Telecommunications (Interception Capability) Bill — Second Reading 
Telecommunications (Interception Capability) Bill — Second Reading 
[Volume:616;Page:12265] 
Telecommunications (Interception Capability) Bill 
Second Reading 
Hon RICK BARKER (Associate Minister of Justice) 
: 
 I move  
That the Telecommunications (Interception Capability) Bill be now read a second time 
. This has been reported back from the Law and Order Committee which recommends that it be passed with amendments as shown. I would like to thank the select committee for the work it has done on this bill. The amendments recommended by the committee will improve the operation of the legislation. 
This bill is necessary to ensure that law enforcement and national security capability are not seriously eroded by changes in technology. The bill places a legislative obligation on telecommunication network operators to be technically able to intercept telecommunications going over that network when authorised by a warrant or other lawful authority. The bill also creates a legislative “duty to assist” on all telecommunication network operators and service providers. This means they must provide reasonable assistance to the police the Government Communications Security Bureau and the Security Intelligence Service when intercepting telecommunications within their technical capability and on a cost-recovery basis. The bill does not change or extend in any way the existing powers of the police the Government Communications Security Bureau or the Security Intelligence Service to intercept communications. If the relevant agency has lawful authority to intercept a telecommunication technological barriers should not prevent it from doing so. 
I shall now focus on some of the amendments to the bill proposed as a result of the select committee process. Concern was raised in some submissions that the bill required each network and service to have interception capability installed within it. This would impact on costs making them unnecessarily high when the same interception capability could be achieved by an external technology used on an “as needed” basis. The intention of the bill was not to require interception capability to be installed within all networks and services. The bill was intended to set out broadly what is required to have interception capability and to leave it to the network operator to decide how best to achieve this within the network. The committee has therefore recommended an amendment to the bill to clarify that the interception capability does not need to be installed within each element of the network or service to comply with the requirements of the bill. 
This freedom to choose is enforced in the purpose clause which states that one of the purposes of the Act is to ensure network operators and service providers have the freedom to choose design features and specifications appropriate for their own purposes. 
The committee also recommended some amendments around clause 8 which sets out when the duty to have an interception capability is complied with. These include recognising that in some cases the network operator not the surveillance agency will carry out the interception. In this situation interception is complete when the information is passed on to the surveillance agency. 
The committee also recommended further limitations to be placed on the requirement to decrypt. This limitation is that a network operator will not be required to decrypt communications for products that it simply on-sells on behalf of the manufacturer and that the customer would be able to purchase from a retail outlet. To require decryption in this situation would place the network operator at a commercial disadvantage as he or she would not be able to sell a particular product if he or she did not have the key but the customer could go and buy exactly the same product from a shop and then use it over the network operator’s network. 
The committee also recommended two changes in respect of the “duty to assist” provision. The first was as with clause 8 to recognise that in some cases the network operator not the surveillance agency will carry out the interception. The second was to lower the standard required to comply with the duty to assist. This means that network operators and service providers would have to take all reasonable steps that are necessary in respect of interception. In response to a submission from a network operator the committee recommended changing the time required for a surveillance agency to pay an invoice from 2 months to 1 month. This has been agreed. In light of the comments made by the Regulations Review Committee the committee has recommended that the regulation-making power in the bill be amended. These amendments include removing two regulation-making powers that were very general and adding a regulation-making power to allow regulations for matters that are necessary for the bill’s administration or necessary to give its full effect. 
The committee also recommended removing part of the clause that stated that the failure to comply with certain requirements did not affect the validity of any regulations made. There is ability for the Minister not to comply with those requirements if urgency in the public interest requires it. In those circumstances the committee agreed that this clause should be deleted. 
The committee has also recommended amendments to some of the definitions contained in the bill to enable the bill to be given full effect. The committee also examined the issue of costs. A phased implementation process is included in the bill to provide the industry with the opportunity to implement the necessary changes in a way that is cost efficient. The Government will pay for the provision of interception capability for fixed and mobile voice networks that were in operation on 12 November 2002. Interception capability needs to be implemented within 18 months from when the bill comes into force. The cost is estimated to be $3 million. 
Network operators will meet the cost of providing interception capability for Internet and email services with a 5-year implementation period from the date of enactment. It is estimated that this will cost the industry $12 million. The committee received submissions from network operators stating that the costs were estimated to be much higher than this. Because of this variance further consultation work took place with these network operators. The increased costs were based on operators perceiving that they would be required to have interception capability installed with all networks and services to comply with the requirements in the bill. As I said earlier this is not the intention of the bill which is to give each network operator the freedom to decide how interception capability is best achieved within its system. 
