A consistent theme from APHANZ members is, the current approach by regulators to risk is out of balance. In this article, APHANZ board director, David MacGibbon CMInstD explores risk from a governance lens.
Governance and risk - context matters
In our sector, risk is assessed by two regulators under two different legislative regimes: the Hazardous Substances and New Organisms (HSNO) Act, administered by the Environmental Protection Authority (EPA), and the Agricultural Compounds and Veterinary Medicines (ACVM) Act, administered by the ACVM Group in the Ministry of Primary Industries. This dual structure creates fragmentation in how risk is interpreted and managed.
From a governance perspective, risk is not just about hazard—it’s about context. The ISO 31000 definition of risk as, “the effect of uncertainty on objectives” is a useful starting point, but boards must go further in line with the NZ Institute of Directors Four Pillars. We must understand risk in relation to business outcomes, sector realities, and national priorities. Governance sets risk appetite for the organisations they are responsible for, and in the public sector, legislation defines the framework for assessing risk.
The fear of something going wrong can be a powerful force, but it can also be mastered through operational decisions that are evidence-based, informed by current science, real-world data, and proportionality.
We accept the vital role that regulators play in ensuring products are safe, used safely and do not compromise trade agreements. Industry is not asking for a free pass. It’s about balancing caution with responsiveness, proportionality, and scientific progress.
Agricultural and Horticultural Products Regulatory Review
One of the key findings from the Ministry for Regulation’s review was that our regulatory systems are effective at managing risk, but they are not enabling timely access to new and innovative products. These next generation products often offer the potential to replace older chemistry with greater efficacy and enhanced safety for people and the environment. Regulation is disproportionate to the actual risk, and concerns around regulator resourcing, engagement, and the tools used to assess applications persist.
These findings echo Public Service Commissioner Sir Brian Roche’s observation that excessive risk aversion can paralyse progress.
Getting the risk settings/balance right is essential to unlock innovation, support trade and answer the calls of farmers, growers, veterinarians, and innovators for a more responsive, proportionate regulatory system.
As a board director of APHANZ, I believe this is a critical governance issue— often overlooked, but speaks directly to our sector’s ability to innovate, compete, and contribute meaningfully to government’s Going for Growth agenda.
Sir Bill English in his keynote address at our 2025 annual conference in June, reminded us that while safety ensures security, calculated risk is essential for progress.
As a board of an industry association that represents over 80 global and New Zealand companies that manufacture, distribute and sell animal and health products, we are calling for decision-making based on a balanced risk framework—one that clarifies which risks matter most, how they’re being managed, and at what cost.
Industry knowledge is not capture - it’s context
Regulatory capture occurs when a regulatory agency, established to act in the public interest, becomes influenced by the industry it oversees—resulting in decisions that favour industry interests over broader societal outcomes. This is a legitimate concern, and APHANZ supports the continuation of a fair, neutral, and proportionate system.
But industry knowledge is not capture—it’s context. Industry can bring real-time insights into risk exposure, probability, and impact. Incorporating this expertise through structured engagement and feedback loops builds trust and strengthens decision-making.
Risk and use of the precautionary principle
Understanding the risks that matter most is a first step to risk balance, yet there does not appear to be a common operating picture on these for new product approvals.
Adding to the uncertainty is the EPA’s use of the precautionary principle(#1) which says —“if we’re unsure, we pause and say no for now”. Precaution operates on a sliding scale and where applications of strong formulations of the precautionary principle are applied, a technology which brings advantages may be banned by the precautionary principle because of its potential for negative impacts, leaving the positive benefits unrealised(#2).
A recent paper from the University of Massachusetts(#3) also highlights that “precautionary principle-based decisions reflect outdated science and risk-management principles” and “failure to use updated science and decision science may result in more harm than good”. Others have also viewed(#4) “the principle as a tool to halt progress.”
Diversity of thought is essential for performance at the board table. That includes risk, in a system that is shifting from precaution to paralysis, and where the cost of inaction is mounting.
The recent hydrogen cyanamide reassessment is a case in point: after four and a half years and millions in cost, the final controls applied to the product mirrored what industry had already been doing for almost a decade. This is not a system that supports innovation—it’s one that penalises it.
Delegating lower-risk decisions
We have a governance responsibility to use best practice approaches to manage risk. We can go further, faster and expect to see governors of regulators explore options to delegating lower-risk applications through group standards, harmonisation, and light-touch pathways, freeing up regulatory capacity and deliver results on the ground. These are practical, proportionate steps that can be taken right now.
Why this matters?
If agrichemical companies see the risk of delays and red tape in the regulatory approval process as outweighing the benefit of investment in R&D, then New Zealand will fall behind. This has already started, with Bayer recently exiting crop R&D in New Zealand after 64 years.
That’s not just a regulatory issue—it’s a strategic governance challenge.
In the words of John F. Kennedy: “there are risks and costs to action. But they are far less than the long-range risks of comfortable inaction.”
We are currently inside a rapidly closing window of opportunity for those in governance positions for the regulators to review the risk settings and make a genuine commitment to direct a more balanced approach.
Considered decisions made and articulated with exigency, clarity, and a renewed commitment to balancing risk are essential actions. The future of our agricultural and horticulture export-led industries depend on this because delays in approving new biologicals and low-risk products are now seen as a barrier to sustainability, innovation, and trade.
The greatest risk - is not having these products at all.
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