Organised Crime and Anti-corruption Legislation Bill — Second ReadingText is incorporated into the Bound VolumeOrganised Crime and Anti-corruption Legislation Bill — Second Reading[Sitting date: 20 May 2015. Volume:705;Page:3508. Text is incorporated into the Bound Volume.]Organised Crime and Anti-corruption Legislation BillSecond ReadingHon AMY ADAMS (Minister of Justice): I move That the Organised Crime and Anti-corruption Legislation Bill be now read a second time. This bill reflects the Government’s ongoing commitment to combat organised crime and corruption both in New Zealand and globally. Can I take this opportunity to thank the Law and Order Committee for its work on the bill. I understand the committee received 20 submissions and has recommended that the bill proceed with a number of amendments mostly of a minor and technical nature.This bill addresses a serious issue faced by societies around the globe. Organised crime is a corrupting influence worldwide undermining public safety economic development good governance and national security. New Zealand has robust legal frameworks to combat organised crime and corruption and high levels of international engagement in responding to these threats. However we are not immune to organised criminal activities such as money-laundering identity theft people-trafficking and a range of conduct that constitutes bribery and corruption. This bill tackles such conduct in a number of ways. It enhances New Zealand’s ability to collaborate with international efforts to disrupt organised crime and ensures that law enforcement agencies are able to quickly and effectively respond to new challenges. Measures in the bill will also increase New Zealand’s compliance with a number of international agreements.One of New Zealand’s core assets internationally is its reputation as one of the least corrupt countries in the world. However we can never afford to be complacent. This bill will send a strong signal that New Zealand values having and is committed to maintaining corruption-free institutions. This is vital for maintaining New Zealand’s reputation as a reliable trading partner and enhancing our influence in international fora. The 2011 all-of-Government response to organised crime outlined a range of measures that this Government had introduced to target and disrupt organised crime. However we also recognised that more work could be done and identified a range of areas for improvement. This bill implements many of these reforms by making a number of key changes.I will begin by outlining two important amendments to the money-laundering offences under the Crimes Act. Firstly the bill removes the requirement that the proceeds of money-laundering be generated from offending punishable by 5 years’ imprisonment or more. This requirement places the police in the position of having to establish that the proceeds of crime are generated solely from such offences. This burden is both difficult to meet and inconsistent with the reality of these crimes as the proceeds are often intermingled and arise from a range of criminal activities.The second change simply clarifies that the prosecution need not prove that a defendant had intent to conceal the proceeds of crime although this may result from the money-laundering transaction. This is a return to early case law on the money-laundering offence which held that intent to conceal was not an element of the offence. More recent decisions however have required the prosecution to prove that element creating unnecessary hurdles to successful prosecution. Removing this requirement will help deter those who exploit the current limitations and responds to the concerns raised by the Financial Action Task Force which sets the international best practice for combating money-laundering.In addition the bill introduces new reporting requirements under the Anti-Money Laundering and Countering Financing of Terrorism Act for two high-risk classes of transactions that we know criminals use to launder money and finance terrorism. Under the new requirements financial institutions will need to report international wire transactions of over $1000 and all physical cash transactions of $10000 or more to the financial intelligence unit within the police. This amendment will improve our ability to detect and investigate money-laundering and align New Zealand with international best practice for combating money-laundering. The fact that the banks are already required to collect identity information from their customers means that the public should not notice any change as a result of these new requirements.The bill also addresses the issue of identity theft. Identity theft and the misuse of personal information is estimated to impact over 190000 New Zealanders each year and this bill deals with gaps in New Zealand’s identity crime framework by adding new offences of selling or distributing unlawfully obtained identity information and of making or possessing goods intended to facilitate identity crimes such as credit-card skimming devices. By addressing the gaps in our identity crime framework we will ensure that a full range of identity crimes can be prosecuted.Other important amendments in the bill expressly provide police with the power to share personal information including fingerprint information with their international counterparts. This amendment will allow implementation of the Agreement on Enhancing Cooperation in Preventing and Combating Crimewith the United States. The Law and Order Committee has recommended inserting a new requirement in this part of the bill for the Commissioner of Police to consult with the Privacy Commissioner before entering into international information-sharing agreements. This was already a requirement in accordance with a Cabinet decision. However including the consultation in the bill will ensure that the oversight role performed by the Privacy Commissioner is more transparent. In addition the bill makes an amendment to allow information stored in the DNA Databank to be provided to assist criminal investigations and prosecutions overseas subject to the Attorney-General’s authorisation. I have great confidence in New Zealand’s law enforcement agencies which have a successful history of prosecutions against those who engage in organised criminal activities. The measures I have outlined will further enhance international law enforcement cooperation and capability.A range of amendments in the bill will also strengthen New Zealand’s ability to combat bribery and corruption. These will enable the Government to ratify the United Nations Convention Against Corruption which is the first global instrument to address corruption in both the public and private spheres. Although New Zealand already broadly complies with the convention the bill contains a number of legislative amendments that are required before we can formally ratify it. These changes include increasing the penalties for private sector bribery and corruption offences under the Secret Commissions Act 1910 to bring them into line with public sector bribery and general fraud offences.The bill also creates new offences to address gaps in our anti-corruption framework. The new offences criminalise the acceptance of a bribe from a foreign public official and the acceptance of a bribe in return for using one’s influence over an official. Other amendments in the bill will enhance compliance with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The foreign bribery offence is amended to ensure that it applies to bribery in relation to the provision of international aid and clarifies the circumstances in which a company is liable for foreign bribery. The Law and Order Committee recommended a further amendment to make specified fines available as sanctions for foreign bribery in addition to a term of imprisonment. The amended penalties reflect the serious nature of foreign bribery and send a very clear message that those who engage in corrupt behaviour will be meaningfully held to account.A final amendment to the foreign bribery offence addresses the existing exception for small payments made to foreign public officials for the sole purpose of expediting a service to which the payer is already entitled commonly known as facilitation payments. It is important to note that this exception has been part of our law for many years and is important to ensure that New Zealanders acting in good faith are not unintentionally criminalised. However the bill tightens this already narrow exception such that it will not now apply to payments that provide an undue material advantage to the payer or an undue disadvantage to anyone else. This maintains compliance with the UN convention which requires parties to criminalise payments that provide the recipient with an undue advantage. This measure combined with a new requirement for companies to record such payments in their books will ensure that the exception is not open to abuse. I note that this is consistent with the treatment of such facilitation payments in Australia in the US and in South Korea and with operational practice in the UK.Let me conclude by outlining three final sets of reforms in the bill. The bill extends the Crimes Act offence of people-trafficking to ensure it applies to trafficking within New Zealand and not just in or out of the country. The revised section also expands the trafficking offence to include the movement of a person for exploitative purpose—for example prostitution or slavery. These amendments enhance our compliance with the UN anti-trafficking protocol bringing us into line with best practice. The bill also amends the Criminal Proceeds (Recovery) Act to allow foreign restraining orders to be registered without notice and enable the court to extend the registration of these orders more than once if necessary. A further amendment recommended by the select committee ensures that extensions are not limited to extradition cases. Finally the Law and Order Committee recommended a minor amendment to the Extradition Act to ensure that the police are able to take identity information from those arrested under that Act in relation to offences committed overseas.Collectively the amendments in the bill will ensure that New Zealand has a robust legislative framework that complies with best practice. The bill will ensure that those engaging in organised or corrupt criminal activities will be subject to the full force of the law by removing current limitations in domestic law and enhancing New Zealand’s ability to internationally cooperate. I commend the bill to the House.JACINDA ARDERN (Labour): It is my pleasure to speak on the Organised Crime and Anti-corruption Legislation Bill. It is a bill that has been some time coming. It was first brought to this House by Judith Collins when she was the Minister of Justice. We were told that it would be