Once this was clarified the revised cost estimate was put within the range of $10 million to $13 million making the original estimate of $12 million still accurate. Amendments have been made to the bill to ensure that the intention of the legislation in this respect is clear. 
I have also tabled a Supplementary Order Paper that makes three minor amendments. The first is a change to the definition of “interception warrant” to take into account the passage of the Crimes Amendment Act which was passed in October last year. The second amendment is to ensure that all legislative authorities to intercept are covered in the definition of “other lawful interception authority”. The final amendment is a drafting change to correct a wrong cross-reference. I commend this bill to the House. 
SIMON POWER (National—Rangitikei) 
: 
 Although I was not a member of what at first glance appears to be a reasonably high-powered group on the Law and Order Committee this evening I have found myself taking an urgent interest in this bill. I wish to raise two or three matters with the House and with the Minister in his interpretation of the bill. The Minister moved quickly through his recital of officials’ notes and perhaps did not spend sufficient time explaining to the House the fact that this bill does not change or extend existing powers. That is quite an important issue. The bill does ensure that certain technicalities by the telecommunications industry are able to be met in order to carry out the interception as opposed to creating a whole new raft of legislative measures so that that interception may occur. 
It is an important point to make because on the one hand issues like this always balance finely issues of privacy for individuals using telecommunications devices with on the other hand the greater public good in respect of security issues. I have to say concerning the explanatory note to this bill referring to national security—and the Minister himself raised the issue of national security—that it is worth reading from the background commentary this point: “This legislation is necessary to prevent law enforcement and national security capability being seriously eroded because of technical issues related to telecommunications networks.” 
I am sure when various officials appeared before this high-powered Law and Order Committee the first question on the minds of those members of the select committee would have been to ask those officials: “Whatever happened to the incredibly benign strategic environment?”. No doubt given the calibre of those members who make up this committee there was sufficient cross-examination of those officials to simply get to the bottom of the issue. If indeed this country still exists in what the Prime Minister has termed an incredibly benign strategic environment then why is legislation like this necessary? I would be interested in hearing from those members of the Law and Order Committee as to what response they received from officials when they raised that issue. 
The Government cannot have it both ways. The Government either believes that we live in an incredibly benign strategic environment as the Prime Minister has stated on many occasions or the Government believes that legislation is necessary to be brought into this House to literally twist the arm of telecommunications providers to ensure national security objectives are met. Now we in the National Party will be supporting the passage of this bill because we do believe that these measures are essential for national security objectives to be met and in particular for telecommunications providers of both landlines as they are so-called and cellphones to have the technical equipment in order that the necessary surveillance is carried out. 
But the question must be asked that if the Government’s stated foreign policy position in respect of the post - September 11 environment is still that this country is in an incredibly benign strategic environment then how does this legislation fit into that paradigm? I do not think it is an unreasonable question for members of this House to ask particularly when this party and to be fair the ACT party have consistently supported the view that changes to our foreign policy and defence arrangements must reflect the fact that our strategic environment has altered substantially since September 11 since Bali since Jakarta since Madrid and since Baghdad. 
It is simply not good enough for the Government to say on the one hand“Well no that is just not the case we live in an incredibly benign strategic environment but at the same time we’re going to pass new legislation for national security measures.” I would be interested in hearing from Marc Alexander and others who sat on the select committee as to how those two objectives were met by the select committee when considering the policy statements of the Government about the strategic environment that we exist in and how that was measured against the legislation that now appears before this House for its second reading. 
Interestingly and I have to say that this is a point that leapt out of the commentary at me as I was sitting here earlier this evening reading this bill the fact that Australia and the United Kingdom passed this type of legislation into law—in the case of the United Kingdom 4 years ago and in the case of Australia 7 years ago—that goes to the heart of the issue being raised by members on this side of the House which is this. Australia and the United Kingdom took these issues seriously long before this Government did. And it is simply not good enough to have a last-minute run at this issue when we have seen world terrorism on the global stage operating at a level that simply denies the Government its fundamental foreign policy position that we live in a benign strategic environment—because the evidence simply does not point in that direction at all. 
Keith Locke 
: It does. 
SIMON POWER 
: Well I am looking forward to hearing what the Green Party and I presume Keith Locke has to say about this. I know that the Green Party will be concerned about privacy issues and I will be interested to hear from them as to how those issues fit in with their view of how benign or otherwise the current strategic environment is. 
