Organised Crime and Anti-corruption Legislation Bill — In CommitteeText is incorporated into the Bound VolumeOrganised Crime and Anti-corruption Legislation Bill — In Committee[Sitting date: 21 October 2015. Volume:709;Page:7419. Text is incorporated into the Bound Volume.]Organised Crime and Anti-corruption Legislation BillIn CommitteePart 1 Amendments to Crimes Act 1961Hon PHIL GOFF (Labour—Mt Roskill): The Labour Party will be supporting this bill including Part 1 because it does some things that are useful some things that in fact we should have done years ago and some things that are necessary for us to do—for example to ratify the United Nations Convention Against Corruption 11 years after we signed it. So if I was going to ask a question to the Minister in the chair the Hon Maggie Barry—if she is familiar with the bill; I am not sure that she is—the question would be after 7 years in Government why has it taken this long to pass the legislation needed to ratify the convention against corruption that we signed 11 years ago?There is nobody in this Committee I think who would not be in favour of some of the key provisions of Part 1. It talks about trafficking in persons and it makes the law tougher in that area. We know internationally what trafficking in persons is doing particularly in regard to the refugees but we know that it is also a factor in New Zealand particularly in some commercial areas such as the sex trade. Year after year when the US Department of State does a report on the upholding of human rights it is critical of New Zealand for not doing enough in this area. That might be a double standard on the part of the United States because there are a lot of criticisms we could make there but I think that we have to accept that criticism that we have not acted fast enough. I would add to that that we have not gone far enough in what we are doing here.This part of the bill also deals with organised crime and money-laundering. Organised crime and money-laundering is worth literally billions of dollars. There are billions of dollars each year being made by criminal enterprises out of money-laundering and out of organised crime and particularly drug trafficking. Of course we would support anything in this bill belated though it may be that deals with those areas.But what I want to say is that there is one huge area of weakness here and that is in relation to what is called a facilitation payment. If I was to ask any member of the National Government what the difference is between a facilitation payment and a bribe I would really like to hear what their answer is. Well the answer is actually set out unfortunately in the Crimes Act 1961 section 105C(3). It says that foreign bribery offence provisions set out in this part of the Act do not apply if “(a) the act that is alleged to constitute the offence was committed for the sole or primary purpose of ensuring or expediting the performance by a foreign public official of a routine government action; and (b) the value of the benefit is small.” I support David Clendon’s Supplementary Order Paper 76 on this bill to repeal that provision.The challenge I put to the National Government and the Minister in the chair is to explain to this House why a bribe is not a bribe simply because it is a small bribe. Of course it is a bribe. A bribe is a bribe and if it is designed to ensure or expedite the performance by a foreign public official of an act that is paying a foreign public official money that goes into his or her pocket not the Government of that country in order to facilitate something that you want from that Government. And that is a bribe. It should not be there and it is not part of the United Nations Convention Against Corruption.Let me read from article 16 of that convention: “Each State Party shall adopt such legislative and other measures as may be necessary to establish as a criminal offence when committed intentionally the promise offering or giving to a foreign public official or an official of a public international organization directly or indirectly of an undue advantage for the official himself or herself or another person or entity in order that the official act or refrain from acting in the exercise of his or her official duties in order to obtain or retain business or other undue advantage in relation to the conduct of international business.” That article 16 of the United Nations Convention Against Corruption is very very clear. So my challenge to the Minister is this: how are we not acting in contravention of article 16 by saying: “You can do it to get the advantage as long as it is small.”? Because that is the thin edge of the wedge.We heard some really important submissions before the Law and Order Committee on this particular point and in particular we heard from Transparency International New Zealand we heard from the Human Rights Commission and we heard from other organisations. And these organisations which set out the standard in New Zealand which should be upholding a proud legacy of this country being one of the least corrupt countries in the world said that we were letting the side down that we were falling short of the standard that we should be setting and that we were way behind what other countries were doing.Let me refer to the Transparency International submission on this point because it makes what I regard as four really important points. It makes the point first of all that if you were to make a small payment to a New Zealand official there is no doubt about it that that would be a bribe. That would be a corrupt act. And the submission says that “a New Zealander who makes a ‘facilitation payment’ to a foreign customs official would face criminal penalties for making the same payment to an official here at home.” So why the double standard Minister? Why the double standard that if it is a crime in New Zealand it is not a crime if a New Zealander does that to a foreign official overseas?Secondly Transparency International makes this point. It says that we are perpetuating a corrupt system in those countries where our people are making those facilitation payments. It says: “Facilitation payments are [commonly] not recorded and go directly into the pockets of the corrupt government officials. Paying these low value bribes perpetuates a corrupt system; imposes additional costs on the host country’s companies and citizens and undermines efforts by the host country’s government to stamp out corruption in their public service.” So here we are putting ourselves up on a pedestal saying “This is how these countries should operate.” and then we are contradicting it by saying that it is OK for our companies to undermine the laws in those countries.Thirdly the submission makes the point that in this legislation before the Committee that we are debating now we are falling behind other countries that are like-minded countries. The United Kingdom has legislated against facilitation payments Australia is likely to follow Canada has prohibited facilitation payments and the United States is also moving in that direction and yet in this brand new legislation before the Committee we do not meet the standards of other countries that we would want to compare ourselves to like the United Kingdom and Canada.And fourthly Transparency International makes the point that you do not have to make facilitation payments to actually do business in these countries. It quotes from a 2009 business survey conducted by TRACE International which found that “76% of survey respondents believe it is possible to do business successfully without making facilitation payments given sufficient management support and careful planning.”So these are the concerns that were set out before the select committee and my question to the Minister Amy Adams who is now in the chair and is responsible for this bill is why we are putting forward a piece of legislation that is second-rate in response to facilitation favours. That is what this is doing. Has the Minister read the Transparency International submission? Does she understand that the Serious Fraud Office is against this? Does she understand that it is not only contrary to the United Nations Convention Against Corruption but also contrary to what the OECD and APEC promote as proper practice? So I want to know from the New Zealand Government why we have fallen short of the standards of the organisations that we belong to and that we sign up to and of the countries that we would respect in terms of their being countries that are opposed to corruption and bribery. Why are we falling short of those standards?Hon DAVID PARKER (Labour): I want to reinforce what the Hon Phil Goff has said in respect of facilitation payments. It beggars belief I think that we have got ourselves into the position under this legislation where we are not covering off and prohibiting facilitation payments. The influence of countries like New Zealand in the world can either be positive or negative or neutral. I like to think that we are a country that would uphold high standards and help other countries to get their standards to be better by doing the right thing in New Zealand and encouraging improvement in standards in those countries. Transparency International is quite right: David Clendon’s Supplementary Order Paper ought to be supported by this Committee. If the Government does not support that Supplementary Order Paper it should say why. Is it saying that the United Kingdom has got it wrong and that other countries that are banning facilitation payments have got it wrong? As the Hon Phil Goff has said what is illegal in New Zealand is illegal because it is improper. Small bribes are improper and ought to be illegal.Can I address a couple of other issues that I would like commentary on from the Minister of Justice. The first relates to the narrow definition of “foreign public official”. Members will be aware that currently there is controversy which the Auditor-General is looking into as to whether the payments that were made to the Al-Khalaf Group by the New Zealand Government amounted to improper payments. It is notable that the people to whom those payments were made who exerted influence on whether Saudi Arabia acceded to a free-trade agreement in the Gulf were not public officialsthemselves but were people of influence in Saudi Arabia who could block a free-trade agreement. In my opinion the definition of whom New Zealanders should not be able to pay facilitation payments or bribes to needs to be wider than the narrow definition of “foreign public official” that is currently in the legislation and I think that it is wrong that we in this Parliament have so narrow a definition that we would not catch the sorts of payments that we have been concerned about in respect of the Saudi farm debacle.In that instance we had a very powerful person in Saudi Arabia who was disaffected first with the Labour Government and then with the National Government for their having a ban on the export of live sheep to Saudi Arabia. That person was a close friend of the then Minister of Agriculture in Saudi Arabia and there is no doubt that he has made speeches which are a matter of public record to say “Well why should New Zealand come wanting a free-trade agreement?” and asking why he should cooperate with New Zealand’s getting a free-trade agreement in Saudi Arabia when from his perspective New Zealand was blocking the export of live sheep to Saudi Arabiafor slaughter.He made his protestations clear to the Labour Government and we said: “No we disagree. We’re going to regulate for what we think is the right thing in New Zealand. We’re going to ban that.” The current National Government may have created impressions that it was going to go differently—it probably did—but in the end the current National Government said that it would renew those bans on the export of live sheep for slaughter which was its sovereign right to do in New Zealand and we actually think that it made the right decision. But this disaffected businessman was blocking the advancement of free-trade arrangements with Saudi Arabia to the detriment of the New Zealand trading relationship.That does not justify that person being paid off. That is what the Auditor-General is looking into at the moment: whether the allegation which I think is made out on the papers is the true underlying nature of the payments that were made—whether a $7 million upfront payment to the Al-Khalaf Group which did not buy $7 million of value was actually paid in order to buy the influence of that person in order to stop them blocking the advancement of free trade with New Zealand. That sort of payment is improper and yet this piece of legislation does not cover it because the definition of the “foreign public official” in Saudi Arabia is too narrow and applies only to people who are effectively public servants rather than to other people who can exercise influence over those public servants. Again in addition to the point that was made by Transparency International which the Hon Phil Goff has also made there is that point as to why this legislation does not go far enough.I think New Zealand is facing more pressures relating to corruptionthan we used to both within the country and outside. It is partly a consequence of the world becoming a more competitive ruthless place. It is also partly a consequence of some of the different norms if I could put it that way of some of the more recent immigrant populations that have come to New Zealand. That is not to call all immigrants corrupt. That is not to call immigrants corrupt but it is true—David Seymour: Clarified just in time.Hon DAVID PARKER: Actually if you do not want to face the reality that there are higher levels of corruption in India and China than