ready in 2013 but it came to us in 2014. Needless to say this is an area that of course is crucial to all parties in this House. It is I guess important to us as a nation that we continue to uphold our standing in the international community for doing our bit in this area. It does require cooperation and collaboration if it is going to function properly. Labour for instance recognised that when it set up the Organised and Financial Crime Agency within the policein I believe 2008.But it is not just about reputational issues abroad. Obviously making sure that we keep our own house in order is incredibly important. I just wanted to use these introductory comments as an opportunity to point out that the Serious Fraud Office is one of the best mechanisms that we have to make sure that we maintain our own domestic high standards when it comes to fraud bribery and corruption. That is an organisation that has in the past few Budgets now sought additional funding to do its job. It warned the Government for instance of its concern that there might be additional issues around corruption as a result of the massive amount of infrastructural rebuild occurring in Christchurch. That was a bid that was declined. Instead it was just left simply to do presentations around the importance of being vigilant around corruption in Canterbury. Equally it has warned that it is not able to prosecute as many cases as potentially it would like to. It is something I thought prudent to raise—that we do need to make sure that we keep our own house in order even though we are primarily discussing today our international obligations in implementing this legislation.Transparency International is one organisation that does a very good job of keeping in check where New Zealand sits relative to other countries. We have a branch that operates in New Zealand but it is part of a wider reporting regime that takes into account what kinds of mechanisms New Zealand is implementing to make sure we remain a transparent corruption-free country. We have fared very well in the past. We had a slight slip in the last measure. We are at No. 2. No one wants to celebrate coming second. Denmark pipped us at the post. In part I believe it has been flagged that the fact that we have not quite implemented some of these obligations has been part of the reason why. That is because this is an omnibus bill. It implements proposals including around the all-of-Government response to organised crime which it started back in 2011.But it also aims to improve New Zealand’s ability to cooperate with international partners. It ratifies the United Nations Convention Against Corruption it implements the US and New Zealand Agreement on Enhancing Cooperation in Preventing and Combating Crime and also enhances 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 which I think is something that Transparency International is particularly interested in.There were 20 submissions to this bill. One of the ones though and the area that I want to focus on the most—because there are a number of really important points raised—does sit around a point that the Minister touched on and that was the facilitation payments exception that exists in this law. Labour overall is supporting this bill; I should point that out. But we do have some reservations around the fact that we do still have a facilitation payments exception in this bill.I thought making reference to a bit of the background on this and also to the submissions that were made against it would be useful for the House. New Zealand’s foreign bribery offence contains as the Minister said a very narrow exception for small payments to be made to foreign public officials for the sole or primary purpose of ensuring or expediting the performance of a “routine Government action”. These are not for instance the kinds of things that you might pay as part of tariffs or as part of customs duty or anything like that. These are direct payments to Government officials or public officials to help facilitate and expedite a particular activity.I think we should be very clear that in making this payment you are expediting yourself over and above someone else who has not made that payment. I think that is clear in the way it is described. The exception though states that for such a payment to be lawful in New Zealand law it must be small. I would be interested to hear from members of the committee whether or not there was a discussion over what the definition of “small” was. Was it relative to what the payment was being made for? Was it sized in any way? Will you make a bigger exception around what “small” is depending on the size of the country or the activity? It must be small for an action within the scope of the official’s ordinary duties—so obviously if you are paying a port inspector it has to be around port issues—and not involve a decision about awarding new business or continuing existing business. So it is about facilitating business that would otherwise occur.Examples of facilitation payments include “small payments relating to the grant of a permit or licence the provision of utility services or loading or unloading cargo.” Again it would be really useful for the House if members—I believe that the Hon Phil Goff was on the Law and Order Committee; perhaps he could share with us some of the examples that might have been raised at the committee because I do think that it is a fine line. It is a fine line and who is making the judgment over what is routine what is “small” and where you decide there is a difference between—[Interruption] Either Jonathan Young has a contribution that he will hopefully make in the House or he is talking to himself; I am not sure. But hopefully at some point he might make a contribution and talk me through some of ways that were discussed by the committee.There were a number of submissions—I believe three—that were quite explicit about this point in the bill and had concerns about it including I believe the Human Rights Commission and Transparency International New Zealand. Apparently these submissions were fairly similar in the concerns that they raised. Their points were these—and I think they are good points so I want to reiterate them and highlight them in this House. Their points were that such payments are bribes regardless of their size. If they are not something that is applied universally and equally to all applicants then how is it not considered a bribe? The conventions that we are party to do not distinguish between facilitation payments and bribes and therefore there was a concern that by having this exception we might actually fall foul of the conventions we are trying to make sure that we are ratifying in this law. Also thirdly the OECD and the Asia-Pacific Economic Cooperation also encourage businesses to eliminate the use of such payments.I noticed that the Minister in her speech said that these kinds of payments exist in comparable countries to us—she referenced Australia and the United States. They do not exist in the UK. It has explicitly ruled out being able to use exemptions like these—obviously for good reason. In the response from the ministry it has said that it does not believe the exception is likely to fall foul of the conventions. How do we know? Were we able to seek advice beyond our ministry officials on whether or not we would actually fall foul of those conventions by having this exception? The ministry also raised that in the UK they have made the point that they are unlikely to prosecute for small payments. It is a very big difference to say you are not going to prosecute small payments versus creating an exemption in law that explicitly says you can do it. One is much more permissive than the other.So I do think that there are still considerable questions to be answered about this part of the bill which really does let down what is otherwise I think a very useful bill and one that we should all be supporting not only for our international reputation but also to make sure we spread best practice domestically as well. Thank you.KANWALJIT SINGH BAKSHI (National): Thank you Mr Deputy Speaker for the opportunity to speak during the second reading of the Organised Crime and Anti-corruption Legislation Bill. First of all I would like to commend the Minister of Justice the Hon Amy Adams for progressing this bill. Even though our country has robust domestic law arrangements and enforcement and has low levels of corruption we still need to keep working on becoming more immune from domestic and transnationally generated organised crime. I would also like to thank the members of the Law and Order Committee and the officials who guided us through this process. The committee received 20 written submissions and heard 11 orally. There were changes recommended to the bill that appear to be accepted by all the members.The previous speaker Jacinda Ardern raised the issue of facilitation payments an issue that came up during the discussion of this bill. It was debated at length and the members of the Opposition also agreed that if we do not have this provision then we are taking away opportunities from New Zealand businesses that are dealing in those areas. These are minor payments and it has been particularly worded so that a facilitation payment is not included as a bribe in this bill because these payments are very small in nature for an action that is within the scope of an official’s ordinary duties and that does not involve a decision about awarding new business or continuing existing business. One of the examples that was given during the select committee was that in some countries to move a file from one desk to another desk sometimes you have to give some facilitation payment to officials. That is not a huge amount. It is token money that is paid and it makes the work easy for businesses to deal with such situations. If they do not pay then those files keep sitting on the first desk and do not move to the next level.So that was the reason and we had a very good discussion and Opposition members also participated in this. The member who was speaking before me was not present at the select committee. She does not have any idea of what discussions we had at the select committee so I want to clarify that and let her know that this discussion took place and all the members agreed that we do not want to put New Zealand businesses at a disadvantage and we want to make sure that they are on a level playing field.Another issue that came up which was also discussed at length was the commencement date of the bill. Originally it was proposed that the bill should be implemented on 1 January 2016 but the banks and the New Zealand Bankers’ Association came and suggested that it would be very hard on them to implement the software upgrade so that the provisions in this bill could be implemented. I think it was a very reasonable