Draft transcript - Wednesday 04 November 2015First draft - subject to correction.Draft transcript - Wednesday 04 November 2015Question Time EndSocial Development Minister—StatementsCHRIS HIPKINS (Senior Whip—Labour): I raise a point of order Mr Speaker. I want to draw your attention to Speaker’s ruling 200/4 which states that Ministers who make incorrect statements must correct those in the House at the earliest available opportunity. I want to seek your guidance as to whether that applies in a situation where a Minister refuses to answer a question on the basis that they claim that there is an incorrect assertion in the question as was the case with Mr Joyce earlier today and whether once the information has been presented to demonstrate that in fact that was correct he needs to correct that.Question Time EndSocial Development Minister—StatementsMr SPEAKER: No. I think on this—[Interruption] I do not need any assistance thank you. The question the member is referring to was asked in that particular question. A suggestion was made which the Minister disputed. That is a legitimate answer to that question. If subsequently information becomes available then it is for the Minister when he becomes aware of that information if he considers it relevant and important enough to come to the House and correct it. I presume the Minister will do so if he sees it relevant.[Continuation Line: Dr Jonathan ColemanThird ReadingsCrimes Amendment BillHon ANNE TOLLEY (Minister for Social Development) on behalf of the Minister of Justice: I move That 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 be now read a third time. These bills implement a number of measures to strengthen New Zealand’s response to organised crime and corruption both domestically and abroad. Organised crime is a global problem that undermines public safety economic development good governance and national security. Unfortunately New Zealand is not immune to the threat posed by both international and domestic criminal networks which operate on many fronts. New Zealand has strong legislative frameworks in place to obstruct organised crime. However the amendments in the bills will address a small number of gaps in our law and improve the efficiency of existing processes aimed at disrupting the activities of organised criminal groups. Bribery and corruption in connection with international trade is the focus of a number of international conventions underlining the growing recognition that corruption is a substantial barrier for economic and social development. It is now widely accepted that bribery is bad for business creating uncertainty and risk in commercial transactions. Corruption also has negative consequences for a country’s financial stability and economic performance draining resources from more productive economic activities. New Zealand businesses trade on our hard-earned reputation as one of the least corrupt countries in the world. However we cannot rest on our laurels and must continually work to prevent and address the threat posed by corrupt activities. To that end the bills ensure that our laws reflect the seriousness of this conduct by increasing penalties for bribery and corruption in both the public and private sector introducing new offences and setting out the circumstances in which corporations can be liable for bribery of a foreign public official. The provisions also highlight how important it is for New Zealand businesses to adopt anti-bribery policies and conduct risk assessments and training. To avoid liability under New Zealand’s anti-bribery laws all businesses should have a zero-tolerance approach to bribery and corruption. In addition to the measures in the bills the Government has progressed a number of other initiatives that reflect this commitment. These include passing new legislation targeting match fixing and shell companies formally joining the Open Government Partnership and conducting a review of New Zealand’s extradition and mutual legal assistance laws. Together these measures will enhance New Zealand’s compliance with the OECD anti-bribery convention enable New Zealand to ratify the United Nations Convention Against Corruption and send a strong signal that New Zealand values and is committed to maintaining corruption-free institutions. In addition to bribery and corruption the 2011 all-of-Government response to organised crime recognised a number of other areas where New Zealand could further enhance its efforts to tackle organised criminal activities such as money-laundering identity theft and people-trafficking. Money-laundering is an insidious crime that undermines the integrity and stability of financial systems discourages foreign investment and distorts international capital flows. Criminals are now using smarter and more complex ways to disguise the illegal origins of their activities exploiting both the complexity inherent in the global financial system as well as differences between national anti - money-laundering and countering financing of terrorism laws and systems. To combat this New Zealand has recently overhauled its anti - money-laundering and countering financing of terrorism regime meaning that individual firms are now much more aware of the money-laundering and terrorist financing risks that they face and the obligation to implement compliance programmes to migrate and address those risks.[Continuation line: Under the changes New Zealand’s financial]Hon ANNE TOLLEYUnder the changes New Zealand’s financial institutions casinos and trust and company service providers are playing a much larger role in detecting suspicious financial activity and alerting authorities to this. The bill expands on the existing reporting regime with new requirements for financial institutions to report international wire transactions of over $1000 and all physical cash transactions of $10000 or more to the financial intelligence unit with Police . We know that criminals use these transactions to launder money and finance terrorism and the amendments will improve our ability to detect and investigate money-laundering and terrorist financing. In addition the bill amends the existing money-laundering offence to remove unnecessary hurdles to police prosecutions and deter those who exploit the current limitations of the offence. The bill also addresses gaps in New Zealand’s identity crime framework introducing specific offences that prohibit criminals from selling or distributing unlawfully-obtained identification information or possessing goods intended to facilitate identity crimes such as credit card skimming devices. Other important amendments will enhance the courts’ ability to restrain assets strengthen New Zealand’s human trafficking offence and provide Police with the power to share information including fingerprint information with international counterparts. A further amendment will ensure that DNA data bank information can be provided to assist in criminal investigations and prosecutions overseas. The Government has great confidence in New Zealand’s law enforcement agencies which have a history of successful prosecutions against those who engage in organised criminal activities. However the measures outlined above will improve international law enforcement cooperation and capability enhancing New Zealand’s reputation in the international community. Collectively the amendments in the bill signal this Government’s commitment to combat organised crime and corruption everywhere on every level. The wide-ranging measures in the bill will ensure that New Zealand has a robust legislative framework that complies with international best practice and augments New Zealand’s reputation as a trustworthy trading partner with strong reliable and corruption-free institutions. I commend this bill to the House .