there are in New Zealand then Mr Seymour you are naive. It is true that there are higher levels of corruption in countries like that than there are in New Zealand and we have got to be very very careful that we push against those practices becoming prevalent in New Zealand.I have those comments made to me by senior members of the business community in Auckland and these are pressures that we in this Parliament must guard against—we must guard against. The vast majority of immigrant populations from all countries including India and China are good people but there are exceptions—[Interruption] Yes Russia is another example where there are corrupt practices that are more prevalent than we want them to be here. We have got to guard against that sort of conduct becoming prevalent in New Zealand including when we have trading relationships that are from New Zealand into those countries. That is why this sort of legislation is absolutely important—so that we push against those sorts of practices becoming prevalent in New Zealand.Just in the last couple of weeks we had the example reported in the newspapers—and this goes to clause 5 of the bill which relates to trafficking in persons—where someone in New Zealand was passed a note by someone from an eastern country saying that this person was effectively being held in servitude in the prostitution industry and that her rights were being abused. I hate it when I read those sorts of things. I want our Government officials our police and our customs and immigration people to have all of the powers that they need to push against the sort of reprehensible behaviour where people are exploited and are effectively held in servitude. I was somewhat dismayed to see the response of the police to that. They would not even go in there and investigate the allegation despite the fact that a New Zealander—at considerable risk to his own reputation given that he had been visiting a brothel—actually said that he had been passed a note by a person in that brothel to say that that person was being exploited having been brought in from an eastern country.That sort of thing happens more often in New Zealand than it used to. It is not as prevalent as it is in overseas countries but it does happen. The OECD has pointed out that it cannot believe that New Zealand is so free of corruption that we have never had a prosecution in New Zealand of a New Zealand business person accused of bribery of overseas officials. It says that it is unbelievable that even in a clean country like New Zealand we have never had occasion to find out and root out the low levels of corruption that we have. For those reasons I want the Minister of Justice to answer why we have such a narrow definition of “foreign public official” in respect of who can be paid bribes because we are effectively saying other people can be paid bribes and just not foreign public officials as narrowly defined in this legislation. I want to hear also why the Minister believes that Transparency International the UK and indeed the United Nations Convention Against Corruption are wrong in respect of facilitation payments.Hon AMY ADAMS (Minister of Justice): I did want to take a call on this main part of the Organised Crime and Anti-corruption Legislation Bill and just bring us back to the core purpose of what this bill is actually intending to do which is significantly enhance the way New Zealand deals with responds to and prevents both organised crime and corruption. The matters within the bill are issues that New Zealand takes incredibly seriously. Let us just remember that this bill is about ensuring our protection against organised crime against human trafficking and against corruption is stronger than it will ever have been.If you listened to the last few speakers from the Opposition you would perhaps I think take a few inappropriate conclusions from their contributions so I just want to get a few things very clearly on the record. The first is that facilitation payments are not being authorised by this bill. They have been lawful in New Zealand for many years. The Crimes Act has provided an exemption for the payment of facilitation payments for many years. What this bill does is actually narrow that. We are narrowing the exemption and making it much more controlled and much tighter. We are ensuring that it can be applied only in situations where no undue benefit accrues to the person involved and in situations where businesses must record and keep detailed records of any such payments made to ensure that we get the right balance I believe between ensuring proper high standards of business practice in New Zealand and protecting innocent New Zealanders against unintentional criminalisation. That is a serious threat and we have worked through this in some detail.I am going to come back to that point but I want to make one other point very clear: this bill is in every way compliant with our international obligations. I heard most of Mr Goff’s contribution and he I think left this Committee with the impression that somehow this bill would make us non-compliant with the United Nations Convention Against Corruption—it does not; it is entirely compliant with that—and that in some way it would make us non-compliant with the OECD anti-bribery convention. It does not. We are entirely compliant. I can also make the point that such facilitation payments are also legal in both the United States and Australia. So this idea that somehow we are doing something that the rest of the world has turned its back on and that all of our international partners have rejected is quite simply wrong.The other point that I would make actually is that Transparency International New Zealand the Serious Fraud Office and Business New Zealand got together in 2014 and put up quite good seminars for businesses on how they should properly deal with facilitation payments. So this is not a new issue. It is one that has been in the lexicon of our oversight agencies for some time and can I reiterate: this bill makes the exemption narrower and more tightly controlled.Let me just walk through the thought process that I followed when I was looking at this issue because on the face of it you wonder why any sort of payment might be able to be permitted. We have to be incredibly careful but there are situations when a New Zealander quite lawfully going about their business will be in a situation where a foreign public official effectively says to them: “Look you can go through the traditional track or you can have a priority service for the payment of a small fee.” That could be an entirely lawful properly offered service. You are not receiving any material benefit; you are paying for a service in the normal course of business. It is a small payment and you have no way of knowing as that innocent New Zealander what is happening behind the scenes. You have no way of knowing whether that payment is being properly accounted for returned to the Government and properly paid tax on or whether out the back someone is pocketing it.I am not going to see innocent New Zealanders who honestly believe they are paying a reasonable sum for a priority service that does not give them an undue benefit and is not a large amount of money suddenly become criminals.The protections that we have put in place around that I think are very important. The first is that it must be a small payment. We are talking about very small amounts of money. The second is that it must be for a service provided in the ordinary course of business. So let me give you an example. If you were to arrive at an immigration counter and you could stand in a long line while you have—I do not know—screaming children or you are ill or whatever or you could pay US$50 and go through the fast-tracked line then that is absolutely an ordinary course of business transaction. An immigration official is offering you an immigration service that is absolutely to be expected in the ordinary course of business. It is a small payment—and these are examples that do happen—and you receive no particular material benefit. You were going to go through immigration anyway and you are simply going through a priority queue. That is quite different from a situation where you make a payment to receive a contract being awarded to you to stop someone else getting a contract or where you receive a material benefit.I absolutely will stand firm against New Zealand corruption either domestically or internationally but I am very concerned—and I can think of many situations where innocent New Zealanders could find themselves in that situation of paying for what looks on the face of it to be a perfectly valid service that does not give them any particular benefit and then finding that because that official was pocketing it out the back they have suddenly become a criminal. That is not the sort of thing that I am prepared to oversee.The other thing is that actually as I said facilitation payments have been lawful in a much much wider context in New Zealand law for many years and we are assiduous in overseeing them to make sure they are not abused. That will continue to be the case but as I have said under this bill not only will we continue to be assiduous in ensuring that it is not exploited but we have a much narrower selection of areas where it can be applied and businesses in New Zealand will now be required to quite clearly account for it. I did spend quite a bit of time looking at this issue working my way through it and satisfying myself that it was the right balance between properly protecting New Zealanders against a situation that they can have no control over and no way of understanding and that we would not be passing a law to unintentionally criminalise innocent New Zealanders and ensuring that we are tightening up any misuse of that provision.Let me just conclude by reinforcing that this is entirely compliant with the United Nations Convention Against Corruption and does not in any way fall foul of the OECD convention against bribery. I absolutely understand the need to be very careful in this regard but I certainly speaking for myself am absolutely confident we have that balance right.This bill is an improvement on the law as it stands and any party that votes against it will be voting effectively to keep a much wider exemption and a much wider hole for people to drive through and will be rejecting the additional protections that this bill will bring into force. Thank you.DAVID CLENDON (Green): Could I begin by thanking the Minister of Justice for that contribution. It was helpful. I was interested in her last comment about any party voting against this bill. To my knowledge no party is intending to vote against this bill. The Greens are certainly not. The bill does some necessary and useful things. It does strengthen our position in terms of organised crime money-laundering people trafficking and these sorts of unfortunate activities that none of us could possibly support. So we are quite happy to continue to support the bill.It is an OK bill but it could be a very much better bill and it could be more likely to achieve one of its key purposes if Supplementary Order Paper 76 in my name was adopted and passed today. Why do I say that? The report back on the bill from the Law and Order Committee says: “The bill would enhance New Zealand’s compliance with a number of international conventions and when enacted will allow ratification of the UN Convention against Corruption (UNCAC)”. The fact that we continue to have on our statute book a “get out of jail free” card in the Crimes Act in a sense around legitimating facilitation payments compromises our ability to stand tall and say: “Yes we are compliant with UNCAC and therefore we can hand on heart ratify that document.”I think it is worth referencing Supplementary Order Paper 76. It is very simple. It would simply insert one extra line into the bill which would be to repeal section 105C(3) of the Crimes Act. What the Crimes Act does in that sense is in section 105C(2) it says: “Every one is liable to imprisonment for a term not exceeding 7 years who corruptly gives or offers or agrees to give a bribe to a person with intent to influence a foreign public official in respect of any act or omission by that official in his or her official capacity …”—in other words if anyone pays a bribe. Seven years is not a trivial sentence. I think our distaste for corruption at every level is reflected in the fact that that is quite a severe sentence—potentially up to 7 years’ imprisonment.Unfortunately section 105C(3) goes on to say: “This section does not apply if—(a) the act that is alleged to constitute the offence was committed for the sole or primary purpose of ensuring or expediting the performance by a foreign public official of a routine government action; and (b) the value of the benefit is small.” In other words in everyday language it excludes facilitation payments because they are only little bribes. I appreciate that there is a distinction between that and paying a bribe to a foreign official in order to secure a contract to export to a country for example. That is barred. That is banned. Nobody allows that. That is illegal. What this does though is play around at the margins and say: “OK having secured my licence to export I’ll now pay a foreign official a bribe in order to get my goods across the border a little more quickly and to get them off the wharf and into market a little more swiftly.”Let us reverse the situation. Let us imagine that foreign Governments have similar provisions on their books that allow foreign business people to come to New Zealand and behave in that way and to slip one of our customs officers a couple of tickets to the rugby and a hundred bucks’ worth of beer just to