Geographical Indications (Wine and Spirits)Registration Bill

Hon JUDITH TIZARD (Minister of Consumer Affairs) Link to this

I move, That the Geographical Indications (Wine and Spirits) Registration Bill be now read a third time. This bill repeals and replaces the Geographical Indications Act of 1994, which was passed following negotiation of the World Trade Organization Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs agreement). This is a multilateral agreement that sets basic standards of intellectual property protection, which include geographical indications. Geographical indications, as defined by that agreement, identify that a good has originated from a place and has a certain quality, reputation, or other characteristic that is essentially attributable to its geographical origin. World Trade Organization members were given the flexibility to choose how to give effect to those obligations. A number of international developments since the 1994 Act was drafted, however, mean that the Act is now out of date.

Geographical indications are collective rights, which means they are not owned by any group or individual. No matter who applies for a geographical indication, once it is registered it can be used by any producer, large or small, who falls within the geographical indication region, and who complies with the requirements of this Act.

A robust and up-to-date intellectual property rights regime is an essential part of an innovative, growing economy, and well-defined, enforceable intellectual property rights help provide incentives for this innovation and creativity. Geographical indications form part of that intellectual property system, so, for producers of wines and spirits, geographical indications can be a marketing and branding tool that, alongside trademarks, creates recognition for their products. Geographical indications can also support regional efforts to establish and develop a quality geographical label from which all producers in the area can benefit.

Geographical indications also help consumers to have information about a wine or a spirit communicated to them quickly and efficiently. They can help consumers make informed choices regarding the origin and authenticity of the product. As the reputation of New Zealand wines is growing worldwide, consumers here and overseas are increasingly interested in particular New Zealand wine regions and their products. This bill will put in place a robust and efficient process of wine and spirit geographical indication registration, a system that is based on voluntary registration for both New Zealand and international wine and spirit geographical indications and that is consistent with our international obligations.

The bill limits registration to geographical indications for wines and spirits only. The TRIPs agreement accords two levels of protection for geographical indications. The first is a minimum level that applies to all goods, and requires Governments to provide measures to prevent geographical indications from being used in a misleading or confusing manner. The second is a higher level that applies to wines and spirits only. The second, higher level of protection requires Governments to provide measures to prevent the use of a geographical indication on a wine or a spirit that does not originate from the area indicated, regardless of whether any use misleads or confuses consumers. The protection given to registered geographical indications by the bill is specifically tailored to meet New Zealand’s obligations under the second level of protection.

The registration mechanism provided in the bill is voluntary, and complements rather than replaces existing legal mechanisms that apply to geographical indications. Unregistered geographical indications for all products—wines, spirits, and other products—will continue to be covered by the Fair Trading Act 1986 and the common law tort on passing off. This bill does not seek to reinvent the wheel, so it does not seek to create a whole new set of infringement provisions and penalties. Instead, a breach of the bill will be treated as a breach of the Fair Trading Act, and the penalties available under that legislation will apply. That makes sense, given the important role of geographical indications in consumer information.

The bill contains a new definition of a geographical indication, to ensure that only those geographical indications for wines and spirits that meet the standards of the TRIPs agreement are able to be registered under the Act. In order to meet the definition, a term must indicate that a wine or spirit originates from a defined area and has a particular quality, reputation, or other characteristic of a wine or spirit that is essentially attributable to its geographic origin. Getting these decisions right will be important both for the industry and for New Zealand as a whole, and the Government has listened closely to concerns expressed by the wine industry about the decision-making mechanisms in the bill. The Registrar of Registered Geographical Indications will be able to seek advice from those with the relevant skills and knowledge in determining whether a term is a geographical indication, and, in particular, will have the power to convene an experts committee. The bill provides for mandatory wine or spirit industry involvement in that committee, to ensure that all proper expertise is brought to the table.

