LawNews - Issue 16

NEWS May 27, 2022 Issue 16

Inside ■ EMPLOYMENT

A rocky road for fair pay agreements P03-06

■ CRIMINAL

Could a Māori justice system work?

P08-09

adls.org.nz

Contents 03-06

Back to the future: do we need fair pay agreements?

BARGAINING UNIONS VULNERABLE

LawNews is an official publication of Auckland District Law Society Inc. (ADLS).

07 DEMENTIA TRUSTEE DISPUTE

How to remove a trustee with dementia

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08-09 CRIMINAL OFFENDERS IMPARTIAL

Should the Crown have a monopoly over justice?

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11 EVENTS

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May 27, 2022 Issue 16

EMPLOYMENT LAW

Are fair pay agreements the old award system in drag?

In-work poverty is not an accurate description of New Zealand’s wider employment conditions and does not justify introducing Fair Pay Agreements across the economy

Rod Vaughan

The debate

The idea that this is an agreement is conceptually unsound

Photo: Hagen Hopkins / Stringer / Getty Images

A battle royale is shaping up over the government’s Fair Pay Agreements Bill with unions and employers at loggerheads about the biggest change to workplace laws since the Employment Contracts Act was passed in 1991.

Unions are welcoming it with open arms, saying the changes will address in-work poverty which they describe as an albatross around New Zealand’s neck. But business says the bill is badly timed, unworkable and will drive up consumer costs.

And, if some are to be believed, the only winners will be lawyers who will have a field day with an avalanche of litigation that’s likely to be spawned.

In essence, the bill establishes a new system of collective bargaining for workers to negotiate minimum pay and working conditions across a raft of industries and businesses.

Fair pay agreements will affect current employment contracts only if the latter are less advantageous to the worker than the FPA. Employees will be able to force their employers to negotiate working conditions and pay if at least 10% of their workforce, or 1000 staff, agree to it. The bill allows for a public interest test, removing that threshold if there are systemic employment issues in a sector.

Such issues could include low pay, low bargaining power, lack of pay progression, long hours or contractual uncertainty that isn’t compensated adequately.

The Council of Trade Unions says the bill will provide minimum fair pay standards for some of the lowest paid people in the workforce such as cleaners and security staff and workers employed in supermarkets and early childhood centres.

However, employers maintain the 244-section bill goes much further, allowing the highest paid members of the workforce, such as doctors and skilled tradespeople, the right to negotiate FPAs. If parties fail to reach an agreement, the matter will be referred to the Employment Relations Authority (ERA) for resolution.

Given the ERA’s heavy workload and serious backlogs, this could be problematical.

To gauge the depth of feeling on some of these

Continued on page 04 03

Continued from page 03

contentious issues LawNews sought the views of key players in the debate, including Business New Zealand, private sector union E tū and employment lawyers.

Annie Newman, assistant national secretary of E tū, believes FPAs are essential to address in-work poverty in New Zealand.

“The current model of employment relations remains firmly bedded in individualism and this drives litigation as individuals and unions seek justice through the legal system,” she says.

“We need a regulatory framework that supports negotiation between parties representing collectives of employers and unions, along with tripartism that addresses the big systemic issues of industry and occupation.

“For too long there has been a race to the bottom as businesses compete to reduce costs and workers bear the brunt of this competition through lower wages and pressure on hours of work, among other things. FPAs provide that framework for the first time in 30 years.”

All of which is hotly disputed by Kirk Hope, chief executive of Business NZ. “In-work poverty is not an accurate description of New Zealand’s wider employment conditions and does not justify introducing Fair Pay Agreements across the economy,” he says.

“Unions are conflating concerns over a small number of groups they consider at risk such as cleaners, drivers and supermarket employees with the entire economy and promoting an economy-wide policy based on employment conditions in a very small part of the economy.”

Hope also dismisses the unions’ claim that most developed economies now have some form of sector-wide bargaining and New Zealand should fall into line.

“This is incorrect. The OECD has noted that while sectorlevel collective bargaining has been common in the past, there has not been any extension of it since the 1970s.

“Further, those most engaged in sector bargaining – for example, Germany and France – have moved steadily towards an enterprise model of collective bargaining since the early 2000s,” he says.

