BusinessPlus October 2016

ISSUE 141 - OCTOBER 2016

BUSINESSPLUS NEWS AND COMMENTARY FOR EMA MEMBERS

BUSY BEES GROWING THE NZ ECONOMY READ MORE: PAGE 29

MORE STORIES Page 5, 8: Environment law protects no one Page 13:

Manufacturing driving NZ’s growth

Page 19:

90-day trials strictly enforced

Page 26: Nothing like a trade mission to get you going PLUS:

Spring Member Briefing schedule and more...

“THE BEST WAY TO DEAL WITH ANY EMPLOYMENT RELATIONS MATTER IS WHEN YOU KNOW THAT YOU ARE ON THE RIGHT TRACK, FOLLOWING THE RIGHT PROCESS. THE EMA SUPPORTS AND COACHES MEMBERS, LIKE US, TO BE PROFESSIONALS LIKE THEM” Marilou Cuison, Human Resources Manager | PAK’nSAVE Papakura

Do you need help with restructures, union negotiations, personal grievances or other staff issues?

LET AN EMA CONSULTANT HELP YOU. Visit ema.co.nz or call 0800 300 362 to find an EMA consultant near you.

BUSINESSPLUS is published by The Employers and Manufacturers Association (Northern) Inc (EMA) EMA is the major shareholder of national lobby group, BusinessNZ. EMA head office: 145 Khyber Pass Rd, Grafton, Auckland, New Zealand Private Bag 92066, Victoria Street West, Auckland 1142, NZ Ph: +64-9-367 0900 Email: ema@ema.co.nz In Hamilton: EMA/ExportNZ Waikato 103 Tristram Street, Hamilton.

PO Box 490 Waikato Mail Centre, Hamilton 3240.

Ph: +64-7-839 2713 In Tauranga: ExportNZ Bay of Plenty Smart Business Centre, 65 Chapel Street, Bay Central, Tauranga, 3110.

PO Box 13202, Tauranga Central, Tauranga 3141.

Ph: +64-7-571 0600 AdviceLine: 0800 300 362 (in NZ) or 1800 300 362 (from AUS) or advice@ema.co.nz Phone 8am-8pm weekdays for information about employment and more, plus referrals to EMA Legal lawyers and your local EMA consultant in employment relations and/or occupational health and safety.

Visit www.ema.co.nz for owner and staff training programmes, conferences and other events, employer guides and templates, manufacturer services, media statements and submissions, export development and more EMA contacts Chief executive: Kim Campbell Membership manager: Roger Carson External Relations manager: Val Hayes Advocacy and Industry Relations manager: Mark Champion Learning manager: David Foley Enterprises and Strategy manager: Mauro Barsi Industrial Relations and Safety manager: Paul Jarvie Finance and Technology manager: Paul Yeo Corporate and Building Services manager: Sheree Alcock ExportNZ manager: Catherine Lye BusinessPlus is free and available to EMA members only Editor: Mary MacKinven, +64-9-367 0939, mob +21 636 089, email mary.mackinven@ema.co.nz Designer: Ripeka Mikaere | Printer: MHP | Distributor: Rocket Mail Advertising sales: Colin Gestro, Affinity Ads, mob + 27 256 8014, email colin@affinityads.com ISSN No. 1176-4953

“To champion New Zealand business and help our members succeed”

Enterprises of all types and sizes belong to EMA for a variety of benefits: • The latest information and advice on everything to do with employing staff or managing contractors, and legal representation if employers require - at member rates; • A choice of 100-plus courses and tailored training options, plus specialist seminars and events on topics such as Lean practice and developing markets offshore through EMA’s Export New Zealand division – all providing opportunities to network; • Ensuring your voice is heard by local and central government, since our aim is to improve the environment in which your business operates.

NEWS AND COMMENTARY FOR EMA MEMBERS

BUSY BEES GROWING THE NZ ECONOMY READ MORE: PAGE 29

On the cover...

Manuka honey production pioneer, New Zealand Manuka Group, keeps innovating and growing.

Full story, p29.

MORE STORIES Page 5, 8: Environment law protects no one

CONTENTS

Page 13:

Manufacturing driving NZ’s growth

Page 19:

90-day trials strictly enforced

Page 26: Nothing like a trade mission to get you going PLUS:

Spring Member Briefing schedule and more...

Commentary 5

EMA’s CEO Kim Campbell on: Effective use of our resources – a case for change Winston Peters guest speaker at AGM in November 6 Want better transport? Over to you, Aucklanders 7 Obituary to Sir Graeme Douglas 8 Report backs need for resource management reform 9 BusinessNZ CEO Kirk Hope on: We need people with skills and work visas 10 Tapping into global expertise Survey: How well does this magazine keep you informed?

11 Opotiki – more than farms and shops 12 Seen @ Mayoral candidates’ debate - Auckland 13 Manufacturing driving NZ’s economic growth Employment 14 15 16 18 19

Avoiding employment traps with employment agreements Apprenticeships making a comeback in NZ Employment Chat – Q and A: Coping with health and safety, underpaying competitors and public holiday pay 20 EMA members reach finalist status in Best Workplaces Awards Case law: Strict rules relating to 90-day trial periods The end isn’t nigh for worker safety and wellbeing

20 In business 22 23 24

EMA is yours

ISSUE 141 - OCTOBER 2016

BUSINESSPLUS

ICT: Choose the computer solution based on the business problem Wellbeing: Nutrition - the game changer your business needs?

Marketing: Marketing-led approach leads to market leading Selling up: Strategically exiting a significant business

25 International trade 26

Nothing like a trade mission to expedite exporting Business opportunities for NZ in Cuba

27 Member profileS 29 30

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Manuka Group: Busy bees grow their Manuka honey business Zealong Tea Estate: NZ tea tempts German tastebuds Over the Moon Dairy: International recognition for NZ cheese Spring Member Briefings schedule: book now!

+ Inside: Training Plus insert detailing October training courses, and more BusinessPlus October 2016

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10 WAYS WE HAVE HELPED YOUR BUSINESS

01.

Been deeply involved in making practical changes to the Health & Safety at Work Act

02.

Provided economic and employment updates to more than 6000 people via our regular Member Briefings

03.

Introduced the concept of Employment Readiness Certificates for school leavers

04.

Continued to raise the importance of better transport infrastructure and funding for this

Promoted the need for a more efficient planning and consent process

06.

Been instrumental in the passing of legislation protecting migrant labour from exploitation

08.

Answered more than 30,000 queries from members via our AdviceLine service in the past year

10.

Delivered a reduction in ACC levies

05.

07.

09.

Fought to mitigate members having to bear unnecessary costs of earthquake strengthening for buildings in low risk areas

Provided more than 750 training, networking and conference events for our members, which were attended by more than 10,000 people

NZ 0800 300 362 | AU 1800 300 362 www.ema.co.nz

CEO COMMENTARY

By Kim Campbell

Effective use of our resources – a case for change The launch of our campaign to reform the resource management system marks a significant milestone for the EMA. In late September, we and the Property Council of NZ and the New Zealand Council for Infrastructure Development, released a ground-breaking piece of research conducted by the Environmental Defence Society (EDS) – which you can read more about on page 8.

You may well wonder why business organisations such as ourselves would have teamed up with an environmental organisation. The answer is simple: the current resource management system is not working for anyone – no matter which side of the debate you sit on, the one thing we all agree is that there is an overwhelming need for change.

This research delivered the empirical evidence that our current system is failing the environment.

As a member, you will be well aware the

EMA has been vocal on reforming the Resource Management Act (RMA) for many years. We know that this piece of legislation has been the bain of your life and most businesses consider it a handbrake on development - particularly when it is combined with the Local Government Act and the New Zealand Transport Management Act. In this latest development, we can now say the current system is not working for business, nor serving the needs of the environment. We commissioned the EDS to explore whether the RMA had delivered to desired environmental outcomes, as part of a wider assessment of the efficacy of the Act. Now in its 25th year, and having been amended more than 20 times, the RMA has not met the environmental outcomes expected of it, according to this research.

A lack of national direction has limited the potential of the resource management system to effectively and efficiently achieve

its environmental goals.

Rigorous evaluation and monitoring of outcomes has been limited, resulting in an erosion of the potential for adaptive governance and robust implementation.

It’s time to put the party politics aside, and have a mature debate about how we as a nation want to effectively manage our resources.

While we initially believed a reform of the Act was required, we are now of the view that the debate goes beyond this. There is no quick fix on offer here.

What’s important is that we, as a nation, need to explore the options for change.

These may be legislative, they may be institutional, these may be around process – whatever they are it’s important that we marshal a new era for resource management.

• Kim Campbell is the CEO of EMA. Email kim.campbell@ema.co.nz

Winston Peters guest speaker at AGM Come along to our annual general meeting (AGM) on November 9 and gain an insight into how New Zealand politics will shape up over the next 12 months leading into the 2017 general election.

With The Right Honourable Winston Peters as the guest speaker, you will be left in no doubt about his view of his role in the next Government.

While he is the current MP for Northland and Leader of New Zealand First, his political career spans almost 40 years since he first entered Parliament in 1978 as a National Party MP. Arguably, under the MMP environment, he is best

known for his role as kingmaker when he held the balance of power after the 1996 election. He eventually formed a coalition with National.

The question is, will he be kingmaker again in 2017?

AGM details: Date: Wednesday, November 9 Time: 4pm-6pm: AGM meeting, guest speaker and refreshments Venue: EMA Business Hub, 145 Khyber Pass Road, Grafton, Auckland Please register your interest with kylee. goodwin@ema.co.nz if you would like to attend the AGM.

BusinessPlus October 2016

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COMMENTARY

By Alan McDonald

“The EMA would have liked the same urgency applied to actually building the required infrastructure.”

Want better transport? Over to you, Aucklanders are going to have to pay more for better public transport, better road links and less congestion on the roads somehow.

That’s the clear message that emerged from the findings of the Auckland Transport Alignment Project (ATAP) announced in mid-September. ATAP has been a success for Transport Minister Simon Bridges and Auckland Mayor Len Brown, in that central government and Auckland local government, plus the transport planning agencies, all now agree the transport priorities for the city and the region.

The result is a 10-year programme of transport priority projects – basically the Auckland Transport Plan developed by Auckland Council and Auckland Transport two years ago, plus a NorthWestern Busway.

At nearly $24 billion that’s $4bn more than the previous forecast spend. But there is no clue as to where the $4bn will come from.

Why the 10-year delay in reducing congestion? That’s how long it will take to assess and implement the technology

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BusinessPlus October 2016

options for progressive congestion charging.

Enhanced roading, public transport and traffic management systems are all part of the equation, but ATAP is pinning its hopes on reduced congestion on a yetto-be-identified road pricing mechanism.

That is hoped to shift the mindset and behaviour of Auckland drivers towards off-peak schedules and public transport in sufficient numbers to reduce congestion in 2027 by about 6 per cent of 2013 numbers.

That’s roughly equivalent to the freer flow of traffic we see every school holiday in Auckland.

Who pays the $4bn shortfall?

our transport future. But, they must also be convinced that the future vision will deliver the promised benefits. That leadership must come from our Mayor, Council and perhaps a specialist ATAP-style body charged with delivering the newly aligned transport strategy.