The TRIPs agreement establishes a balance of rights and obligations for the protection of geographical indications. This balance includes certain limitations of, and exceptions from, geographical indication protection, and the bill incorporates all the limitations and exceptions provided by that agreement. For example, terms that are common descriptions, or that are considered generic in the New Zealand market, will not be protected—a spirit name such as vodka, for example. Similarly, the bill also clarifies the relationship between trademarks and geographical indications. New Zealand has obligations under the TRIPS agreement in respect of trademarks as well as geographical indications, and it is important that pre-existing rights within New Zealand are not unfairly restricted. Consistent with New Zealand’s position internationally on this issue, the bill implements a “first in time, first in right” principle for determining which has priority. That means that in most cases where a trademark already exists, it will prevent the registration of a later-filed geographical indication, and vice versa. In very limited circumstances, the bill allows for the potential for a later-filed geographical indication to be registered despite a pre-existing trademark having priority, or for the two to coexist. There is also provision in the bill that geographical indications identical in name or sound but relating to different geographical areas can be allowed. As registration is not compulsory, the bill introduces an exception, ensuring that unregistered identical geographical indications remain unaffected by the bill.

As I have already noted, the bill enables the registrar to establish an experts committee to provide advice to the registrar. The bill also stipulates that each committee must include the Surveyor-General and a member of the New Zealand Geographic Board, if their expertise is required. The registrar may then appoint as members of the committee any other people whom he or she considers appropriate. In response to concerns raised by New Zealand WineGrowers about the composition of the committee, the Government moved to accommodate that organisation’s views. The changes made by the Supplementary Order Paper included an amendment to the composition of the geographical indications committee that required that someone with knowledge of the wine or spirits industries always be part of the committee. This shows that the consultation with the industries was wide, and they have expressed their general support for the bill. The Government has continued to engage with industry representatives, and we have done our best in this bill to accommodate their concerns.

The bill provides for a modern, efficient, voluntary registration process for wine and spirit geographical indications, which will provide legal certainty for producers without stifling innovation. The bill will also help consumers make informed choices about the wines and spirits they buy, and where they originate from. It does so in a manner that ensures that New Zealand continues to meet its obligations under the TRIPs agreement, but without, we hope, adding unnecessary red tape for anyone, particularly producers. This bill forms part of this Government’s commitment to our burgeoning wine industry and our emerging spirits industry. It is also part of the Government’s wide-ranging reform of intellectual property law in general.

TIM GROSER (National) Link to this

National supports the Geographical Indications (Wine and Spirits) Registration Bill. The process in the Foreign Affairs, Defence and Trade Committee was very extensive, as the Minister Judith Tizard has outlined, and on most matters it has been a very collegial process with very few differences between us. There is one point of remaining difference. Whether it is a small point or a large point will simply depend on the way in which practice evolves, and I will come to that presently. But I do not want that to obscure the underlying large measure of agreement here. The whole field of intellectual property law is really crucial to an objective that is shared right across the House, which is to transform our economy by getting higher value out of the great resource base of this country. Protecting the intellectual property of that resource base is an absolutely essential prerequisite to that process.

Nevertheless, there is not a high level of public understanding of this issue. I was giving a speech earlier this afternoon to a group of folk who are involved in the export and agriculture industries. When they asked me whether I could stay for a little longer, and I explained that I was required here to speak on geographical indications, I do not think a single member of them immediately understood what I was talking about. That was fair enough, because the term itself is a pretty forbidding one.

But although we have been slow as a country—and I do not exclude myself from that in any respect—to understand the power of this issue and the importance of it, I think we are amending that process in a constructive way. We have done this as we have moved forward, particularly in agriculture, in an increasingly sophisticated way. I would like to pay tribute to the increasing sophistication of not just the wine industry, which is the central industry involved in this particular case, but agriculture industries right across the board in the course of the last 20 years. For example, 90 percent of our lamb exported in 1970 was in carcass form; the figure is less than 5 percent today. So we are getting the message. We are heading in the right direction, and having the right legal frameworks around intellectual property law is certainly a part of it.

Like the Minister, I commend the New Zealand wine industry for having built itself up. I would say, frankly, that the stick played as much part as the carrot in this process. I remember very well that during the CER negotiations the New Zealand wine industry was absolutely convinced it could not export and saw CER as a great threat. But to its great credit it made adjustments, and we are now looking at exports worth a fraction under $500 million a year. That is a success story that I think will serve future generations of New Zealanders extremely well.