I do want to raise one further point and that is that the Government rightly will pay the costs relating to the provision of the particular interception capability and so it should and National supports that measure in particular as well as supporting the wider implications of this bill. If indeed this bill is as the Minister says an issue of national security then it is incumbent on the Government to meet those technical capabilities by way of cost to those telecommunication providers in a way that makes us a responsible international player in an environment that we believe on this side of the House has never been incredibly benign let alone since September 11 Bali Jakarta Madrid and Baghdad. 
It is worth noting though—and I did raise this while the Minister was making his contribution—that although the Minister estimates costs to be borne by the telecommunications companies were estimated to be $12 million in fact the submissions made to the select committee according to the commentary put those figures well out of line with the $23.5 million or if one likes $43.5 million based on all network elements that that interception capability would cost. I think the Government needs to assure the public of New Zealand that the moneys committed by the Government to ensure these interception capabilities are going to work are sufficient to ensure national security will be preserved. 
Hon Rick Barker 
: Yes. 
SIMON POWER 
: While the Minister says “Yes” I hope he is right. As I said earlier in my contribution the National Party will be supporting the passage of this bill through the House primarily because our view that we do not live in a benign strategic environment has not altered at all in the time that I have been in this House. I look forward to making further statements in respect of this bill when we enter into the Committee stage later this evening. 
RON MARK (NZ First) 
: 
 I think I sound like a stuck record. Given the summary that the Associate Minister of Justice so robotically read out at a thousand miles an hour I do not think there is any sense in rotary hoeing the same paddock again. I think we pretty much know what the bill intends. But I will touch on a couple of headings. 
Although my name does not appear amongst the members of the Law and Order Committee listed in its report I did sit in on many of the submissions and on the consideration of this bill as a result of my interest in matters of defence and security. The reasons for the bill have been quite clearly put and reinforced by Simon Power. I think one of the things the bill does make very clear is who a network operator is who a service provider is what is “duty to assist” and what does having interception capability mean. The bill highlights recent overseas legislation passed by the Australian Commonwealth in 1997 and by the United Kingdom—the Regulation of Investigatory Powers Act 2000. 
The report from the select committee is worth looking at because it states that the committee received four outside submissions three of which were opposed. The opposition to this bill came from people who believe that it is “an overreaction to the terrorist events of 11 September 2001 and an intrusion into personal privacy.” I will come back to that. 
A number of things were dealt with by the select committee and most interesting was the controversy that arose out of the original estimated cost to telecommunications companies—the cost that the companies themselves are to bear as a result of this legislation being enacted. It was interesting that the telecommunications companies questioned the $12 million cost—a figure arrived at by the Government—and quoted a much larger figure of $43576000 as being the base cost for compliance. After some discussions and the amendments to the bill which have seen some limitations it is interesting to note that the costs are back down to around the $10 million to $13 million range. 
It is interesting to note also that this bill was looked at by not just the Law and Order Committee; I understand that it was looked at by the Commerce Committee and also by the Regulations Review Committee. So the scrutiny of this bill was most definitely wide reaching. 
What struck me as very interesting were some of the comments made about the bill by people who quite clearly are opposed to it and I have absolutely no doubt that the Green Party will want to reinforce those views. I would like to raise the comments that have been made that do give me cause for concern. 
Comments made by the Anti-Bases Campaign state in part: “And for what good reason are our privacy protections being progressively eroded and our private communications being open to intelligence agencies with no effective oversight or accountability?”. I would ask every member of this House to read this legislation carefully and see where the oversight and accountability lie because those words are lies. “No convincing case has yet been made by Government as to why so much new intrusive power must be vested in the police and intelligence agencies. The Anti-Bases Campaign believes that the Telecommunications (Interception Capability) Bill and the several recent pieces of legislation related to it are overreactions to the terrorist events of September 11 in the United States and are not driven by genuine and supportable law enforcement needs in New Zealand.” 
Well I find absolutely astounding that people who have the freedom and liberty to write those views and to express them publicly internationally are the very last people on this whole planet who will ever put on a uniform ever pick up a firearm ever swear allegiance to the Crown in this country and ever fight to defend the right to express such nonsensical views. The absolutely astounding irony is that this wall around us is bedecked with memorials to men who have given their lives to allow people to say such things and we all know that the very people who say those things would never ever do likewise. In fact what is even more ironic is that I have never heard the Anti-Bases Campaign people or the people who are members of such an organisation go on about the KGB. The huge irony is that many of those people were members of the Communist Party the party renowned for giving us Stalin Lenin and the KGB. So where were their cries of intrusion into privacy in those years? Where was Mr Locke? Was he out there campaigning against the KGB for its intrusion into the privacy of the life of the average Soviet person? Not on your nelly was he! He was a member of the party advocating and supporting such things. [ 
Interruption 
] It had better be legitimate. 
