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It’s fair to say that Aotearoa New Zealand’s approach to regulation (and empowerment) of the rapid adoption of AI-enabled solutions has been conspicuous in its absence to date. New Zealand’s Privacy Commissioner is the only regulator to have released substantive guidance for businesses adopting AI-enabled solutions (see our thoughts on that here). Meanwhile, we (and our clients) have been looking overseas to make educated guesses about what regulation may look like in New Zealand – in particular, the EU’s AI Act has become a yardstick for businesses looking for best practice (see our EU AI Act app for more on that).

It looks like that is about to change, with a strong signal from the Government on how the regulatory landscape in Aotearoa will be shaped. Happily, for businesses looking to leverage the transformational potential of AI, we are unlikely to see sweeping legislative reform – rather, a pragmatic, risk-based approach is on the cards.

Find out more below.

What’s the news?

On 25 July 2024, the Minister of Science, Innovation and Technology – Hon Judith Collins KC (Minister) published a Cabinet paper seeking agreement from Cabinet’s Economic Policy Committee on a strategic approach for New Zealand’s use of artificial intelligence (AI) (Cabinet Paper). The proposed approach aims to boost public and economic confidence in the use of AI.

The Minister is promising a “light-touch, proportionate and risk-based approach to AI regulation”. The approach would leverage existing laws as guardrails and only introduce new regulation to “unlock innovation or address acute risks”. We agree with the Minister’s proposed light-touch approach to AI regulation as we, and no doubt the Government, are closely watching key international developments on the regulation of AI, in particular the EU’s AI Act which came into force on 2 August 2024. The AI Act is a world first attempt to regulate the use of AI and it remains to be seen how this could influence, if at all, the Government’s approach to AI regulation in New Zealand.

The key elements of the Cabinet Paper are summarised below, including the current challenges for AI adoption in New Zealand, and the Minister’s five proposed domains for decisions and action in AI policy.

“New Zealand is behind its peers”

Alongside this strong statement of the need for progress, the Minister identifies key challenges to the success of AI in New Zealand, including:

  • mistrust of AI technology, particularly regarding its use for malicious activities and the security of personal data;
  • low and slow uptake in the economy because of a dearth of skills, strategic vision and information, the prohibitive costs of AI solutions and a lack of confidence in the legal and ethical implications of AI due to regulatory uncertainty; and
  • limited adoption with public service agencies owing to similar concerns regarding managing privacy, security, and ethics/bias.

Addressing the challenges

The Cabinet Paper proposes five domains of decisions and actions for AI policy. We address each in turn.

  • Setting a strategic approach

    The first step of the proposed strategic approach is an expression of support and encouragement for AI use. The accompanying regulatory approach is promised to be proportionate and risk-based – as adaptive and agile as the technology it governs.

    Instead of producing a standalone AI Act, the Minister proposes drawing upon existing regulatory frameworks (eg privacy, consumer protection, and human rights) that are largely principles-based and technology neutral, as well as voluntary guidance, industry codes, technical standards, and audit requirements. This would also allow New Zealand to draw on, and adapt with, international developments and best practice as they happen.

    • Enabling safe AI innovation in public services

    When considering the use of AI in the public service, the Minister is cautious of the need to balance AI efficiencies against the imperative for social licence and trust. Underpinning a governmental AI roll out is the Government Chief Digital Officer who “will support agencies to safely adopt and innovate with AI and steward AI uptake for the system overall”.

    • Harnessing AI in the New Zealand economy

    To facilitate the use of AI throughout the economy, the Minister has instructed the Ministry of Business, Innovation and Employment (MBIE) to produce risk management-based guidance for firms, and an AI Roadmap to support AI in the private sector. The goal is to unlock AI technology for innovation, productivity, and export potential.

    • Prioritising our engagement on international rules and norms

    The Minister asserts the importance of New Zealand being involved in key international discussions. The Ministry of Foreign Affairs and Trade (MFAT) is currently leveraging global networks and tracking international initiatives and has been encouraged to provide AI advice to other agencies. The Organization for Economic Co-operation and Development (OECD) AI Principles are also said to be a key direction for New Zealand’s approach to responsible AI. New Zealand is closely following global trends on AI – you can read our article here to learn more.

    The Minister notes that globally, countries are actively shaping AI standards to support economic and security ambitions. It is crucial for New Zealand businesses looking into AI to be across these conversations. You can read DLA Piper’s summary of a set of international guiding principles launched by the governments of the Group of Seven (G7) here and The Council of Europe’s first-ever binding AI international treaty here.

    • Coordinating with work on national security

    The Minister notes that AI can be both a threat and a tool to protect national security. The Department of the Prime Minister and Cabinet is the lead strategic coordination agency for the national security responses to emerging, critical, and sensitive technologies.

    Treaty of Waitangi

    The Minister acknowledges obligations of the Crown under the Treaty of Waitangi (New Zealand’s constitutional document between the Crown and Māori, the Indigenous peoples of New Zealand). In particular, the Minister notes the work of the Data Iwi Leaders’ Group (Data ILG) and the need to ensure Māori share the benefits of AI developments.

    The Data ILG was established in 2016 to respond to the increasing need for iwi (Indigenous extended kinship groups) to better harness the potential of data to enable iwi development and to advance data and digital kaupapa (policy) with the Crown. Data ILG aims to ensure full, free access and control over data about and for iwi, to empower iwi development. You can read more about the work of the Data ILG here.

    Next steps / implementation:

    The Minister offers to return a cross-portfolio AI work programme to Cabinet in September 2024, and a review of progress across all domains in mid-2025.

    The Cabinet Paper is just one part of a system-wide project to build New Zealand’s trust and confidence in AI. Other projects include Statistics NZ’s Centre for Data Ethics and Innovation, and the Office of the Privacy Commissioner’s guidance on privacy and AI.

    When consulted on the Cabinet Paper, the Privacy Commissioner expressed concerns about the extended timeframe for the national approach on AI, particularly given immediate issues, such as resolving uncertainty about how existing regulatory frameworks apply to AI.

    The Privacy Commissioner has convened the Digital Regulators Forum to explore progressing public-facing guidance for businesses on how existing regulations apply to and support the responsible use of AI in the near term. Members of this forum include the Ministry of Business, Innovation, and Employment, the Department of Internal Affairs, Statistics NZ, and the Commerce Commission.

    Want to know more?

    DLA Piper is a global legal leader in advising many of the world’s most prominent companies and governments on the legal and compliance risks of creating, using and deploying AI. We have also developed tools and resources for our clients to assess their AI maturity and readiness to implement AI solutions and keep up to date with the latest AI insights. If you want to know more, check out:

    • our dedicated EU AI Act app – where you can navigate, compare, bookmark, and download articles of the Act;
    • AI Focus – where you can stay informed on AI developments and insights; and
    • our AI and Employment Podcast series – discussing the key employment law issues facing employers arising out of AI.