Brokering (Weapons and Related Items) Controls Bill

When we were last debating the Brokering (Weapons and Related Items) Controls Bill, the next call was to go to the Labour Party.

I rise to take a call in support of this legislation, the Brokering (Weapons and Related Items) Controls Bill, at first reading. I thank the Government for bringing this bill to the House. It attempts to plug a hole in our law, which is that there is currently no law governing the conduct of New Zealanders when it comes to the sale or the brokering of sale of certain weapons to overseas jurisdictions or people, even where those exports or those sales or the brokering of those sales are illegitimate.

The bill attempts to do this by introducing a requirement that anyone who is involved in this sort of trade has to be registered, and then it has various categories of goods that are specified as being controlled as being strategic goods. These are listed in a list of goods and classes of goods the exportation of which are going to be prohibited under section 56 of the Customs and Excise Act 1996 because they have or may have strategic use, and strategic use is defined in the Act.

It is quite a broad Act. It does not cover just the seller; it covers anyone who is involved in brokering activity, and that means those who arrange or facilitate or negotiate the transaction involving the international transfer of weapons or related items. It includes people who act as agents and includes people who do not just acquire those weapons in New Zealand but who acquire or store weapons in a place outside of New Zealand for the purpose of transferring those weapons to a person also outside New Zealand.

It takes some care to exclude ancillary services such as administrative services, customs broking, and financial services, so that those people do not have to be part of the registration system.

It appears a sensible piece of legislation. Some of the questions that we may have at select committee will include whether the classification of what is covered by this is appropriate. For example, when it talks about military end use it is including incorporation into military items that would fall within that specified category that I have already mentioned and, also, use, production, or testing of equipment and components for the development, production, or maintenance of military items, and unfinished products for the production of military items.

The legislation, I am sure, will be part of international efforts to try to limit the risk of movement of weapons to illegitimate end-users—that is what the explanatory note says—or undesirable destinations. As I said previously, anyone who wishes to engage in this brokering activity or sales activity has to register with the Secretary of Foreign Affairs and Trade and then for each activity that they are carrying out that may be legitimate, they have to obtain a permit. The Secretary of Foreign Affairs and Trade can only grant that permit if they are satisfied that the activity is consistent with New Zealand’s international obligations and would not prejudice the security, defence, or international relations of New Zealand.

It is slightly unusual in that this applies to activities outside of New Zealand even if they are not initiated within New Zealand, so it applies to the conduct of New Zealanders when they are in overseas countries rather than just in New Zealand. I am sure the select committee will want to have a look at that and how that fits within international law and New Zealand law.

I think that is probably all I need to say at this stage. We are supporting this to first reading and look forward to the report of the select committee.

I rise to take a short call this evening on the first reading of the Brokering (Weapons and Related Items) Controls Bill, and my contribution is going to continue in a similar vein to that of my colleague David Parker, who, essentially, talked to the rationale. It is very good to see that this already has the support of the Labour Opposition members, and I wait to hear their contributions. I see a thumbs up from my friend and colleague Barry Coates, which suggests that it could well be a reasonably uniformly supported piece of legislation, which would be nice.

The key purpose of this bill is to establish a regime to regulate the brokering of arms and military equipment by New Zealanders and New Zealand - based entities. As we have already heard, part of the importance of creating a regulatory regime like this in New Zealand is to ensure that arms and military equipment do not end up in the wrong hands. There is no particular suggestion that this is a huge pressure in a New Zealand context, but it is important that we play our part to ensure that, as signatories to the Arms Trade Treaty, we are seen to be doing as much as we can do in this space. We have had a sort of voluntary approach to date, and it is the Government’s view that that now needs to be augmented with a fleshed-out and enabled regulatory regime.

In terms of the brokering itself, brokering is where arms are transferred from one foreign country to another, and it is widely recognised, as we have heard already this evening, that the brokering of conventional arms can assist the movement of arms and military equipment to illegitimate users or undesirable locations. One of those locations that has had quite a lot of proven arms movement, which has created an enormous amount of death of destruction, is Iraq and Syria.

Both David Parker and I, and the Minister of Defence, Mark Mitchell, were up in that region only a couple of months ago and, firstly, saw the tremendous work that our New Zealand servicemen and servicewomen are doing up there as part of Operation Inherent Resolve, playing our part in terms of ensuring that the Iraqis are well trained in terms of taking the fight to the Islamic State of Iraq and Syria (ISIS).

