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FAQ: changes in regulatory control under the ACVM Act

The following are frequently asked questions about changes in regulatory control under the Agricultural Compounds and Veterinary Medicines Act 1997. Most of these matters will be discussed in more detail in public discussion documents to be released early in 2008.

ACVM Act 1997

• What is the purpose of the Act?

• What are agricultural compounds?

• What are the basic requirements of the ACVM Act?

• What kinds of products are currently being regulated under the ACVM Act?

Proposed changes to the administration of the ACVM Act

• What is prompting change?

• Will there be major changes in the way agricultural compounds are regulated?

• Which kinds of products that were not regulated before may be regulated under the ACVM Act in the future?

• What is the timeframe for change?

Recent amendment to the ACVM Act

• Is there anything new about the purpose of the Act?

• Have the basic requirements changed as a result of the amendment to the Act?

• Was the definition of agricultural compound altered by the amendment to the Act?

• Did the amendment to the ACVM Act alter the kinds of authorisation that products need?

• What new regulatory tools have been added?

Administration of the ACVM Act

• Who is responsible for administering the ACVM Act?

• What are the classes of agricultural compounds?

• Do products that are not used in an agricultural context fit any of these classes?

• What kind of authorisation must products have?

Suspension and revocation of registration

• What would prompt the suspension of a registration?

• What would be the consequence of registration suspension?

• How long can a suspension last?

• What would happen if the remedial action were not taken?

• Will there be any warning?

• Will registrations be suspended in cases in which NZFSA considers that the conditions of registration are inadequate or inappropriate?

• How and when would NZFSA revoke a registration?

• What would prompt reassessment of a registration?

Product recall

• When would product recall be used?

Operating plans

• What is an operating plan?

• Will NZFSA continue to approve codes of practice and will there be a statutory requirement to comply with an approved code of practice?

• Who prepares an operating plan?

• When will operating plans be required?

• What will be the consequence of not complying with an operating plan?

• Will operating plans always have to be approved by NZFSA?

• Who will have to have operating plans?

• Who will have to have their operating plans approved by NZFSA?

Recognised persons

• What functions will have to be done by recognised persons?

• Who will require recognition?

• Can organisations be recognised or only individuals?

ACVM Act 1997

What is the purpose of the Act?

The Agricultural Compounds and Veterinary Medicines Act 1997 regulates the importation, manufacture, sale and use of substances and/or products used to manage animals or plants in order to manage the following specific risks associated with their use:

• risks to public health

• risks to trade (international and domestic) in primary produce

• risks to animal welfare

• risks to agricultural security.

At the same time, the Act ensures that the use does not result in breaches of domestic food residue standards and that sufficient consumer information is provided so that products can be used appropriately and safely.

What are agricultural compounds?

Any substance, mixture of substances or biological compound will be considered to be an agricultural compound if the immediate intention for its use is to manage plants or animals for any of the purposes listed in the definition of an agricultural compound in the Act. The intended outcome of that management (i.e. to achieve an agricultural, public health, conservation, social/cultural etc benefit) is not relevant to the classification of an agricultural compound. The relevant purposes listed in the definition of an agricultural compound are briefly:

• pest control

• maintaining, promoting, regulating productivity and performance

• meeting nutritional requirements

• manipulating, capturing or immobilising animals

• diagnosis

• prevention or treatment

• enhancing the effectiveness of other agricultural compounds

• marking animals

• post-harvest treatment.

What are the basic requirements of the ACVM Act?

No person may sell or use within New Zealand any agricultural compound unless it is authorised as:

• a registered trade name product or

• exempt from registration.

No person may manufacture in New Zealand any agricultural compound unless it is:

• a registered trade name product

• exempt from registration or

• manufactured for export only.

No person may import any agricultural compound into New Zealand unless it is:

• a registered trade name product

• exempt from registration or

• only to be exported, with or without further processing.

Note: a declaration can be made that imported goods are not agricultural compounds to facilitate the importation of goods that are not subject to the ACVM Act.

Failure to comply with any of the basic requirements may be an offence that upon conviction may result in:

• a fine of up to $30,000 for a person ($150,000 for a corporation) and/or imprisonment for up to two years for a person, and/or

• a prohibition on further importation, manufacture, sale or use.

What kinds of products are currently being regulated under the ACVM Act?

Currently, the products that are regulated under the ACVM Act are those that are commonly thought of as:

• agricultural chemicals that are used to manage agricultural or horticultural crops

• vertebrate pest control products

• fertilisers

• animal feeds and nutritional supplements

• veterinary medicines.