call. The committee considered that and the commencement date was moved to 12 months after the date of assent of the Governor-General. These are some of the issues that were raised during the select committee.Another issue that I would like to touch on discussed at the select committee and raised by the banks was that individual names in prescribed transaction reports should be removed. It was proposed that the name of the employee from the bank who had conducted that transaction should be made public or known to the police. But banks were very hesitant about this clause and they did not agree to it. This was amended. We made a change and removed the requirement that the individual employee be named in the prescribed transaction report. This information is not necessary for intelligence purposes and can be requested by the New Zealand Police if necessary. If there is a reason for it then the police can ask the bank for the name of the person who has completed that transaction.Another issue that I would like to discuss today is some of the issues that were raised by the Privacy Commissioner during their submission and considered in the select committee. A special provision as the Minister mentioned was omitted during the process but it had already been discussed in Cabinet that the Commissioner of Police before entering any agreement with international agencies or renewing the existing agreement has to have a discussion with the Privacy Commissioner so that they are satisfied with the provisions of the agreement. This is all because we want to keep it transparent. This Government is working so that we have world-class laws and transparent laws available so that there is ease of doing business.There were requests for certain types of transactions to be exempted from the prescribed transaction reporting requirement and to extend the maximum time of the period of submission of such reports and the date of commencement. There is uncertainty as to which reporting entities involved in international wire transfers will be required to make a prescribed transaction report. Also there were concerns that the penalty for failing to report prescribed transactions was too high.One of the major priorities of this National-led Government is to make communities safer for New Zealanders. We are working hard to prevent people from becoming involved in organised crime. This bill aims to strengthen the law to combat organised crime and corruption. We are committed to being part of tackling this global problem and protecting the country from threats posed by international and domestic criminal networks. Once again I would like to mention a few points about how this bill will achieve our purposes. It implements a proposal containing an all-of-Government response to organised crime which was reported in August 2011 when the Government released an all-of-Government response to organised crime. It was realised that even though New Zealand has got a strong legislative framework in practice to obstruct organised crime a number of amendments are required to address gaps in the law that are reflected in this omnibus bill. The bill will ensure that law enforcement agencies are able to quickly and effectively respond to new challenges.We all want to maintain New Zealand’s reputation as a fair and transparent country. People from more than 200 different ethnicities live in New Zealand and our country ensures that everyone is treated fairly. This bill will improve New Zealand’s ability to cooperate with international partners to disrupt organised crime and enhance New Zealand’s compliance with a number of international conventions including the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the United Nations Protocol to Prevent Suppress and Punish Trafficking in Persons Especially Women and Children.One of the significant challenges for us is to reduce the use of cannabis and methamphetamines which leads to physical as well as mental ill health. I would like to acknowledge the New Zealand Police for helping us in tackling this problem through their recent implementation of the Organised Crime Strategy and the Methamphetamine Control Strategy in coordination with the Customs Service. Apart from reducing drug-related harm especially to vulnerable populations like youth we are also focusing on issues like robberies theft and fraud. This will help in raising awareness especially in young ones of the potential harm that these drugs could cause. We want to be able to reduce people’s desire for illegal and illegally sourced goods and services that further increase the risk involved with offending. The penalty for bribery and corruption types of offences under the Secret Commissions Act 1910 will increase from a maximum of 2 years’ imprisonment to a maximum of 7 years’ imprisonment. I commend this bill to the House.Hon PHIL GOFF (Labour—Mt Roskill): The Labour Party will be supporting this piece of legislation but we are not entirely happy with every aspect of it and I want to differ with the chair of our Law and Order Committee in terms of the view of the Labour Party on facilitation payments.I raised a number of questions particularly when Transparency International was appearing before the select committee because I believed that Transparency International the Human Rights Commission and the Victoria University of Wellington School of Government all made a very valid point when they said that it is impossible to distinguish where a facilitation payment ends and a bribe begins. A bribe does not have to be a big bribe to be a bribe. A small bribe is still a bribe. If I was to offer a Customs Service official in New Zealand money to speed up the transaction that I was trying to get into the country I would be committing a crime in this country. Why is it a crime in this country to do that but if I am working overseas somewhere in South-east Asia and I offer that payment somehow it is not a crime? If it is a crime in New Zealand then it is a crime internationally.I think that what Transparency International said made a lot of sense. It pointed out that there are countries that have banned facilitation payments outright. The United Kingdom you will remember is one such country that says that facilitation payments are illegal. The officials came back to us and said: “Oh but they aren’t prosecuting small facilitation payments.” They might not be but they are still illegal. The Canadians have moved to make facilitation payments illegal. Transparency International said that the United States and Australia are also moving in that direction. My question to the National Party is: if we are really proud of our reputation of being the least corrupt country in the world why are we not leading on this aspect of facilitation payments? We ought to be. We ought to be leading on that to maintain our reputation for the highest possible standards of integrity and transparency.It is also true that other organisations that we are proudly part of have spoken out against facilitation payments. APEC—the Asia Pacific Economic Cooperation—has opposed facilitation payments. The OECD which we are a member of has opposed facilitation payments. In New Zealand the Serious Fraud Office and Business New Zealand working in conjunction with Transparency International put together a programme where they recommend that facilitation payments are not paid. Some questions were asked of officials at the select committee about whether this would hugely disadvantage New Zealand if others are acting corruptly and we are not able to do the same. Well I do not think that is a good excuse because if we are encouraging other countries in which we are conducting our business to stamp out corruption why would we then say that it is OK to make a facilitation payment? We would not because that is a double standard.There was a survey done of New Zealand businesses in 2009 a business survey conducted by Trace International. It found that more than three-quarters of the survey respondents believed that it was possible to do business successfully without making facilitation payments if they planned carefully and they did proper management support.So I do not accept that facilitation payments are OK. In fact in the United Nations Convention Against Corruption in article 16 there is nowhere where it says that a bribe has to be a big bribe in order to be a bribe. In fact it defines that form of corruption—bribery of foreign public officials—as when you promise or offer or give to a foreign official or person in an international organisation directly or indirectly any undue advantage for the official themselves. That is a payment. That is surely an undue advantage. You are not paying customs officially to make the transaction; you are paying the officials to grease their palms to get something that gives you an advantage.The other part of the definition is that it needs to be an act that does create undue advantage and if you are prepared to pay a facilitation payment or rather if a business is prepared to—I know you would notpersonally do any such thing Mr Assistant Speaker—make a facilitation payment it isto get an advantage. They do not want to queue up. They do not want it to take time. They want it now and it gives them an advantage. So I cannot see how anyone can read article 16 of the United Nations Convention Against Corruption as allowing facilitation paymentsbecause they are small and they are perhaps not that important. If you believe in the process of having a clear line then you do not make a payment that is not an official payment and a payment that goes into the pocket of an official to get anadvantage. Yet in this piece of legislation here we are saying that that is OK. I do not believe that it is OK.The other criticism—in so far as I have a criticism of this bill—is the length of time that it has taken to get here. The matters that this bill deals with are important matters. They are matters of large-scale criminal activities. It is designed to make sure that our law against organised crime is as tough as it needs to be. It needs to be a lot tougher because we know that if we take one aspect of organised crime and that is the manufacture and sale of methamphetamine that is a business infiltrated by organised crime that makes more than a billion New Zealand dollars a year in this country. That is a billion dollars going into the pockets of organised crime to promote drugs and we have taken a long time to bring our legislation up to the standard that makes it easier for us to crack down on that sort of organised criminal activity.The bill also provides for further action to be taken against the crime of money-laundering. Money-laundering is when you convert the proceeds of crime into a legitimate payment by cleansing that money and making it a payment on property or some such thing that makes it look