make sure that their shipment got ahead and was first in the queue. We would not tolerate that and nor should we. So why do we legitimate that sort of action in a foreign country by our business people who are operating internationally? There are several reasons why we ought to remove that provision from the Crimes Act embed that change in this amended legislation and therefore make it a better piece of legislation a much more robust one and a much more positive one. It is the right thing to do.New Zealand stands tall as a country that is perceived as having a very very low level of corruption. That gives us an ability to make moral statements on the world stage. We are perceived as being a country with very low levels of corruption and I think that is legitimate. We are not squeaky clean and we are not perfect but the corruption that exists is at a very low level. Generally there is a very very low tolerance for corruption in the New Zealand community in society and in the business community. Our abhorrence for corruption is I believe one of the reasons why New Zealand routinely rates very highly as one of the best countries in the world to do business in. Business people can come here and know that they are playing on a more or less level field and that they cannot be outbid by someone who is paying off an official to get a resource consent to get goods across the border more swiftly or to get permission to do something. This gives us the ability to encourage businesses to come here to do business and know that the legal landscape is fairly robust and will protect their interests and protect them against corruption.The point has been made already that Transparency International has led the charge on this in terms of encouraging us to remove this exemption. I acknowledge—and the Minister was quite right—that this amendment bill we are debating today does not add a negative but what it does do is it misses an opportunity to take away that blot on our statute book. I absolutely believe that that section in the Crimes Act is a blot on our statutes. It legitimates illegal activity overseas. I think that dancing around the margins and talking about undue benefit is relying on semantics and is simply splitting hairs.The reality is we ought not to be indulging in this sort of behaviour. We certainly ought not to legitimate that behaviour by our business people overseas. One of the arguments I have heard is “Don’t be naive. It’s the way of the world.” and a couple of our key export markets—typically China and India—get named as being countries with a culture of corrupt practice. You have simply got to pay the bribes to get your business done there. It is also true however that the Governments of those two countries have come out very strongly in their wish to drive that culture out of their business communities and out of daily practice. New Zealand is held up as a good example of a country that does not tolerate corruption. We go to China and we go to India and if our exporters engage in this sort of behaviour where then does it leave their Governments in their attempts to drive corruption out of their domestic business environment? It would be a case of: “Hey New Zealanders do it so it must be OK.”We can stand proudly. I believe that if we remove this provision if we make it illegal for our business people to operate in this way and offer bribes then as a Government we can have a Government to Government dialogue and say: “Hey guys you need to crank up your act. You need to make sure that our business people are not disadvantaged.” Would it not be great if we got a reputation as whistleblowers who would not tolerate corrupt practice? That would be a very strong statement New Zealand could and should make.I confess that it puts our business people in a difficult position but I believe that if we go to market with good quality products and good services and if we stand on an honest and good ethical base and legitimate that in our legislation it would be to the advantage of our business of “New Zealand Inc.” and our progress as a country economically as well as socially.The Minister made the point that Australia does not have an absolute ban on facilitation payments and she is right—it has not yet gone to the point we would like it to. It is also true that the 2012 UN review of Australia’s position in relation to the United Nations Convention Against Corruption called for the Australians to have a really hard look at that. It implied—and I do not think I am overselling it here—that the UN sees a dilemma in Australia’s continued willingness to accept the payment of facilitation payments by its business people. It just does not sit well. It does not mesh with Australia’s position of having ratified the convention.We will face the same dilemma. Why would we want to do that? Why not put ourselves in a very clean position and say that we will not tolerate the payment of bribes be they large or small and we will not tolerate behaviour by our business people overseas that we would not tolerate here. That is a clean and a straightforward and an honest position. It is a principled position and it is one that I do believe would advance our business interests in the long term.We have the examples of the UK and Australia. The British position is that it will not allow facilitation payments.It will not allow its people working abroad to engage in that behaviour.The Minister made the point—and quite legitimately—about unintentional criminalisation. I do not believe that a New Zealand business person operating overseas intentionally pays a bribe if they hand over some cash thinking: “Oh that is the way they do business here.” I do not believe that any New Zealand prosecutor or the police would be interested in taking that person to task on that. Certainly they might give them some information and they might advise them against that course of practice but I do not believe that we will criminalise our own if through naivety they did that.MAHESH BINDRA (NZ First): I wish to speak on this bill on behalf of New Zealand First. We need to make all facilitation payments illegal as they are all small bribes. It was very disheartening and very disappointing to hear the Minister trying to justify small facilitation payments. Whether small or big a bribe is a bribe and that is what we need to address because what is at stake is our reputation as a clean transparent country. We have a reputation for having businesses doing business above board without bribery and without those facilitation payments. We need to also work particularly on the facilitation payment side of it and it is not a good sign when the Minister herself tries to justify small facilitation payments.During the Saudi sheep debacle where $11.5 million of taxpayers’ money was paid—we called it a bribe. Well we got into trouble for that but we still called it a bribe and that is what it was—a bribe. There is no such thing as a harmless bribe. Whether you call it a bribe or you call it a facilitation payment whether you call it speed money in some countries whether you call it baksheesh or whether you call it a hafta—there are various names for it but it is the same thing. It is a bribe. So you must also support the anti - human trafficking part of it because that has got more angles to it. It has got the human rights issue angle and it has got the corruption angle. Also it is a punishable offence in most countries including ours.Coming back to the money-laundering part of it we suggest that the high-value goods and services such as the lawyers professions and businesses dealing with real estate also should come within the purview of this bill and that any wrongdoing in that area should also be covered in the Organised Crime and Anti-corruption Legislation Bill.We have had a large number of submissions during our select committee hearings and I would like to quote one of them. In the words of one of the submitters: “Those facilitation payments are bribes and by failing to address them we are enshrining bribery in New Zealand law.” That actually explains the whole thing in just two sentences.David Seymour: What thing?MAHESH BINDRA: Which one?David Seymour: Which thing?MAHESH BINDRA: OK—coming back to the facilitation payments. Facilitation payment—when that was made it was justified as a facilitation payment whereas it was actually a bribe. Had Supplementary Order Paper 128 which David Clendon put in—we are going to support that because it addresses that particular issue. New Zealand First supports the notion that it should be illegal for New Zealand companies to make facilitation payments overseas. Facilitation payments are bribes in the simple no-nonsense language of New Zealanders. The United Nations Convention Against Corruption prohibits facilitation payments and the OECD has called for a prohibition on facilitation payments. The United Kingdom has prohibited them and Australia is looking to do the same. So we suggest that we should also be getting rid of this lacuna in the law this little excuse for small facilitation payments. What is small for a National Party funder could be a big fortune for some of us so who draws that line? What is small? What is big?David Seymour: Careful.MAHESH BINDRA: I think you need to be careful Mr—DAVID SEYMOUR (Leader—ACT): I would like to make a short contribution on the facilitation payment aspects of this bill and the Supplementary Order Paper that has been put on the Table. This is a debate between those who measure public policy by its intentions on the one hand and those who measure it by its outcomes on the other. It is also a debate between those who would like to go and ingratiate themselves in the corridors of international agencies on the one hand and those who represent the interests of New Zealanders and particularly New Zealanders doing business overseas on the other.What an absolute prohibition upon any kind of facilitation payment by New Zealanders to any overseas authority in those overseas countries would do is ensure that something we cannot quite define is illegal. It would ensure that anybody who gives any kind of payment that did not fit into the correct framework—a framework defined by a foreign country—is therefore an illegal payment and therefore a crime has been committed. It is entirely impractical to achieve that. First of all it places an onus on the person making the payment to determine whether or not the payment they have made is truly legitimate.Let me just give you one simple example relayed to me just a few weeks ago by a constituent in my electorate who said: “Look I was travelling overseas. I was told in a very remote location that were I not to purchase an additional visa I could not go any further.” So is it the intention of this Committee by adding this Supplementary Order Paper to the bill to ensure that that person would have to err on the side of caution—that the payment would indeed be considered illegal in the eyes of the jurisdiction they were trying to enter—and return home impractically from a remote location where they were not actually able to get any kind of safe passage or accommodation back? Is that really the intention of this Supplementary Order Paper? Or is it—as has been the experience of New Zealanders overseas doing business in unfamiliar places with different legal frameworks from our own—a necessity to make payments that would maybe not be familiar or acceptable under our legal framework or that may not be legal or familiar under the framework of the host country but none the less are demanded in that circumstance?I put it to the Committee that it is an unfair prohibition to put the onus on New Zealanders in difficult circumstances to make those judgments. But even if we were to believe that it were true—and believe that we as New Zealanders could travel overseas and inspire foreigners to be more like us and it is odd that there is a sort of cultural imperialism coming across here some might say—then of course the New Zealand Government would find the onus would be on itself to make judgments about whether payments made under an unfamiliar legal framework in an unfamiliar land were actually legitimate according to the standards of that country. That again is highly impractical for the New Zealand Government to actually do. So we find ourselves in this conflict between those who believe in public policy intentions—and will sing them from the rooftops because don’t it make you feel good—and those who tend to judge public policy by its outcomes which are much grittier and more filled with practicality than the proponents would make out.It is a conflict as I said between those who would ingratiate themselves in the corridors of international agencies where such high-minded ideas always ring true and those who experience the practicality of actually going about their business and it might be that the British actually understand this a little bit better than other speakers have let on. David Clendon very graciously showed me a letter from Transparency International. I read all of the parts that he had highlighted in his letter including the fact that the British have nominally introduced an absolute prohibition on facilitation payments. What I read under the highlighted part was that the British are not enforcing it because as I have suggested with the proposal before us today it is impossible for a Government such as New Zealand’s or the Government of the United Kingdom to enforce an absolute prohibition on such payments right across the world in a range of unfamiliar environments. That is how I can stand here as a proud New Zealander and a New Zealander—CHRIS HIPKINS (Labour—Rimutaka): It concerns me greatly that in the contribution we have just heard from David Seymour and