“New Zealand’s fair pay agreements policy is in fact heading back to where the world was 30 years ago, not towards the future.”

Hope’s says the timing of the FPA Bill is “dreadful and unworkable” and will exacerbate the pressures businesses are already facing.

“Coming on top of the pressure created by covid, several significant increases to the minimum wage and increased cost pressures in the current inflationary environment makes the introduction of FPAs very badly timed.

“The lack of available guidance and the complete inexperience of the vast majority of employers – and, indeed 04

Annie Newman

unions – in award-based bargaining systems increases the risks considerably. This is not conducive to the economic agility required in today’s challenging business environment.”

Hope is concerned that many, if not most, employers are not associated with any national organisation, let alone one with the expertise needed to represent them in collective bargaining.

“Even identifying and contacting employers whose employees will be caught by the coverage of a proposed FPA will be hugely problematic.

“This means many thousands of small businesses may have no input at all into matters that affect the very existence of their businesses.”

Regulatory safety net

Kirk Hope

New Zealand’s Fair Pay Agreements policy is in fact heading back to where the world was 30 years ago, not towards the future

But Newman shrugs off such concerns, maintaining the timing of the bill is both necessary and workable.

“Cost-of-living pressure is driving more families into poverty, highlighting the need for a regulatory safety net that does not leave workers exposed to the exigencies of the market.

“FPAs will create stability for New Zealand businesses because the parties will decide on the best outcome for their own sectors. The covid pandemic has reminded us exactly what work is essential and we have seen that they are often the lowest-paid people,” she says.

“Improving their wages and conditions is not only the right and fair thing to do, but it will also support the economic recovery as the costs of poverty fall on us all.

“Low-income earners spend a higher proportion of their wages in the local economy and so improving wages is an investment in local businesses and local economies. FPAs are one important way we, as a nation, can build back better from this pandemic.”

Such reasoning cuts little ice with Hope who also dismisses the government’s claim that FPAs will increase productivity and innovation in many sectors.

“It won’t,” he says bluntly. “The Global Financial Crisis and covid pandemic, as well as other economic pressures, have taught us that to survive, businesses need to be agile and free to react to circumstances.

“A collective agreement covering all workers in a single occupation is by definition anything but agile. Changes a business may need to make quickly may infringe an FPA, for instance hours of work, thus constraining the ability to react.

“Furthermore, FPAs may not deliver as much as workers expect. Under the pre-1991 award system, settlements became more and more conservative in order to enable most businesses to cope with negotiated or arbitrated changes.

“A national-level FPA may be no different.”

Continued on page 05

May 27, 2022 Issue 16

Continued from page 04

More strikes?

Hope also warns of “the real prospect of increased industrial action”.

“Dissatisfied with low outcomes, workers and their unions may put pressure on individual employers for ‘above award’ settlements. History suggests FPAs will need to be similarly conservative, which will create pressure for extra increases at enterprise-level bargaining, thus recreating the ingredients of the disastrous industrial environment of the 1970s and 80s.”

Hope suspects the FPA Bill amounts to little more than unionism by stealth and is a throwback to the ‘problematic perks’ of that era such as triple time and long meal breaks.

“High penal rates and generous meal breaks were features of the award system prior to 1991,” he says.

“While these are issues to be bargained over in the first instance, the Employment Relations Authority will make the final determination as to what is included on these matters if agreement cannot be reached over the table.

“Whether ‘problematic perks’ resurface under Fair Pay Agreements will therefore be up to the ERA, as employers will not have any control at this point.”

Under pressure For a legal perspective of the issues, LawNews sought the opinions of experts in employment law.

Simon Schofield, a teaching fellow at the University of Auckland and a member of the ADLS Employment Law committee, says businesses are undoubtedly under pressure and this will be exacerbated by the introduction of FPAs. “The common way to deal with timing is to have a long lead-in time for commencement. This government, however, has indicated it is keen to get several FPAs in force as soon as possible.

“Fair pay agreements certainly add to the long list of burdens on businesses that are being implemented by this government.”

Schofield does not believe the FPA Bill is unionism by stealth but concedes that ‘problematic perks’ will almost certainly be an issue.

