3 When do the RIA requirements apply?

The Regulatory Impact Analysis (RIA) requirements apply to any policy initiative or review that:

• considers options that would involve creating, amending or repealing legislation (either primary legislation or disallowable instruments for the purposes of the Legislation Act 2012), and
• is expected to result in a paper being submitted to Cabinet for approval[2].

This includes papers submitted to Cabinet seeking:

• the release of a discussion document (see Part 3) that contains options that may lead to regulatory change (although a RIS is not necessarily required if the RIA elements are incorporated in consultation material - see section on Effective Consultation (Part 3)
• “in principle” policy decisions and intermediate policy decisions, (see Part 4) particularly those where policy options are narrowed down (eg, limiting options for further work/consideration, negotiating mandates for certain international agreements)
• decisions to introduce regulatory changes that are merely enabling and the substantive decisions as to whether and what sort of intervention will be made later, and
• to inform Cabinet of a Minister's intention to make regulations under an enabling power given to that Minister in an Act.

The RIA requirements should be met in one of the following ways:

• where Cabinet is being asked to give policy approval, a RIS must accompany the Cabinet Paper, or
• where Cabinet is being asked for permission to consult on potential regulatory options, the substantive RIA elements must be incorporated into the discussion document (or a draft RIS attached to the discussion document).

Policy proposals with regulatory implications are normally submitted to Cabinet Committees for policy approval before legislation or regulations are drafted. In rare circumstances, the policy proposal and draft regulations may be submitted together. In these cases, the usual procedure is for the paper to be submitted to the relevant Cabinet Committee, rather than directly to Cabinet Legislation Committee (LEG).

To meet the RIA requirements, RISs (or discussion documents if no RIS is produced at the consultation stage) must be complete, convincing, clear, and concise. Efficient and effective consultation must also have taken place during the RIA process, and be accurately reflected in the RIS. The specific requirements are set out in the section Undertaking RIA (see Part 2).

3.1  Exemptions

The value of completing even a modest Regulatory Impact Statement (RIS) is likely to be limited in some circumstances, such as those where the potential proposals would result in little or no change to the status quo legislative position or would have no or very small impacts outside of government. Consequently, the RIA requirements do not apply to those aspects of proposals that:

• involve technical “revisions” or consolidations that substantially re-enact the current law in order to improve legislative clarity or navigability (including the fixing of errors, the clarification of the existing legislative intent, and the reconciliation of inconsistencies)
• are suitable for inclusion in a Statutes Amendment Bill
• would repeal or remove redundant legislative provisions
• provide solely for the commencement of existing legislation or legislative provisions;
• need to be authorised in an Appropriation Bill or an Imprest Supply Bill
• are for a Subordinate Legislation (Confirmation and Validation) Bill relating to regulations that have already been made
• implement deeds of settlement for Treaty of Waitangi claims, other than those that would amend or affect existing regulatory arrangements
• bring into effect recognition agreements under the Marine and Coastal Area (Takutai Moana) Act 2011
• are essential (the minimum necessary) in order to comply with existing international obligations that are binding on New Zealand, or
• have no or only minor impacts on businesses, individuals or not-for-profit entities (such as might be the case for certain changes to the internal administrative or governance arrangements of the government, like the transfer of responsibilities, staff, or assets between government agencies).

3.2  Discussion documents

The RIA requirements apply to discussion documents that include consideration of options that may lead to regulatory changes. A Cabinet paper seeking to release a discussion document with regulatory proposals must apply RIA in one of two ways: either a consultation/interim RIS must be appended to the discussion document; or the discussion document itself must include the substantive RIA elements. Discussion documents for significant issues must be provided to RIAT for comment prior to consultation.

Under most circumstances, Treasury recommends that departments include the elements of a RIS (a summary of the RIA) in the discussion document. In some cases - such as when a Cabinet paper seeks in-principle decisions or seeks to narrow options prior to consultation - a RIS will usually be required. Such cases are best determined either by agencies or with RIAT on an individual basis as early as possible.

Whether or not a separate RIS is prepared, the discussion document should include the RIA elements, as doing so will optimise the value of consultation for subsequent policy development. Incorporating the RIA elements involves:

• Structuring the document around the RIA framework: explaining the current situation and the nature and size of the problem; setting out the policy objectives; identifying the range of feasible options, and providing preliminary analysis of the costs, benefits and risks of these options, and an indication as to how they would be implemented, monitored, and reviewed. The document may indicate a preferred option.
• Including suitable questions for stakeholders, that will prompt respondents to confirm and challenge the analysis, provide feedback on the assumptions, estimated magnitude of impacts etc and suggest additional options.

Further information on the features of good discussion documents and consultation processes are summarised in the Effective Consultation section (see Part 3).

3.3  Supplementary Order Papers

From time to time, policy changes may be made to draft legislation that are outside the scope of the original RIS. When these changes are sought through a Supplementary Order Paper (SOP) that is submitted to Cabinet, the original RIS must be updated (or a new RIS prepared) to indicate how the changes affect the impact analysis-such as how the SOP alters the nature and/or magnitude of the impacts).

3.4  International treaties

In some cases, there may be legislative or regulatory implications that arise as a result of the completion and implementation of an international treaty. The RIA requirements apply to any proposals that may lead to a paper being submitted to Cabinet, which, in the case of international treaties, may include papers seeking Cabinet approval to enter into negotiations (ie, a negotiating mandate), to sign the final text of a treaty, or for a treaty to enter into force for New Zealand.

In accordance with the Cabinet Manual and Standing Orders 388-391, all multilateral treaties or “major bilateral treaties of particular significance” concluded by New Zealand require the preparation of a National Interest Analysis (NIA). When preparing an NIA for a treaty with regulatory impacts, the Ministry of Foreign Affairs (MFAT) adheres to NIA drafting guidelines produced in collaboration with the RIAT. Those guidelines require that, for treaties with regulatory impacts, the NIA also includes all the requirements otherwise considered in a RIS (becoming an “extended NIA”). A separate, standalone RIS is therefore not required when an extended NIA is prepared.

The International Treaty Making booklet[3], which includes the NIA drafting instructions, contains detailed guidance about how the RIA requirements apply to treaties. For any questions regarding international treaties and arrangements, please contact the Treaty Officer in the Legal Division of the Ministry of Foreign Affairs and Trade (treatyofficer@mfat.govt.nz).