[Continuation line: Phil Goff]Third ReadingsCrimes Amendment BillHon PHIL GOFF (Labour—Mt Roskill): The Labour Party supports the 15 bills that are before the House for their third reading today which derive from the Organised Crime and Anti-corruption Legislation Bill . Of course the Labour Party would strongly support legislation that is designed to deal with offences like corruption and like organised crime. Organised crime is huge in this country. The methamphetamine market by itself is estimated to be worth $1 billion within New Zealand—money going into the pockets of organised crime and gangs. Money-laundering in this country is estimated at an even higher level: $1.5 billion. We have residual problems in human trafficking. All of these problems are domestic problems but they are also international problems and it behoves us to cooperate with like-minded countries overseas and international organisations to suppress that sort of criminal activity. So we support it but we do not support it without criticism of the way that the Government has handled this measure. For a start it has taken so long to get these measures—outlined by Minister Tolley and mainly measures that make a lot of sense—before this House. We should have acted years ago. Judith Collins as Minister of Justice stood up in 2012 3 years ago and said: “I will have this legislation before the House and through the House by the end of next year.” Well we know what happened there: Judith Collins herself got caught up in a scandal involving Oravida  and the legislation did not happen. But this bill itself represents the tardiness of the Government in dealing with the problem for which we have been criticised internationally. We signed the United Nations Convention Against Corruption 11 years ago—11 years ago. It does not come into effect until we legislate to bring it into effect to do what has to be done under it and then we can ratify it. My question to the next National speaker is why has it taken this Government 7 full years to get to the point of allowing us to ratify the United Nations Convention Against Corruption if this legislation is so important—and I believe that it is. There is a key weakness in this bill too that I now want to focus on. It was a weakness that was raised before the Law and Order Committee by major organisations that we would respect: Transparency International New Zealand  the experts in this country on measures that a country needs to take to prevent corruption and to prevent bribery; the Human Rights Commission ; and the Victoria University of Wellington School of Government . All of them drew to the Government members’ attention a fatal flaw in this legislation which tries to distinguish between a bribe and a bribe on the basis of the size of the bribe. That distinction is kept in the Crimes Act . It is section 105C(3) of the Crimes Act. It says that the foreign bribery offence “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;” . I am sorry—that is what bribery is. You pay the official to carry out the action; that gives you an advantage. Secondly “(b) the value of the benefit is small.” Amy Adams  the Minister of Justice continued that false analogy. It is OK to make a bribe as long as it is small she said. She said—Jonathan Young: She didn’t say that.Hon PHIL GOFF: She said—let me quote: “It is in the usual course of activity to make payments as long as the payments are small.” Well I am sorry—bribery is akin to pregnancy. You cannot be a bit pregnant and you cannot exercise a corrupt act in bribing an official and say: “But it’s only a bit. It’s a small bit not a large bit.” That distinction is not recognised in the Convention Against Corruption nor is it recognised by like-minded countries. The UN convention makes it clear that the corrupt act is giving yourself undue advantage by making a payment to an official which ends up in that official’s pocket. That is what the UN convention says and this legislation does not come up to the standard set out in the UN convention. Not only that but it is contrary to what the OECD requires of us. The Minister mentioned the OECD and how these bills enhance compliance with the OECD anti-bribery convention. But actually we do not do what the OECD says we should be doing because the OECD says that we should not be making facilitation payments. It does not come up to the standard of APEC . That is an organisation that we are a regular attendant at and we come up to its standards in most effects but APEC says that businesses should eliminate this practice and we legislate specifically to allow it. APEC says to eliminate it OECD says to eliminate it and we legislate to allow it. The Serious Fraud Office and Business New Zealand run training programmes to allow New Zealand businesses to operate in overseas countries without making facilitation payments. Both of those organisations recommend against facilitation payments but this legislation explicitly allows them.[Continuation line: And I have mentioned the United Nations Convention Against Corruption]Hon PHIL GOFFAnd I have mentioned the United Nations Convention Against Corruption. What really upsets me about this legislation is that there would not be a member in this House who is not proud of the fact that year after year New Zealand is rated as one of the two least-corrupt countries in the world. We deserve to be proud of that accolade. That accolade is given to us by Transparency International but Transparency International railed against what we were doing in this legislation. And I want to quote the four key points that that organisation makes. They make the first point that it would be illegal to make a facilitation payment to an official in New Zealand. So why is it not a double standard that the same business that would be committing a crime in New Zealand to make a facilitation payment to a customs official here is not committing a crime if they do it overseas? Secondly they make the point that allowing facilitation payments lets us perpetuate corrupt systems abroad. And I want to quote their submission: “Paying these low-level 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”. But our legislation explicitly allows companies to do it. Thirdly Transparency International makes it clear that we are falling behind like-minded countries. The United Kingdom Bribery Act 2010 prohibits facilitation payments. It does not make an exemption for them as our legislation does; they prohibit them. Canada has done the same thing and the United States and Australia are going in the same direction. We are the odd one out in that grouping of countries who would claim to be amongst the least-corrupt countries in the world. And fourthly Transparency International makes the point that you do not have to make facilitation payments to do business in these countries. And it quotes the 2009 business survey by TRACE International that found that more than three quarters of businesses said that with proper management they did not have to go down the track of making facilitation payments. An outright ban in this legislation would back up all of the organisations that have told us that there is no place for facilitation payments. It would remove doubt and it would provide clear direction to businesses but this Government in its weakness has failed to put that provision in this legislation which would otherwise be a perfectly good piece of legislation.