Border (Customs Excise and Tariff) Processing Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Border (Customs Excise and Tariff) Processing Bill — Second Reading In Committee 
[Sitting date: 24 November 2009. Volume:659;Page:8220. Text is incorporated into the Bound Volume.] 
Border (Customs Excise and Tariff) Processing Bill 
Second Reading 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I move  
That the Border (Customs Excise and Tariff) Processing Bill be now read a second time 
. The bill was introduced into Parliament in October this year and had its first reading on 15 October so I think that gives members an idea of how quickly the Government Administration Committee worked to process it to get it through and get it back. I pay tribute to the members of the committee which was ably chaired by Mr David Parker and deputy chaired by my colleague Jacqui Dean. The committee members did a superb job. I pay tribute to them all and thank them for the attention that they gave to the bill including some of the minor tweaking and tidying up that select committees often do so well to make a bill just a little bit better. 
The bill is an omnibus bill that amends the Customs and Excise Act 1996 and the Tariff Act 1988 and makes consequential amendments to the Goods and Services Tax Act 1985 the Finance Act (No 2) 1993 and the Finance Act (No 2) 1995. The amendments contained in the bill make improvements in the processing and administration of goods and people required under these interrelated Acts. The majority of amendments relate to border processing and administration by facilitating New Zealand’s international commitments or the use of new technology while other amendments improve border processing and administration generally. This bill contains three sets of amendments to improve the effectiveness of the Customs and Excise Act—which I will refer to as the Act from here on—and to meet the Government’s policy goals: amendments relating to the automated passenger processing system SmartGate six amendments to clarify and enhance the Act and eight amendments to address legislative gaps and/or uncertainties. 
In today’s international travelling environment we are faced with threats to our personal security. Those of us who have travelled internationally are well aware of the various security measures with which we must comply whether it be to protect New Zealand’s biosecurity New Zealand’s community—from for example illegal firearms offensive weapons and controlled drugs—New Zealand’s aviation security or indeed New Zealand’s immigration laws. These obligations on the travelling public have resulted in longer waiting and processing times at airports. 
To counter this the Government has announced that low-risk Australian and New Zealand passport holders will enjoy a faster more streamlined exit through border processes at the international airports at Auckland Wellington and Christchurch. As part of that automated processing through the SmartGate system will become an option for travellers holding an Australian or a New Zealand e-passport. In reviewing the Act to take account of SmartGate Customs Service officials have identified potential amendments relating to passenger interaction with the clearance process. These amendments are relatively minor. The focus of the amendments is to ensure that automated systems can be used in place of customs officers. The effect of the amendments is to allow the use of the automated processing systems at the border which will benefit the travelling public and will contribute to the Government’s objectives of improving the border-crossing experience for trans-Tasman travellers. 
The Government Administration Committee has proposed an amendment to ensure that the Customs Service provides for an alternative means of border processing that involves having a person in any new or amended automated electronic system. Having a manual processing option is already part of the SmartGate arrangements so I was happy to agree and accept this amendment in order to provide an assurance to the public that anybody who does not like machines or who does not want to use them can always use the manual alternative. I intend to propose a very minor technical amendment by way of Supplementary Order Paper 100 however to ensure that this new provision does not inadvertently impact on some existing arrangements. For example if we specified that there has to be a manual alternative to every automated process it may mean that the Customs Service would need to have a manual paper base for all its automatic database tracking of incoming passengers. This amendment will make sure that only the processing of passengers through the gate has the alternative for a human to process passengers not all the back-office computer systems which if the provision had stayed would have caused at least some doubt. 
Hon Darren Hughes 
: Sounds a bit tricky. 
Hon MAURICE WILLIAMSON 
: Well it is very straight up and down. It is not a coastal shipping type of thing. 
SmartGate will enhance the role of customs officers at the border as front-line customs officers can be redeployed to the secondary line where the intervention with high-risk passengers occurs. I reiterate that SmartGate cannot and will not be a substitute for the observation skills and vigilance employed by trained customs officers at the border but I want those customs officers putting their effort into the really high-risk big targets and not into all of the ordinary Kiwis and Australians travelling across the Tasman as part of their everyday operations. 
Six amendments are included in the bill to clarify and enhance the Act especially in relation to strengthening the Customs Service’s law enforcement capability. The amendments enable customs officers to search a vehicle regardless of whether it is being operated or is unattended and they give them the ability to use reasonable force to gain entry to effect the search of such a vehicle. The bill will create a power to arrest any person committing an offence punishable by imprisonment under the Act whether or not the person is on a craft. One of the quirks of history is that a person had to be on the craft to be arrested but once the person was off the craft customs officers could not do that. 
