Hansard and Journals
Criminal Proceeds (Recovery) Bill — Second Reading
Criminal Proceeds (Recovery) Bill
Hon SIMON POWER (Minister of Justice) : I move, That the Criminal Proceeds (Recovery) Bill be now read a second time. I thank the Law and Order Committee, of which I was a member, for its careful consideration of the bill. I am confident that the amendments recommended by the committee will improve the operation of the legislation, but I need to alert the House that there will be a further Supplementary Order Paper to consider in the Committee stage.
The committee listened to 14 submitters and received 26 submissions while considering the bill. There was a range of views on different aspects of the bill, but in general submitters supported the bill’s aim of preventing criminals from profiting from crime. The unfortunate reality is that crime really does pay. Too many criminals are able to retain property and income acquired through criminal offending by distancing themselves from those committing the crimes. This weakness in the existing criminal forfeiture regime enables gangs and career criminals to amass more money to fund more crime. The current legislation, the Proceeds of Crime Act 1991, did not provide enough of a disincentive to deter crime. This bill seeks to remedy the problem by introducing a new civil forfeiture regime under which assets and profit gained from crime can be confiscated without a conviction. It will be sufficient to prove, on the balance of probabilities, that a person has benefited from significant criminal activity.
This bill was introduced by the previous Labour Government. At the 2005 election it promised to pass into law a civil forfeiture regime to allow gangs to be stripped of the proceeds of crime. That never occurred. It surprised me, because this bill was on the Order Paper for quite a considerable period of time before the House lifted, going into the general election. A number of law and order bills were sitting there waiting to go, and would have been supported by the then National Party had they been included in the former Government’s final urgency motion, which they were not. One can assume only that it was not a lack of will that saw this particular set of circumstances transpire, but rather the arrangements that Labour had with its support parties, because those urgency motions in Labour’s last weeks as a Government simply did not allow it to proceed with this legislation.
Hon David Parker: Your opposition to the urgency motions.
Hon SIMON POWER: Well, we were actually in favour of this legislation, and had agreed to support it for quite some time, I say to Mr Parker.
Hon David Parker: Not the urgency motion.
Hon SIMON POWER: No, we did not support the urgency motion, but that was not our issue. The then Government was left at a distinct disadvantage on the platform during the election campaign, when it could have progressed this legislation rather than some less significant legislation that I recall was progressed at that time.
This measure should improve the level of compliance with international obligations to combat money-laundering and terrorist financing. Creating a civil forfeiture regime strengthens our mutual legal assistance framework, enabling New Zealand to assist other countries more effectively in recovering the proceeds of crime. The speed and ease with which funds can be transferred internationally make it imperative that countries cooperate to ensure that criminal proceeds transferred offshore can be seized and returned to their country of origin. I want to be clear, however, that it will still be necessary to obtain a criminal conviction before property used to commit crimes can be confiscated.
I now turn to the changes to the bill recommended by the Law and Order Committee. Part 1 contains interpretations of terms used in the bill. The main substantive change, which I support, is the specification that the New Zealand Police will be the agency responsible for civil forfeiture. This was a matter of some discussion and some controversy at the select committee. My recollection is that originally the then Government had intended the Serious Fraud Office to hold that role, but the select committee formed the view that the New Zealand Police would be the most appropriate agency. This change will provide the public with clarity and certainty about where the responsibility lies, and it will empower the Independent Police Conduct Authority to hear related complaints, which may address concerns raised in public submissions about the potential for the misuse of civil forfeiture powers. Having carefully considered advice from the New Zealand Police on proposals to establish an independent specialist group to undertake the new civil recovery functions, the committee recommended changes to the bill that would afford police operational flexibility while ensuring the head of the new group would be directly responsible to the Commissioner of Police. This was an extremely important point, and, on my thinking back, it seemed really complicated at the time we were discussing it in the committee; when I just say it out loud in the House now, it seems to make perfect sense.
The changes to the bill include replacing references to a recovery body and its director with references to the Commissioner of Police. I am confident that the New Zealand Police is the agency best placed to assume this new role and carry it out effectively and efficiently. The bill targets organised crime, and the police have the knowledge and expertise to investigate and take proceedings effectively in respect of gangs. Civil forfeiture complements existing policing roles and related crime prevention initiatives. The New Zealand Police will be able to maximise efficiencies by leveraging existing operational infrastructure, policies, and procedures, such as information sharing with other agencies.
Part 2 of the bill sets out the investigative powers under the new regime. It provides for search warrants and production orders, both of which can be issued only by judicial officers. The bill would also have introduced examination and production notice powers, which could have been issued by the Commissioner of Police, but the notice powers were a concern for some submitters on the bill, who considered that such powers could be subject to abuse because of the lack of judicial oversight of their use. These matters have been widely canvassed by the Law Commission in its report on search and surveillance powers. The commission recommended against the provision of notice powers for criminal investigative purposes. Although it is possible to draw a distinction between civil and criminal forfeiture investigations, the committee considered that, on balance, some of the concerns raised in submissions were equally applicable to civil forfeiture investigations, and that there was no compelling reason to diverge from the Law Commission’s recommendation. Accordingly, the committee has recommended amendments to remove the production notice power and replace the examination notice with an examination order power. The committee has also recommended changes that would reduce the duration period for production orders from 3 months. I am confident this change will not impair the police’s ability.
Part 2 also provides for information to be shared with the Inland Revenue Department, as a result of submissions from the Institute of Chartered Accountants and concerns raised by the Inland Revenue Department. The committee has recommended the insertion of new clause 167A, which creates a privilege for tax advisers that is similar to professional privilege for lawyers. It is also consistent with the privilege available to tax advisers. The committee has also recommended a number of technical amendments to the information-sharing provisions for clarity and workability.