in the contribution from the Minister of Justice both of those speakers seemed to be unable to differentiate between a fee for a service that is a service available to all those who pay the fee and a bribe. Those are very different issues. It is a fairly clear distinction that I think anyone can understand and it concerns me greatly that they are unable to distinguish between them.I think it is very important that culture is taken into account. One of the cultures that we are trying to inculcate through the passage of this bill is one that is against corruption. I want to talk particularly about section 105F “Trading in influence” in clause 7 but before I do that I want to go back right to the beginning of this part of the bill to clause 4 which defines what is meant by a “crime involving dishonesty”. When we turn to the actual Crimes Act itself—the one that is being amended—it makes a clear reference to Ministers of the Crown and members of Parliament. The reason I raise this is that I want to bring into context the issue of what is a small payment versus what is a large payment. I want to use a very quick anecdote by way of that.I have regularly dined in establishments in my electorate and throughout the Wellington region where when I have got up to leave the proprietors of the establishments have tried to prevent me from paying for my meal. Then in many other instances I have been approached by those very same proprietors seeking assistance with a matter. It is normally an immigration matter but there have been other matters as well. I can say to the Committee that I have always insisted on paying for every one of those meals that I have eaten. They are not significant amounts of money—we are not talking here about fine dining establishments—but I have always paid for the meal concerned because I have a standard that says that any payment of that kind could be deemed to influence me in the way that I act and therefore I have made that distinction. That is a value that I hold dear. That is the culture that is the value that we need to be instilling through this kind of legislation.When we get the Government saying that there is a difference between a small payment and a large payment how small is small? For example is the cost of one of those meals a small payment? I mean we are talking about a small amount of money. It is not a very expensive meal. But I am covered by this law; we are all covered by this law. We are all deemed to be covered by the law that we are passing and quite rightly so. This impacts on all of us. Is going out and accepting a free meal from someone whom you then offer assistance to—whether it be for an immigration matter or whatever else and it is a small payment—a bribe? That is a question for Government members and I think it is a legitimate one for them to answer. I would say that yes it is. If Government members would say “Yes it is.” too then how is that different from a small facilitation payment as they have defined it in the debate that we have had on this bill so far? I think that is something we have yet to hear from the Government on.I come to section 105F “Trading in influence” and the point that I want to make here is that this section deals with only the influence of officials but actually there are people other than officials who have significant influence on decision-making processes. By limiting this to officials only we potentially narrow down the scope of the intent of this legislation. So what I would like to know from the Minister in the chair the Hon Louise Upston is whether the wording of this section and particularly “a bribe for that person or another person with intent to influence an official …”—what I would like is some more definition from the Minister on what is meant by “or another person”? Does that mean somebody who is basically paying a bribe to someone who they think will have influence over a decision-making process but who is not an official? Is that wording designed to cover those people?It is not always a direct payment or a direct bribe to an official. There are other people who have influence on officials as well. I want to be sure that section 105F “Trading in influence” covers those people. If it does not then in fact there is a real argument to be made that this bill will not achieve its stated objectives of ensuring that bribery—outright bribery—is illegal. If a payment can be made to somebody else who can then exert influence then in fact I think that many of the other provisions in this bill are therefore redundant.So the final point I want to make in this brief contribution to this debate is the one that I opened with: culture matters. The point of this exercise the major thing that we have to be stressing as parliamentarians is that we have a zero-tolerance culture when it comes to bribery and corruption. I am not sure that the messages coming from the Government members speaking on this legislation are contributing to that.RINO TIRIKATENE (Labour—Te Tai Tonga): I am pleased to take a call in this Committee stage. I want to acknowledge the Minister Amy Adams who while on her feet before mentioned that this bill is entirely compliant—entirely compliant—with our UN international conventions and treaties on which this legislation is based. We know that the suite of amendments that are enacted under this bill all stem from a report from 2001 Strengthening New Zealand’s Resistance to Organised Crime. That report involved 18 Government departments. The proposals that were in this report were incorporated in this bill.I am curious to know how cast-iron the Minister is in her assurance about compliance with the international conventions because the report which was written by the Ministry of Justice and is the foundation for this bill had the biggest legal disclaimer that I have ever seen and have ever read. Basically it was a cast-iron disclaimer that everything that was in the report—the ministry accepted no responsibility for its accuracy or any legal action that might eventuate on the basis of this report. So I am somewhat pleased but I would like the Minister to elaborate a bit further on the assurance that this bill is compliant with all of the international conventions and fully compliant with all the treaties and other protocols that are included in this legislation—that it is cast-iron and that she is not hiding behind any legal disclaimers that have been put to her by her officials.It is important that the people of New Zealand know that in this bill we are not hiding behind legal-speak—we are not hiding behind disclaimers. If it says that we are fully compliant with UN conventions and the like then that needs to be the case otherwise we are actually fooling the public. So there is more than just the United Nations Convention Against Corruption at stake included in this bill. There is a host of others and I would like the Minister to give that assurance that we are indeed fully compliant with all of those conventions as a result of this legislation.Just a quick word now on the issue of facilitation payments. I understand that it is a very difficult issue. Just to give an example prior to the enactment of the China free-trade agreement which was championed by the Hon Phil Goff our entire live lobster industry in New Zealand went through what was called grey channels through Hong Kong and into Mainland China. Obviously the customers were in Mainland China and the financial transactions took place via Hong Kong for its banking system. However the passage of all of the lobster that came out of New Zealand went through grey channels which was basically the word for bribery or greasing the wheels—greasing the access of those lobsters through to the importer. Everyone in the New Zealand industry knew about that. It was common knowledge. That is why hundreds of tonnes of product go that way. The reason that New Zealand companies exported that way was that was the mode of business. Sure there were official tariffs that were in place in China but everyone knew that the hub and the way that the importers circumvented that was through these grey channels under the dead of night in darkness from Hong Kong into southern China.Fortunately the business has changed and it has become much more open and transparent. In southern China at that time there were massive billboards basically saying that “The success of this region is based on cooperation between the border officials the importers and the police.” It was blatantly obvious that it was all about some form of bribery to be able to transact that whole industry. The New Zealand industry does not operate in a vacuum and so I just wanted to highlight the point that I guess it was based on who had knowledge. The actual knowledge and the actual grey channels were enacted and effected—JACINDA ARDERN (Labour): I appreciate the opportunity to take a call and although I absolutely agree with what my colleagues have had to say on early clauses in this part around facilitation payments I actually want to focus my call on replaced section 98D of the Crimes Act set out in clause 5—the provisions that relate to trafficking in persons.The Organised Crime and Anti-corruption Legislation Bill in large part makes sure that we are compliant with international treaties and overseas obligations and that stands true for this part as well. If we were to identify the problem that we have it is in respect of the United Nations protocol to prevent suppress and punish trafficking in persons especially women and children—otherwise known as the anti-trafficking protocol. New Zealand is a signatory of that particular protocol and currently we are not entirely compliant with it.There are two areas we are meant to ensure that our legislation covers. Our legislation needs to clearly and precisely define the constituent elements of the trafficking in persons offence in order to distinguish it from other offences and enable the identification of trafficking victims and we need to ensure the trafficking in persons offence reflects the three constituent elements of actions means and exploitative purpose.So we have the situation at the moment where in New Zealand it is the Crimes Act that covers our trafficking requirements and they are set out in section 98D of the Crimes Act. However these provisions in the Crimes Act contain and express transnational requirement and—just to pull out the relevant part of the Crimes Act—that is that the offence requires in section 98D(1)(a) the “entry of a person into New Zealand”. In addition the offence does not explicitly refer to an exploitative purpose as one of the elements of trafficking. So it does not allow there to be cover currently in our legislation of trafficking within New Zealand with an exploitative purpose and the definition is too narrow based on what the UN would otherwise require us to do.There are rankings internationally of countries and how they performed in the area of exploitation and this is in the Trafficking in Persons Report. This is a report that puts countries on to different tiers. It is produced by the United States and New Zealand currently is in tier 1. There is however a concern that we may lose our ranking within that report because of the way that we currently define the exploitation and trafficking of people. I have pulled out a section of the report—and I thought I would be very digital and “e” and use my laptop but it is not really performing properly. But under the prosecution section of that report it states that in New Zealand: “The government moderately increased efforts to hold traffickers accountable for trafficking crimes. New Zealand does not have an anti-trafficking law that prohibits all forms of trafficking but the Parliament passed a second reading of proposed amendments (which are part of the Omnibus Crime Bill) to conform the definition of trafficking to international law. New Zealand statutes define human trafficking as a transnational offense akin to smuggling and do not include exploitation as an element of the crime. The Crimes Act of 1961 criminalizes only some specified forms of forced labor. Slavery is criminalized but limited to situations of debt bondage and serfdom; this prohibition does not cover forced labor obtained by means other than debt law custom or agreement that prohibits a person from leaving employment. The Dealing in Slaves statute and the Prostitution Reform Act criminalize inducing or compelling a person to provide commercial sex and with regard to children provide a broader prohibition to include facilitating assigning causing or encouraging a child to provide commercial sex.”So you can see from that reference that we do have specific provisions in things like the Prostitution Reform Act and our labour laws that might criminalise these areas but according to this report that of course does leave some gaps and may not cover all situations and circumstances that we need to cover. So this bill seeks to remedy that situation and does so reasonably successfully in my view because if you think first of all about the issue at the moment of our Crimes Act requiring it to be a transnational trafficking situation the amendment set out in new section 98D(3) states: “Proceedings may be brought under this section even if—(a) parts of the process by which the person was exploited coerced or deceived were accomplished without an act of exploitation coercion or deception: (b) the person exploited coerced or deceived—(i) did not in fact enter or exit the State concerned; or (ii) was not in fact received recruited transported transferred concealed or harboured in the State concerned.” So explicitly there we are removing that transnational requirement and allowing domestic situations to be covered.Let me give you an