“For instance, each fair pay agreement must specify details of wages to be paid to employees including the minimum base wage rates, whether superannuation is included in or excluded from that rate, overtime rates, penalty rates and any adjustments over time.

“Most private sector employers simply do not have overtime rates, penalty rates or adjustments over time. This is on top of the fact that some private sector employees do not have a wage rate at all but instead have salaried employees.

“To put it in perspective, currently a collective agreement requires only that remuneration in the collective agreement is specified as ‘the rates of wages or salary payable to employees bound by the agreement’.

Simon Schofield

But what does Schofield make of Business NZ’s assertion that fair pay agreements will breach international law?

“The government’s position is that while it acknowledges that there may be a breach of international law, the greater benefits provided by fair pay agreements mean that any such possible breach is justified.

“This argument highlights the fundamental flaw in how fair pay agreements have been conceptualised. The problem is in the name. The idea that this is an agreement is conceptually unsound.

Awards

Liz Coats

Fair pay agreements certainly add to the long list of burdens on businesses that are being implemented by this government

“Collective bargaining must be voluntary. It would have been better to call them industry-wide or occupation-wide minimum employment terms and conditions or, as they were previously called, ‘awards’. The government has made, however, a conscious decision to dissociate them from ‘awards’ to dictate the fair pay agreement narrative but ‘awards’ are really what they are.”

Schofield also has reservations about the 10% threshold to initiate an FPA, something the business sector believes is too low and anti-democratic. It believes it should be at least 50%.

“A good argument can be put that the representation test for initiating bargaining of at least 1,000 covered employees or 10% of all covered employees should be dropped altogether, or at least should be required as well as satisfying the public interest test for initiating bargaining,” Schofield says.

“This is because the purpose of fair pay agreements is to provide better terms and conditions for vulnerable workers who have little bargaining power.

“That said, raising the 10% threshold to a 50% threshold may mean some vulnerable employees who do not work in a unionised environment are unable to satisfy the representation test.

“However, the reference to the idea that the representation test is ‘undemocratic’ highlights the irony that fair pay agreements have not been designed to be democratic but, rather, have been designed to be imposed on employers and employees alike.”

And what of the raison d’etre for fair pay agreements – the need to address in-work poverty? Does Schofield believe they are the correct prescription for those struggling to make ends meet?

“Given the well-recognised inequality of bargaining power between employers and employees in New Zealand, it is true that some groups of employees suffer from greater inequality than others,” he says.

“In particular, New Zealand law already recognises a group of these so-called ‘vulnerable employees’ in Schedule 1A to the Employment Relations Act 2000 which includes employees who provide cleaning services, food catering

Continued on page 06 05

Continued from page 05

services, caretaking, orderly services, laundry services and security services in specified workplaces.

“The question is not so much whether there is inequality but whether fair pay agreements are the solution to that inequality.”

Another cornerstone of the government’s push for FPAs is the belief that they will increase productivity and innovation in many sectors, but according to Schofield this could be a double-edged sword.

“Due to the increased cost of labour, employers will be forced to invest more heavily in technology to reduce labour costs – think robots in restaurants – which in turn will lead to greater productivity and higher unemployment.”

Cost concerns Specialist employment lawyer and Bell Gully partner Liz Coats is another who sees downsides for both employers and employees.

“The timing may well prove difficult for some, given these issues as well as the many other proposed or intended employment law reforms on the cards.

“Many employers are very concerned at the increased cost that will come with FPAs – not just the cost arising from the terms of any FPAs themselves, but the cost of learning this system, participating in bargaining and the cost of ensuring compliance.

“We have heard accounts from employers that an FPA could cripple their ability to employ staff and might result in them exploring options to employ workers off-shore, or to reduce staff in exchange for increased use of technology.”

Coats says evidence from countries that have sector-wide

Many thousands of small businesses may have no input at all into matters that affect the very existence of their businesses

bargaining, such as Australia, demonstrate how complex and fraught with litigation such agreements can be.

So, given the likely complexity of FPAs on this side of the Tasman, it’s probable many will be referred to the Employment Relations Authority for resolution, raising yet another problem.

The ERA already has a very heavy workload and is unlikely to have the resources and time to cope with all the litigation that may come its way.

