Parliament has rejected David Seymour’s bill three times in the past two decades. The bill will elevate corporate rights above all else, writes Ryan Ward. (Photo: Samuel Rillstone RNZ)

David Seymour’s Regulatory Standards Bill, which passed its first reading under urgency last week, is now in the public consultation phase, with submissions closing at 1pm on June 23.

This bill includes a frightening principle that sets the stage for corporate interests to trump all public and Indigenous rights, explains Ryan Ward.

The Regulatory Standards Bill threatens to upend the entire framework under which Māori have been able to challenge corporate infringement of Indigenous rights here in Aotearoa.

Indeed, given the bill’s broadly defined principles, which serve as the ideological measuring stick against which all legislation must conform, there is the real possibility that its passage could open the door to corporations suing the government for regulations that protect Indigenous rights.

Even more perversely, Māori groups may be required to reimburse corporations for any loss to their profits that results from government regulation that protects the environment and Indigenous land claims.

This couldn’t really be the case, could it?

After all, the bill has been framed by Seymour and his corporate backers as merely a sensible bill that will increase transparency and accountability. All the think-pieces by business organisations, such as the New Zealand Initiative, stress this framing.

They would like us all to think that this is a little piece of legislation that doesn’t deserve any public scrutiny. That there’s really no reason to be concerned.

But none of them, including Seymour, will explain why the bill has been rejected by parliament three different times in the last 20 years. Nor why business interests conceived the initial bill and are pushing so hard for the bill to be passed. Nor why Seymour’s own Ministry for Regulation has said the bill is not necessary and recommends it be rejected.

For a “commonsense” bill, none of this makes sense.

The reason is that the bill is not just a commonsense piece of legislation designed to make regulation better. It is an undercover attempt to normalise a legislative framework that prioritises a libertarian ideological worldview, which holds private property as the most sacred right of all. It lays out a framework to protect private property against any interference, including and especially regulation that is in the public’s interest.

Seymour and ACT claim that no one should argue against the protection of property rights. But the situation quickly becomes complicated when we realise that according to New Zealand law, corporations have the same rights as people. When we realise this and read the bill through this lens, it’s easy to see that the bill will heavily shift the balance of power from the people to companies.

This is most evident in the third principle of responsible regulation (Part 2, Subpart 1): Taking of property.

This principle states that legislation should not “take or impair” property without the consent of the owner, unless there is a good reason and the person is compensated for their loss of property. This is known as a “regulatory takings clause”.

Because corporations have many of the same rights as people under New Zealand law, what this means in practice is that if government regulation or policy results in a corporation’s property being taken or diminished in value, the government must compensate the corporation for this loss.

Applied to the real world, this means that anything the government does that decreases corporate profits opens it up to possible legal action.

When we consider that much of the regulation that affects corporate profits has to do with the government enacting policy that protects the public or environment, you can see how this type of “regulatory takings clause” sets the balance of legal power heavily on the side of corporations, and against the public good.

This kind of “takings” can be applied to any kind of regulation that is made in the interests of the public. For example:

Companies that have their carbon emissions targeted by government can claim a loss of property if they are unable to operate at capacity.

An agribusiness corporation can claim a loss of property if the government regulates against it polluting waterways or groundwater with its pesticide runoff.

A fossil fuel company can claim property loss if the government halts oil and gas exploration or attempts to tax the use of fossil fuels in vehicles as a way of reducing emissions.

A commercial fishing company can claim property loss if the government puts restrictions on its fishing activity.

A logging company can claim loss of property if the government restricts forestry to encourage conservation or protect endangered species.

A tobacco company can claim property infringement if a government attempts to regulate its marketing or packaging to include health warnings.

These examples may sound extreme, but corporations all over the world have used broadly defined regulatory principles exactly like those in the Regulatory Standards Bill to bring legal action on such grounds.

For instance, tobacco giant Philip Morris sued the government of Australia, claiming their inclusion of health warnings and grisly images of health problems caused by smoking constituted an illegal taking of their property. Mining companies have sued governments for enacting regulations that limit their mining on certain lands based on the claim that this diminishes the value of their property.

