Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Bill
Government Bill
165—1
Explanatory note
General policy statement
The Dairy Industry Restructuring Act 2001 (the Act) was passed to enable the formation of Fonterra and to manage risks arising from Fonterra’s dominance in New Zealand dairy markets. Subparts 5 and 5A of Part 2 of the Act promote the efficient operation of dairy markets in New Zealand by regulating the activities of Fonterra to ensure that New Zealand markets for dairy goods and services are contestable. To this end, the Act includes requirements relating to Fonterra’s capital structure, as its share-trading arrangements could impact on contestability in the market for farmers’ milk supply.
Enabling Fonterra’s new capital structure
Fonterra intends to implement a new capital structure to enable it to better compete for farmers’ milk supply in the face of forecast static, or declining, milk production, and to efficiently use its existing processing infrastructure. Two key elements of Fonterra’s new capital structure are—
reduced minimum shareholding requirements: farmers wishing to become shareholders in Fonterra and supply milk will need to purchase and hold fewer Fonterra shares for every kilogram of milk solids supplied. This will make it less costly for new farmers to join Fonterra and will reduce incentives for existing farmers to switch their supply to other processors or pursue a land-use change away from dairy. This will help secure milk supply for Fonterra but may have negative implications for the wider dairy industry and alternative land use; and
a restricted farmer-only market: the reduced minimum shareholding requirement will see Fonterra’s existing farmer-shareholders potentially seeking to divest around 1 billion surplus Fonterra shares. If those shares were exchanged for units in Fonterra’s unit fund it could cause the unit fund to grow significantly, increasing the proportion of external investor ownership in Fonterra. To avoid the cost of having to buy back shares to manage that risk, Fonterra intends to partially delink the unit fund and operate a restricted farmer-only market for its shares on a permanent basis. This will support Fonterra’s ability to allocate capital to other competing business priorities but could constrain or deter farmers from exiting Fonterra, as they may not be able to realise the full value of their capital investment in the co-operative on exit. This could in turn constrain entry into the market or expansion by potentially more innovative or efficient dairy processors. Over time, this could reduce pressure on Fonterra to perform optimally and innovate.
The Act does not explicitly prohibit Fonterra from proceeding with its new capital structure. However, because key elements of the current capital structure are embedded in the Act, Fonterra could face the risk of a legal challenge if it partially delinks the unit fund on a permanent basis under the current provisions in the Act.
This Bill therefore amends the Act to explicitly enable Fonterra to keep the unit fund partially delinked on a permanent basis. Currently, the Act prohibits Fonterra from engaging in conduct that restricts or prevents farmer-shareholders from exchanging their co-operative shares for units if the purpose of that conduct is to deter them from entering or exiting Fonterra. The amendment specifically excludes Fonterra’s ability to set a limit on the size of the unit fund (irrespective of its purpose) from conduct that could otherwise be prohibited. This provision will remove the risk of a legal challenge that Fonterra may otherwise face if it proceeds without the proposed amendment to the Act. This will enable Fonterra to pursue its commercial objectives with certainty and to contribute to the benefit of farmers, rural communities, and the wider New Zealand economy.
Mitigating risks arising from new capital structure
The Bill also introduces 2 sets of measures to mitigate the risks arising from Fonterra’s new capital structure.
Fonterra’s base milk price-setting arrangements
A transparent, independent, and robust base milk price-setting process is important, as Fonterra’s dominance in the market for farmers’ milk means that Fonterra essentially sets the milk price for the whole dairy industry. To attract and retain farmers’ milk supply, other processors need to exceed Fonterra’s milk price. The base milk price-setting process promotes efficiency across the whole industry. The Act therefore includes provisions that govern the calculation of the base milk price, including monitoring by the Commerce Commission.