Public Private Partnerships would be one way to speed up project delivery; Infrastructure Bonds could spread costs over future generations of Aucklanders who also benefit from today’s projects; and asset reallocation might help unlock the Government’s wallet by demonstrating Auckland is willing to contribute its share – much as Christchurch has shown during the rebuild.

In the meantime there is no urgency to reduce worsening congestion and not even a hint at where that extra $4bn might come from, although Auckland Council’s chief executive Stephen Town made it clear at the ATAP briefing that the majority of that funding was expected to come from Auckland Council.

The ATAP report acknowledges the urgency around finding funding solutions, and proposes a work stream to address that issue as early as next year.

Auckland ratepayers and road users will have to accept they have a role in funding

The EMA takes issue with some of the ATAP priorities, as enhanced port access and the

The EMA would have liked the same urgency applied to actually building the required infrastructure.

, Aucklanders second stage of improved airport access should be included in the early priorities rather than in the intermediate phase.

We will also continue to push for threelaning of the Mt Wellington overbridge as part of the East/West link.

But ATAP has also been a significant success in identifying an agreed set of priorities.

With the multitude of agencies and ownerships/responsibilities for various parts of Auckland’s transport network, it’s great to have that alignment.

Let’s get on with it.

Proposed contractors law defeated A special thanks to all our member companies who responded to our call to action recently, which resulted in defeating the Minimum Wage (Contractor Remuneration) Amendment Bill.

Our members emailed MPs and raised awareness of what was a flawed piece of law – and which was defeated by one vote in Parliament in late August.

That was influenced by your direction and support, along with pressure applied by our sister membership organisations around the country.

The Contractors Bill would have imposed restrictions on contracts for services, requiring those in contracting arrangements to be paid the equivalent of the minimum wage or higher. Members were telling us their concerns were not that businesses would have to pay the minimum wage.

Rather, it would have meant Government would have to set a minimum contract rate for services in order to address concerns about poor remuneration practices. The Bill would have blurred the line between contracts and employment agreements.

• Alan McDonald is policy director at EMA. Email alan.mcdonald@ema.co.nz

Obituary to Sir Graeme Douglas

By Kim Campbell Founder and joint managing director of Douglas Pharmaceuticals, Sir Graeme Douglas, passed away on September 1. The company has been a member of EMA for 35 years.

It was as if you were the only person on earth when you met him; his personal attention and simple, old-world manners never permitted him to be anything but attentive, polite and charming… year in and year out.

A quiet, determined man with unshakeable personal values, possessed of a sharp intellect and tough inner resolve.

Sir Graeme Douglas

Often underestimated, Sir Graeme Douglas was at the same time a shrewd and determined businessman and a generous, charitable philanthropist. He was a colossus in the Auckland business community, standing stride of an international pharmaceutical enterprise he started in his Pharmacy in Te Atatu , and now employing more than 450 people.

I doubt his headmaster at New Plymouth High school saw the promise of the distinguished old boy he would spawn, nor indeed his best mate Sir David Levene who was knighted on the same day as Sir Graeme at Government house. Graeme would marry Ngaire, whose sister would marry David.

We first met when we were competitors in the pharmaceutical industry nearly 30 years ago, and he subsequently asked me to become a director of his company.

In the intervening years I have observed how he was able to build his business steadily; without fuss, enter and exit markets with good timing, believing in his people and building durable relationships around the world. He was the type of businessman who makes you proud to say you are in business.

He will be deeply missed by his many charities, his dedicated staff, his sons Jeff and Richard, his wife of nearly 60 years Ngaire, his extended family and a huge community of colleagues and business associates.

New Zealand has said farewell to one of its leading citizens and I have lost a dear friend.

• Kim Campbell is chief executive of EMA. Email kim.campbell@ema.co.nz

BusinessPlus October 2016

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COMMENTARY

By Alan McDonald

Evaluating the Report backs need for resource environmental outcomes management reform of the R Our report on the environmental outcomes of the Resource Management Act (RMA) paints a dim picture.

A little over a year ago the EMA joined forces with the Property Council NZ and New Zealand Council for Infrastructure Development to commission a report to analyse the effectiveness of the RMA in protecting and managing New Zealand’s environment.

Those findings are now available and we’ve been sharing them with key stakeholders, relevant Government Ministers and opposition politicians leading up to, and since, the formal launch of the report’s findings late last month.

MA

There were two parts to the report.

A report by the

BusinessPlus October 2016

Evaluating the environmental outcomes of the RMA

Part one lookedEnv at what measures were ironme ntal Def ence Society available to assess the outcomes for June 2016 the environment since the introduction of the RMA. They painted a pretty dim picture, with much of our native flora and fauna, maritime and freshwater environments, in a poorer state than they were in 1991.

Part two of the report focused on the The purpose of this proje ct is to explore whether the Resource Management implementations andamen effectiveness of the The notable exceptions were Act 1991 (RMA) has delive ded and much-discussed red desired environmental , outcomes for New the Act’s impa It is intended ct RMA, and the results are telling.

There is and improvements inZeala airnd. quality, possibly on economic to complement wider asses sments of the efficacy of the Act. envir onme ntal mes is a common project is focused on gathe wide agreement among thoseoutco various driven as much by the HealthTheAct and ring the best available information on topic of conversation, altho the state of the environme ugh nt in New Zealand and the more stakeholders involved on a daily basis with other legislative change, as much as by influence of the RMA on the former than the latter that state. This evidence . is intended to help enable an inform ed discu ssion on the future the the RMA, and in the significant reduction of theAct, RMA. that it needs significant or some Often missing from this discussion reform to meet its environmental goals. of point source (drains, The RMA is an empirical element. was thesewers, first legislation internation The ally to enshrine the conc ept of sustainability in its overr critical issue really is, has iding wastewater outlets) pollution into rivers, the RMA purpo se which is ‘to promote the sustainable management of natural delivered on its environme and physical resources’ ntal pg28 . Now in its 25th year, the CONTINUED on lakes and maritime environments. profile of the Act rema goals and A report by the Environmental Defence Society

EvAluATINg ThE ENvIRONMENTAl A REpORT by ThE ENvIRONMENTAlOuTcOMES Of ThE RMA DEfENcE SOcIETy JuNE 2016

ins high amongst observers of environmental and econ omic management and it is highl y visible compared with other legislation. Often

EvAluATINg ThE ENvIRON MENTAl OuTcOMES Of ThE RMA A REpORT by ThE ENvIRON MENTAl DEfENcE SOcIETy JuNE 2016

8

The Reso urce Mana gement human activities Act has jurisdicti on New landscap on over Zealand’ es and many s fragi unique of the le islan outcome wildlife. impacts d ecos s of the This repo of ystems, RMA have of poor rt conc exception 9. A narr not met ludes impleme al ow rang that the expectati ntation, Addressin e of instr environm but also ons, large has been g air disc uments ental due to ly as a employed harges, a wide impleme result most poin range to gene behaviou nting mitig of othe rate r chan t source ation and standard r facto ge whic freshwate rs. instances ising deci offsetting h, in man r disc , has not sion-ma y to addr most com harges, been fit king and ess unav purpose. munities for oidable providing better can func impacts, outcome a fram likely poss tion are ework s are all achi ible throu within The effec evements which gh emp a broa tiveness it can der rang loying of the claim. commun e of instr RMA woul including ity aspi uments, d seem rations economic but has to have are more instrume been weak been grea easily nts. est whe reconcile The Act test whe 10. futu re reso d with has been re re refor urces extractive strongest m of the are past and weak inter managem resource on adju comforta ests, est on dicating overarch ble alloc ent syst longer individua ing man em for ation limit term strat New Zeal agement l perm s. and shou egic issue itting func the goal of cum ld proc s. As a only whe of sust ulative tions, eed result, ainable effects re the below. it has anticipate managem and othe largely Some improvem r d ent to are sym failed ents are date. The to achi ptoms certain eve and whe of othe key issue r key issue re any s are iden 1. Whil changes s – they based e the RMA tified are are all on robu has brou linked: st evid it coul ght toge ence. d be more ther a lot of integrate be bett The rese decision d. Ther er joine tting of -making e are still d up to case law King Salm processe enhance key exclu through on and s, overall sions that 2. A lack the ongo environm improvem should ing of effec ental outc ent in tive strat planning omes. has redu of natio egy and , availabili nal direc ced the oversigh ty tion and potential including public t of deci rising to prot expectati the capa sion-ma ect envi ons sign king city to potential ronmenta al that manage of the l value the cumulati Act is 3. The s, unlocked ve effec only just incorrect . The RMA ts. being jurisprud is the undermin for New ence relat flashpoin Zealand’ ed the ed t to the potential s effor reset of with sust ‘overall ts to grap June 2016 for envi the case ainability balance’ ple ronmenta law and and it approach seem l bottom woul other we d have som amendm lines to 4. Agen e work be appl ents are cy capt to do. ied. The likely to ure of see this (particula vested This chall improve. interests rly loca enge is l) gove has redu far from appropria projected rnment ced the dissipatin tely man by populatio power g. age effec n and of the economic RMA to ts on the growth 5. A lack environm will only pressure ent. sharpen of natio s on the nal direc environm system restructu tion has ent, and to effec ring of limited tively econ the pote will be omic syst and effic required ntial of iently ems the RMA to achi achieve 6. Agen sustaina eve genu its envi cy capa bility (suc ronmenta ine city has The purpose of this project h as ‘curb the RMA the appe l goals. often is to explore whether the been insuffi ing and oppo tite of Resource Management the afflu Act 1991 (RMA) has delivered amended rtuni cien and finan mus much-discussed ties t to succ ent’).1 desired environmental outcomes t recognis cial and , for cent We essfully for logistical e the curre ral gove New Zealand. It is intended the Act’s impleme impact of the on ort economic and supp rnment to complement wider assessments nt failin RMA and nt to prov have gene gs of act upon 7. The the efficacy of the Act. ide environmental outcomes to mars rally not The project is focused on is a common design them, hal in gathering the best been take of impl a new available information on ementing although n. conversation, era of different topic of genuine the state of the environment more adoption institutio mandate in New Zealand and the influence of the ns and of sust requires the best more the sformer than the latter.

RMA on that state. This ainability allocation systema means evidence is intended . of of deliv tic revie to help enable an informed ering on discussion on the future w to ensu of the RMA. statutory re it is 8. Rigo Often missing from this aspiratio discussion rous eval ns. uation The RMA was the first legislation is an empirical eroding and mon element. The internationally to enshrine the pote itoring the concept of ntial of sustainability in its overriding critical issue for really is, has theoutc omes adaptive purpose which is ‘to promote RMA has been the sustainable governan management of natural delivered on its environmental limited, ce and and physical resources’.

Now in its 25th year,AEvAluA TINg ThE robust the REpOR profile ENvIRO goals impleme of the Act remains high JuNE 2016T by ThE ENvIRONMENTAl and if not, why not? This amongst observers of environmental ntation.

NMENT OuTcOMES and economic Of ThE DEfEN management and it is highly is theAlkey cE SOcIET RMA question visible compared with other y that this legislation. Often report seeks to answer.

1 benid ickson et al, 2011

if not, why not? This is the key question that this report seeks to answer.

“We have skills shortages despite bringing in many skilled migrants basically because our economy keeps growing. The shortages are a by-product of economic growth - surely a good thing.”

