Criminal Proceeds (Recovery) Bill Mutual Assistance in Criminal Matters Amendment Bill Sentencing Amendment Bill — Third Readings 
Criminal Proceeds (Recovery) Bill Mutual Assistance in Criminal Matters Amendment Bill Sentencing Amendment Bill — Third Readings 
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Criminal Proceeds (Recovery) Bill 
Mutual Assistance in Criminal Matters Amendment Bill 
Sentencing Amendment Bill 
Third Readings 
Hon SIMON POWER (Minister of Justice) 
: 
 I move 
 That the Criminal Proceeds (Recovery) Bill the Mutual Assistance in Criminal Matters Amendment Bill and the Sentencing Amendment Bill be now read a third time 
. These bills repeal the Proceeds of Crime Act 1991 and introduce a new civil forfeiture regime to complement an enhanced criminal forfeiture regime. This will make it easier to strip organised crime groups of the assets and profits that they have obtained from serious criminal offending. For too long senior organised crime figures have been able to hide behind the people they hire to carry out their dirty work. They have managed to hang on to the wealth they have accumulated by avoiding the conviction required under the current legislation before property can be forfeit. Under this new legislation a conviction is not required to trigger forfeiture proceedings for criminal proceeds. It will be sufficient to prove on the balance of probabilities that a person has unlawfully benefited from significant criminal offending. Conviction will still however be required for the forfeiture of property used to commit serious crimes. 
The legislation empowers police to carry out the new civil forfeiture functions. Police can draw on their existing knowledge expertise and a national operational infrastructure to enforce the new regime cost-effectively. Police will have access to examination and production powers necessary for effective enforcement but these investigative powers are available only by court order which ensures that there are appropriate checks and balances in place. The civil forfeiture provisions will also assist New Zealand to meet its international obligations to fight transnational crime. New Zealand is being evaluated this year for compliance with the Financial Action Task Force’s global standards on countering money laundering and terrorist financing. Civil forfeiture legislation is a key compliance requirement in this regard as are the bill’s international enforcement provisions enabling New Zealand to better assist other countries to recover proceeds of crime that have been moved here. The mutual reciprocity arrangements to which New Zealand is party mean that we can expect the same assistance from other countries. The technological ease with which criminals can transfer and hide funds around the world make it imperative that law enforcement agencies are empowered to move quickly to locate and recover the proceeds of crime. 
We have progressed these bills which were introduced by the previous Labour Government because the threat posed by organised crime to law-abiding New Zealanders is real and unacceptable. It can best be managed by removing the funding necessary for such groups to operate. This is a particularly important tool in the fight against P or methamphetamine given the large amounts of money being made by those who orchestrate the manufacture and supply of this drug. 
I could not finish the third reading of these bills without making some mention of Martin Gallagher. Mr Gallagher who chaired the Law and Order Committee progressed it in a relatively timely manner and acted as a chairperson who was able to guide the legislation through the select committee in a way that could not be described as forceful but that was ultimately effective. Mr Gallagher brought to the deliberations a unique perspective to ensure that all matters were put before the committee in order not to rush it in any way shape or form. On that basis I am confident that the legislation which I hope the House will pass through its third reading today will have met the test of what we are now referring to as the “Gallagher Rigour Test”. 
This Government will not let safety take a back seat and these bills are a key plank in the raft of reforms we are progressing to make New Zealand a safer place. I commend these bills to the House. 
LYNNE PILLAY (Labour) 
: 
 I would like to join with Simon Power in acknowledging the contribution of Martin Gallagher in the Law and Order Committee. Indeed I know the select committee put very careful consideration into the Criminal Proceeds (Recovery) Bill now divided into the Criminal Proceeds (Recovery) Bill the Mutual Assistance in Criminal Matters Amendment Bill and the Sentencing Amendment Bill and spent a lot of time pondering and giving generally a lot of time—time very very well spent. The result is I think that we have much-improved legislation before this House and in previous speeches in this House I have acknowledged that. I think it is probably worth looking at some of the changes that the select committee took the time to recommend which were accepted and made the legislation more effective. 
Firstly the committee recommended that the police be the recovery body—a very sensible recommendation—and also defined the owner of property to include those who might have an interest in it. I would really like to speak a little more on that because that means that third parties who may have a stake in forfeited property have protection under these bills and that is excellent. 
They can apply to have their stake excluded from any forfeiture order. The exclusion could apply to business relationships with the property owner such as a bank or the dependants and spouses of criminals because they may be the innocent victims of forfeiture orders. The deletion of clause 111 of the Criminal Proceeds (Recovery) Bill which allows the director of the recovery body to issue a notice requiring the production of documents is a common-sense change. New clause 222A permits the Inland Revenue Department to provide the police with information for the purposes of civil recovery. 
