Snake Oil and Venom


Larry Ellison's BMW Oracle is out of the Americas Cup. Team New Zealand suffered a loss to the Spanish - who are putting up quite a fight. It's getting exciting. Luna Rosa has been so convincing that whoever they face in the final will have to perform consistently well.

I noticed an interesting use of language in the newspaper this morning. The New Zealand and Australian governments plan to form a merged Therapeutic Goods Agency. Johnson & Johnson have released a comment that 1000s of products will disappear under the new regulation regime. Annette King, New Zealand's beleaguered advocate for the controversial legislation, is showing the strain of an assault on her beat. The Herald had this to say:

State Services Minister Annette King would not comment last night on Johnson & Johnson's claim but said there had been a huge amount of misinformation peddled about the legislation, which was aimed at shutting out "snake-oil merchants".


Quite how one can not comment while letting fly with a broadside - claiming that business that sell high SPF sunscreens and natural remedies are 'snake oil merchants' - is beyond me.

If you look at any government minister's website you will see a constant flurry of press releases making all sorts of rabid, ideological claims in support of their positions - not always rational or reasonable. But when cornered opposing views become 'misinformation' and this misinformation is 'peddled'.

One of the issues worth considering in the proposed merger (aside from creating a spectacularly cloddish regulatory impositions on small New Zealand business who will fold under the burden of compliance) is the fact that New Zealand opens the door to giving up sovereign rights to Australia. Decisions about the New Zealand economy will be made by faceless, unelected bureaucrats in Canberra.

Here's what Green MP Sue Kedgley had to say about the matter in Parliament:

Therapeutic Products & Medicines Bill: Appropriation Bill Debate - State Services Commission

13th March 2007

One of the oddities in this particular session of Parliament is that the Minister of State Services is responsible for the development of a proposed new agency called the Australia New Zealand Therapeutic Products Authority. This agency is all about regulating health issues�medicines, medical devices, and dietary supplements�so it should fall within the health portfolio, as it did for the previous 6 years. But presumably Annette King, the previous Minister of Health, felt that, having put so much effort into this authority, she wanted to bring it to a successful fruition herself, so she got that part of the health portfolio taken with her into the State Services portfolio. So within this Budget we had $1 million spent last year on setting up this new authority�altogether about $6 million of taxpayers� money has been spent. A whole army of officials have been travelling backwards and forwards between Australia and New Zealand and having endless little meetings setting up this agency and getting quite carried away about it.

Now, of course, we find that all these years and years of negotiation and all this expenditure and taxpayers� money could be for nothing, because it is rather looking as though the one thing Annette King forgot to do was ensure she had the numbers to pass the legislation. It is increasingly looking as if the Government could suffer an embarrassing defeat over the Therapeutic Products and Medicines Bill, with the announcement by Taito Phillip Field that he will not be supporting it. It looks as if it is dead in the water. But while the bill is still before the House I think there are a few things we need to examine about this odd agency that the Minister of State Services has spent so much of her time negotiating.

First of all, the authority is being called an offshore entity, but it is set up under Australian legislation�Australian corporate law�and is going to be headquartered in Australia. The Minister has refused me 6 years� worth of Official Information Act requests. I have asked for the minutes of the Ministerial Council about the decisions it has been making these 6 long years, and the Minister has refused all those Official Information Act requests. So much for democracy. But she did inadvertently give me one paper that stated there would be about 550 staff in the authority, 93 percent of whom would be Australian and 7 percent New Zealanders. I think that sums up what this authority is all about. It is 93 percent Australian, with a little clip-on of 7 percent New Zealand.

In this offshore authority there will be an unelected and unaccountable managing director who will have completely unprecedented and virtually unconstrained powers to issue orders that would have the effect of law in New Zealand without ever having to come before our Parliament. When the select committee examined the treaty that sets up this agency we pointed out that the Managing Directors powers were completely unprecedented. We examined the treaty and said: �Look, what is this odd provision? It says that the managing director shall not be responsible to the board for decisions made by the Managing Director in the performance of the agency�s regulatory functions. So this Managing Director will be able to issue orders about a huge range of subjects, will have the statutory delegated decision-making powers of the Minister of Health or of the Minister of State Services, but will not be responsible to the board for any of its decisions, so who will this Managing Director of this offshore entity set up under Australian law be responsible to? There are all sorts of alarming provisions in the bill that sets up the agency, including a provision that will give the new authority powers, again unprecedented powers, of search and seizure so that an agency official of this offshore entity would be able to come to New Zealand, enter and search a business in New Zealand without a warrant, and impose penalties of up to $5 million without having to go through a normal judicial process. This is an extraordinarily odd provision.

Some of these issues really need to be examined because they have constitutional and wide-ranging implications. A very heavy-handed regulatory regime is proposed, which inevitably will increase the cost of dietary supplements and traditional remedies, and also the public�s access to them. The problem is that if, for example, somebody wanted to use a traditional remedy�shall we say, a herb called kawakawa�and put it into a dietary supplement, but it was not on an approved list, that particular traditional remedy, and literally hundreds of traditional Chinese or Maori herbal remedies, would become illegal if they were not on the approved list once the agency was in place. They would not be able to be sold in New Zealand even if they had been safely used for centuries and approved by an overseas regulatory authority such as the American Federal Food and Drug Administration.

So this raises very serious issues. Why should New Zealanders have their access to traditional Chinese remedies, for example, taken away from them because we sign up to some offshore entity that is based in Australia and has virtually unlimited powers of the Managing Director. I am not being hypothetical here. A Chinese herbalist out in Mana has 250 Chinese herbs that she administers. All of them have been approved by the American Food and Drug Administration and have been safely used for centuries. None of these are on an approved list in Australia, nor will they be approved in New Zealand, because they contain many ingredients and it would be far too expensive to licence these remedies. So they will become illegal in New Zealand.

I think the Government and all those officials who are having their endless little meetings backwards and forwards across the Tasman forgot to ask the people of New Zealand what they thought of their plans, and the people of New Zealand have become increasingly concerned about this treaty that the Government has signed and about this agency. They have said: �Hang on a minute.� Basically, what this Parliament would be doing if it passed the bill, is transferring control over all these dietary supplements and traditional remedies to an offshore agency, and Parliament would completely lose control over these matters into the future. More and more New Zealanders have become concerned about the constitutional implications of this authority. There are no Treaty of Waitangi provisions, and, once it has been put into place, it will basically be beyond the reach of MPs in this Parliament.

Another odd quirk is that the legislation that will set up this authority has been introduced into the New Zealand Parliament�it is currently before the Government Administration Committee but it has not even been introduced into the Australian Parliament. So, presumably, the Australians could change the legislation after we have passed it here. No explanation has been given as to why this has happened. We are also, effectively, almost signing a blank cheque with this particular agency, because all of the details of how it will operate are contained in rules and orders, and we do not know what those rules and orders are. So it is like signing a blank cheque. We have no idea, really, of the detail of how it will operate because, even though it is before the select committee, none of this has been consulted on.

The other issue, of course, is that Australians themselves are saying that the agency, as it operates in Australia, is draconian and heavy-handed. Many of them believe that it has been a disaster in Australia. They are not able to access many of the dietary supplements and traditional remedies that we have here, because, effectively, the agency, which is a pharmaceutical-type agency, regulates their dietary supplements according to a pharmaceutical paradigm. It has not approved many, many remedies and basic vitamins that are on sale here in New Zealand.

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