"RESPONSIVE REGULATION" THEORY AND THE SALE OF LIQUOR ACT(1).

INTRODUCTION

Moderate and safe enjoyment of alcohol by those over 20, sold through a range of responsibly managed licensed businesses, is the policy ideal embodied in the Sale of Liquor Act, 1989. The Act liberalised New Zealand's traditionally restrictive licensing regime, and the number of on- and off-licensed premises and clubs selling alcohol has doubled. The Justice Department Review of the Act (Liquor Review Advisory Committee 1997) has recommended further liberalisations, including lowering the age of purchase to 18; Sunday trading by bars, bottleshops and supermarkets as well as restaurants; and permitting beer and spirits to be sold in supermarkets alongside wine. Amendment of the Act also provides an important opportunity to improve provisions on administration, monitoring and enforcement, and the way licensed businesses operate. Eight years of case law and regulatory practice under the Act provides the experience to fine tune the legal framework to ensure a system that works well for licensees as well as regulators, while addressing policy objectives.

As a contribution towards review of the Act, the Alcohol & Public Health Research Unit was funded by the Health Research Council to investigate regulatory theories based on research in a range of industries for insights relevant to their common concerns with the liquor licensing legislation(2) (see ALAC 1996a,b; Hill and Stewart 1997; Liquor Licensing Authority 1996, 1997). This paper draws primarily on "responsive regulation" theory (Ayres and Braithwaite 1992) to suggest changes to the Sale of Liquor Act that could encourage compliance by licensees, and contribute to cost-effective monitoring and community satisfaction.

Understanding arising from theoretical debates on regulation, illustrated by this example of theory applied to legislative practice, will also be relevant to other regulatory law that addresses public health risks and costs arising from business activities. Reviews of regulation or future legislative design in areas such as food hygiene, workplace health and safety, and environmental protection could benefit, in the authors' view, from consideration of some of the concepts and strategies reviewed in this project.

BACKGROUND

As Judge Holland noted (Hayford AP201/92), "the holder of a liquor licence ... is granted a privilege [that] permits him to sell liquor when others are not permitted to do so." The 1989 Act represents a shift from limiting the number of licences and the hours of trading to using regulation to require good management and "host responsibility" on licensed premises. The new policy direction is stated by Parliament in the Act's object (S.4) of "a reasonable system of control ... contributing to the reduction of liquor abuse, so far as that is possible by legislative means".

Theorists make the point that market liberalisation and privatisation have frequently been associated with increased regulation (Ayres and Braithwaite 1992:7-12). This has also been New Zealand's experience (Sharp 1994:2). Governments may shift control to less interventionist forms of regulation but they remain politically accountable for "market breakdown" or, at very least, may require information (Ogus 1994). The protection of public health and safety and the provision of health services are a responsibility of government that is brought home at every election. "The harm and hazards of ... alcohol use" have been prioritised as a health policy issue (Ministry of Health 1998) because of high social and fiscal costs resulting from intoxication (Hall 1997, Easton 1997). That is, despite the liberalisation of liquor licensing, the government remains accountable for the "externalities" of the market in alcohol.

The liquor industry points to a decline in overall consumption since the late 1980s (Beer Wine and Spirits Council 1998 and website). However, at 8.9 litre per adult aged 15 and over (year to 31 March 1998, Statistics NZ 1998), this average remains high compared to pre-war levels and to the three litres or less that represents the lowest risk for population mortality levels, cirrhosis and certain cancers (Anderson 1996:280). Patterns of drinking within a population are associated with harm to communities and families (Edwards 1994:33-40). In New Zealand the personal characteristics highlighted by statistics on heavy drinking are gender and age. Heavy drinking by males, particularly young males, is reflected in statistics on breath alcohol and road injuries (Land Transport Safety Authority 1996). Young men aged 18-24 are most likely to drink heavily and for this group drinking large amounts in hotels, taverns and clubs is an important predictor of alcohol-related harm, such as getting into a fight or drink-driving (Casswell et al. 1993, Wyllie et al. 1996, Dacey 1998).