Keith Locke 
: I raise a point of order Mr Speaker. The member was talking about the Communist Party and said I was a member of the Communist Party. I have never been a member of the Communist Party. 
RON MARK 
: Oh a Russian Pol Pot—I am sorry. But the member’s father was. Maybe I got it wrong; maybe I have the wrong Locke. But the point is—[ 
Interruption 
] Was that Labour member over there a member of the Communist Party as well? 
Jill Pettis 
: I raise a point of order Mr Speaker. In that interchange that just went on reference was made by Mr Mark to connections with Pol Pot. That has been ruled out repeatedly in this House and I would say that a mercenary attitude towards things is not applicable. Does the member know what I mean by “mercenary”? 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: No we will not get into that. I thank the member for pointing that out. No references to Pol Pot please Mr Mark. 
RON MARK 
: I will not refer to any newspaper article I have ever read. 
Jill Pettis 
: A very mercenary attitude. 
RON MARK 
: Absolutely there is nothing wrong with a good mercenary. I do not know what that has to do with anything on this planet. I do not know what the member means. I do not know whether it is meant to be an insult but if she pulls out the Collins dictionary she will find that it is not. I do not know why the chief Government whip is defending the view of a party that is voting against this very legislation. [ 
Interruption 
] All the reds are out from under their beds! 
Steve Chadwick 
: I raise a point of order Mr Speaker. I would like it clarified for the record that I have never been a member of the Communist Party. I have been a proud member of this great Labour Party all my life. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: That is not a point of order. 
RON MARK 
: That is not a point of order at all and the member jolly well knows it If the member wants to break up my speech to make a personal statement then she should stand up to make a personal statement. I hope that none of that has come off my time. The member is being paid $100000 a year to do better than that. That is pathetic. She should hand back a day’s pay. 
The point is that I take great offence. Many of my fathers uncles and relatives from one end of this country to the other— 
Jill Pettis 
: How many fathers have you got? 
RON MARK 
: I have five fathers. In fact I have six. I have a natural father and five foster-fathers for the information of that ignorant member over there who has not read my bio. 
Jill Pettis 
: Why would I? 
RON MARK 
: At least my father is not a parrot. I really have got the reds out from under their beds! I make the point that there was a time when Mr Muldoon ran some advertisements about dancing Cossacks and was lambasted from one end of the country to the other. Much comment was made about the fear of reds under the beds. I put this to members: today we have a group of people who see Feds under the beds! Wherever they go they think the Feds or the police or spies are watching them. I actually think they have other things on their minds like terrorism. Yesterday 700 police in the UK busted up a terrorist ring found half a tonne of high explosives and arrested a whole bunch of Pakistani Brits. That is like what is happening in Manila in Bali in Baghdad and all over the world. They are dealing with the real security threats to the very lives of the people here who object against their doing that. I just hope that one day some time very soon we do not face a terrorism act in this country and that no member of the Greens has a family member who is caught up in that carnage. That will be the day that those people finally appreciate and understand the work that the New Zealand Police and the New Zealand Security Intelligence Service and all of its agents including Defence Force personnel of this country have to perform thankless though some people may be for the duties they carry out. 
ROD DONALD (Co-Leader—Green) 
: 
 I draw the House’s attention to the time which is close to midnight. I seek leave that the House rises because it would be unfair on the next speaker to have his speech interrupted by the midnight adjournment. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Leave has been sought for that course to be followed. Is there any objection? There is. 
LINDSAY TISCH (National—Piako) 
: 
 At nearly midnight we are discussing one of the most important pieces of legislation on our national security. This legislation was first introduced in 2002. In fact the bill was introduced to the House on 12 November 2002 and referred to the Law and Order Committee on 18 February 2003. Over a year later and at this hour at night we are discussing very very important legislation about our national security. Other countries have taken national security seriously. For example Australia has the Commonwealth Telecommunications Act 1997. The United Kingdom has the Regulation of Investigatory Powers Act 2000. What is happening in New Zealand? Here were are in 2004 and this legislation is being debated under urgency at midnight. That is an insult. 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m (Thursday).