To improve the transparency and robustness of the governance and operation of Fonterra’s base milk price-setting arrangements, the Bill—
increases the number of Ministerial nominees to Fonterra’s Milk Price Panel (the panel) from 1 to 2, and provides for a maximum and minimum number of panel members to ensure that the ministerial nominees’ contribution to the panel’s recommendations cannot be diluted; and
requires the chair of the panel to be fully independent of Fonterra, appointed only with the approval of the Minister, and to be additional to the 2 ministerial nominees to the panel; and
requires Fonterra to contract out the day-to-day administration of the base milk price calculation to an external party, and to periodically replace the contracted party to maintain its independence from Fonterra.
To strengthen the Commerce Commission’s oversight of the base milk price-setting regime, the Bill—
gives the Commerce Commission the power to give directions to Fonterra on matters arising from the Commission’s reviews of Fonterra’s Milk Price Manual and the base milk price calculation; and
sets out the scope, criteria, process, and means of enforcement for directions that the Commerce Commission could issue if Fonterra does not voluntarily comply; and
clarifies the boundaries of the current safe harbour provisions that relate to the setting of the base milk price; and
requires Fonterra to publish information relevant to the Commerce Commission’s reviews, except where that information is commercially sensitive.
Liquidity in trade of Fonterra shares in its restricted farmer-only market
A restricted farmer-only market can impede the ability of farmers to trade shares and therefore limit farmers’ ability to exit from Fonterra, either to switch their milk supply to other processors, thereby supporting contestability, or to move to alternative more sustainable land use. The Bill supports liquidity by—
specifying that there will be a market maker in co-operative shares designated under relevant market rules to support ongoing liquidity; and
requiring Fonterra to make independent market analysis of its performance accessible to farmers and unit holders; and
requiring Fonterra to maintain and publish a dividend and retentions policy.
Technical amendments
The Bill also includes minor and technical amendments to—
adjust the time frames for the Commerce Commission’s base milk price calculation review process; and
expand the scope of leviable activities to cover the cost associated with the Commerce Commission’s issue of directions to Fonterra and any additional enforcement; and
correct minor drafting errors and cross-references in the Act.
Departmental disclosure statement
The Ministry for Primary Industries is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.
A copy of the statement can be found at http://legislation.govt.nz/disclosure.aspx?type=bill&subtype=government&year=2022&no=165
Regulatory impact statement
The Ministry for Primary Industries produced a regulatory impact statement in April 2022 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.
A copy of this regulatory impact statement can be found at—
Clause by clause analysis
Clause 1 is the Title clause.
Clause 2 is the commencement clause. It provides for the Bill to come into force on 1 June 2023, except for clauses 9(1) and (2), 14, 18, 21, 23(1), and 24, which come into force on 1 January 2023.
Clause 3 provides that the Act amended is the Dairy Industry Restructuring Act 2001 (the principal Act).
Part 1Amendments to subpart 5 of Part 2
Clause 4 amends section 72 as a consequence of the repeal of sections 140 to 146.
Clause 5 amends section 109L to impose minimum requirements for market makers that are required to operate when the licensed market on which co-operative shares are quoted is in operation.
Clause 6 inserts new sections 109LA and 109LB to require new co-op to make information about its performance publicly accessible.
Clause 7 amends section 109M to provide that certain conduct by new co-op relating to its capital structure is not prohibited by section 109M(2), and to update 2 cross-references.
Clause 8 amends section 118 to provide that a failure to comply, without reasonable excuse, with new section 109LA, 109LB, or 135A or with a requirement in a notice given under section 150ZD(2) is an offence.
Clause 9 amends section 134 to permit a levy amount to be set outside the financial year to which the levy relates. It also amends section 134 to update the costs that may be included in the levy calculation to include the cost of making directions under new sections 150UA to 150UD.
Clause 10 inserts new section 135A, which requires new co-op to keep, maintain, and make publicly accessible a dividend and retentions policy.