Despite a minimum drinking age of 20, a series of Auckland surveys shows a trend among teenagers of binge-drinking increasingly large amounts (Alcohol and Public Health Research Unit 1998, Casswell et al. 1998). Among the 18-19-year-old drinkers, this trend was particularly associated with drinking in nightclubs, most of which have "supervised" licence designations permitting 18-19-year-olds to drink with a meal. Binge drinking by the 14-17 years was associated with other people's homes, meaning that the alcohol came from off-licensed premises permitted to sell only to those over 20 years of age. However, underage drinkers have reported meeting few refusals when purchasing alcohol (Wyllie et al. 1996). Longitudinal studies both here and in the United States show that the age at which people start to drink is predictive of alcohol-related problems in later years (Casswell and Zhang in press, Fillmore et al. 1991, Grant and Dawson 1997, Chou and Pickering 1992).

In research on the operation of the Sale of Liquor Act, inspectors, police and public health officers all reported underage drinking in their area and difficulties in enforcing current law (Hill and Stewart 1996, 1997; ALAC 1995a,b). There was satisfaction with the general direction of the 1989 Act, in particular with the profitable new "cafe society" that is replacing the old style "booze barns". However, local officers reported that resources limited routine monitoring of off-licensed and on-licensed premises, and efforts to cancel the licences of "problem premises" had been largely unsuccessful at the time of the research. There was also dissatisfaction with provisions related to public objection to licence applications and renewals, and the Liquor Licensing Authority itself feels "powerless" to respond to community concerns (LLA 1996, 1997). These difficulties are verified by review of the case law (Hill and Stewart 1998).

Clearly there are aspects of compliance, enforcement and public participation, which are not yet working as well as they might under the Act.

This paper addresses ways of maximising the "legislative means" by which sale of liquor policy is addressed. It reports on an investigation of liquor licensing in the light of regulatory theory. Reviews of recent theory and debate, liquor licensing case law and available research on licensing and enforcement practices led to a set of suggested amendments incorporating different ways of increasing "responsiveness". These were presented to 12 expert informants from both national and local levels of licensing, included lawyers, police, and policy advisors. Hospitality industry representatives were also invited to give their responses, but only one organisation accepted, representing independent off-licences. The amendments that received widest support are discussed below, and are being submitted to the parliamentary Select Committee and to MPs exercising their "free" vote on the Amendment Bill.

COMPLIANCE, ENFORCEMENT AND EDUCATION MODELS

The "responsive regulation" strategies developed by US law professor Ian Ayres and Australian National University Professor John Braithwaite aimed to "transcend the deregulatory debate" about different models of regulatory interaction developed to explain why firms do or do not comply with regulations (Burdach and Kagan 1982, Hawkins 1984, Scholz 1984, Black 1976).

The "enforcement" model takes the rather Hobbesian view that an "amoral, calculating" firm pitted against a rule-bound policing agency will break the law unless the anticipated penalties exceed the costs of compliance (Lamm 1992). In response, formal regulations adopt a "deterrence" strategy with enforcement "going by the book" to apply "sanctions" for regulatory violations (Grabowski and Braithwaite 1986). These may foster a business subculture of resistance, particularly if a rule is felt to be unreasonable (Ayres and Braithwaite 1992).

In fact, most firms do comply most of the time. This lends support for the "compliance" model in which the agency is "diplomatic" and treats the firm as a "political citizen" who is ordinarily inclined to comply out of belief in the law as well as long-term self-interest (Lamm 1992). Cooperation is assumed and compliance is encouraged through informal strategies of negotiation and conciliation, using the law as a last resort. Advocates note that large corporations are protective of their reputation, which suggests that informal pressure or publicity can be effective. This "compliance" model is the most common approach in actual practice in Britain, North America and Australia (Grabowski and Braithwaite 1986).

