Opportunities for New Zealand agriculture
The development of internationally recognised environmental management standards is likely to have a significant impact on New Zealand export businesses. As consumer incomes have increased in developed countries, personal values associated with, for example, environmental aspects of food quality and animal welfare, have increasingly influenced purchasing preferences. Consumers wanting to differentiate their purchases on the basis of these characteristics are seeking assurances not only of the health and quality status of the products themselves, but also of the ways in which the products were produced. Internationally credible systems which give consumers assurances about these quality attributes are being sought, and the ISO 14001 EMS standard is being designed to provide just that.
At the "GATT - Capturing the Opportunity" conference held in Wellington in 1994, Mr David Irving, Area Director, Heinz/Wattie’s Australasia described the context within which environmental management standards will operate. He said:
"As countries are forced under the terms of GATT to reduce transparent trade barriers, so non tariff trade barriers are likely to become more important. Issues relating to the environment, animal welfare and food safety are likely to be paramount. Excellent and consistent quality management and assurance systems from paddock to the supermarket shelf will become even more critical if we are to effectively manage our way through regulatory minefields and cultural sensitivities in the course of getting our products on the tables of consumers. Consumers are reading our labels for evidence which will encourage purchase of one product over another. This is not the behaviour of some lunatic fringe, it is becoming a mainstream activity in export markets and we should encourage it."
One of the concerns expressed about environmental standards is that they might become barriers to trade. Under GATT rules, the ISO 14001 standard cannot be used as a non tariff trade barrier. GATT rules do not allow any importing country to require compliance with standards such as those being developed by ISO. Because these standards address company management practices rather than any particular characteristic of traded products, these standards cannot be used by importing countries as mandatory technical measures under GATT rules.
However, customers may choose to seek compliance with these standards from their suppliers. While the New Zealand government can maintain official market access under the new GATT rules, New Zealand exporters will need to ensure that they can meet the specific requirements of their customers, insurers and lenders, which may include evidence of environmental management practices. Such evidence could be in the form of compliance with recognised standards. Certification to these standards would demonstrate to customers that companies have reached a bench-marked and globally acceptable standard.
Competitive environmental advantage for New Zealand’s agricultural produce will come largely from the quality of our production processes:
- proof of the natural farming conditions in which products are produced;
- the relatively low levels of inputs required over the whole process from paddock to plate; and
- practices to avoid, remedy or mitigate any off-site effects of production.
Differences between New Zealand’s farming environment — climate, pastures, soils and animal care — and that of our competitors, can be highlighted to New Zealand’s advantage.
Given its natural environmental endowments of climate and productive soils, New Zealand is well placed to take advantage of a "green market". But capturing the gains from this market shift will require more than companies complying with an international standard. Environmental indicators at the farm level need to be seen as being quality attributes with marketable value. Exporters can help provide incentives to producers to farm and grow their products in a more sustainable way by incorporating these attributes in their marketing strategies.
Should New Zealand exporters choose to incorporate this advantage in marketing strategies, competitors can be expected to counter-attack by highlighting perceived deficiencies in New Zealand’s stated environmental performance. Visible and verifiable quality assurance systems will be increasingly important to provide consumers and trading partners with the confidence they demand about the origins of agricultural products. "Quality" in environmental terms will increasingly extend beyond the safety and purity of any particular product to the way in which it has been produced and in the way lapses are detected and put right.
For companies in New Zealand, the incentive to establish environmental management systems, and then seek certification to the 14001 standard is twofold. In addition to the marketing imperative, regional and district plans under the Resource Management Act (RMA) 1991 are beginning to be finalised. In many cases, they will become final plans at the same time as the ISO 14001 standard is released. The ISO 14001 Environmental Management System Standard will be a vehicle that has the potential to provide councils with the assurances of environmental practices they seek within their RMA accountability. Many of the plans currently at submission stage are encouraging the adoption of best practical options or practices that mitigate or avoid adverse effects on the environment. Some mention codes of best practice as an acceptable means. The ISO 14001 standard has the potential to satisfy this domestic requirement, and enhance market access opportunities, while minimising the overall costs of compliance.
Clearly, there will be other means of providing environmental assurances in the future. Certification to the ISO 14001 standard will not be the only way ahead, but if recent history (ISO 9000)is a guide, it will play an important part.
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