[Continuation line: BAKSHI]Third ReadingsCrimes Amendment BillKANWALJIT SINGH BAKSHI (National): Thank you Mr Deputy Speaker for the opportunity to contribute to the third reading of these bills. I acknowledge the previous speaker and some of the points that he has raised—I will try to address those. New Zealand is one of the least-corrupt countries in the world as has been said time and again. And it is not just us who are saying it but it has been said by a lot of international agencies. The Hon Phil Goff mentioned Transparency International—that organisation has just now released a press release from which I would like to quote. It says: “Good news about New Zealand’s Defence Force. A 76-question Government defence anti-corruption index shows the New Zealand Defence Force leading our region. This 2015 index just released by the United Kingdom Special Defence Force Project gives the New Zealand Defence Force high marks for a strong integrated system across every risk area assessed by the index such as personal recruitment operations political and finance.” This proves that New Zealand is not just the least corrupt but is also working very well for us in all areas. This National-led Government has worked on many fronts to ensure that we maintain and also continue to encourage the signing of some of the international treaties that we have signed. To maintain our country’s reputation and keep it being a responsible member of the international community we are working in that direction. Organised crime is a global issue and we need to make sure New Zealand is not vulnerable to such attacks which are easily spread through illegal frameworks in financial systems and through technology from the organised crime network. The Hon Phil Goff also mentioned some of the issues such as methamphetamines money laundering and human trafficking. He said these are the domestic issues but I do not think these are just domestic issues—they have a connection internationally. And that is why we have been working hard to ensure that we are ready to tackle these issues. The Government has worked on many fronts in the previous 7 years. The hon Phil Goff mentioned that we signed a treaty 11 years ago and asked what this Government has done in the past 7 years. I would like to ask him what he did while he was a Minister for those four years—nothing. At least we are working in the direction to honour those treaties. We also passed the Criminal Proceeds Recovery Act in 2009 which allows law enforcement agencies to recover the proceeds of crime. This money is then used for other law enforcement initiatives which is working very well. The police have recovered millions of dollars from criminal proceeds which has been used in other areas. Another law that was passed was the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 which helps law enforcement agencies to detect and deter serious crime such as drug dealing tax evasion and fraud. This Act makes it easier to recover money gained illegally and has helped to close those loopholes that criminals use for money laundering. Before I go any further I would like to acknowledge the officials for their contribution and their support and I would also like to acknowledge the contribution of the Law and Order Committee members during this process. I would like to highlight some of the key issues that have been dealt with in this bill such as banks now being required to report to the Financial Intelligence Unit within NZ Police all wire transfers that are above $1000 or any physical cash being deposited into the banks. This ensures that the transactions are very transparent and can be tracked right back to the bottom. Redrafting of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 to specify the intent to conceal is also not required any more—we have to declare all those transactions to the Financial Intelligence Unit. Some of the issues that were raised by the Hon Phil Goff have been addressed and I think he will be happy to learn that these issues have been resolved. With these words I commend this bill to the House.[Continuation line: DAVIS]Third ReadingsCrimes Amendment BillKELVIN DAVIS (Labour—Te Tai Tokerau): It is my pleasure to give a contribution to the third reading of the Organised Crime and Anti-corruption Legislation Bill. There are a number of parts to this bill. It is a very complex and complicated bill and it has been divided into a number of parts. The Hon Phil Goff has covered in some detail our concerns around the practice of facilitation payments and I will come to that shortly. A few other areas that I would like to touch on are in this bill. One in particular is the part around human trafficking.[Continuation line: Human trafficking is generally thought]KELVIN DAVISHuman trafficking is generally thought of as about people being moved across borders. Often we hear of incidents in Europe where somebody in the United Kingdom for example will hear noises in a shipping container they will open the shipping container and dozens of people will fall out in various states many deceased. And that is our general impression of human trafficking—that it is this sort of smuggling of people across borders. This legislation though makes sure that human trafficking is no longer subject only to people crossing borders—in fact human trafficking can be internally within countries and there can be domestic trafficking. I think that is a big distinction to make and something that is good to clarify—that simply trading people for servitude or slavery is unacceptable and that they do not actually have to cross over any border for people to be guilty of human trafficking. This legislation also addresses identity offences through forgery of documents. These days we all know about identity theft and the use of the internet to scam people. This legislation also strengthens that. There is a part on addressing money-laundering and strengthening the laws around that. Previously there had to be some intent to conceal money for it to be considered laundering. That intent to conceal has now been removed. You do not actually have to have concealed money or hidden money away to be guilty of money-laundering. In fact I remember a story of somebody that I knew who worked—it sounds a bit cloak and dagger—for the FBI and had uncovered a money-laundering scheme in the United States where money was laundered and trafficked and hidden away. But it actually had to be physically moved into the United States and would you believe that the cash was physically held in tyres of airplanes? So there are many ways—many imaginative and creative ways—that money can be laundered but the intent to conceal money is no longer an issue. Laundering of property is no longer part of a crime punishable by 5 years’ imprisonment. On the sharing of DNA for the purposes of criminal investigation New Zealand has improved our international cooperation around the sharing of DNA for criminal investigations. The police can also share personal information with their overseas counterparts a lot easier but subject to certain safeguards. So the police cannot just hand over information willy-nilly about people. There are certain safeguards to make sure that personal information is used in the most appropriate way. Phil Goff has spoken at some length about the facilitation payments and the whole issue about when a bribe is not a bribe. The discussion has been that even a small bribe is seen as just a facilitation payment to help people conduct business overseas. A bribe can be $5 $10 $50 $100 that could help speed the process of business or the process of goods through customs or through various border agencies and staff. We oppose that. We believe that it does not matter what size the facilitation payment is a bribe is a bribe and it needs t be treated as a bribe. We had the strange situation where we would not let overseas and foreign officials to come here and use facilitation payments in New Zealand but we could have New Zealand officials overseas actually using facilitation payments. That is just not right. We have heard how Transparency International appeared before our select committee. It was vehement in its opposition to the use of facilitation payments. We have also heard how the OECD and other reputable organisations do not believe it is necessary to have facilitation payments to conduct business. We have heard how the Serious Fraud Office does not believe that facilitation payments are necessary to conduct business. We pride ourselves in New Zealand on being one of the least corrupt countries