legitimate. Money-laundering in this country in the Government’s own regulatory impact statement is estimated to be at a value of over $1.5 billion a year—$1.5 billion a year in criminal activity being laundered. So why is it that we had to first be criticised by international organisations about the inadequacy of our money-laundering legislation before we acted? Those criticisms date back to 2009. It is now 2015 and I ask the Government why it took 6 years to bring back to the House this necessary piece of legislation dealing with criminal activity to the value of $1.5 billion a year.Of course what this legislation also does is it enables us to ratify the United Nations Convention Against Corruption. We were one of the first countries to sign it 11 years ago and we will be one of the last countries to actually ratify it. We will be one of the last countries that signed the convention to ratify it and bring it into force. I want to know why if we are so proud of our role of being a good international citizen it took all of that time—the whole 7 years of this Government—to actually act on something that needed to occur. It is not good enough that we turned a blind eye to these things. We lowered the priority we did all sorts of other legislation but we did not crack down on criminal activity.There is a range of things that this bill enables us to do. We can not only now ratify the convention against corruption but also improve our compliance with things like the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions the UN Convention Against Transnational Organized Crime and the United Nations anti-trafficking protocol. If I take that instance of trafficking again why has it taken so long to crack down on that when we know the appalling human costs and consequences of trafficking?What is finally before the House we support but it took too damn long for it to get here and we need some explanation of that from the Government and some explanation of why a small bribe is OK but we will criminalise a large bribe. Where is the line drawn? Why are facilitation paymentsexempted from being defined as bribery when clearly that is exactly what they are and what they are intended to do?TODD BARCLAY (National—Clutha-Southland): It is a pleasure to speak on the Organised Crime and Anti-corruption Legislation Bill. I would just like to acknowledge the chair of the Law and Order Committee Kanwaljit Singh Bakshi and the Minister of Justice the Hon Amy Adams as well as the other members of the committee particularly those who have spoken already.This was one of two of the first pieces of legislation that I was privileged enough to work on in the Law and Order Committee and I have to say that it was certainly a piece of legislation around which I think all parties involved and all representatives across the House were certainly on the same page regarding the importance of this legislation. By and large we were all on the same page when we were talking to officials and submitters from the various representative agencies on the legislation and the importance of it.I just want to acknowledge a couple of the agencies and organisations that provided a lot of work and guidance on this particularly the Ministry of Justice the Police the Police Association the Privacy Commissioner and Transparency International. I acknowledge their guidance with regard to the international protocols and experiences around how other countries have adopted and implemented this legislation. I would also like to acknowledge the New Zealand Bankers’ Association and the three banks that submitted separately—ANZ Westpac and BNZ. Collectively for those organisations as well as for the agencies involved there was a high level of constructive productive and pragmatic engagement and I think everybody at the heart of it wanted the best piece of legislation that could come out.We have already heard from the Minister and a number of other members tonight about some of the changes that have taken place in response to the concerns that were raised by the various submitters in order to make the legislation the very best it can be. We have already heard from Mr Goff about the value of money-laundering as reported by the departmental report at $1.5 billion. That is a serious aspect of the economy that could provide obviously dangerous flow-on effects to some vulnerable New Zealanders. Although we are talking about why this legislation may have taken a little bit longer to progress than it could have while we are looking at vulnerable New Zealanders we have passed other pieces of legislation that have tried to protect them as well such as that resulting from the White Paper for Vulnerable Children and a number of education amendment bills.So I think that we have given this piece of legislation the priority it deserves. One of the advantages potentially of implementing the legislation behind some of the other countries that ratified the UN convention is that although we may have been one of the first to sign and one of the last to eventually progress the legislation it means that we have had the luxury of being able to look at how other countries have articulated the challenges that were raised as they were progressing the legislation in their respective countries. We have been able to take those perspectives and craft our own unique legislation which draws on the challenges and inconsistencies that may have been experienced by others. So I think there is an advantage in that and it means that New Zealand has truly got a piece of unique legislation picking the best from other countries that we compare ourselves to.There are just a couple of points that the Minister has raised that I think are important given that that probably draws into another reason why it has taken a little bit longer to progress the legislation and that is that a number of aspects and indeed the changes that have been incorporated through the select committee process are minor and highly technical in nature.As we have heard from a number of the banks such as the Banks Association ANZ and Westpac the nature of the systems and software that these organisations already have in place and already provide reporting mechanisms to the police is complex and unique and takes time to change. I think as a committee we did this legislation a lot of justice by taking the time to get a greater understanding of some of those complexities. Westpac articulated that it provides banking and insurance and investment services across a broad range of industries to a broad range of clients. It estimates that it has around 1.4 million customers. When this legislation does finally progress and the regulations have been implemented it estimates that it will be required to report around 2000 transactions per day. So we have got a duty to be able to make sure that if it is having to do this we have got the right frameworks in place from the outset so that when it spends millions of dollars on developing its software to meet the requirements of Parliament and the regulations that follow that money has not been wasted and it is not having to go back and repeat and redo the software based on changes we may have to make later on down the track.BNZ is in a similar situation. Internationally it expects that across the world it will have about 5 million to 7 million reportable transactions annually. They are not small numbers and given the threshold of payments that are reportable—as low as $1000 and most of these are electronic transactions and they happen numerous times on a daily basis—I think that if these organisations are going to be reporting these to the police they need to be able to have some clear understanding of what is actually necessary from a police perspective and the collection agency of these transactions. They need to have a clear understanding of what is actually required from the outset because it will be a hugely costly exercise to ensure that both sides of the spectrum have the necessary software to be able to take on board the transactions that come about.The Minister and other members have also reported that obviously this is a borderless and global environment we are acting within. I do not think I can remember the last time I actually gave a cash sum of over probably about $100. If you look at most members of this House we do use our banks’ online mechanisms to make payments so it is very important. As we have heard from a number of members tonight the organised criminal networks—Jacinda Ardern: You use cash?TODD BARCLAY: Cash? I use cash every now and again. I use an Eftpos card a credit card from time to time. I do not use credit cards on undesirable things. I do not use my parliamentary credit card where I should not either.The all-of-Government response to organised crime has been an important aspect of this and we have heard that the Ministry of Justice has played a huge role. Another aspect that the Banks Association raised in its submission on the billwas that it felt that the bill did not adequately identify the form of information reported that should take the proposed method of delivery. It specifically raised an issue with new section 48B of the Anti-Money Laundering and Countering Financing of Terrorism Act where it requires that the nature of the transaction be reported. The association raised questions as to what kind of analysis is needed to be undertaken to make sure this determination was clearer. That is an example of an aspect within the bill where the Ministry of Justice went back and looked at it and took into consideration the views of the Banks Association.Another aspect was the time of implementation. The bill initially set down that after 12 months following the implementation of the Act the requirements will come into force. But as we know the regulations will take a long time following that to implement and the Ministry of Justice was quite clear that it—Hon Ruth Dyson: It’s OK to not take the full 10 minutes.TODD BARCLAY: I am enjoying this Ms Dyson. It is very fascinating. The ministry basically said that it will look at the legislation and will implement it as soon as the banks and everybody are in order.When Mr Goff was reflecting on money-laundering and why facilitation payments were not included I just wonder what hat he was wearing—whether he was wearing his hat as a member of the Law and Order Committee a former Minister of Justice or a former Minister of Trade. If this was such a huge aspect of this bill that absolutely needed to be included I am not sure why he did not feel compelled to pass the legislation himself when he was the Minister of Justice and take a world-leading step as he said we should be here. Obviously as a former Minister of Trade he will know more than many of us that it is of the utmost importance that we ensure that our businesses are not disadvantaged on the global scale. We are