example. I heard a case not long ago of a woman who under legitimate terms came into New Zealand from Eastern Europe. I believe from recollection that she was in a relationship when she came into New Zealand. That fell apart. Her source of income fell apart. She found herself in a situation where for money she was working in prostitution but she was in an exploitative situation with the person who was employing her in that trade. Because of her tenuous immigration status and the nature of her work she was essentially being exploited by that individual.She was not expressly recruited into New Zealand for that purpose so technically I imagine under the Crimes Act currently charges could not have been pressed against that person under that clause but I would imagine—this is simply my reading of it—that the removal of the transnational factor would allow her exploitation to be properly covered when it comes to trafficking and exploitation.But the question I want to raise is that even though we are changing these provisions in line with the Trafficking in Persons Report there are still some criticisms in that report that are not simply legislative. I will leave it to my colleague Iain Lees-Galloway to speak at greater length about this.Iain Lees-Galloway: No pressure.JACINDA ARDERN: At great great length I would hope. The report goes into some detail and I will read some extracts about recommendations for New Zealand. It states that New Zealand should “Approve and enact the Omnibus Crime Bill to expand New Zealand’s current anti-trafficking legal framework; increase efforts to proactively identify victims through proactive screening of vulnerable populations including women and children in prostitution foreign workers and illegal migrants; significantly increase efforts to investigate and prosecute trafficking offenses especially offenses committed by recruitment agencies and employers who subject workers to debt bondage or involuntary servitude through deceptive recruitment non- or underpayment of wages and threats of deportation;” and so it continues.The point that I think is being made is that legislation is not enough and that even though we may have these provisions in place and we are enabling a broader set of references in statute we are still relying on particular cases to be brought before the courts in order to allow these provisions to apply. But the point being made in this report is that we do not screen. We do not look for those cases. We do not proactively go out there and seek to protect those communities who are most vulnerable.I myself have seen situations and I know that Iain Lees-Galloway will probably have countless examples of foreign workers who have been in these situations. But I know for instance that when I had a case that was brought to me that was clearly exploitative it was treated as a labour law case rather than under these provisions and it relied on the affected people to bring the case forward.When you are dealing with vulnerable populations like this the idea that they will proactively come forward—particularly when they have come from countries where people do not have a trusting relationship with officials—and bring a case to someone like a member of Parliament is not only daunting and prohibitive but it is not seen as safe I imagine by a significant part of our migrant population.So I do absolutely agree with the points made in the Trafficking in Persons Report—this legislation is one thing but we need to be proactive in our screening.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.The CHAIRPERSON (Lindsay Tisch): I am going to hear from David Clendon. He has two amendments.DAVID CLENDON (Green): I would just like to make some further comments about this bill and this part. As I said earlier it is an OK bill. It could be a very good bill if it adopted Supplementary Order Paper 76 in my name and inserted those words about repealing section 105C(3) of the Crimes Act.I would like to respond to one or two comments that Mr Seymour made in his contribution. Firstly he talked about what I think the Minister of Justice described earlier as unintentional criminalisation. He told us a cautionary tale of an innocent abroad who was coerced or intimidated or somehow persuaded to make a payment to a corrupt public official. No doubt that goes on. We hear many stories of people being stopped in vehicles and obliged to pay a “road tax” which is actually going into somebody’s pocket. Why this bill would not capture that sort of activity abysmal though it may be is contained in the section of the Crimes Act that I quoted earlier which very clearly and specifically puts this matter about facilitation in the context of doing business. It talks about obtaining or retaining business or obtaining some improper advantage in the conduct of business.Mr Seymour talked about operating in the real world—the practical matters that actually happen. The scenario he created is not one that would occur. There is no way I believe that in New Zealand we would prosecute a person who had been unknowingly naively the victim of a corrupt official. We would prosecute—and I think we ought to prosecute—people who go abroad and offer to make these payments in order to progress their business in a way that gives them some advantage. So I think that objection to the bill is not well-founded because the context for the change is clearly spelt out in the context of doing business abroad.Mr Seymour also quoted briefly from Transparency International’s submission. He did not quite get it right. I acknowledge that he is a busy man. He must have read it in some haste. He told us that the UK prohibits facilitation payments. That is correct. He also told us that the UK Government is not enforcing that prohibition. That actually is not the case. To quote from the letter he referenced the submission from Transparency International: “The UK’s Bribery Act 2010 prohibits facilitation payments and that these have always been illegal under previous UK corruption legislation.” It goes on to say that although the UK has a low level of enforcement it is advised that the UK will soon take action against an international organisation in the near future. I paraphrase slightly. But it talks about a low level of enforcement which is a very different thing from not enforcing.It is entirely appropriate. I would not suggest for a minute that if we do pass this legislation and remove the exemption the next day we charge out mob-handed and start prosecuting people en masse. That is not the way laws happen. We like to think perhaps that in this Chamber everybody is hanging on every word and that immediately that we make law the public immediately know about it and understand it. I think the UK’s approach—I am inferring this—of a low level of enforcement would be entirely appropriate initially because we are working against a very long period of improper action. It would take time for the business community to get its head around the fact that this is no longer acceptable or legal.So I think that the UK approach would be the appropriate one—have a low level of enforcement but then pick a good fight find somebody who is overtly and on some large scale breaking the law breaking the prohibition and making these payments as a matter of course. Go after a big target and knock them down. That would send a message to the people who might otherwise engage in this sort of activity illegal as it is in the UK. So I do think that Mr Seymour’s objections are not well-founded and I do stand by the Supplementary Order Paper. I think it would make this better law.Mr Seymour also mentioned the Australian situation. Certainly it is moving I think closer to prohibition. In terms of other organisations the United States has been complimented by the OECD because it is also moving towards a position of prohibition of eliminating these facilitation payments. APEC is another body that has spoken out against them and said that countries ought to move away. The opportunity here is for us to show something called leadership. Let us for once be at the head of the pack. Let us lead the way and take a clear principled unequivocal position.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.IAIN LEES-GALLOWAY (Labour—Palmerston North): As was foreshadowed at some length by my colleague Jacinda Ardern I would like to look closely at clause 5 of the Organised Crime and Anti-corruption Legislation Bill which replaces section 98D in the principal Act the Crimes Act. Section 98D deals with trafficking in persons. Largely the amendments contained in this bill enlarge on the original section and add some important aspects that hopefully will add some clarification and hopefully make it easier to prosecute cases of exploitation under this legislation rather than under some alternatives including for instance our employment legislation. What is probably most likely to support that is new section 98D(4) which actually has some definitions around the word “exploit”. Exploitation includes “slavery practices similar to slavery servitude” and in particular “forced labour”.This is what I want to concentrate on in this contribution because the same report that Jacinda Ardern referred to the Trafficking in PersonsReport 2015 did identify some issues with our ability under current legislation and under section 98D as it is currently written to actually identify some forms of labour exploitation as forced labour and to prosecute them under the Crimes Act. The report identified things that are probably well-known to us which are that “Foreign men and women from China India the Philippines countries in the Pacific South Africa and the United Kingdom are vulnerable to forced labor in New Zealand’s agriculture horticulture viticulture construction and hospitality sectors or as domestic workers. Some foreign workers are charged excessive and escalating recruitment fees experience unjustified salary deductions non- or underpayment of wages excessively long working hours restrictions on their movement and have their passports confiscated and contracts altered.” None of this is news to us but I think what perhaps has not been really recognised by the New Zealand public is that these actually constitute forms of forced labour and the report identifies some examples.One investigation revealed that an employer was exploiting Chinese chefs but there was no prosecution of the defendants for forced labour. It was stated by NGOs and Government officials that there was a high evidentiary bar and there was a failure to identify the behaviour as trafficking or forced labour as per international law. There was a lack of judicial support for prosecuting it as forced labour or even an understanding of trafficking and these were all identified as reasons for the lack of anti-trafficking prosecution of the employer of those identified victims. The report noted that “The Immigration Act prohibits retention or control of a person’s passport or any other travel or identity document [yet] there were no prosecutions under that provision.”So my hope is that—and I did not see anything in the commentary about this—by including forced labour as something that is explicitly defined as exploitation for the purposes of this section we might actually have a better opportunity to prosecute some of those offences under this Act. I would think and I would hope that the penalties which are imprisonment for a term not exceeding 20 years or a fine not exceeding half a million dollars or both—neither of those are new; those are in fact the penalties under the current section 98D but they are significant penalties—are a far greater disincentive to conducting the type of exploitation that is identified in this report than the penalties that are available under our employment legislation.There are other examples where New Zealand is currently failing to appropriately apply the laws that we already have. Again an example from this report: “Labor inspectors reported visiting legal brothels to ensure working conditions were in compliance with New Zealand law but none of these inspections resulted in the identification of trafficking victims.” I just do not think any of us in this Committee believe that that is realistic—that not one of those inspections actually identified any victims of trafficking. “Labor inspectors reported conducting routine audits in workplaces that employ migrant workers; they identified breaches of labor standards but these did not result in investigations or prosecutions of forced or coerced labor exploitation.” So clearly there is work to be done and this amended section 98D certainly appears on the face of it to go some way to addressing that. There is some rearrangement of the language which again hopefully makes it clearer what is the evidential bar for recognising trafficking and things like forced labour and slavery and for that matter other things that are identified in here like the removal of organs or prostitution and other sexual services. These definitions now hopefully are much clearer and much easier for the judiciary to apply.But we also need to see some enthusiasm for this approach from the judiciary. We need to see our labour inspectors properly resourced to be able to go out and identify potential cases of exploitation of this nature but also to be able to pursue those prosecutions because there is no doubt that pursuing those does require quite a high test. There is a high evidential test. The labour inspectors will want to be sure that they are able to prove their case and that takes resources—that takes resources. I would like to hear some assurance from the Minister in the chair the Hon Louise Upston that not only is the law appropriately written so that we can actually address some of these matters of forced labour but also the Government is prepared to resource the Ministry of Business Innovation and Employment and the other agencies tasked with enforcing this legislation to be actually able to go out there identify the cases take successful cases pursue them all the way and not fall at the final hurdle if they are not able to meet some of the evidential tests that will be required of them.Overall in my view this new section 98D is a significant improvement on what we have in the current legislation and it certainly looks to address some of the issues with New Zealand’s approach to these matters that have been identified by overseas agencies.