7 Consultation

The purpose of consultation is to provide confidence about the workability of proposals and that options have been properly considered. This section covers the basic process requirements for RIA consultation - see Effective Consultation (Part 3) for general guidance.

To meet the RIA requirements, agencies proposing new regulation must demonstrate consultation with affected parties on the problem definition, the range of feasible options, and the impacts of the options. Consultation can be inadequate for a number of reasons, including:

• when affected or interested parties are not consulted (eg, not consulted at all or unrepresentative consultation, such as where only large organisations are consulted), and
• when consultation processes are ineffective (eg, consulted parties not given enough time to respond, important issues not consulted on, consultation documents not promoted widely enough).

The magnitude of the proposal, including who is likely to be affected determines who and how to consult - more consultation is required if the proposal has wide-reaching impacts.

In most cases, and particularly for significant proposals, there should have been material consultation before the RIS is drafted. The draft RIS nevertheless provides another vital basis for consultation, both with affected parties and with government agencies. The RIS format (which follows the RIA framework) also provides a useful vehicle for providing advice to the portfolio Minister, during the course of policy development.

The draft RIS should therefore be circulated for comment to relevant government agencies. Ideally, this should be done before the Cabinet paper is prepared. Otherwise it must be circulated with the draft Cabinet paper. It must also be included with draft Cabinet papers when they are submitted to Officials' Committees.

7.1  Who to consult

In addition to consultation with affected parties, a number of government agencies may need to be consulted, depending on the nature of the option or proposal.

For guidance on which departments require consultation on particular issues, see this CabGuide section on consultation with government agencies[8]. It does not provide a complete list of consultation requirements, but is intended to assist officials in identifying the departments they should consult.

For regulatory proposals, key government agencies to consult (as well as the relevant Treasury policy team) include the following:

• The Ministry of Justice (MoJ) is responsible for vetting proposals for consistency with the New Zealand Bill of Rights Act 1990, MoJ must also be consulted on proposals that potentially create or alter criminal offences, sanctions, or penalties.
• The Ministry of Foreign Affairs and Trade (MFAT) has certain obligations with respect to ensuring New Zealand's compliance with international agreements to which we are a Party. It is therefore important to consult MFAT where a regulatory proposal could affect New Zealand's international obligations.

These obligations include the Agreements of the World Trade Organisation (WTO), Closer Economic Relations (CER), free trade agreements, etc. Where a proposed regulation affects, or may affect traded goods and services, or foreign investment, the advice of the Ministry should be sought on whether the proposed regulation is consistent with these obligations. Even where proposed regulation is consistent, there may be an obligation to notify an international organisation or a trading partner of the proposed measures and allow them to comment. The usual timeframe for comments is 60 days.

• The Ministry of Business, Innovation and Employment (MBIE) should be consulted on proposals that may impact on businesses, particularly those that impose compliance costs and direct costs. MBIE should also be consulted on regulatory proposals that have Trans-Tasman Mutual Recognition Agreement (TTMRA) implications.

The TTMRA is a horizontal arrangement that impacts on a wide range of non-specified areas and is predicated on a number of principles, including comprehensiveness (there should be limited exceptions) and mutual recognition principles (as opposed to harmonisation principles). Judgments need to be taken on a case by case basis taking into account both trans-Tasman and domestic factors. Judgments should also be informed by the RIA requirements (as required by the Council of Australian Government (COAG) Principles and Guidelines for National Standard Setting and Regulatory Action).

• For matters relating to local government, or potential regulatory options that may be implemented or enforced by local government agencies, please refer to the Department of Internal Affairs' Guidelines for which entities to engage with directly.