already disadvantaged by the tyranny of distance; we do not need to be disadvantaged by other aspects that are just in the general course of doing business overseas.Mr Bakshi has reflected that there were 20 submissions and 11 were heard orally. Particularly within two aspects of the bill the money-laundering side as one and organised crime as the other the themes that were coming through were incredibly consistent. We are comfortable that we have struck the right positioning of this bill to provide the best legislation for all parties involved to ensure that we are adhering to our obligations under the international treaties that we have ratified. Thank you very much. It is great to be passing this very important legislation and commending it.DAVID CLENDON (Green): I am also pleased to speak to this bill the Organised Crime and Anti-corruption Legislation Bill. It is an interesting bill. It has been around for some time. It has had time to mature clearly. The Greens are supporting it because it does some good things some necessary things.Time and technology move on. Technological developments create new opportunities for criminal elements to offend and to find ways to extract money in ways they ought not to do. We are however in common with our Labour colleagues disappointed by this bill to the extent that it fails to do something that it could do and that is clearly about this notion of bribes. I will avoid the language of “facilitation payments”. It is such a dainty expression. It simply overlooks or seeks to disguise the fact that actually you are talking about bribes—small bribes perfectly formed little bribes but bribes none the less. I will say more about that in a moment or two.This bill does some good things as I said. Among other things it will make it much more difficult for people to launder money through improper transactions and pass money through the banking system by various ways and means. It was quite an education I must say. Some of the early submitters to the Law and Order Committee were the banks and some of the major financial interests. It was genuinely interesting to hear about novel ways people find to work electronic systems that to most of us look to be quite impregnable and quite bulletproof.We did raise some concerns as did others about the very low level of reporting. A $1000 remittance overseas by a New Zealander will be tracked and will be recorded. I cannot recall now the number of transactions that that represents in the course of a year going through the banks—most of them the vast majority of them legitimate—but it was many millions of transactions. That is a difficult challenge technically for the banks. They got somewhat nervous I think about the commencement date initially making the very good point that they need to develop their software and their systems to accommodate that level of reporting. There was no opposition as such that I could see. They were simply concerned about their ability to meet the requirements of the bill. So those matters were dealt with.I continue to have some unease about the level of data that is being gathered here. As we know massive data banks information about people’s banking and their transactions can have value in all sorts of ways not least of all for commercial reasons. I discovered recently when visiting Spark in Auckland that there is a new and interesting profession called a data scientist—people who can manage these massive databases extract information from them and discover patterns and trends within them. I am sure the police will do this for very good reasons for good and sound reasons. They will be looking for the patterns and trends that represent offending in some way. But equally that information is vulnerable to being mined and to being manipulated and applied for purely commercial or other reasons and for that reason I guess we will continue to have some level of scepticism about these massive databases and will want to be assured that over time they will be managed they will be eliminated—whatever it takes to protect individuals’ privacy.The bill does some very useful things around people trafficking. It tidies up our law. It stiffens up some of our regulations. It criminalises actions in New Zealand even if the offending is carried out overseas and that is as it should be. New Zealanders should not be exempt from offences or from liability for offences simply because what they are doing is not currently criminalised in New Zealand. As I said though where we part company with this bill is that it is the perfect opportunity when it does deal with matters around money laundering bribery and anti-corruption measures to remove the section in the Crimes Act that allows for these so-called facilitation payments these small bribes. We have heard a number of justifications about why that is OK and they are common enough justifications. The pragmatic argument and Mr Bakshi made that in all honesty is that yes if you want your business matter to progress you might have to slip somebody a few dollars or whatever the currency is in order to progress that. But that is simply a bribe. It also embeds in that culture the notion that it is OK.Often the history of bribes and corrupt money exchanges is about the fact that people are not properly paid to do jobs not least of all in the public service in other countries where the income levels are so low that actually the bribes supplement the income and allow those people simply to do well or at least to have decent lives and of course the potential to accumulate large fortunes. I think the pragmatic argument fails. I think we as a country with a very good reputation as a transparent country with very very low levels of corruption should exercise some leadership and not be afraid to simply say openly and publicly even in environments where bribes are commonplace: “No we don’t do that. We don’t go there.” I think we would be supporting those countries.Two of the countries with the most serious problems around corruption in the world are China and India two countries that are important trading partners for us. I think we could stand up and be the example in a sense. Yes it is true that some countries do allow for facilitation payments although it is interesting to note that typically the regulations the laws in those countries like Australia and like Canada are actually tougher than ours. I think the provision in this legislation to require the reporting of facilitation payments of small bribes catches us up with Australia where that is already obligatory. The penalties in those countries for overstepping the mark in terms of bribery internationally bribing foreign officials are more serious than ours.It is interesting to note that only 44 percent of the top 50 companies on the NZX have policies prohibiting bribery and 18 have policies that regulate facilitation payments. Compare that with the UK where of the top 100 companies there 72 explicitly prohibit giving and receiving bribes. The figure in Europe is around 57 percent. Only five companies in New Zealand on the NZX have codes of ethics that prohibit facilitation payments. As I say we have a very good reputation as being a country with very low levels of corruption. We also have a reputation as a clean green country. I think Transparency International is something like Mike Joy in the sense that Mike Joy is blowing the whistle on our water quality and on the fact that our environment is not pristine. In the same way Transparency International is blowing the whistle on the fact that to the extent that we continue to accommodate accept and even legally allow for these small bribes we are undermining our reputation.It is interesting in respect of Transparency International that the patron is one Sir Don McKinnon whom we heard mentioned in an earlier debate today a former MP of a National Government and a Deputy Prime Minister if my memory serves me. Transparency International is lobbying very hard for us to include in this bill the removal of that clause in the Crimes Act. It put out a media release just a day or two ago which I hope some members have seen and I would encourage those who have not to have a wee look at it. I think I was the only MP who attended a workshop over at Victoria University hosted by Michael Macaulay. I can never recall the name of his department. It is the Institute for Governance and Policy Studies. He calls himself the “Professor of Corruption”. It was an excellent presentation from him from Transparency International which put up I think an undeniable argument that facilitation payments are bribes. We ought not in New Zealand to have provision in our legislation that enables New Zealand companies to be involved in bribing foreign Government officials.It is not the moment now to mention it but I will anyway. In respect of the Committee stage I have lodged Supplementary Order Paper 76 which seeks to remove that provision from the Crimes Act. I would encourage Government members to have a look at that read what Michael Macaulay has had to say read what Transparency International is saying what the Human Rights Commission is saying and give some serious thought to whether now is the time to enhance our reputation as a country that does not tolerate corruption. Kia ora.MAHESH BINDRA (NZ First): It is a pleasure to rise on behalf of New Zealand First to speak to the Organised Crime and Anti-corruption Legislation Bill. But before I do that I would like to join the earlier speakers in paying homage to the late Ērima Hēnare—and our sympathies to our Labour colleague Peeni Henare.New Zealand First supported this bill to the Law and Order Committee and we will continue to support this bill. This bill aims to strengthen the law to combat organised crime and corruption. Proposals within this bill aim to improve New Zealand’s ability to work alongside international efforts to disrupt and respond to organised crime. We have an enviable reputation for being a corruption-free society. Well that reputation may be a little overrated because low corruption does not mean no corruption at all. We need to keep it that way. We are one of the least corrupt countries in the world and I have seen the whole spectrum having grown up in a country that has the dubious distinction of being one of the most corrupt countries in the world. So I have seen the whole spectrum during my career and I am proud to say that I do now belong to a country that is one of the least corrupt countries in the world.New Zealand First supports the new offence criminalising the acceptance of a bribe by a foreign public official. We are pleased that the new offence also identifies the acceptance of a bribe in return for influencing an official. I know of countries where the payment of a bribe is termed as—the nomenclature varies from country to country. I look at this scenario in a