Whilst I cannot be sure that arms had been illegally obtained, when you are up in that part of the world and you go through, as we did, the miles and miles of land that is within the Camp Taji set-up, and you see the equipment that has been used over the various Gulf wars stretching out in front of you as far as the eye can see, you certainly do get a small glimpse—I got a small glimpse—of the scale of this problem, the scale of, essentially, the amount of military hardware that is used in these conflict zones, and the very last thing you want is to have military hardware in that space that has turned up there illegally. So this is New Zealand’s small, but I think quite meaningful, effort to ensure that we and our New Zealanders and New Zealand businesses are following the appropriate approach.

In terms of the key provisions of this bill, no doubt we will explore these in great detail, those of us who are privileged enough to return to the 52nd Parliament and, indeed, be part of the Foreign Affairs, Defence and Trade Committee when it returns. We will step through the key provisions. As a highlight, the provisions outline the purpose of the bill, describing the nature of brokering in quite detailed terms; they describe the weapons and related items that this bill covers, specifically arms, military equipment, and civilian goods; and they talk around the conditions that can be placed on a registered broker and the permit system that underpins that, and also the conditions in terms of the importance of alignment with international obligation.

Of course if you have a regulatory regime that sets up some requirements for the permit holders, there also need to be consequences if there are breaches. So there is a specific clause, clause 10, which talks through, in again pretty significant detail, the offence provisions. They are actually quite significant. The penalty for the offence, in the case of the individual is a term of imprisonment not exceeding 5 years or a fine not exceeding $100,000—that is for an individual—and for a company, larger than that.

I think you can see that this is a framework that has been well considered. We are, obviously, applying international best practice. This is not a new model. We are taking what applies in other countries that have signed this arms treaty and already have this framework in place, and we are applying the New Zealand version of it. I look forward to the debate and discussion that will happen in the Foreign Affairs, Defence and Trade Committee if I am back and have involvement in that committee. I am sure the legislation will be a useful addition to demonstrating New Zealand’s commitment to this very important cause. Thank you.

Tēnā koe e Te Māngai o Te Whare. I am pleased to take a call on the Brokering (Weapons and Related Items) Controls Bill. I think that as New Zealanders we all feel proud that we like to be responsible global citizens and that we are good global citizens. There are lots of examples of how we do that. This particular bill is one that will address an issue and fix a situation where there is not so much regulation, and New Zealand entities and New Zealanders were able to carry out the role as broker for the sale of weapons, without too much regulation. So it is a good idea that we enhance our international reputation as good global citizens by enacting this bill into legislation.

I look forward to seeing submissions from different groups that are interested in this type of legislation. I would well imagine that the very strong peace movement within New Zealand would make submissions on a bill like this. I expect that those who are interested in disarmament—and as we all celebrated 30 years of nuclear-free New Zealand this year, I would say that a number of the people who have supported that legislation over many years will be interested in this particular bill.

I think it does our reputation no harm at all to enact a piece of legislation like this. Of course we need regulation. Of course we need to be thinking about the end-user of such products, how they are used in the world, and the harm that is caused by the use of weapons and related items. That is the kind of thing that I am most interested in, rather than the purpose that these weapons are manufactured for, which is pretty much for taking people’s lives. That would probably be done under the guise of protection more than their actual use, but I think we ought to be mindful that that is the purpose of these weapons. It is to take people’s lives, and we should always be conscious of that matter as a Parliament.

I think it is important that that voice is heard within the process of this Parliament, and so I highly recommend to the select committee that it take note of those submissions. All submissions are from interested parties, and I support my colleague David Parker on his contribution. We will be supporting this bill to select committee, and I commend it to the House. Kia ora.

It is a pleasure to speak on the Brokering (Weapons and Related Items) Controls Bill. It is quite an unusual thing. I take on board what was said before, which was that the purpose of these weapons is actually to kill people, but that is the ultimate end use, for which we hope they will never have to be used. The deterrent factor in weapons is not to be undervalued. Of course, I guess we have not a great example, I suppose, but from a deterrence point of view there are the nuclear weapons—vast arsenals of them—which have not been utilised at all since the Second World War. So deterrence does work, and I think that we have to be aware that it is a big, bad world out there, and we need to be a part of it.

