Mark RonHon RON MARK (Minister of Defence): Thank you Mr Assistant Chair. Firstly I want to start this being my first call in the committee stage—just to acknowledge and congratulate all of the honourable members who sat on the Foreign Affairs Defence and Trade Committee who heard the submissions on this bill and clearly no doubt put many of the questions that they are discussing here this evening to those submitters and to the officials at the time. I just want to acknowledge them for the work that they did.I just also want to acknowledge that I am told that all of the recommendations that that committee put forward to the Government were accepted so given that scrutiny by the select committee and their very thorough questioning I will take these questions as being meaningful and purposeful. I'll attempt to answer them given that clearly these questions weren't discussed at select committee but we'll have a conversation about that some other time.There're a couple that stand out. There've been a lot of questions in the last few speeches and I'll try to address a few of them. The first one I want to address is around the question of fit and proper". I have no doubt that the very learned members of the select committee—as very experienced as many of them are including the Hon Gerry Brownlee who's been a Minister of Defence and a Minister of Foreign Affairs—would be very familiar with the term "fit and proper" as pertains to licensed firearms owners which is a well-accepted definition that is used in the Arms Act and which is used by the police to calculate determine and ascertain as to whether a specific individual who's applying for a firearms licence should be entitled and trusted to have such a licence and buy and sell and use firearms. So the advice that I have—"fit and proper" is a common term used throughout New Zealand as I've already explained. It's currently described in existing legislation. It's appropriately flexible for the secretary to make a judgment on a particular case. I want to acknowledge my Labour speaker Dr Deborah Russell off to my right who I think hit the nail squarely on the head. It is a test of character as far as I can determine from the bill. It's a test upon which the secretary will make a judgment of that particular individual in that particular case.It's not possible to set an exhaustive criteria to account for every possible variation but what it does give—and the members of the committee I know from their experience are very aware—the assessing authority is the ability to look further into the nature and the character of that individual. It certainly does; there're a number of benchmarks and tests the 12-month threshold being one such threshold which is set and that's a very clear threshold. That is set to exclude minor regulatory crimes that do not reflect on their fitness or properness to be a registered broker. So I think in the terminology and the description within the clause it gives scope for the secretary to seek information as the secretary sees fit.It probably explains why this has been done by the secretary as opposed to the Minister. Those members of the committee who have been Ministers know that this is an operational matter. This is an assessment that is done lower down the tier and the last thing the Minister wants to be involved in is analysing each and every application that is tabled. As the committee knows they were right not to seek any amendment to that clause. They were right not to propose any changes in their report back on the bill. So I think all in all the House has clearly indicated to the Government that it's comfortable with those clauses.Overseas convictions has been another question that's been raised in the House. The bill provides that the secretary may when considering whether a person is a fit and proper take into account any conviction whether or not the conviction was in New Zealand. That's covered under clause 15(2)(a)(i). I have no doubt that that was probably canvassed by the committee at some stage but the committee of the whole House is clearly asking for some clarification and I give it that clarification. This will be ascertained by police checks. Twelve months is a pretty standard definition of a serious crime and I think some might argue that it's a very low threshold but I'd ask you to consider the nature of the bill and the importance and the significance and the consequences of a permit being given inappropriately.Applications for a permit will be assessed against the export controls criteria. That is currently published on the Ministry of Foreign Affairs and Trade (MFAT) website. For the questioner around that can I just suggest they have a look at the MFAT website.Yes the secretary will take into account all relevant information indicating whether the broker has been a New Zealand exporter of controlled goods. There are other questions around why the secretary and not the Minister—I think I've covered that off already.What will be included in the annual report? The broker will have provided significant detail in their application. The annual report will not require the broker to duplicate that information rather it will seek to confirm what activity has taken place under the permit.Further advice. Do other countries have brokering laws? Another question. The bill is modelled on similar laws in Australia. Other countries including the United Kingdom the United States and the European Union all have brokering laws. This bill also draws on best practising guidelines in brokering.There were a number of other questions. In the time I have available let's deal with another one. How would MFAT assess the applications? MFAT firstly needs to assess whether an applicant is a fit and proper person. We've discussed that. To be a registered broker in accordance with the bill's criteria—in assessing the individual brokering permit applications MFAT intends to apply the criteria currently used to assess applications to export strategic goods. That's already been covered off. This means MFAT would refuse an application for a permit to broker goods if the brokering transaction would breach New Zealand's obligations under the United Nations Security Council resolutions including arms embargoes; the brokering transaction would contravene New Zealand's other international obligations; or MFAT has knowledge at the time of considering the application that the goods are to be used in the commission of genocide crimes against humanity or war crimes—sounds all sensible stuff to us. And if a permit is not declined on these grounds a risk assessment would then be undertaken against the criteria.There was another question about the level of trading activity and I've got a sneaking suspicion that was discussed at select committee but let's go back through that ground again. The four export control regimes that New Zealand participates in as you know are the Wassenaar Arrangement; the Missile Technology Control Regime; the Australia Group which controls chemical biological weapons - related materials; and the Nuclear Suppliers Group which controls nuclear material equipment and technology. There are approximately 45 members there. They produce lists of goods to be controlled. The secretariat's had expert groups decide on the control lists. They share the information on proliferation and establish best counter-proliferation practices.The area that I really wanted to cover off was on the scale of brokering. It pretty much reflects what I said in my first reading speech. The scale of brokering activities taking place in New Zealand is limited. There are currently 11 entities registered with MFAT under the voluntary registration scheme so let's see where that ticks up once it becomes mandatory. It could well be different. However of those 11 less than five were potentially interested in actual brokering. I think let's just take a pinch of salt and see. While some of us may have thought that the level of trading and the level of traders in New Zealand was very small that was under a voluntary regime. So once this is enacted let's see how those numbers shift."