The bill provides that duty on goods manufactured other than in a manufacturing area become due immediately upon the manufacture of the goods. It creates a new offence of making a false allegation or report to the Customs Service that an offence has been committed while knowing that the statement is not true or of making statements with the intention of wasting or diverting personnel or resources. The bill will enable the Customs Service to use future technology in those provisions that relate to the detection of tampering or interference with goods containers or packages. It will also provide the Customs Service with the ability to require payment of debts within the 20-day time limit period where the Customs Service receives advance warning that a company has a dubious financial situation and payments by the due date are unlikely. 
I note that committee members have paid close attention to the arrest provisions which is entirely appropriate given the serious nature of this power. This particular amendment extends the circumstances where customs officers may arrest without warrant but it is consistent with the focus of customs officers’ work. I am pleased to see that the amendment has been supported by the whole committee. 
The bill also includes eight minor amendments to the Act aimed at addressing legislative gaps and uncertainties. These include amendments to clarify the provisions in the Act relating to authorised persons to allow for the revocation of a customs export delivery order in certain circumstances to allow material usually set out in the schedules to the Customs and Excise Regulations to be incorporated by reference to relocate the alcohol personal use exemption from the Customs and Excise Regulations to the Act to allow the chief executive to nominate non - customs officer employees to lay an information to allow for the suspension of a registered user’s registration to clarify that the chief executive can grant further time for the lodgement of an entry of goods for exporting in appropriate cases and to allow for the imposition of administrative penalties for entries containing an error or omission. 
The bill contains amendments to the Tariff Act 1988 primarily to allow for the faster and more efficient implementation of tariff reductions arising from free-trade agreements. It will allow material usually set out in tariff amendment orders to be incorporated by reference and will make  
The Working Tariff Document of New Zealand 
 which is maintained by the New Zealand Customs Service the legal Tariff. Following the amendments to the Tariff Act schedule 3 of the Customs and Excise Act is replaced with an excise and excise-equivalent duties table available on the Internet and in hard copy. The bill also enacts a previous decision of Cabinet to raise fuel excise duty by 3c per litre effective from 1 October 2010. 
Again I thank the Government Administration Committee very much for completing its work on this bill in such a very compressed time frame. We will be launching the SmartGate terminals at Auckland Airport on 3 December which is only a few days away and this legislation is required to allow those terminals which operate without any manual intervention to be implemented. I commend the Border (Customs Excise and Tariff) Processing Bill to the House. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 I am happy to rise to declare that Labour supports the Border (Customs Excise and Tariff) Processing Bill as outlined by the Minister of Customs the Hon Maurice Williamson. I take this opportunity to reflect back to the Government some areas that need to be illuminated. I also signal that we have a couple of questions we would like to ask the Government during the Committee stage for clarity. I also take this opportunity to recognise my colleagues the Hon Rick Barker and the Hon Nanaia Mahuta who as former customs Ministers when Labour was in Government had a hand in the genesis of the development of the SmartGate system with our neighbours across the ditch the Australian Government. I acknowledge them because through their initial efforts we are able to join today with the Government in introducing SmartGate. Labour supports SmartGate as an automated passenger processing system that can be used for faster and easier passenger processing and that will facilitate trans-Tasman travel for people deemed to be low-risk. 
Although I was not a member of the Government Administration Committee it was a concern to me that there were only two submitters. Because the airport is in Mangere I had the opportunity to ask the people there whether they had any concerns about SmartGate. Although the people of Mangere—which is the gateway to the nation—support SmartGate they did express some concerns. One concern was this: because we now have a National Government SmartGate may be used only for the elite of society big business or those who travel in first or business class. There was a concern that SmartGate may not include ordinary citizens and ordinary Kiwis. What the Government does is what the Government will do. But in so far as Labour is concerned SmartGate is an option for low-risk passengers. It should not be solely for business passengers and it should include tourists and the ordinary Kiwi traveller. 
A further concern raised was that SmartGate is only a machine and it may make a mistake. If we can imagine a machine using SmartGate a confrontation could occur where the machine is capable only of making a yes or no decision and a person arriving has a valid explanation that could work in his or her favour but is unable to provide that to a real person. This concern was reinforced by the Office of the Privacy Commissioner which in its submission to the select committee gave evidence that there should be a requirement that manual alternatives would always be available or that the chief executive will consult the Privacy Commissioner on any privacy implications before eliminating or reducing manual alternatives. Labour supports the Privacy Commissioner’s recommendation that manual alternatives or real people always be available. I am pleased that the committee recommends an amendment to clause 22 of the bill that proposes at least one alternative method of processing involving a person being available alongside automated border processing. 
