Brokering (Weapons and Related Items) Controls Bill

This is really the substantive part of the bill, so I’m sure a lot of my friends in the committee will be leaping to their feet to discuss this part as well. I want to focus in particular on the offence parts of the bill, and these are found in clause 9 and clause 9A as well. Clause 9A is of particular importance because clause 9A carves out some particular exceptions to the offences of brokering without a permit or without registration.

There are a couple of things really that I would put to the Minister in the chair, the Hon Tracey Martin. I’m really just alerting them because I think they’re probably dealt with satisfactorily, but I do think they are worthy of the attention of the House because of the questions of onus that arise. It’s really about burdens of proof and presumptions of innocence. So we have, for example, clause 9, which doesn’t apply to a person who carries out a brokering activity on behalf of the person’s employer but only if, in relation to that activity, the person has reasonable grounds to believe that the employer complies with clause 9. So we’ve got a question there of whether there is a positive belief. The question, I suppose, is: what if there is no belief whatsoever? What if they never even turned their mind to that—no idea, for example, of the illegality?

We, only moments ago, were speaking of dual-use goods—the fact that things as innocuous-looking as software can be a dual-use good, which in fact is regulated under this legislation. So that’s one question there: what amounts to reasonable grounds to believe? And, of course, earlier on in clause 9A, in fact, we’ve got dual-use goods, where the person “has taken reasonable steps to ensure that the dual-use goods will not be used for a prohibited use.”

Dual-use goods raise particular problems because so many of them—and I have not read the entire Strategic Goods List, but I did actually have a good look at it. Some things you would kind of know have a possible military application—like, for example, a gunsight might have an entirely non-military application, but, equally, we would expect to know. But when we’ve got things which are things like software or even defensive clothing—a Kevlar vest which might have a perfectly good security use for a security guard but is in fact regulated as a dual-use good—is it reasonable to expect someone to turn their mind to that question and take “reasonable steps to ensure”? So that’s the first thing I’d say about that.

The next thing is how those defensives work. So the question then becomes, if there has been a brokering in arms without a permit, what are the procedural steps? We then turn to clause 10, and we note that in clause 10(1A) it is presumed “in the absence of any evidence to the contrary, that an exception … does not apply.” So the onus actually falls on the defendant, the person who is accused, in proving that a defence does apply. I think probably the appropriate threshold is that they have to raise some evidence.

We’ve got this quite unusual, at least to the layperson, problem of a shifting onus, where the defendant has the onus to show some evidence, and then the prosecution has the onus of showing that the evidence doesn’t go far enough to establish the defence. In fact, only then do we shift on to the onus to prove the offence itself. So there are some questions that I would raise around, really, the criminal procedure around these quite unusual provisions, particularly because they are unexpected. There’s a real risk that people may find themselves being charged for trading in goods which they had no idea were in fact regulated. Thank you.

I’ll just articulate some information I have, in an attempt to assist the member Dr Duncan Webb. There seems to be quite a wide concern that people will be caught trading with items that would be considered dual-use goods without any knowledge. That seems to be what the major concern is.

Weapons, military equipment, and dual-use goods and technologies are already subject to export controls in New Zealand and elsewhere, under the four international export control regimes. So we believe it is reasonable to expect a person dealing with weapons, military equipment, or dual-use goods to know that it is a controlled activity, and that they should look into how to broker these goods lawfully.

The Ministry of Foreign Affairs and Trade (MFAT) will publish extensive guidance on its website for prospective brokers on New Zealand’s brokering regime. The guidance will include outlining the circumstances in which registration and permits are required, and where an exemption may apply. MFAT encourages all prospective brokers to first inquire with them to seek advice on the status of the goods they are intending to broker, and whether they may or are likely to fall within an exemption. I think the other thing to note—so the first thing is, if in doubt call MFAT and find out before somebody shows up at your door. I think that’s probably the first piece of advice.