It’s an issue that concerns Schofield.

“In my view, the Employment Relations Authority does not have the resources or expertise to deal with fair pay agreements. In truth, this power should lie in the first instance with the Employment Court,” he says.

“It is important to emphasise several points. Firstly, the changes wrought by covid-19 have seen an increase in cases before the Employment Relations Authority.

“It now commonly refers previously mediated matters back to mediation to delay matters and avoid having to make a decision on them.

“Secondly, the Employment Relations Authority does not record or transcribe evidence which means that important decisions can be made which potentially lack transparency.

“Indeed, it is not unknown for Employment Relations Authority files to be destroyed once a matter has been heard.

“Thirdly, the Employment Relations Authority members are not subject to the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 so there is no effective oversight and accountability of the conduct of Employment Relations Authority members.

“All in all, fair pay agreements are exactly the type of employment relationship problem which will be subject to complex legal argument which the Employment Relations Authority was established to avoid.” ■

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May 27, 2022 Issue 16

TRUST LAW

Removing a trustee with dementia

The incidence of dementia is now so common in the community that all trust deeds should contain a mechanism to enable the speedy and inexpensive removal of a trustee who loses cognition

Anthony Grant

Anthony Grant

With the large number of small family trusts in New Zealand, it is inevitable that many trustees will manifest these types of failings

The Court of Appeal’s decision in Mason v Triezenberg & Another [2022] NZCA 138 highlights two things: the ignorance of many trustees of their duties, especially their duty to act impartially, and the need for trust deeds to have provisions enabling trustees who develop dementia to be removed and replaced.

The case involved Alexander and Wendy Mason who settled two trusts. Over the course of time, Wendy Mason developed dementia and became wholly unable to act as a trustee.

I deal with the topic of trustee ignorance first. The High Court removed Alexander Mason as a trustee for a catalogue of deficiencies. In my practice in trust litigation, I see many similar cases.

Here are some of the reasons why the Court of Appeal said Mason should be removed: ■ disputes between the trustees had led to legal expense and significant cost; ■ the need to involve lawyers was “inappropriate and unsustainable”; ■ there was no prospect of the trustees being able to work together on an ongoing basis; ■ future disputes were inevitable and recourse to a dispute resolution mechanism would involve “disruption, delay and cost that would erode trust assets”; ■ Mason “did not believe in the concept of trusts and regarded the assets as his and his wife’s and in respect of which he should be able to do with them as he liked”; ■ Mason was not well placed to actively consider the management of trust assets and the exercise of discretions; ■ he “was no longer capable of giving fair and impartial consideration to two beneficiaries”; ■ he had fallen out with his two co-trustees, his lawyer, medical professionals and caregivers of a beneficiary; and ■ he was ‘extremely hostile’ to his co-trustees and two of the beneficiaries.

With the large number of small family trusts in New Zealand,

it is inevitable that many trustees will manifest these types of failings. They ought to know their removal as trustees is also inevitable.

I turn to the second lesson from the case. As time went on, one of the trustees succumbed to dementia. Removing a trustee who suffers from dementia is problematic in ways that were illustrated by the two trust deeds in this case.

Alexander Mason did not have the power to remove and appoint trustees. That power was vested in both him and his wife and she couldn’t make a decision about her removal as she had dementia. He therefore purported to remove her pursuant to s 43 of the Trustee Act on the grounds that she was incapable of acting as a trustee.

His attempt to remove her under s 43 was held to be invalid.

So long as his wife was alive, she remained a person who was required by the trust deed to participate in a decision to remove herself as a trustee.

The court held that a requirement to involve the participation of a “continuing trustee” probably included a trustee who had lost capacity and that “the appropriate procedure was to apply to the court” for an order to remove a cognitively-impaired trustee and an order to appoint a replacement. The purported removal of Wendy Mason pursuant to s 43 was therefore invalid.

One of the two trust deeds in this dispute authorised each settlor to appoint and remove a trustee. It was held that this clause didn’t authorise Alexander Mason to remove two trustees as they had not been appointed by him.

The outcome was that the deed by which Mason purported to remove his two co-trustees was held to be “invalid and of no effect”.