in the world—in fact we have often held the No. 1 position in the world for being the least corrupt country. That though is starting to slip. Our reputation has been tarnished. It is tarnished when we have incidents like Minister of the Crown for all intents and purposes going overseas to conduct their ministerial business only to hear that while they were overseas they have actually been dabbling in personal business and in the interests of personal companies.Jonathan Young: Have you got any evidence for saying that?KELVIN DAVIS: Well there are photos of a certain Minister in the office of her husband’s company overseas.Jonathan Young: Pretty dangerous allegation.KELVIN DAVIS: They say it is a dangerous allegation. All I am alleging is that the Minister was there doing ministerial business—Hon Anne Tolley: Bet you wouldn’t say it outside the House.KELVIN DAVIS: I ask you to defy this Anne Tolley—Mr DEPUTY SPEAKER: You are not asking me to do anything. I suggest you carry on with your speech.KELVIN DAVIS: She was there to do ministerial business and instead took quite a long diversion from the airport to the offices where her husband works. That is the sort of thing that tarnishes and taints our reputation.Hon Anne Tolley: Yeah like Ministers taking their partners on jaunts all over the world.KELVIN DAVIS: That is the sort of thing that taints our reputation. Here we have a Minister defending that sort of thing—that sort of behaviour where when a Minister is meant to be overseas on Government business they are instead taking these big diversions and going around and having photographs taken in another business of her family’s.Mr DEPUTY SPEAKER: Move along.KELVIN DAVIS: The point I am making about our reputation—our reputation as a country for doing business—is that it should not be tarnished. We cannot have this sort of behaviour. We know what the Ministers’ guidelines the Cabinet Manual says about doing this sort of thing. And yet here we have the National members who are pretty touchy when we raise these issues and these concerns.Hon Anne Tolley: No we just want you to say it outside the House—have the courage of your convictions.KELVIN DAVIS: Well I challenge the Minister to show me the part in the Cabinet Manual where it says it is OK.Hon Anne Tolley: Bet you won’t.KELVIN DAVIS: Show me the part of the Cabinet Manual that says it is OK—I bet you that you cannot. This is the point. Our reputation is being tarnished because of those sorts of behaviour by Ministers. Here we have Ministers defending other Ministers for behaviour that we know was inappropriate. I ask the question: why is that Minister no longer a member of Cabinet?Jonathan Young: Nothing to say.KELVIN DAVIS: Nothing to say. So if there is nothing to hide if there is nothing inappropriate about what occurred why is that Minister no longer a Minister? The Labour Party supports this legislation in its third reading despite how tetchy those members are about certain issues that have happened in their own party. We do have concerns about the facilitation payments. We believe that there is no need for facilitation payments to be made to expedite business and that something—[Interruption]Mr DEPUTY SPEAKER: Order! There is one member who has the floor.Hon Annette King: I’m sick of Anne’s speech.Mr DEPUTY SPEAKER: I am sick of a number of things but we are going to hear the end of Mr Davis’s speech and we are just there now so he should sit down.KELVIN DAVIS: Basically I cannot help the way the Minister is feeling in defence of her colleague but we do support this bill although we do have reservations around the facilitation payment. Kia ora.[Continuation line: Todd Barclay]Third ReadingsContinued Speech - KELVIN DAVISTODD BARCLAY (National—Clutha-Southland): It is a privilege to be able to speak on the third reading of the legislation arising from the Organised Crime and Anti-corruption Legislation Bill. I just want to touch briefly on the comments made by the previous speaker about the Hon Judith Collins. I would like to make one short remark before moving on to the contents of the legislation. It was quite short-sighted of that member to be making remarks about a former senior Cabinet Minister in this Government when half of those people making judgments of Judith Collins have not been in Cabinet themselves and probably will not for quite some time. It would be of quite some concern to the New Zealand public if they ever did make it into Cabinet. I think she has done a fantastic job as Minister of Justice over the last 3 years and this piece of legislation is in large part her doing. It has been ably taken over by the Hon Amy Adams who is doing a fantastic job as well. I think that making those personal remarks says more about that member’s integrity than it does about Miss Collins’ contributions to this Government and this country. I just want to touch on a number of points about this legislation. The first is around requiring banks to report all international wire transfers over $1000 and the more physical cash transfers over $10000. I just want to acknowledge the banks and the Bankers’ Association which played a pivotal role in the facilitation of this legislation through the select committee process given their expertise both here and in Australia to develop more detail around this. I just want to acknowledge that. The changes that we are requiring to adhere to international standards for these organisations to implement within their business will come at a significant cost and their productivity and cooperation in the development of the detail of this legislation was greatly appreciated by the select committee. On that note a few people have raised whether or not the threshold set at $1000 for reporting international transfers is the right level—whether or not it is too low. The reason for it sitting at $1000 is that it is us keeping in line with our international obligations which were imposed by the Financial Action Task Force on Money Laundering which basically was an international standards-setting body that was set up to combat money-laundering and terrorist financing. The countries are required to ensure that the information about the originator and beneficiary of wire transfers is immediately available. The threshold that they recommended and set was for US dollars or euros of $1000. For simplicity reasons New Zealand decided to adopt that as well. Just closing off on that remark I then want to offer my support for the legislation and all of the submitters who took the time to come in and spend a lot of time talking us through the individual implications that these changes will have on them and their cooperation going forward. Thank you.[Continuation line: CLENDON]Third ReadingsContinued Speech - KELVIN DAVISDAVID CLENDON (Green): I am pleased to take a final call on the legislation arising out of the Organised Crime and Anti-corruption Legislation Bill. I will endeavour following on from what we have heard to perhaps offer at least equal amounts of heat and light to the debate. The Minister made reference in her opening remarks to the desirability of zero tolerance when it comes to corruption and I am sure that is something we would all support. I think she was particularly referencing the business community at that point but that certainly rolls over into the public sector as well—the Public Service. It is critically important that we do get as close as we can to zero corruption and a zero-tolerance approach to that is not only the ethically and morally correct thing to do but it is also an economically very smart thing to do. We know that high levels of corruption are highly destructive of economic well-being. Look anywhere in the world where there are high levels of inequality of poverty and even of violence. Almost without exception you will find high levels of corruption sitting beneath or around that. So zero tolerance for corruption is a very