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New Zealand Royal Commission reports on genetic modification

In brief: Articled Clerk Eliza Collier looks at the recent report of the New Zealand Royal Commission into genetic modification.

The Report of the New Zealand Commission on Genetic Modification was released by Prime Minister Helen Clark on 30 July this year. The Commission (which was chaired by The Right Honourable Sir Thomas Eichelbaum G.B.E.) generated wide public and media interest in New Zealand and created some controversy when the Green Party attacked the Commission for failing to deal adequately with food safety issues and the protection of organic produce. The Report deals with a range of legal issues and particularly considers the potential for liability arising from the release of genetically modified organisms.

The Royal Commission

The Royal Commission was directed to receive representations upon, inquire into, investigate and report upon:

  • the strategic options available to New Zealand to address genetic modification, genetically modified organisms and products; and
  • desirable changes to the current legislative, regulatory, policy, and institutional arrangements for addressing genetic modification, genetically modified organisms and products.

The Commission accepted more than 10,000 written submissions. It also requested a number of background papers from experts in the field and conducted a public opinion survey. It held 15 public meetings, a Maori consultation programme, a youth forum and formal hearings which lasted 13 weeks.

The Commission's Report is extremely wide ranging. It covers cultural, ethical and spiritual issues; considers potential applications of genetic modification in research, crops, food and medicine and investigates key legal issues such as intellectual property, liability issues and implications arising from the Treaty of Waitangi.

The essential conclusion of the Commission was that New Zealand should keep its options open on issues pertaining to genetic modification. It recommended that New Zealand proceed carefully with the use of genetically modified material, while at the same time facilitating the development of conventional farming, organics and integrated pest development.

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Liability issues

The Commission specifically examined the potential liability of those involved in creating, using or approving the use of genetically modified organisms or products for harm caused to individuals or the environment. An example of a likely scenario that would lead to such harm is the contamination of non-GM crops or products by GM crops, potentially causing losses related to the recall of products, loss of sales and/or loss of certified organic status.

The Commission discussed potential liability for harm caused by the release of GMOs under the Hazardous Substances and New Organisms Act 1996 (NZ) and the Resource Management Act 1991 (NZ). For example, under the Hazardous Substances and New Organisms Act 1996 (NZ) it is an offence to develop a genetically modified organism in contravention of the Act. Under the Resource Management Act 1991 (NZ), it is open to anyone to apply to the Environment Court for orders to prevent or stop any dangerous, offensive, objectionable or noxious activities that are or would be harmful to the environment and the Court may order that parties responsible repair or mitigate the damage.

The Commission considered the application of the Accident Insurance Act 1998 (NZ) (soon to be replaced by the Injury Prevention and Rehabilitation Bill currently before Parliament). The Act generally covers death or physical injury caused by an accident on a specific occasion. The Commission considered that it was likely that personal harm shown to have been caused by trans-gene technology or an associated infection would be covered by the Act. However, damage caused by ingestion or exposure to genetically modified organisms or products over time would not be covered. In addition, the Commission concluded that the New Zealand accident compensation scheme would cover personal injury caused by medical error or mishap and personal injury suffered by practitioners or researchers in the field of genetic modification.

Currently, where an injury is covered by the Accident Insurance Act (NZ), it is not possible to bring a claim for damages based on negligence in respect of personal injuries or death. However, where a potential claimant is not prevented by the Act, he or she can claim in negligence. A claimant can also bring a negligence action for damaged property or for economic loss which may be caused by genetic modification techniques or products. The Commission identified problems for potential claimants such as difficulties establishing causation, proper identification of a defendant and problems related to obtaining payment, particularly if the defendant is an insolvent company. The Commission also gave some consideration to issues arising in relation to the limitation of actions and it concluded that, in accordance with current case law, a victim can bring a claim on the harm being discovered.

The Commission also noted the availability of the tort of nuisance where activity related to the release of a GMO causes damage to neighbouring land or interferes with the enjoyment of land. Where land is damaged, the Commission noted the possibility of liability under the rule in Rylands v Fletcher; a rule that creates liability for the 'escape' from a defendant's land of something related to a 'non-natural' use of the land resulting in harm.

Insurance

The Commission discussed insurance coverage for risks related to genetic modification. It concluded that, provided there was full disclosure, and subject to standard exclusions, risks associated with GMOs would be covered by existing liability policies. However, it foreshadowed the possibility that insurance companies may attempt to limit insurance cover to exclude such risks. Insurers had indicated that not enough was known about the degree of any danger associated with GMOs and the extent to which there was any potential for widespread consequences. Insurers were also less willing to cover risks associated with GMOs because of negative public perceptions.

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Alternative approaches

The Commission considered a variety of alternative liability regimes including the following suggestions:

  • legislation regulating genetic modification to include specific provision for liability and compensation;
  • imposition of strict liability for environmental and economic damage;
  • the establishment of a liability fund, where all companies concerned with carrying out any biotechnology activities in the environment would be legally bound to contribute to a fund to cover future claims;
  • the possibility of imposing bonds on those responsible for the release of genetically modified organisms to deal with future events or problems. Such a bond would guarantee the performance of a person who is required to fulfil statutory requirements or comply with safety regulations.

Recommendations

The overall recommendation of the Commission was that there be no change to the liability system for the time being. It considered it unnecessary to recommend legislative remedies for parties who may have been affected by the release of a GMO and recommended reliance on the common law, the accident compensation scheme and general environment protection legislation rather than the imposition of a strict liability regime.

Download the Commission's Report.

Australian developments

To compare, Australia has developed a variety of Commonwealth and State legislation covering products derived from gene technology. In particular, the Gene Technology Act 2000 (Cth) set up a regulatory framework for gene technology and established the Office of the Gene Technology Regulator, which works with various scientific committees to establish whether genetic manipulation work is hazardous and to approve licences for dealings with GMOs. Of particular note is section 62(3) which stipulates that licence conditions for dealings with genetically modified organisms may include conditions requiring the licence holder to be adequately insured against any loss, damage or injury that may be caused to human health, property or environment by the licensed dealing. Apart from that stipulation, no specific regime has been created for dealing with liability relating to the release of GMOs in Australia.

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