As I said earlier, I signal my intention to put forward a Supplementary Order Paper. As a result of cases heard since the bill was referred to the select committee, some problems have been identified with the mutual assistance provisions in the bill as reported back to the House.
I thank all members of the Law and Order Committee, and in particular Martin Gallagher, who chaired that committee in a gentlemanly, gentle, and laid-back way, but who retained a certain control which was very elusive and hard to pin down. The Criminal Proceeds (Recovery) Bill will greatly enhance the police’s crime-fighting capability, and will enable New Zealand to better meet its obligations in the international arena. I commend this bill to the House.
Hon LIANNE DALZIEL (Labour—Christchurch East) : I am very pleased to see that the Government has seen the error of its ways and decided to progress this very, very good bill in its 100 days of action. I thank the Government for including the Criminal Proceeds (Recovery) Bill in its 100 days of action. It has turbocharged the bill; it is just great to see that.
I am glad to see that this Government rates this bill as more worthy than the measures it has been talking about in the media over the last couple of days, measures that it has signalled are scheduled for debate tomorrow under urgency. Apparently we are getting boot camps, and apparently we are getting the “three strikes and you’re out” rule, but not for a very long time. I think that one has a 20-year implementation period.
Chris Hipkins: But not for Gerry Brownlee.
Hon LIANNE DALZIEL: I think Gerry Brownlee is on more than his three strikes. I do not know how many strikes the Government will allow Gerry Brownlee, but it is definitely more than three.
Chris Hipkins: Boot camp!
Hon LIANNE DALZIEL: He might be at boot camp as we speak, or at least applying for it as he works studiously at his table across the Chamber. The point I want to make is that the Government has at least brought forward a positive measure, because we know that those two measures that I have mentioned already, the boot camps and the “three strikes and you’re out” rule, are internationally condemned as failed models—absolutely condemned. So it is great to see that legislation introduced by the very good Labour-led former Government is now proceeding through the House at a reasonable pace.
I say to the Minister, Simon Power, that if he would like to include this bill in the urgency motion tomorrow, then we could get it through the rest of its stages and it could be implemented very, very quickly. That might make us think that the Government really is committed to 100 days of action, rather than to smoke and mirrors and the implementation of populist ideas that everyone in this House knows do not work anywhere in the world. But this idea does work in many places in the world. I understand that Australia, Ireland, and the UK have all passed similar laws in respect of the proceeds of crime, allowing the Crown or the State to confiscate the profit made from a crime after someone is convicted of a crime and that profit has been spread around others who have not been convicted. I guess that is what makes organised gangs the target of this bill.
The bill is very much based on the principle that crime should not pay. I will tell an anecdote to the House. I remember my husband having a conversation with a relatively well-known person of disrepute in my patch in Christchurch. My husband went to his house—it was a very good house, an amazing house; it was stunning—and said to the guy: “Gee, you’ve got an amazing house here.” This guy said: “Well, who, who, who would say that crime d-d-does not pay?”. He has a stutter. Now everyone in Christchurch knows exactly whom I am talking about.
But the point is that crime must not pay. This is actually where deterrence works. It is not only the risk of getting caught but also the consequences of getting caught that determine the behaviour of those involved in criminal activities in the drug-related area and also in white-collar crime. This is an area where deterrence does work. Addressing the ability of anyone to profit from the proceeds of crime acts as a deterrent.
We can go much further than just the confiscation of property associated with direct criminal activity. This legislation gives the Crown the power to confiscate profits and assets obtained through criminal activity, but instead of basing that power purely on the criminal standard of “beyond reasonable doubt”, which is required for conviction itself, it bases that power on the civil standard of proof, which is “the balance of probabilities”. That means that this bill will allow the Government to tackle gang leaders who do not like getting their own hands dirty but certainly enjoy the benefits of their fellow gang members’ illegal activity. This bill finds an appropriate balance between targeting the proceeds of crime and protecting personal and property rights.
As I said earlier, this legislation appears in other jurisdictions, so New Zealand’s adoption of this approach shows that it is an effective mechanism, and one that produces real results.
Looking at the Law and Order Committee report on the bill we see that it spent a considerable amount of time talking about where the recovery body might be located. In fact, the bill, as introduced, talked about a recovery body rather than about the police or the then Serious Fraud Office. There was some debate about where it would be appropriate to locate the recovery body. Members of the House may recall that we had a debate as to whether the Serious Fraud Office should be relocated within the New Zealand Police, and the former Government subsequently decided to do that. The incoming Government has decided to overturn that decision, so it is probably a jolly good thing that the select committee decided to include references to the New Zealand Police, because that removes all doubt as to where the body should lie.
I think the committee did a very good job on this bill. Actually, I do not know who chaired that committee.
Lynne Pillay: Martin Gallagher.
Hon LIANNE DALZIEL: Was it Martin Gallagher? Well, I am sure that Martin Gallagher is tuned into the House tonight, and I congratulate him for an excellent piece of work in considering this particular bill. The reason the bill is good is because, by having the police take up the responsibility for enforcement, we already have in place the protection of an independent complaints regime through the Independent Police Conduct Authority. That is an excellent consideration by the committee, in terms of ensuring that the authority could respond to other issues that were raised in submissions.
A serious issue raised in submissions was whether there would be sufficient oversight, essentially because of the change of the onus of proof and of spreading the net a little wider, as it were, in terms of recovering criminal proceeds.
Another issue dealt with in the select committee was the whole question of restraining orders. I think the select committee also tidied up that issue to make it clear that the type of property in question could be restrained only by the operation of an earlier restraining order if that order explicitly applied to subsequently acquired property. I know that that sounds like a relatively technical detail, but I think the select committee again got it right in the recommendations it made.