certain country—which I would not like to name and I have just named—where say if you are an importer or an exporter and you expect a large consignment of goods from another country the customs officials are paid a certain facilitation fee which is called “speed money” over there which actually expedites the process of clearing those goods. That is perfectly acceptable in those cultures but we do not want to head that way.New Zealand has one of the strongest reputations globally for being one of the least corrupt countries as I said. We demand honest and fair dealings in all aspects of our lives. We expect our Governments to make laws that combat organised crime and corruption. We expect our law enforcement officers to effectively enact those laws and enforce those laws and advice from the New Zealand Police was welcomed by the select committee. In the select committee process I contributed by way of a couple of queries as to whether this bill will address the ambiguity of various nomenclatures such as in certain countries if it is called “speed money” will that be addressed by this bill or are we going to just stick to our own ways of addressing these things and just leave that and we will be there. I was assured by the officials that we will be addressing those things and we will also be addressing the issue of extradition of those suspects who are involved in these activities in foreign lands.The select committee recommended that a new clause 46B be added so that New Zealand police could take identifying particulars from a person arrested on an extradition warrant. This new clause recognises that police need to have the authority to take these particulars to ensure that they have arrested the right person. We expect our legal system to respond quickly to punish those who are involved in organised crime and corrupt practices. The select committee was grateful to receive advice from the Ministry of Justice and I acknowledge the great work done by the other committee members and also the officials and a large number of organisations and individuals who gave some very meaningful submissions during the select committee process. We have some very good legislation and our Crimes Act will be enhanced by this bill. It will allow New Zealand to ratify the United Nations Convention Against Corruption to which we are signatories. It will also improve our compliance with a number of other international conventions.During this bill’s first reading my colleague Denis O’Rourke welcomed the changes made to the human trafficking offence in the Crimes Act. Peopletraffickers can be prosecuted regardless of whether the crime occurred overseas. The recommended amendment to clause 15 ensures that money-laundering acts committed outside New Zealand will be captured by this bill. Money-laundering is a growing criminal activity and it needs the strongest possible deterrent. The ability to detect and investigate money-laundering is also improved through amendments to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.The bill amends the Policing Act to expressly provide the police with the power to share personal information with their international counterparts. New Zealand First took special interest in this part of the bill and challenged the select committee to ensure that any information sharing did not infringe on the right to New Zealanders’ privacy. So there will not be this issue of the Privacy Act either. After consulting with the Privacy Commissioner the select committee recommended inserting a new section 95CA. This section requires the Police Commissioner to consult with the Privacy Commissioner when entering into or making changes to agency-to-agency agreements.The bill will bring New Zealand into line with international best practice as set out by the United Nations conventions. It will update the definition of crime involving dishonesty in the Crimes Act to ensure that those convicted of corrupt offences cannot hold positions of trust in the community. New Zealand First supports the committee’s recommended change to clause 6 for foreign bribery penalties. Including fines as penalties for foreign bribery alongside the existing term of imprisonment is a positive move and will strengthen our compliance with the OECD’s anti-bribery conventions. Making fines available as well as imprisonment supports the OECD working group’s findings that monetary sanctions are a fundamental deterrent for economic offences. This bill will remove the dual-criminality requirement for foreign bribery offences in the Crimes Act. New Zealand will be able to effectively prosecute foreign bribery regardless of whether it is an offence in the country where the bribery occurred.In closing as I said earlier New Zealand First is heartened that the bill substantially increases the penalties for bribery and corruption in the private sector. Some offences will now be punishable by up to 20 years’ imprisonment or fines up to $500000. This bill has some very sound and useful clauses. New Zealand First will be supporting this bill.JONATHAN YOUNG (National—New Plymouth): I have found this debate absolutely fascinating as we have looked at this issue. And who would have thought on a Wednesday night at 9.25 p.m. that people might find Parliament interesting? But I have found it very interesting as I have heard different views around facilitation payments and comments around bribery. I think that the previous speaker Mahesh Bindra has brought out a very important point when he talked about—what did you call them—“speed payments”. He said that in a number of countries around the world that is absolutely normal and quite acceptable. And I think what we are discovering is the fact that we live in a world of great cultural difference. What might be perceived to be wrong here is not so wrong in other places for lots of reasons.The very first time—to perhaps illustrate this in a benign way—that I went to the United States of America at the age of 17 to play rugby I went into a restaurant or a diner actually and ordered grits. A huge experience the first time I ever had McDonald’s in another restaurant. In those restaurants where people served you personally it was expected that you would show appreciation. So not only did you pay for the product but you showed some appreciation.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I have never had grits so let us just say—JONATHAN YOUNG: Not you Mr Assistant Speaker.The ASSISTANT SPEAKER (Hon Trevor Mallard): That is right.JONATHAN YOUNG: I have to say that when people talk about tips coming to New Zealand I was the first to think: “No no no there is something wrong about that.” And we are just discovering that there are cultural differences of understanding around some of these measures. So when I am in New Plymouth in a restaurant and you get great service great attitude you get somebody who is doing their job very very professionally very very well and you give them a tip it feels good. They appreciate it. It is not a facilitation payment but it is something that was culturally difficult to accept a decade or so ago. But today it is becoming increasingly part of how we show appreciation.Iain Lees-Galloway: Yeah that’s because you keep wages so low.JONATHAN YOUNG: No it has got nothing to do with wages. It has got something to do with appreciation of service. I think that is a generous way to look at it.So I think that what we understand in this bill is that we have very strong principles here in New Zealand when it comes to public service or people giving a service for what would be the bona fide and acceptable level and means of payment. But in other countries it is slightly different. And so although we have in this bill something described as facilitation we also have measures in this bill regarding corruption here in New Zealand. We are trying in this bill to live in a big world where we participate. And what we have got to understand is that trade trade itself is a great facilitating process where people become—can I use this term—civilised toward one another. Because if I have something to sell I have got to convince you that you want to buy it. If I have got goods or products that come from this beautiful country I have to convince people in other countries that this is going to be of benefit. So we have to communicate. We have to perceive that I have value you have got value and together we actually start to dialogue and talk. So trade is a very good means by which we can facilitate increasing harmony in interaction between nations.Although I understand the purist point of view around this debate that has been defended by members on the other side I also understand the pragmatic view that actually has at the end of it a good result. What we need to understand is that the democracy that we have come to appreciate with all of its weights and balances its accountabilities its checks and balances—all of these aspects do take generations sometimes to actually become part of the ethos and the cultural thinking of people. So what are we to do? Because we find something in this bill offensive do we withdraw and say we are not going to participate in that nation? Well I know companies here in New Zealand that work in some of those nations of the world and they understand what we are talking about. If we were to say “No no. You ought not have a facilitation payment because that is a bribe and that is corrupt.” then what we would find is that we would have lost a relationship that can have an ongoing beneficial process not only of enhancing our economic strength and our trade in this country but also of the relationships that we form having some influence upon thinking in other countries. In that I guess brief analysis I want to support what this bill says around facilitation payments and I want to say that this bill is a good bill.I want to just touch on another area that the bill speaks on and this is around the amendment that people-trafficking offences apply to activities in New Zealand not just when victims are moved in or out of this country. If you would allow me let me just read just a couple of sentences from the bill: “Every person is liable to the penalty stated in subsection (2) who arranges organises or procures—(a) the entry of a person into or the exit of a person out of New Zealand or any other State—(i) for the purpose of exploiting or facilitating the exploitation of the person; or (ii) knowing that the entry or exit of the person involves 1 or more acts of coercion against the person 1 or more acts of deception of the person or both;”. It goes on to say in new section 98D(1)(b) that it applies not only in and out of the country but also within New Zealand.I just want at this point in time to put a shout-out to a group in New Plymouth that tomorrow evening is organising a public meeting around human trafficking and its