Proposed changes to the administration of the ACVM Act

What is prompting change?

The ACVM Act was passed in 1997. Aspects of its administration commenced immediately, while others had to be delayed until the commencement in 2001 of the hazardous substances provisions of the Hazardous Substances and New Organisms (HSNO) Act 1996.

NZFSA is currently reviewing its administration of the ACVM Act in light of significant changes in the regulatory environment since the passing of the Act. Some of those changes include:

• growing experience in the administration of the HSNO Act by ERMA NZ and clarification of the interface with the ACVM Act and NZFSA as a whole

• establishment of NZFSA as an autonomous government department with responsibility for the safety of food and food-related products

• repeated incidents, internationally, in which agricultural compounds have been implicated in adverse events either because of problems with the products or the way the products have been used

• closer alignment between NZFSA and the Australian Pesticides and Veterinary Medicines Authority (APVMA) in registration requirements, assessments and registration processes

• evolution of responsible use and public health initiatives prompting a need for additional assessments of products and consideration of a wider range of products

• dentified gaps in regulatory control associated with ensuring efficacy and minimising risks to food and food-related products.

The amendment to the Act created new regulatory tools and modified existing ones. These changes have to be integrated into the current regulatory regime.

In addition, there are products in the New Zealand marketplace that are not assessed in regard to their impact on the safety of food and food-related products because they do not fit the current operational interpretation of an agricultural compound. There is no certainty that their use is safe. These products may not be regulated sufficiently under any other Act to address the risks relevant to the ACVM Act.

Regulated parties have expressed concerns that regulatory intervention has caused disruption and rising compliance costs without delivering better risk management. These concerns need to be addressed to ensure that the regulatory regime is appropriate, and no more interventionist than is necessary to address the relevant risks.

There is also growing international expectation of regulatory control that must be met in order to maintain New Zealand’s reputation as:

• a reliable source of safe food

• an effective check against agricultural compounds causing unnecessary or unreasonable pain or distress in animals or spreading pests/diseases.

All of these reasons are prompting NZFSA to take a fresh look at how it administers the ACVM Act. NZFSA strongly considers that regulated parties will benefit from the reform. NZFSA will focus its attention on the way it regulates agricultural compounds to ensure that costs and disruptions are kept to a minimum.

Will there be major changes in the way agricultural compounds are regulated?

No. For the most part, the ACVM Act has provided a sound statutory foundation on which to construct an efficient and effective regulatory regime. The recent amendment has merely clarified certain provisions and introduced a degree of flexibility that was lacking in the original Act. It will be business as usual for most regulated parties.

However, some new kinds of products will now be regulated under the ACVM Act. Proprietors of such products will note a significant change in their regulatory responsibilities.

Which kinds of products that were not regulated before may be regulated under the ACVM Act in the future?

Some products that have not been considered agricultural compounds will now be regulated under the ACVM Act. These include products that are used to manage animals or plants for outcomes other than agriculture, such as public health, conservation, industrial and domestic safety and hygiene, private and amenity gardening etc. For examples, the products include:

• public health pesticides

• commercial and domestic herbicides

• disinfectants, cleaners and sanitisers

• forestry and post-harvest timber treatments (but not wood processing chemicals).

These, and possibly others, will be regulated under the ACVM Act as well as under the HSNO Act. This does not necessarily mean that they will all have to be registered.

What is the timeframe for change?

Where there is likely to be change, NZFSA intends to phase-in new requirements to minimise disruption while adequately managing the relevant risks. It has begun discussions with interested and affected parties. Introduction of change will be discussed with the affected parties to agree on a practical timetable and process.

Recent amendment to the ACVM Act

Is there anything new about the purpose of the Act?

Yes, public health is a new risk area. It is not intended to duplicate current risk management under the HSNO Act for occupational health and safety. The risks being managed are ones that do not relate to the hazard characteristics of the product and so are not within the scope of the HSNO Act and its Regulations. They relate more to the efficacy of the product in regard to public health outcomes, or the flow-on effect of use of agricultural compounds as they affect public health concerns and outcomes. They also relate to the impact agricultural compounds may have on domestic and export food products. These are also outside the scope of the HSNO Act.

Have the basic requirements changed as a result of the amendment to the Act?