BusinessNZ COMMENTARY

By Kirk Hope

We need people with skills and work visas Migration is in the news at present. We hear concerns about large numbers of immigrants, especially in Auckland, and about the fact that many low-skilled people are getting work visas.

These concerns have a lot to do with business.

The numbers need to be seen in context.

Globally, temporary migration is not out of the ordinary. Just about every developed country is seeing rapid growth in migrants because people worldwide are more mobile and many economies are in a state of flux.

In New Zealand the rise in immigration is not out of the ordinary either. New Zealand has always been a country of high inflows and outflows of people, often on a cyclical basis – only a few years ago there was huge concern about a brain drain and exodus.

The immigration effect is more noticeable in major cities because that’s where migrants tend to go, and Auckland’s growing pains are similar to what’s happening in many other large cities in the world.

Immigration is not a simple, undifferentiated pipeline; there are several ways temporary migrants come here.

First, they come as tourists. Tourism is a major earner for New Zealand, making us over $10 billion a year and many temporary migrants are simply tourists.

They also come as students. Export education (schooling overseas students here) is another major industry, earning us about $3 billion a year. Many young people you might see on the streets

of your city or town are students paying fees to New Zealand education organisations, accommodation providers and host families.

Temporary migrants also come as working holiday-makers. This is another large group, of mostly young people from Europe, the US and other places.

They fill skill gaps in many parts of the country, for example, the Christchurch rebuild and Queenstown’s hospitality scene rely heavily on these workers.

Then there are people on essential skills work visas, employed in New Zealand with skills that are in short supply – or not.

Addressing concerns There are two concerns being voiced around these.

The first is that many visa holders don’t have the right skills to address our shortages of high-level skills – in trades, technical areas and so on.

We have skills shortages despite bringing in many skilled migrants basically because our economy keeps growing. The shortages are a by-product of economic growth - surely a good thing.

The issue of low-skilled migrants displacing low-skilled New Zealanders is not such a good story.

Employers are commonly seeking employees who are available where the job is located, who have a driver’s licence, are drug-free and have a positive attitude to work. Unfortunately it can be hard to find such employees in New Zealand, and a migrant on a work visa can be a better option.

What should we do about these issues?

There’s no shortage of things we can do to improve the delivery of skills into the economy.

We should keep improving the targeting of skills by Immigration NZ and make it easier and faster to get in-demand skills onto Immigration NZ’s skills shortage lists.

The second concern is that many visa holders are low-skilled and are displacing low-skilled New Zealanders in a number of occupations.

We should work towards getting a more responsive education and training system to produce more of the skills we need.

It’s suggested that our immigration system could address both issues by better targeting important skill needs.

We should reduce the requirements on small businesses when seeking to hire a worker from overseas.

Immigration does need to provide us with skills to drive quality economic growth, while helping businesses manage the transition up the value chain.

We should investigate how to address “willingness to work” issues.

While the immigration system could be improved – and business would like to see some changes – the issues aren’t just about immigration.

What we shouldn’t do is clamp down on temporary migrants coming here on work visas, because for many reasons in many workplaces we need them.

• Kirk Hope is chief executive of BusinessNZ. Visit www.businessnz.org.nz

BusinessPlus October 2016

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COMMENTARY

Tapping into global expertise “Engaging with this expert gave us answers to our questions, led to a far greater knowledge of the topic at hand, and brought out valuable new knowledge in other associated areas.

Read how Callaghan Innovation helped Methven get the international design expertise it needed, without it leaving the country.

Methven is a market-leading designer and manufacturer of showers, taps and valves.

It is an international business operating in New Zealand, Australia, China, the UK, Europe and the Middle East.

“The value for us lies in both the quality and the speed of knowledge gained, without our allocating any significant internal resources.

Methven celebrates 130 years of innovation in 2016 and has recently set out plans to grow the business to $130 million revenue

by June 2018.

“This has saved us two to three months by greatly reducing the need for inhouse research and identifying technical risks early on.”

In November 2015 Methven approached Callaghan Innovation for assistance with a project: the company was investigating new technology to be used in manufacturing its products and engaged Callaghan Innovation’s Global Expert programme, which enabled them to speed up their development cycle and get to market faster.

Methven was awarded a Callaghan Innovation Growth Grant, co-funding the company $3-5 million over a maximum period of five years, to increase its investment in research and development (R&D).

Callaghan Innovation, through its international networks, was able to find a technology expert who was the perfect fit: someone with the right balance of technical knowledge and industry experience who was able to recommend the best options to Methven.

This enabled Methven to make informed

decisions about future manufacturing processes which can be applied to many different processes, ensuring that Methven would remain innovative in the industry.

Methven’s senior technology development engineer, Stephen McCutcheon, says, “The Global Expert service allowed us to access specialist technical expertise quickly and effectively, with minimal time and resources expended.

According to Methven Group chief executive David Banfield, investment in R&D is critical for Methven to deliver more ground-breaking products that drive value for the business and its shareholders.

• Callaghan Innovation is the Government’s agency aiming to help New Zealand businesses succeed through technology. Visit www. callaghaninnovation.govt.nz

How well does this magazine keep you informed?

It’s a year since we made some changes to EMA’s monthly, free magazine for members, BusinessPlus, which you are reading right now.

So this month, I hope you don’t mind that we will email you a brief survey to gauge your views of it. I would

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BusinessPlus October 2016

appreciate your taking a few minutes to answer the multiple-choice questions.

in New Zealand and emailed to members in Australia, as part of your annual membership subscription.

Our reason for the survey is to ensure the magazine is providing a genuine member benefit.

Thanks in anticipation of your reply when you receive the survey.

BusinessPlus is posted to EMA members

– Mary MacKinven, BusinessPlus editor

COMMENTARY

“We like to say we roll out the red carpet rather than the red tape!”

By Aileen Lawrie

Opotiki – more than farms and shops Recent economic statistics from the eastern Bay of Plenty back up what many locals have known for a long time – Ōpōtiki is the place to live, work and play.

Recent indicators show growth across the primary and manufacturing sectors across Ōpōtiki, Whakatāne and Kawerau, which is matched with strong growth in incomes and spending across sectors.

The chief executive of Ōpōtiki District Council, Aileen Lawrie, says the numbers reflect the excitement in businesses across a wide range of industries.

She says, “We have a booming local economy in growth industries like kiwifruit and the dairy and farming sectors. But we have a wide variety of other sectors that also offer fantastic opportunities in the district.

“Mānuka products and honey are spreading wealth into smaller communities up the East Coast. Agar is an unusual but growing local industry. Tourism is growing rapidly as well, with visitor nights up more than 7 per cent in the last year driven by attractions like the Mōtū Trails.

beaches, a slower pace of life and a real community feel. And as a Council we are working hard to make it as attractive to businesses as it clearly is to individuals.

We like to say that we roll out the red carpet rather than the red tape!

“Online consumption means that even more businesses can base themselves in the places they choose, rather than the places that cities choose for them.”

relations, and Alan McDonald, policy director, recently travelled to Ōpōtiki to get a better sense of issues facing members in regional New Zealand.

Aileen says, “That visit was an opportunity to raise awareness of the on-the-ground issues for those in the regions, and it was a great opportunity to show off the businesses doing well such as NZ Mānuka and OPAC. “I think people are often surprised at the range of industries we have here in town, and the opportunities that just abound here.

“But the formula for making that work is largely our size – we are a very small council so the planners know the consents team and they know the asset people and the people who are planning our infrastructure. We are small enough to talk and still make things work in a practical sense rather than get caught in red tape.”

“Gone are the days when regional New Zealand was just famers and shop owners – there are opportunities for businesses of all sizes. Online consumption means that even more businesses can base themselves in the places they choose, rather than the places that cities choose for them. And who wouldn’t choose to live in a place like this?!”

EMA’s staff Mark Champion, general manager of advocacy and gvernment

• Aileen Lawrie is chief executive of Opotiki District Council. Visit www.odc.govt.nz

“The high-profile Ōpōtiki Harbour redevelopment will see a local harbour built to service a marine farm operating just 8km off the Ōpōtiki shoreline. The infrastructure we are building will allow the mussels from that aquaculture venture to be processed right here in Ōpōtiki.

“We are already well underway planning for the workforce needs for that industry and the associated research, education, infrastructure, services and skills that the industry will need.”

Most locals and visitors can see the attractiveness of living and working in Ōpōtiki, with its beaches, bush, rivers and a busy, historic main centre. “Ōpōtiki is incredibly attractive to people –

A conceptual image of the Opotiki Harbour development with marina and revived town area (January 2016).

BusinessPlus October 2016

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n e e S

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@

Mayoral candidates’ debate - Auckland

Raewyn Brajkovich, Viv Beck and Fiona Johnston [Heart of the City]

John King [EMA life member] and Rob Young [Platform 1]

Kate Marsh [Auckland Council] and Shane McMahon [NZ Bus]

Steve McCrone [Cornwall Strategic] and Raveen Jaduram [Watercare]

Chris Farhi [Colliers International] and Dan Boyd [Heart of the City]

Susan Warren [Comet Auckland] and Margaret Brown [EMA board]

David Vinsen [Imported Motor Vehicle Industry Association] and Regan Hall [Heart of the City]

Adre Hodgskin [Architex NZ] and Victor Yukich [Eurotec]

Stuart Stitt, Tracey-Lee Wood and David Bodenham [Fujitsu NZ]

Colleen Stairmand [EMA board] and Verity Craft [Intelligent Ink]

Liz Thomas and David Jack [EMA board]

Jeremy Hall [Ministry of Foreign Affairs + Trade] and Paul Sullivan [Cornwall Strategic]

BusinessPlus October 2016

“Yet manufacturing is an unsung hero, and its importance is not widely recognised. This is despite the fact that it employs quarter of a million New Zealanders, contributes $12 billion in wages, and earns billions in export revenue every year. “

COMMENTARY

By Catherine Beard

Manufacturing driving NZ’s economic growth New Zealand’s positive growth story continues, with the latest GDP figures confirming that the economy is growing solidly.

Even more positive is the role that manufacturing is playing in this. The latest Economic Survey of Manufacturing from Statistics NZ shows very strong growth in the manufacturing sector, with manufacturing for the construction sector growing 9.5 per cent and meat and dairy product manufacturing growing by 8.6 per cent over the last quarter (to June).

These are outstanding results, and are obviously part of the driver for current GDP growth - manufacturing is having a huge impact on how well the New Zealand economy fares.

Yet manufacturing is an unsung hero, and its importance is not widely recognised.

This is despite the fact that it employs quarter of a million New Zealanders, contributes $12 billion in wages, and earns billions in export revenue every year.

I believe there are a lot of misconceptions about manufacturing, and four myths in particular mean manufacturing doesn’t earn the credit it deserves. These myths need busting:

Myth #1: Manufacturing is a sunset industry The myth of manufacturing’s decline harks back to a previous age when manufacturing was a more dominant sector of the economy - but only because it was heavily protected. Before 1984 manufacturing made up around 40 per cent of the economy, however, this was artificially high because tariffs and import regulations protected New Zealand goods against competition.

In today’s less regulated economy,

manufacturing’s share has now stabilised at a more realistic 11 per cent, similar to that of many other developed countries.

The international index (the PMI) which measures manufacturing sectors around the world shows New Zealand manufacturing has had an almost unbroken run of expansion since the Global Financial Crisis.

