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New Zealand Stumbles Towards UK-Style E-Commerce Legislation

Mary Swire, Tax-News.com, Hong Kong

17 November 2000


Ministers in the Cook Islands, New Zealand's very own backyard tax haven, were no doubt pleased to hear yesterday that the Kiwi government is moving closer towards UK-style RIP e-commerce legislation, which if enacted will drive many new e-commerce business offshore and into the arms of the waiting Cook islanders.

In New Zealand the e-commerce legislative agenda is being driven by concerns about hacking: the first proposed change is an amendment to New Zealand's Crimes Act, which would make it illegal to access a computer system without authorization. But the amendment would exempt New Zealand's law enforcement and security agencies, working with appropriate authority.

The amendment also extends the definition of "private communication" to include not only oral communication but also e-mail, faxes, and message pagers. The second phase of the changes will be amendments to the Telecommunications Act, expected to go before parliament next month. That proposal would require telecommunications network operators to ensure their networks are capable of being intercepted.

Introducing the amendment, Government minister Paul Swain said: 'We need this legislation to protect the privacy of law abiding New Zealand citizens. Just as it is not cool or clever for a criminal to break into someone's home or workplace, it is not cool or clever to break into some one's computer."

And he said the exemptions for law enforcement and security agencies were necessary so that all forms of private communication were on the same footing as phone calls. "We need to give the police and security agencies powers to go after criminals who are using new technology to further their criminal activity," Swain told parliament.

Opposition parties immediately said they would oppose any increase in official snooping powers, although they supported the criminilisation of hacking as such. And researcher Nick Hager, author of the 1996 book Secret Power about the existence of the Echelon surveillance network, writing in New Zealand's Sunday Star Times newspaper, said that the planned extensions to New Zealand law, when taken together, have the same effect as Britain's controversial Regulation of Investigatory Powers Act.

Hager's article suggests the new legislation would allow a permanent "interception interface" to be built into every Internet and phone company's system, which could be remotely controlled by intelligence and police agencies.

Officials at the Ministry of Economic Development say that the proposed changes to the Telecommunications Act are necessary because the police are unable to intercept calls on digital mobile networks and have pushed for the changes to require network operators to make their networks and any encrypted messages capable of interception. But Hager says this might mean new provisions to force people to hand over passwords and encryption keys.

New Zealand's independent Privacy Commissioner Bruce Slane, has serious concerns about the powers the proposed legislation could give police.

"I'm concerned that proposal should not establish search warrants as legal authority for remote access to computers ... a sort of 'police hacking' provision," says Slane. "I consider that the exception should be limited to having access to computers on premises which the police have entered pursuant to a search warrant."

"If the exemption were to enable the police to have access without ever having entered the premises, it would be an entirely new surreptitious means of carrying out investigations which would carry worrying privacy and accountability issues," Slane said.

Nicky Hager is sceptical that the Government will allow real debate. 'The trouble is that when the government has committed itself, internally before the issues are even made public it's much harder to make them change their minds. However, I don't think they have appreciated at all how big the public reaction may be,' he said.

For the minister Paul Swain, the choice is clear. 'If New Zealand is to be successful in the new economy, we have to have an environment where our law-abiding businesses and consumers can conduct their business with confidence that their privacy is being protected.' Well OK, Minister, that will be in the Cook Islands then, yes?

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