Yes, the prohibitions on manufacturing and importation have been expressly stated so that there is no doubt. It has also been made clear that export-only products are agricultural compounds, but they can be imported or manufactured without registration or exemption. NZFSA will create a programme for export-only products to ensure that:

• they do not jeopardise international or bilateral agreements regarding trade in agricultural compounds

• they cannot be mistaken for products registered for trade in New Zealand or diverted onto the New Zealand market without registration.

The penalties associated with convictions have also changed, introducing imprisonment as an option open to the Courts.

Was the definition of agricultural compound altered by the amendment to the Act?

Only two minor changes were made to the definition. The first was to make it clear that all animal feeds and nutritional products were included. The second was to broaden the scope of post-harvest treatment beyond just pest control.

This means that everything that was an agricultural compound is still one, and some products that were not (e.g. post-harvest waxes on fruit) or where there was some doubt (e.g. pet food) are now agricultural compounds.

Did the amendment to the ACVM Act alter the kinds of authorisation that products need?

Yes, approval in special circumstances and listing as GRAS (generally recognised as safe) are new authorisation tools. Some products/substances currently have provisional registrations that will be converted to approvals in special circumstances because this is more appropriate. Feed additives prescribed in Schedule 7 of the ACVM Regulations 2001 as GRAS will be listed as GRAS under section 8B to make the list more sensitive to change. However, most products will continue to have the same kind of authorisation as they currently do.

What new regulatory tools have been added?

Two new types of authorisations have been added:

• listing as GRAS (generally recognised as safe) for both substances and trade name products

• approval in special circumstances.

NZFSA now has the power to suspend registrations. This allows restrictions to be imposed while remedial actions are taken to bring a product into compliance, without revoking the registration.

NZFSA can now recognise persons to carry out functions required under the ACVM Act. This tool will become a commonly used mechanism to specify persons/organisations, and to set technical and performance standards to govern their agricultural compound related activities. Types of functions that would be relevant are:

• manufacturing of certain kinds of agricultural compounds

• trading in restricted products

• authorising restricted products

• carrying out data assessments

• carrying out research under approvals in special circumstances

• using certain restricted products.

NZFSA can issue notices giving detailed guidance about how parties should meet requirements in ACVM Regulations.

NZFSA can issue certificates of compliance on request from regulated parties. Such certificates can be of use to regulated parties to support international trade in their products or possibly to provide evidence of acceptable practices to meet requirements under other legislation. NZFSA will certify only things that it can verify. Consequently, regulated parties may have to participate in NZFSA compliance programmes if they wish to get certificates of compliance.

Administration of the ACVM Act

Who is responsible for administering the ACVM Act?

NZFSA has been directed to administer the ACVM Act, even though some aspects are outside the scope of food safety. This was considered most appropriate because:

• the expertise and systems for assessing and authorising trade name products already existed in NZFSA

• it would be more efficient to have a single authorisation address the range of risks posed by trade name products in the market.

Because agricultural compounds can pose risks that are relevant to the mandates of a number of government departments and independent authorities (i.e. Ministry of Agriculture and Forestry, Environmental Risk Management Authority [ERMA NZ], Ministry for the Environment, MedSafe, Ministry of Health, Department of Labour), NZFSA has to maintain close working relationships to ensue the collective risk management outcomes are achieved.

What are the classes of agricultural compounds?

There will be five classes of agricultural compounds:

Veterinary medicines – agricultural compounds administered to or applied onto vertebrate animals (but not including ones used in vertebrate pest control)

Oral nutritional compounds – agricultural compounds used to meet the nutritioinal requirements of animals (livestock and pet feeds, nutritional supplements and feed additives)

Vertebrate toxic agents – agricultural compounds used to kill/manage vertebrate pests (1080, cyanide, phosphorous, anticoagulants etc.)

Agricultural chemicals – agricultural compounds applied directly to plants or to the environment in which animals or plants are or will be managed. This group includes:

• pesticides not applied to animals

• herbicides

• aquaculture products to treat invertebrate marine and freshwater animals

• cleaners, disinfectants and sanitisers

• timber treatment products.

Fertilisers – agricultural compounds used to supply the macro and micro nutrient needs of plants (e.g. chemical and organic fertilisers, fertiliser additives, soil conditioners.

Do products that are not used in an agricultural context fit any of these classes?

The word ‘agricultural’ has no significant meaning under the ACVM Act. Even though the title of the Act implies that products used on farms to treat animals and plants are a significant focus, the provisions of the Act do not limit regulatory control to products used on livestock or cropping farms and orchards. It covers the management of animals and plants and pest control in any context, including industrial and domestic circumstances.