Labour agrees with the need to stay up to date with the latest technology to keep our borders safe. We need to protect our borders against the growing P menace and I will have a little bit more to say about that later. Labour believes that the New Zealand Customs Service must have the tools to stay on top of this threat and the Government must give its full support to our border control agencies. We will also be looking to support the Government’s amendments that will be introduced later on. 
JACQUI DEAN (National—Waitaki) 
: 
 I rise to speak to the Border (Customs Excise and Tariff) Processing Bill. Managing New Zealand’s border provides a number of challenges for New Zealand and for the New Zealand Customs Service. The current customs priorities reflect the New Zealand and Australian Governments’ desire to make crossing the Tasman simpler and more efficient for travellers with the introduction of new technology and streamlined processes. Another priority is the introduction of a new express lane for travellers in airports identified as being a low biosecurity risk. There will be a pilot of assessing bags during flight time in order to allow quicker processing on arrival and an increase in the instant biosecurity infringement fine from $200 to $400. These measures demonstrate the Government’s commitment to streamlining trans-Tasman travel while enhancing our world-class biosecurity system. The Customs Service also has a strong priority of increasing the interceptions of illicit drugs and precursor materials that are entering New Zealand. 
Our border is extremely busy. In a year the Customs Service processes 9.62 million air passenger movements inwards and outwards. Every year 4611 marine vessels are cleared by the Customs Service. The Customs Service also coordinates the surveillance of some 15000 kilometres of coastline and clears just over 1000 small aircraft each year. It deals with nearly 42 million import transactions including those by mail and with 27.5 million export transactions during a year. The amendments in the bill will also meet the Customs Service’s objective of meeting our international obligations relating to cross-border crime. 
The bill makes amendments to the Customs and Excise Act and also to the Tariff Act. The bill contains three sets of amendments: firstly there are amendments relating to the automated passenger processing system known as SmartGate and I will make a few comments about those; secondly there are amendments to clarify and enhance the current legislation and our good Minister of Customs the Hon Maurice Williamson has gone over those amendments so I will not repeat that; and thirdly there are amendments to address legislative gaps and uncertainties. The majority of the amendments relate to border processing and administration by facilitating New Zealand’s international commitments or to the use of new technology although other amendments contained in the bill improve border processing or improve administration in a general sense. 
I will make a few comments about the SmartGate amendments. One of the positive aspects of the bill is that it sets out amendments to the current legislation so that it can take into account SmartGate technologies. Although these amendments are relatively minor they will ensure that automated systems can be used in place of customs officers. The effect of these amendments is to allow the use of automated processing systems at the border which is something that will benefit the travelling public and contribute to the Government’s objective of improving the border-crossing experience for trans-Tasman travellers. As the Minister mentioned in his very good speech there is a provision in the bill for passengers to have the alternative choice of clearing customs face to face with customs officers far from the contention of the members on the opposite side of the House that the SmartGate technology will work to the benefit of more affluent travellers and leave less affluent travellers to meet with a customs officer in person. To the contrary that alternative is provided for people for whom it is not suitable get their face scanned—for example people who are blind or who are in wheelchairs. Alternatives to the SmartGate technology are there to cater for people who do not want to be scanned or are not able to be scanned through the SmartGate technology. 
This bill amends interrelated Acts to improve the processing and administration of goods and people across New Zealand’s borders. The majority of the amendments relate to border processing and administration by facilitating New Zealand’s international commitments for the use of the new SmartGate technology. I commend the bill to the House. 
Hon CHRIS CARTER (Labour—Te Atatu) 
: 
 I am pleased to stand in support of the Border (Customs Excise and Tariff) Processing Bill. I guess it is unusual to have legislation in this House that is supported by both sides of the political divide. As my colleague the Labour Party member for Mangere Su’a William Sio said the genesis of this bill lay in the previous Labour-led Government. I want to take this opportunity to thank you Mr Assistant Speaker in your role as a former Minister of Customs in our Labour-led Government. You were the first person to bring to the customs area a focus on practicality and a common-sense approach to things. I think few New Zealanders realise when they line up at the airport and see a sign saying: “Australian and New Zealand Citizens” that Rick Barker was the person responsible for that. You took Chris Ellison the Australian customs Minister to our airport and you said to him: “Look! We allow Australian citizens to line up with New Zealand citizens to be processed.” and he did the same for Australian airports. That has made travel for New Zealanders to Australia quicker more efficient more effective and a lot easier. I think few New Zealanders know they can thank you for that very practical approach and that was just one example of the approach you took to the customs portfolio. Your successor in the Labour-led Government Nanaia Mahuta and now Maurice Williamson have attempted to bring to customs an efficient practical hands-on approach so that the critical task of border security services—customs immigration and so on—is about finding effective ways to keep our borders safe but at the same time facilitates the movement of people and goods through the border in a way that is practical and helps to create economic efficiencies. 