A third model distinguishes the regulator as "consultant" and the firm as "uninformed" -- of requirements or effects, or insufficiently in control of employees. This educational and advisory role was, for example, emphasised in the Robens Report (1972) which preceded workplace health and safety legislation in Britain, Australia and New Zealand.

While theorists distinguish between the models, actual practices may combine these styles of regulation (Sigler and Murphy 1991:15). The three models may be seen as embodied in the Sale of Liquor Act through the statutory roles of local police, District Licensing Agency inspector and Medical Officer of Health (although this last role is not supported by the same powers of delegation, entry and closure as the other two statutory agencies (Alcohol & Public Health Research Unit 1996)). Officers have reported most satisfaction with the Act and with local licensed businesses in localities in which all three agencies are working closely together. As a team, their differing perspectives and responsibilities enable them to respond appropriately to any infringement or undesirable management practices by a licensee. The regulation literature puts a theoretical spin on practices which local officers report to be highly successful (Hill and Stewart 1996).

"RESPONSIVE REGULATION"

Ayres and Braithwaite (1992) reflect empirical research into the regulation of business activities in a wide range of industries, from mining and nursing, to pharmaceuticals and finance. They work primarily with the first two models above, using an algebraic "prisoner's dilemma" game to explore dynamic interactions between regulator and firm. A punitive strategy alone, they argue, engenders a cat-and-mouse relationship, whereas informal, co-operative interaction risks regulatory "capture or corruption" should an officer begin to put business interests before public ones. They hold these two approaches in tension through regulatory practices that assume co-operation but employ a "tit-for-tat" response to a firm's actions. This "finesse at dynamic interactive deterrent escalation and at projecting an image of invincibility" is compared to the "regulatory accomplishments" of the dog:

   [Firstly] ... dogs are delightfully friendly to other creatures who
   cooperate with them ... Second, dogs are convincing at escalating deterrent
   threats while rarely allowing themselves to play their last card. They bark
   so convincingly that a bite seems more inevitable and more terrifying than
   it is ... in a way that is strategically responsive to the advance or
   retreat of the intruder. Friendliness can turn to a warning bark, then a
   more menacing growl, posture and raising of the fur transforms her ...
   teeth are bared, slightly at first, the dog advances slowly but with a
   deliberateness that engenders irrational fears that a sudden rush will
   occur at any moment. (Ayres and Braithwaite 1992:44)

Such interaction between firm and inspector requires a system that allows flexibility within a formal framework ensuring enforceability. Burdach and Kagan (1984) suggest that much of what is considered excessive in protective regulation springs from the over-inclusiveness of centrally formulated rules. Instead, Ayres and Braithwaite advocate systems based on firm-specific agreements to address a more general set of legal requirements, standards or outputs. They argue that allowing a firm to negotiate the detail of how the law will be complied with permits responsiveness to differences between operations and circumstances across an industry. That responsiveness to particulars, together with the personal involvement in negotiation, will, in their view, increase commitment to compliance.

THE LICENCE AS A FIRM-SPECIFIC AGREEMENT

The licence through which the sale of alcohol is regulated provides exactly the kind of the firm-specific agreement that Ayres and Braithwaite advocate. The application includes the licensee's proposals for type of premises, hours of trading, food to be provided and steps to avoid sales to minors and intoxicated persons. In granting a licence, the Authority is strictly limited in the matters it may consider, and the conditions it may set. The Act is more rigid in this respect than similar legislation in countries comparable to New Zealand in their legal history and drinking culture (Hill 1997). Local officers report negotiating informally with licence applicants to resolve problems (Hill and Stewart 1996). Some Authority Decisions document informal agreements between licensees and neighbours, noting that any breech would be considered to reflect on the licensee's "suitability" (e.g. Briant LLA 1004-5/95, Runana LLA 1047/95, Vershoor LLA 7114/96). However, the legislation as presently written cannot be used to formalise and enforce these solutions as a condition of the licence unless they relate to matters specifically listed, such as hours of trading or age designations.