Both those trends – part-outsourcing and global supply chains – reflect our more connected, mobile world. They don’t mean we’re losing manufacturing to “overseas”.

Instead, we are creating products in new ways, making more from our creativity and design with the use of new global efficiencies.

Manufacturing is not a sunset industry – it is stable and growing.

Myth #4: The future is in services, not manufacturing

Myth #2: Food manufacturing isn’t real manufacturing There’s a common belief that “hard” manufacturing is what matters, eg, machinery, equipment, cars, metal-based products, engineered components and widgets; and that “soft” manufacturing such as bio-based, chemical, nutraceutical, food or beverage manufacturing isn’t really manufacturing at all.

This belief is wrong, because manufacturing is a diverse activity that includes all those categories and many more. In New Zealand our climate and abundant natural resources make food manufacturing a good strategic choice. This doesn’t mean we don’t excel in “hard” manufacturing – we do. But we have particular strengths in food manufacturing, and are on a journey to turn even more of our unprocessed food exports into manufactured food products to reap higher revenues. Food manufacturing is real manufacturing and it earns us billions every year.

Myth #3: It’s all made overseas anyway These days New Zealand firms often outsource parts of the manufacturing process to other countries where efficiencies in scale and labour costs can help their competitiveness. They also increasingly take part in global supply chains, contributing components towards finished products that may be made up of components from many parts of the world.

The service industry is growing all around the world. As countries become richer and more developed, their consumers spend more on services – information, entertainment, financial and many other kinds of services.

But the growth of services doesn’t mean the end of manufacturing. In fact, what is happening is that manufacturing and services are morphing into each other, especially at more sophisticated levels. High level services – legal, financial, accounting, marketing, computing, etc – are increasingly part of the makeup of sophisticated manufactured products. And it’s becoming harder to say whether software, a critical part of manufacturing, is even a product or a service.

It’s truer to say that the future is in manufacturing and services.

Examining these four myths reveals some important truths about New Zealand manufacturing: it’s strategic, it’s broadbased including both food and non-food manufacturing, it’s well integrated in the global economy, it’s based on the ingenuity and creativity that New Zealand is famous for, and it’s bringing economic growth.

The true story of manufacturing in New Zealand is great news.

• Catherine Beard is executive director of ManufacturingNZ, a brand of BusinessNZ. Visit www.manufacturingnz.org.nz

BusinessPlus October 2016

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EMPLOYMENT

By David Shannon

“…the key is choosing the right type of employment agreement from the beginning – and putting it in writing.”

Avoiding employment traps with employment agreements Employers, envision this nightmare scenario.

Briefly, they differ as follows:

The manager of a small firm, George, is approached by his neighbour’s son, Mike, who is looking for work and says he is open to anything.

• A Permanent Employee is employed for an indefinite period – either full time or part time. Employment will consist of regular, predictable work patterns until the employee resigns or is dismissed. Provision for annual holiday pay and sick and bereavement leave, as well as an agreed notice period, must be specified.

George says, “Sure, Mike, come down to the plant and I’ll put you to work.”

So Mike arrives, and George sets him to general cleaning tasks. Mike works diligently and satisfactorily for three solid weeks.

Once the plant is tidy, George says, “Thanks, Mike, here is your pay. But we won’t be needing you anymore.”

Here comes George’s nightmare.

Mike replies: “Thanks for the pay, but you can’t just kick me out. You employed me indefinitely, so I am a permanent employee and you will have to give me proper notice of dismissal. I did not agree to any temporary or casual employment arrangement.

“You also owe me time and a half for working Sunday – a public holiday – and I want compensation for the leave I did not get.”

Mike is correct: if the employer does not specify the nature and conditions of employment, the employee has the right to assume he/she is being taken on as a full-time, permanent employee with all the rights that adhere to that condition.

The key to avoiding George’s nightmare is choosing the correct type of employment agreement from the beginning – and putting it in writing.

Employment types There are three basic types of employment: permanent, fixed term or casual. Each has different terms and conditions, including entitlements for holidays and other leave.

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BusinessPlus October 2016

• A Fixed Term Employee agrees to temporary employment, which ends upon expiry of a fixed term, ie, on a date, or after a period or event. Such employment must be based on “genuine reasons based on reasonable grounds.”

The agreement must state how and why the employment will end. Seasonal employment is the most common example of this, as there are specific agreed criteria for ending the employment, but the agreement must specify carefully the criteria.

At the end of the term, the employment must end or a new agreement must be signed.

• A Casual Employee has no guarantee of work from one week to the next, but is engaged “as and when needed”. This is typically useful when the employee is needed for a short period for a specific purpose, such as Mike’s cleaning work.

This can mean an irregular work pattern, depending on the work demands and the employee’s availability.

It is important to monitor the work to ensure it does not evolve into a part-time, permanent arrangement with an ongoing expectation of work. Such a situation is often better served with a short, fixed-term agreement as described above.

Employment agreements At a minimum, an effective employment agreement should include the following: • Names of the parties, • Description of the work to be performed, • Location and hours of work,

• Remuneration to be provided, • Options for resolving any employment relationship issues, • Reference to “time and a half” if the employee is working public holidays, • An Employment Protection Provision in the event of sale [of the business], transfer or contracting out, and • A Restraint of Trade provision, if applicable.

Other clauses that may be included, but carefully written, could provide for: • Deductions from wages for “reasonable cause”, • Prohibition on other employment if there is a genuine reason, and/or • Trial period of employment if relevant.

One of the hot issues in employment is the inclusion of “zero hours” arrangements in contracts, whereby the employer does not guarantee specific hours of work in a week, but may expect the employee to be available for any period up to the full work week. Such clauses must have genuine reasons for the availability provision and include guaranteed hours of employment. Reasonable compensation must also be paid for the hours of availability that are not actually worked.

However, there are consequences if the employer gets it wrong.

It is usually difficult to get an agreement signed after the employee starts, as all kinds of issues and objections can be raised.

There are penalties running into thousands of dollars for an employer who fails to have an employment agreement in place.

And a final word of advice: do not take this article as an authority for drawing up an employment agreement. Refer to your EMA employment lawyer to ensure you get it right.

• David Shannon is EMA’s remuneration consultant. Email advice@ema.co.nz

“Our workplaces are our most up-to-date classrooms, and employers are making a huge contribution to the development and deployment of skills in our workforce.”

EMPLOYMENT

By Michael Burgess

Apprenticeships making a comeback in NZ Consolidation in the provision of trades training in New Zealand has seen the number of industry training organisations (ITOs) reduce from 42 to 11 in recent years.

But trainee numbers are growing.

These registered, but industry-owned ITOs include the Boating Industries Association of New Zealand Incorporated, the Building and Construction Industry Training Organisation and Competenz Trust. They are responsible for: • setting national skill standards for their industry, • providing information and advice to trainees and their employers, • arranging for the delivery of on- and off-job training (including developing training packages for employers), • arranging for the assessment of trainees, and • arranging the monitoring of quality training.

Today, 138,000 industry trainees and apprentices are being supported to learn on the job, receiving just 7 per cent of the tertiary budget, or $180 million. These learners are employed, are paying tax and are economically active. They earn while they learn, and do not require study and living subsidies through student allowances, or attract debt through student loans.

The last official count showed almost 42,000 people in the New Zealand Apprenticeships scheme - representing a slightly higher proportion of the workforce than apprentices did in 1987 when the apprenticeships scheme began to take a dive in line with growing unemployment after the share market crash, among other factors.

Apprentices gain a Level 4 national certificate after two to four years combined work and study.

There are almost as many industry trainees as there are university students, but the 146,000 university students absorb 53

After a drop in hiring industry trainees and apprentices around the GFC, employment is on the increase. per cent of the tertiary budget for tuition subsidies ($1.100m), as well as more than $800m each year in student loans and allowances, according to the Industry Training Federation (ITF).

But as ITF chief executive Josh Williams says, “New Zealand needs skilled workers to meet the pace of technological change and keep up with global challenges.

Our workplaces are our most up-to-date classrooms, and employers are making a huge contribution to the development and deployment of skills in our workforce.”

The New Zealand apprenticeship system is now open to all age groups. In 2015 there was a 17 per cent increase in those aged over 35, reaching 4,650 apprentices; and a 25 per cent increase in those aged 55-plus.

The Government’s 2016 Budget will help support another 5,500 apprentices into training on the job by 2020.

Construction-related apprentices in demand

Across New Zealand, demand in construction-related occupations has been projected to increase by 10 per cent or 49,000 employees by 2021, to a total of 539,500.

Occupations that are expected to experience the largest growth include electricians (14 per cent), plumbers (13 per cent) and civil

engineering professionals (11 per cent).

Auckland has the largest construction workforce requirements in New Zealand, requiring about 185,000 employees by 2021. Occupations that are expected to experience the largest levels of growth include project builders (39 per cent), plumbers (38 per cent) and carpenters and joiners (34 per cent), according to the report Future Demand for Construction Workers in July 2016 from the Ministry of Business, Innovation and Employment.

A recent survey* of employers in the UK highlighted the following benefits from hiring apprentices: Benefits of hiring Agree apprentices (%)

Improved product or service quality 72 Improved productivity 68 Improved staff morale 67 Improved staff retention 60 Improved ability to attract good staff 55 Brought new ideas to the organisation 54 Improved image in the sector 49 Won business 24 Lowered overall wage bill 19 *(Source: UK Department for Business, Innovation and Skills)

• Michael Burgess is a senior policy analyst at EMA. Email michael.burgess@ema.co.nz

BusinessPlus October 2016

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Employment CHAT

Coping with health and safety, underpayi Q. I’m dismayed that my managers are not taking health and safety as seriously as they should. How can I drive home the importance of the new law requiring us all to be proactive about these matters? - Dan

Dear Dan The quick answer is to send them to a training programme here at the EMA Learning centre in Auckland – some programmes are also held in other centres or as one-off webinars, or online courses.

We also run tertiary courses resulting in NZQA-approved certificates and a diploma.

We also have a new health and safety training game called WorkplaceSIM that’s done online.

Whether you want to know how to run an effective health and safety committee, conduct an ACC audit, identify and report hazards or gain a better understanding of your legislative requirements, we have a programme to suit you.

A separate or simultaneous approach is to make prominent all company policies relating to health and safety, and make the topic top of the agenda at team and other meetings, to rub it in.

BEST E H EST T T E YOU W R O F . ..

“We also have a new health and safety training game called WorkplaceSIM that’s done online.”

Repeat as often as you need to, that employers – owners and managers- have a responsibility to protect people from harm caused by workplace hazards. This is not just a concern for the heavy industrial sectors; even small office enterprises can have health and safety risks that could result in prosecution if neglected, or worse, cause harm to staff or customers if ignored.

It might be that a new clause needs to be added to their employment agreements and those agreements re-signed and reprinted for both parties. Call our AdviceLine to find your local EMA employment relations consultants to get help in drafting that clause. You can incorporate measurements and consequences for failure to adhere to health and safety practices that are required.

Q. How will I compete with migrant employers who are underpaying migrant workers? Can I complain about the treatment of migrant workers? – Elliott

Dear Elliott There was a law change last year specifically designed to manage the exploitative employment practices around immigrants, ensuring they are employed with the minimum legal employment standards such as the minimum wage, five days paid sick leave and four weeks paid annual leave for full time workers. Also because of the kind of thing you are talking about.

