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Criminal Proceeds (Recovery) Bill — In Committee


Criminal Proceeds (Recovery) Bill

In Committee

Part 1 Preliminary provisions

Hon CLAYTON COSGROVE (Labour—Waimakariri) : As the previous Labour Government—in the form, specifically, of the then Minister the Hon Annette King—wrote the Criminal Proceeds (Recovery) Bill, we will, of course, be supporting it. I do not think there is a lot of politics around this bill. It is based on the clear principle that crime must not pay.

Part 1 looks at significant criminal activity and other terms around that. The major change proposed by this bill is that a criminal conviction will no longer be required for property representing the proceeds of crime or the value of unlawfully derived income to be confiscated. We support this measure; we know that crime in any form is nefarious. The Minister in the chair, the Hon Simon Power, has proposed a Supplementary Order Paper—which I know we will get to later—that provides some tidying-up and some technical amendments. I note that another Supplementary Order Paper, Supplementary Order Paper 5, has been put forward by Mr Flavell. After some discussions with the Minister and others, I think that Supplementary Order Paper 5 presents some difficulties, and I believe that the Minister may want to provide some advice on this to the Committee. I am advised that he has taken a high degree of advice on this and, as a learned lawyer himself, he is well briefed. He may want to provide some clarification around that matter.

Currently the Proceeds of Crime Act 1991 allows the Crown to confiscate the profit made from a crime after someone is convicted of that crime. The profits of the crime, however, can be spread among many people, not all of whom are able to be convicted of the crime. Organised crime is an example of this, as we know. The bill deals with this problem by providing the Crown with the power to confiscate profits and assets obtained through criminal activity on the civil standard of proof. The bill will also allow us to tackle gang leaders who do not—shall we say—get their own hands dirty. Many of them, as we know, do not wear patches. This bill addresses and provides a huge weapon in the fight against organised crime and gangs, as opposed to—meaning no disrespect—the bill put forward by the Wanganui District Council and Mr Borrows, the Wanganui District Council (Prohibition of Gang Insignia) Bill, which addresses apparel rather than providing key tools to attack gangs and organised crime. Again I say that I mean no disrespect, but I think that this bill is a substantive measure that will actually go quite a way towards addressing, hitting head-on, and dealing with gang leaders and organised crime. Some of the most insidious gangs and elements of organised crime in our community do not parade around on motorbikes and wear patches. In fact, they loathe any sunlight being poured on them or having any profile. They deal in the shadows and cause devastation with their activities.

We in the Labour Party believe that this bill provides an appropriate balance between targeting the proceeds of crime and protecting personal and property rights. As we know, Australia, Ireland, and the UK have passed similar laws. I think that the Law and Order Committee has done a serious job on this bill. The report of the select committee has recommended a number of changes, which we will address as we go through. The key recommendations are that the police should be the recovery body, that the definition of owning “property“ should be extended to include those who might have an interest in it—hence dealing with many of the nefarious activities of organised crime—and that the definition of “instrument of crime” should be amended to include proceeds from the sale of property. There is also clarification of the circumstances in which property acquired can be restrained after a restraining order has been made.

I think this is a good bill. As I have said, it addresses very simply the notion that crime should not pay. There is a high degree of bipartisanship on this; we support the bill. I look forward to the Minister providing us—as I know he can as an expert in this area—with a very extensive extrapolation of the facts and the legal tenets behind the pitfalls or pluses we might find in Supplementary Order Paper 5.

Hon SIMON POWER (Minister of Justice) : It is always a good sign when the Hon Clayton Cosgrove and I agree on an issue. I am pleased that this first occasion has arisen after 9½ years.

Clause 9 relates to one of the areas where the Law and Order Committee made a technical amendment. It was contentious for some submitters. The Legislation Advisory Committee and the Law Society held the position that the Criminal Proceeds (Recovery) Bill was essentially a penal statute and should therefore not apply retrospectively. The Law and Order Committee did not share this view. It considered that the rule against retrospectivity, as provided for in the New Zealand Bill of Rights Act, the Sentencing Act and the common law, did not apply, because civil forfeiture is not universally considered to be a penalty, and does not increase penalties under New Zealand law. Also, the Committee might be interested to know that the bill is not completely retrospective in its application. It is limited to criminal proceeds obtained up to 7 years previously. This period was chosen for consistency with tax law requirements, as there is more likely to be a record of a person’s legitimate financial activities over this period.