The Law and Order Committee’s recommendations have strengthened the legislation. It goes a long way in giving out a very very clear message that crime does not pay. A criminal conviction will no longer be required in order to confiscate property that represents the proceeds of crime or the value of unlawfully derived income. The legislation allows us to tackle gang leaders because although they may not get their hands dirty they enjoy the benefits of the illegal activities of their fellow gang members. People who perhaps are not directly affected can derive a benefit from this legislation. The legislation achieves an appropriate balance between targeting the proceeds of crime and protecting personal rights and property rights. I note that Australia Ireland and the UK have all passed similar legislation and that it is working very effectively. 
It is a pleasure to speak in support of the legislation and commend it to the House. Members have acknowledged that the original bill was introduced by the Labour Government. Perhaps it would have been good to see it go through within the National Government’s first 100 days of action but it did not see that as a priority. Rather it thought the passing of the “90 day ‘sack-at-will’ bill” was a priority. We do not share that view but on this occasion it is a pleasure to stand and commend the legislation to the House. Thank you. 
CATHERINE DELAHUNTY (Green) 
: 
 Tena koe Mr Deputy Speaker. Tena koutou katoa. 
Paul Quinn 
: Kia ora. 
CATHERINE DELAHUNTY 
: Kia ora. 
I stand to speak in support of the speeches already given on the Criminal Proceeds (Recovery) Bill by Green MP Metiria Turei. Metiria has spoken several times on this bill and its friends. She has spoken with lucidity fairness and a sense of justice. It is the duty of this House to legislate with a strong sense of justice as opposed to a strong sense of populism or vengeance or a misguided commitment to policies that fail to deter crime. Therefore the Green Party will be voting against the legislation. Kia ora. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Amongst the 24 submissions received by the Law and Order Committee on the Criminal Proceeds (Recovery) Bill there was a statement from my electorate of Te Tai Tonga specifically from the Dunedin Community Law Centre that made all the members sit up. The statement raised the concern that there is not adequate provision for people to be able to appeal forfeiture orders or decisions. For example farmers could lose their land if another person grew cannabis on the land without the consent or knowledge of the farmer. 
During the Committee stage I addressed a possible scenario located in the whenua that I whakapapa to—Rangitoto ki te Tonga / D’Urville Island. I canvassed the possibility that land could be seized under this legislation and sold on the market and its ownership lost and all without the original owners being informed. The Minister of Justice presented advice that innocent owners would be able to make application to the court that the land not be sold but unfortunately that is where the situation turns ugly. Once the land is sold it is too late to stop the confiscation. Once the land is sold it is too late for innocent owners to have the chance to go to court to prevent the sale. Notably if those innocent owners simply lack the resources to make an application to the court or even to pay for a lawyer to get them to base one what situation do they find themselves in? The Maori Party objects in the strongest possible form to the possibility of designated Maori land being confiscated—land that is inherited through the generations; ancestral land of great significance to the uri of that area. 
Under the terms of this legislation a profit forfeiture order enforces the seizure of property to a value that represents the profits of significant criminal activity whether committed by the owner or another on his or her behalf. In plain English that means that the court can seize property to the value alleged even if the property itself is lawfully acquired. It is my deepest fear that all this will lead to is another round of confiscation of Maori land. 
I suggest that this situation is similar to what happened to so much of our land and so many of our people in the 19th century. If one person in the whanau or hapu wanted to dispose of his or her interests in Maori land or even to make a claim for a separate interest in the land that person would go to the Native Land Court. However because all claimants had to be present in person before the Native Land Court if the rest of the whanau or hapu wanted to retain their interest in that land—that is if they did not want the land to be sold out from under them—they also would have to go to the Native Land Court and uphold their interest in their ancestral land. 
The Native Land Court hearings were usually held in towns many miles away from their land block so the whanau or hapu would have to travel days to get there. Once at the hearing they would usually have to wait days—often weeks and in many cases months—for their hearing to be held and completed. They were away from their homes and mahinga kai so they would have to buy food and other supplies going into debt to do so. And because they were often away during the planting season they were not able to plant for the following season therefore having to spend that second season buying their food and going into debt to do so. They would have to sell their land that they spent so much time and effort trying to save. That is exactly what we are expected to do now. I cannot pretend in this House that I can sit back nohopuku and close my eyes to the potential effect that this legislation may have for tangata whenua. 
To me it is an interesting coincidence that the third reading of this legislation follows the second reading just last week of the Maori Trustee Amendment Bill. I would suggest that to keep faith with the statutory objectives in Te Ture Whenua Maori Act the Maori Trustee should hold the interest for sale to persons within the class of permitted alienated people and failing a sale apply the income to the Crown until the amount due has been recovered. What will happen to the liable land interest after that? One proposal is that it should be vested in those persons who were the balance owners immediately after the purchase in question according to their shares at the time. 