Currently, we are operating under a voluntary regime, which is the registration scheme for our New Zealand - based brokers, but it has no legislative controls to actually regulate that process. We have to do that not only from a good process point of view but because we are part of the wider world and our allies and our trading partners expect better of us than that. So we do need to get our legislation up to ensure that these things are controlled in the manner that they would expect and that we, indeed, would expect as good global citizens. So I think it is a great step forward for us.

It is interesting in that it not only covers military equipment but it also covers civilian goods that may have a military end use, which are dual-use goods. If I have the privilege of serving the good people of Kaikōura in the next term and also have the other privilege of serving on the Foreign Affairs, Defence and Trade Committee, I would like to find out a lot more detail about some of the terms that are used in the bill in some of the clauses that were, in fact, alluded to by my colleague Todd Muller. I think those things will really be of great interest to us all. It is actually incumbent on us that we do a really good job of this, because it is so vital with these things that not only do we do the job well but we are seen to be doing it well. New Zealand entities will have to register with the Secretary of Foreign Affairs and Trade, and I think it is important that we get all those processes right. I am sure that is the right person.

All the other requirements in the bill—are they the right ones? Until we hear some evidence to back all of that up and we hear the pros and cons—which is really the working, day-to-day tools of the select committees in Parliament—we will make sure this bill is in a really good space. So, with that, I commend it to the House.

Tēnā koe e Te Māngai. It is with great pleasure that I rise to support the Brokering (Weapons and Related Items) Control Bill, and the pleasure is not only because the Green Party fully supports this bill but, for me, this is the culmination of actually having spent 20 years on this particular issue. In the mid-1990s I worked with other organisations on the forerunner of arms control around this, which was the European Union code of conduct, at a time when I was living overseas. That provided for basic controls over small arms, which were then, and are now, flooding into some of the poorest and most conflict-ridden parts of the world, where they cause unimaginable suffering and terror. The scale of small arms going into troubled parts of the world is absolutely staggering, and it is to the shame of Security Council members that, actually, most of the sales of small arms around the world come from the five permanent members of the Security Council.

This legislation follows on from the Arms Trade Treaty, and the Arms Trade Treaty was exceedingly important. It was championed by Oscar Arias, the former President of Costa Rica. New Zealand did not play a leading role in the negotiations, but it was amongst the first 50 States to ratify and, importantly, New Zealand did provide model law to Pacific Island countries, which enabled Pacific Island countries to quickly sign and ratify this agreement, which they had been strongly behind. Around that time there had been cases of small arms being trafficked through the Pacific without the understanding of Governments.

This issue of small arms became particularly relevant in New Zealand when we were subject to brokering an arms deal. A shell company—a company that was a company in name only—was formed to traffic arms between North Korea and Iran. It may seem rather bizarre, and, in fact, it took investigators a very long time to establish that the company involved was actually a New Zealand company. It was registered in Auckland. A labyrinth of thousands of Auckland-based companies were sifted through, and eventually they came to the address of 369 Queen Street, where this company was based.

This New Zealand company brokered 35 tonnes of weapons going between North Korea and Iran, and, really, that case provides an absolutely impeccable reason as to why this bill is urgently required. In a way, it is a shame that it has taken since that case happened in 2009 until now to have this legislation come through, because the Arms Trade Treaty, which was ratified in 2014, had actually talked about prohibitions on the brokering of small arms. So, certainly, it is about time this legislation came to Parliament.

In that particular case, the 35 tonnes of weapons included destructive weapons such as surface-to-air missiles, explosives, and rocket-propelled grenades, and, by the way, this weapons shipment was entirely in contravention of the UN arms embargo at the time. The shipment was intercepted in Thailand. Eventually, the director of the company was traced back and found to be a 28-year-old fast-food manager based in Auckland who had no idea what the company was that he was registered as a director of.

The registration system that led to the formation of this shell company, and many thousands of others, was initially defended by the Government, but subsequently—thankfully—there has been legislation passed to tighten up on shell companies. However, it took until the Panama Papers and their revelations to actually take the next stage in tightening up the regulations. I would say that this was a period of this Government when there was an extraordinary number of shady and crime-ridden syndicates operating through New Zealand shell companies. Thankfully, some of that has been tightened up, and recently we saw, finally, after a very, very long time, money-laundering provisions passed in this House, as well. It has taken far too long for this legislation to come through.