I will just pick out one or two of the key provisions of the legislation. The first one is the central point about clause 6 using the existing definition in article 22.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs agreement). It is very important that domestic legislation that enables international treaties simply mirrors the exact provisions of those agreements, if at all possible. I remember once being on a dispute settlement panel between India and the United States, where a very small difference in wording became a crucial issue for the arbitrators, such as me, to make a judgment on. International lawyers are capable of making a great deal out of very little in these situations. I think it is appropriate that the amended clause 6 brings the wording into a unified form that is completely consistent with the wording of the TRIPs agreement.

I draw attention to clause 16 and the strange term “homonymous geographical indication”—and these are not closet homonymous geographical indications; they are right out there in the open. This is a very complicated process. I am pleased we have got a balanced approach here whereby we will recognise them. These are geographical indications that have the same spelling as, or sound the same as, geographical indications for a wine with a different geographical origin.

There have been some very bitter cases over the history of this issue. I particularly remember a small village in Switzerland that actually had the same name, Champagne, as the region of Champagne in France. A bitter bilateral dispute between the European Union, representing France, and Switzerland ensued, and that small village, which had been producing sparkling wine since the 15th century, was forced to retract its use. That caused a lot of pain and emotion and upset on the part of that small community. But under clause 17 we have a procedure that I think is fair and reasonable. Subclause (2) requires the Registrar of Registered Geographical Indications to take into account the need for “equitable treatment of the producers … and (b) the need to ensure that consumers are not misled.” So I think we have a sensible middle path through that.

I am also pleased that the bill deals with the quite important issue of geographical indications that have fallen into disuse. “Into disuse” has several different meanings in the context of geographical indications. In particular, there is the issue about the point at which a geographical indication becomes so widely used that it is generic. That is an issue that is actually very important to New Zealand. Although this particular legislation relates only to wines and spirits because the Uruguay negotiations gave this higher level of protection only to wines and spirits, we have had to approach this issue from the perspective that this may become a template for geographical indications in other agricultural industries.

This is a key negotiating objective of the European Union. It is called, in the jargon of negotiations, extension, and to put it in common-sense terms it simply would mean that if the European Union succeeded in its negotiating objective, the same provisions that we are considering here that will give effect to a higher level of protection would apply to other agricultural products—and, potentially, other products as well. For our most important goods export—tourism is our largest foreign exchange earner but dairying is our largest export earner, in the more conventional sense of an export—this is absolutely crucial, because many of the products that our dairy industry produces use terms that, in our view, have become generic.

But this is a highly contestable area. On the one hand there are generic words like “cheddar”, which originally was a particular type of hard cheese developed in the English village of Cheddar, but which is now used right around the world and can no longer be considered to be a geographical indication in terms of the origin of the product. As a product of the colonial process, and as in many other countries in Latin America, and the New World more generally, many industries in New Zealand have adopted the terms that were used when the same product was originally being produced in Europe. So this is potentially a very significant issue. I think we have a way through that makes sense.

In the time available I want to touch on the one remaining difference of opinion, which is the procedures in, in particular, clauses 51 and 52. Clause 31 sets out that the registrar shall be an employee of the ministry. A definition at the beginning of the bill makes it clear that that ministry could change, but at the moment we consider it to be the Ministry of Economic Development, and we have no problem with that. Obviously, the registrar must be an official. But the difference between the National Party position and the Government position on this relates to the non-mandatory nature of the geographical indications committee. In the language of clause 51, the registrar is the person to make the decision as to whether he or she will use the expertise of the industry to make decisions about a geographical indication. Clause 51 states: “The Registrar may, if the Registrar thinks fit, establish a … committee”.

We think this is a mistake. The industry had quite strong views on that. The point here is that the drawing up of a geographical indication is not a matter of pure science. It is not a matter of simply putting in place cadastral boundaries and including everything that comes from there—that comes from the Wairarapa, for example. It is not as straightforward as that. It is much more complex, and at the end of the day the decision involves a high level of subjectivity. We do not believe that the official, no matter how well intentioned she or he may be, will have the requisite level of knowledge in every case to make an informed decision. So we put on notice our concern, and we may have to come back to it at a future date. Thank you.