desirable thing to achieve. When it came to the crunch in the Committee stage of this legislation I am pleased to say that 60 members of this House expressed their preference for a zero-tolerance approach when they supported my Supplementary Order Paper that would have removed a clause from the Crimes Act that basically facilitates and legitimates small bribes being paid offshore. Unfortunately 61 members of this House chose not to go for zero tolerance—maybe 0.002 or thereabouts is OK. Just a little bit of corruption; just a few drops in the bucket. I think that is unfortunate. This legislation has some desirable elements but it was a missed opportunity. This was an excellent opportunity to remove that clause from the Crimes Act and really move ourselves closer to being truly anti-corruption and to demonstrate that in our statutes. I will return to that point. But I would comment that the legislation does some useful things such as the business of reporting of money being transmitted overseas from New Zealand usually electronically in this day and age of course. Some of the most spirited and interesting debates at the select committee were about that issue. The banks came and gave some quite substantive submissions and appropriately so. I continue to be a little bit surprised that the electronic transmission of amounts in excess of $1000 must be reported. I still feel that that limit is somewhat low. There are many reasons why people would and do legitimately send $1000 overseas be it to family be it for purchases whatever it might be. Nevertheless that is where we have ended up. But just to put some scale around that. I recall the Westpac submission indicated that Westpac bank could make approximately 2000 reportable transactions per day—up to 2000 a day. It is not hard for that bank then to be thinking in terms of perhaps half a million transactions a year. Multiply that by four for the four major banks plus the very high number of private companies and individuals making transactions and that is an enormous volume that needs to be reported and recorded. That of course is one reason why part of the commencement date of this legislation has been put back simply to allow the banks and the companies the time to build the necessary software and to create the infrastructure that will allow for that. The Privacy Commissioner was somewhat unhappy with this legislation to the extent that there is less privacy protection for information about New Zealanders dealing offshore than there is in the domestic environment. She thought there needed to be some stronger constraints around that. The select committee did agree and there is a requirement on the Police Commissioner for example to consult with the Privacy Commissioner when setting or altering agency to agency information-sharing agreements and that is a good thing. That is a good step forward. But I think it is something we will have to continue to monitor. When the Privacy Commissioner is making a fairly strong submission to say “Hang on. This is a little bit over the boundaries.” I think we need to take that seriously. I would hope that in time it will be proved that in fact we will get that balance right. The point has been made that this legislation has taken rather a long time to come to the House. One of the declared purposes in fact one of the primary purposes of this legislation is to enable us to make those legislative changes that are necessary for us to ratify the United Nations Convention Against Corruption that we signed in December 2003. It took about 6 years before that matter got as far as the select committee. There is a certain symmetry. The first reading of the Organised Crime and Anti-corruption Legislation Bill was exactly 1 year ago today on 4 November 2014. So we are just rounding that off quite nicely. Perhaps we should put a little candle in the middle of it when we do vote. It is true that the Minister at the time indicated in August 2013 that the original bill would come to the House by the end of that year. In fact it was in the middle of the year. It was in June or thereabouts June or July 2014 before we had the bill tabled in the House and then as I say a year ago today we finally got the first reading. That is peculiar because all parties I think all sides acknowledge there is a significant economic benefit in ratifying this legislation or rather ratifying the convention and of course this legislation is necessary for that to happen. That well-known left-wing commentator Phil O’Reilly head of Business New Zealand  is on record as saying that New Zealand’s high trust public sector is its single greatest competitive advantage. That is quite a strong statement from a fellow who does on occasion find reason to criticise the public sector. I do think that it just highlights the fact that in order to maintain and develop good economic relationships with other countries particularly those countries that have already ratified the UN convention it is important we progress to that position ourselves. It is odd that that has taken such a very long time. I do wonder if we need to take a lesson from that. Again just to return to the matter of the facilitation payments which unfortunately continue to be allowed—the so-called facilitation payments. These are actually little bribes. New Zealand businesses do have a very good reputation for operating honestly within the law and with integrity. Long may that be the case.[Continuation line: The fact that we missed the opportunity to take out]DAVID CLENDONThe fact that we missed the opportunity to take out that unfortunate clause in our legislation that legitimates payment of small bribes does degrade the quality of that reputation. The point was made in earlier debates in respect of some of our key and very important trading partners—critically China but also India as it becomes an increasingly significant trading partner both in terms of products services education and tourism—that it would be a great thing if New Zealanders abroad New Zealand companies abroad were seen to have a zero tolerance approach. But unfortunately we can have that 0.002 approach. We can continue to allow countries to behave in ways that they would not be allowed to behave in in New Zealand and I do think that is unhelpful. The leaders of both China and India have made very very strong statements that they are determined to drive corruption out of their economies. That will take a very long time. That is a very significant undertaking and may they have success in it. It would be nice to think that New Zealanders abroad would be setting the example rather this rather tarnished example that maintaining the legitimacy of what are small bribes unfortunately does propagate. So in final comments I say we do support this legislation. As I say it does some useful things about sending money overseas about making money-laundering more difficult about increasing protections against human trafficking and the like. It is good and useful legislation. It could have been great legislation but that is work for another day for a more progressive Government. Kia ora. Thank you.