I pay tribute to the organisations that have worked on these brokering issues for a very, very long time. The organisation that I headed for 10 years, Oxfam New Zealand, was one of those that pressed firstly for the Arms Trade Treaty and also for the coverage of the brokering activities under this legislation. I commend its work and the work of many other organisations that have been working in a dedicated way for a long time to see this legislation finally come before the House.

There are two aspects of this legislation that we really want to see strengthened, and the first of those is that the register is able to be made public. There are provisions in the legislation that suggest that perhaps it will not be made public. From the Green Party’s perspective, we need transparency around this register. It does need to be made public. There may, of course, be some details that should remain commercially confidential, but we think that the onus should be on a public register and full transparency in that register, as with, we should say, other registers, such as the foreign trusts register, which is still not public, even after the Panama Papers revelations.

The second major thing that we would like to see introduced at the select committee is the extension of this bill from brokering to also cover the activity of mercenaries. Mercenaries are also an important element in destabilising legitimate Governments, and are increasingly a mechanism of choice for those who would foment illegal revolutions in different countries. We saw that when the Papua New Guinean (PNG) Government reacted to the fiasco in Bougainville, which had descended into a civil war over a goldmine. The PNG Government hired a British mercenary called Sandline International to come in and basically kill lots of people in Bougainville. Thankfully, there was a division within the Government and the mercenaries were stopped before they were able to commit what could have been atrocities against the local people of Bougainville, who were trying to struggle for a degree of autonomy.

I certainly think that this bill is worth supporting. I think it is one of the more important bills that we have had through this House. I commend the Government for bringing it to the House. I commend political parties for supporting it. We need this legislation to go through, and, more than that, we need it to be very well implemented and enforced in ways that will stop the misery that brokering brings to innocent civilians around the world who are victimised by the flood of small arms into the world’s conflict zones. We certainly will support this bill, and commend it to the House. Thank you.

Well, I have to say I will make no apology for using a full 10 minutes this evening, because New Zealand First is quite puzzled by the introduction of this bill in this, the dying throes of this term of Government, by this Government and its cling-ons. We could be prioritising biosecurity, which is being punctured daily, but no. We could be debating myrtle rust and kauri dieback disease, which threaten iconic species this country, but no. We could be asking what Parliament can do to support our exporters, but no, we are not doing that. We could be raising the Manawatū Gorge as a road of real significance, but we are not doing that. We could be focused on healthcare, especially in the regions, but we are not doing that, either. We could be zeroing in on education outcomes for the young, and particularly for those students out at Mauriceville School in the Wairarapa, or on ongoing resourcing scheme funding and how totally out of kilter that is, but no, we are not doing that. It seems that, in the dying throes of this Government’s tenure, the single-biggest issue facing New Zealand in the Parliament right now—and it just saddens me that every other party in this House seems to have just fallen over and swallowed this hook, line, and sinker—is about brokering of arms and military equipment.

There may be some in this House who are more peace-sensitive than other parties, and who love this opportunity to dance around the maypole singing “Kumbaya” and telling everyone what a wonderful job we are doing here tonight. They do not like the military, they do not like the defence industry, they do not like the trade in military equipment or any of that violent sort of stuff, and we have seen enough rhetoric out of certain parties in response to the Government’s approach to youth training using the military that it is not a surprise to us that everyone is holding hands and singing “Kumbaya” over this piece of legislation. We expect this bill, like the outer space one, will see bans raised in an attempt to strangle our boutique trade and military equipment industry. In saying this, New Zealand First will support it to select committee so we can have a sensible conversation, but there is no guarantee that we will support the legislation beyond that point.

We recognise and acknowledge the commitment New Zealand has given by signing—and, by crikey, this is a test of my pronunciation—the Wassenaar Arrangement, which came into effect 21 years ago. It was 21 years ago. But we have to point out that the United States regulated its arms brokering industry in the same year, that being 1996. So an agreement that was signed in 1996 has only just assumed a position of paramount importance in this Parliament and is being put through in the dying throes of this Government’s tenure. Given it is 2017, we wonder whether Gerry Brownlee watched Netflix and stumbled across Lord of War, which saw him wonder whether we had a Nicolas Cage - type person darting around selling arms in Africa. We assume that Mr Brownlee asked his officials about this issue, and they responded: “Yes, Minister. If you think it’s that bad, you need to watch War Dogs.” While in actor Jonah Hill, Minister Brownlee might well have seen a kindred spirit, he might well have resolved at that point to do something about it, and so this bill was born. Well, this bill is over late, it is over here, and, typically, from our look at it right now, it is over the top.