This reverses the situation under the previous legislation. Under the 1962 Act, a licence could only be granted if there was a demonstrated community "need". If a licence was granted, the Licensing Commission could set conditions "as it sees fit". Under the 1989 Act the Authority finds itself unable to refuse a licence except where the applicant is shown to be "unsuitable" (Liquor Licensing Authority 1996), and has very limited discretion in setting licence terms. The case law shows that this rigidity is compounded by unusually wide appeal provisions. These allow the High Court to review Authority decisions not only on "points of law", but also on the crucial "point of fact" in granting or renewing a licence, the "suitability" of the licensee.

RESPONSIVE SANCTIONS

Once such a firm-specific agreement is concluded, Ayres and Braithwaite take a "responsive" approach to its enforcement. Drawing on a hierarchy of sanctions, escalating response to match the seriousness of any infringement enhances the "inevitability" of compliance. Ability to use the "big stick" should occasionally be demonstrated, they argue, but if this is the only sanction available, its use may be thought inappropriate not only by the firm but by the enforcing authority itself.

In its first years under the 1989 Act, the Liquor Licensing Authority demonstrated just such a reluctance to remove licences and livelihoods, as noted by the High Court (Holland J, Hayford 1992 NZAR 158, 171). Following reports from local officers, the Authority may decline to renew, or may suspend, cancel or vary the conditions of a licence. However, the wide right of appeal, an automatic stay of decision pending appeals, and emerging case law narrowing interpretation and possible action by the Authority, have not made licences "easy to lose" (Liquor Licensing Authority 1994), as was claimed on introduction of the Act. In recent years, the Authority has identified and utilised discretions not explicitly intended as sanctions, such as cutting back trading hours, granting renewal for 12 months rather than three years, or changing area designations related to age. In September 1996, the right to continue trading pending appeal of any Authority decision was repealed. In the past two years, the Authority has demonstrated increased willingness to cancel licences and grant short suspensions, with adverse effects on profitability. Some local officers report satisfaction with the response to news of suspensions from other licensees in their area.

Grounds for licence suspension or cancellation include breach of the law or licence, evidence of licensee "unsuitability", or conducting the premises in a disorderly manner obnoxious to neighbours. The Authority takes particularly seriously any police reports of sales to minors or intoxicated people, whether or not prosecutions have been laid. Auckland police report that more manpower and longer surveillance are required to obtain evidence of sale to minors from premises, such as off-licences and most nightclubs, where those under 20 may legally be present although their purchase of alcohol is prohibited or restricted to dining.

THE COMMUNITY PARTNERSHIP

A key element in "responsive regulation" is the value placed on "tripartism", the term Ayres and Braithwaite use in relation to involving public interest groups in regulatory decisions. They argue that this can have a number of benefits. Firstly, the "third party" at the negotiating table changes the dynamics between firm and regulator. Secondly, they acknowledge the dedication to purpose of most voluntary groups, which makes them unlikely to be co-opted. "Capture" of the regulator is also inhibited, since the public interest group will represent a stronger position on control than the regulator, whose position reflects law that is inevitably a compromise outcome of political processes. Thirdly, regulatory resources will be used cost-effectively if advantage is taken of the valuable "watchdog" role that locally based groups can play. In some areas of regulation, such as environmental pollution, a community group may have considerable technical expertise and local knowledge. Fourthly, involving the community in a monitoring role is likely to enhance corporate "citizenship" with a little of what Braithwaite calls "reintegrative shaming" (Makkai and Braithwaite 1994).

These theoretical points are supported by local practices that are proving successful in liquor licensing. Reliance on the "community watchdog" is implicit in reports by police and inspectors of limited resources for routine monitoring and a strategy of targeting "problem premises" that "come to their attention" (Hill and Stewart 1996). In a number of localities, community and business groups, well as licensees and statutory officers, are taking a cross-sectoral approach to problems and events planning through "liquor liaison" meetings (Alcohol Advisory Council 1996, Stewart and Casswell 1992, Hill and Stewart 1996). "Good citizenship" is encouraged in some areas through use of the local media to raise issues or to give publicity to licensees receiving a local Host Responsibility Award (Hill and Stewart 1996). In Queensland, problems of intoxication and safety affecting tourism are being resolved, not by pitting police against liquor licensees, but by involving the full range of community groups, businesses and agencies in proposing solutions (McIlwaine 1994, Homel et al. 1995).