Clause 11 repeals sections 140 to 146, which deal with the enforcement of provisions in subpart 5 of Part 2. These sections have been relocated to new subpart 5B of Part 2, which now provides for enforcement of provisions in subparts 5 and 5A of Part 2.
Clause 12 amends section 148 to update a cross-reference as a consequence of the repeal of section 145.
Part 2Other amendments
Clause 13 amends section 5 to insert a definition of publicly accessible.
Clause 14 amends section 150B to clarify that the provision stating that the use of certain assumptions does not detract from the achievement of the purpose set out in section 150A does not extend to the way those assumptions are used by new co-op when it sets the base milk price.
Clause 15 amends section 150D to insert a reference to the persons required to be engaged under new section 150EA to calculate a base milk price.
Clause 16 amends the composition of, and the process for appointing members to, the Milk Price Panel under section 150E. The amendments provide for the Minister to nominate 2 members and to approve the chair nominated by new co-op. The amendments also provide that all members of the panel must be appointed on the same terms and conditions and that the chair must not have a meaningful association with new co-op or a shareholding farmer.
Clause 17 inserts new section 150EA, which requires new co-op to engage 1 or more persons to calculate a base milk price to enable the Milk Price Panel to perform its function under section 150D(3). Under the new provision, the persons may be engaged for a term of no more than 6 consecutive seasons and may not be re-engaged until another 4 seasons have passed. The persons engaged must be independent of and operate at arm’s length in relation to new co-op when providing the service.
Clause 18 amends section 150I to clarify that the Commerce Commission’s (the Commission) report on the review in relation to the milk price manual may include the extent to which the way new co-op uses an assumption described in section 150B(1) is consistent with the achievement of the purpose set out in section 150A.
Clause 19 inserts new section 150JA to require new co-op to publish information that has been requested by or provided to the Commission in relation to the review of the milk price manual, and that new co-op reasonably considers is not commercially sensitive.
Clause 20 amends section 150L(b) to correct an error. The amended paragraph (b) will now refer to recommendations for the milk price manual rather than the setting of the base milk price.
Clause 21 amends section 150P to clarify that the Commission’s report on the review of the calculation of the base milk price may include the extent to which the way new co-op uses an assumption described in section 150B(1) is consistent with the achievement of the purpose set out in section 150A.
Clause 22 inserts new section 150QA to require new co-op to publish information that has been requested by or provided to the Commission in relation to the review of the calculation of the base milk price, and that new co-op reasonably considers is not commercially sensitive.
Clause 23 amends section 150T to bring forward from 1 July to 15 June the date by which new co-op must provide certain information to the Commission in relation to the calculation of the base milk price. A new subsection (2) is also inserted, requiring new co-op to provide the Commission, no later than 5 working days before 15 September in each year, the panel recommendations described in section 150D(3)(c) in relation to the setting of the base milk price.
Clause 24 amends section 150U to bring forward—
from 15 August to 1 August the date by which the Commission must provide new co-op with a draft of its report on its review of the calculation of the base milk price; and
from 1 September to 15 August the date by which new co-op must make a submission to the Commission on the draft report.
Clause 25 inserts new sections 150UA to 150UD, which provide for the Commission to give directions in relation to reviews required by sections 150H and 150O.
Clause 26 repeals section 150V and the cross-heading above that section.
Clause 27 inserts new subpart 5B into Part 2. The new subpart provides for enforcement of the provisions in subparts 5 and 5A of Part 2 and regulations made under section 115.
Clause 28 amends the transitional and savings provisions in Schedule 1 of the principal Act. The amendments are set out in the Schedule of this Bill.
Hon Damien O’Connor
Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Bill
Government Bill
165—1
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Act 2022.
2 Commencement
(1)
This Act, other than the provisions specified in subsection (2), comes into force on 1 June 2023.
(2)
Sections 9(1) and (2), 14, 18, 21, 23(1), and 24 come into force on 1 January 2023.
3 Principal Act
This Act amends the Dairy Industry Restructuring Act 2001.