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.A party vote was called for on the question That the question be now put.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 76 in the name of David Clendon to clause 6 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 60New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.Noes 61New Zealand National 59; ACT New Zealand 1; United Future 1.Amendment not agreed to.The question was put that the amendment set out on Supplementary Order Paper 128 in the name of David Clendon to clause 6 be agreed to.A party vote was called for on the question That the amendment be agreed to.Ayes 60New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.Noes 61New Zealand National 59; ACT New Zealand 1; United Future 1.Amendment not agreed to.Part 1 agreed to.Part 2 Amendments to other enactmentsIAIN LEES-GALLOWAY (Labour—Palmerston North): It is a privilege to be able to speak on Part 2 of the Organised Crime and Anti-corruption Legislation Bill. This Part deals with amendments to other enactments. Whereas Part 1 was dealing with amendments to the Crimes Act Part 2 deals with amendments to a variety of other pieces of legislation.Subpart 1 deals with amendments to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The principal Act came into force in 2009 in response to some pressure that New Zealand was being put under to join the international coalition of the willing if you will to put pressure on international crime organisations. I think that the nomenclature in terms of that legislation is probably a little bit over the top. Actually it could have related to organised crime rather than the financing of terrorism but nevertheless restrictions on financing for any form of organised crime are certainly useful.The significant amendments to that legislation are in clause 19 of this bill which amend section 5. The “ ‘domestic physical cash transaction’ means a transaction in New Zealand involving the use of physical currency”. That has been amended slightly by the Law and Order Committee. I would be interested to know from members who were on the select committee why that change needed to occur. The original wording there does not look terribly difficult to interpret. I would be interested to know from members who were actually on the committee why that change was made. There is also an insertion of a new term “international wire transfer”. That is a transfer where at least one of several New Zealand institutions is “(i) the ordering institution: (ii) the intermediary institution: (iii) the beneficiary institution”.New subpart 2A inserted by clause 23 refers to “Prescribed transaction reports”. New section 48A “Reporting entities to report certain prescribed transactions” reads “(1) Despite any other enactment or rule of law but subject to any regulations made under section 154 if a person conducts a prescribed transaction through a reporting entity the reporting entity must (as soon as practicable but not later than 10 working days after the transaction) report the transaction to the Commissioner in accordance with section 48B.” This I assume is to improve transparency around certain prescribed transaction reports and to improve the ability to monitor the movement of certain monetary payments.Subpart 3 is “Amendment to Criminal Investigations (Bodily Samples) Act 1995” and clause 39 inserts section 27(1)(d): “for the purpose of responding to a request under the Mutual Assistance in Criminal Matters Act 1992 if—(i) access to the information requested is authorised by the Attorney-General; and (ii) the request relates to an offence that corresponds to an offence in New Zealand that is punishable by a term of imprisonment of more than 1 year.” This has to do with information that goes into the DNA-profile data bank. These are a number of I guess what are technical amendments but they are designed to improve the functionality of various pieces of legislation that relate to greater transparency around—RINO TIRIKATENE (Labour—Te Tai Tonga): I am pleased to take a call on Part 2 of this bill. I would like to pick up on my remarks that I made during the debate on Part 1 where the Minister in the chair Louise Upston acknowledged that this bill is entirely consistent with our international obligations. I would like to ask the Minister in relation to Part 2 whether the provisions in Part 2 are entirely consistent and compliant with our international obligations because the actual proposals upon which this Part 2 are based were based on the Ministry of Justice and 17 other Government departments and the proposals that were put forward were subject to the biggest legal disclaimer that I have ever read in my life.Actually I am amazed that the Government’s ministries—it was an all-of-Government approach to this legislation and there was a monstrous disclaimer from the ministries on their own proposals yet those proposals form the basis of this legislation and the basis of the enactments that are contained in Part 2.I would like the Minister to rise to her feet and reassure the public of New Zealand that all of the international obligations—the treaties conventions and protocols whether they be OECD or through the UN—that those international commitments that we have made are as she has mentioned in relation to Part 1 entirely compliant. If her own officials have to hide behind legal disclaimers and not take responsibility for the advice that they give when recommending proposals for this legislation then how can we this Parliament and the people of New Zealand be clear?I know that genuine efforts have been made through the Justice and Electoral Committee to implement these provisions whether it be through money-laundering Acts or through all of the other subsequent amendments that are being made to a host of other pieces of legislation—I believe it is 12 pieces of legislation in total. The bulk of those amendments fall under Part 2—but I return to the point.This piece of legislation and the provisions in Part 2 that give effect to many different provisions around money-laundering and other legislative provisions are all based on New Zealand being compliant and ratifying the international commitments that we have made. I would like to ask this Minister the Hon Louise Upston to rise to her feet and reassure the public of New Zealand and this Parliament that indeed in enacting this legislation New Zealand is going to be fully compliant. If not then how compliant are we?This is no time for half-baked measures. If we are putting through this legislation and amending a host of various pieces of legislation that are addressing a very very important topic around strengthening our laws around organised crime and corruption we need to have that assurance that indeed this legislation does ensure that New Zealand fulfils its international commitments. We have signed up to these international commitments and indeed it has been exposed by Transparency International New Zealand in 2013 I believe that New Zealand is falling short—we are falling short. So we are putting this legislation through to ensure that we are able to lift the bar but I would like to know from the Minister: have we really raised the bar and are we fully compliant with our international commitments which are the topic and which underpin the provisions here in Part 2? Thank you.Hon DAVID PARKER (Labour): I have a question for the Minister in the chair Todd McClay relating to clauses 58 and 59 together and I have a separate question in respect of clause 61 of the bill. Clauses 58 and 59 of the bill relate to amendments to New Zealand legislation to provide mutual assistance to overseas countries that are looking into the sorts of things that would be illegal in New Zealand.The first question I have is in respect of clause 58 which inserts a new section 31 into the principal Act which is the Mutual Assistance in Criminal Matters Act 1992. It says that “A foreign country may request the Attorney-General to assist in arranging—(a) the taking of evidence in New Zealand;” and the Attorney-General can authorise that assistance if “satisfied that—(i) the request relates to criminal proceedings in the foreign country; and (ii) there are reasonable grounds for believing that the evidence can be taken…in New Zealand:”. I can see why that power is necessary.My first question relates to why it is that these rights go to the Attorney-General rather than sit with the police. It seems to me that these things ought not to be elevated to so high a level that in practice there are procedural impediments to actually cooperating with foreign countries trying to stamp out these sorts or corrupt practices. It may be that there has been proper thought given to that and that the reasons for leaving that with the Attorney-General relate to the fact that it is the Attorney-General who through Crown Law generally exercises those prosecutorial decisions. But it also could be argued I suppose that in respect of lower levels of criminality which none the less ought to be policed it is generally the police that exercise those questions of discretion.The second issue that I have not yet had an answer to from the Government—the Ministers in the chair—arises again in respect of clause 59 which also amends the Mutual Assistance in Criminal Matters Act. I raised this issue in respect of my contribution on Part 1 and it relates to the definition of “foreign public official”. You will see in clause 59 that schedule 1 is amended by inserting into the list of offences against the Crimes Act section 105D which relates to bribery outside New Zealand of foreign public officials. I asked why it is that we have got such a narrow definition of “foreign public official” that it does not capture the sort of controversy that we have currently in respect of the Saudi sheep issue. I accept that the Government does not accept the Opposition’s characterisation of the payments that were made to the Al-Khalaf Group—a $7 million cash payment which the Opposition and the media—Ian McKelvie: Not still talking about this.Hon DAVID PARKER: I am still talking about this—that is the reference we have from the National Party. You know irrespective of whether you think that the Labour Party’s characterisation of those payments is accurate in fact I would have hoped that National would concede that if we are right in fact then those payments are improper. If a $7 million payment really was to buy the cooperation of the Al-Khalaf Group in order to stop that person blocking the advancing of the free-trade agreement with Saudi Arabia that is improper in my book. You can have a factual disagreement as to whether the facts actually show that that was the purpose of the payment but if that was the purpose of the payment—and I think it was—it was improper.That sort of payment ought to be illegal under New Zealand’s law because it is improper. But the problem with this legislation is that that sort of payment even if it is made is not made illegal because you have got such a narrow definition of “bribery of a foreign public official” that it does not capture that sort of payment. So if Mr Al-Khalaf was paid that sort of payment and it was improper and he was a public official it would be caught by this legislation but if he is not a public official—because he is not a public servant he is just someone who has got influence on public servants—it is not caught by this legislation.We have yet to have an explanation from any Minister in the chair as to what the logic is behind that proposition. Having not had an answer on Part 1 I am hoping that we get an answer in Part 2 because it arises in respect of clause 59 of the bill where reference to section 105D of the Crimes Act is inserted into schedule 1 and what is inserted is relating to bribery outside New Zealand of a foreign public official. I make the point that the definition in this bill is so narrow that the situation that we have in respect of the Al-Khalaf Group would not be caught because Mr Al-Khalaf is not a public servant or a foreign public official in that context. Irrespective of whether the Government agrees with my characterisation of what Mr McCully and his Government did the possibility that you can make those sorts of payments legally under New Zealand law is in my contention wrong.I turn to clause 61 which funnily enough is sort of the flip side of what I have been saying. Clause 61 inserts provisions relating to international policing and information sharing to assist the corresponding agency overseas. Can I just note a degree of caution here which I hope that the Government has properly taken into account. We have had experiences in this Parliament in recent years—and not just under the current Government but also under prior Governments; this is not a political point—where overseas Governments that are not very good at preserving civil liberties actually at times take what are quite political prosecutions or attacks against members of their own populations for political reasons.We have got to be a bit careful that we enable our police to pass a sniff