The Treasury of New Zealand, July 28, 2006


Policy Perspectives Paper 06/06

[Rachel's introduction: In New Zealand, the Treasury has issued a report arguing that the precautionary principle needs to be implemented carefully, to get the most benefits while minimizing economic disruptions.]

By Linda Cameron


This paper, published by the Treasury of New Zealand, assesses whether a more generic and consistent approach is required to environmental risk management in New Zealand.

The precautionary principle has been developed as a means of avoiding danger to human health and the environment in situations where there is a high degree of uncertainty and the effects of policy decisions are possibly irreversible. The definition most widely quoted is from the 1992 Rio Declaration, which states that: "where there are threats of serious or irreversible damage, lack of full scientific evidence shall not be used as reason for postponing cost-effective measures to prevent environmental degradation".

There has been rapid growth in the adoption of the precautionary principle in international agreements and the laws of many countries, including New Zealand (for matters such as hazardous substances and new organisms, biosecurity and fisheries). However, it remains highly controversial. Variations in how the precautionary principle is interpreted and applied can create problems, including the potential for significant costs to society through stifling economic development and technological innovation. The principle offers little guidance for regulatory policy.

The precautionary principle needs to be considered in the context of a more generic risk management framework, with clear guidelines that provide a systematic approach to setting the best course of action under uncertainty. Such an approach could assist in determining when and how the principle should be applied to manage risk and uncertainty while minimising potential economic costs. A key benefit is that it could support activities that foster development and innovation (that may not proceed otherwise), through focusing on alternative ways of implementing the precautionary principle, while still aiming to minimise or mitigate risks. This could enable the greatest returns to be achieved with acceptable results, costs and risks.

Currently in New Zealand, the precautionary principle is not being applied in the context of an integrated risk management framework (unlike in the European Union, the United States and Canada). There is also a lack of guidelines on implementation. Clear guidelines could help ensure a more consistent and subtle approach that explores a wider range of options.

Draft guidelines developed in Canada could be relevant to New Zealand and would be the most applicable from an operational perspective. Key benefits include: a more participatory approach and increased consistency with international commitments and across domestic legislation and regulatory regimes. Possible limitations include the potential cost of participatory processes and successful implementation being highly dependent on support from government agencies. Implementation issues would require further exploration.

This working paper is available to view or download in Adobe PDF format: tpp06-06.pdf (157 KB)

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