Part 1 Amendments to subpart 5 of Part 2
4 Section 72 amended (Overview)
Replace section 72(10) with:
(10)
Sections 135 to 139 contain general provisions.
5 Section 109L amended (New co-op’s obligations in relation to market in co-operative shares and to new co-op fund)
(1)
Replace section 109L(1) with:
(1)
New co-op must ensure that there are 1 or more market makers in co-operative shares who—
(a)
are designated a market maker under the market rules of the licensed market on which the co-operative shares are quoted; and
(b)
operate during the periods of operation of the licensed market on which the co-operative shares are quoted.
(2)
After section 109L(2), insert:
(3)
In this section, market rules has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013.
6 New sections 109LA and 109LB inserted
After section 109L, insert:
109LA New co-op must commission financial markets research and analysis about its performance
(1)
New co-op must commission, on an ongoing basis, financial markets research and analysis in respect of new co-op’s performance.
(2)
New co-op must ensure that the commissioned financial markets research and analysis—
(a)
is free from bias and independent of new co-op; and
(b)
provides credible analysis.
(3)
New co-op must make the commissioned financial markets research and analysis publicly accessible.
109LB New co-op must keep list of financial markets research and analysis about its performance
(1)
New co-op must keep and maintain a list of financial markets research and analysis relating to new co-op’s performance.
(2)
New co-op must ensure that the list—
(a)
reflects a diverse range of financial markets research and analysis of new co-op’s performance (to the extent that the research and analysis is readily available); and
(b)
is regularly updated to maintain currency.
(3)
New co-op must make the list publicly accessible.
(4)
New co-op must ensure that the following are complied with in relation to each item of financial markets research and analysis on the list:
(a)
the item is a credible analysis of new co-op’s performance; and
(b)
the item is accompanied by information that describes the extent, if any, of new co-op’s involvement in the preparation of the item; and
(c)
the item is available to be accessed; and
(d)
the item is accompanied by information about how to access the item or a means of accessing the item.
(5)
New co-op may include in the list additional information that is not an item of analysis. Any additional information must be clearly identified in the list as additional information.
7 Section 109M amended (Restrictions on new co-op)
(1)
After section 109M(1), insert:
(1A)
Despite subsection (1)(c) and (d), subsection (2) does not apply to conduct by new co-op that—
(a)
restricts the exchange of co-operative shares for new co-op fund securities by setting a limit on the number of new co-op shares that may be exchanged for new co-op fund securities; or
(b)
prevents the exchange of co-operative shares for new co-op fund securities when a limit referred to in paragraph (a) has been reached.
(2)
In section 109M(2)(a), replace “section 73(1)”
with “section 73(2)”
.
(3)
In section 109M(2)(b), replace “section 73(2)”
with “section 73(1)”
.
8 Section 118 amended (Offences)
After section 118(1)(b), insert:
(c)
fails, without reasonable excuse, to comply with the requirements of section 109LA; and
(d)
fails, without reasonable excuse, to comply with the requirements of section 109LB; and
(e)
fails, without reasonable excuse, to comply with the requirements of section 135A:
(f)
fails, without reasonable excuse, to comply with the requirements of a notice given under section 150ZD(2)(a), (b), or (c).
9 Section 134 amended (New co-op must pay levy)
(1)
In section 134(1), replace “in each financial year”
with “for each financial year”
.
(2)
In section 134(3), replace “in each of those years”
with “for each of those years”
.
(3)
In section 134(4)(a)(i), after “determinations”
, insert “and directions”
.
(4)
In section 134(4)(a)(iii), after “determinations”
, insert “and directions”
.
(5)
In section 134(4)(b)(ii), after “this subpart”
, insert “, or directions made under subpart 5A”
.
10 New section 135A inserted (Dividend and retentions policy)
After section 135, insert:
135A Dividend and retentions policy
(1)
New co-op must keep and maintain a dividends and retentions policy.