Ayres and Braithwaite argue that the representation in negotiations of an appropriate public interest group helps balance the "disorganisation of diffuse interests" in adverse externalities against the "concentrated interests" of business (pp.76, 81). That representation should be therefore be funded by the state (p.59). This view may seem unusual in the current New Zealand context, but the involvement of non-government and voluntary organisations in such processes is supported by the UN "Ottawa Charter" on Heath Promotion (World Health Organisation 1986), and the further step of state funding was recommended in "Agenda 21 for Change" to protect the environment (Earth Summit 1992).

Discussion of public interest group representation would benefit from further investigation of theories of the state and of collective action (e.g. Hasson and Ley 1994, Offe 1984, Franzway et al. 1992, Watson 1990, Jessop 1979). Ayres and Braithwaite assume that an appropriate group will be available to negotiations because "statutes that threaten the interests of business would never have been enacted in the absence of an interest group pushing for them" (p.59). However, such groups are often ad hoc as well as underresourced. They lobby for regulation so as to "throw with the weight of the state" and to institutionalise political outcomes beyond the life of their own small group (Eisenstein 1986). A group with more institutional continuity might bid for state funding, but it is the edge provided by directly oppositional interests to the business activity and its externality costs that will keep a group effective and deter regulatory capture. The industrial relations and corporatist theory (Lehmbruch and Schmitter 1982, Jessop 1979), from which the term "tripartism" derives, makes clear that it is the regulating state that is the "third party", the referee between conflicting interests.

As governments continue to "downshift risk" onto communities (Beck 1992), these issues are important to explore. However, the purpose here is to draw on theory to improve an existing Act that does offer one mechanism for community input into licensing decisions: the right of public objection.

RIGHT OF PUBLIC OBJECTION IN LICENSING DECISIONS

In the review that led to the 1989 Act, a strong theme in submissions was the need for community involvement. The solution recommended was the devolution of licensing to local government. However, submissions also expressed reservations and fears about "local political influences" (Laking 1986). The final Act shifted administration, inspection and "special" event licences to local level, with national-level decisions made on the basis of reports from local officers. Devolution of some routine decisions has again been proposed by the 1996 review of this Act.

However, the current system of administration and enforcement of the Act at the local level cannot be said to represent community control. Statutory officers, and even the Council committees issuing "special" licences, represent state power, formally devolved and prescribed by the Act.

The community input possible under the Act is through objections to the grant or renewal of a licence by adults with "an interest greater than the public in general" -- in most cases, neighbours. Case law and interviews with statutory officers and objectors document dissatisfaction with the provisions related to objection (Hill and Stewart 1998, 1996 and research in progress). New licences, and new licensees in existing premises, may only be challenged on the "suitability of the applicant", while objections to licence renewal may only address the limited list of criteria and possible conditions laid down.

The Authority may choose to consider neighbouring land use, but only in setting hours of trading. Community control over the locality of licensed premises is considered to have been exercised through the planning consent that must be obtained prior to applying for a licence. The 1989 Act was intended to focus on the drinking environment and licensee accountability, not decide matters of locality; the previous licensing system based on community "need" was considered to overlap with town planning (Laking 1986:18-19). However, the Liquor Licensing Authority (1996, 1997) has reported to Parliament on what it considers to be a "gap in jurisdiction" between planning and licensing, in that the way District Plans regulate land use by zone does not allow consideration of the suitability of a particular site for licensed premises. Few Plans have addressed the sale of liquor as a land-use issue. For this reason, the Authority has requested Parliament to grant it a clear discretion to decline a licence application in response to the reasonable concerns of communities.