New Zealand First and exporters eagerly look forward to hearing from earnest National Party backbenchers and from the Foreign Affairs, Defence and Trade Committee saying that this meets important international obligations and that controlling the trade in arms is vital for our country’s reputation. But here is an inconvenient question for the Minister of Foreign Affairs and every other member who takes a call on this and speaks in favour: what exactly is the scale of the issue? We could argue that the speech previous to mine, by Barry Coates, actually was a good example of how people who trade illegally get caught. We could argue that in actual fact the one area of greyness that allowed that to happen has recently been highlighted in the Panama Papers, where people were able to use New Zealand, use its lax procedures to set up a company, set up a trust, and take advantage for their gain, using New Zealand’s name. Yet has this Government seriously sought to close those loopholes? No, it has not.

So it introduces this bill. This bill is one that demands primary legislation, as opposed to an amendment to something like the Customs and Excise Act, which already regulates the importation and export of arms—already. A simple adjustment to the Customs and Excise Act, done through a statutes amendment bill, would resolve this and negate the need for all this palaver—wasting the time of the House, ignoring the plight of every other New Zealander who cannot get a home and cannot get sufficient funding in their district health board. But oh, no, no, we are going to pass primary legislation, and every other party in the House appears suckered into it. Having done our research via the United States Department of State, which administers the United States’ International Traffic in Arms Regulations, we wonder why this sledgehammer approach has been taken. Is this just to pontificate on the international stage and make Mr Brownlee and Mr McCully look wonderful? Is this to make Mr English look wonderful on the international stage: “Oh, look what we’re doing about illegal arms trading.” Just amend the Customs and Excise Act—a very simple change to a clause or two. But no, no, we have this palaver and this performance.

Bearing in mind that the United States is the world’s largest arms exporter, exporting goods worth about 5,000 times more than what New Zealand exported in 2015, a country that boasts Boeing, Lockheed Martin, General Dynamics, and others—guess how many brokers it has? We are just trying to tease it out. How big is this problem? So in a country that manufactures arguably the most weapons in the world, how many dealers, exporters, brokers does it have? Is it 100,000? Is it 50,000? Could it be 25,000 in the whole of the United States of America? Maybe 10,000? Is it 5,000, or 2,000? Well, the answer is that the problem is so huge in the United States, or New Zealand, that in the United States it affects only 1,300 registered brokers.

💬 Clayton Mitchell: How many?

1,300. There are more people living in Eltham than there are registered arms brokers in the entire United States. Does that therefore mean the number here will be counted on fewer than the fingers of one hand? We would say, probably yes. So why, Minister, do we need a whole new Act when the Customs and Excise Act could have been amended to create a registry more in keeping with the likely numbers involved? But, typical of National, the Government against red tape and bureaucracy and legislation and regulation, this Government, as always, has managed to create a regulatory Mount Cook out of regulatory molehill.

The question that the Government needs to think about is this. If a ship-broker in Whangarei purchases a retired navy minesweeper from England and sells it to a millionaire in Florida for conversion into a gin palace, does that now mean that that broker in Whangarei has to be registered as an arms broker? Yes, it does. What is the sense in that? What is the purpose in that? There is no purpose. It makes no sense. What about someone who buys and sells military artefacts, collectable artefacts? So let us say I have a sword, there is a buyer in Australia who wants this, and I know a seller in America who needs that. So I arrange a deal between those two. Do I, as an antique arms collector, now have to register as an arms broker?

This legislation actually typifies this Government—the Government that came to power telling business that it was opposed to red tape and opposed to increased compliance costs. Here it is, once again, doing exactly that which it promised not to do. Our minds just boggle.

💬 Clayton Mitchell: Time for a change.

Time for a change.

Kumbaya, Mr Assistant Speaker, kumbaya. Previous members have traversed the contents of this bill and the purpose of this bill. I simply want to reiterate Labour’s support for passing legislation in this House that brings us into alignment with other nations. This particular legislation supports our commitments under the Arms Trade Treaty, which was ratified by New Zealand back in 2014. Members have raised some issues with the bill. I am sure they will be thoroughly invested by the select committee, and we are happy to see this bill progress to that stage.

Bill read a first time.

Bill referred to the Foreign Affairs, Defence and Trade Committee.

Sitting suspended from 9.15 p.m. to 9 a.m. (Wednesday)