Aside from providing corporations with a legal avenue to challenge government regulation that’s in the interest of the public, this principle contains a section that is particularly worrying for us in Aotearoa.

It stipulates that in the case of required compensation for the taking of property, “the compensation is provided, to the extent practicable, by or on behalf of the persons who obtain the benefit of the taking or impairment.” This might seem sensible on the face of it: if the government benefits from taking property, they should be the ones to compensate the property owner.

But in Aotearoa, these kinds of legal battles are contested against the backdrop of violations of Te Tiriti. Legislation or court rulings against corporations are often made because of breaches of Treaty obligations. In other words, the parties who benefit from such legislation are Māori.

According to this principle of responsible regulation, if legislation affects corporate profits in favour of Māori, it is Māori who may be legally compelled to compensate the corporation for its loss of profits.

Moreover, activist groups or individuals who spearhead protest actions that limit the activities of corporations or reduce corporate profits can also be targeted in these types of lawsuits. Around the world, global oil, gas, and logging companies routinely target Indigenous groups and protesters with these types of lawsuits.

While the outcomes of these lawsuits are not always favourable to corporations, they are time-consuming and costly, taking time and resources away from other activities that Indigenous groups or activists can be engaged in. Corporations, on the other hand, have the money and resources to engage in many of these legal actions at once, often forcing the submission of those with fewer resources.

Often, the mere threat of legal action is enough to get governments to back off from regulations that are in the public’s best interest. This is known as “regulatory chilling”.

For example, following the legal action of Philip Morris in Australia, which the company lost, they sent a threatening letter to the government of Uganda, which had recently announced its intention to pass plain-packaging laws. The letter cited the opinion of the only judge who had supported Philip Morris’s claim that plain packaging constituted an illegal taking of property. Philip Morris then threatened Uganda with an “incalculable” amount of legal action, and the government there backed off its proposed policy. In fact, New Zealand delayed its own plain-packaging tobacco laws by several years during the Australian litigation. It’s obvious that such legal uncertainty and threats have a chilling effect on the willingness of governments to regulate in the interest of the public.

Seymour’s bill will also establish a Regulatory Standards Board, handpicked by the Minister for Regulation (currently himself). The board is granted sweeping powers to compel information for the purpose of compiling reports that would indicate whether legislation accords with their ideological principles for responsible regulation.

If the law doesn’t align, we can be sure that the board will publish these reports and take up a lot of media attention claiming that the government isn’t following best-practice recommendations. As always, this will be framed as costing the taxpayers more and not respecting their rights.

While the bill itself is not legally binding, the likely result is political pressure on ministers to include the principles of responsible regulation — including regulatory takings clauses — in their legislation to avoid bad press. Over time, this will heavily shift the policy landscape in favour of corporations. In my view, this is the overall purpose of the bill, and is the reason why business interests have been fighting so hard over the past 20 years to get it through parliament.

Finally, the alarm bells have sounded over the fact that there was no meaningful consultation with Māori during the drawing up of the bill. The urgent hearing on the bill by the Waitangi Tribunal found serious issues. It recommended the bill’s progress through parliament be immediately halted until appropriate consultation takes place.

Significantly, the bill itself removes any role for the courts in terms of arbitration related to questions of interpretation and application of its principles. Instead, discretion sits solely with the Minister for Regulation and the Attorney-General (now Seymour and Judith Collins).

This bill sets out to achieve exactly what the failed Treaty principles bill aimed to do. The Regulatory Standards Bill is an attempt to eliminate the protections against corporate exploitation provided by the Treaty. Whereas the Treaty bill attempted to redefine away these protections by changing the meaning of the Treaty principles, the Regulatory Standards Bill attempts to sidestep the Treaty altogether, with no mechanism for legal recourse.

Instead, the bill may very well open the door for corporations to force Māori to pay for their own exploitation and the erasure of their Indigenous rights and lands.

Ryan Ward is a senior lecturer in psychology at the University of Otago.

Information for making a submission on the RSB can be found at these links:

Submission builder tool here

Make your submission on the bill here

Up to date information and sources on the RSB

E-Tangata, 2025