The final thing I will refer to is the question of professional privilege. This is a serious matter. The question relates to the recommendation of the select committee to insert new clause 167A “to protect tax advisors with a form of professional privilege similar to that available under the bill for the legal profession.” The select committee considered “that this privilege should be similar to that afforded by the Tax Administration Act, whereby an advisor must be subject to a code of conduct and disciplinary process and belong to an approved advisory group, which is defined in the Act. Since New Zealand’s tax system is one of voluntary compliance, we recommend protecting tax advisors to maintain their good cooperation.”
Again, that is very helpful, because the question of the proceeds of crime is integrally linked to the amount of money a person actually had, compared with the amount he or she declared for tax purposes. That is often the way of resolving the question of what the proceeds of crime are.
I feel that the select committee has done excellent work on this bill. Again, I pay tribute to the Government for picking up and progressing this excellent legislation, and I encourage it to pick up the bill again tomorrow under the urgency motion and pass it through its remaining stages so it can take effect as soon as possible.
CHESTER BORROWS (National—Whanganui) : It is a privilege to be able to speak on the Criminal Proceeds (Recovery) Bill, which, of course, the new Government has brought on, and which languished for a long time under the stewardship of the previous Government. That was a shame, because it showed that the previous Labour Government took its foot off the throat of gangs in this country. There were a number of indicators of that. One of those indicators was the expiration of the 2004 Organised Crime Strategy, which was never replaced by the Labour Government until the death of Jhia Te Tutua. I look forward to the sentencing of the murderers of that wee child on Friday. That brought into the public consciousness the scourge that is gangs. In actual fact what had happened was that the executive had just patted gangs on the head and let them get on with business. Gangs were not coming to the attention of the police or the public very often at all, because it was bad for business. Then there was a turf war. It happened to be in Wanganui. A number of incidents went on for about 18 months and resulted in the tragedy of the death of Jhia Te Tutua. Thankfully, the Government of the day then shook itself off, woke up, and started implementing some legislation, including bringing this bill before the House. It had been sitting around for a long time doing absolutely nothing.
The new Government has given this bill legislative priority because we are committed to clamping down on gangs and disrupting their behaviour. We need to hit gangs in the pocket, because money is the lifeblood of gangs, just as it is the lifeblood of the rest of us who try to operate within society. We need to compare and contrast the new Government’s record on gangs with that of the Labour Government. In addition to this bill, the new Government has introduced legislation that provides for tougher penalties for membership of criminal gangs, expands police surveillance powers in respect of gang communications, and provides greater powers to remove gang fortifications—all within the first 100 days of office—and we have only just finished debating another bill, the Corrections Amendment Bill (No 2), which will also deal with the criminal activities of gangs in jail.
In Government, Labour failed to deliver on its 2005 election promise to hit gangs where it hurts by removing the proceeds of crime. In the 2005 election, Labour made all the promises to introduce legislation but then pulled the bill in July 2006, when the bill was dumped without being debated. Nothing more was heard of it until May 2007, 18 months after the election, when the Labour Government introduced the Criminal Proceeds (Recovery) Bill. The bill then languished on the order paper for another 18 months, awaiting its second reading. If the Labour Government saw the bill as such a huge priority, I ask why the bill sat there doing nothing. Silence. There is no answer. It sat there doing nothing, initially for 18 months while it waited for something to happen; then the bill was introduced and the Government sat there for another 18 months, knowing that it had support within the Law and Order Committee.
I was very pleased to be part of the select committee that considered this bill. We were under the chairmanship of the very able Martin Gallagher, with strings being operated by Jill Pettis, who unfortunately is long departed. We know that there are a number of strategies within the bill. The Hon Phil Goff said at the time of the introduction of the Criminal Proceeds and Instruments Bill: “The Bill will have an immediate impact on becoming law”. He also said that millions of dollars a year would be confiscated from gangs. They might be under this Government when we finally get this bill passed. But the Labour Government was so besotted with the Electoral Finance Bill and the emissions trading scheme that it forgot all about this stuff.
This kind of legislation is the nuts and bolts of Government. The first priority of Government is to keep members of its society safe, and Labour abrogated that responsibility by walking away from it. Time and again, Labour promised long but delivered short on promises to attack gangs. It is clear that Labour’s priorities were never—and never will be—to make hard decisions to tackle gangs. They put gangs in the too-hard basket and have left the new Government to clean up that mess. We are quite happy to grab hold of the issue, to get our hands around the throats of gangs, and to deal with them, because they are an insidious blight on our society. When one lives in communities that are being controlled by gangs—as I have—one understands just how deep and intense the hold of gangs is on local communities. We saw on the front page of the Dominion Post last week about the activity around Farmer Crescent at Pōmare, the inability of the police to be able to get in there and make those people safe, and the fear that the other residents in that community have in coming forward and exposing the sort of pressure and intimidation that is heaped upon them. Every other provincial city in this country has pockets of gang activity where members of those little groups dig in and have little potholes of gang heat within those communities that are very, very difficult to police. One cannot blame the police for staying away in their ones and their twos from those sorts of areas and strongholds until they are able to be there in number.
It is interesting to note, too, that this legislation created some difficulties for the way in which those accused of being the recipients of the proceeds of crime were able to access legal representation. For instance, one point the committee debated at some length was the fairness or otherwise of a person who has the ownership of land or property being able to use that as security to raise a loan to represent him or her. What this, in effect, did was take away a property right before an order had been made within the court—the property right to borrow against land for the purposes of mounting a defence to a claim before the court. The committee was divided on that. Some of the committee believed that people should be able to use the security of property to provide money to mount a defence, and some did not see that as an issue. But we were assured by advisers that, in fact, those people would be entitled to legal aid, so a defence would be able to be provided.