[Continuation line: Bindra]Third ReadingsContinued Speech - KELVIN DAVISMAHESH BINDRA (NZ First): It is a privilege to rise on behalf of New Zealand First to speak on the legislation arising from the Organised Crime and Anti-corruption Legislation Bill. The intent of this legislation is to strengthen the law to combat organised crime and corruption. The intent is also to improve New Zealand’s ability to collaborate with other like-minded countries to interrupt organised crime and work effectively with the other countries’ public officials and law enforcement agencies to respond to future challenges. We like the intent of this legislation. The intent is to improve New Zealand’s compliance with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. I will come back to this part later in my presentation and will now touch on the human trafficking part of the legislation. The legislation has gone to some extent in tidying up the current provisions in terms of simplifying the provisions against human trafficking. The provision has now been added to cover the purpose of human trafficking for prostitution and slavery as well as illegal human organ transplants. Coming back to the bribery part of the legislation I note there has been a change made in the provision with regard to corruption or bribery by foreign public officials. New Zealand citizens New Zealand permanent residents and those corporates based in New Zealand will come under that provision of this legislation. However the waters have been left muddy—we suspect deliberately—with a view to leaving some space there for New Zealand corporates as well as private businesses to provide for facilitation payments which in plain English is bribery. There is no clarity around how corrupt a foreign public official can be before he or she gets into trouble. Facilitation payments—or in plain language bribery—as I have said have been given a wide scope to thrive in. As pointed out earlier it is a matter of shame that the Minister has conceded that small facilitation payments are OK and at times necessary to get the job done. We think that has been a deliberate attempt to actually weaken this brilliant legislation. Had David Clendon’s Supplementary Order Paper been accepted by the other 61 members of this Parliament this legislation could have been stronger and better. However it was unfortunate that only 60 of us supported that and 61 did not. We have serious issues with this approach. Who decides how much is OK for a bribe? Whether it is small or big a bribe is a bribe. This approach will contribute towards damaging our image as a transparent and relatively corruption-free country. Having travelled in both the larger countries that David Clendon just mentioned—India and China—I say that it will take them a long time to change their old culture but they are working at it. What we are working at is actually damaging our reputation. Our businesses are relatively transparent relatively clean however this sort of anomaly in our laws will give them a wide scope to indulge in bribery or facilitation payments. Touching on the now infamous Saudi sheep debacle I say that had this legislation been appropriately strengthened in good time a certain Minister could have been answering some serious questions as to whether those millions of dollars of taxpayers’ money were a facilitation payment or were a plain simple bribe. Thank you.[Continuation line: Young]Third ReadingsContinued Speech - KELVIN DAVISJONATHAN YOUNG (National—New Plymouth): I am very pleased to stand in support of the legislation arising from the Organised Crime and Anti-corruption Legislation Bill under the name of the Hon Amy Adams Minister of Justice. We have heard a lot of rhetoric today about corruption bribery—using terms like that—and even the previous speaker Mahesh Bindra made a comment that he felt that the Minister was giving way. What needs to be known is that this issue of facilitation payments has not been authorised by this legislation. They have been lawful in New Zealand for many years. In fact this legislation tightens and narrows the application of them. The previous speaker in I think his first or second reading speech made a comment that it is normal practice in many countries of the world that a small facilitation payment a small payment to facilitate a service takes place. We can live in our own little glass bubble; we can live in our high moralistic world here and never be able to transact business in some of those other countries without those facilitation payments. We would be at the end of the queue. I remember the very first time that I as a young man went to the United States of America and paid a tip for service. What was acceptable in that culture was foreign to us and I did not like it but I have come to understand that it has become more and more acceptable when we show appreciation for service and we do it in New Zealand quite often. So what has happened in this legislation is that this issue around facilitation payments has been narrowed and tightened quite considerably compared with what existed before under a Labour Government. It is very high and mighty of them to crow from the rooftop on this issue when we are actually doing something more about it because we understand that in the global world of trade progress is being made. We are ensuring that facilitation payments can be applied only in situations where no undue benefit accrues to the person involved. This is what the Minister said in the Committee stage of this legislation. In these situations businesses must record and keep detailed records of any such payments made to ensure that we get the balance right. This is the balance between ensuring proper high standards of business practice in New Zealand and protecting innocent New Zealanders against unintentional criminalisation as they transact business across this world. I believe that for businesses that are going to nations of the world where facilitation payments are normal business practice then we need to put protections around our people so that according to New Zealand law they are not criminalised for entering into normal business practices. I believe that we have got this balance right. I commend the good work of the Minister in this legislation and I commend it to the House.[Continuation line: Tisch: The next call is a split call]Third ReadingsContinued Speech - KELVIN DAVISThe ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Denise Roche—5 minutes.Third ReadingsContinued Speech - KELVIN DAVISDENISE ROCHE (Green): I rise to take a short call for the Greens on the legislation arising from the Organised Crime and Anti-corruption Legislation Bill. My colleague David Clendon has already outlined lots of reasons why we are supporting this legislation. It is great that New Zealand is exercising our international responsibilities and moving to align ourselves with the various conventions that we have signed up to like the United Nations Convention Against Corruption  the Agreement on Enhancing Cooperation in Preventing and Combating Crime  an agreement between the United States and New Zealand; the OECD convention known as the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; the United Nations Convention Against Transnational Organized Crime; and the UN Trafficking Protocol. The public submissions on the original bill were largely in support with groups as varied as the New Zealand Bankers Association the New Zealand Police Association and Transparency International all expressing support. However I would like to raise some of the concerns that were raised in some of those submissions. Transparency International for example stated the importance of this bill making it explicit that facilitation payments to Government officials are bribes. It rightly notes that facilitation payments are widely recognised in many countries and are common practice and it also says that many of our close allies and friends including the United Kingdom actively prohibit facilitation payments. The UK has the Bribery Act. I hope this Government has not deliberately stymied this legislation because of its own embarrassment over its facilitation payments to a certain Saudi Arabian national. There are important principles at work here and I hope that the Government’s deserved embarrassment over its own poor conduct has not resulted in New Zealand condoning a poor practice. I guess a timely reminder of how important it is that New Zealand maintains a strong stand against facilitation payments is the developing case in the Philippines that was covered recently. It is the case of the Laglag Bala  or the “fallen bullet” scandal where Filipino airport customs officials were allegedly placing