That’s the Immigration Amendment Act (No 2) 2015, which imposes up to seven years in jail for exploitation of migrant workers or fines of up to $100,000.

Employers here on residence visas who exploit migrant workers could be deported if offences are committed within 10 years of their gaining residence.

Tougher search powers were extended to immigration officers to enter employers’ premises.

Furthermore, this year the Government toughened the sanctions against employers for breaching minimum employment standards. These include the possible banning of individuals from being a manager for serious breaches or

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Employment CHAT

ing competitors and public holiday pay exploitation of migrant workers.

If you witness or have good reason to suspect problems, you can complain to the government agency, Immigration New Zealand or the Labour Inspectorate at the Ministry of Business, Innovation and Employment, whose Labour Inspectors make sure that workplaces meet at least the minimum standards and requirements of employment law. Or even the police.

Other than that, you have to rely on the usual practices to compete in business… like having a good product/service, good pricing/margins, great branding and communication including your website, great customer service, strictly managed terms of trade, cash flow…not to mention good people!

Q. Now that we can open shop on public holidays, this will make leave and rostering more complex. Will I have to pay more to attract people to work on those days? – Rose

Dear Rose Yes, when people work on statutory (public) holidays you have to pay them time and a half to meet minimum employment standards.

“You decide if it’s worth it for your brand and in relation to your competitors.”

Remember to alter or create new employment agreements to reflect this.

Yes there is a cost with growth, or selling more. You decide if it’s worth it for your brand and in relation to your competitors.

Shops have been able to trade on some public holidays for a long time – except for Easter Friday, Easter Sunday and Christmas Day and the morning of ANZAC Day. You will be referring to the recent law change allowing shops to trade on Easter Sunday, as long as your local territorial authority allows it.

Recent legislation allows territorial authorities to put in place local policies that will permit shops within their area, or parts of it, to trade on Easter Sunday.

The law also gives all shop employees the right to refuse to work on Easter

Sunday without their being required to give a reason.

They will also be able to take a personal grievance if they are treated adversely or compelled to work on Easter Sunday.

• By the EMA communications team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional.

The information in this article is a guide only and not to be used as business advice without further consultation.

EMA members can start with our free AdviceLine team at phone 09-367 0909 or 0800 300 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays NZ time; or email advice@ema.co.nz You can also find information at www.ema.co.nz such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, or the detailed Employer Guides on 12 popular topics.

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17

EMPLOYMENT

20 EMA members reach finalist status in Best Workplaces Awards Twenty EMA members feature among the finalists in New Zealand’s largest and longest-running study of workplace climate and employee engagement.

This year over 36,000 employees from 210 New Zealand organisations in the private and public sectors participated, with 50 workplaces reaching finalist status across five categories: Small, Small-Medium, Medium-Large, Large and Enterprise.

7196_Kenexa

The IBM Kenexa Best Workplaces Survey is again supported by the EMA. The winners will be announced at an awards dinner on 3 Infographic_02.pdf 1 20/09/2016 3:40 PM November in Auckland – book tickets now via www.bestworkplaces.co.nz “Congratulations to the EMA member finalists. That members are striving to create engaged workplaces is evident in this year’s strong showing among finalists,” says Emma Martin, senior consultant, IBM Kenexa New Zealand.

The 2016 survey results showed that workforce engagement increased across all size categories, with large organisations (400-750 employees) showing the biggest lift, registering an improvement in 97 per

cent of survey questions.

Employees are reporting more effective teamwork, and nine out of 10 respondents agree that people cooperate to get the job done. Perceptions of reward and recognition have also increased, with significantly more employees agreeing that their workplace rewards outstanding performance, that pay and benefits are fair, and that successes are celebrated.

“Increasing adoption of social tools in the workplace can enable employees to share their knowledge and ideas more easily than before, resulting in better collaboration,” says Ms Martin. “The best employers, particularly those in large organisations, are also recognising their people in a variety of ways, which is encouraging to see and makes good business sense in a tight labour market.”

Another important trend is the increase in employees’ perceptions that their workplaces are taking action as a result of Best Workplaces surveys.

“As organisations adopt continuous listening strategies, the conversation between organisations and their

Survey Highlights

NZ's largest employee engagement survey Most comprehensive benchmark dataset available in New Zealand

36,000

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18

210

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Who are the finalists?

BusinessPlus October 2016

29

new organisations this year

A cross section of industries

employees is ongoing. Results are showing that organisations are closing the loop by responding to employees with meaningful action,” she says.

Analysing survey data provides business leaders with key insights about their organisations from their most valuable assets: their people. The insights identify the characteristics that make their organisation a great place to work, as well as areas to improve in order to increase engagement levels and gain a more accurate view of what is needed to retain critical talent, and benchmark their performance against other similar organisations.

All employees can follow the online conversation around Best Workplaces at #BestWorkNZ.

EMA member finalists in each category are listed below.

Small Workplace (20-49 employees): • Hyundai Motors NZ Ltd • Inspire Group Ltd • Naveya and Sloane • Starnow • The Wrigley Company (NZ) Limited Small-Medium Workplace (50-149 employees): • FUJIFILM NZ Limited • Hilti (New Zealand) Ltd • Masterpet Corporation • NZCU Baywide • Solomon Group • William Buck Christmas Gouwland Limited Medium-Large Workplace (150-399 employees): • Bay Audiology • Colliers International New Zealand Ltd • Comvita NZ Ltd • Toyota New Zealand Ltd Large Workplace (400-749 employees): • AA Insurance Ltd • Meridian Energy • Overland Footwear • Southern Cross Health Society Enterprise Workplace (750 or more employees): • The Warehouse

“Trial periods and probationary periods are quite separate from each other and each has their own legal meaning in the Act.”

EMPLOYMENT

By Matt Dearing

Strict rules relating to 90-day trial periods A recent Employment Relations Authority determination serves as a reminder to employers about the need to ensure their 90-day trial period clauses are compliant with legislative requirements.

As many employers will be aware, the 90day trial period is a legislative provision contained in the Employment Relations Act 2000. Trial periods and probationary periods are quite separate from each other and each has their own legal meaning in the Act. It is important not to confuse the two, or inter-change the terminology.

Trial periods are covered in sections 67A and 67B of the Act and provide enhanced rights for an employer to terminate an employee’s employment. Trial periods are more flexible than probationary periods and they enable an employer to shortcut the usual dismissal process by not having to undertake a full consultative regime before making a decision to terminate.

However, the Authority and Courts have a very strict interpretation regarding the application of the 90-day trial period and the rules must be followed or the provision is void and cannot be relied upon.

The trial period provision cannot apply to any person who has been a previous employee of the company at any time.

It also will not apply to any existing employees who you may get to sign updated employment agreements. Further, the employment agreement that contains the provision must be signed before the employee has commenced employment; otherwise the provision will have no effect.

The trial period (up to 90 days) allows employers to dismiss an employee at any time during the trial without the employee being able to bring a personal grievance or other legal proceedings in relation to the dismissal. However, grievances can

still be raised for disadvantage or where the dismissal has been for an unlawful reason (eg, race or gender orientation).

Agreement unclear, invalid In the recent case of Honey vs Lighthouse ECE, the Authority held that a trial period clause in an individual employment agreement was invalid because it did not specify the trial period start date as required under section 67A of the Act. Ms Honey worked as an early childcare teacher for Lighthouse from 22 November last year. Lighthouse emailed here on 8 January 2016 terminating her employment under the 90-day trial period provision in her employment agreement.

Ms Honey, and three other Lighthouse employees terminated under the trial period provision around the same time, challenged the validity of the particular trial period provision Lighthouse had used. The Authority was required to determine as a preliminary matter whether the trial period provision was valid and therefore whether Ms Honey and her former colleagues would be able to raise a personal grievance for their dismissals.

Section 67A(2) of the Act states that a “Trial provision means a written provision in an employment agreement that states, or is to the effect, that (a) for a specified period (not exceeding 90 days) starting at the beginning of the employee’s employment, the employee is to serve a trial period (…)”.

Clause 15 in Ms Honey’s employment agreement stated that “A trial period will

apply for a period of ninety (90) days (…) under s.67A Employment Relations Act 2000, to assess and confirm the suitability of the Employee for the position (…)”.

Elsewhere the employment agreement stated the commencement date of employment as 22 November 2015.

Although a start date for employment was set out in the agreement, the trial period clause did not expressly refer to that start date.

As a result, the Authority determined the trial period clause was invalid and Lighthouse was unable to rely on it to prevent Ms Honey pursuing a personal grievance in relation to her dismissal during that trial period.

This case shows again that the Authority and court are continuing to apply the requirements for trial period provisions in employment agreements strictly, and any departure from those requirements will render the provision void.

It is recommended that employers check their 90-day trial period clauses and ensure they provide the required information.

• Matt Dearing is a senior solicitor at EMA Legal and a member of the Auckland District Law Society’s Employment Law Committee.

Email matt.dearing @ema.co.nz

BusinessPlus October 2016

19

EMPLOYMENT

By Craig Garner

The end isn’t nigh for worker safety and wellbeing The world as we know it was predicted to end when the clock shifted from the year 1999 to 2000. Despite plenty of professional and soothsayer rhetoric about a looming global catastrophe, we sailed into the new millennium without missing a beat.

The new health and safety legislation introduced this year, according to some, was going to be the end of business as we know it. Company directors would be abandoning their governance posts to ensure they avoided prosecution rather than managing the health and wellbeing of workers in their charge.

Again, the soothsayers and doom merchants seemed to have missed the boat and businesses are demonstrating an increasingly positive attitude to their legislative and ethical duties.

While my observations are not based on scientific data or research and I can only base my assertions on the attitudes of those I come into contact with, overall I am pleased to say that increasingly the positives far outweigh the negatives in respect to the future of business leaders’ compliance with the Health and Safety at Work Act.

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BusinessPlus October 2016

I was fortunate to have the opportunity to attend the Health and Safety Association of New Zealand (HASANZ) inaugural conference last month. This was touted as “a conference by health and safety professionals for health and safety professionals”. HASANZ was formed in 2014 with an aim of raising professional standards across the sector, and part of this initiative has been the implementation of a national register of competent health and safety professionals.

The theme of the HASANZ Conference was overwhelmingly focussed on the importance of leadership in ensuring that health and safety is, and continues to be, a high priority at all levels of business, regardless of its perceived risk profile. The safety and wellbeing of every single person must be a primary consideration, whether through informal meetings, internal or external communications, staff inductions, contractor management or strategic planning.

It’s not surprising that many business leaders are not equipped with the skillset to ensure that health and safety compliance is fully integrated. At first glance it seems an impossible task that will become allconsuming.

In the potential undertaking of a workplace audit or inspection, there will be significant emphasis placed on providing evidence of compliance. Evidence would include, but not be limited to, planning, hazard identification, training, supervision, injury reporting, accident investigation and emergency planning.

Training is part of this progressive accumulation of skills and best practice, and there are numerous solutions and offerings in today’s marketplace. Education programmes done badly, or without leadership buy-in, commitment and follow-through will be a cost to the business. Done well, training will be an investment ensuring every person associated with that business is safe and healthy, more content, more committed and more productive.

The introduction of new health and safety legislation is not the end of anything at all; it’s the beginning of a new conversation about how we can be better. Better businesses, better leaders, better people.