(2)
New co-op must make the policy publicly accessible.
11 Sections 140 to 146 and cross-heading above section 140 repealed
Repeal sections 140 to 146 and the cross-heading above section 140.
12 Section 148 amended (Commission input)
In section 148(2), replace “section 145”
with “section 150ZD”
.
Part 2 Other amendments
13 Section 5 amended (Interpretation)
In section 5(1), insert in its appropriate alphabetical order:
publicly accessible, in relation to making a document or information accessible, means that the document or information is available for inspection, free of charge, on an Internet site that is accessible to the public at all reasonable times (except to the extent that making the document or information available would infringe copyright in the material in question or is inconsistent with any enactment or rule of law)
14 Section 150B amended (Certain assumptions do not detract from purpose of subpart)
In section 150B, insert as subsection (2):
(2)
Subsection (1) does not extend to the way in which new co-op uses an assumption in setting the base milk price.
15 Section 150D amended (Milk Price Panel)
In section 150D(3)(a), after “price”
, insert “carried out by the person or persons engaged under section 150EA”
.
16 Section 150E amended (Appointment of members of panel)
(1)
Replace section 150E(1) and (1A) with:
(1)
New co-op must appoint—
(a)
2 members nominated by the Minister to the panel; and
(b)
a chair of the panel nominated by new co-op who has been approved by the Minister; and
(c)
2, 3, or 4 more members to the panel; and
(d)
an additional member nominated by the Minister if the chair is a member nominated by the Minister.
(1A)
Members appointed on the nomination of the Minister must be appointed on the same terms and conditions as other members appointed by new co-op to the panel.
(2)
After section 150E(2), insert:
(2A)
New co-op must ensure at all times that the chair does not have a meaningful association with new co-op or with a shareholding farmer, for example, the chair must not be—
(a)
a sitting director of new co-op, a member of new co-op’s Co-operative Council, or a current panel member appointed by that council; or
(b)
a relative of a person described in paragraph (a); or
(c)
an associated person or an employee of a person described in paragraph (a).
(2B)
The obligation in subsection (2A)—
(a)
is in addition to the obligation in subsection (2); and
(b)
applies regardless of how a position or relationship referred to in subsection (2A)(a) to (c) is described in new co-op’s constitution or any other document.
(3)
In section 150E(3), replace “(1A) or (2)”
with “(1), (1A), (2), or (2A)”
.
17 New section 150EA inserted (Calculation of base milk price)
After section 150E, insert:
150EA Calculation of base milk price
(1)
New co-op must engage 1 or more persons to calculate a base milk price that will enable the panel to perform its function under section 150D(3).
(2)
New co-op must ensure that a person—
(a)
is engaged to provide the service for a term of no more than 6 consecutive seasons; and
(b)
is not re-engaged to provide the service until at least 4 seasons have passed since the end of their previous term.
(3)
New co-op must ensure that a person it engages to provide the service—
(a)
is independent of new co-op; and
(b)
operates at arm’s length in relation to new co-op when providing the service.
(4)
The requirements in subsection (2) apply, in respect of a person that is an entity, to the entity and its key personnel.
(5)
In this section,—
arm’s length includes, without limiting the ordinary meaning of the expression, having relationships, dealings, and transactions that—
(a)
do not include elements that parties in their respective positions would usually omit, if the parties were—
(i)
connected or related only by the transaction or dealing in question; and
(ii)
acting independently; and
(iii)
each acting in their own best interests; and
(b)
do not omit elements that parties in their respective positions would usually include, if the parties were—
(i)
connected or related only by the transaction or dealing in question; and
(ii)
acting independently; and
(iii)
each acting in their own best interests
key personnel, in respect of an entity, means—
(a)
a director, partner, trustee, or senior manager of the entity who has a role in providing the service; and
(b)
senior personnel engaged by the entity for the purpose of providing the service
service means the calculation of the base milk price described in subsection (1).