bullets in people’s luggage to extort from them later and demand a facilitation payment. As far as I know no New Zealander has been caught in it so far but if an official from the Ministry of Foreign Affairs and Trade or another staffer elected to pay that type of payment it would be completely legal and it disturbs me that it would not be illegal under our own law. Our Filipino New Zealand citizens who have ties back to the Philippines and visit their home country as well as other New Zealanders with interests in the country could potentially be affected by this and my heart goes out to them. By failing to criminalise this behaviour in New Zealand we are tacitly supporting corrupt systems empowering corrupt officials and normalising a culture of corruption and we have to stand up and make it clear by our words and by our deeds that corruption and facilitation payments are unacceptable whether they are to secure an agri-hub in a Saudi desert or to make sure the baggage you are travelling with goes through airport security unmolested. We should take a stand on this. Corruption is a bit like tooth decay. If you allow a little bit through and do not clean it up it spreads and trashes the whole mouth. It also causes other feedback loops within systems and by not taking a firm stand against it we are partly enabling cultures of corruption and that is a lost opportunity with this legislation. We do not believe this bill goes far enough to stamp out facilitation payments. We could do better and with the Greens in Government we certainly will.[continuation line Rino Tirikatene]Third ReadingsContinued Speech - KELVIN DAVISRINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora Mr Assistant Speaker. I am pleased to add my contribution at the third readings of this suite of 15 bills that are strengthening our legislation against organised crime and corruption. The bills that we are debating this afternoon are wide-reaching. They cover topics as diverse as money-laundering credit card skimming human trafficking and match-fixing all the way through to organised crime and bribery and corruption. We do support these measures. They are long overdue. It has taken a while to get this far and to progress these bills through the House but they bring our country into line with overseas conventions and treaties and protocols that we have signed up to. By and large they are measures we do support. I want to add my comments with regard to the facilitation payment issue. Where does a facilitation payment end and a bribe begin? That is a moot point but I do take on board the fact that New Zealand is a trading nation. We are reliant on trading with the outside world and I myself have experienced at first hand the business culture that exists in other markets in other countries from far-flung places like North Africa through to countries closer to ourselves in our neighbourhood like Papua New Guinea. Pretty much every country around the world has its own culture and there is an element of baksheesh in certain nations or greasing the wheels or tipping—you might want to call it charitable giving or you might call it bribery. That is the commercial reality that New Zealand exporters deal with day in and day out right around the world. I do regret that this Government was not bold enough to raise the bar and say yes we should live up to our ranking of 4th most transparent in the Transparency International rankings and we should try to lift that ranking higher and get back to the top. We need to take that extra measure to outlaw facilitation payments and set the bar high. We know that the commercial reality is such that it is very difficult but I think that if it is good enough for the Canadians if it is good enough for the UK and if it is good enough for APEC and various other major international clubs that we are part of to frown upon the practice of legalising facilitation payments then we certainly should be rising to that challenge and doing the same. Just to conclude my contribution can I acknowledge the New Zealand Customs Service which is included in one of these bills the Customs and Excise Amendment Bill (No 3). It was great to celebrate the 175th anniversary or birthday of the New Zealand Customs Service the very first Government department of Aotearoa New Zealand. On the shores of Kororāeka in Russell under a tent before we even had a Treasury there was a New Zealand customs service. So I am very pleased that I was able to share with the Customs Service and the Minister the Hon Nicky Wagner last night the great work that it does and the passage of this legislation is strengthening that good work and policing our borders. I commend these bills to the House. Kia ora tātou.[continuation line:McKelvie]Third ReadingsContinued Speech - KELVIN DAVISIAN McKELVIE (National—Rangitīkei): It gives me great pleasure to take a very short call on the bills arising from the Organised Crime and Anti-corruption Legislation Bill at their third readings. The original bill of course went through the select committee I am part of and it took quite a considerable time I guess for me to get my head around the bill. I think I have said that in here before and got into trouble but it is part of the Government’s response I guess to organised crime basically. The National Government has done some work in the organised crime area already with the Criminal Proceeds (Recovery) Act  which commenced I guess some 4 or 5 ago and also around the Anti-Money Laundering and Countering Financing of Terrorism Act in 2009 which recently commenced—in fact in June 2013. So we have started some work. This is a continuation of this work. This law covers all sorts of crime as the previous speaker mentioned. I think that unfortunately if we all in New Zealand had the same or perhaps a higher level of standards—in fact if we all around the world valued our freedom and the way we behave we would not need legislation like this but unfortunately that is not the case.[continuation line So I think that this piece of legislation is a very good response]IAN McKELVIESo I think this piece of legislation is a very good initial response to some significant challenges that we face. And only at lunchtime I sat by a member of the Microsoft team in New Zealand and we were talking about cyber-security and it just shows how the world has changed so dramatically in the last I guess 15 years that we are now needing to protect people’s information effectively in space. So we put the information out there we hope it is stored securely—it usually is not or maybe is not—and consequently there is a significant amount of work going into ring-fencing that information and trying to keep it secure. So the world changes so quickly that we need to keep our legislation ahead of or certainly up with the changes as best we can. This legislation is an effort by the Minister of Justice to do that it took a lot of work from the Law and Order Committee to get it to the point it is at now and I think it will play a very valuable part in the future of protecting New Zealand and New Zealanders from organised crime. Thank you.