The full text of our submission to the Social Services and Community Select Committee recommending amendment of the Resale Right for Visual Artists Bill.

About the New Zealand Council for Civil Liberties

1. The New Zealand Council for Civil Liberties (‘the Council’) is a voluntary, not-for-profit organisation which advocates to promote human rights and maintain civil liberties.

2. We wish to make an oral submission to the Committee.

Summary

3. The Resale Right for Visual Artists Bill is introduced to ensure New Zealand complies with its obligations under the free trade agreements reached with the United Kingdom and the European Union.

4. The bill requires the Minister to appoint an agency to collect royalties on the resale of qualifying visual works of art, so they can be redistributed to the artists or their estates. The appointed agency will also have the power to obtain information needed to perform its functions.

5. The bill and government intend that the agency the Minister appoints will be outside of the public service, that is, in the private sector. However, performance of the functions that will be carried out by the agency are legal obligations that the New Zealand state bears, and that would otherwise have to be carried out by a government department or agency.

6. A general principle of freedom of information laws around the world is that they apply to entities carrying out government functions. However, the bill does not require that the agency appointed by the Minister is subject to the Ombudsmen Act 1975, the Official Information Act 1982 (the OIA), the Public Records Act 2005 or the Public Audit Act 2001.

7. The Council strongly recommends that this gap in the governance and accountability arrangements for the agency appointed by the Minister is rectified, and the bill be amended accordingly.

Open Government

8. Section 12(1)(d) of the Public Service Act 2020 sets out that a principle of the public service is to ‘foster a culture of open government’. Section 12(2) of that Act states that public service chief executives ‘are responsible for upholding the principles when carrying out their responsibilities’ and for ‘ensuring that the agencies they lead or carry out some functions within also do so.’

9. It is internationally recognised, both by the Open Government Partnership that New Zealand is a member of, and by scholars and practitioners that ‘open government’ has three core elements: access to information, public participation, and accountability. This is reflected in the section 4 purposes of the OIA, which has for 40 years made clear that people’s ability to access information is both ‘to enable their more effective participation in the making and administration of laws and policies’ and ‘to promote the accountability of Ministers of the Crown and officials’, and ‘thereby to enhance respect for the law and to promote the good government of New Zealand’.

10. Our right to information has international legal foundations in the International Covenant on Civil and Political Rights (the ICCPR), given effect through the New Zealand Bill of Rights Act 1990. Article 19 of the Covenant and section 14 of the Act guarantee the right of people to seek, receive, and impart information.

11. In other words, the OIA creates mechanisms to give practical effect to part of the state’s obligations under Article 19 of the Covenant and section 14 of the Act.

12. Other legislation, such as the Ombudsmen Act 1975, the Public Audit Act 2001 and the Public Records Act 2005 also provide accountability and access to information for public authorities.

13. Given the government’s acceptance of the Open Government Partnership’s definition of ‘open government’ when it joined the organisation in 2013,¹In joining the Open Government Partnership, New Zealand signed up to the Partnership’s Open Government Declaration. https://www.opengovpartnership.org/process/joining-ogp/open-government-declaration/ the requirements of section 12 of the Public Service Act are profound. Amongst other issues, it should be reasonable to assume that it means that whenever a department does policy work that will create a new organisation, or require an existing organisation to take on public functions, it should be ensuring that the organisation in question should be made subject to the country’s core legislation for access to information, participation and accountability, such as those listed above.

14. This is reinforced by Part 5 of chapter 20 of the Legislation Design Advisory Committee’s Legislation Guidelines, which states:²Legislation Guidelines 2021 edition, Legislation Design Advisory Committee. http://ldac.org.nz/guidelines/legislation-guidelines-2021-edition/new-powers-and-entities-2/chapter-20/

All public bodies should be subject to the Ombudsmen Act 1975, the Public Audit Act 2001, the Public Records Act 2005, and the Official Information Act 1982 (or the Local Government Official Information and Meetings Act 1987).

The Acts discussed in this section are key mechanisms by which government bodies are held accountable for their activities. They should apply to all new bodies and existing bodies unless there are compelling reasons for them not to.

(emphasis in the original)

Public nature of the collection agency

15. The Regulatory Impact Statement for the bill assesses options for meeting the government’s obligations under the two free trade agreements.³Regulatory Impact Statement – Artist Resale Royalty scheme, Ministry of Culture and Heritage, 2022. https://www.treasury.govt.nz/sites/default/files/2022-09/ria-mch-arrs-aug22_1.pdf It is explicit that the alternative to the Minister’s designation of a non-government body as the collection agency is a government agency performing these functions.⁴Regulatory Impact Statement, pages 20, 29 and 30.

16. If the functions were added to an existing government agency, the agency and the relevant information would already be subject to the Ombudsmen Act, the OIA, the Public Audit Act and the Public Records Act.

17. If the functions were to be performed by a newly created government agency, it would be expected – and in line with the Legislation Design Advisory Committee’s Guidelines – for the new agency to be made subject to these laws.

18. The government has decided to design the legislation in such a way as to empower the Minister to appoint an organisation outside government to perform the functions that the New Zealand government would otherwise have to carry out to meet its free trade agreement obligations. But the functions remain public functions, regardless of the fact they will be carried out by a private organisation. (The Explanatory Notes for clause 22 of the bill make clear it could be a single natural person, a corporation sole, a body corporate or an unincorporated body.)

19. The public nature of the collection agency’s functions are clear. The agency will:

• be carrying out a function on behalf of the government in order to meet international legal obligations;
• have powers to compel people and organisations to provide it with the information needed to perform its functions;
• have power to disclose information gathered with these powers; and
• have power to collect resale royalties, hold them, and redistribute them.