Labour is supporting this bill. We think SmartGate is a sensible use of technology to improve effective passenger flows. Labour also supports the enhanced ability of customs officers to intercept and to search and to use new technologies to see whether containers have been interfered with. Certainly in policing and indeed in immigration as well containers can provide a vehicle a vector for the importation of drugs. Even on short haul journeys there is the ability for people-smuggling in containers. Having an effective system and an effective use of technologies to be able to check whether containers have been interfered with is very important. 
Another area I would like to focus on is biosecurity. In his first reading speech Maurice Williamson said he was trying to shift resources from the management of passenger flows where people do not pose a risk either to our security or to our immigration services to using resources to intercept in those very critical issues of keeping New Zealand safe particularly from biosecurity and health threats. I think that is very commendable but I ask Maurice Williamson—as I undoubtedly will in the Committee stage—how this seems to be in contradiction to the last Budget that was presented to the House by the new National-led Government where $3.75 million appeared to be cut from border security funding. This is at a time when new technology and the associated expenses are being used for things like SmartGate. My understanding is that about 50 border security staff have lost their jobs. 
This area that Mr Williamson touched on in his speech is so critical to the health and well-being of our country. We are a major food producer in the world. Primary production is critical to the economic well-being of all New Zealanders. Not just rural dwellers but all Kiwis depend on the prosperity and wealth of our country and on the effectiveness viability and safety of our agricultural industries. For 5 years I was privileged to be New Zealand’s Minister of Conservation. A lot of the work on leading the Department of Conservation to protect our natural environment was about the biosecurity of New Zealand. I think only one other country in the world Madagascar has suffered as much impact on its natural environment from introduced pests—animal insect plant bacteria and fungi—as New Zealand has. Only New Zealand and Madagascar have been most impacted on by alien species. There are 90 million possums chewing their way through our forests and millions of stoats devouring our native bird species. Plant species like gorse and broom have colonised our agricultural land and have cost millions for industries to combat. We even have an introduced species of seaweed  
Undaria 
 infesting many of our southern harbours creating costs and threats not only to our unique biodiversity but also for the practical use of those ports. It colonises boats moorings jetties and wharves. These are all costs for the country and they are all about having slack and ineffective security. I remember when I was first elected as an MP we had the painted apple moth incursion in west Auckland. 
Hon Darren Hughes 
: Last century! 
Hon CHRIS CARTER 
: It was last century Mr Hughes; that is true. My colleagues from west Auckland like David Cunliffe and Lynne Pillay remember well the concern of our local residents and the millions that our Labour-led Government had to spend in dealing with that incursion. Luckily we were successful because the painted apple moth posed an enormous threat not only to our timber industry but also to our native forests. In more recent times we have had the problem of the varroa bee mite which has devastated the honey bee industry in New Zealand. Earlier than that we had the introduction of about five exotic wasp species which has had a big impact on biodiversity. Those are the things that have happened. 
Today in question time we heard about a cane toad that was found in Queenstown. I think I heard the Minister of Agriculture rebutting the Labour Party spokesperson when he raised concerns about cuts to biosecurity services saying that there had been eight in the time that the Labour Government was in power. I do remember well as Minister of Conservation that a cane toad jumped out of someone’s suitcase in Levin of all places. It again shows that a suitcase had come through our border and inside it—inadvertently I am sure—was a cane toad. It is a rather large species but it still managed to get through a port or more likely an airport. Those are all species that could impact on New Zealand. Of course we also have threats not only to our native environment and our agricultural industries but also to our human health. 
Hon Paula Bennett 
: If it doesn’t have a swipe card it’s not getting through the SmartGate. 
Hon CHRIS CARTER 
: I hear the member for Waitakere Paula Bennett ridiculing this speech. Of course she has lived in west Auckland for only a short time so she will not remember the painted apple moth drama but I assure her that people in west Auckland felt very concerned about it. If she actually went to a few more things in the west she might know about that. 
As I said we face threats to human health as well. Rabies a disease that has been eliminated from New Zealand—its vector a canine species—could well be introduced into New Zealand as a result of inappropriate border control. The Asian tiger mosquito has larvae that have already been found in tyres imported from Japan. It is a vector for malaria and other very dangerous pathogens that could infect the human population. 