I turn to clause 5, and in particular to Supplementary Order Paper 5, which has been offered up by the Māori Party—by Te Ururoa Flavell. It excludes, amongst other things, Māori customary land and Māori freehold land from the definition of “property” in the bill. The National Government is not in a position to support this Supplementary Order Paper, as I indicated to the member earlier.

Officials advise me of a matter that may help to put to rest the Hon Clayton Cosgrove’s mind as well as the mind of the promoter of the Supplementary Order Paper. The residual rights of innocent parties who are caught up in the forfeiture regime continue to attach to the procedure. This means that if an innocent party who can show an interest in Māori customary land, Māori freehold land, or the other land indicated on the Supplementary Order Paper makes an application for that land to not be dealt with under the regime—in other words, confiscated; well, caught by the regime, sold, and then the proceeds are divided—the court has an option of hearing that application and retaining the land. But the party involved in making the application needs to bring a clean slate to the proceedings—in other words, the party cannot be tainted by the criminal activity surrounding that application. As I understand it, that is the position.

So although the member might have genuine concerns about the multiple-ownership structure of, for example, Māori customary land or, indeed, Māori freehold land, to an extent—and I am not saying that it is as full as the member would like—there are options for application by parties who hold that status and are innocent in respect of the matter under consideration, in the same way as would apply, by the discretion of the court, if a spouse of someone who was caught under this particular recovery regime was completely innocent or unaware of the criminal activity. Those applications, and the capacity to make those applications, are available to that party.

As I understand it, the legislation does not run with a “must” but with a “may”. In other words, the court retains discretion in this area. But the legislation does mean that not all residual rights that would otherwise be held by an innocent party caught up in the application, when that innocent party had no part in the criminal activity, are completely lost. I hope that gives the member some assurances.

Hon LIANNE DALZIEL (Labour—Christchurch East) : I had wanted to defer to the representative from the Māori Party in particular as he has a really important Supplementary Order Paper on the Table, but obviously he is not going to take the call. It is a bit difficult to comment on that Supplementary Order Paper without having the benefit of his contribution to the debate, which is why I was very keen for him to speak first but I may take an opportunity to speak again after he has.

I am deeply concerned about the proposal in the Supplementary Order Paper to exclude Māori customary land and Māori freehold land, land that has ceased to be Māori land, and land acquired from Māori for public works, etc., as listed in this proposed amendment. I am a little unclear from the Minister’s explanation as to whether he has received advice on whether this particular provision adds anything to the existing status of Māori land. Does it represent something that is required to be addressed in the legislation, or can we leave it to the application of existing principles under current statute? I suspect it is the latter rather than the former, and because this has been brought to the Committee by way of Supplementary Order Paper and we have not had a presentation from the person proposing it, it makes it very difficult for us. My instinct would be to vote against the inclusion of Part 1, clause 5 definitions, but not on the basis that, in principle, I object to what it is trying to achieve; I just believe that the current law already enables that to be the case. A very clear statement from the Minister—not just in the Committee stage but certainly in the third reading on the bill—would be very important to clarify that, in order that there is a clear statement of record in terms of the Government position on the application of the existing law.

There are important issues to have consideration of and I am very mindful of the fact. It may sound as though I am not speaking to the bill itself but that is because this amendment raises the issue of Te Ture Whenua Maori Act 1993, which was—of course—the Act that was under consideration in respect of what has become known as the foreshore and seabed issue. The reason I raise that is because the Te Ture Whenua Maori Act 1993 would never have been written the way it was written if in fact the In re the Ninety-Mile Beach case had never been decided in the way it was decided; there was no way a National Government in 1993 would have passed legislation that would have allowed for parts of the foreshore and seabed to become classified as Māori land and able to have a registrable interest under the Te Ture Whenua Maori Act if it were not for the In re the Ninety-Mile Beach decision that actually limited the application of that registration to land that was contiguous to land considered Māori land under that Act.

I think it is an extremely important provision because most people do not understand the foreshore and seabed issue. All the court did was to overturn the In re the Ninety-Mile Beach case and that had a huge impact on legislation that had been passed in the belief that that law would stand. That is why it is really important that we have a very clear statement about what the legal rights and obligations are in respect of this issue and why it does not necessarily need to be dealt with in the context of this legislation.