• Craig Garner is EMA’s training portfolio manager – health and safety.

Email craig.garner@ema.co.nz

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IN BUSINESS

By David Spratt

“… asking the right questions provides insights into the real business need, and often greater internal support from demonstrating that management values the perspectives of those affected.”

Choose the computer solution based on the business problem This is the first in a series of three articles about choosing new, or upgrading, computer systems in your enterprise.

How often have you and your staff experienced the technical computer people arriving, virtually unannounced, to advise they will be installing a new system on your computer?

You go along with it and find that the “new, improved system” makes your life even harder.

My real world example is about First Assistance, which manages simple and complex, critical emergencies of all types, locally and worldwide. The business requires skilled people to be available via a 24/7 contact centre, communicates with clients, engages support staff, accesses medical and subject matter experts and tracks progress on multiple issues as they unfold.

First Assistance turned to us as ICT broker for help to select a more advanced contact centre than the decade-old one they were using.

“Easy,” you might say. “Write a specification, create a request for proposal and send it to the top vendors. How hard can it be? After all, they already have a system that works – surely the new one wouldn’t be that different?”

THAT, dear reader, is exactly how a disaster unfolds, with subsequent years of pain, wasted cash and extremely annoyed bosses seeking retribution against guilty and innocent alike.

Rather than focussing on the technology, we worked with the business and technical teams to go “beyond the spec” by: • Asking the people who count, what matters to them; and • Writing down and weighting their priorities.

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BusinessPlus October 2016

Stakeholder Needs Analysis Out of sheer intimidation, decision-makers often default to relying on the “expert” to select their upgrade. As a result, you get what is known as a Technical Specification driving the decision and delivering a less than ideal result. Nowhere does this specification describe who will use it, for what purpose and under what conditions.

Hence the need to seek the opinion of key stakeholders, ie, the people directly and indirectly impacted by the system or service. This group usually includes sales, finance, IT, operations, administration staff and management.

It is important to ask them all the same open-ended questions such as: “What’s working? What’s not working? What would you most like to see come out of this selection process?”

You can be sure the answers will not be the ones you expect!

When I interviewed the First Assistance contact centre people I expected talk of pop-up menus, push-to-call dialling and the like. These all came up, but the most important single request? “We want high quality, wireless headsets!”

Wireless headsets would let staff get up, move about, wander over to ask a colleague a question - all without cutting off the call or strangling the operator.

stakeholders and identified key themes.

Perhaps it turns out that: • Finance don’t want the cheapest price after all. Instead they would really like to see greater cost transparency around product and service delivery.

• Sales don’t actually care that the system will help with forecasts. But having price lists and key staff availability on their new smart phone would be great!

• The CEO’s support staff will be happy as long as they can easily access a set of standard reports on operational performance and job costs for presentation at the monthly board meeting.

Now is the time to prioritise and weight the categories and key criteria. These will usually fall into a set of high level categories – things like Money, Technology, Vendor Relationship, Delivery and Contract Terms. Under these headings are the key criteria or what makes up a category.

For example, the qualities most people want from a vendor might look something like this:

Vendor Qualities Account Management

Long Term Future Vision Viability

Weight the categories in terms of priority (usually out of 100). Present the list of stakeholder priorities to a small group of influential people, who are usually finance, sales, an executive sponsor and a technical recommender/advisor. Get them to debate the priorities.

OK, we were not going to choose a high value technology solution just based on the quality of the headsets, but asking the right questions provides insights into the real business need, and often greater internal support from demonstrating that management values the perspectives of those affected.

This consensus-building engagement builds trust and agreement. It also confirms the BUSINESS reason for the process to happen at all.

Weighted Selection Criteria

• David Spratt is a director at Total Utilities. Visit http://www.tumg.co.nz

So you have interviewed the key

Your business’ selection process is now measureable, transparent, contestable and neutral.

“Health is a positive vitality, and nutrition remains an untapped resource in empowering employees not only to be physically present at work, but to be engaged, motivated and productive.”

IN BUSINESS ByAmanda Cleghorn

Nutrition: the game changer your business needs?

Successful businesses are diligent in looking after their employees’ wellbeing on various levels. They provide a safe working environment and might subsidise health insurance and/or gym memberships.

into their health and safety policies, businesses can invest in preventative measures to protect employees’ health while achieving measurable results in terms of energy and productivity.

However, the importance of nutrition is often overlooked, despite the fact that it directly affects work performance. The food that we eat on a daily basis can define our overall health, as well as determine how well fuelled we are to focus on the job and deliver results.

There are various ways to engage and equip the workforce, such as providing interactive nutrition seminars, healthy eating challenges and tailored menu plans.

Nutrition influences mental health. A staggering proportion of people in the workplace describe themselves as having poor concentration, difficulty making decisions and anxiety, or being overwhelmed, easily distracted and lacking in motivation. Is this the type of employee you would risk making decisions or operating vehicles and machinery?

A person’s workplace governs a large part of what and when they eat and drink and how much physical activity they undertake.

It influences sleep patterns, stress and budget for food.

Nutrition is a rapidly developing science and it is important to demystify the scientific reasons linking diet to illness or disease, and to encourage people to consider the underlying causes of health issues, not just to focus on isolated symptoms.

Key performers in the organisation may benefit from a personalised and in-depth nutrition support programme, helping to manage their exposure to stress, extended working hours and a compromised work/ life balance. Equally, any individual can maximise their full potential by addressing

niggling health concerns or chronic disease through a structured and supported nutrition plan.

The challenge for businesses is to stimulate behavioural change around food choices both at work and at home, resulting in a beneficial outcome for both worker and employer.

Health should not be viewed as simply the absence of disease. Health is a positive vitality, and nutrition remains an untapped resource in empowering employees not only to be physically present at work, but to be engaged, motivated and productive.

A proactive approach to preventable diseases may also be a crucial factor in ensuring a healthy bottom line for businesses.

• Amanda Cleghorn is a nutritionist, and director of Amanda Nutrition. Visit www.amandanutrition.co.nz

There is no denying that the most prevalent chronic diseases drain business profitability in terms of health care costs, sick leave and reduced productivity.

No organisation is immune. Heart disease, obesity, cancer, diabetes and hypertension are not limited to specific countries, social class, age or gender. They are present in almost every workplace and are largely preventable through the adoption of healthy nutrition and lifestyle measures.

Mitigate the financial burden of illness in the workforce Understanding a few key nutrition principles and making small dietary changes can make a huge difference to overall health. By incorporating nutrition

BusinessPlus October 2016

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IN BUSINESS

By Rosina Webb

“For this approach to succeed, everyone in the organisation needs to maintain a customer focus.”

Marketing-led approach leads to market leading Many organisations are moving towards becoming more marketing-led, as opposed to being driven by sales or production.

So what is the difference in the business approaches?

• A sales-led organisation tends to produce products or services… and then attempt to sell those products or services via promotional sales techniques. They often use a “hard sell” approach and rely on sales volumes in order to make money.

• A production-led organisation focuses on producing a product or service they believe they are good at…and then they try to find a market to sell those products or services. A lot more effort goes into the refining and improving the production process as opposed to evaluating and addressing their customers’ actual needs and wants.

• By contrast, a marketing-led (or “relationship”) approach is all about researching and identifying those products or services that your customer NEEDS and WANTS. It’s also about pinpointing unmet needs in the market itself.

The organisation then uses this research to gear itself up to develop products or services that will meet those needs and wants. It is important that they ensure their version of these products or services will satisfy those customers better than their competitors’ products do. This involves keeping tabs on competitor behaviour in the market and on their product development and offerings over the long term.

Once the organisation has begun to produce its product or service, customer buying behaviours are closely monitored over time, and production is altered in order to continue to meet customer requirements and expectations. Profit is achieved by way of customer satisfaction.

Advantages of a market-driven approach The biggest advantage is that those who have adopted a market-led organisational culture often perform financially better.

They are also more focused long-term on: • providing high levels of customer satisfaction, • retaining those customers, • ensuring a high quality customer experience, and • achieving the longevity of the customer lifetime value with their company.

A marketing-led approach is mutually beneficial to both the customer and the organisation. Customers have a solution to their problem or need, resulting in satisfaction and sense of well-being.

The organisation has long-term financial and social success, business survival and longevity by focusing their energy on producing a product or service that is wanted and therefore purchased.

One of the most important facets to becoming marketing-led is a cultural shift within an organisation whereby everyone within it becomes the “voice of the customer” - including long term resource commitments (financial and personnel).

For this approach to succeed, everyone in the organisation needs to maintain a customer focus.

Steps that you can take within your organisation to ensure you are marketingled are: • Market research should be a priority, so as to understand current customer needs as well as to uncover unmet needs in the market itself, thus identifying opportunities for growth.

• Undertaking customer touchpoint mapping can be a useful way to ascertain how your organisation “touches” its customers at each point in their customer journey. It forces you to think of your organisational interactions from a customer perspective and can be valuable in terms of pinpointing areas of improvement.

• Once customer touchpoint opportunities have been identified, staff training programmes need to be incorporated that are customer-focused.

• Marketing strategy and company mission statements need to be created with a customer focus in mind and adopted by all personnel.

• Deliver value to customers and build long term relationships with them in order to generate ongoing loyalty.

• Repeat market research as necessary in order to uncover new opportunities and maintain current customer satisfaction.

It’s all about business teamwork and information flow within an organisation.

Information about customer needs and market opportunities need to flow into finance for backing, into production to be produced, and ultimately into marketing and sales as part of a seamless operation.

The cultural shift required to ensure this seamless flow can be difficult to achieve but worth it, in order to incorporate a customer focus into your organisational DNA and to achieve long term business growth and gains.

• Rosina Webb is founder and managing director of Energise & Associates. Visit www.energise.net.nz

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BusinessPlus October 2016

“In other words, you can free up both capital and time, continue to be involved in the business in whatever capacity you desire, and share in the future potential of your business.”

Strategically exiting a significant business

2.

Selling all of your shares for cash upfront (Outright Share Sale); or Selling all of your business assets for cash upfront (Outright Asset Sale)

The option many business owners are asking for is a “Staged Exit” from their business. A Staged Exit often ultimately leads to a complete exit from the business, but is also possible to partially exit the business and retain a financial interest and/ or working involvement in the business indefinitely.

In other words, you can free up both capital and time, continue to be involved in the business in whatever capacity you desire, and share in the future potential of your business.

Sell all of your business now and get paid in instalments over time. This can be done by either selling the business assets or shares.

3. Outright Sale Sell the business outright and be paid a full settlement and retain no control or responsibility.

Sell part of your business now and sell part(s) later and get paid in instalments for each part as it is sold. Typically, this is done by selling shares, but it can be done by asset sale if the business assets are capable of being sold in parts.

The reasons for your choosing a Staged Sale could include the following: • The best buyer may not have sufficient funding for 100 per cent of the business now.

• You may want to retain an ownership in the business for a period (or indefinitely). The purchase price formula can be designed so that any subsequent payments would increase to reflect the business growth, and result in a greater total purchase price than would have been paid in the context of an Outright Sale.

• By selling part of your business, you can free up some capital for other things.

• It can allow a slow transition of the existing owner becoming less involved, whilst minimising disruption to the business.

• You may want to retain a certain level of control over the business following the sale of part of the business.