RESPONSIVE AMENDMENTS TO THE SALE OF LIQUOR ACT

Responsive regulation theory highlights just those aspects of the Act which have been identified, through research, case law and the Authority's own reports, as giving rise to dissatisfaction. Amendments were developed with the aim of increasing "responsiveness" in clauses related to the criteria to be considered and conditions that can be set for each licence, objection by the public to a licence or renewal, and the powers of sanction open to the Authority. Responses to these amendments from expert licensing informants are presented below.

Licence Conditions

Support was given to increasing "responsiveness" in the firm-specific agreement of the licence by allowing, where appropriate, the attachment of a condition specific to the premises, in addition to the standard conditions currently listed. This could arise in one of two ways: (i) through the licensee's own proposals in the application; or (ii) at a public hearing, required when a licence or renewal is opposed by local statutory officers or by objectors with an interest "greater than the public in general".

Full support was given to any "host responsibility" proposals formulated by the licensee being made a formal, enforceable licence condition. These include the current requirement to propose "steps" to ensure that liquor would not be sold to minors and intoxicated persons. Also supported was formal requirement of a wider statement of the licensee's policies for the management of the premises, which could include any proposal or agreement satisfying objectors. This would also become a condition of the licence.

A current debate in licensing circles focuses on the "host responsibility" concept: whether it should be included in the Act, with or without definition, or whether some other wording should be used to link practical requirements to the aim of the Act (S.4). Informants made the point, however, that tying the licensee's proposals for good management too closely to "alcohol abuse" (S.4) might preclude "environmental" changes to resolve an adverse impact on neighbours -- sound insulation, limits on use of live bands or a garden bar, an undertaking to clear litter, etc. The amendment, as it finally appears, names as "host responsibility" the "steps" and management proposals required of licensees, without limiting the content of proposals. Once accepted by the Authority, however, those proposals are listed as conditions on the licence, to be posted at the entrance of the premises where it is visible to enforcement officers and public alike.

Public Objections and Local Policies

The second route to an additional condition specific to the premises is through a public hearing. A proposal to allow the Authority more discretionary power, as in the 1962 Act and licensing Acts elsewhere (Hill 1997), was supported by most informants but strongly opposed by a few. All but one, however, strongly shared the Authority's concern to provide a better response to legitimate community concerns, and agreed that full right of public objection should apply on all occasions on which the Authority considered the grant or renewal of a licence.

The amendments finally recommended follow the present structure of requiring the Authority to base its decisions on reports and objections from the local level. However, they extend the Authority's ability to respond to community concerns by including neighbouring land use and public objections in the licence criteria to be considered and the matters on which conditions (not just hours of trading) may be set. Where no difficulties arise, standard conditions will be decided "on the papers", as at present. Where there is opposition and no solution is forthcoming from the licensee, a public hearing ensues, at which the concerns and proposals of all parties are heard by the Authority. As the specialist decision-making body empowered by Parliament, it may then arrive at a reasonable solution to be attached as an enforceable condition of the licence.

As an additional way of closing the "gap" between licensing and planning, support was given to an amendment formalising the Authority's recognition of any policies formally adopted by local authorities in relation to licensed premises.

A Range of Sanctions

Informants gave support to laying out in a more visible manner the full range of sanctions currently available to the Authority, including a shortened period of renewal. There was general support for instant fine for licensees (as well as for minors, as suggested by the Review committee) but this foundered on discussion of the respective jurisdictions of Authority and District Court and the practicalities of collecting fines. Short suspensions of licence were seen as a simpler way of imposing a monetary sanction on licensees, and considerable satisfaction was expressed with the Authority's increased use of suspensions and cancellations. Local-level informants reported a high degree of awareness of such decisions among licensees, which gave them leverage in applying informal pressure for improved compliance.