TE URUROA FLAVELL (Māori Party—Waiariki) : Kia ora tātou, Mr Deputy Speaker. For the benefit of Ms Lianne Dalziel, I say that the example we used in respect of this particular issue in the second reading of the Criminal Proceeds (Recovery) Bill is about the land. I used the example of some of the constituents in my area, although not a lot of them are involved in such a situation. For example, we believe that a whānau could potentially lose its ancestral land as a result of another person growing cannabis on a farm without the whānau’s knowledge or even consent—hopefully, it would not be the consent at issue, but more the knowledge.

In the sense that there have been some precedents in the past in respect of some laws that have, unfortunately, alienated Māori land, I placed this issue fairly and squarely in front of the Minister Simon Power. His explanation was that there are some mechanisms. It is of real concern, particularly in the case of multiple-owned land where the owners live throughout the country, that people may not even know that this is going on. A family member or a trust member of some kind is caught up in some sort of wheeling and dealing, and all of a sudden the court has determined that some proceeds come from criminal activity. Firstly, the whānau members, being innocent parties, do not have any knowledge of the issue. Secondly, they have to apply to the court to maintain that land under their ownership, when they should quite rightly have the use and ownership of that land. That is of real concern.

I join with Ms Dalziel in the sense of asking whether there is a possibility of Supplementary Order Paper 5 adding to and benefiting the bill in one form or another in those circumstances. There should not be any doubt in the minds of anyone in this Parliament that the Māori Party is determined to protect any issues around Māori land interests. If there is any move towards the further alienation of land by any means, through the courts or unwittingly, then I think we certainly want to deter any thoughts about that. I seek the Minister to take a call to consider this line. For it is very important.

It is not that we do not have other concerns about the bill, of course, but this is the key one. It is just one example, but, nevertheless, its ramifications are quite far-reaching, particularly around issues of land. With that as a very brief explanation, I ask the Minister to perhaps take some consideration of how the bill might be added to. Kia ora.

SIMON BRIDGES (National—Tauranga) : It is good to take a call at this stage of the progress of the Criminal Proceeds (Recovery) Bill, and to speak on Part 1 and on the purposes of the bill. I agree with the Hon Clayton Cosgrove that really its purposes are summed up by the words “Crime does not pay, and it should not pay.” I also agree with the member that gangs these days are no longer just the gangs that we see wearing patches, or the gangs that we talked about when we debated the Wanganui District Council (Prohibition of Gang Insignia) Bill. They are often much more sophisticated than that, and it is important that we have a strong response to those gangs, as we do through this bill.

Where I suppose I part company from the Hon Clayton Cosgrove is that although Labour has talked the talk on this issue, it was sad to see that in 2005 and the years following it, the previous Labour Government did not walk the walk. I note that at the election in 2005 the previous Government promised to pass into law a civil forfeiture regime to allow gangs to be stripped of the proceeds of crime. It did not do that; the bill languished on the Order Paper. Over Labour’s time in Government we had a situation where in fact although crime went up, the proceeds of crime that were seized went down. Since 2002-03 the total value of proceeds that were seized was one-third of what it had been, dropping from $3.6 million to $1 million, and at the same time the average value of each seizure dropped from $183,000 to approximately $24,000. That was a shame indeed, when, anecdotally, any police officer or prosecutor on the street could tell us that the amount of crime committed by gangs and in relation to P has gone up. So it is a shame that this bill has languished, but it is here now. It is good to see that the Opposition is in support of the bill.

I say to the Committee that the law on the proceeds of crime has been seen as a bit of a poor cousin in the criminal law arena. It should not have been; it is vitally important that we do more than send a message but actually make sure that crime does not pay. That is vital in the war on gangs and P. As I said at the first reading of this bill, it is quite clear to me—and a case in Mount Maunganui in my home electorate made this clear, when police swooped in over Christmas time and seized multimillion dollars worth of ingredients for the illicit manufacture of P—that the money that can be made in crime really does go not just into one or two million dollars but into tens of million dollars. As I said, I agree with the Hon Clayton Cosgrove that as the criminals and the gangs have become more sophisticated, then so must we. This bill here does that. It hurts the gangs to take their assets—not just to lock the gang members up but to make sure their Harley Davidsons, their motorbikes, and so on are taken. This bill goes towards that.

What does this bill and Part 1 achieve? As the Hon Clayton Cosgrove said, it repeals, effectively, parts of the confiscation regime we had previously, whereby it was only when we had the owner convicted that we would see the proceeds of crime seized.

  • Progress reported.
  • Report adopted.