The saltmarsh mosquito has already been found in the area around Nelson and briefly in the Kaipara area although fortunately not recently. Again that is a vector for dengue fever. These are all threats to human health. Red fire ants have been found in New Zealand. I remember that when I was the Minister of Conservation we discovered at Auckland Airport and in Napier two colonies of red fire ants. They were eliminated but within secure borders that very nasty ant species which is now very widespread around Brisbane could well be introduced into New Zealand. 
I say to the new Minister of Customs in the National-led Government that yes this bill is a good bill. It seeks to do good things. But if the Government cuts back on border security—and we have seen that already in the latest Budget where 50 staff have lost their jobs—then these diseases these pests these risks to human health these risks to our agricultural industry and these risks to our natural environment do pose a real danger. That is what we need to focus on. 
KEITH LOCKE (Green) 
: 
 During the first reading debate on the Border (Customs Excise and Tariff) Processing Bill our speaker Kevin Hague was in somewhat of a quandary. The bill had been made public—and therefore able to be read—only a few minutes before the debate started. The Green Party in protest against not having notice voted against the bill at the first reading. It is often difficult with omnibus bills to work out whether to vote in favour or against because there are often a number of things we agree with as is the case with this bill—such as the improvements to the workings of the Customs Service—and some things we are much more questioning of. On balance we are voting against this bill but we recognise that there are a lot of good measures in it. 
I will go through firstly the SmartGate measures that will be brought in I understand on 3 December. The Green Party is supportive of more efficient processing of people crossing the Tasman between Australia and New Zealand. I understand that the purpose is to allow people on both sides to go through proper processing—immigration checks etc.—only once rather than twice which is certainly an advantage. Also there are security issues with SmartGate. Making sure that one has the right person going through is important. 
We have some questions as to where biometric identification might go. At present the system envisaged and implemented in some respects in New Zealand is the facial recognition system where certain points of a person’s facial features are by a photograph compared with what is on the chip in the passport. But the Green Party is concerned that that might be extended to other forms of biometric identification. During the debate on the Immigration Bill which has now passed through the House we put forward an amendment to the effect that iris scans should not be used at airports. An iris scan is a much more intrusive form of biometric identification that is coming in around the world including I think in Australia. We are wary that the SmartGate system might use the iris scan system or even worse another system that is being brought in. It is not necessarily used just for identifying people but it could be part of the SmartGate system. It is often called the naked scanning system. A person going through the sorts of things we go through at airports now is scanned and a naked image of the person taken. I have seen articles around the world in various papers complaining about this system as a grave intrusion on the privacy of people. One writer complaining about it said: “It is often said that if you’ve got nothing to hide you’ve got no need to worry.” but in the case of naked scanning we do have something to hide. So the Greens are hoping biometric identification does not go too far down that track. And it is good that a manual alternative for people has been put in the legislation. 
There is also the problem of electronic proof and we have seen this just last week with the debate over council car-parks in Auckland and the gaining of people’s credit card numbers. Upon first analysis that does not seem to have been done by people skimming the machines that the credit cards are put in; somebody has got in behind the system. That can be a problem with relying too much on electronic identification. Someone could get in behind the electronic system and change round the electronic part of the identification—for example mucking up the chip in a passport so that the SmartGate system thinks it is John Smith when it is really John Jones. Someone could even get into the computer database. That is always possible. One of the problems with electronic systems is that people completely rely on them; they think that if people have gone through the electronic system they must be OK. There is not the same vigilance the same looking for human characteristics for the suspicious indications that people might give out that our customs officers and immigration officers are trained to recognise at the present time. 
The other question that has come up and has been spoken about by other speakers is biosecurity. There is a bit of tension between a SmartGate system where the whole point is to rush people through and proper biosecurity checks. The person doing the biosecurity check has to do the same biosecurity check on all the people coming through but there might be some nervousness about holding up people coming through the SmartGate system because that might be seen to be undermining that system. That nervousness can be complicated by what Chris Carter has just talked about. There seems to be a loss of staff at the frontline. He mentioned the figure of 50 staff lost from our airports. I think it is important to keep up the biosecurity checks at our airports. It will be very bad if we let that down at all. 