R DOUG WOOLERTON (NZ First) Link to this

New Zealand First supports the Geographical Indications (Wine and Spirits) Registration Bill. In speaking to the bill I want first of all to give credit to people in the sorts of occupations that Mr Groser and Mr Hayes held in their former careers—our trade negotiators all around the world. There are not a lot of them. [ Interruption] Well, there are quite a few, and they do a marvellous job on our behalf. They are essential, because we have just had a recent occurrence when our English friends, on the release of the Stern report, talked about food miles and all sorts of things that people in our exporting markets bring up as essentially non-tariff barriers. I am sure that in the diplomatic world formerly inhabited by Mr Groser the phrase “non-tariff barriers” and crudities like that would not be countenanced in any shape or form, but I am not there, I am here, and to me that is exactly what they are.

I commend the people in the industry who have brought this bill together for turning something that is an essential requirement of the economic union in Europe to our advantage. They are saying that if we are required to do something over there, then, in turn, if it is fair enough to be done there it should be done here, and we can use some of these things to our advantage. One hopes that in the future some products in New Zealand, in the wine industry in particular, are just as famous as Champagne and other areas in Europe. I know that people have worked diligently, long and hard, and at great expense to make our wines superb and make them the equal of anywhere in the world. It would be nice if they took the added step—which I know would take years to accomplish—to establish over a period of time regions in New Zealand just as famous as those in the old countries.

I know that in the Committee stage Mr John Hayes attempted to introduce a Supplementary Order Paper, which Mr Groser has alluded to, that makes it compulsory for industry personnel to be on the committee that the registrar is required to call if he needs its expertise. But we in New Zealand First, as I have said before, are satisfied by the assurances of the Minister and the Government that this person will call together a committee and we do not think it is essential that that be put into legislation. In fact, I do not think it should be included, because those sorts of clauses in a bill quickly go out of date and it is not uncommon to have to come into this House to correct provisions like that from time to time. We try to do things specifically but in more general terms nowadays, if I can put it that way.

I can well understand that in the world that Mr Groser and Mr Hayes were previously in, lawyers make a lot of very fine points—and get well paid for it, I say to Mr Chauvel—about words and sentences and they argue for ages as to what they will mean. My humble experience has been that no matter how tight and prescriptive we try to make legislation, lawyers will still do that. I would sooner leave the industry and the registrar, with due respect, a bit of room to move. I for one would worry if the industry is defined just as those people who sell and trade in wine. I suggest that the farmers and the vintners who make the wine will have more to say, and perhaps because I come from farming stock I would put just as much, or more, trust in the farmers and the people who make the wine than I would in the industry, or in, perhaps we could say, the purveyors of the wine who, in a cruder term, clip the ticket on the way through.

I cannot speak on any bill related to the wine industry without bringing to mind a colleague who is no longer here, Gerry Eckhoff, who was from the ACT party. He was with me on the Primary Production Committee. His family did rather well out of the wine business. When Mr Hayes and Mr Groser talked about the characteristics of a region and the characteristics that that brought out in a wine, I could not help but recall the raptures that Gerry used to go into when it came to a wine. I do not blame him, because they made millions out of it. As far as he was concerned there were magical things in the make-up of wine. Being of a more pragmatic nature, although I can understand how that can be, I think that if the registrar is able to call on the pragmatism of farmers, the commercial expertise of the people who sell the wine, the people involved in the registration, and the Government, I think it is a pretty good mix and we do not need to go into the magical properties of a particular wine or a particular region. I think they will be understood by the people that the registrar can call together on what is called an experts committee.

I do not think I need to take any more of the time of the House. The bill is rounded out pretty well and I congratulate the people who took part in the deliberations. I thank them for that, particularly, as I said at the beginning of my little speech, the people who have turned a requirement into something that is an advantage for New Zealand. That I applaud.