With regard to offences under the bill, they are subject to the Attorney-General’s consent to ensure prosecutions are not brought lightly, particularly when they involve the exercise of extraterritorial jurisdiction. The bill also does allow for civil enforcement, recognising that some breaches will be minor, but again I would encourage—if in doubt, check it out; give MFAT a ring.

Tēnā koe e Te Māngai o Te Whare. I’d like to contribute a kōrero that’s based on some of the information that the Minister in the chair, the Hon Tracey Martin, has contributed tonight, and I want to thank her as well for her constructive engagement in this process. It really is about the Strategic Goods List, that I did find on the Ministry of Foreign Affairs and Trade’s website, and the definition of “dual-use”. Essentially, this part is dealing with dual-use goods. If you’re brokering, you need to be registered and you get a permit. If you’re engaged in brokering dual-use goods that are not being used for military purposes—and I guess that’s the caveat—you don’t need to register and you don’t need a permit.

But you actually need to understand what dual-use goods are. So, by definition, they’re goods and technology developed for commercial purposes but which may be used either as military components or for the development or production of military systems or weapons of mass destruction. Herein lies some really interesting distinctions, because included in that are such things as technology. So it’s specific information or software necessary for the development, production, or use of a product. This information takes the form of technological data or technological assistance. It can be instructions, skills, training, working knowledge, consulting services, the transfer of technological data that may be blueprints, plans, diagrams, models, frameworks, tables, engineering designs, specs, and those sorts of things.

Herein lies, I guess, the challenge of this bill. What we’re essentially instituting in Part 2 of this piece of legislation, as my colleague Duncan Webb highlighted, is an exception, and we particularly focused on staff—you know, employees working for somebody in a factory, in a warehouse—and how would they know? I think that whole question of “how would they know?” is really important.

But I guess herein lies why clause 4(3)(b) is really important, and the gazetting of that Strategic Goods List, and ensuring actually that employees have access to information that ensures they understand the industry that they’re involved in and, I guess, the technology or the goods that they are handling on a day-to-day basis. It also—and I’d love the Minister to elaborate fully—is relevant to clause 18A, which is actually about brokers providing an annual report to the secretary.

The reason that we’re wanting that form of transparency is because if you are a broker, we want to actually know where those goods are going. It’s in the process of understanding where those goods are going that, actually, you possibly can make a determination about what the use of those dual-use goods is or the use of, I guess, the military goods and technology—what they will be used for.

So I’m really interested in the Minister’s perspective. Each of these parts isn’t discrete; they’re actually all interrelated. Everything in this bill fits together, and, I think, in a really nice way.

I would like some clarification, I do have to say, in terms of the offences—where did the fines come from? Where did the $100,000 for individuals and the $1 million in any other case come from? I mean, obviously that’s a deterrent, and what we’re trying to do is to ensure that people who are engaged in activities, either brokering or dual-use technology or goods, actually understand that this sector and the industry that they’re choosing to be part of is one that we must be vigilant about. We actually have to ensure that the Arms Trade Treaty isn’t being compromised by people who choose to engage in these activities.

What we also know is this isn’t just a theoretical exercise, from our perspective. There have been occasions and instances where people have tried to sell and to transfer the goods that this bill is talking about. So it would be really good to hear from the Minister about how this whole package is seen as the best deterrent for people who want to trade and to use dual-use goods in a negative way, and how this is going to stop that behaviour.

Just to answer a couple of questions that are still unanswered, with regard to a previous speaker questioning how there would be the enforcement of the bill. In the case of a clear breach, New Zealand would gather evidence in the usual way, utilising mutual legal assistance arrangements with other countries and wide law-enforcement relationships, including Interpol, to establish a case.

I think you would find that if there was a major incident, a terrorism incident, there is a lot of investigation and a lot of tracking back that goes on. I think people probably underestimate the high skill level that New Zealand has in participating to ensure that we are safe and that our world is as safe as we can possibly make it. So that answers that question.