test across what is being asked of them in terms of the pursuit of allegations of corruption in another’s home country because sometimes it is not what it seems and sometimes what can be happening in those other countries is actually oppressive of some of their own citizens. We have to retain a discretion on the part of the police as to whether they think they should be assisting their corresponding overseas agencies. On some occasions I would actually trust the New Zealand Police to say: “Actually no. We don’t think we should be assisting in this particular prosecution because this particular country overseas has endemic corruption within it and we ought not to be letting them use the New Zealand authorities to assist with politicised prosecutions that aren’t grounded in actual corruption.”That is a hard thing to do—to legislate for—and you actually cannot specify every eventuality in writing but you do need to make sure that the police have a discretion in my opinion. We need to trust the New Zealand Police to actually sort the wheat from the chaff and to responsibly exercise discretion as to whether it cooperates with the overseas authority when that foreign country wants to have the assistance of the New Zealand Police in order to gather information relating to a prosecution in that overseas country.MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnākoe Mr Chair. Tēnātātou katoa. It is my privilege to take a call on Part 2 “Amendments to other enactments” of the Organised Crime and Anti-corruption Legislation Bill. I have listened intently to all the contributions in the Committee tonight and there are clearly some questions around whether we are meeting our international obligations so I want to reinforce that point on this side.When I look at the regulatory impact statement it says in the very front that a lot of the proposals that we are putting up in this piece of legislation are untested and the point that I draw members’ attention to is the fact that we do not collect enough detailed data on the extent of organised crime in New Zealand. So that somewhat limits whether we can properly evaluate the proposals put in here.I just want to preface my contribution tonight with that statement—that these proposals are untested. I think it is the intention as well but like most things it is the implementation. So it is to that end that I particularly want to draw the Committee’s attention to the DNA testing in clause 39 in Subpart 3 “Amendment to Criminal Investigations (Bodily Samples) Act 1995”. Clause 39 which amends Section 27 amends the disclosure of information on the DNA profile databank. Hopefully in the time we have got the Minister in the chair may be able to give some assurances that—I guess the extraction of DNA is important for many people—we are doing it in a way that is not only transparent but also safe so that we ensure that the DNA samples that we are taking are for the purposes that we are taking them for. I would be interested in hearing from the Minister about how that is going to be conducted who is going to be responsible for it because we have had a history of DNA mixing in this country and the outcome has not been very good obviously for those at the centre of it. So just in respect of this part I would invite the Minister to perhaps allay some fears around DNA testing.The other one in my time to contribute in terms of Part 2 is the collection and monitoring of international funds transfer data. Just in terms of outlining I guess the problem that this piece of legislation is trying to address—you know we talk about the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 which I believe came into force in June 2013. It enhances the existing regime and establishes a new supervisory regime to better detect deter and investigate funds related to organised and financial crimes. In the 6-month period between 1 December 2009 and 31 May 2010 a total of just over 2300 suspicious transaction reports were received by the financial intelligence unit from various financial institutes. The majority of these were from registered banks. Under the new Anti-Money Laundering and Countering Financing of Terrorism Act banks other financial institutions and casinos—reporting entities—will be required to report suspicious transactions to the New Zealand Police’s financial intelligence unit. However the information that is reported can be limited due to the subjective and disparate nature of reports that are based on suspicion. This can be a problem because they are subjective and they could be disparate.So the first option that is proposed in this piece of legislation is to keep the status quo so that under this option reporting entities would only provide reports of suspicious transactions to the financial intelligence unit. This option is not preferred as debated by the select committee. Although suspicious transaction reports are valuable on their own they are unlikely to fully address the high risk from wire transfer and cash deposits. Option two is that international wire transfers and large cash transactions be reported to the financial intelligence unit.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe Mr Chair. Tēnā koe e te Heamana o te Komiti o te Whare o ngā Māngai nei nō reira tēnā koe.[So acknowledgments to you Mr Chairman of the Committee of the House of Representatives here; greetings.]I would like to just take a short call on this bill. I was not on the Law and Order Committee but I did take the opportunity to read some of the submissions. I think that in this particular bill it is fundamental to this bill that we have a very strong banking sector so I took particular note of the submissions from the BNZ and then the New Zealand Bankers’ Association. I think that in talking about money-laundering and the processes of banking as I said it is critically important that we do have a strong banking sector. In BNZ’s submission what it is saying is that in determining issues around transfers of money it is important that the systems of the Government align with its systems so that it can maximise and be able to ensure that it picks up everything that it is meant to pick up. It talks about the use of its SWIFT system and so I think it is important for the Committee to recognise and acknowledge the submissions from the banks.The other part I wanted to talk about is that when we are talking about money-laundering money-laundering in itself is of course an offence but they are proceeds from another criminal offence as well otherwise there would be no need to actually launder the money. Actually we are talking about two things that are happening here so I just wanted to also acknowledge that this bill takes care of one part and partially takes care of where those funds actually come from because with this being an omnibus bill there are several parts that this bill is actually part of.I think my colleague mentioned earlier that her device was not working. Mine is and I just wanted to quote from one of the submissions. As I mentioned earlier the international banking system uses a service known as SWIFT to make international wire transfers. This involves passing authenticated messages to settle payments from one financial institution to another. The SWIFT system uses standard codes—I am going to jump right through because it is quite long—and the definition of wire transfer in section 5 of the Act deems transfer and settlements between financial institutions acting on their own behalf not to be wire transfers. These types of transfers are made using SWIFT and it should be made clear that these are not reportable—that last bit was the key message that I wanted to really make in this. So from what I am reading it is that it is that last bit about it not being reportable—The CHAIRPERSON (Lindsay Tisch): Sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.ADRIAN RURAWHE: I quoted BNZ before the dinner break and I just want to quote Westpac as well and pose a question to the Minister: how does the proposed legislation support what the banks are saying? “Westpac estimates that it will be required to report at least 2000 transactions per day under the legislation.” and it goes on to say: “To identify and electronically report this volume of transactions Westpac will be required to develop new IT systems and business processes.” So that was the question that I wanted to ask relevant to this piece of legislation.Westpac also goes on to say that the legislation—[Bell rung] I have one last thing. Westpac goes on to say that the legislation must allow sufficient time for this to be done and so I would like to ask the Minister that as well. That is all of my contribution. Thank you.JACINDA ARDERN (Labour): I want to come to a part of the bill that has not been debated thus far I believe and that relates to the amendment to the Criminal Investigations (Bodily Samples) Act in subpart 3. It is in Part 2 of the bill. I think that probably the fact that we are canvassing such a wide range of issues from human trafficking to facilitation payments to things like the sharing of DNA information between countries does demonstrate that this is indeed an omnibus bill. But in this part of the bill which is the amendment to the Criminal Investigations (Bodily Samples) Act 1995 without seeing the context it is probably very difficult to see why such a requirement is necessary. That is why I wanted to canvass in a little more detail the problem that we have just to ensure I guess that we have opted for the right options in updating our legislation because five options have been canvassed by officials.The situation we have is that periodically the police will receive requests from overseas agencies for DNA profile and those are most likely to come from the Australian authorities—interesting given the situation we are currently in—via Interpol. But there is an inability at present for New Zealand to legally provide information about DNA profile to our counterparts in Australia and that is because the current legislation that governs the DNA Databank is the Criminal Investigations (Bodily Samples) Act 1995 which does not permit DNA profile information to be provided for an overseas agency for the purpose of investigation.What is interesting is that we have had for some time a Mutual Assistance in Criminal Matters Act. That was put in place in 1992. Our bodily samples legislation came in 3 years later and yet for some reason that legislation did not factor in the fact that we had that mutual assistance agreement. What that means in practice—in an example that is used in the regulatory impact statement—is that the Queensland police investigating a homicide may take a DNA sample from the crime scene and may ask the New Zealand Police whether or not there is a matching sample in New Zealand’s data bank but even if the police in New Zealand go ahead and carry out that analysis and they come up with a positive match they are unable to disclose who the matching sample belongs to.Obviously that will seem curious to members in this Committee but what still seems curious to me given there was a 3-year difference between when this mutual arrangement was forged and when New Zealand put in place its bodily samples legislation to regulate the way we deal with DNA samples is whether there was any reason why that was not explicitly dealt with. Obviously it is some time ago now so it might be hard to demonstrate that but I do wonder whether Parliament gave it explicit consideration and decided against it.I do think in the context that we are now in where we have greater information-sharing arrangements—particularly with Australia which is where this provision will take the greatest effect—we are now sharing between countries information about detainees who for instance might have parole provisions that would apply to themdomestically but they are being sent back to their home country. We should have that information so that we are able to apply it. I would make the point though that that is very different to what we are seeing at the moment and members on all sides of the House are advocating very strongly against the deportation of people who have for all intents and purposes taken on Australian citizenship.But coming back to the bill and to subpart 3 there was a range of options to deal with this dilemma and it seems that of the five options that were canvassed a decision was made not to have a broader information-sharing provision within the Policing Act but to come in specifically with an amendment to the Criminal Investigations (Bodily Samples) Act. I think that is probably the right decision on the part of the Ministry of Justice. The ministry did want to make sure that it narrowed down the provision of this information-sharing agreement and to do that it would be better to put it in the enabling legislation for the Act that regulates samples itself rather than in something more broad like the Policing Act. But what is interesting is the role that the Ministry of Justice has recommended that the Attorney-General should play in decision making. I come to the specific—unless the Minister in the chair Minister Finlayson would like to make a contribution? No.I come now to the way that it has been set out in the bill itself. It states under subpart 3 that this subpart amends the Criminal Investigations (Bodily Samples) Act. Clause 39 “Section 27 amended (Access to and disclosure of information on DNA profile databank)” inserts in section 27(1) of the Act: “(d) for the purpose of responding to a request under the Mutual Assistance in Criminal Matters Act …”—so we are still falling back on making sure that those requests do come via that agreement—“(i) access to the information requested is authorised by the Attorney-General;”—which