News
Are new surveillance powers warranted?
First published in NZLawyer magazine, 13 November 2009.
Arising from recommendations of the Law Commission, the Search and Surveillance Bill 2009 (Bill) proposes a number of significant reforms to consolidate and harmonise existing search warrant powers for non-Police regulatory agencies including the Commerce Commission (the Commission). For example, the Bill standardises the procedures for applying for search warrants, the execution of search warrants, and the procedures for protecting privileged material. As an agency which currently has search warrant powers under sections 98A – 98F of the Commerce Act 1986 (the Act), the Commission would be affected by these changes.
The Bill also brings about two significant changes in respect of surveillance powers. First, it limits the ability to engage in "non-trespassory surveillance" (e.g., observing from the street) by requiring an agency to obtain a warrant to observe and record activity in certain circumstances, such as if it observes private activity within the yard of the property for more than three hours in a twenty-four hour period. Currently, such surveillance is only constrained by section 21 of the New Zealand Bill of Rights Act 1990 (Bill of Rights).
More controversially, it also confers the power to obtain a surveillance warrant allowing non-Police agencies to engage in "trespassory surveillance", such as breaking into private premises to install audio and visual surveillance devices. Currently, such powers are only available in respect of organised criminal enterprises, serious violent offending, drug offences, and terrorist offences. The Commission would receive such powers in relation to offences under the Act.
Clause 46 sets out two conditions for applying for a surveillance warrant. First, there must be reasonable grounds to believe that, "an offence has been committed, or is being committed, or will be committed in respect of which this Act or any relevant enactment authorises an enforcement officer to apply for a search warrant." Second, there must be reasonable grounds to believe that the surveillance will obtain evidential material in respect of the offence.
Under clause 50(3)(g), a surveillance warrant may specify that an enforcement officer "carrying out the activities authorised by the warrant" may, "using any force that is reasonable in the circumstances", "enter any premises, area, or vehicle specified in the warrant", "break open or interfere with any vehicle or other thing," or "temporarily remove any vehicle or other thing from any place where it is found and return it to that place."
Are these extended powers necessary and appropriate?
Opponents of the Bill have raised a number of concerns, including:
- The Law Commission has not explained satisfactorily why all of the agencies covered by the Bill require surveillance powers for the fulfilment of their statutory functions;
- The extended powers by their very nature erode the right of citizens to be free from unreasonable search and seizure under the Bill of Rights; and
- There is a risk that these intrusive powers will be used inappropriately.
Although the Act creates a number of criminal offences, they are largely procedural offences whose seriousness is not comparable to the crimes for which existing surveillance powers apply. For example, under section 87B, it is an offence to intentionally contravene price or quality regulations, which apply in certain industries regulated under Part 4 of the Act. Section 103 makes it an offence to, among other things, fail to comply with an information-gathering notice issued by the Commission or provide misleading information to the Commission.
It is also difficult to see why surveillance powers are required to detect breaches of such provisions – the absence of a clear rationale illustrates the concern expressed by the Law Society that the Bill is engaging in an inappropriate standardisation of powers.
The Law Commission itself observed that, "the Police themselves expressed reservations to us about the desirability of this, believing that the activity might become too widespread and uncontrolled."1 This concern may reflect the fact that non-Police agencies do not have the checks and balances that exist in the Police culture of supervision, training and discipline, which constrain the misuse of surveillance powers. The nature of the power is such that it should only be granted where there is sufficient justification and robust supervision and training to minimise misuse.
Relevance to potential future cartel offences
Currently, restrictive trade practices under Part 2 of the Commerce Act do not give rise to criminal liability. If, however, Parliament criminalises price-fixing, the power to obtain surveillance warrants under the Bill will extend to cartel investigations.
The United States and Canada have authorised their respective antitrust agencies to apply for wiretaps of suspected cartel participants because price-fixing in those jurisdictions is a criminal offence. In the United States, the Department of Justice's Antitrust Division has the power to apply for surveillance warrants in respect of suspected violations of the Sherman Act. These powers were strengthened by the USA PATRIOT Improvement and Reauthorization Act 2005 and signed into law in 2006. In Canada, the Competition Bureau has the power to apply for the interception of private communications under the Criminal Code in respect of certain offences under the Competition Act, which include conspiracy to lessen competition and bid-rigging. However, the authors understand that at least in respect of the USA, investigations rest with the FBI, a body having a long history of training and discipline.
Standards for obtaining surveillance warrants
Unlike the United States and Canadian statutes, however, clause 46 does not require an enforcement officer to satisfy the issuing officer (a Judge) that alternative and less intrusive investigative methods have been tried or would not be likely to succeed.
The New Zealand Court of Appeal has previously interpreted the Commission's authorisation to apply for a search warrant as requiring the Commission to demonstrate that less intrusive methods would be ineffective. In Tranz Rail Limited v Wellington District Court [2002] 3 NZLR 780, the Court of Appeal concluded that a search warrant obtained by the Commerce Commission was invalid on the basis that it was not "necessary" in terms of section 98A. One of the requirements for a search warrant to be "necessary" is that "there must be no other reasonable way of gaining access to the subject-matter of the search" (at 791).
While the Bill would maintain the requirement of necessity in respect of search warrants under section 98A(2) of the Commerce Act, there appears to be a lower standard for obtaining a surveillance warrant under clause 46. We do not believe that any sound reason has been advanced for adopting a lower standard. Further, as the Court noted in Tranz Rail, warrant authorisation provisions should be read consistently with the Bill of Rights, which protects the rights of corporate entities and their employees to be free from unreasonable search and seizure. We consider the Commission should continue to be required to establish that a search warrant is reasonably necessary in the circumstances, having regard to the possibility of less intrusive alternatives, and there should be a similar high standard to justify trespassory surveillance of either the business place or home.
In our view, this Bill should not be passed into law in its current form, and the decision of the Justice and Electoral Committee to allow more time for debate and consideration is welcome (the Committee's report is now due on 1 May 2010).
Ralph Simpson heads Bell Gully's litigation practice and Jesse Wilson is a litigation solicitor with the firm.