This legislation expands the ability of the authorities to confiscate property of gangs, gang members, associates, and other criminals, and places an onus of proof onto the defendants to prove the legitimacy of the ownership and their holding of that property. In shifting that onus of proof—it is a fairly rare situation where that onus is laid upon the respondent and does not rest on the prosecutor—the offenders may be liable to a cause of action under both the criminal law and the civil law, as the criminal and civil liability legs stand independently. There has been argument from some quarters that it is a sort of double jeopardy situation, but it is not. One is dealing with charges that are brought against the person; the other is dealing with an action that is attacking the property. Those who want to get involved in a criminal lifestyle and who want to reap the profits—for instance, in drug dealing, to deal and gain money from the curse that is put on other people, the recipients of their drug dealing—should be ready to do the time if they have been found to have done the crime.
The objects of the bill are fourfold. The first is to confiscate property from persons who have engaged in or profited from significant criminal activity. The second is to reduce the rewards of crime for the individual. The third is to reduce the attraction of crime for potential offenders. The deterrents contained within this bill are many and they will certainly spread further than just to those caught for the immediate crime of committing criminal offending, because we all know that within gang situations it is those more vulnerable associates of gangs—prospects or junior members of gangs—who are forced to commit crime in order to be promoted up the ladder. The fourth benefit is that the policy objectives of this bill are to reduce the resources that could potentially be used for criminal activity. We know that once the snowball of criminal activity gets rolling it generates wealth for those who are the taggers-on, and those who are at the hub of the planning and execution of crime are then further and further away from those committing it and those who find themselves before the court on criminal charges.
LYNNE PILLAY (Labour) : It is a pleasure to stand in support of the Criminal Proceeds (Recovery) Bill, which, of course, is a Labour bill. I think it is really good that the National Government, in its 100 days of action, has at last introduced a bill that has real teeth and that will do a considerable bit, in terms of addressing issues in this country.
This bill is based on the principle that crime does not pay. We know that is the case, because Labour spent a lot of time preparing this bill. The bill is not window dressing; it is a bill with teeth. I hope that Martin Gallagher, who chaired the Law and Order Committee, is at home tonight watching television—
Grant Robertson: He will be.
LYNNE PILLAY: He will be watching television. I hope he is watching Parliament TV, because I think he will be as amazed as we are that in these 100 days of action National has chosen this bill. It puts its other bills to shame. I really have nothing else to say, other than that I agree with the eloquent speech of Chester Borrows and that I commend this bill to the House. Thank you.
METIRIA TUREI (Green) : The Green Party considers the Criminal Proceeds (Recovery) Bill to be an outrage. It is an attack on the citizenry. It is unbelievable that the public are not aware, I think, of how significant this legislation is and what an attack on their rights as citizens it is. People going about their ordinary business could be subject to, perhaps, overzealous police interest or even prejudicial police interest and could find themselves at the blunt end of the justice system, having their property confiscated, not on a criminal proof but on a civil-based proof, without there being any conviction. They do not even need to be charged with any crime; there simply needs to be an accusation and an attack by a State service, whether it is the police or the justice system, and those people can have their property taken from them. The previous legislation, which at least required a conviction, was based on some kind of additional layer of proof that a crime had been committed. This legislation does not require any crime to be committed; none the less, people can have their homes taken from them by the State.
My former colleague Nandor Tanczos, our justice spokesperson for a number of years, went to the UK to talk to officials over there about very similar legislation that they had—legislation on which this bill is based. They could give him no evidence whatsoever that the legislation like this in their jurisdiction had any impact at all on offending. There was no evidence that it deterred offenders from offending. What they did say was that it acquired for the State millions and millions of dollars—that it was a massive income-generating operation by law against the citizens of that country.
Now we will have that same law in our country. The State will be able to strip citizens of their property on a burden of civil proof, where there is no conviction or even any charge laid, but simply on the accusation of an overzealous police force. This is a form of double jeopardy, indeed. Those who have been charged but acquitted, or those who have been convicted but then had their convictions quashed, will none the less still face the very severe penalty of having their property taken from them and from their families, even when there is no evidence that a crime has been committed or when they have been acquitted of any crimes that they were accused of.
It does raise the question of who the victims of this legislation will be. Will casinos—and this is an example that was raised in the past—be subject to this legislation? Given that there are reports that 45 percent of those who gamble at casinos commit crimes in order to find the money to fund their gambling addiction, will casinos be considered to be acquiring property through crime? Probably not, because this kind of law does not attack corporations. Lianne Dalziel mentioned white-collar criminals, but they have mechanisms for protecting their assets that keep them safe for them and their families for the future. They are not the ones who will be suffering from this legislation.
The example from England shows that low-income people are the ones who suffer from this sort of law. They are the ones who are targeted by enforcement agencies, because they are easy to get to. Their property is property that they have fought for desperately and worked for desperately. They do not necessarily have any kind of conviction, and they have not necessarily committed a criminal offence in order to get that property, yet the State can take it from them. The poorest people in our community will be the ones who suffer from this legislation, because they have the least protection via other mechanisms that the State provides. Those who benefit the most will be the ones who get away, because this law is not directed at those people and law enforcement is not concerned about those people.
This legislation is a serious attack on the rights of New Zealanders as citizens in this country. The Green Party will not support this law.
JOHN BOSCAWEN (ACT) : I will take a short call on this bill. I would like to make a couple of comments on the speeches that I have heard this evening. I find it rather ironic that Metiria Turei has just said that this bill is a serious attack on the citizens of New Zealand. I remind her that a far greater attack on the citizens of New Zealand is the Electoral Finance Act, which was repealed earlier this evening. There can be no greater attack on the people of New Zealand than restricting their right to speak out and to criticise, and to campaign against their Government. I was also interested in the comments of Lianne Dalziel earlier this evening. I am not sure whether she understands ACT’s “three strikes” rule or whether she is deliberately trying to mislead fellow members and members of the public.