During the passage of the Criminal Proceeds (Recovery) Bill my colleague Te Ururoa Flavell presented a Supplementary Order Paper to the effect that the legislation would exclude “Maori customary land and Maori freehold land” “land that has ceased to be Maori land and land acquired from Maori for public works” “Crown land set aside or reserved for use or benefit by Maori … and land vested as a consequence of settlement legislation.” As  
Hansard 
 records when the Supplementary Order Paper put forward by my colleague in respect of Maori land was voted on it received the support of only the Maori Party and the Green Party. 
The Minister has assured me that he will watch carefully to see how the provision is utilised and he also gave me an assurance that he will monitor the situation carefully. But suffice to say it remains a hot point of contention for Maori and the Maori Party and has ultimately led to our not being able to support these bills. 
A related issue in the detail of the implementation will be to ascertain whether multiple-owned Maori land could be sold if one of the owners had acquired an interest by criminal means or had used the land for criminal purposes. If so it would be a most serious matter. If such a law was made with co-ownership of general land in mind but also applied to Maori land it would be quite improper because the circumstances affecting Maori land are not the same as those affecting other land. A law that assumes it can treat everyone the same when there is a minority whose circumstances are patently not the same and who are prejudiced as a result discriminates against that minority. This issue prompts the question of whether that type of discrimination is contrary to the New Zealand Bill of Rights Act—an issue that the Attorney-General may need to give due consideration to. 
The crux of the issue is the assumption upon which this bill is founded—an assumption that Maori owners will be aware of what is happening to their land and of what other owners are doing. It is assumed that all Maori landowners live on their land yet we are all aware that many live away from their whenua and even away from Aotearoa. 
I want to raise the issue of the way in which the debate has proceeded in this House. 
The major change proposed by this legislation is that a criminal conviction would no longer be required for property representing the proceeds of crime or the value of unlawfully derived income to be confiscated. The assumption is that this amendment will act as a disincentive to criminals and disrupt their capacity to finance further criminal activity. But there are a number of conflicting issues around this. The Human Rights Commission told us that the suggestion that the amendment will act as a disincentive is contrary to evidence from other countries where similar legislation has been introduced. It was the commission’s view also that the bill offends a number of fundamental principles of justice. The legislation relies on lower civil law standards of proof which undermine criminal law protections for defendants. Civil forfeiture orders could come to take the place of criminal proceedings if the Crown considers that it will be difficult to get a successful conviction given the higher standard of proof needed. 
Finally I ask whether it is worth sacrificing principles of justice to recover criminal assets. Is this bill simply yet another reaction to the perceived problem of gangs? Throughout the debate we have heard frequent reference to criminal gangs and the proceeds of their crime. In the main the gangs that appear to attract the shrill excesses of irrational rage are those that would be considered to be Maori gangs yet the white-collar corporate criminal gangs—the organised gangs such as Bridgecorp and Nathans Finance—are rarely mentioned. These corporate rogues have between them chalked up $633 million of debt to over 21000 New Zealanders. In my mind it raises questions around the political opportunism so often demonstrated in our society and I simply ask for whose benefit it is. We will continue to oppose this legislation. 
AMY ADAMS (National—Selwyn) 
: 
 I rise to take a call on the third reading of the legislation that began as the Criminal Proceeds (Recovery) Bill and is now before the House as a divided bill with the Mutual Assistance in Criminal Matters Amendment Bill and the Sentencing Amendment Bill. The bills between them as we know set up a new civil forfeiture regime that will work as a powerful enhancement to the crime-fighting arsenal of the New Zealand Police and in particular to the ability of the police to clamp down on the illegal gang activity that is of such concern to the good people of New Zealand. 
This legislation will repeal the Proceeds of Crime Act. We know that although the philosophy of that Act is agreed it has not worked in the way it was intended to. It has been shown that it simply does not have the teeth to get to where the real money is in criminal offending. That is why we have the need for these bills to come before us to replace the law we have and to ensure that the law we intended to pass has the teeth this House wanted. 
This Government has given the legislation legislative priority because we are committed to clamping down on gangs and to disrupting their behaviour. It has been said many times in this House during the passage of this legislation that we need to hit gangs in the pocket if we are to have any impact on their activities especially those gangs making millions and millions of dollars out of the P trade which we know is so destructive to our communities our children and our sense of well-being. 
I will just for a moment comment on a little part of the speech made before mine. This legislation does not address just gangs. Let us remember that. It addresses any criminal offending. If white-collar criminals are found guilty of any criminal offending then their assets and profits will be subject to this legislation just like any other criminals. Although we talk about gangs—and certainly they are a big part of the focus of the legislation—the legislation will target any criminals who are convicted it will target any criminal gains that are made and it will allow the police to trace the profits that are made from criminal offending through to wherever those profits might sit. 
