Act leader David Seymour is rejecting claims his controversial Regulatory Standards Bill could lead to corporations seeking compensation if their property rights are affected and believes those saying so could be “deliberately making mischief”.
The legislation sets out “principles” for regulation. These don’t have legal effect – not following them isn’t unlawful – but they are intended to guide what is “good” and “responsible” regulatory practice.
One of these principles is the concept that property shouldn’t be taken or impaired unless there is fair compensation for that.
This has led to concern among some commentators that, once enacted, the legislation could lead companies to require compensation should their property rights be negatively impaired. For example, landowners getting compensation if they aren’t allowed to do something on their private property.’
Public law expert Dr Eddie Clark of Victoria University said this concern has been “overblown”, pointing to a specific section of Seymour’s bill which explicitly says it does not create any new legal obligations in this way.
That provision in the legislation says: “This act does not confer a legal right or impose a legal obligation on any person that is enforceable in a court of law.”
Clark told the Herald: “Some of the concerns that have been raised about it aren’t actually the things that you should probably be most concerned about with this bill.”
Seymour, who’s in charge of this with his Regulations Minister hat on, said the legislation is about improving transparency. He said it ensures future bills are assessed against the proposed principles, but any findings about their consistency are non-binding.
“It does not give anybody any additional legal rights. The people that are saying that are either not capable of understanding what the law is about or worse, are deliberately making mischief,” he said.
Labour has promised to repeal the legislation within 100 days if it re-elected to power. One of its most vocal opponents is Willie Jackson, who has called Seymour’s bill “dangerous” and “rotten”.
His criticisms focus on the legislation including what he deems “Act” and “libertarian” values that he believes come at the expense of “community values, Māori values [and] New Zealand values”.
Jackson has also said it would “allow corporations to put their property rights ahead of our human rights”.
“It would allow polluters to pollute no matter the environmental costs; it would allow the wealthy to dictate to the community; and it would allow corporate interests into the very heart of our democracy.”
The Herald asked Jackson on Tuesday whether he acknowledged the legislation did not impose any legal obligations enforceable within the courts.
He initially noted his distrust for Seymour and said “we know what their intentions are”, but eventually saying: “No, I don’t acknowledge it, don’t believe it, don’t trust it. I don’t trust them.”
To that, Seymour said that “thankfully” it’s not up to Jackson to interpret the law.
“It’s up to the courts, and I suspect that when they see in black and white, there are no additional legal rights, the purpose of this law is to increase transparency to Parliament, that’s what they will take,” he said.
“The good thing is, I don’t think Willie Jackson will become a judge any time soon.”
Jackson’s colleague Dr Duncan Webb is leading Labour’s opposition and has warned it could take “power away from communities” and give “it to corporate friends of the Act Party”.
Earlier this month, Webb appeared on a video podcast speaking about the bill. During his appearance, he questioned whether it could lead to pharmaceutical companies seeking compensation if legislation affected their intellectual property rights, or private landowners wanting compensation if they are stopped from cutting down native trees.
Speaking to the Herald, the Labour MP acknowledged there was no legal obligation created by the bill, but instead a “political and moral force” that would lead future legislation to be drafted in a way that puts property rights first.
“It’s an expectation. It’s a starting place for any discussion about how we do more, and that’s dangerous,” Webb said.
He said the section about not creating legal obligations was “really bizarre”.
“I don’t understand what it means, but certainly the values behind the bill are [putting] private property and corporate interests ahead of ordinary New Zealanders.”
The Regulatory Standards Bill outlines a set of principles the Government believes reflect “responsible regulation” and requires agencies to assess the consistency of legislation against those principles. However, politicians can still make legislation that doesn’t comply with the principles.
A Regulatory Standards Board – appointed by the minister – would also be established to make independent assessments and recommendations, but these are non-binding.
The principles found in the bill include that it is important laws are “clear and accessible”, should “not unduly diminish a person’s liberty”, and there should be reasonable consultation on bills.