Hon Dr Michael Cullen: That’s your industrial relations policy.
JOHN BOSCAWEN: Let me explain to the Hon Dr Cullen and Lianne Dalziel and her colleagues. Let me explain to them about ACT’s “three strikes” bill. The most important thing to highlight—
Hon Steve Chadwick: I raise a point of order, Mr Speaker. This is not the “three strikes” bill. I thought we were speaking on the Criminal Proceeds (Recovery) Bill.
JOHN BOSCAWEN: Speaking to the point of order, I point out that Lianne Dalziel made references to, and criticisms of, ACT’s “three strikes” proposal and I am addressing those.
Mr DEPUTY SPEAKER: This is not a debating point. Continue with your speech.
JOHN BOSCAWEN: Let me explain to Lianne Dalziel that the “three strikes” proposal that ACT is putting forward in the bill coming before the House tomorrow relates only to serious violent crime. We are not talking petty shoplifting, graffiti, or vandalism; we are talking about serious violent crime. We are talking about people who commit murder, rape, and manslaughter. We are talking about people who go into a bank armed with a gun and try to steal and inflict pain on people. Ms Dalziel may wish to misrepresent the bill to the public, and she may try to misrepresent the position of the ACT Party, but I want to correct her on that.
I notice also that Lynne Pillay talked about criminals needing to know the consequences of their actions. Criminals need to know that their actions have consequences. One of the consequences of implementing ACT’s proposals on “three strikes” is that when criminals are convicted and sentenced on their second serious violent crime, they will be advised by the judge that if they come back before the court and are convicted of a third serious violent crime they will be sent away for 25 years to life.
Finally, let me come back to Metiria Turei’s point. She talked about the victims of the legislation before the House right now. Well, I would like to talk about the beneficiaries. Who will actually benefit from passing laws that catch and punish criminals and try to prevent crime? They are the people of New Zealand, and in particular, I say to Metiria Turei, they are the poorest people in our society. They are the people who cannot afford to put fences around their properties or have security patrols. I and the ACT Party will be supporting this bill.
TE URUROA FLAVELL (Māori Party—Waiariki) : Tēnā koe, Mr Deputy Speaker. Kia ora tātou i te Whare. It is one of those ironies that we are here tonight considering the Criminal Proceeds (Recovery) Bill, legislation to radically reform the existing regime relating to criminal proceeds and recovery, while a funding crisis is confronting the 27 community law centres. What does that have to do with criminal proceeds? It is very simple. The bill vests the recovery body and the police with the powers to target people and confiscate property under suspicion. There is that element of discretion and flexibility.
This time last week we were in the midst of a debate about new, tougher, and leaner measures to control gangs. I spoke then about the pitfalls of discretion—the dangers of institutional bias, racism, and prejudice—and about the disproportionate toll on Māori. But here we go again. This bill introduces changes whereby the confiscation of property can now occur without a prior conviction. Instead of a single criminal standard of proof—the “beyond reasonable doubt” standard—there will be a new civil standard of proof based on the balance of probabilities. That is a much weaker test. In a nutshell, the New Zealand Police will have greater powers. There will be a far lower standard regarding the need for evidence.
To compound matters further, even more issues will come out of the fact that a 44 percent funding cut is to affect the Coalition of Community Law Centres of Aotearoa. We know that legal aid funding is already woefully inadequate and cannot cover the full cost of preparation that lawyers might reasonably expect to put into these sorts of cases. The immediate impact of the recession is that it is likely to significantly affect the free services that are currently available, potentially forcing some centres to close. That, from our perspective, would be a tragedy. So once again the Māori Party is coming to this House and putting out the call to ensure that whānau, hapū, iwi, and all New Zealanders can continue to have due access to justice. The question for us is how we can be sure that Māori will gain access to the quality legal advice and representation that will be needed.
The Dunedin Community Law Centre, I understand, said in its submission that the bill will be used primarily to target petty criminals, and it is in that light that we are concerned that the criminal law protections for defendants will be reduced by the lower civil law standards. We have concerns about who may be targeted, about innocent parties, and about the adequacy of legal aid and legal funding, and we are concerned about the breach of human rights such as the breach of minimum trial rights: the presumption of innocence until one is proven to be guilty.
We absolutely agree with the submission from the Human Rights Commission that measures must be put in place to deter criminal activity. The question is whether the extreme measures proposed in this bill are the only means of achieving these changes. The challenge that the Human Rights Commission lays down is one that I think the House must give consideration to. Is it worth sacrificing the principles of justice to recover criminal assets? In other words, does the end justify the means?
The Māori Party cannot, by any stretch of the imagination, accept that it is acceptable for any legislation to be inconsistent with our international commitments and human rights laws, which this legislation is. Let no one in this House forget that New Zealand, as an international State, faces the shame of having breached a raft of international treaties in the enactment of the foreshore and seabed legislation. Let no one in this House forget that the trauma of Operation Eight, resulting from the attack in the Ureweras during 2008, drew international condemnation for the way in which it universally stigmatised the people of the Tūhoe nation as terrorists. Let no one in this House forget that only four countries in the world voted against the United Nations Declaration on the Rights of Indigenous Peoples—a declaration affecting over 350 million indigenous peoples globally.
We have a chance to put things right regarding that declaration. The Māori Party is aware that both Australia and the United States have already indicated a willingness to reconsider their negative vote against the declaration, and with a new Government in place here, a Government that is committed to mana maintenance and enhancement, we are in a strong position to live up to our international commitments, to demonstrate leadership in acknowledging the human rights of indigenous people, and to adopt that declaration. But in the meantime, while that process is in flow, we must not as a Parliament continue to sit by and allow the fundamental principles of justice to be blatantly disregarded. A couple of barristers who attended the select committee, namely Rob Weir and Dr Donald Stevens, were quite clear that the bill breaches the entitlement under the New Zealand Bill of Rights Act to a fair hearing, and that needs to be noted.