It is an important part of the legislation that one does not need to have been convicted for one’s goods to be seized. Although that represents a significant departure from the existing situation it is necessary because we know that with the way complex criminal organisations often work the funds do not always sit with the person who committed the offence. The funds and profits and the property that arises from them will often need to be traced back through many layers of holding to get to where it sits. That is the nature of the way complex criminal organisations will often work. 
The regime proposed in the legislation is very simple. It allows the courts through the police as the enforcement agency to target anyone who has knowingly directly or indirectly received or derived a benefit from significant offending whether or not the person himself or herself was involved in the offending. That is an important change and it is the simple part of the legislation that will give it the teeth that the Proceeds of Crime Act before it lacked. 
When we talk about that sort of significant criminal offending we note in the provisions of the legislation that we are looking at the sort of offending that is subject to a maximum imprisonable term of 5 or more years or from which $30000 or more in value has been derived. We are not talking about the kids who shoplift from the local dairy. We are not talking about minor offending. We are talking about significant offending for which a serious penalty has been imposed by this House or from which serious money has been made. That is the sort of offending we are talking about and this legislation allows the police and the courts to look at offending that has occurred any time in the previous 7 years and then not only to trace the actual proceeds of the crime—we are not talking solely about a situation where a bank has been robbed and one can go away find a bag of money and claim it—but to follow those proceeds through into the benefits or the property that has been purchased with those funds. If $100000 worth of profit was made from the commission of an offence then $100000 worth of property can be seized from the people who have benefited from the offence. 
If we do not take these sorts of measures we will not get at the gangs where it hurts them. We will not be hitting them in the pocket. If there is one thing we have come to know it is that we have to address this thing economically. If there is one thing this House understands it is that we need to hit gangs in the pocket. We need to get at their lifeblood which is their money. This legislation is designed to do that. It takes significant steps forward in doing that. I am very happy to be supporting it. 
When I was speaking on the second reading of the legislation— 
Hon Darren Hughes 
: We remember. 
AMY ADAMS 
: —I remember it well too; it was a high point—I talked about a number of the legal aspects of the legislation which I think are worth commenting on. 
I accept that this legislation in going further than has been gone before does raise the prospect of affecting people’s rights. We have to be very careful when we look at limiting or restricting people’s rights to freely hold property that we do so carefully and with due consideration. But I suggest to the House that within the legislation we have the sorts of checks and balances in place that will ensure that these sorts of powers are not used inappropriately. I for one have considerable faith in our police force and our judiciary in terms of their ability to deliver on the expectations that Parliament is setting for them and to make sure they do so appropriately. 
I have been involved in the legal system for 15 years and although I freely admit that it is a long way from perfect I do believe that we have a highly talented judiciary—a judiciary that applies the highest standards of care and proof to make sure its members make their decisions well. I think the same can be said of our police force. Given that the police force is now the agency that will be administering these powers I think it bears repeating that in this country we are very blessed to have a police force that works incredibly hard to make our society a safer place. 
I am very well aware of the lengths the police go to and I know they will be very grateful for any additional tools we can give them that will help them in their battle to crack down on gangs and illegal criminal organisations. The police know as we in this House know that the way to do that is to stop gangs and other criminals from making the sort of money they currently make from crime. That is how we will do it. Yes we can put criminals in jail for the offences the police catch them for but we know that the money supply has to be stopped. We have to turn off that tap and this legislation will be a big part of doing that. 
We have talked about the restraint provisions that allow the court to seize property for up to a year which can be acted upon by themselves or be followed up by the permanent forfeiture provision. When we went through the second reading we went through in some detail the provisions that work in around that—the matters the court will take into account in either of those orders. 
As I have said I think the bill strikes a good balance between checks and balances in relation to safeguards but equally makes no apology for the fact that it puts the necessity of clamping down on criminal organisations ahead of concerns around the rights of criminal organisations. I have no issue with that; I will sleep well at night knowing we might have taken away a right from a criminal organisation if it makes New Zealand a safer place in which to live. 
I think that when we look through the three bills that this legislation has now become we can see that National has taken the Proceeds of Crime Act given it teeth and done so as a matter of priority because this Government follows through on its promises. We do not talk big or huff and puff for 9 years about clamping down on gangs; we deliver on the promise. This bill languished on the Order Paper under Labour for 18 months and went nowhere but with this Government the National-led Government people will see real action on clamping down on gangs. This legislation is a big part of that action and I am pleased to support it. 
A party vote was called for on the question  
That the Criminal Proceeds (Recovery) Bill the Mutual Assistance in Criminal Matters Amendment Bill and the Sentencing Amendment Bill be now read a third time. 
Ayes 108 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; Maori Party 5. 
Bills read a third time.