(6)
If, without reasonable excuse, new co-op contravenes subsection (1), (2), or (3), it commits an offence and is liable on conviction to a fine not exceeding $200,000 and a fine of $10,000 for each day that the offence continues.
18 Section 150I amended (Commission’s report)
After section 150I(1), insert:
(1A)
To avoid doubt, a report under subsection (1) may include the extent to which the way new co-op uses an assumption described in section 150B(1) in relation to the milk price manual is consistent with the achievement of the purpose set out in section 150A.
19 New section 150JA inserted (Milk price manual review information to be published)
After section 150J, insert:
150JA Milk price manual review information to be published
(1)
New co-op must make all non-sensitive information publicly accessible within 20 working days after the date on which the Commission makes its final report publicly available under section 150J.
(2)
In this section, non-sensitive information means information that has been requested by or provided to the Commission in relation to the review of the milk price manual and that new co-op reasonably considers is not commercially sensitive.
20 Section 150L amended (New co-op must provide Commission with milk price manual and other information)
In section 150L(b), replace “setting of the base milk price”
with “milk price manual”
.
21 Section 150P amended (Commission’s report)
After section 150P(1), insert:
(1A)
To avoid doubt, a report under subsection (1) may include the extent to which the way new co-op uses an assumption described in section 150B(1) in calculating the base milk price is consistent with the achievement of the purpose set out in section 150A.
22 New section 150QA inserted (Base milk price calculation review information to be published)
After section 150Q, insert:
150QA Base milk price calculation review information to be published
(1)
New co-op must make all non-sensitive information publicly accessible within 20 working days after the date on which the Commission makes its final report publicly available under section 150Q.
(2)
In this section, non-sensitive information means information that has been requested by or provided to the Commission in relation to the review of the calculation of the base milk price and that new co-op reasonably considers is not commercially sensitive.
23 Section 150T amended (New co-op must provide Commission with certain information)
(1)
In section 150T, replace “1 July”
with “15 June”
.
(2)
In section 150T, insert as subsection (2):
(2)
New co-op must, no later than 5 working days before 15 September in each year, provide to the Commission the panel recommendations described in section 150D(3)(c) in relation to the setting of the base milk price.
24 Section 150U amended (Draft Commission report)
(1)
In section 150U(1), replace “15 August”
with “1 August”
.
(2)
In section 150U(2), replace “1 September”
with “15 August”
.
25 New sections 150UA to 150UD and cross-heading inserted
After section 150U, insert:
Directions relating to Commission reviews
150UA Commission may give directions in relation to reviews
(1)
The Commission may, by notice, direct new co-op to do 1 or more of the following in the manner specified in the notice:
(a)
take any action in relation to a matter referred to in any of the following reports:
(i)
a report made under section 150I:
(ii)
a report made under section 150P:
(b)
publish any information requested by or provided to the Commission as part of a review under section 150H or 150O (whether or not the information is actually provided to the Commission).
(2)
A direction must state—
(a)
the date by which, or period within which, the direction must be complied with; and
(b)
the reasons for which it is given.
(3)
New co-op must comply with a direction given under this section.
150UB Criteria for giving directions
(1)
The Commission may only give a direction that is consistent with the purpose set out in section 150A.
(2)
A direction under section 150UA(1)(b) is consistent with the purpose set out in section 150A for the purpose of subsection (1).
(3)
A direction under section 150UA(1)(b) to publish information applies despite sections 150JA and 150QA if the Commission is satisfied that the information is not commercially sensitive.
150UC Process for giving directions
(1)
Before giving a direction (the proposed direction), the Commission must—
(a)
make the proposed direction and the reasons for the proposed direction publicly available; and
(b)
consult new co-op about the proposed direction (including the Commission’s reasons for giving the proposed direction); and
(c)
have regard to any submissions or evidence provided by the persons consulted.
(2)
The Commission must give the direction to new co-op.