abhorrence of it. The shout-out goes to Tu Tama Wahine in New Plymouth and also to Steph Lambert a friend of mine in her work as the executive director of Justice Acts New Zealand. They invited me to be at that seminar and to participate but I am unable to be there so I want to wish them the very very best for tomorrow evening.Just if I can I will talk very briefly in the next 2 minutes about what the United Nations Office on Drugs and Crime says about trafficking. Based on data gathered out of 155 countries—and of course it is so difficult to get data around this subject because it is through such subterfuge that this happens—according to their most recent report the most common form of human trafficking is sexual exploitation; 79 percent of it is that. The victims of sexual exploitation are predominantly women and girls. Surprisingly in 30 percent of the countries that provided information on the gender of traffickers women make up the largest proportion of traffickers. In some parts of the world women trafficking women is the norm. So insidious is this that it affects even those of the same gender. The second-most common form of human trafficking is forced labour—18 percent although this may be a misrepresentation because forced labour is less frequently detected and reported than trafficking for sexual exploitation. This is the shocking figure: worldwide almost 20 percent of all trafficking victims are children. However in some parts of Africa and the Mekong region children are the majority—up to 100 percent in parts of West Africa. It is very very good and very important that this bill places this issue at the heart and centre of it and I commend this bill to the House.DENISE ROCHE (Green): I rise to take a short 5-minute call for the Greens on the Organised Crime and Anti-corruption Legislation Bill. We will be supporting this bill despite the fact that we do not think that it really goes far enough. We agree that this bill is overdue and we fully support this bill being enacted as it will allow New Zealand to ratify and comply with international agreements and conventions—conventions like the United Nations Convention Against Corruption the United States and New Zealand Agreement on Enhancing Cooperation in Preventing and Combating Crime the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions the United Nations Convention Against Transnational Organized Crime and also the United Nations anti-trafficking protocol. I agree with the previous speaker Jonathan Young about this insidious crime and it is well overdue that we are doing something about it to ensure that we meet our international standards.As the New Zealand Police Association outlined in its submission to the Law and Order Committee—which I was not on but I have read the submission—this bill will improve New Zealand’s ability to address crime locally combat crime internationally and tighten up the provisions in the Crimes Act around human trafficking as they apply to the activity that takes place in New Zealand. There is no doubt that this is needed and quite frankly it is well overdue.But the area where we think the bill falls down—and others have spoken about it but I will add my 2 cents worth as well—is around what are called facilitation payments which are basically small bribes. The Ministry of Justice in its reports gives examples of what these facilitation payments are: small bribes for things like the granting of permits or licences the provision of utility services or the loading or unloading of cargo. Essentially the bill as it is written at the moment would exempt these sorts of payments from being recorded because the ministry maintains that these payments would not yield any undue advantage. That is exactly what it says: “undue advantage”.But we believe that payments to grease the wheels should be resisted at every opportunity. If we allow small-scale corruption to continue and thrive then where do we draw the line? Where does it go from there? Does it escalate? Does it de-escalate? Generally in these sorts of things it certainly escalates. Undoubtedly it allows the culture of corruption to continue and given that countries like Australia and the United Kingdom have taken a very strong stand to stamp out facilitation payments and even India and China are actively working to get rid of this type of small-scale corruption surely we should be doing more to ensure that our laws prohibit this type of bribery.The bill is an opportunity to take a really strong stance. I believe that by not doing so we undermine our reputation as a country that rates highly with Transparency International for being an honest country for having open and transparent government. I note that this reputation is built not only on our laws like the Official Information Act but also on our Public Service which does not take bribes.Transparency International released a statement yesterday that said it was bitterly disappointed about the opportunity that this bill has lost by maintaining the allowance for small payments or small bribes to occur. It makes no bones about the fact that it endangers our standing in the international community. I agree with the president of Transparency International New Zealand who says there is no such thing as a harmless bribe. I certainly hope that the Government will reconsider that clause in this bill when it comes to the Committee of the whole House and that it will support the Supplementary Order Paper that will be brought to the Committee on this issue by my colleague David Clendon. Thank you.RINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora Mr Assistant Speaker. I am pleased to make a short contribution in this debate. Although I am not a member of the Justice and Electoral Committee which has considered this bill—Ian McKelvie: Law and order.RINO TIRIKATENE: —oh sorry the Law and Order Committee—I have found the debate very interesting. It is good to be actually supporting legislation to strengthen the way we can combat organised crime and corruption. We support this bill. It has been a long time in the making. It is quite ironic that it was introduced by the Hon Judith Collins about 3 years ago but it has finally made its way here to its second reading. It is good that it brings New Zealand in line with various international conventions across a range of measures. I understand that it is amending roughly about a dozen pieces of legislation which will all be implemented as a result of the passage of this bill. So it is a commendable piece of legislation. I just want to pick up on the—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Sorry I have reflected on what the member said in his recent comments and I think they were unparliamentary. I will ask him to withdraw his comments in relation to another member.RINO TIRIKATENE: I withdraw. So returning to the bill—I raise a point of order Mr Speaker. Could I seek some clarification with you on that—The ASSISTANT SPEAKER (Hon Trevor Mallard): Well the problem that I have is that if I do clarify with the member what the inappropriate comments were I will in fact repeat and compound his offence. I think if the member reflects carefully on what he said he will understand what his offence was.RINO TIRIKATENE: Thank you Mr Assistant Speaker. Well it certainly was not taken as offensive by the members of the opposite backbenches there.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member will take a seat. When I make a ruling it is not the role of the member to reflect on that ruling. It is final and it is finished.RINO TIRIKATENE: Thank you for that ruling. I would like to talk about facilitation payments. I have experienced international trade in other countries. It is a big wide world out there. New Zealand is an exporting nation. We rely on selling our goods and services to customers around the world so it is very important that we break into overseas markets. I have been working on behalf of the New Zealand Government assisting New Zealand companies and I have worked with New Zealand companies themselves to break into certain countries to expand our exports and grow our foreign exchange earnings. It is difficult. It is a difficult business. I guess New Zealand businesses have to appreciate the cultural differences that do apply. In certain countries that I have been attempting to do business with on behalf of New Zealand companies the culture is very much of facilitation payments the greasing of the wheels—baksheesh as they call it. Whether it is just trying to park your car or whether it is trying to get to an appointment or whatever level of decision making needs to be done in certain cultures it is endemic. I guess it is a business decision that ultimately New Zealand companies have to make.What I do find is that countries that are at the lower end of Transparency International’s spectrum are the countries that we tend to avoid because doing business in those countries is too tough. But in terms of this legislation there is an ambiguity. It does not state when facilitation payment ends and bribery begins and by perpetuating that ambiguity it does not really help our own international reputation as being one of the least corrupt countries in the world. I would have hoped that the Government could take on board Mr Clendon’s Supplementary Order Paper 76. It has some very sound recommendations. If it is good enough for the United Kingdom and it is good enough for Australia to outlaw facilitation payments then surely it should be good enough for Aotearoa New Zealand.It is good that we can set the example because New Zealanders know how to do business. We are exporting all around the world and we will put our efforts into countries and into overseas markets where we can form good relationships—but on a sound business footing. We are not perpetually trying to feed people who are trying to extract demands bribes facilitation payments and the like. That is one aspect that we would hope could be improved in this bill but otherwise there are some very positive measures that we do support.IAN McKELVIE (National—Rangitīkei): It gives me pleasure to take a call on the Organised Crime and Anti-corruption Legislation Bill. The Government produced this bill as a result of a report on strengthening New Zealand’sresistance I guess to organised crime. It was an all-Government department report and it encompassed the whole of our legal fraternity and you can tell by the number of bills that it touches on—a dozen of them I think—that it was quite a complicated bit of legislation for someone like me to understand. I could understand the need to deal with some of the facts we are dealing with but it was pretty hard to understand how it all worked. Linking it together was quite a task; it took a while. Primarily the bill deals with the law enforcement agencies that deal with instances of organised