KEITH LOCKE (Green) Link to this

The Green Party supports this bill. In fact, we think this bill should be a model for other legislation that requires the labelling of other food products in New Zealand across the board. It is disappointing that although the Government is at the head of the world in this particular area of labelling—geographical indicators for wines—it is near the back of the pack when it comes to other food labelling and is behind Australia by disassociating itself from the food-labelling regime that was implemented across the Tasman. Unfortunately the parties in this House, including the Labour Party, did not go down the track of supporting the food-labelling bill put up by my colleague Sue Kedgley, much to their shame and in stark contradiction to the good approach that Labour is taking in this bill. As Tim Groser mentioned earlier on, even though the World Trade Organization and the international trading bodies gave particular prominence to international agreements on geographical indicators for wines and spirits, this is just the first step down that road for food production in general, and he is right when he says that matters will go further down that road. We should lead the way and not be at the back of the pack in relation to other food products, including dairy products, which he mentioned in his speech.

I think the same concept applies to wines as applies to other food products, because the whole point about geographical indicators on wines and spirits is that consumers get an idea of the producing nation and a feeling for the product. I was in Ireland a month ago and went around the wine shops there. They have the bottles labelled by country, and on looking closely one often sees a little description of the area where a wine comes from. New Zealand wines stand out on some of the shelves. They are gathered together, and within those groups there are Marlborough wines and Hawke’s Bay wines, with their geographical indicators on their labels. Sometimes the person who runs the shop provides a description of the area in written form.

I think that concept is very positive. If we think back a few years to a time when more of our wine came from overseas than it does now, we remember that part of the attraction was that it came from particular areas of southern France and Italy where we had a feel for the climate, spirit, and culture of the people—like how they trod on the grapes. The feel for the region was part of the attractiveness of the wine. Now, that applies to New Zealand wines. We try to get across to consumers in France, Britain, and other countries a bit of a feel for our regions, too—regions like Marlborough and the Hawke’s Bay—by getting people interviewed and articles put in magazines, so that we are seen as quality producers from a region that produces quality wines.

That situation applies to other products as well as wine, which is why I think the Government is a bit silly to hold back on labelling other food products. Perhaps if we export kūmara from Dargaville, we may want consumers to get a feel not only for New Zealand kūmara but also for Dargaville and for what goes on there—a feeling for the culture behind the production of that food product. Instead, unfortunately, the Government has turned it round the other way and says that if we have labelled products for export to America and the Americans prefer to support a local product, then somehow we will be discriminated against. That is very negative thinking. We should think in a positive way about getting brand identification as a country, and as regions within that country, for particular food products, whether they be Dargaville kūmara, Nelson apples, or whatever they may be. I think that is the way things will go and is the way to counter the problem referred to by the previous speaker of the “food miles” argument being used against New Zealand products.

When the “food miles” argument came out a month or so ago, both the trade Minister, Phil Goff, and the co-leader of the Green Party Russell Norman, explained that when one is talking about the contribution to climate change and the depletion of resources in the world, one has to look at the total resource and energy input into a product. New Zealand does have an advantage in a lot of pastoral agriculture by virtue of having grass-fed animals, not grain-fed animals, etc. So the net resource use may be in our favour. But having said that, I say people have a perfect right to buy locally and to encourage the local economy. That will be a natural reaction as time goes by. It is a natural reaction in New Zealand, which we do promote with the Buy New Zealand Made campaign, etc. In order to overcome that, if we want to get our products traded into other markets, we have to promote their quality and promote a feeling for the people in the regions that produce those products.

We should not accept at all the sorts of arguments that were raised by Labour and others against Sue Kedgley’s bill about food labelling. They said the safety of all food products can be guaranteed by the official bodies. But that is not necessarily the case, because the safety of particular ingredients, pesticides, or whatever else is often a question of debate, and we would not necessarily totally trust the relevant agency on that. But quality and preference are more subjective areas, and we want to train the consumer to prefer New Zealand products, based on an understanding of the regions of origin of those products. That is the reasoning, essentially, behind this bill in relation to wines and spirits.

On the question of the committee that will be set up to look at the registration of geographical indicators, the alteration of such a registration, or the removal of one from the register, I take Tim Groser’s point about the bill. He is worried about the qualification that the registrar may, if the registrar thinks fit, establish a committee. I think it should be a more general procedure, but the Green Party did not put forward an amendment in the Committee stage on that. However, I did put forward an amendment to try to get clearer representation from the wine and spirits industry, and it was very supportive of my amendment. I tried to get a representative of New Zealand Winegrowers, of the Distilled Spirits Association of New Zealand, or of some other industry body on that committee. That would have covered the point raised by the previous speaker that the industry does change. My amendment covered that point, but unfortunately it was not passed.