Also there is reference in the bill to improvements in the X-raying of containers. The problem at the moment is that the overwhelming majority of containers are not given any serious biosecurity inspection and that has resulted I think in a number of the nasties that Chris Carter talked about coming into New Zealand. Even X-ray systems have a limited use in relation to true biosecurity with smaller items. The X-ray systems are very good. I have seen them in operation. They are time-consuming but they tend to pick up people-smuggling. They pick up the bigger items such as people or other big objects that are not supposed to be in a container. The X-ray system picks them up. But little nasties and things like that require closer inspection and I do not think we are doing quite enough about that at the present time. That is one of the reasons why the Greens would like this bill to go much further. 
There is the question of powers of arrest. It is a tricky question because clearly at the airports themselves often we have to detain people pretty quickly. A police officer might not be around so the officials having that power has validity. There is a certain caution among the Greens about extending that power to 7 days beyond the suspicion that a person may be about to commit some sort of crime. It is understandable in certain situations where like on sea craft the customs officer cannot get to the people immediately and that is one of the reasons I think why that 7-day provision was put in. But if one has advance suspicion then I think that in general a police officer should be obtained to go with the customs officer so that the customs officer does not develop a consciousness that over those 7 days he or she can do the arresting. Wherever possible we do not want to turn customs officers into police officers and to give them all the hassles of doing the arrest process themselves. I do not think it is what the customs officers would want. The commentary on the bill as reported back from the Government Administration Committee states: “Under section 174(3) a Customs officer who arrests a person under section 174 must unless the person is released sooner as soon as practicable call a constable to his or her aid and deliver the arrested person into that constable’s custody.” That is clearly trying to get away from customs officers doing much more than very immediate arrests then quickly passing the person over to the police to be taken into custody and charged. 
The other thing that the Greens are worried about with this bill is that it tends to streamline the regulations around the free-trade agreements in operation. The Green Party has been a bit concerned about those free-trade agreements lowering tariffs to zero and undermining New Zealand manufacturing. We do not want a streamlined process of regulation that is out of the purview of Parliament and that detrimentally affects New Zealand industry. We have seen that over just the last week with Griffin’s and some of its iconic biscuits; some of its operations are now going offshore. Also the production of various Cadbury’s bars like Moro or whatever they are is going offshore. I think the Government’s approach of total deregulation—sometimes through free-trade agreements—the high dollar and everything else that goes with the completely open-market free-trade approach of the present Government is being helped by the implementation of this legislation. That is why we are voting against it. 
Bill read a second time. 
In Committee 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I seek leave for the Committee on the Border (Customs Excise and Tariff) Processing Bill to take the bill as one question. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? There is not. 
Parts 1 and 2 schedules 1 to 3 and clauses 1 and 2 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 Labour supports the Border (Customs Excise and Tariff) Processing Bill for many reasons. One of the key reasons of course is that our people Rick Barker and the Hon Nanaia Mahuta have worked on this issue for some years. This bill clarifies and enhances the Customs and Excise Act in terms of law enforcement capability. Its provisions include enabling customs officers to stop and search a vehicle to use reasonable force to gain entry and to search a vehicle that is unattended or abandoned. The use of reasonable force is needed in order to open a vehicle if it is locked or unattended. Otherwise customs officers cannot search the vehicle without a court order and in the time it takes to obtain a court order the prohibited goods could have been disposed of and the people responsible for the vehicle could be gone. 
This bill is important particularly for communities that have a serious concern about illegal drugs and P coming through our borders. The bill also allows customs officers to arrest any person committing an offence under the Customs and Excise Act whether or not that person is on a craft. These provisions simply streamline enforcement processes by the Customs Service and aid efficient law-enforcement procedures. 
The bill also creates a new offence of making a false allegation or a false report to the Customs Service. If anyone does so he or she commits an offence and can be prosecuted. The bill allows customs officers to use future technologies to detect tampering with containers or interference with goods and packages. Using future technologies is seen as being more effective than the currently utilised customs seal. That is especially pertinent now as I have been made aware that the United States is making rapid advances in the use of technology for its trade security. 
There are however a couple of things that I seek clarity on from the Minister of Customs. The first is that the bill gives customs officers the power to arrest not only when reasonable cause to suspect has arisen but for a period of 7 days after the offence. That raises the question of why the period is limited to 7 days. What happens if the offender immediately goes to ground and is not located for another 3 months? Do police and customs officers stop searching for the offender after the 1-week period has expired? We want some clarity on that. 
The other point I want to make concerns new section 274A inserted by clause 22. It allows the chief executive to arrange for the use of automated electronic systems for any purposes that he or she sees fit in exercising a power. Labour asks where the checks and balances in this process are. Although Labour members have the deepest respect for our customs and border control officials we do not believe that it is a good thing to have a chief executive with unfettered power. We would expect checks and balances in that regard. 