There is one very significant issue that we will want to raise at the Committee stage. It is the issue concerning the right to appeal forfeiture order decisions. We believe there is inadequate provision for people to be able to appeal forfeiture order decisions. The bill will confiscate property from persons engaging in, or profiting from, “significant criminal activity” via forfeiture orders. The new measures introduced in the bill propose that confiscation of property or the assessed value of criminal proceeds can occur without a prior conviction. Where this becomes a particular threat for many of the constituents that I have is that, for example, a whānau could potentially lose their ancestral land if another person has been growing cannabis on their farm without their consent or knowledge. We are therefore of the view that in the bill there should be some specific exclusion of Māori customary land, Māori freehold land, Māori freehold land declared to be general land pursuant to section 6 in Part I of the Maori Affairs Amendment Act 1967, and any lands returned to iwi under deeds and settlement legislation. We are very concerned about any threat to our whenua, so we will be providing a Supplementary Order Paper that addresses our concerns.
We are very concerned about the potential for huge unfairness with the precarious nature of the civil balance of probabilities test, and in particular with there being no opportunities for a fair review of the decision. We are concerned that those accused may be unable to properly defend themselves. We are concerned that this bill may see New Zealand breach its international obligations regarding the right to legal representation in the International Covenant on Civil and Political Rights, to which New Zealand is a party. We are concerned about the breach of a number of human rights and freedoms contained in the New Zealand Bill of Rights Act 1990, including the right to be secure against unreasonable search and seizure. We are also concerned about the possibility of double jeopardy, as mentioned by my colleague Metiria Turei, and about the fact that the bill is incompatible with a human rights approach to the development of policy.
There is one glimmer of hope embedded in the bill. It is the fact that the bill may provide an opportunity to introduce a liability for casino and pokie-machine operators when profiting from the criminal offending of their customers. At present, even when problem gamblers are convicted of theft or fraud, there is no ability to recover the moneys from gambling operators. However, although we as a party are totally committed to eliminating the social hazard that we recognise in gambling, that one issue simply is not sufficient to be able to turn our minds away from the human rights breaches and infringements that are associated with this bill. Having regard to that, I say the Māori Party will not support this bill.
Hon Dr RICHARD WORTH (Associate Minister of Justice) : I was particularly interested in the comment of a former member of the Government who is now, of course, a member of the Labour Opposition, that the Criminal Proceeds (Recovery) Bill was a Labour bill. That seemed an intriguing proposition because it is partly right; on 20 March 2007, this bill was the subject of a first reading. It was then referred to the Law and Order Committee, where it languished for a considerable period of time. It then came back to the House as recently as 2008—in fact, on 25 July 2008.
I have been intrigued by the comments that Labour members have made about the incredible output of Martin Gallagher, and I would like to join for a moment in a short encomium to the work that he did. Unfortunately, he is no longer with us, but he was very much an exemplar of industry and an exemplar of competence. I think one of his great strengths was that he had the ability to identify issues that turned out not to be issues at all, but he was sufficiently persistent to run with them. I would like to place on record the contribution that he made, as the member for Hamilton West, in what was a very extended period of service to the House.
In connection with criminal proceeds recovery issues generally, organised crime has changed hugely in New Zealand. We can think back 10 years to when we had jacketed thugs in New Zealand and see that there were significant problems as organised crime developed insidiously. But it is all so different now, because today’s criminals in the organised crime sector are not wearing patches. Their tattoos, if they have them, are concealed by black pinstripe suits. The whole deal has changed hugely. In fact, if we look at the international brotherhood of criminal activity—and I single out Hell’s Angels as a really good example of that—we see that we need only to reflect on the motto of Hell’s Angels when its members say that “Three can keep a secret when two are dead.” to realise the pernicious and insidious nature of organised crime. The Hell’s Angels organisation is actually a bit of a study in itself, because its innovation seems to have no bounds. As members may well know, one of the things it has done is set up a Hell’s Angels church in Los Angeles, and its licensed parsons and vicars—by dint of their clerical association—can gain access to jails and collaborate with those who are behind bars. That is why I think this legislation is incredibly important, and it was so disappointing that Labour did not see that there was a mischief to be cured and that expedition to advance this bill to its final stages was so important.
So Labour’s good ideas fizzed and spluttered; they needed to be relaunched and revived under this National Government—and is this not just the reality of the situation that the Government has come to? We are doing that. When we look at the purposes of the Criminal Proceeds (Recovery) Bill, we see that they are to reform the existing criminal proceeds recovery regime and to repeal the Proceeds of Crime Act 1991. Others have mentioned—but, it seemed to me, in a very fleeting way—that under the current Act, property that either represents the profits of criminal offending or is used to facilitate the commission of a crime can be confiscated once a criminal conviction is secured. That is clearly an unsatisfactory threshold position. The major change proposed by this bill is to provide that a criminal conviction would no longer be required for property representing the proceeds of crime or the value of unlawfully derived income to be confiscated.
I want to add—at a high level; a macro-perspective, if I can put it that way—just what this bill is about in the context of the policy of the bill as I have just sought to explain it. We are replacing the bill with a conviction-based forfeiture regime limited to the instruments of crime, and—significantly, I would say—a non - conviction-based regime to deal with all other property representing the proceeds of crime or assessed to be the value of a person’s unlawfully derived income.
When we look around the world at this issue—and I am speaking to members opposite—we see what has gone on in Australia. We tend to take a lot of inspiration from our Australian colleagues as they have had huge success with these types of regime in Western Australia, but in other parts of Australia they have not been so successful. Certainly, in the past I have argued in this House at this time of night that we should be looking at something more patterned on the Western Australian model than some of the other models that are available.
