How to Join HEA

Prospective New Product Groups

Procedure for New Product Groups Seeking Recognition under the HEA Act 1987

Recognition of a Product Group is in the form of an Order in Council made on the recommendation of the Minister of Agriculture to the Governor General (all future references to “the Minister” refer to the Minister of Agriculture). Before making a recommendation the Minister needs to be satisfied that: Propective New Product Groups

the Product Group is suitable,
those affected by the request i.e. growers, exporters and other industry participants have been informed of the fact and nature of the request (the Product Group will need to demonstrate this ),
reasonable time for the making of representations concerning the request has elapsed, and
it would be in the interest of the export marketing of the product that the order be made.

These requirements are set out in section 25 of the Act.

An industry body can elect to come under HEA at any time provided there is sufficient industry support for this to happen. Similarly, a Recognised Product Group can exit HEA by notifying HEA and the Minister and requesting the Order in Council to be revoked under section 31 of the Act.

For a successful application HEA strongly recommends that the industry group and HEA work together in conjunction with MPI Policy. It is also critical that the industry group has a good understanding of HEA and how the Product Group would operate under HEA.

The following guidelines outline the steps to be taken by a prospective Product Group interested in coming under HEA.

Preliminary Meeting with HEA

Meet with HEA to discuss how HEA works, the strengths and weaknesses of HEA, the benefits and costs of being a Recognised Product Group (RPG) and the process and timeframe to become a RPG.

Product Group Formation

Growers and exporters agree to form a Product Group. Where there are no current exporters, provision must be made for exporter representation within the Product Group.
Meet with HEA to discuss an appropriate legal entity for the Product Group.
Formation of the Product Group:

The group must be a legal entity e.g. an incorporated society or limited liability company.

Where an existing legal entity exists, this structure could be used, however the rules/constitution may need to be amended to reflect the wider representation base i.e. exporters and growers.

Alternatively a new group, separate from the existing (grower) group could be formed.

There are two issues to be considered:

whether or not the existing structure adequately represents the growers and exporters of the product to be specified, and
whether or not the industry believes its needs would be best met by a combined group i.e. growers and exporters representing the industry or whether a grower organisation separate from export business is retained.

Please note that a number of Product Groups have made provision for packhouse representation, acknowledging the packhouse contribution to the export industry.

Develop documented proposal for industry consultation

The proposal to become a Recognised Product Group under the HEA Act needs to be formally documented for circulation to stakeholders in accordance with the consultation requirements of S25 of the Act. The proposal should contain a clear explanation of why the Product Group is seeking to operate under the HEA framework.

Conduct Industry Consultation

Prior to making an application to the Minister the Product Group must consult growers and exporters of the product and any other persons that would be affected by the making of an Order in Council.

The Product Group will need to document its consultations and demonstrate to the Minister that reasonable efforts were made to inform the appropriate parties. Growers and exporters must be given a reasonable amount of time to make representations to the Minister.

HEA strongly recommends that the Product Group take the following steps, to provide evidence to MPI and the Minister that the industry supports the application. The Groups is advised to:

compile an up-to-date and comprehensive list of growers and exporters,
widely publicise the intention to apply for Recognised Product Group status,
hold grower and exporter meetings,
send written information to growers and exporters,
publish articles in grower magazines and newsletters, and
consider holding a support referendum if necessary to demonstrate support.

Under the Act there is no requirement to hold a referendum. However, the Minister will consider representations made concerning the request to come under HEA and the extent and nature of any opposition. Growers and exporters must be advised that they have this right. While there is no requirement to hold a referendum it is often the simplest way to measure support.

Draft Application to HEA

In determining whether or not to recognise a Product Group the Minister will have regard to the Authority’s views on the suitability of the group to be a Recognised Product Group as outlined in Section 25 (3) (e) of the Act.

Before making an application to the Minister, the Product Group must first prepare a draft application (with HEA’s assistance if required) for HEA to review. HEA will then liaise with MAF Policy on the draft application.

If the Product Group wishes to have the Authority’s support for the application then it is essential that this step be followed.

Formal Request to the Minister

Once HEA has given its approval of the draft application, the Product Group can then proceed with its formal request to the Minister as outlined below.

(i) Letter to the Minister

Write to the Minister of Agriculture requesting:

that the group be Recognised as the Product Group under section 25 of the Act,
the product(s) to be “prescribed“ under the Act (Genus & species),
whether any variety / cultivar is to be excluded, and
whether export licensing under part 3 of the Act is to apply.

(ii) Product Group Information

The following information on the prospective Product Group needs to be supplied to satisfy the Minister that the Product Group is suitable and that it would in the best interests of the export marketing of the product that the group be recognised.