As I said before Labour members support the bill. We will be supporting the amendments. In the third reading debate we will emphasise our concerns about the issues around P and other drugs. My colleague the Hon Chris Carter has also highlighted our concerns about ensuring that our borders are well-resourced. Despite having SmartGate—a tool that customs officials need—the job of the Customs Service is still labour-intensive. That is what I understand from what I have learnt about the service at the border. 
Cutting the budget of the Customs Service may send to criminals some signals that we do not want to be sending. The signals could say to them that we are putting our customs officials and border agencies under strain. It could mean that we are sending them the signal that they can compromise our borders. That is not what we want. I will leave it at that and give my colleagues the opportunity to speak. 
Hon MAURICE WILLIAMSON (Minister of Customs) 
: 
 I will take a brief call to answer a couple of things that Su’a William Sio raised and also to try to head off a little of what Chris Carter may raise because he raised it in his second reading speech. First of all with regard to the 7-day arrest period the reason that customs officers have the 7-day period of arrest from an offence having been committed is that simply in a number of cases now we actually track offenders into the networks rather than arresting them at the border. We may catch a very low-level functionary—for example somebody who is a mule—who has been paid $1000 but who does not even know he or she is doing anything wrong. We really want to try to work back through the networks to catch the Mr Bigs at the top. We want customs officers to have the ability to put a track and trace procedure in place in order to follow the person. It may be that after the fourth or fifth day of watching motels and hotels we want to make an arrest. The 7-day limit is just for practical purposes. If we want to go beyond that customs officers can get a warrant if they wish or by that stage we could have the police actively involved and it may be that the police would make the arrest. I think the 7-day limit is set at a practical level. It gives customs officers the chance to track and trace people into hotels and motels and then to make a decision about whether to arrest them. 
With regard to the other one I do not think there is anything sinister about empowering the chief executive to use some electronic systems. I tell members that one of the biggest problems we have in this portfolio is that crooks can nearly always get better equipment than we can. For example a number of people who have been arrested recently for the customs offences of bringing in P and precursor substances to pseudoephedrine have been found to have a funny little scanner sitting on the seat which they had bought at Dick Smith Electronics for $200 and with which they could scan the entire analogue bands of all of the customs officers hear them talking and know what they were doing. So we need to be able to move to some new digital equipment—some stuff that cannot be interfered with; all of those things—along with new computer systems and GPS tracking devices in packages as well. Technology will become our biggest friend in the fight to try to deal with some of the real nasties. I think that answers the two questions raised by the member for Mangere. 
In the case of Chris Carter I want to make matters really clear so he gets them sorted out. He was quite firm in his second reading speech about some of the biosecurity issues. He talked about the painted apple moth and the varroa bee mite and about his concern about the impact of biosecurity breaches on the conservation estate. But I tell the member that the Customs Service does not do that work. The service did not have a budget cut in Vote Customs. The cut was done to Vote Biosecurity. It was done in Mr Carter’s portfolios as Minister of Agriculture and Minister of Forestry and the biosecurity people the ones in green whom we see when we come through the airport. I know everyone will know—those who travel a lot like Mr Carter—that the customs guys are in dark navy blue and the Biosecurity New Zealand guys are in the green shorts and socks. We do both the customs and the immigration roles at the border. We check people to make sure that they are the right people and so on but once they have come through picked up their baggage and headed on down the Biosecurity New Zealand people do the checking of them as they go through the border to make sure that their bags do not contain fruit or any of the other pests and bugs. That is not a Customs Service role so this bill has no impact on that role. 
I want to confirm—well not confirm; members know this as was announced in the Budget and they saw the figures from a press release. I tell members—and I really want to get this very clear as well—that the error rate with SmartGate is actually lower than the rate of human error. If someone dresses up with a bit of hair colouring and different glasses and puts a beard on a human being who is working busy shifts and processing a lot of people could look at that person think he looks all right—that his photo is from 5 years ago or so—and through he goes. But with SmartGate the machines measure the distance between the eyeballs from the tip of the nose to the eyeballs from the tip of the nose to the chin between the ears from the top of the forehead down to the chin and so on and one cannot actually forge that. One cannot change that no matter what one does. That is why SmartGate does not work for people under the age of 18: their faces are changing in shape and size as they grow but from 18 years on they do not change. These machines will fast process the very low-risk mainly good-quality New Zealand and Australian citizens and get them out of the place. That will free up the front-line customs officers to do the role that they are best trained for which is to identify the bad people to deal to them to move them off into secondary-line processing and to make sure that we keep our nation safe. 