2. Vendor Financed Sale

Two key risk management issues which

There are many options for achieving a Staged Exit and each gives rise to different issues, as outlined below.

Options for achieving a Staged Exit There are endless options for structuring a Staged Exit, however, the majority can be grouped into three types of transactions: 1. Staged Sale

By Mike Fokkens

arise in the context of a Staged Sale, which do not arise (or are less important) in the context of an Outright Sale, are control and enforcement/security.

The issue of control As you transition from becoming a 100 per cent owner of your business to a part owner and potentially exiting altogether, you need to consider what level of control and input you and the buyer (your new business partner) each want to have in the business.

Market research, and business owners such as BusinessPlus readers, are telling us that when people are planning to exit their business, they want more options than just the allor-nothing approaches of: 1.

IN BUSINESS

It is important to consider the buyer’s expectations, as a purchaser may be put off if their level of input and control does not match their investment. Issues of control can be agreed and documented in a number of ways.

The risk of enforcement/security In a Staged Sale where you would not receive all the purchase price upfront, you need to consider what should happen if the buyer fails to complete any future steps or make any future payments. Options include: Buy Back Right – If the buyer defaults you could have the right to buy back the buyer’s share of the business at a preagreed price and take back full control and ownership of the business.

Security – You could take a security over the buyer’s assets and if the buyer defaults you could exercise your rights to sell those assets to recover the balance of the price, and complete the sale.

Control - You could agree with the buyer that their control rights in respect of the business are suspended for so long as the buyer is in default.

It is the balance between these issues of risk, security, control and value that determine the correct divestment strategy.

• Mike Fokkens is a business broker at LINK Business Broking (Licenced REAA08). Email michaelf@linkbusiness. co.nz

BusinessPlus October 2016

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International trade

By Catherine Lye

Appointment at supermarket in Thailand: Mission participants (l-r) Catherine Lye, Laurayne Pillai, Joyce Zhao with Villa Market’s chief operating officer Andrew Rainham and assistant.

Trade missions expedite exporting Businesses looking to exploit the offshore opportunity cannot go past the trade mission as a vehicle to enter the market.

A trade mission travelling in a market relevant to you validates the market quickly, develops a plan or strategy for the market and starts building connections with buyers or partners - all within a week!

“You will not achieve in a private capacity what you can achieve on a business/trade mission” is the experience echoed by exporters time and again. The real value for trade mission delegates is access to in-market support through New Zealand Trade and Enterprise (NZTE), access to the Ambassador and/or High Commissioner, and making connections and friendships with fellow participants.

Delegates who participated on our recent ExportNZ business mission to Thailand and Malaysia, co-organised with the ASEAN New Zealand Business Council, cited the following benefits: • better understanding of what it will

•

• • • •

take to establish and/or grow business in Malaysia/Thailand; better understanding of implications for the organisation’s strategy or business model; better understanding of the regulatory environments; productive and useful market learnings, meeting potential new customers, developing relationships with other companies on the mission.

Mission participant Kim Willoughby, co- owner of DeosanNZ, a dairy and detergent business, says to businesses, “I highly recommend that you look at attending next year.

“You get out what you put in, so if you don’t do the hard yards before you come, don’t expect to get much of an outcome.

But if you do that and invest your time and energy before you get here, then you will find NZTE, their people on the ground, and [mission organisers] Liz and Catherine will do a fantastic job for you and it will be a rewarding time for you and your business.

I’ll be back next time.”

Capitalising on the opportunity requires you to clearly articulate your objectives for the mission, and importantly, your unique value proposition. This provides the NZTE inmarket team with the information it requires to co-ordinate a programme of activity that includes identifying potential customers/ partners that most fit your business’ needs.

There are three parts to the mission: a market overview briefing as the mission enters each country, and sector-focussed site visits; assisting delegates in developing a strategy/plan for the market; and assisting delegates to start building connections with partners and/or buyers.

Delegates rated 54 per cent of the business leads as “hot” on a scale of cold, warm, hot.

Hot leads represent opportunities with a 75 per cent or greater chance of success.

• Catherine Lye is manager of the ExportNZ division of EMA. Email catherine@exportnz.org.nz for more information on upcoming business missions.

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BusinessPlus October 2016

“New Zealand exporters need to make themselves known to Cuban traders to ensure that New Zealand’s offer is well-known when fresh food orders are made to meet the needs of sophisticated US and European visitors.”

International trade

Business opportunities for NZ in Cuba Lucrative business and investment opportunities are emerging in Cuba as a result of the growing normalisation of US/ Cuban relations, as well as its business and banking sector reforms.

The 2014 Cuban Foreign Investment Act allows foreign investment in utilities, administrative concessions, real estate, hotel management and professional services sectors.

Cuba allows 100 per cent foreign ownership and repatriation of profits; the corporate tax rate is 15 per cent; investors in joint ventures (JVs) receive an eight-year exemption from all taxes on profits; and foreign investors’ IP is recognised.

The expanded Panama Canal has improved New Zealand’s access to Atlantic markets and particularly to Cuba where quickoff-the-mark NZ exporters could build significant first-mover advantages to establish strong brand recognition and customer loyalty before other entrants to the market.

According to the World Bank, Cuba’s population is 11.2 million and 2015 GDP was $78.394 billion, comprised of 74 per cent services, 21.6 per cent industry and 4.4 per cent agriculture.

Cuba imports twice as much as it exports, as evidenced in 2014 when imports were $7.99bn, including 70 per cent of its food worth US$2.6bn including $145 million of New Zealand milk powder and dairy products. Exports were $2.35bn.

Cuba’s ambassador to New Zealand, Mario Alzugaray Rodriguez, and the president of the Cuban Institute for Friendship, Kenia Serrano who visited Auckland last year, have highlighted opportunities for New Zealand exporters in the Cuban tourism, food, renewable energy, IT and agriculture sectors.

Tourism in Cuba has been severely restricted by the US economic blockade and a federal travel ban. But this is in the process of changing as a result of the US Department of Transportation allowing flights to Cuba from the US mainland for a range of approved travel purposes, although vacation travel has not yet been approved.

Cuba has around three million visitors per annum (principally from Canada, Europe, Russia and South America) and with the addition of US visitors, the number is expected to reach five million by the end of 2017.

Tourism, technology and more In provisioning for Cuba’s rapidly burgeoning tourism sector there are significant openings for New Zealand’s premium food and beverage products. New Zealand exporters need to make themselves known to Cuban traders to ensure that New Zealand’s offer is well-known when fresh food orders are made to meet the needs of sophisticated US and European visitors.

Adventure tourism in Cuba is completely undeveloped, and savvy New Zealand operators can gain a huge first-mover advantage in this sector by forming JVs with local investors and established tourism operators.

More than 95 per cent of electricity in Cuba is produced from fossil fuels, with the balance supplied by a hydroelectric dam, solar parks and wind generators. As Cuba has set a target to produce 24 per cent of its electricity from renewable sources by 2030, New Zealand green energy companies can make profitable investments by sharing their world-leading technologies and expertise.

Around a quarter of the Cuban population is able to access the internet despite serious problems accessing US websites. There are

By Tom Manning

three million cell phones in use, which are currently the easiest and most affordable way to access the internet, although the Cuban government is making substantial investments in fixed-line networks and it has a target to ensure every classroom in the country has internet access by 2018.

There are particularly strong opportunities for New Zealand services and technology providers in the rebuild of Cuban agricultural capacity, which is presently much reduced due to the US economic blockade, given that before the blockade Cuba produced more sugar than even the US and had more cattle than inhabitants (the national herd is now around four million).

Cuba places high priority on food security.

It is actively looking at ways to improve production and in particular wants technologies in mapping for agriculture including fertiliser and pesticide dosing, and for food packaging, as well as animal husbandry and cropping.

Despite the thaw in US/Cuban relations, the US commercial blockade (on banking services in particular) still remains in force, which can make getting paid reasonably complex. However, international banking services will improve once the blockade is fully lifted, as is expected after the forthcoming US presidential and congressional elections.

It’s imperative potential investors, exporters, tourism service and technology providers personally visit Cuba to clarify the opportunities, understand market structures and build productive personal relationships, key elements in profitably positioning New Zealand products and technology.

• Thomas Manning is governing director of Latin American business consultancy Manning Group Limited and Transpacific Business Tours; former Vice President of the Latin America New Zealand Business Council; and publisher of the Transpacific Business Digest.

Visit www.manninggrouplimited.com

BusinessPlus October 2016

27

“The plan is also silent on how Auckland is going to build and fund the water and waste water infrastructure to cope with new growth and intensification. It is silent on how to double the size and capacity of the electricity network to cope with growth.”

CONTINUED from pg8 The key findings of the report are: 1. While the RMA has brought together a lot of decision-making processes, it could be more integrated. There are still key exclusions that should be better joined up to enhance overall environmental outcomes.

2. A lack of effective strategy and oversight of decision-making has reduced the potential to protect environmental values, including the capacity to manage cumulative effects.

3. The incorrect jurisprudence related to the ‘overall balance’ approach undermined the potential for environmental bottom lines to be applied.

The reset of the case law and other amendments are likely to see this improve.

4. Agency capture of (particularly local) government by vested interests has reduced the power of the RMA to appropriately manage effects on the environment.

5. A lack of national direction has limited the potential of the RMA system to effectively and efficiently achieve its environmental goals.

6. Agency capacity has often been insufficient to successfully implement

28

BusinessPlus October 2016

the RMA and opportunities for central government to provide financial and logistical support have generally not been taken.

how we better manage the outcomes New Zealanders want, to protect our environment while also matching the outcomes New Zealanders want for their economic and social well-being.

Evaluating the environmental outcom 7. The design of implementing es institutions and allocation of thofedifferent RMA We don’t yet know what the answer might look like but we certainly know the current mandates requires systematic review to resource management system is not ensure it is the bestA means reportof bydelivering the Environmental Defence the answers New Zealanders on statutory aspirations.

Socproviding iety want.

June 2016 8. Rigorous evaluation and Our reason for this joint project was that, monitoring of outcomes has been in addition to our feeling there was an limited, eroding the potential for established case for the failure of the adaptive governance and robust resource management system to effectively implementation. cope with rapid growth and allow business and economic development, we also had 9. A narrow range of instruments The purpose of this proje ct is to explore whether the Resource Manageme nt Act 1991 an underlying sense that the was amen has been employed to(RMA generate ded RMA and much ) has delivered desired -discussed, environmental outcomes for New Zealand. It is intended the Act’s impact on econ omic and in its environmental protection behaviour change which, in many to complement widerfailing assessments of the efficacy of the Act. environmental outcomes The project is focused on is a common gathering the best goals. instances, has not been fit for purpose. available information on topic of conversation, altho the state of the environme ugh nt in New Zealand more the former than the influence of the RMA on that state Better outcomesand arethelikely possible latter. . This evidence is intended to help enable an inform ed discussion on the future of the We jointly through employing a broader range RMA. commissioned the Often missing from this discussion The RMA was the is an empirical elem Environmental Defence Society, New of instruments, including economic first legislation internation ent. The ally to enshrine the conc ept of sustainability in its overr critic al issue really is, has the iding purpose which is ‘toZealand’s leading environmental researchRMA instruments. manageme promote the sustainable delivered on its environme nt of natural and physical ntal resources’. Now in its 25th year, the profil e team and acknowledged experts onnot? ourThis of the Act remains high goals and if not, why amongst observers of envir onmental and economic management and it is highl is key questo tionprovide that this y visible compared withresource management the system, 10. Future reform of the resource other legislation. Often report seeks to answ an in-depth analysis of the RMA ander. management system for New Zealand associated systems over the past 25 years should proceed only where the since its inception. anticipated improvements are certain and where any changes are based on The full report, “Evaluating the robust evidence.

