Just when you thought it could not get any worse

Having banned saliva testing for more than a year, the government is now proposing to take it. As in, expropriate inventors and manufacturers of COVID testing products.

Newsroom ($) quotes the Chief Executive of Rako, Leon Grice:

There is other legislation where the Government can come in and expropriate or requisition private property – that’s the Public Works Act. But that has more protections, like a process to determine a market rate that the Government must pay…. They can just insist we give up our stock and our reagents and our premises that we need to do our work.

This is real. The government really is proposing to give the Minister of Health the right to “insist we give up our stock and our reagents and our premises that we need to do our work.” The COVID-19 Public Health Response Amendment Bill (No 2) 2021 says:

11 Orders that can be made under this Act

(1) The Minister or the Director-General may, in accordance with section 9 or 10 (as the case may be), make an order under this section for 1 or more of the following purposes:

(e) requiring the owner or any person in charge of a specified laboratory that undertakes COVID-19 testing to—

(i) deliver or use, in accordance with directions given under the order, specified quantities of COVID-19 testing consumables that the Minister considers necessary for the purposes of the public health response to COVID-19:

(ii) undertake COVID-19 testing solely for the purposes of the public health response to COVID-19 while subject to the order, whether or not the laboratory is contracted by the Crown for that purpose.

The bill says the Minister will be able to set quality control standards in labs, manage the supply of testing consumables, and set different rules for different classes of testing.

Presumably the government’s target is Rako.

The bill provides for compensation and appeal:

11A Compensation or payment relating to requisitions

(1) This section applies if an order is made under section 11(1)(e).

(2) The owner of a testing laboratory injuriously affected by the requisitioning of testing consumables is entitled to receive compensation from the Crown at the market rate for the consumables requisitioned.

(3) The owner of a testing laboratory required to undertake COVID-19 testing solely for the purposes of the public health response to COVID-19 is entitled to be paid by the Crown for its services at the market rate for those services.

(4) All questions and disputes relating to claims for compensation or payment under this section must be heard and determined by the District Court, whose decision is final.

However, the bill does not define “market rate” or say who decides it. If the answer is Ministry of Health officials – the purchaser – then clearly there is a problem.

As I understand it, Grice has been asking for a commercial negotiation for the best part of a year. How is expropriation even on the table?

Expropriation is likely even if the quoted provisions are never used. The government will have a commanding position in any commercial negotiation when in its back pocket it has the option to take the property of the counterparty and decide compensation.

It is… breathtaking that a government which is borrowing a billion dollars a week wants to nickel and dime the developer of the one thing we need more almost than anything else right now: a rapid fast, saliva-based PCR test for COVID. If Grice’s technology means ten fewer minutes of lockdown, pay him. Let him have his millions. Or make a deal with a competitor. Either way, it’s worth it. And not just for COVID-19. We want the Leon Grices of the world to turn up in the next pandemic, too.

But, no. This government is threatening to take the property of the one company which could do more than any other to get us out of lockdowns. I look forward to the government’s explanation for how that is in the public interest. The judgment seems astoundingly poor. This looks like world class bad faith from officials and ministers.

Another worrying aspect of the bill are the proposed changes for section 12. The government wants to remove the prohibition which says a COVID-19 order “may not apply only to a specific individual”. Changes in section 12 and elsewhere in the bill are clearly designed to enable the Minister and Director-General to issue orders to specific individuals.

This is draconian legislation, yet it seems to be slipping under the radar. It deserves attention.

Here is the legislation: https://www.legislation.govt.nz/bill/government/2021/0068/latest/LMS552303.html

Here is where to make a submission, which closes next Monday, 11 October:

https://www.parliament.nz/en/pb/sc/make-a-submission/document/53SCHE_SCF_BILL_115898/covid-19-public-health-response-amendment-bill-no-2

Here is the Ministry of Health analysis and RIS: https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-novel-coronavirus/covid-19-response-planning/covid-19-public-health-response-amendment-bill-no-2-2021

Here are marked up changes to section 11: https://www.dropbox.com/scl/fi/vpqwry2bzd0v6fypz1hs4/11_diff.docx?dl=0&rlkey=armucq7yh1w4qejp8yy7ppf1c

And to section 12: https://www.dropbox.com/scl/fi/sidz80ck8yaalfx50d2ss/12_diff.docx?dl=0&rlkey=7mbivhxfbo5bayrkcvtj53phz

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