The lesson from this case is obvious. The incidence of dementia is now so common in the community that all trust deeds should contain a mechanism to enable the speedy and inexpensive removal of a trustee who loses cognition. ■ Anthony Grant is an Auckland barrister specialising in trusts and estates ■ 07

POLITICS/OPINION

The conundrum of a separate Māori justice system Chris Trotter How would a Māori justice system deal with ram-raiders? The question is not intended to be facetious. Ram-raiding is precisely the sort of high-profile criminal offending that is most likely to test the efficacy – and acceptability – of a legal system dedicated to delivering justice according to indigenous principles.

The most stringent test, central to all justice systems, is whether offences committed by the members of one community against the members of another community can be adjudicated successfully by any agency other than an at-least theoretically impartial state?

Historically, the evolution of New Zealand’s imported justice system was driven by this very question. In its earliest iteration, it was a largely villagebased system. Those accused of criminal behaviour would have been apprehended, interrogated, prosecuted, defended and ultimately judged and punished by their neighbours.

The accused would know, and be known by, the alleged victims of the crime who would have a major say in any punishment handed down. Much would depend on the character of the accused. Could he or she be trusted not to offend again? Or was the accused universally regarded as incorrigible, meaning his or her future was likely to be bleak.

The intimacy of this system has a great deal to recommend it. It embodies the true meaning of being judged by our “peers” – which is to say by people like ourselves, among whom we wish to go on living and who are as well acquainted with the good in us as they are with the bad.

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How will Pakeha citizens react if the trial of a person accused of ram-raiding one of their businesses takes place in a court run by and for Māori? If the presiding judge is positioned beneath a traditional Māori figure, in a court where the Crown is entirely absent?

Significantly, the idea of a Māori justice system relies heavily upon a similar degree of intimacy.

Marae-based, it is envisaged as involving both the perpetrator’s and the victim’s whanau, hapu and iwi in the determination of guilt and innocence; deciding what, if any, punishment should be meted-out; how the perpetrator and his or her victims might be reconciled; and what restitution is due to restore the moral equilibrium of the community.

But, what if the alleged perpetrators have offended against people who are not part of their community?

People they do not know and who do not know them?

People connected to them by only one thing – the crime?

In such circumstances, intimacy and informality are likely to strike at least some victims as wildly out of place. New Zealand’s family group conferences record failures as well as successes in the fraught business of bringing people from radically different communities together for the purposes of reconciliation and restitution.

Monopoly on justice In feudal England, crimes committed outside one’s immediate community – cattle-stealing, poaching – were dealt with by the local aristocrat or by officials acting in his name. Though these lords pretended to impartiality, the potential for gross miscarriages of justice was considerable.

Above the aristocrats, however, there was only the king. Small wonder then, with the natural direction of jurisprudence being forever onwards and upwards, that as the centuries passed, the administration and delivery of justice became monopolised by the Crown.

Currently, a young Māori ram-raider would stand

trial in the Queen’s court and the justice delivered to him and to his victims (who, for the sake of this example, we shall make the Indian-New Zealand owners of a corner dairy) emanates from the Crown.

Certainly, every effort will be made to understand the background of the offender. He will be spoken for by whanau, hapu and iwi. The judge presiding over the trial may even be of Māori descent.

In the end, however, the delivery of justice is required to be impartial and according to law. If not, then in this instance the relationship between the Māori community and the Indian-New Zealand community could only deteriorate and with it the public’s trust and confidence in the judicial system itself.

In the context of the ongoing debate over co-governance, the delivery of the kind of justice acceptable to all New Zealand’s many communities is fast becoming acutely problematic.

Under whose rubric, for example, will justice be delivered? In most courts, conspicuously positioned above the judge’s seat is the New Zealand coat-ofarms. The shield itself is flanked by two figures: one Pākehā, one Māori and surmounting them both is the Crown.

This, in heraldic terms, is a powerful representation of what used to be the generally-understood meaning of the Treaty of Waitangi: one nation, comprised of two peoples, all of whom acknowledge the sovereignty of the Crown.

Today, the official view is that this was never the arrangement agreed to at Waitangi on 6 February

Continued on page 09

May 27, 2022 Issue 16

Continued from page 08

1840. Sovereignty, it is now claimed, was never ceded to the British Crown.

By what right, therefore, does the Crown presume to dispense justice to the descendants of those who never surrendered their tino rangatiratanga?