If we look for a moment at the non - conviction-based regime that, as I said, is going to operate independently of any criminal proceedings, we see the situation where the same person may be the subject of both criminal prosecution and confiscation action under the civil process. Property acquired as a result of unlawful activity could be targeted, even though it may not be possible to prove beyond reasonable doubt that the owner has committed a specific criminal offence. When we think about it, we realise that is fair enough, because when the police burst into a gang fortification and find substantial assets scattered around—or, in many cases, hidden away—it is very hard to determine in what circumstances a particular item has been acquired by the gang members involved. The beauty of this regime is that we do not need to get involved in that exercise. The umbrella of the Criminal Proceeds (Recovery) Bill picks up those issues in a neat and clean way, and it will not involve those issues of proof that can be incredibly burdensome in this particular field of criminal law. I say this to members opposite, as well. There is also provision for a restraining order on property while the Crown gathers evidence to support its case for forfeiture. There can be a move in and action taken, then the passage of time for the further orders that are necessary to support the forfeiture case.
It is right, of course, to say in the context of this bill that the property must come from significant criminal activity. That has been defined in this bill—appropriately, I think—as either an offence punishable by at least 5 years imprisonment or an activity that has generated profits of at least $30,000. I suppose there could be an argument raised by cynics as to whether that threshold of $30,000 is appropriate. Why was $30,000 chosen and not some higher number? I hope that, when this bill is enacted, an opportunity may be taken at a later date to make a judgment as to whether that threshold figure of $30,000 is appropriate. We could argue that a higher threshold number could more readily have been chosen, but in the context of getting the legislation through we have decided not to change that number. We will run with $30,000 and, perhaps, at a later stage, look at it again.
I was interested when Chester Borrows, who was here a moment ago, talked not so much about the policy of the bill in a broad way, but about some of the more specific aspects. If I noted them correctly, he identified four. The first was to confiscate property from persons who had engaged in, or profited from, significant criminal activity. There were three others: to reduce the rewards of crime for the individual, to reduce the attraction of crime for potential offenders, and to reduce the resources that could potentially be used for criminal activity. We need to get very serious about dealing with gangs; I think that that is one of the lamentable failures of the previous and failed Government.
CHRIS HIPKINS (Labour—Rimutaka) : For the people at home who listened to that last speech, I tell them that that was the Hon Dr Richard Worth, the new Minister of Internal Affairs, filibustering on one of the Government’s own bills, because the Government is so desperate not to get to the next bill on the Order Paper, which is the Oaths Modernisation Bill. Which Minister is in charge of the Oaths Modernisation Bill? Could that be Dr Worth himself? I am staggered that Dr Worth does not want to get to the Oaths Modernisation Bill. Perhaps that could be because of some of the comments he made on that bill last time it came before the House.
I am happy to take this call on the Criminal Proceeds (Recovery) Bill, which was introduced by the previous Labour Government. The bill is based on the principle that crime must not pay, and Labour believes that this legislation will uphold that precious principle. It will allow us to tackle gang leaders who do not get their own hands dirty but who enjoy the benefits of their fellow gang members’ illegal activity.
I noticed Chester Borrows speaking earlier about the recent raids that took place last week in Pōmare, which is a State housing estate in my electorate. I want to know how the National Government thinks that stripping policing resources out of Upper Hutt to send them to South Auckland will help the police with situations like that in Pōmare.
Paul Quinn: Rubbish! Rubbish!
CHRIS HIPKINS: Paul Quinn thinks that is rubbish, yet his Government wants to take police away from Upper Hutt by merging the Upper Hutt and Lower Hutt policing districts. The Government wants to take police out of Upper Hutt. It wants to remove police without telling the community about it. The community found out about that only because somebody in the police leaked it. Otherwise, we would never have found out about it. Is it not an outrage that this Government, which promised to increase police numbers, wants to take police away from Upper Hutt? Chester Borrows did not mention that in his speech when he talked about the gang raids in Pōmare. He did not mention that at all, because the Criminal Proceeds (Recovery) Bill requires the New Zealand Police to be the recovery body. How will the Police be able to be the recovery body if resources are taken away from it?
I can tell members, on behalf of the community of Upper Hutt, that that community is very concerned about this National Government’s proposal to strip away its policing, and to strip away its level of community safety, as part of the Government’s 100-day action plan. That proposal was certainly not on the 100-day action plan that National put to people before the election. This is a whole new thing that the National Government has introduced—to take police out of Upper Hutt and move them to South Auckland. So much for democracy!
We know a little bit about law and order in Upper Hutt, as it is the home of Rimutaka Prison. Is it not interesting that National wants to lock up more people in Rimutaka Prison and strip the policing resources out of Upper Hutt at the same time? I can tell the House that the people of Upper Hutt will not stand for that. The people of Upper Hutt will not stand by while the National Government steals their police resources to send police to other parts of the country in order to meet the Government’s manifesto commitments, which it did not cost properly and which it has no idea how to pay for. Now the Government is raiding police resources in Upper Hutt so that it can meet those commitments, and I tell members that we will not stand for that.
I come back to the Criminal Proceeds (Recovery) Bill. Labour believes that this bill finds an appropriate balance between targeting the proceeds of crime and protecting personal property rights. Australia, Ireland, and the United Kingdom have passed similar laws—
Paul Quinn: It’s your bill.
CHRIS HIPKINS: That is right, and it is a good bill, too. I will keep my contribution to this short, though, because I am looking forward to the debate on the Oaths Modernisation Bill, as part of the Government’s 100-day action plan agenda. So I will end with that. I commend this bill to the House. It is a good bill. It was introduced by the previous Labour Government but it is being pushed through by the National Government because it does not have any bills of its own.
