs for businesses.

Yeah.

But more than that, I think there were some signals leading into the election — we’ve just been talking about immigration policy setting, right — where businesses have been saying, ‘We’re struggling to get the employees we need. We’re paying well above minimum wage now, and we just can’t get the people, so we’re worried about our ability to fulfill demand,’ particularly at a time when, of course, CPTPP is coming online. We’ve got more foreign markets that are—

…opening up.

…more accessible than we’ve ever had before. So there is that going on. So in terms of sentiment, there’s the general mood of business, which has been pretty grumpy. The things to watch, actually, are businesses’ own assessment of where they’re at, and that tracks quite closely to GDP. So that’s really the number to look at, and that’s been declining also.

Yeah. But I just want to ask, though — I mean, you say that businesses are pretty grumpy — is that just a political bias? Because I’ve noticed that the confidence levels fell off a cliff immediately after the election.

Sure. Well, I think, again, it’s because you’re seeing a policy programme, which means quite a lot of chance for your business, probably quite a lot of cost for your business and not really much upside. One thing that I would say is that sentiment is now starting to impact in actual investment, so…

Right. So does that mean we’re going to see businesses downsize? Are we going to see jobs going?

Well, let me just talk about the investment situation first. So, in the five years leading up to this year, on average, business investment was growing at about 5.4% per year. For the last year, it’s 0.7%. So that tells you that there is a sharp contraction in business investment, so the sentiment is now translating into a real non-activity. That could have some real impact for, certainly, productivity in jobs, I would suggest, in the future.

Okay. Just finally, do businesses see climate change as a threat or an opportunity?

I think both, actually, and I think what good businesses are doing is thinking how they can A) manage their carbon footprint, but they’re also thinking about the investments that they might need to make to fundamentally change their business and also some of the products and services that people might need to continue to reduce their own carbon footprint. Because, of course, it’ll be lots of individual doing things, lots of businesses doing things and so on and so forth. So I see it as a threat and as an opportunity. It has been characterised, I think— over-characterised as a threat. I mean, it’s certainly real, it’s certainly happening. People, I think, are still figuring out how to manage through that stuff.

Right. Okay. Business New Zealand chief executive Kirk Hope, thanks very much for your time.

Pleasure.

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