However, some have generated debate, with opponents seeing the legislation as putting too much emphasis on private property rights. For example, the principles say legislation should not be taken or impaired without “good justification” or “fair compensation”.
Clark said there was a lot to be concerned about with the legislation, but he didn’t believe it would have the direct effect of allowing companies to go to court asking for compensation if their property rights were affected.
“There’s a principle in it that says any taking or impairment of property should be compensated and some people are concerned that that means companies will be able to sue,” he said.
“I think that concern is not particularly well-founded because there’s a provision in the bill ... that says this doesn’t found any legal rights. So that specific concern, I think, is overblown.”
However, Clark said it was not a “silly suggestion” that courts could take note of the principles and they could act to “nudge or push the court in a particular direction”.
“That could shift things in that direction without directly allowing people to sue based on the principles.”
A similar issue was also raised by the Legislation Design and Advisory Committee (LDAC) in its submission on the legislation. The committee provides advice on the development of legislation.
“On face value, the LDAC considers that the bill, as currently proposed, is not intended to have legal effect,” it said.
“In this regard, it notes that the bill sets out principles which Parliament should consider when making legislation. It does not make inconsistency with those principles unlawful.
“A key risk with legislation that is not intended to have legal effect is that legal effect may nonetheless be read in by the courts.”
Seymour told the Herald that the Government had taken advice about the likely interpretation by the courts.
“We’re very satisfied that this is going to be a very strong guide to people making laws, but the accountability mechanism is through Parliament because the people elect the Parliament.”
In a press release on Monday, Labour’s Webb said the Regulatory Standards Bill could put other pieces of legislation, such as those limiting the sale of vapes, “at risk”.
Asked how that could happen under the legislation, the Labour MP said the Regulatory Standards Board could say “that’s a bad law because it impairs private property and we should do something about it”.
“We could go back to our tobacco laws, we could revisit them and we could be saying we shouldn’t be taking away the right to brand cigarettes. That’s the kind of conversation that the people that David Seymour would have on the Regulatory Standard[s] Board would say.”
When the Herald put it to Webb that the board’s recommendations were non-binding and Parliament remained sovereign to do what it likes, Webb said: “Yes, but it has political, moral force.”
Both Clark and Webb suggested officials drafting future legislation would do so with the principles in mind.
Webb: “It creates a starting place for every conversation about what the law should be. It says, ‘start with the assumption that private property comes first’ and that anchoring is invidious.”
Clark: “While it’s not binding, I do think it’s fair to say that this is an attempt to shift what proper government is seen as doing. That overall is probably a bigger effect in some ways than allowing people to roll the dice on litigation.”
“It’d be brave officials that would just be like, ‘we will completely ignore the law that says that we should do this’,” he said.
A number of government departments have raised issues with the Regulatory Standards Bill. For example, the Ministry of Justice said the principles differed somewhat from existing law and guidance, while the Ministry for the Environment suggested the proposals conflict with principles of environmental and climate systems.
Clark’s own concerns include that it takes a “narrow” view of what good regulation-making is, that it duplicates the role of other bodies and that it doesn’t meet the criteria of its own principles.
For example, the bill says legislation should receive good consultation “to the extent that is reasonably practicable”, but Clark said initial consultation was reasonably short and held over the holidays.
A discussion document was opened for weeks over the summer period and received more than 20,000 submissions. The select committee consultation period had also just finished and drew significant attention.
Seymour has argued social media campaigns have resulted in “totally off-topic” submissions on the bill. He’s also responded to departments raising problems with the bill by saying the process has “shown me how poor the level of policy-think is in some government departments”.
He acknowledged the legislation would “put extra costs on people that want to make bad laws inconsistent with the principles”.
“It will put costs of administration. It will put a political embarrassment. It will potentially lead to people challenging, through the Regulatory Standards Board, and getting declarations that bad laws have been made. All of that is true.”
Jamie Ensor is a political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. In 2025, he was a finalist for Political Journalist of the Year at the Voyager Media Awards.
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