[Continuation line: Peeni Henare]Third ReadingsContinued Speech - PEENI HENAREPEENI HENARE (Labour—Tāmaki Makaurau):I rise to speak on the legislation arising from the Organised Crime and Anti-corruption Legislation Bill. Much has been said about this particular legislation in its third reading and in my kōrero in my contribution today I would like to touch on some of those points that were raised. More important I would like to talk about the underlying themes that I think were not really spoken about too much. It is important to note that we the Labour Party do support this legislation. I was not on the Law and Order Committee but I do understand that there was some significant debate that took place around this particular legislation. And I guess that is a reflection of just how complex it is—complex in nature just by the fact that there are a significant number of bills incorporated into this omnibus bill. Some of the members this evening have already mentioned some of them and I would like to just briefly touch on some of those too. My mind casts back to the contribution of probably one of the most experienced and one of the most skilled members of this particular House and of this august institution the Hon Phil Goff; who in his former capacity has a lot of experience in particular in international trade. He spoke very passionately and very wisely about his experiences with regard to our reputation offshore. And we all know that our reputation offshore is a key part in why countries come to New Zealand and why countries look towards New Zealand as a shining light of not only trade but of global citizenry. It allows New Zealand to hold its head high in places like the United Nations in places like trade talks and trade negotiations and also on debates around security. It allows New Zealand to take that position as somewhat of a guiding light in those particular scenarios. So it is important that we when we consider this particular legislation have that in mind. We bear in mind that our integrity must come first. So the underlying theme is the integrity of our country not only as a trade partner but as a global citizen as a responsible country as a country that believes in democracy and as a country that has served its time in conflicts around the world in support of democracy too. So therefore it is only befitting that this particular bill allows and strengthens that democracy internally here in New Zealand. I want to talk briefly about some of the other amendments made across the many bills in this particular omnibus bill. In one of them it talks about cybercrimes. We know how in this ever-changing world you buy a phone in the morning brand new and it is generally out of date that evening so it is important that our legislation keeps up with that technology and makes sure that citizens feel safe in what they do not only here in New Zealand but of course abroad and that when they make financial transactions that when they go online and that when they check their emails of course they feel secure in what they do. Match fixing is another issue that has been raised and it is good to see that there is a particular piece there that will tighten up some of the match fixing that goes on—Poto Williams: Like in the cricket.PEENI HENARE: Like in the cricket I daresay. We all pat ourselves on the back because we have got a great team and we have had some great experiences and wins over the past decade and indeed many decades past but you know a lot of us are left scratching our heads as to whether or not that support was misguided or that support was misplaced when we consider some of the antics and some of court trials that are going on currently. So I think it is a good thing to tidy that up. Also I want to talk about the human trafficking. Mr Davis has already mentioned it but a lot of people when they think of human trafficking they often think back to the slave trade that was prevalent around the world quite a number of years ago but it is ignorant to say that it does not continue to this day. So it is important that we look after our people not only those here domestically but of course the operation of human trafficking of our own citizens offshore and more important that of citizens who do live overseas to make sure that wherever they may be in the world we have legislation that will look after them their rights and of course our citizens as they travel freely to the far corners of the earth. That particular bill also tightens up the penalties for those who do involve themselves in human trafficking and are found to be guilty of it and I think that is a good move. If you want to be serious about making so many changes it is important that we have the right deterrents in place to ensure that those things do not happen moving on into the future. It has already be mentioned in the House by many colleagues in particular on this side of the House that this particular piece of legislation was a great opportunity to really do something to really put a stake in the ground and to make sure that corruption does not infiltrate into this great country and all that we do. Earlier it was mentioned around bribery and around facilitation payments. I will not go on about that as I feel it has already been well mentioned in this House. I do however want to say it is important that we tidy these things up and I am a little bit dismayed that we did not take this opportunity to indeed fix that kind of conversation of bribery because it is a terrible word and when you say it in this House and when you say it out in business transactions and in our country’s dealings with other nations bribery is a filthy word. So I am a little bit dismayed that we could not get rid of that one. So this particular legislation also improves New Zealand’s compliance with a number of other international conventions including the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. That is why I am talking about its great intention but I do not think it quite goes far enough. The legislation also has a range of other anti-corruption measures that many of the members have spoken about. In conclusion I would just like to add my final statements touching back on my contribution at the beginning around the themes that really run under the debate today on this particular legislation. What are those? I will mention them again: it is about the integrity and mana of this country. I think about our captain of the All Blacks Richie McCaw and the mana he conducts himself with and I would like to think that whenever any of our officials or whenever any New Zealand citizen makes their way offshore or conducts themselves in business or in trade or in sport or in anything else that they do it with mana and they do it with the integrity that I think the likes of Richie McCaw do well in leading us in. The legislation touches on the need for us to be responsible global citizens and I think this legislation certainly is a right step in that direction. It makes us a responsible country a responsible country whereby people look towards us not only for leadership but look towards us for the kind of advice that would be expected on all of the global forums such as the UN. Finally I want to conclude by saying that Labour does support this bill. Kia ora tātou katoa.[Continuation line: Paul Foster-Bell]Third ReadingsContinued Speech - PEENI HENAREPAUL FOSTER-BELL (National): Tēnā koe e te Mana Whakawā tēnā koutou katoa e ngā Mema o te Whare Paremata. [Authorised te reo text to be inserted by the Hansard Office.]In taking a brief call on the Organised Crime and Anti-corruption Legislation Bill I would like to say that we are proud on this side of the House that New Zealand remains one of the top one or two least-corrupt countries in the world. But we must not rest on our laurels there is always more to be done. Now this is a very practical and balanced bill. We have to make sure that we do not go too far and put in place restrictive criteria that would make it difficult to observe cultural traditions such as koha gratuities and the presentation of small and appropriate gifts. But we do want to make sure that we do not have financial corruption of the sort that is found in other countries in the world. I welcome today the announcement by Transparency International New Zealand that New Zealand is the least corrupt and most transparent in terms of defence procurement. This goes along with the many other areas of our economy and Government that function in a very transparent way. This bill further advances that cause. I congratulate the Minister Amy Adams and commend the bill to the House.[PV on third reading—Ayes 109 Noes 12][Continuation line: Waitangi National Trust Board Amendment Bill; Nicky Wagner]