VISITING JUSTICE

Abolish prisons This is much more than a purely academic question.

The co-leaders of Te Pāti Māori, Rawiri Waititi and Debbie NgarewaPacker, have both affirmed their support for the abolition of the New Zealand prison system – a radical proposition which surely entails an equally radical revision of our justice system and the body of law it administers.

In this context, it is difficult to imagine justice continuing to be dispensed under a single rubric. Te Pāti Māori’s position makes sense only in an Aotearoa blessed with a dual justice system – one for Pākehā, one for Māori.

In the evolution of the English legal system, this would take us back to the period in which the universal Catholic church could try its own clergy in its own courts. This dual system lay at the heart of the epic quarrel between King Henry II and his Archbishop of Canterbury, Thomas Beckett.

Ironically, the He Puapua report, written at this government’s behest to provide it with a road-map to the fulfilment of the UN Declaration on the Rights of Indigenous Peoples, relies upon the same sort of moral suasion once exercised by the Pope. No government wants to be “excommunicated” by the United Nations.

There is, however, a reason why the figure of Justice is depicted blindfolded, with a pair of scales in one hand (to weigh the evidence) and a sword in the other (to manifest the wrath of the wronged state).

She is not permitted to see who stands before her, because nothing must be allowed to sway her judgment. Not the richness of the accused’s attire, nor the colour of his skin.

Which brings us back to the question we began with: how to adjudicate successfully the crimes committed by the members of one community, against the members of another.

How will Pakeha citizens react if the trial of a person accused of ramraiding one of their businesses takes place in a court run by and for Māori? If the presiding judge is positioned beneath a traditional Māori figure, in a court where the Crown is entirely absent?

The obvious response from tangata whenua is that this is what happens every day to young Māori offenders.

Are they not tried in a room where the only reference to their people is an heraldic Māori warrior positioned under the crushing weight of a huge and heavy crown? Are those defendants not expected to make their case in another’s language, using another’s laws, and all according to the tikanga of the colonial power that stole their land and traduced their mana?

But, if that is the point we have reached in Aotearoa-New Zealand, then neither the preservation of the colonialist status quo nor the creation of a dual justice system are peaceful options.

Figuratively-speaking, the Māori warrior on our coat-of-arms has little choice but to lift up his taiaha and topple the white-robed Pākehā woman and her flag – followed by the Crown. And her only choice is to try to stop him. ■ Chris Trotter is a political commentator of 30 years’ experience. He is the author of the Bowalley Road blog ■

Expressions of interest are invited from persons wishing to be considered for appointment as a Visiting Justice in the following areas: – Whanganui – Manawatu – Canterbury – Otago – Invercargill Section 19 (2) of the Corrections Act 2004 provides that the Governor-General may, on the recommendation of the Minister of Justice, appoint any Justice of the Peace or barrister or solicitor of the High Court to be a Visiting Justice for every prison. Under section 19(4) of the Act, Visiting Justices have the following powers in respect of each prison.

The central function of Visiting Justices is to hear charges and appeals relating to offences against prison discipline. They also review decisions to detain a prisoner in a police jail, to segregate a prisoner. Occasionally, Visiting Justices undertake inquiries into aspects of prison administration and the treatment of prisoners.

They have statutory powers to conduct such inquiries and to report their findings to the chief executive of the Department of Corrections.

In addition to a sound knowledge of the governing legislation and an interest in access to justice issues, appointees will need to have: • Relevant qualifications and/or experience • Impartiality, open-mindedness and good judgment • Sound decision-making abilities • Integrity • Listening and communication skills • Awareness and sensitivity to the place of the Treaty of Waitangi in New Zealand’s constitution and the diversity of New Zealand society.

Visiting Justices hold office for a term of three years and may, from time to time, be reappointed.

Expressions of interest are sought by 3 June 2022 and should be emailed to General.OLC@justice.govt.nz. Please include a full curriculum vitae and cover letter, together with completed expression of interest forms.

Additional information and an application pack for the position may be obtained from the Ministry of Justice website here.