SIMON BRIDGES (National—Tauranga) : It is a great pleasure to take a call in this debate on the Criminal Proceeds (Recovery) Bill, and it is also a great pleasure to have listened to the previous speaker, Chris Hipkins. Some say there is not much in the way of mutual respect across the Chamber, but I like what I have seen of Chris Hipkins. He is one of the few Labour MPs in the House who has won an electorate. There is another one over there—two of them! Chris Hipkins had a few good things to say in this debate, and that is good.
I also enjoyed listening to the Hon Dr Richard Worth, who spoke in this debate. Admittedly, he spoke in a rather wide-ranging way. He ranged from the Hell’s Angels of California to the pinstripes of Ōtaki, but it was a good speech. I agree with his comments about Martin Gallagher, a former MP who seems to have done a very good job in guiding this important bill through the select committee process. I say good on Martin Gallagher. We all hope he is watching tonight and has some sort of moral reward, at least, that this bill—finally—is back in the House under a National-led, not Labour, Government.
Really, if we were to sum up this bill in a sentence, it would be that crime should not pay. Crime should not pay, but it did pay under Labour. Crime paid under 9 long years of a Labour Government. I have seen gang members in greater Tauranga and in the Bay of Plenty who own mansions and businesses. Metiria Turei said this bill affects only the poor. Well, mansions have been built in Tauranga, not to mention in Auckland and in Wellington—and, no doubt, in Rimutaka, I say to Chris Hipkins. Mansions have been built on the ill-gotten proceeds of crime. Many a Harley Davidson motorbike, a boat, a yacht, you name it, has been bought that way. Some have been seized in Tauranga, I have to say, but this legislation will go a long, long way towards seizing more and to doing a better job of seizing them.
Make no mistake, criminals have become fat and prosperous under Labour. We were losing the war on crime under Labour. Criminals were getting fat; they had to expand their belts. National has come into office and there has been a flurry of legislation. It was needed in order to do something about the fact we were losing the war on crime. There has been a lot of talk, of course, from Labour members—[Interruption] There has been a lot of talk, just like we are hearing right now. A lot of hot air has been expelled over crime. But Labour was busy passing measures like the Electoral Finance Act, which it now wants to do away with. It spent time passing laws like that for no good reason other than to screw the scrum, it seems, and criminal legislation was left on the shelf. Under 9 long, hard years of a Labour Government the criminals were winning.
Peseta Sam Lotu-Iiga: Hard labour.
SIMON BRIDGES: That is absolutely correct. Criminals were getting fat.
Make no mistake. Huge amounts of money are involved when we are talking about crime. Millions and millions of dollars are involved. Take Mount Maunganui, where I live. Over the Christmas period the police went into a factory and seized, on their estimate, millions of dollars worth of chemicals intended for the illicit, illegal manufacture of the nasty, pernicious drug P. Let us think about that. If they had not seized those chemicals—and let us face it; they are not seizing all of them—then many millions dollars of ill-gotten gains would have gone to precisely the wrong people. We have seen 9 years of that under Labour. We have seen the police knowing where the mansions are, knowing where the Harley Davidsons are, and knowing that they are the proceeds of crime, but because the Proceeds of Crime Act 1991 is not doing its job adequately and is not fit for purpose, those criminals have got away not only with, shall I say, literally murder but also with the ill-gotten gains of their crimes. Indeed, it is good that National is finally bringing this legislation to the House, and we will see those criminals who are caught up with the ill-gotten gains of crime finally taken care of.
I ask members who crime is paying. It is paying the gangs. I agree with something the Hon Dr Richard Worth said in this House—that it is no longer just the Mongrel Mob, Black Power, and the gang members with patches and tattoos on their faces who are making money. That is perhaps what some in this House who are voting against this bill would say. Under Labour, gangs became seriously sophisticated, and that is why this law is needed in order to make a change. Gang members are no longer in gang patches. They are in suits, they have mansions, and their tools are not crowbars and weaponry but emails and cellphones. With the increase in sophistication of criminals and gang members, we need to move with the times. I commend Labour for starting the process, even if it had other things like the now-deceased Electoral Finance Act to get on with. It did not seem too worried about the criminal laws on its shelves. We have got on with it, we are passing this important law, and now the police will have many more tools with better onuses to deal with crime.
I also agree with something else Richard Worth said. It was a perceptive point. He said that the people peddling P are now in pinstripes—not like the Hon Dr Richard Worth; he was wearing a very nice pinstripe suit. We have other members on both sides of the House who wear pinstripes. Nevertheless, those criminals have cellphones and laptops, and they are in pinstripes. We are moving with the times.
We get to this bill’s purpose. I think the recovery of criminal proceeds has traditionally been viewed by many people as an under-rated poor cousin in the criminal justice arena. But I say to this House that it is a fundamental and exceptionally important tool in the armoury of the police, because it hits gangs in the pocket. It takes their mansions, their Harley Davidsons, and their boats.
From my experience, I have observed that seizing the proceeds of crime drives criminals apoplectic. It is funny; when criminals are fighting their charges and fighting the seizure of their Harley Davidsons, it is the seizure of the Harley Davidsons they get really upset about. When they have been caught for a crime and go through trial and sentence, they know they have been caught. But when their Harley Davidsons or their speedboats have been seized, they get really angry. I have a theory that criminals think they have earned the Harley Davidson, even though they have earned it through illegal dealings, intimidation, and peddling misery, and they fight hard, dirty, and deviously for it. Therefore, this bill has had to do something about that. We are curing that mischief and are making sure that the tests and the onuses are lowered, and not before time, because we have been losing the war.
This bill is part of the raft of legislation being passed by National. It is a suite—
Peseta Sam Lotu-Iiga: A rolling maul.
SIMON BRIDGES: —a rolling maul of legislation being passed by the National Government, including tougher penalties and so on, that will deal to criminals.
- Debate interrupted.