Worth Richard: Serious Fraud Office (Abolition and Transitional Provisions) Bill — First Reading 
Worth Richard: Serious Fraud Office (Abolition and Transitional Provisions) Bill — First Reading 
[Volume:647;Page:16101] 
Dr RICHARD WORTH (National) 
: 
 It is always an excellent outcome to be invited by an opposing member of the House to comment on legislation. I am delighted to take this call in respect of the Serious Fraud Office (Abolition and Transitional Provisions) Bill. My delight I hope is tempered by dismay from Mr Chauvel that I will not take the stance he so keenly wants me to take. National opposes this legislation and I believe that there is very good reason for doing that. I remember as a lawyer the circumstances when the Serious Fraud Office was set up in 1990 following the 1987 sharemarket crash when there was widespread public concern about corporate misconduct. 
Just thinking back to those days some 18 years ago now I say that there were companies that developed overnight including the like of Omnicorp and Equiticorp with practices that were later judged to be extraordinarily shady. So it was that the Serious Fraud Office Act was enacted in 1990. It was modelled on what had been a proven institution in the United Kingdom—the Serious Fraud Office; an organisation of the same name—with the intention that this small specialist multidisciplinary agency would fill a gap between existing law enforcement and regulatory agencies. Although it is right to say that since 1990 the nature and the scale of fraud offending has changed it is also the case that the changes that have occurred are changes that are—and I am certain will be—within the scope of the Serious Fraud Office as it is now established to deal with. 
I would make the comment however that over the period that the Serious Fraud Office has been established some doubts have been expressed about the culture of that office. Many of the comments are anecdotal. Some of the comments may not be true but it is right to say—certainly from a lawyer’s perspective—that some of the criticisms of the Serious Fraud Office that have ascribed to some members of that office an almost cowboy character have done nothing to advance the image of that office. So a culture change may well have occurred but certainly there was a period where the Serious Fraud Office was bedevilled by its image. 
I also say that in the world of pursuing so-called white-collar criminals there are particular difficulties. Those charged with such offences often have substantial means and substantial resources that can be deployed in defence of charges brought against them. So although it is right to say perhaps that the nature and scale of fraud offending has changed nevertheless many of the activities and structures that are now being set up to take advantage of criminal activity are not in any way new structures. 
One of the major problems I suggest with this bill which the Government seems determined to pass is that it strips away significant powers that the Serious Fraud Office had. At the time those powers were seen as powers of substantial constitutional significance. One of those provisions section 27 of the Serious Fraud Office Act is headed “Privilege against self-incrimination no excuse”. There is an American expression “Pleading the Fifth Amendment” and that is in effect claiming the privilege of not incriminating oneself. And here in that section that privilege is swept away with these words: “No person shall be excused from answering any question supplying any information producing any document or providing any explanation pursuant to section 5 or section 9 of this Act on the ground that to do so would or might incriminate or tend to incriminate that person.” There was good justification for that provision in 1990 and there remains great justification for the retention of that provision in 2008. Just in the last 12 months we have seen some 19 finance companies collapse. We have seen activities particularly activities involving the two companies Blue Chip and Bridgecorp that clearly called for intensive investigation. 
It was under section 9 of the Serious Fraud Office Act that the director of the office could require production of documents. He could require—it has always been a male director—a person whose affairs were being investigated or any other person for that matter to attend before the director and to answer questions in respect of any matter that the director had reason to believe might be relevant to the investigation. Those are powers needed today to tap into the real issues that touch serious fraudulent activity yet the Government with what it says is its passion and its commitment to law and order would see those provisions removed. This is assuredly not the time to do that. 
So here we have the Government moving to make it easier for white-collar crime to occur and having no real justification at all for legislation of the type that would abolish the Serious Fraud Office and set up an organisation called “OFCANZ”—the Organised and Financial Crime Agency of New Zealand. It is held out that this agency will be able to do a better job than the Serious Fraud Office. I think not. I think that the Serious Fraud Office is well resourced. It has a competent director in Grant Liddell who has an enviable reputation in the law. I think that the Serious Fraud Office is more than able to tackle on a strong basis these aspects of white-collar offending that concern us all. So it is that National I am certain is correct in stating its opposition to this bill with its lack of merit.