is the important point here; the bill is very explicit that it must be via the Attorney-General that these requests are made so that it is not the police who have the discretion to determine whether or not DNA profiling of a New Zealand citizen is able to be shared ad hoc with any counterpart in Australia that requests it—“and (ii) the request relates to an offence that corresponds to an offence in New Zealand that is punishable by a term of imprisonment of more than 1 year.”I guess one of the questions I wanted to raise in light of some of the issues that we are seeing currently is whether this requirement for the Attorney-General to provide that information is specific to New Zealand citizens or does it also apply to New Zealand - born individuals who may now hold citizenship somewhere else? So to give an example if Australia made contact via the mutual assistance agreement via the Attorney-General and sought DNA profiling of someone who was born in New Zealand but now holds citizenship in Australia how would that be treated for instance? This is keeping in mind some of the situations we are seeing in Australia at the moment where obviously the Australian authorities are trying to build cases against people whom they determine to be New Zealand citizens but who for all intents and purposes have been raised in Australia as Australians.The other point I wish to make is that in subparagraph (ii) it says “the request [must relate] to an offence that corresponds to an offence in New Zealand that is punishable by a term of imprisonment of more than 1 year.” It is obviously creating a threshold there that says we do not consider this to be a provision that should be used for things that have an offence that does not have a custodial sentence attached to it. We do not consider such an offence to be important enough and we want to make sure that the threshold is reasonable. I think that is really important but again it highlights the absurdity of the situation that we are seeing at the moment where people who have been imprisoned for not even a year are being deported and yet under this legislation a country cannot even ask for their DNA information if the threshold is that low. You could be deported for that offence and sent back to a country that you have not known for 20 years but you cannot even have your DNA information shared between countries because the threshold has not been met.That to me highlights the contradiction about what we are seeing in the way Australia is enacting its policy right now—that it will not give us information about these people but Australia will still deport them for a lesser offence than what we have set in this law as the threshold. I think that demonstrates something quite critical. I am glad the threshold has been set there. We should not be just sharing information about New Zealand citizens willy-nilly for what the public in this country—and indeed probably the public in other countries as well—would consider to be minor offences.From reading the regulatory impact statement I am heartened by the level of analysis that has been gone through to come to the conclusion that of the five options the bar has been set relatively high. The Attorney-General will be acting on the advice of Crown Law will be assessing the seriousness of the offence in the context of the reciprocal arrangement and has the ability to refuse the request. From the threshold that we have established in the legislation the Attorney-General has the ability to hold that sovereign decision to say that either it is not an offence that we consider to be serious enough or it simply does not meet our standards. I think that is incredibly important.I think it is important also to keep that decision making away from the police and put it in the hands of the Attorney-General. The police in New Zealand need to maintain their relationships with their counterparts via Interpol and this is one way that they will not be caught between a rock and a hard place when Australian police ask for the information and they are the decision makers in that regard. I think it is a provision that demonstrates how much thought has gone into ensuring that we balance the need to cooperate at an international level whilst also preserving the rights of New Zealanders in regard to the information that is held on them.And that is perfect timing I think you will find Mr Chair.JENNY SALESA (Labour—Manukau East): Thank you for this call on the Organised Crime and Anti-corruption Legislation Bill. Strengthening our laws to combat organised crime and corruption is a worthy aim. This bill will allow us to meet a number of our international obligations and will enhance our compliance with various international treaties and conventions so we can better assist international efforts on corruption on bribery and on the activities of organised crime.Part 2 Subpart 7 amends the Income Tax Act 2007. It seeks to ensure that bribes are not tax deductible. Clause 51 of the bill is designed to make taxation legislation more consistent with criminal legislation and it replaces section DB 45 with a new section that denies deductions for bribes. The intention of this clause is to make it clear that no bribe payments can be tax deductible whether they be bribes paid through intermediaries bribes paid for the purpose of obtaining an advantage for a third party or bribes paid to foreign public officials for acts or omissions in relation to the performance of official duties.This amendment is another of those contained in this bill that will enhance our compliance with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the United Nations Convention Against Corruption. However in contrast the Crimes Act amendments in Part 1 had a number of authoritative contrary submissions during the select committee because Part 1 actually permits facilitation payments.Bribes paid to foreign public officials for the sole or primary purpose of ensuring or expediting their performance of a routine Government action where the value of it has no undue benefit or disadvantage seems to be A-OK but there will be no tax breaks allowed. Well clearly such payments are not legitimate business expenses. Of course we would not be advocating that we should resolve this inconsistent approach by allowing payments to grease the proverbial wheels to become tax deductible. No I am merely pointing out that Part 2 in this respect is not consistent with facilitation payments allowed in Part 1. Rather the question for the Minister of Justice is: should we not be following the strong taxation approach and saying that bribery is not acceptable. A genuinely hard-line approach by this Government against corruption would be most welcome in this bill.We are now slipping in the ranks of least corrupt countries in the world. In recent years we have seen a lessening of transparency from this Government. The Government arrogantly continues to look after itself and the privileged few at the expense of everyday hard-working New Zealanders. Its “no rules apply to me” approach was revealed in detail in Nicky Hager’s Dirty Politics book. The implications of a concerted campaign to undermine regulators like the Serious Fraud Office and the Financial Markets Authority cuts deep to the heart of the integrity of our financial system. Public servants and many people from both sides of the Chamber have worked hard to clean up the mess from the finance company collapses and have attempted to restore some faith so that the public can invest with confidence again. We support clause 51 in Part 2 of this bill because it clarifies that bribes are not tax deductible. Thank you.STUART NASH (Labour—Napier): Thank you very much Mr Chair.Hon Ruth Dyson: Excellent choice excellent choice.STUART NASH: Thank you Mrs Dyson. My learned colleague Jenny Salesa and I were on very much the same wavelength when we looked at this. I want to talk about DB 45 Bribes. Part 1 relates to a number of sections in the Crimes Act. The one I want to talk about in particular is section 103(2) but before I do let me first also just go to the definition of bribes in the Crimes Act. This is the definition—I had it here 2 seconds ago; you would not believe it. This is the definition in the Crimes Act: bribe means “any money valuable consideration office or employment or any benefit whether direct or indirect”. So we need to be pretty clear about what we are talking about here.Section 103(2) of the Crimes Act which DB 45 Bribes applies to actually says “Every one is liable to imprisonment for a term not exceeding 7 years who corruptly gives or offers or agrees to give any bribe to any person with intent to influence any member of Parliament in respect of any act or omission by him or her in his or her capacity as a member of Parliament.” This is quite an interesting definition. When I looked through this I wondered what constitutes a bribe to a member of Parliament.We all know that the Electoral Finance Act really tightened things up. So if we are given a campaign contribution over $1500 then we have to declare that; we all know this. If it is under that then this is fine and it is not considered a bribe. But say for example a member of Parliament was given a car and told to promote something—just as a hypothetical example. Would that be considered a bribe—when they are trying to exert undue influence by driving around let us just say a badged car? When I look at the definition here it would come quite close.The thing I cannot find though is the definition—I am sure there is one—of corrupt. So this is 7 years for those who corruptly give or offer to give bribes. So I suppose what it is is it is about the intent of the person who gives the money or the good or the offer of employment to that particular MP. So what defines corrupt? Well do they mean to mislead the public or do they want the MP to do something that he or she should not be doing or knows is morally wrong as opposed to legally wrong? I am not too sure.The Minister in the chair Todd McClay no doubt does understand the law a lot better than I do in this area and I would not mind just a little bit of direction on this because I think that in this day and age of increased scrutiny that MPs are coming under we need to be incredibly clear about what constitutes a bribe so none of us get put in a situation where unwittingly we accept a gift or an offer of money or a car or something like that that may by law constitute a bribe.There is one other clause that I would like to talk about if I may and that is clause 46. This relates to section 209 “Offences in relation to importation or exportation of prohibited goods”. Clause 46(1) states: “is knowingly concerned in any importation or exportation of—(i) goods that are designed manufactured or adapted with intent to facilitate the commission of a crime …”. The interesting thing about this is that you could argue that a gun is designed to facilitate a crime. I mean you have a gun so you can shoot something whether it is a target a person or an animal. You could mount a strong argument that a gun is designed to actually facilitate a crime and so how do things like guns or spears or shields whether they are ornamental whether they are African whether they are Indian whether they are new whether they are old—how would you actually know in fact whether you are importing a prohibited good? The definition here of “prohibited good” is quite wide I would have thought and so a little bit more definition around that—all I am after is a little bit of clarification so that good hard-working Kiwis do not get caught at the border when in fact they are bringing in stuff unknowingly. And as we know ignorance is no defence when it comes to the law—of that there is no doubt.The other thing also is paragraph (ii) which states “goods that having regard to all relevant circumstances can reasonably be considered—(A) part of or involved in an attempt to commit a crime involving dishonesty”. I suppose that is a little clearer because there seems to be more of an intent test around that because it is talking about “involved in an attempt to commit a crime” so there is a bit more of intent whereas paragraph (i) talks only about goods that are designed or manufactured with the intent to facilitate the commission of a crime like as mentioned a gun a spear a shield or any other thing that could be considered a weapon. And those of us who have flown will know that even a plastic fork these days can be used for disingenuous purposes.TIM MACINDOE (Senior Whip—National): I move That the question be now put.Motion agreed to.The question was put that the amendment set out on Supplementary Order Paper 118 in the name of the Hon Amy Adams to clause 46 be agreed to.Amendment agreed to.Part 2 as amended agreed to.Clause 1 agreed to.Clause 2The question was put that the amendment set out on Supplementary Order Paper 118 in the name of the Hon Amy Adams to clause 2 be agreed to.Amendment agreed to.Clause 2 as amended agreed to.The Committee divided the bill into the Crimes Amendment Bill the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill the Companies Amendment Bill the Criminal Investigations (Bodily Samples) Amendment Bill the Criminal Proceeds (Recovery) Amendment Bill the Customs and Excise Amendment Bill (No 3) the Extradition Amendment Bill the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill the Financial Transactions Reporting Amendment Bill the Income Tax Amendment Bill the Limited Partnerships Amendment Bill the Misuse of Drugs Amendment Bill the Mutual Assistance in Criminal Matters Amendment Bill the Policing Amendment Bill and the Secret Commissions Amendment Bill pursuant to Supplementary Order Paper119.Bills to be reported with amendment presently.