(3)
After giving the direction to new co-op, the Commission must make the direction, and the Commission’s reasons for giving the direction, publicly available.
150UD Amendment and revocation of directions
(1)
The Commission may amend or revoke a direction—
(a)
on its own initiative; or
(b)
at the request of new co-op, if the Commission is satisfied that new co-op has provided the Commission with evidence of reasonable grounds to amend or revoke the direction.
(2)
A direction may be amended or revoked in the same way in which it may be made, except that section 150UC(1) does not apply to an amendment of a direction if the Commission is satisfied that the amendment is only correcting a minor error or is otherwise of a minor nature.
26 Section 150V and cross-heading repealed
Repeal section 150V and the cross-heading above section 150V.
27 New subpart 5B of Part 2 inserted
After section 150V, insert:
Subpart 5B—Enforcement
150W Jurisdiction of High Court
The High Court may hear and determine the following matters:
(a)
applications for orders under section 150Y:
(b)
proceedings for recovering pecuniary penalties under section 150Z:
(c)
applications for injunctions under section 150ZA:
(d)
actions for damages under section 150ZB.
150X Meaning of relevant provision
In this subpart, relevant provision means subpart 5 or 5A or regulations made under section 115.
150Y Court may order new co-op to comply with direction
The court may, on application by the Commission, order new co-op to comply with a direction given under section 150UA by a specified date or within a specified period.
150Z Pecuniary penalties
(1)
The court may, on application by the Commission, order a person to pay to the Crown a pecuniary penalty if satisfied that the person—
(a)
has contravened a relevant provision; or
(b)
has been involved in a contravention of a relevant provision.
(2)
The maximum amount of a pecuniary penalty under subsection (1) is,—
(a)
for contravention of section 150UA or 150Y, $500,000 in respect of each act or omission; and
(b)
for any other contravention, the same as the amount that applies under section 80 of the Commerce Act 1986.
(3)
Despite section 150ZD, section 79 of the Commerce Act 1986 does not apply to proceedings under this section.
(4)
In this section, a person is involved in a contravention of a relevant provision if the person—
(a)
has attempted to contravene the provision; or
(b)
has aided, abetted, counselled, or procured any other person to contravene the provision; or
(c)
has induced, or attempted to induce, any other person, whether by threats or promises or otherwise, to contravene the provision; or
(d)
has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by any other person of the provision; or
(e)
has conspired with any other person to contravene the provision.
150ZA Injunctions
If the court is satisfied, on application by the Commission or any other person, that a person has contravened a relevant provision, the court may grant an injunction restraining a person from continuing the contravention.
150ZB Actions for damages
(1)
Every person (other than the Commerce Commission) is liable for damages for loss or damage caused by that person engaging in conduct that constitutes a contravention of a relevant provision.
(2)
Sections 82 and 82A of the Commerce Act 1986 apply to actions for damages under this section.
150ZC Miscellaneous
(1)
In determining an appropriate penalty under section 150Z, the court must have regard to all relevant matters, including the following:
(a)
for a contravention of subpart 5 or regulations made under section 115, the purpose and principles of subpart 5, as expressed in sections 70 and 71; and
(b)
for a contravention of subpart 5A, the purpose of subpart 5A, as expressed in section 150A; and
(c)
the nature and extent of the contravention; and
(d)
the nature and extent of any loss or damage suffered by any person because of the contravention; and
(e)
any gains made or losses avoided by the person in contravention; and
(f)
whether the person in contravention has paid an amount in compensation or taken other steps for reparation or restitution; and
(g)
the circumstances in which the contravention or other act or omission took place (including whether it was intentional, inadvertent, or caused by negligence); and
(h)
any previous contraventions of a similar nature; and
(i)
any other relevant matter.
(2)
The standard of proof in proceedings under this subpart is the standard of proof that applies in civil proceedings.