Almost all of the new product groups that will now be regulated under the ACVM Act will fall into the agricultural chemical class.

What kind of authorisation must products have?

The ACVM Act provides a number of types of authorisation to allow agricultural compounds and veterinary medicines to be imported, manufactured, sold and used in New Zealand.

Registration – authorisation issued under section 21 of the ACVM Act to trade name products for general marketing in New Zealand.

Provisional registration – authorisation issued under section 27 of the ACVM Act for trade name products to allow them to be used for trial work to gather information about the product.

Approval in special circumstances – authorisation issued under section 8C for the use of a substance/product in specified circumstance in which registration would be inappropriate but restrictive conditions are needed and could be imposed to manage the risks without registration (e.g. urgent biosecurity use, research using substances that are not trade name products)

Listed as generally recognised as safe (GRAS) – authorisation issued under section 8B for a substance that can be used as an agricultural compound (or as an ingredient in an agricultural compound) without registration because it is of low regulatory interest.

Prescribed exemption from registration – authorisation issued under section 75 of the ACVM Act for groups of products that do not require registration, but prescribed conditions are needed and must be complied with.

Suspension and revocation of registration

What would prompt the suspension of a registration?

Suspension will be considered in cases in which a product does not comply with its conditions of registration, but action could be taken by the registrant to rectify the non-compliance in a reasonably short period of time.

What would be the consequence of registration suspension?

If a product registration is suspended, it would be an offence to import, manufacture or sell that product. Strictly speaking it would be an offence to use it as well, but NZFSA will be specific about the consequences in regard to use because in most cases product that has already been purchased with the expectation that it is compliant will be allowed to be used. If the non-compliance is so critical that even product that has already been sold poses serious risks, then NZFSA will issue a recall of that product.

How long can a suspension last?

A suspension can be issued only for three months with an extension for an additional three months. Therefore, the registrant has to take the necessary remedial action in that period of time. Once NZFSA has confirmed that the necessary remedial action has been taken, the suspension will be lifted.

What would happen if the remedial action were not taken?

Failure to complete the necessary action in the allotted time will result in the registration being revoked. Consequently, re-activation of the registration will not be permitted. An application for new registration would have to be lodged.

Will there be any warning?

NZFSA will advise the registrant that they or their product is not compliant with the conditions of registration. They will be advised that suspension is being considered. If it is decided that a registration must be suspended, the registrant will be advised accordingly. NZFSA will specify the remedial action that must be taken and the timeframe.

Will registrations be suspended in cases in which NZFSA considers that the conditions of registration are inadequate or inappropriate?

No, NZFSA will not suspend a registration if it considers the conditions must be adjusted. Adjusting conditions requires a reassessment of the registration under section 29.

How and when would NZFSA revoke a registration?

Revoking a registration is final. Assuming that the action was not prompted by a request from the registrant to cancel the registration, NZFSA would have to make the decision that the:

• product is not compliant (and cannot be made compliant) with the conditions of registration

• product now poses unmanageable risks, or

• the registrant has not paid the necessary fees to maintain the registration.

In all cases the registrant would be advised of the intended action along with the required action needed to avoid revocation.

What would prompt reassessment of a registration?

A registration may be reassessed when new information indicating that the original decision to register the product may no longer be appropriate at all or without modification of the conditions of registration comes to hand. The registrant would be advised of the new information and that reassessment is being considered.

Product recall

When would product recall be used?

A new power in the amended ACVM Act allows NZFSA to recall product from the marketplace. This will be done only if it has been decided that the product poses immediate risks and any further use of product that has already been sold is not acceptable.

Product recall will occur only with the agreement and direction of the Minister. Affected parties will be advised and will be given an adequate explanation of the reason why such a significant action was being taken.

Operating plans

What is an operating plan?

The amendment to the Act provided NZFSA with the power to approve operating plans. This will become a commonly used tool to give effect to certain conditions of registration or, in some cases, conditions on exemptions from registration.

An operating plan is the minimum required documented description of a specified process or activity (approved by NZFSA or not), either in general or as it refers to a specific agricultural compound, substance or product. Operating plans are the statutory equivalent of quality systems such as Site Master Files for manufacturing agricultural compounds; or Institutional Operational Plans for the use of restricted products in research, testing and teaching organisations. They are organisation-specific and they are not industry/sector codes of practice.

Will NZFSA continue to approve codes of practice and will there be a statutory requirement to comply with an approved code of practice?

NZFSA will no longer approve codes of practice and there will be no statutory obligation for code approval or compliance.