Environmental Outcomes of the RMA”, can be found at www.ema.co.nz We believe that research findings, coupled with the economic handbrake • Alan McDonald is policy director at the Act represents, should be the EMA. Email alan.mcdonald@ema.co.nz catalyst for a national discussion on EvAluATINg ThE ENvIRON MENTAl OuTcOMES Of ThE RMA A REpORT by ThE ENvIRON MENTAl DEfENcE SOcIETy JuNE 2016

MEMBER PROFILE

Busy bees grow their Manuka honey business Rapid growth across all six business divisions is requiring New Zealand Manuka Group Limited to put into place a strategy, structures and systems to meet this growth.

The company started out selling native Manuka honey products but now has six divisions that go beyond selling honey as a food. It is a major employer in the Eastern Bay of Plenty, Wairarapa and East Cape regions – with 100 full-time-equivalents in beekeeping, growing Manuka trees, and manufacturing products from Mānuka honey, Mānuka oil and more recently, from seaweed found predominately on the East Cape.

Chief executive Karl Gradon says revenue is expected to hit $20 million this year, up from $15m last year, and mostly from Asia.

Exports also go to Europe, North America and Australia; and New Zealand is a strong market.

He says a key driver of the growth is the company’s people.

“Staff are highly engaged, committed and motivated to ensure the success of the Group.

Staff regularly attend training courses to upskill their knowledge in their respective fields of expertise and are given feedback on their performance throughout the year.”

And the Group has appointed a new chief executive, chief financial officer, marketing manager and innovation manager in the past six months.

“These new appointments to the Business Lead Team reflect just how much the company is growing and ensures we have the right resources to continually manage the ongoing growth.”

Karl says the Group also prides itself on been the first company in New Zealand to implement a “fair share” return for bee

keepers and Māori land owners for Mānuka honey and oil from a land owner’s property.

“The “fair share” scheme is contributing to making regions such as the East Cape prosper and reflects New Zealand Mānuka Group’s philosophy of social equity and sharing of profits with key stakeholders.”

The company is also able to trace Mānuka honey back to the hive and give consumers confidence in food traceability and security important in today’s market place.

Another unique initiative is working with Scion Research in Rotorua developing a Mānuka seedlings programme. This year the Group will plant several million seedlings for the sustainable supply of honey and oil.

During 2015 New Zealand Mānuka Group initiated joint ventures with Maungaroa and Iwiroa Māori trusts on the East Cape to develop large mānuka plantations.

Pioneers of Manuka industry The Group’s six divisions are NZ Mānuka Natural Health, NZ Mānuka Bioactives, NZ Mānuka Beekeeping, NZ Mānuka resources, NZ Mānuka Seaweeds and NZ Mānuka Direct.

New Zealand Mānuka Group was established in 2011 by Phil Caskey, executive director, after initially starting a company marketing and selling a range of Mānuka honey products around the world, 20 years ago.

Phil was integral in establishing the Unique Mānuka Factor (UMF®), a globally recognised Mānuka honey standard and quality system, which appraises natural markers found in the honey and assures purity and quality.

In 2000, Phil established the world’s first Mānuka honey medical device in conjunction with Dr Peter Molan of Waikato University and a company in the UK. This dressing is still

Karl Gradon

found in most medical kits and hospitals.

In 2013 Phil purchased a Mānuka oil processing plant in Opotiki that is the biggest producer of Mānuka oils in New Zealand. New Zealand Mānuka Group also invested in a Mānuka honey skin care company and now distributes eight UMF® products into world markets.

Shared wisdom When asked about the pros and cons of doing business in New Zealand, Karl says New Zealand is great due to its open and deregulated economy, access to capital markets and one of the least corrupt countries in the world.

However, New Zealand’s small domestic market means production runs can be small, resulting in high product costs that need to be passed on to the consumer.

He says, “This is where more of our New Zealand SMEs need to look at export horizons to increase sales. The small size of the New Zealand market often results in intense competition by companies competing for market share, which often drives down prices and profitability.”

And his advice to someone in their first year of business?

“Stay true to your goals and plans, and know what numbers you need to hit to be successful.

“If you employ staff, involve them with the numbers so they know what they mean to them.

“Don’t be scared to ask for advice from experienced people, including your local EMA branch, on issues that continually arise.”

BusinessPlus October 2016

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MEMBER PROFILE

New Zealand tea tempts German tastebuds The world’s largest speciality tea retailer, in Germany, is buying enough New Zealandgrown tea to brew two million cuppas.

Zealong Tea Estate, New Zealand’s only commercial tea plantation, has signed an agreement with TeeGschwendner retailer to export 10 per cent of its annual tea production.

Zealong Tea Estate general manager Gigi Crawford says the German company’s master tea tasters only consider buying an elite fraction of the annual world tea export harvest – 0.5 per cent. Each tea undergoes rigorous testing before and after purchase, for pesticides and heavy metal residues.

“We are both excited and honoured that our products have been chosen not only to be part of TeeGschwendner’s offering of premium teas, but also part of a unique cobrand cooperation.

“The agreement is testament to Zealong’s commitment to the environment, purity and transparency. It’s our no-compromise approach when it comes to the environment that brings added-value to TeeGschwendner.”

Zealong tea is 100 per cent certified organic and ISO certified across every step of the production process, making it

Daniel Mack, Tea Taster at TeeGschwendner (l) with Sen Kong, International Marketing Manager at Zealong Tea Estate, displaying the new packaging design featuring logos of both the Zealong and TeeGschwendner for the tea to be sold at TeeGschwendner. fully traceable – a unique status in the tea industry.

TeeGschwendner was established in 1978, and has 145 stores in Germany, Austria, Brazil, Saudi Arabia and the United States.

Each of its tea shops carries a selection of more than 300 varieties of tea.

Zealong tea will initially be sold in TeeGschwendner’s 123 German stores.

“We demand that our tea products be of the highest quality, and this quality is assured by certified, transparent processes.

Zealong’s identical attitude to food safety ensures that their teas pass our screening with flying colours every time,” says TeeGschwendner tea taster and purchaser Daniel Mack.

“We always take Zealong tea as the perfect

example of how much handcrafting goes into a magnificent tea, and how much influence that has on the taste of their distinct tea flavours,” he says.

In addition, Zealong’s oolong tea has been awarded a prestigious two star rating (out of three) at the UK’s prestigious Great Taste Awards in London, organised by the Guild of Fine Food and judged by over 400 judges comprising retailers, journalists, chefs, food writers, restaurateurs and buyers.

Its tea was entered into the awards by international tea and coffee retailer Whittard of Chelsea, which sells Zealong’s oolong tea as “New Zealand Oolong”.

The enterprise began with 130 seedlings imported from Taiwan in 1996 and now comprises about 1.2 million plants on a 48 hectare estate.

International recognition

for NZ cheese Over the Moon Dairy company that makes cheese in Putaruru has scored another win for its brand of “Galactic Gold” rindless soft cheese.

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BusinessPlus October 2016

It achieved a second place, silver medal at the Nantwich ICA International Cheese Awards 2016 in the UK in the class of “Soft cheese with or without rind – open to non-UK producers”. Italian company italia formaggi won the gold medal. This year’s 119th annual show received a record 5000 cheese entries from 27 countries, and was judged by 200 judges.

FREE for all EMA members | To register call AdviceLine on 0800 300 362 or email advice@ema.co.nz Visit www.ema.co.nz

SPRING Member Briefings Schedule 2016

Waikato / BAY OF PLENTY Day/Date

Time

Venue

Mon. 31 Oct. Mon. 31 Oct. Tues. 1 Nov. Tues. 1 Nov. Weds. 2 Nov. Weds. 2 Nov. Thurs. 3 Nov.

9.30am - 11.00am 3.00pm - 4.30pm 9.30am - 11.00am 3.00pm - 4.30pm

The Junction Hotel, 700 Pollen Street, THAMES ASB Baypark, 81 Truman Lane, MT MAUNGANUI East Bay REAP, Reap House, 21 Pyne Street, WHAKATANE Suncourt Hotel & Conference Centre, 14 Northcroft Street, TAUPO

9.30am -11.00am 2.00pm - 3.30pm 9.30am - 11.00am

Holiday Inn, 10 Tryon Street, Whakarewarewa, ROTORUA Central North Island Kindergarten Association, 6 Glenshea Street, PUTARURU Claudelands Conference Centre, Corner Brooklyn Road & Heaphy Terrace, HAMILTON

Auckland Day/Date

Time

Venue

Fri. 4 Nov. Mon. 7 Nov. Mon. 7 Nov. Tues. 8 Nov. Tues. 8 Nov. Weds. 9 Nov. Weds. 9 Nov. Weds. 9 Nov. Thurs. 10 Nov. Thurs. 10 Nov. Fri. 11 Nov. Fri. 11 Nov. Tues. 15 Nov. Tues. 15 Nov. Mon. 21 Nov.

9.30am - 11.00am 9.30am - 11.00am 3.00pm - 4.30pm 9.30am - 11.00am 3.00pm - 4.30pm 7.30am - 9.00am 2.30pm - 4.00pm 4.30pm - 6.30pm 9.30am - 11.00am 3.00pm - 4.30pm 9.30am - 11.00am 2.00pm - 3.30pm 9.30am - 11.00am 2:00pm - 3:00pm 11.00am - 12.30pm

Quality Hotel Lincoln Green, 159 Lincoln Rd, HENDERSON Titirangi Golf Club, Links Road, NEW LYNN Waipuna Conference Centre, 58 Waipuna Road, MT WELLINGTON QBE Stadium, Stadium Drive, ALBANY Bruce Mason Centre, 1 The Promenade, TAKAPUNA EMA, Room C, 145 Khyber Pass Road, GRAFTON EMA, Room C, 145 Khyber Pass Road, GRAFTON AGM EMA, Room C, 145 Khyber Pass Road, GRAFTON Counties Inn, 17 Paerata Road, PUKEKOHE Bruce Pulman Park, Teamsports Centre, Walters Road, PAPAKURA Rainbows End Conference Centre, Clist Crescent, MANUKAU Ellerslie Event Centre, Ellerslie Racecourse, 80 Ascot Avenue, REMUERA Aotea Centre, Limelight Room, Level 3, Mayoral Drive, AUCKLAND CITY Webinar: www.ema.webex.com Butterfly Creek, Tom Pearce Drive, MANGERE

Northland Day/Date

Time

Venue

Weds. 16 Nov. 3:00pm - 4:30pm

Te Ahu, Conference Room, Cnr South Road & Mathews Ave., KAITAIA

Thurs. 17 Nov. 9:00am - 10:30am

Scenic Hotel Bay of Islands, 58 Seaview Road, PAIHIA

Thurs. 17 Nov. 1:30pm - 3:00pm

Distinction Whangarei (ex Kingsgate Whangarei), 9 Riverside Drive, WHANGAREI

BusinessPlus October 2016

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