Palmer Report flawed says Christchurch legal expert

“The publication released at 3am this morning by Sir Geoffrey Palmer and others is seriously flawed,” says Christchurch lawyer, Mark Christensen. Mr Christensen specialises in Resource Management law, was a member of the Ministerial Advisory Committee on Biodiversity, is also the Vice-Chair of the Environmental Law Commission of the World Conservation Union, and represented a number of organisations at the Royal Commission on GM.

“The Report calls for the imposition of a “strict liability” regime and a requirement for compulsory risk insurance by users and developers of GMOs.

“The entire report is based on a number of assumptions as to the risks of certain types of effects associated with GMOs. Unfortunately, these assumptions are scientifically flawed and are directly contrary to the findings of fact of the Royal Commission of Inquiry. Further, the Palmer Report does not appear to bring to the fore anything which was not considered by the Royal Commission during its hearings.

“The Palmer publication’s assertions of possible damage arising from, such things as allergenicity and toxicity of foods, and increased persistence, invasiveness and competitiveness of GM crops were considered in detail by the Commission and found not to have merit. The Commission heard detailed evidence about the scientific risks and benefits of genetic modification over a period of some 14 months from both New Zealand and overseas experts from all sides of the debate. The Commission’s conclusions on all these issues are discussed in its report. It must be queried whether the authors of the publication have actually read the Commission’s detailed Report and recommendations on the issues which they raise.

“The assumptions made in the report on risk and possible effects are, on the basis of the findings of the Commission, simply unfounded. As a result the publication’s conclusions on liability must also be questioned.

“On liability issues, the Commission heard detailed evidence and legal submissions from a range of people and organisations throughout the course of the Inquiry. It reviewed overseas’ liability regimes and how New Zealand’s system compares with those other jurisdictions.

“In addition, the Commission obtained a formal opinion from Professor Stephen Todd, Professor of Law from the University of Canterbury on potential liability, under current law, of people dealing with GMOs or products.

“Palmer’s assertion that the Commission has “not put forward the required analysis to support its recommendation that there be no change to the existing liability regime”, is incorrect. After hearing detailed evidence and legal submissions on the issue, the Commission addressed liability issues in Chapter 12 of its Report. It must be remembered that the Chairman of the Commission is a retired Chief Justice of New Zealand, Sir Thomas Eichelbaum.

“The Palmer publication says that it is important to define a liability framework in advance in order to incentivise parties to take due care, and to allow involved parties to better define exposures and thus be better placed to protect their positions. Again, the report makes the assumption that GMOs are somehow different to other technologies and that, consequently, special provisions need to apply. That is incorrect.

“The Commission concluded that the existing liability regime in New Zealand should not be amended at this time. While the Commission acknowledged that liability issues are difficult and raise wider public interest issues so that the Government might wish to refer liability issues to the Law Commission for more intensive study, the Commission significantly did not say that the moratorium on field trials and releases should be extended until such time as additional consideration is made of liability issues.

“The publication’s discussion of incentive structures and risk distribution and the “polluter pays principle” is relevant to all technologies, not just to genetic technology. Importantly, the Government has already decided in the context of developments under the Resource Management Act that the type of liability promoted by this publication is not appropriate. New Zealand has not followed the US “Superfund” system of strict liability which the Palmer publication appears to promote as a useful precedent. To the contrary, and as identified in the Commission’s report at page 324, Superfund’s role of “retroactive, joint and several in strict liability” has been claimed to result in lengthy and expensive litigation, delays and inefficiency in cleanups, waste and even fraud. There are claims that 36 – 60% of every dollar put into Superfund has gone in legal and other transaction costs.

“The publication claims that “an extensive literature supports the application of strict liability in circumstances such as those providing for GMO development”. That “extensive literature” was not put before the Commission, other than in the form of assertions and allegations. The evidence and legal submissions that were put before the Commission, led it to the conclusion that a strict liability regime as set out in the publication is not appropriate in New Zealand

“The publication then refers to the European Commission’s White Paper on Environmental Liability. Again, the EC report is addressed on pages 325 and 326 of the Commission’s report. The Palmer publication fails to recognise that this report deals with environmental liability, generally, and only makes passing reference to GMOs. It also fails to recognise that European community legislation, both in relation to environmental issues generally and GMOs in particular, is behind New Zealand, and much of the discussion about liability set out in the White Paper has already been addressed in New Zealand by way of the Resource Management Act and the Hazardous Substances and New Organisms Act.