(3)
In any proceedings under this subpart, the Commission, on the order of the court, may obtain discovery and administer interrogatories.
(4)
Proceedings under this subpart may be commenced within 3 years after the matter giving rise to the contravention arose.
(5)
If conduct by a person constitutes a contravention of 2 or more provisions of subpart 5 or 5A, proceedings may be instituted under this subpart against that person in relation to the contravention of 1 or more of the provisions, but no person is liable to more than 1 pecuniary penalty under this subpart for the same conduct.
150ZD Application of Commerce Act 1986 provisions
(1)
The following provisions of the Commerce Act 1986 apply in respect of this subpart and subparts 5 and 5A with all necessary modifications:
(a)
sections 15 to 17 (proceedings of the Commission):
(b)
sections 74A to 74C (provisions relating to undertakings):
(c)
sections 77 and 78 (lay members):
(d)
section 79 (evidence not otherwise admissible):
(e)
section 88 (general provisions relating to granting of injunctions):
(f)
section 88A (when undertakings as to damages not required):
(g)
section 89 (other orders):
(h)
section 90 (conduct by employees or agents):
(i)
section 98 (Commission may require person to supply information or documents or give evidence):
(j)
section 98A (power to search):
(k)
section 98G (relating to warrants, etc):
(l)
section 99 (powers of Commission to take evidence):
(m)
section 100 (powers of Commission to prohibit disclosure of information, documents, and evidence):
(n)
section 100A (stating case for High Court):
(o)
sections 101 and 102 (notices):
(p)
section 103 (offences):
(q)
section 104 (determinations of Commission):
(r)
section 106 (proceedings privileged):
(s)
section 106A (judicial notice):
(t)
section 109 (Commission may prescribe forms).
(2)
For the purpose of carrying out its functions and exercising its powers under a relevant provision, the Commission may, in addition to exercising its powers under section 98 of the Commerce Act 1986, by notice in writing, require new co-op—
(a)
to do either or both of the following, at the time and place specified in the notice, if the Commission has reason to believe new co-op may have information relevant for that purpose:
(i)
prepare and produce, or supply to the Commission, documents and information in relation to any matter specified in the notice:
(ii)
answer any questions in relation to any matter specified in the notice; and
(b)
to have prepared and to produce, or to supply to the Commission, at the time and place specified in the notice, an expert opinion from an appropriately qualified person, or from a member of a class of appropriately qualified persons, as determined by the Commission in relation to any matter specified in the notice; and
(c)
to provide any or all of the following:
(i)
a written statement that states whether or not new co-op has complied with relevant provisions:
(ii)
a report on the written statement referred to in subparagraph (i) that is signed by an auditor in accordance with any form specified by the Commission:
(iii)
sufficient information to enable the Commission to properly determine whether relevant provisions have been complied with:
(iv)
a certificate, in the form specified by the Commission and signed by at least 1 director of new co-op, confirming the truth and accuracy of any information provided under this section.
150ZE Additional proceedings
Proceedings brought under this Part are in addition to any proceedings brought under any other Act.
28 Schedule 1 amended
(1)
In Schedule 1, clause 5(3), replace “sections 140 to 146”
with “sections 150W to 150ZE”
.
(2)
In Schedule 1,—
(a)
insert the Part set out in the Schedule of this Act as the last Part; and
(b)
make all necessary consequential amendments.
Schedule New Part 2 inserted into Schedule 1
s 28
Part 2 Provisions relating to Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Act 2022
6 Interpretation
In this Part, commencement date means the date on which section 28 of the Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Act 2022 comes into force.
7 Calculation of base milk price
(1)
A person that, immediately before the commencement date, was engaged by new co-op to calculate a base milk price is a person engaged by new co-op under section 150EA(1) if the person meets the requirements in section 150EA(3).
(2)
Despite section 150EA(2)(a), the maximum term of engagement for a person referred to in subclause (1) is 2 consecutive seasons starting on the day after the commencement date.