Who prepares an operating plan?

Operating plans are prepared by the regulated party and contain specific information about:

• overall responsibility

• quality assurance

• the production/process/activity quality control carried out at a named site and any closely integrated operations at other sites

• security.

When will operating plans be required?

It is NZFSA’s intention to make certain activities subject to operating plans. For example, it is intended to prescribe minimum requirements that must be met by any party manufacturing an agricultural compound. One of those requirements will be that they must have an operating plan. In cases of suspected or alleged non-compliance, NZFSA will investigate and will expect to examine the operating plan to compare performance to the plan.

Another example would be in cases of certain approvals in special circumstances in which the approval will be contingent on compliance with an operating plan.

What will be the consequence of not complying with an operating plan?

Where it is a statutory requirement to comply with an operating plan, failure to do so may be:

• a breach of conditions of authorisation

• a breach of Regulations

• a breach of the ACVM Act itself.

In these cases it will be an offence that, upon conviction, may result in heavy fines and/or imprisonment and, possibly, the loss of the relevant authorisation.

In other cases, there will be no statutory obligation and, consequently, no offence if a party does not comply with an operating plan. However, non-compliance is likely to jeopardise some other approval or status. For example, one of the new provisions of the amended Act is the recognition of persons to carry out functions required. One of the requirements of recognition will be compliance with an operating plan. Failure to do so is likely to result in the removal of recognition. Further activity carrying out that function without NZFSA recognition would be a statutory offence.

Will operating plans always have to be approved by NZFSA?

Prior approval of an operating plan by NZFSA will not be required in all cases. In many cases, the obligation to have a plan will be imposed and parties must have such plans. NZFSA will examine the plan in an investigation but no prior approval of the plan will be required.

In certain cases, the operating plan will have to be approved by NZFSA as a prerequisite to being recognised to carry out that function. Prior approval will be required when:

• official assurances are requested by the regulated party (facilitate certificates of compliance)

• assurances are required under other New Zealand legislation (animal or plant produce being used as food or feed)

• official international or bilateral requirements are imposed (GMP manufacture of veterinary medicines)

• non-compliance poses significant risks of harm (restricted sale/use vertebrate toxic agents) or undermines the authorisation programme (manufacture of export-only products), or

• minimum Government expectations require assurances (e.g. sale of 1080 and cyanide).

Who will have to have operating plans?

Operating plans will be required for the following:

• manufacturers of any agricultural compound

• manufacturers of export-only agricultural compound trade name products

• research, testing and training organisations using restricted products or substances exempt from registration if parties have operating plans

• parties using substances/products under approvals in special circumstances

• persons recognised to trade in specified restricted products

• persons recognised to authorise specified restricted products.

Who will have to have their operating plans approved by NZFSA?

Prior approval of operating plans will be required for:

• manufacturers of veterinary medicines and restricted sale and use VTA products

• traders in restricted products

• manufacturers of export-only products

• organisations using substances/products under approvals in special circumstances.

Recognised persons

What functions will have to be done by recognised persons?

The amended Act provides NZFSA with the power to recognise persons to carry out functions required under the Act. This will become a commonly used tool to give effect to certain conditions of registration or, in some cases, conditions on exemptions from registration.

Recognition from NZFSA will be formal in most cases. However, in the case of veterinarians recognised to carry out the functions of authorising the supply of veterinary prescriptions and restricted veterinary medicines, NZFSA accepts a current practicing certificate issued by the Veterinary Council of New Zealand as sufficient recognition to carry out that function.

The functions requiring recognition of the persons involved will be:

• manufacturing veterinary medicines and restricted sale/restricted use vertebrate toxic agent products

• manufacturing export-only agricultural compound trade name products

• research, testing and training activities using restricted products or substances exempt from registration if parties have operating plans

• certain approvals in special circumstances

• trading in specified restricted products

• authorising specified restricted products.

Who will require recognition?

The following will require recognition:

• manufacturers of veterinary medicines and restricted sale and use VTA products

• traders in restricted products

• manufacturers of export-only products

• organisations using substances/products under approvals in special circumstances

• persons authorising the supply of certain restricted products.

Can organisations be recognised or only individuals?

In all cases it is a person with overall responsibility who will be recognised. The function involved will have an influence on the complexity of the operation/system. NZFSA is prepared to extend recognition to the organisation of the responsible person if their operating plan is sufficiently detailed and robust to control personnel involved in the functions when those persons are not individually recognised by NZFSA.