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TRADE

New Zealand has joined an overtly anti-China alliance – are the economic risks worth it?

Jane Kelsey The uncertainty about whether Jacinda Ardern might land a White House meeting and photo opportunity with US President Joe Biden was perhaps fitting, given the lack of clarity about one of their main topics of discussion.

On Monday in Tokyo, Biden launched his IndoPacific Economic Framework (IPEF). He was flanked by the three other leaders from the “Quad” alliance: Japan, India and Australia, whose new prime minister, Anthony Albanese, was speedily sworn in so he could reach Tokyo in time.

Ardern joined by video and plans to discuss the IPEF directly with Biden in Washington next week, White House covid rules permitting. But despite the high-profile launch, the IPEF remains an enigma, a high-level idea in search of substance.

We know it has four pillars: trade, supply chain resiliency, clean energy and decarbonisation, and tax and anti-corruption. We also know 13 countries have signed up: the Quad plus New Zealand, Brunei, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The next few months will be spent scoping the framework – something you’d expect might happen before countries opt in. But the lack of substance doesn’t matter for now. The launch was symbolic, applauding US re-engagement with the Asia-Pacific (now rebranded Indo-Pacific) region.

That was the easy part. Actually bringing the IPEF to fruition faces major hurdles.

US versus China Most commentators have homed in on the geopolitical conundrum. The Indo-Pacific 10

Strategy issued by the White House in February complained that: [China] is combining its economic, diplomatic, military, and technological might as it pursues a sphere of influence in the Indo-Pacific and seeks to become the world’s most influential power.

The US views the IPEF as the vehicle to reassert its economic primacy. And Australia and Japan are fully on board.

The IPEF gives Albanese an early opportunity to dispel election campaign suggestions he is soft on China, while distinguishing himself from his predecessor Scott Morrison’s belligerence as trade tensions with China escalated.

Indian Prime Minister Narendra Modi is more cautious, especially about China. Biden’s announcement was reportedly rewritten to launch “collective discussions towards future negotiations”, which leaves India’s options open.

NZ’s China tightrope Aotearoa New Zealand has a bigger dilemma. For years successive governments have sat on the fence, assuming they could divorce the country’s economic dependency on China from strategic alliances that were increasingly anti-China.

That dependency is now overwhelming, making the IPEF’s overtly anti-China strategy a real economic liability.

To have credibility, the US also needs broader buyin from the region. Seven of the ten ASEAN countries have agreed to participate. But these are early days. Few will want to jeopardise their relationship with China for nothing tangible in return.

US unions have already targeted Malaysia, Indonesia and Vietnam for their poor human rights

and labour records. They are hardly likely to accept US demands that they accept “gold standard” labour laws.

Domestic US politics The second hurdle is US domestic politics. There is no question the IPEF will put “America first”. But internal US consultations reveal a battle between two camps on what this means.

The Democrats’ core labour and environment base has been promised a new trade model that prioritises workers, the environment and domestic communities ahead of US corporate profits.

They’re rallying behind US Trade Representative Katherine Tai who is responsible for the trade pillar of the IPEF. Its broad scope includes the digital economy and emerging technology, labour commitments, the environment, trade facilitation, transparency and good regulatory practices, and corporate accountability.

These are all chapters in the Trans-Pacific Partnership Agreement (TPPA), including the super-sensitive issue of cross-border data flows and data localisation. But Tai’s trade mandate excludes the domestically volatile issues of market access for goods, including agriculture, which is what most countries, including New Zealand, really want.

Corporate agendas The US corporate lobby, on the other hand, wants to revive the tariff-cutting agenda of the TPPA, which Tai rejects as a 20th-century model that is not fit for purpose.

And corporate America wants to secure strong rules to protect Big Tech from new regulation, something that falls within Tai’s “trade” mandate. They seek a champion in Secretary of Commerce Gina Raimondo, who oversees the other three pillars.

During this week’s White House briefing on the IPEF, Tai made the administration’s priorities crystal clear. While traditional stakeholders have to be part of the solution, she said, they will be “ensuring that other stakeholders, like our workers, like our environmental organisations, the ones who are the smartest about climate and the policy solutions that we need, that they have premier seats at the table and that they will be influencing and shaping the policies that we create”.