“The publication also discusses insurance. It argues that risks should be internalised rather than socialised. That is again an issue which is identified in the Commission’s report at page 328. The Commission recognises that in addition to the technical legal issues, other considerations require delicate balancing. On the one hand, protection of the public and the environment, and on the other the need, in the public interest, not to stifle innovation or drive investors away by imposing overly stringent conditions on research or economic activities.

“By imposing an across the board requirement of strict liability and compulsory insurance, adoption of the position set out in the Palmer publication would lead to the stifling of innovation and the driving of investors away. Moreover, it would go completely counter to the Commission’s overall theme of considering risks and benefits on a case by case basis and preserving opportunities.

“While there may well be situations where identified risks from a particular GMO have to be addressed by some form of bond or insurance, that is not the case with all GMOs and in all situations. It is interesting to note that the Australian government has dealt explicitly with insurance by enabling the Gene Technology Regulator to impose a condition under the Gene Technology Act requiring a licence holder to be "adequately insured against any loss, damage, or injury that may be caused to human health, property or the environment by the licensed dealing". This is consistent with the Commission's recommended case-by-case approach, rather than the approach promoted by the Palmer publication. Indeed, a case-by-case approach to environmental risks is already adopted under the Resource Management Act.

“After hearing the evidence, the Commission decided that there is no reason to deal with liability of GMOs any differently than risks associated with other developments of technology. That is, GM applications should be considered on a case by case basis. To simply impose an across the board requirement of insurance would be unrelated to the actual and potential risks associated with GMOs and thereby increase costs unnecessarily.

“The publication criticises the Commission’s statement that to require compulsory insurance for unquantified and unforeseeable risks where that insurance is not available would be to prohibit activities, contrary to the Commission’s wish to maintain options. The publication’s criticism again fails to recognise that the issue must be one of addressing the actual and potential risks associated with a particular GM technology, rather than addressing unfounded alleged effects. Moreover, if there is a real risk of a particular GM application that cannot be dealt with appropriately by way of condition, the HSNO Act requires that ERMA decline the application for approval.

“The assertion that GM technology “carries the potential for catastrophic levels of damages and in this respect, it has many characteristics in common with natural catastrophes” is contrary to the findings of fact of the Royal Commission.

“The publication states that HSNO does not enable the imposition of a bond or other assurance that an applicant "can meet any claim for damages". That appears contrary to the position taken in the Inquiry by the Ministry for the Environment and the Environmental Risk Management Authority. In any event, that is not the purpose of a bond. A bond should not be imposed to simply allay unfounded concerns. The purpose of a bond is to provide surety to the public that any adverse environmental and health effects will be remedied. The publication dismisses the use of bonds as potentially important for particular GM applications.

“The publication’s discussion of allocating liability fails to recognise the Commission’s recommendation that there be a new class of conditional release approvals. Much of the concerns raised are addressed by the addition of such a class of approval.

“The publication discusses liability law reform in the EC, UK, US and Australia. While issues of liability continue to be examined in those jurisdictions, there is no suggestion in those countries, unlike the Palmer publication, that field trials and releases should not continue in a cautious manner. There is no justification in the Palmer publication for the assertion that the Commission’s recommendations of proceeding with caution should not be implemented until a “liability framework is defined in advance”.

“The discussion about the Australian Gene Technology Act 2000 also fails to recognise that the same liability issues raised by the publication were considered in detail by the Australian Senate when considering submissions on the Bill. The Commonwealth Government of Australia decided that in Australia there was no need for a specific liability regime for GMOs. Australia’s existing regulatory and common law regime was adequate to address the concerns raised. The same should apply in New Zealand.

“The publication comments on a number of alleged deficiencies in the present regime of civil tort actions. Those alleged deficiencies apply in respect of all technologies. No doubt they apply also in relation to any potential liability from the use and sale of unsafe organic produce.

For further information contact

Mark Christensen (03) 3790998 or (025) 878611

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