Hon CHRIS CARTER (Labour—Te Atatu) 
: 
 I appreciate the Minister in the chair the Hon Maurice Williamson making some points on the Border (Customs Excise and Tariff) Processing Bill and reminding us again that biosecurity staff have been cut. I hope that he as a person who is partly responsible for the security of our borders with immigration and customs was a strong lobbyist to see that biosecurity did not lose 50 workers and over $4 million because I am sure Mr Williamson like all New Zealanders wants to see our borders safe and secure especially as he has partial responsibility for them. He made some good points about SmartGate and about the work that customs and immigration are doing. 
I seek an assurance from the Minister that some of the practices that have not been very fair—in fact that have been quite discriminatory by particularly immigration—will be dealt with. For 6 years I was the Minister for Ethnic Affairs and on a number of occasions during that time I and my colleague Nanaia Mahuta—and prior to that Rick Barker—met with different migrant communities to reassure them that racial profiling was not taking place via customs and immigration officers because a large number of cases were brought to us. To be absolutely fair to the chief executives of the Immigration Service and the Customs Service I tell members that they engaged with these communities. 
However only a month or so ago I received a delegation of Pakistani New Zealanders who raised the case of a young Pakistani man in Auckland who had been through New Zealand immigration several times in the last year. He has just graduated as a nurse and got permanent residency as a result making a contribution to our country as a firm and committed New Zealander—or a person seeking to become a New Zealander. He was plucked out of a queue just a month ago taken in for 3½ hours and subjected to a lot of questioning and a lot of rude and abusive behaviour while his partner was waiting for him on the other side unable to access any information about this young man. Sadly I have to say to the Minister that in the 6 years I served as ethnic affairs Minister this was not a unique case. I thought we had dealt with these cases but this case was just a month ago. 
Hopefully this technology will make sure that there is no more of that racial profiling. Sure we have to keep our borders safe but at the same time people who are New Zealand residents should not be subject to 3½ hours of intensive rude and aggressive questioning while their families are waiting to see them. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I want to take only a very brief call on this bill which is relatively non-controversial and is supported on all sides of the House. I had the opportunity to sit on the Government Administration Committee that considered this bill and made a few amendments. I had some concerns as we began the select committee hearings on this bill and I will talk about a couple of those briefly. 
The Labour Party agrees obviously with the need to stay up to date with the latest technology to keep our borders safe. We need to protect against things such as the menace of P. Often smuggling is undertaken by organised gangs with very sophisticated techniques and the Customs Service needs to have the tools to keep on top of that threat. One of the things that we talked about for a reasonable amount of time at the select committee was the powers of arrest that this bill deals with. I guess I just wanted to receive a reassurance in the committee that we were not in fact extending the powers of arrest or giving new powers of arrest. Having looked at all of the evidence on that the committee was satisfied that the bill does not extend those powers and it clarifies what can be done under the existing legislation. We spent quite a lot of time probing that in the committee to make sure that that was indeed the case. We were relatively comfortable that it was perfectly all right although other members have raised issues around the 7 days which I think the Minister in the chair the Hon Maurice Williamson has subsequently addressed. 
We also questioned some of the technology—I can see Jacqui Dean over there; she was also interested in this particular area—just to make sure that the technology was at least as effective and at least as reliable as human checking. I think we found as the Minister has just pointed out that in some cases the technology is actually more reliable than human judgment as to whether the person who is presenting himself or herself is actually the person on the passport. We spent a considerable amount of time considering the issue and we are relatively comfortable about that as well. 
The final things that we spent a reasonable amount of time talking about that I can recall were issues around search and surveillance and making sure that this bill did not give a whole range of new search and surveillance powers that were not there previously particularly with regard to containers and the fitting of electronic devices on containers. Having gone into that issue in some detail although we had some questions around it still I think we were comfortable enough that this bill did not confer huge additional search and surveillance powers which of course is a debate that is being held in another part of the parliamentary process at the moment. 
So overall I think the committee was pretty comfortable with this bill. We had some questions and issues along the way but I think the Committee can be reassured that the select committee interrogated the officials on this bill quite thoroughly. I think as a result this is a good bill and I commend it to the Committee. 
The question was put that the amendments set out on Supplementary Order Papers 100 and 104 in the name of the Hon Maurice Williamson be agreed to. 
Amendments agreed to. 
Parts 1 and 2 schedules 1 to 3 and clauses 1 and 2 as amended agreed to. 
The Committee divided the bill into the Customs and Excise Amendment Bill and the Tariff Amendment Bill pursuant to Supplementary Order Paper101. 
Bill reported with amendment. 
Report adopted.