As things have gone on, the changes to the bill made in the Foreign Affairs, Defence and Trade Committee and the Supplementary Order Paper introduced in the Committee stage have both pluses and minus to them. In the bill as reported back, clause 52(4) provided: “The Registrar may appoint as members of the committee any other persons who the Registrar considers appropriate, including a representative of the wine or spirits industry in New Zealand.” That was actually a plus. Even though now it is a “must” in terms of the registrar looking at representation in that respect, clause 52(2)(c) now states that each committee must include “1 or more persons who, in the Registrar’s opinion, have appropriate knowledge of the wine or spirits industry, as the case may be.” I think “appropriate knowledge” could mean somebody from outside the industry who has done a bit of reading on it. That term is too vague, and I think that is why, when the Minister spoke, she could say only that her change had general support from the industry, or support in general. The industry wanted the provision to go further than that, and my amendment would have fitted that.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

I raise a point of order, Mr Speaker. Kia ora tātou katoa. It has been a privilege this afternoon to listen to some of the debate, and one reflects on one’s performance in the House. I just mention at this point, as it is close to the dinner break, that I have waited this afternoon in respect of the time given—

DARREN HUGHES (Junior Whip—Labour) Link to this

Maybe I could assist the member. I seek leave for the sitting of the House to be suspended until 7.30 p.m.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Tēnā koe, Mr Assistant Speaker. Kia ora tātou. Firstly, I acknowledge and thank the House for allowing me to have my full allocation at this point in time. In doing the research for this bill I note that within the customary rohe of Ngāti Te Whatuiapiti and Ngāti Te Upoko Iri exist the Ngātarawa blocks. Ngātarawa borders the ancient riverbeds of Ngā Rauru on the western edge of the Heretaunga plains, and for those people who are listening, I say that this is Kahungunu turf, Kahungunu territory. The blocks form the subject of claim 596 taken to the Waitangi Tribunal by one Irimana Heemi Totoru Matenga, a claim that suggests there are irregularities in the passage of these blocks through the Native Land Court. But the Ngātarawa name is most probably most strongly associated with the stories connected to a good wine—indeed, as the Ngatarawa label professes, “Life times told in wine”.

With the inevitable passing of this bill, the name Ngātarawa may now indicate that a particular wine from this region will be of high quality because of the fact of its geographical origin. The geographical indication of Ngātarawa will be an advantage in marketing the wine or spirit. That will be a great achievement for one of New Zealand’s winemaking dynasties, the Corban family—descending from a family, I understand, who left Lebanon in 1891 equipped with over 300 years of winemaking traditions. This family of grape-growing businesspeople has crafted over time a respected boutique wine company during the last 105 years of viticulture.

The Ngatarawa label comes with a distinctive fourth-generation pedigree. The location’s specific naming rights that the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs agreement) classifies as a category of intellectual property would identify most likely Ngatarawa as a label founded on heritage on the taste of a classic wine for a discerning wine-tasting public.

The concept of pedigree is, however, also useful to review in the context of other developments that relate to ownership and protection of intellectual property. One wonders, when in early September the Waitangi Tribunal appeared at Waipatu Marae in Hastings to hear the Ngāti Kahungunu submission on the Wai 262 claim, whether the pedigree of Ngatarawa informed the discussions. Wai 262 is a claim to rights in respect of matauranga Māori, or Māori knowledge in indigenous flora and fauna. In the hearings at Waipatu the tribunal heard about the call to actively protect the exercise by Ngāti Kahungunu of tino rangatiratanga and kaitiakitanga in regard to Ngāti Kahungunu cultural knowledge of names and locations, such as Ngātarawa, or indeed, Te Mata, Awatere, or Kaitangata, are very important, obviously. My colleague Dr Pita Sharples reminds us in the Māori Party that names are very important in Kahungunu territory, with Ngāti Kere’s proud reputation for the longest name in the world, Te Taumatawhakatangihangakōauauātamateapōkaiwhenuakitanatahu.