RESPONSIVE REGULATION AND THE IMPACT OF CASE LAW

In the course of this project, examination of enforcement practices at the level of the national licensing authority and the High Court led to a critique of the way case law has affected licensing decisions, limiting flexibility and enforceability. This impact is attributed to restrictions and rigidities in the Act itself, but also to the wide grounds of appeal to civil law, and the automatic Stay of decision pending appeals before September 1996.

The right of review by the High Court, on a key "point of fact" as well as on "points of law", reflects the influence of debates in fields other than licensing. One was the political debate on the respective roles of state and market (Roper 1993, Bertram 1993). Those who see market exchanges as contracts, assumed or actual, between self-maximising individuals have lobbied against tribunals and courts organised around other principles and directed by Parliament to address specific policy goals (Brook 1992, New Zealand Business Roundtable/New Zealand Employers Federation 1992, Wailes 1992, Ryan and Walsh 1993). The second debate is an international one in law, on whether parliaments or judiciaries define the law, and therefore the extent to which civil courts should defer to the expertise of specialist authorities established by parliaments under particular Acts (Taggart 1997). Differences of interpretation and substantive decision making by the Authority and by the High Court reflect respectively the specialist understanding developed by the Authority, grounded in the work of its statutory officers, and the legal expertise of the High Court and legal profession, harnessed by a few licensees to push back the boundaries of the regulatory system.

Most liquor licence holders are responsible and cooperative business people; very few licensing decisions are contested or appealed to a higher court. However, the case law indicated that the lack of flexibility allowed the specialist Liquor Licensing Authority has meant it can give only limited backing to local officers' cooperative strategies based on the "compliance" model. Yet strategies based on the "enforcement" model have been undermined by difficulties in invoking sanctions.

"Responsive regulation" aims to encourage compliance and cooperation by licensees by allowing a certain flexibility in the enforceable agreement negotiated with each firm. Applied to the Sale of Liquor Act 1989, this suggests that small changes to allow some flexibility in setting licence conditions for particular premises would contribute to the development of "responsive" regulatory relationships with licensees and help resolve problems with neighbouring communities. Moreover, any discretionary power that was clearly written into the Act would be recognised and respected in review by the higher courts.

Such small changes, with a continuing base in local statutory reports but allowing a national perspective in decision making, particularly on contested licence applications, would not imply a return to the restrict regime and wide discretionary powers which drew criticism under the previous Act (Laking 1986).

CONCLUSION

The provisions in the Sale of Liquor Act that theory would suggest are the key mechanisms for "responsive regulation" relate to just those aspects of the licensing system that have given rise to most difficulty and least satisfaction for those working to enforce the law and encourage high standards of management in licensed premises. In addition, similarities are readily identified between the approaches recommended by the theorists and informal regulatory practices being developed at local level. This supports a conclusion that amendments to the legislation along "responsive regulation" lines could lead to a more integrated and cost effective system for encouraging compliance and good management of licensed premises.

Based on the work and arguments described above, a set of recommended amendments has been submitted to the Justice Select Committee, as part of the Alcohol and Pubic Health Research's research based submission on the Amendment Bill. They are offered as a contribution towards achieving a legislative framework that can assist both licensees and regulators in working together towards the reduction of alcohol related harm.

(1) This research was funded by the Health Research Council of New Zealand. We would like to express our thanks to all the informants who contributed their expertise and experience to this project. We also thank Prue Taylor, Department of Planning, and Jo Manning, School of Law, University of Auckland, for acting as legal advisers on the project.

(2) The full report "Responsive Regulation" and Liquor Licensing in New Zealand is available free on request from the Alcohol & Public Health Research Unit, University of Auckland, PB 92019, Auckland 1. See also http://www.aphru.ac.nz for a summary of the project, Conclusions and Recommended Amendments, and for APHRU's Submissions to the Liquor Review 1996 and to the Parliamentary Select Committee on the Sale of Liquor Amendment Bill.

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Linda Hill and Liz Stewart 

Alcohol & Public Health Research Unit

Runanga, Wananga, Hauora me te Paekaka

University of Auckland