With regard to safeguards so that somebody—an employee working in a warehouse—cannot be captured by this piece of legislation, the bill includes a number of safeguards to ensure that only appropriate brokering activity is captured, and that the Ministry of Foreign Affairs and Trade has a wide range of tools to address breaches of the Act. The bill’s focus is on core brokering activities and does not include services that are merely ancillary. For example, a person who acts as an agent or intermediary person for persons involved in a brokering transaction is captured; a person who merely provides administrative, customs brokering, or financial services in relation to brokering transactions is not covered. Somebody, I would assume, who is in a warehouse and is packing things—single items or whatever—and is not in a level of decision making or at the level that they could have some form of knowledge of the final end use of those items would not be covered under this legislation.

There are a number of exemptions to the registration and permit requirements. A person who brokers dual-use goods is exempt unless the dual-use goods are intended for a prohibited use in the bill, which is the use in weapons of mass destruction programmes or military end use. The prospective broker must undertake due diligence. I think therein lies the key: the prospective broker must undertake due diligence to ensure that the intended end use of the goods will not be used for prohibited purposes.

The onus lies on us all to keep the world a safe place. That means the onus lies on those who are selling; therefore, it is their business to know where their goods are going. So, no, we certainly won’t be whipping out there and arresting any store people, but if somebody knows that they are taking part in this, then we have the tools by which we will make sure they stop it.

Thank you, Madam Chair. I talk delicately when I look at this bill because it wasn’t too far ago, in my own electorate, in the Waiariki electorate, that some people were accused of having weapons up in the hills of the Ureweras. When I look through this and I look at some of the penalties and some of the regulations that are in place, I personally think it’s a really good thing.

There are a couple of things—a few points—that I’d just like to get a bit of clarification about from the Minister in the chair, Tracey Martin, while we’ve got the opportunity. First of all is just about the situation having the Ministry of Foreign Affairs and Trade assessing the applications. I think that New Zealanders will be happy to hear that there are some strong safeguards in place. I think the term “fit and proper person” is very good and very telling. I’m happy that there will be people there assessing whether or not people are fit and proper people.

The point that was made was about using the strategic goods criteria to assess applications, and I was just wondering, from the Minister, if she could just talk a bit more about what that criteria entailed. I knew that the refusal of an application, as it reads, is if the person that was applying was, in fact, going to somehow breach New Zealand’s obligations under the UN Security Council resolutions—also, any of New Zealand’s other international obligations as well—and, obviously, a person can be refused if the goods are going to be used in the commission of genocide, crimes against humanity, or war crimes. So I think they’re all very fair. I’m just keen to learn a bit more about those criteria, and also the other international export control regimes—just a little bit of information about them. I know that there are only four of them, but I just wondered whether or not the Minister could just give us a brief rundown on those four export control regimes that New Zealand participates in, if there’s a possibility.

I’m also just wanting to take a little step back and have the general conversation about how much of an issue weapons brokering really is in New Zealand. I’d never currently entertained the thought that there are people sitting in offices around New Zealand that are in this area. As I understand it, there are 11, I think, and of that only a small part of them are quite active. I just wanted to understand—and I think also for the people out there that are listening to this or watching this online—whether or not New Zealand is a big player in this game or a small player, whether or not we are potentially going to be bombarded with applications from people that decide that weapons brokering is the business that they want to get into.

💬 Simon O’Connor: That’s a good pun.

So, a wee bit more—what’s that?

💬 Simon O’Connor: “Bombarded”—that’s a good pun.

“Bombarded”. Thank you. I’ll take that pun. And also, I guess a key part of this legislation is just making sure—

I’m sorry to interrupt the member. The time has come for me to report progress.

House resumed.

The Chairperson reported progress on the Brokering (Weapons and Related Items) Controls Bill, and no progress on the Families Commission Act Repeal Bill.

Report adopted.

The House adjourned at 9.56 p.m.