crime and corruption not only in New Zealand but internationally. As I said I found it interesting but quite complicated and I will endeavour to explain that during the contribution I am going to make to this bill.We heard from some 20 submitters almost all of them in support in one form or another. Many of them related to the banks’ role in this bill. The banks’ role in this bill although it seems minor is actually quite important in that the banks give the law enforcement agencies the ability to track financial transactions. There was a lot of discussion about how those financial transactions would be managed who would manage them and at what point they would be reported to the law enforcement agencies. The law enforcement agencies needed this information as quickly as they could get it and the banks needed time to be able compile it and put it together and so there were some changes made to the bill in respect of the amount of time the banks had. I think the bill talked about 10 days and the bill now talks about 10 working days which satisfied the banks’ request in that respect.A number of the submissions raised an issue that I have found to be very interesting and of course it has been talked about by almost every speaker tonight though not all with the same view. I really quite enjoyed the contribution that the last speaker Rino Tirikatene made to this because he touched on the fact that around the world things are quite challenging. In fact Jonathan Young touched on the fact a little earlier too that trade is what makes the world go round and in every part of the world trade is dealt with in a different manner. So the issue of facilitation payments—or bribes as David Clendon called them and they could well be called bribes as well—is quite a complex one and I think that we have probably arrived at the right situation on this and I will explain why in a moment. But there is a very fine line between a bribe and a legitimate payment being made to someone for I guess services rendered or as the bill words it a “routine government action”.I remember when I was much younger I spent a lot of time on a fairly large continent and I remember one night pulling up in quite a large passenger plane in the middle of a runway. A fellow ran up the stairs of the plane when they dropped the stairs he paid the pilot off and everyone walked off the plane and out through the back door. We did not have to go through customs. It had nothing to do with me I might add but that is the sort of thing that I guess this bill is attempting to manage. Obviously in some parts of the world a lot of that sort of stuff happens.Although these facilitation payments are legal in New Zealand and Australia—and I think it was pointed out earlier that the law is worded slightly differently certainly in Australia than it is in New Zealand and consequently could have a different interpretation made of it—they are illegal in the UK. Surprisingly the Director of the Serious Fraud Office and the Director of Public Prosecutions have issued a joint statement in the UK saying that they are very unlikely to prosecute in the case of small facilitation payments being made.I do find this a really interesting topic because I think that when you look all around the world trade varies so much and there are so many different ways of dealing with this issue that I would be very reluctant for us to support I guess the Supplementary Order Paper that David Clendon is putting up for that reason. I think it would preclude us from some courses of action particularly with our trade relationships that we may well want to make.The types of crime talked about in this bill frankly make one’s hair stand on end. One of them is human trafficking. The penalties for human trafficking in this bill are 20 years in jail or a $500000 fine. I was kind of likening human trafficking—and I realise it is a little different—to a topic that I am very interested in and that is stock rustling. I wonder whether there is a great deal of difference between stealing someone’s person and someone’s sheep. I guess I would definitely struggle to get penalties of that order for stock rustling but in fact it is a similar sort of thing when you think about it. [Interruption] Well hopefully—I do not know whether they do. I am not sure whether more sheep do get stolen than people actually. But bribery of course is a very large topic in the course of this bill.The other topic that came to the fore in its many forms was money-laundering. I go back to the days of the bookie in the local pub. They are outlawed now of course. They were then too but they still operated. But I do go back to those days and I am pretty sure a lot of the money that went through those bookmakers’ hands was far from legitimate. Humans have been I guess in the money-laundering business almost for ever. Of course the money-laundering business also impacts largely on a worldwide scale on the gambling business. For many of us gambling is—I was going to say it is a way of life; I should not say that. Gambling is kind of I guess a hobby that is undertaken by people but at the same time gambling is also undertaken by a large sector of the criminal fraternity with a view to laundering the ill-gotten gains from some form of crime or other.The other issue that looms very large in the course of this bill is the matter of drug-smuggling and the worldwide drug markets how that money changes hands and how it is used once it has changed hands. This bill will go a long way to making sure that New Zealand sits with the rest of the world in enabling the handling of these things in a very strong and sensible manner.It really strengthens the law enforcement agencies’ ability to track a whole lot of stuff that we currently have the law in place to deal with but not in the form that will be put in place once this bill goes through Parliament and once the amendments are made to those 12 different Acts that need to be amended to get us to the point we need to be at. The bill ensures we are able to cooperate with agencies worldwide. It encourages better cooperation and understanding with our friends around the world. It will enable us as a country as has been referred to a number of times tonight to stand with the United Nations and manage our way through a lot of these issues as we need to.The bill was put through the Law and Order Committee under the leadership of Kanwaljit Singh Bakshi. I think he did a pretty good job of getting this bill through there. As I said I thought it was a little complicated. It was also under the stewardship of Minister Amy Adams. In the course of the discussion on this bill by the select committee there were some nine or 10 changesin all I think made to the original bill that was put to the committee. Those changes I think will ensure that this bill moves smoothly through the next phase of the House. Obviously there is a Supplementary Order Paper coming from the Greens. I am also very pleased to note that the whole House supports this bill pretty much in its entirety. I think that is a pretty good feat as well. So I have no problem supporting this bill going to the next step and I thank you for the opportunity to speak on it.KELVIN DAVIS (Labour—Te Tai Tokerau): Labour supports this bill almost in its entirety as the previous speaker Ian McKelvie said. We do have a bit of a hiccup or a hang-up with facilitation payments which is a topic that has been traversed by almost every speaker here. I reflected on Jonathan Young’s contribution notwithstanding his story about having to tip a service worker in the States for a meal of grits. May I say that that service worker was probably being paid about 70 cents an hour back when Jonathan Young was 19 years of age on his trip to the States. You know who would begrudge offering a tip to somebody on that sort of income? I remember that in 2004 I was in the States and I was talking to the girlfriend of the person I was staying with who was a service worker at that time and she was paid $3 an hour. Working an 8-hour shift she was earning $24 but she made over $100 in tips. So we do not begrudge people earning tips. But he tried to make the point that that was a custom in the States and that facilitation payments are customs in other countries.I take issue with that. I think there is a fine line being drawn between what is called a facilitation payment and a bribe. If we look at what Transparency International says about facilitation payments it says: “There is no dressing this up. Facilitation payments are bribes and by failing to address them we are enshrining bribery in New Zealand law.” It almost sounded like Jonathan Young—and I know he did not mean to make it sound like this—was defending bribery and corruption. The payment of money to an official to speed up a transaction—it does not matter how small or how large that sum of money is a bribe is a bribe. It is a bit like saying that you are only just pregnant. You are either pregnant or you are not. When I reflect on Ian McKelvie’s story about landing somewhere in an aeroplane and someone running up the steps and giving the pilot a payment which enabled all those passengers to get off without having to go through customs it makes you wonder what sorts of crimes were hidden by that act. How many drugs went out of the airport without being picked up? How much laundered money had gone through the airport without having to go through customs? How many people were trafficked on that aeroplane? We do not know. So I do not think it is right that we can stand here and defend facilitation payments.The Hon Phil Goff was very eloquent and passionate in his summation of them. Basically bribery is bribery. It does not matter how big the sum of money is or how small the sum of money is facilitation payments are bribes. I think that we should absolutely follow the lead of Transparency International and not enshrine these in law. In fact Transparency International says it believes that ratification of the United Nations Convention Against Corruption will not be possible unless the proposed bill amends its stance on facilitation payments. We cannot stand here and say that we are going to ratify that convention and yet still have the capacity for officials to be bribed.I have to say that when this bill came in front of the Law and Order Committee I was quite concerned. I understood the arguments that yes it may facilitate speedy process for New Zealand businesses to do work overseas but in my heart of hearts I knew that there was something wrong with this and that it cannot be justified by our continuing to support it.The other comment that Jonathan Young made was around trafficking. I was quite astounded to hear that 70 percent of people-trafficking is for sexual exploitation. As most people know this is an issue that I am particularly concerned about.Debate interrupted.