20. The agency will also have obligations of a public nature that do not apply to other private entities. It must:

• comply with the rules of operation set out in regulations;
• acknowledge and respect the role of Māori as tangata whenua and provide culturally appropriate support to Māori artists when carrying out its function and duties;
• act in the best interest of the rights holders (i.e. beyond what is in the best interest of the agency itself);
• operate in a way that is ‘transparent, accountable, and respectful’; and
• be subject to monitoring by the Ministry of Culture and Heritage,⁵Regulatory Impact Statement, paragraphs 91-96 with its operation being reviewed 5 years after the legislation comes into effect.⁶The review is not set out in the bill, but is set out in paragraph 59 of the paper to the Cabinet Social Wellbeing Committee SWC-22-MIN-0144. https://mch.govt.nz/sites/default/files/projects/cab-22-MIN-0316-artist-resale-royalty-scheme-policy-approvals_1.pdf and paragraphs 97-101 of the Regulatory Impact Statement

21. The collection agency will also receive public funding for an unspecified period after commencement.⁷Regulatory Impact Statement, page 34 The period is unspecified because the government does not know how long it will take for the percentage the agency will deduct from the royalties collected to enable the regime to become self-funding.

22. A body that:

• will perform public functions;
• has obligations of a public nature – that go well beyond what a normal private organisation would be obliged to do; and
• will receive public funding

will clearly be acting as a public authority even if it is not owned by the state, and sits outside the definitions of public authorities in the Public Service Act and Crown Entities Act.

The bill must be amended

23. The Council is deeply concerned by the Ministry’s failure to acknowledge these issues in its Cabinet papers and Regulatory Impact Statement, let alone work through them methodically. It seems, at the least, a failure to comply with the legal obligation on the Chief Executive of Ministry of Culture and Heritage to ‘foster a culture of open government’, as well as failing to address our constitutional norms of making public bodies subject to the legislation listed by the Legislation Design Advisory Committee in its Guidelines.

24. The Regulatory Impact Statement contains no mention of the agency appointed by the Minister to carry out these public functions being made subject to these laws. Indeed, the Statement does not even mention the word ‘accountability’. It does however recognise the public nature of the collection agency’s functions, because it states that the Ministry will ‘monitor’ the agency’s performance.⁸Regulatory Impact Statement, Executive summary, paragraph 44, table following paragraph 75, paragraph 80, table following paragraph 89, paragraphs 90-96.

25. But monitoring by the Ministry is not a sufficient substitute for the rights of ordinary people and the media to seek information for themselves from the body carrying out this public function.

26. Similarly, by omitting to add the collection body to Schedule 1 of the Ombudsmen Act 1975, a person affected by a decision of the collection agency will not be able to complain to the Ombudsman about it. Since the agency will be taking decisions under public administrative law that affect both artists and art dealers, this is unacceptable.

27. Likewise, the bill’s failure to be clear about making the collection agency subject to the Public Records Act raises the possibility that someone could challenge this in the courts. Section 4 of the Public Records Act defines a ‘public office’ as meaning ‘the legislative, executive, and judicial branches of the Government of New Zealand’ and ‘means the agencies or instruments of those branches of government’. Since the collection agency appointed under the bill by the Minister will clearly be an ‘instrument’ of the executive branch of the Government of New Zealand, it could well be argued that the collection agency is covered by the Public Records Act. If this were found to be the case, it would make the argument for ensuring the agency is covered by the Ombudsmen Act and Official Information Act even stronger.

28. The Council therefore strongly recommends that the bill be amended to ensure the person appointed by the Minister under clause 22 to be the collection agency is made subject to the Ombudsmen Act 1975, the Official Information Act 1982, the Public Audit Act 2001 and the Public Records Act 2005.

29. The Council recommends that this is done by inserting a new sub-clause after clause 22(5):

“(6) The words “The collection agency appointed under section 22 of the Resale Right for Visual Artists Act 2023” are inserted in the appropriate location of:
(a) Schedule 1 of the Ombudsmen Act 1975;
(b) Schedule 1 of the Official Information Act 1982;
(c) Schedule 2 of the Public Audit Act 2001; and
(d) paragraph (c) of the definition of ‘public office’ in section 4 of the Public Records Act 2005”

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• 1
  In joining the Open Government Partnership, New Zealand signed up to the Partnership’s Open Government Declaration. https://www.opengovpartnership.org/process/joining-ogp/open-government-declaration/
• 2
  Legislation Guidelines 2021 edition, Legislation Design Advisory Committee. http://ldac.org.nz/guidelines/legislation-guidelines-2021-edition/new-powers-and-entities-2/chapter-20/
• 3
  Regulatory Impact Statement – Artist Resale Royalty scheme, Ministry of Culture and Heritage, 2022. https://www.treasury.govt.nz/sites/default/files/2022-09/ria-mch-arrs-aug22_1.pdf
• 4
  Regulatory Impact Statement, pages 20, 29 and 30.
• 5
  Regulatory Impact Statement, paragraphs 91-96
• 6
  The review is not set out in the bill, but is set out in paragraph 59 of the paper to the Cabinet Social Wellbeing Committee SWC-22-MIN-0144. https://mch.govt.nz/sites/default/files/projects/cab-22-MIN-0316-artist-resale-royalty-scheme-policy-approvals_1.pdf and paragraphs 97-101 of the Regulatory Impact Statement
• 7
  Regulatory Impact Statement, page 34
• 8
  Regulatory Impact Statement, Executive summary, paragraph 44, table following paragraph 75, paragraph 80, table following paragraph 89, paragraphs 90-96.