Of course, the IPEF may never be concluded. It

Continued on page 11

May 27, 2022 Issue 16

Continued from page 10

has no bipartisan support in the US. Even if the Biden administration has the best of intentions, it cannot give an assurance that future administrations will maintain improved environmental and labour standards in the US or honour commitments to other countries taking part in IPEF. The Biden White House wants to avoid putting the deal to a vote in Congress.

But once it drags into the next presidential election cycle it risks falling into the abyss behind the TPPA. Realistically, the IPEF is a pig in a poke. Aotearoa New Zealand and Australia need to take a deep breath and realistically assess the opportunities and threats from such an arrangement.

That means assessing it next to pressing challenges like the climate emergency, lessons from the pandemic, successive global financial crises, the largely unregulated private power of Big Tech, geopolitical rivalries in a multi-polar world, New Zealand’s obligations to Māori under Te Tiriti o Waitangi, and more.

Then they must weigh up the options: stand aside from the negotiations, pursue alternative arrangements, or establish a clear, public negotiating mandate that would truly maximise the nations’ interests for the century ahead. ■ Jane Kelsey is a Professor of Law at the University of Auckland The above first appeared in The Conversation and is republished with permission ■

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Lessons from Lyttle DISCLOSURE COSTS FAIR TRIALS

Webinar 1.5 CPD hrs Tuesday 7 June 4.30pm – 6pm Presenter Christopher Stevenson, barrister, Pipitea Chambers (David Lyttle’s lawyer) Chair and commentator Julie-Anne Kincade QC, Blackstone Chambers

When did you last make a costs application in a criminal case? Based on the recent Court of Appeal judgment in R v Lyttle [2022] NZCA 52, this webinar will look at the prosecutorial failings in that case and the learnings for any party involved in criminal and regulatory prosecutions.

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May 27, 2022 Issue 16

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Conflict of laws

Webinar 1.5 CPD hrs Tuesday 14th June 1pm – 2.30pm Presenters Maria Hook, associate professor, Faculty of Law, University of Otago and Jack Wass, barrister, Stout Street Chambers

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The authors of The Conflict of Laws in New Zealand will provide a framework for dealing with cross-border problems and discuss issues challenging the law in the field of jurisdiction, statutes and enforcement of foreign judgments. The webinar will interest advisers and litigators in civil, commercial and family law.

CROSS-BORDER FRAMEWORK CONFLICT

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Deportation: a practical guide for lawyers PRACTICAL GUIDANCE PROCESS

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International family law conference PROPERTY MAINTENANCE PARENTING

In person | Livestream 5.75 CPD hrs Thursday 10 November 9.15am – 4pm Presenters Margaret Casey QC; Ewan Eggleston; Isaac Hikaka; Jennie Hawker; Calina Tataru; Inger Blackford; Zandra Wackenier and Duncan Holmes.

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Focusing on legal disputes across international divides, the conference will explore the key issues of property, maintenance and parenting. It will cover trans-Tasman proceedings and provide insights into other jurisdictions.

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Consumer law has been a moving feast of legislative and case law developments in the past 12 months. Significant changes to the Fair Trading Act come into force on 16 August 2022 with the unfair contract terms regime extending to business-to-business or “small trade” contracts and a new statutory unconscionable conduct regime being introduced.

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Overseas investment update

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May 27, 2022 Issue 16

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Community Magistrates Auckland The Minister of Justice is seeking expressions of interest from suitably qualified persons for appointment as part-time Community Magistrates to be based in Auckland. The present intention is that two appointments be made.

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Lessons from Lyttle

1.5 CPD HOURS

Tuesday 7 June | 4.30pm - 6.00pm Webinar When did you last make a costs application in a criminal or regulatory case? Based on the recent Court of Appeal judgment in R v Lyttle [2022] NZCA 52, this webinar will look at the prosecutorial failings in that case and the learnings for any party involved in criminal and regulatory prosecutions.

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5.75 CPD Hours

International Family Law Conference Thursday 10 December | 9.15am - 4.00pm In Person | Live Stream The sessions in this conference will explore the key issues of property, maintenance, and parenting, with a focus on trans-Tasman proceedings and with insights into a range of other jurisdictions.

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