Name and legal form, e.g. incorporated society.
Membership and representation (names of members, who they represent & method of election).
The proportion of growers and exporters represented by the Product Group (of the known total number of active producers and exporters of the product).
The existence, size and nature of any other group(s).
The existing and any proposed method of funding of the prospective Recognised Product Group.
General information about the product:
- area grown,
- present & forecast, and
- number of growers and their geographic distribution.

(iii) Industry Information

Comments on the “state of the industry” and any current problems or issues, explaining why it would be in the interest of export marketing of the product for the group to be Recognised and for export licensing to apply.

(iv) Industry Consultation

Specify the industry meetings and conferences that have been held to discuss the request to become a Recognised Product Group under HEA. Also provide evidence of other forms of consultation e.g. written information and support referendum.

(v) Publicity of the Application

At the time of application to the Minister, the Product Group will need to publicise the fact and intent of the application (i.e. which product and whether licensing will apply). List the newspapers, journals and magazines into which the Product Group intends putting public notices advertising the request to become a Recognised Product Group under the HEA Act. All growers, exporters and other persons affected need to be aware of the application and must be given the opportunity to participate in the consultative process.

(vi) Export Licensing

If the Product Group is to be subject to export licensing, the Minister must be advised that an EMS is being formulated by exporters and growers, with the assistance of the Authority. Once the Order in Council has been made the EMS can be formally submitted to the Authority for its approval.

Export Marketing Strategy

All Recognised Product Groups intending to license exporters under the HEA Act must have a current Export Marketing Strategy (EMS) that has been approved by HEA.

The EMS is an industry document that creates a structure on which an industry can base its export focus. The EMS outlines the strategic direction and sets the rules that govern the industry’s operations and development for the export sector. The EMS aims to provide direction for the industry, set minimum standards for exporters, export growers and export packhouses and ultimately improve participant’s performance.

The EMS is a critical document in setting guidelines that are required to be adhered to by industry participants. HEA’s ability to take action for breach of an the EMS is diminished if the EMS is not precise and comprehensive in its writing. The EMS must cover all aspects of the industry relating to export. The standards and requirements need to be measurable and specific to enable them to be enforced. It must be clear from the terms of the EMS what participants are required to do and what conduct will result in a breach of theEMS .

HEA offers advice and assistance in developing and refining a robust and workable EMS. Product Groups may obtain copies of the EMSs developed by other groups to assist in developing their own document.

The Product Group in consultation with all industry participants develops theEMS . One of the strengths of HEA is that the industry creates the EMS and so is able to cover all the relevant areas. To be effective the EMS needs to have ownership and commitment by all parties i.e. growers, packers and exporters.

The HEA Board will only approve an EMS if:

there has been adequate consultation,
there is general consensus of the EMS ,
the terms of the EMS are reasonable,
the terms are clear, measurable and enforceable,
the long term effectiveness of the industry is improved,
it complies with the HEA Act, and
it does not contravene sections 4 (1) and (2) of the Commerce Act 1986.

Once HEA approves the EMS a date will be set by HEA when it is to come into force, at which point industry participants must comply with the conditions prescribed in the EMS . Failure to comply with the EMS by an exporter may be seen as prejudicial to the EMS by the HEA. This means that the exporter has conducted export operations that could threaten or undermine the industry’s reputation and therefore diminish current and future grower export returns.

Where the Authority first approves an EMS the Authority will place a notice in the Gazette specifying the date on which it was approved and the date for coming into force. From the date of coming into force any person who wishes to export the prescribed product will be required to hold an export licence. Notice of the EMS coming into force will also be published in trade journals. As soon as practical the Authority will supply a copy of the EMS to all existing exporters of the product.

When amendments to the EMS are approved, the Authority will confirm its decision to the Product Group and request the Product Group to circulate a revised copy to all licensed exporters. The Product Group will be required supply a signed declaration to HEA that this has been completed and will communicate the changes to all licensed exporters.

Also refer to Section 5 of this Manual for more information on Export Marketing Strategies.

Summary of the Process:

	Requirement	Estimated Time-frame
1	Preliminary Meeting with HEA	Hour(s) (i.e. not days )
2	Product Group Formation	Depends on the existing organisations & how they are operating
3.	Proposal formulation – documents for stakeholder consultation (this may include a draft EMS – refer point 7 below))	2-4 weeks
4	Conduct Industry Consultation – stakeholder meetings & allow for submissions to be made	Over 2-4 week period
5	Draft Application to HEA	Hours
6	Formal request to the Minister for Primary Industries: Letter to the Minister Product Group information Industry information Industry consultation summary Publicity of the application Whether the order in Council is to include export licencing	Preparation of documents = 1-2 days
7	Export Marketing Strategy (EMS) development and approval	1-2 weeks
8	Parliamentary Process (developing the Order in Council and ensuring it passes through the necessary Parliamentary Process include Cabinet approval, Governor General sign-off and Gazette notification)	4 months – application to implementation (MPI Policy estimate)

Note: A number of these timeframes could occur concurrently