Bill to stop foreign interference 'undermining core New Zealand interests' introduced to Parliament

A bill to plug gaps for stopping foreign interference has been introduced to Parliament.

The New Zealand Special Intelligence Service (NZSIS), in its latest threat assessment, said foreign interference threatens communities, academia, the media, businesses and government.

The bill, introduced by Minister of Justice Paul Goldsmith on Thursday, introduces new offences to criminalise covert, deceptive, corruptive or coercive activities on behalf of a foreign power to intentionally or recklessly harm the country.

Offences like blackmail, threatening behaviour, and misuse of computer systems already existed. But none of these were designed to address "foreign-state actors, and those who support them, who are undermining core New Zealand interests", said an explanatory note.

"Without this update to the criminal law, existing gaps and limitations will continue to be exploited, likely with increased frequency."

The bill sets out a code of the law on owing allegiance to the sovereign, to provide greater "prosecution certainty" for charging people.

Thirdly, it seeks to strengthen accountability for unauthorised disclosure of government information, such as making it more explicit that sharing military tactics and techniques is an offence.

"This combination of stronger sanctions and increased likelihood of detection and prosecution will protect New Zealand and our communities from foreign interference and deter future malign activity," the Justice Ministry said.

The penalties proposed were up to 14 years in prison.

The ministry favoured creating new offences because trying to modify existing ones might ensnare people it shouldn't, due to "overcriminalisation of legitimate conduct", said a regulatory impact statement (RIS).

"For example, if an individual sends an overseas business partner an email containing information on [the] software they developed which has both civilian and military applications, this could potentially fall under a 'reckless espionage' offence as the information holds the potential to prejudice New Zealand's security or defence and the sender was being reckless to this harm," said the 39-page RIS in May.

The bill creates new offences to distinguish how that activity departs from attempts at "legitimate influence".

The threat was growing, official reports state.

"Increasing strategic competition is leading some states to rely on a wide range of grey zone activities to create or exploit uncertainty and shape perceptions in other states.

"Such activities are designed to maintain a level of plausible deniability, hinder other states' abilities to react, and are not readily addressed by international law," said the RIS.

The New Zealand Chinese Association told Prime Minister Christopher Luxon in September that foreign interference was a growing concern.

Canberra in its last Budget put $78 million over the next four years into countering foreign interference and spying.

Here, the spy agencies had their budgets trimmed by a few million on May's Budget.

Australia brought in a raft of foreign interference laws in 2018, but an inquiry by a Senate committee last year warned the regime was inadequate, and substantial reforms have been launched.

Some commentators say the regime did nothing to spot potential foreign influence in the Voice referendum.

Here, the NZSIS threat assessment of foreign interference explicitly named China, saying it "carries out foreign interference activities against New Zealand's diverse Chinese communities", beofre adding "there are other states that undertake malicious activity here as well".

Beijing pushed back, criticising that report.

Another tool touted for several years as necessary against foreign interference - a beneficial ownership register - was not included by the government in changes to companies law, partly due to what ministers said was the small compliance costs it would put on businesses.

Officials have previously said such a register would identify the ultimate ownership and control of potential partners and reduce foreign interference risks.

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