Crime Prevention Unit

Organised Crime

 Office of the Minister of Justice
Office of the Minister of Police
Cabinet Business Committee

The Programme of Action for Organised Crime and the Organised Crime Strategy

Proposal

• Paper 1: Programme of Action for Organised Crime and the Organised Crime Strategy
• Paper 2: Establishment of the Organised Crime Agency and the Disestablishment of the Serious Fraud Office
• Paper 3: Reducing the Level and Impact of Organised Crime in New Zealand: Recommendations for Legislative Reform.

Background

• the development of a model for an organised crime agency
• options for legislative change and
• the development of an organised crime strategy.

Options for Legislative Change

5 The Programme of Action for Organised Crime combines the three streams of work. It incorporates the Organised Crime Strategy, the establishment of OFCANZ and options for legislative reform.

6 Earlier versions of these papers were submitted to CBC on 10 December 2007. Cabinet invited officials to submit revised papers [CBC Min (07) 26/1-3 refers] addressing the following matters:

• the approach to corporate fraud in the Programme of Action for Organised Crime and how that might be expressed in the Organised Crime Strategy;
• the nature of the powers proposed for the Serious Fraud Office in the new Organised Crime Agency, particularly regarding document production and compulsory examination, and how those powers could be ring fenced to preclude their unnecessary or inappropriate use by other members of the police;
• a comparison between the present arrangements and what is proposed for the new Organised Crime Agency;
• the experience of other similar jurisdictions in tackling organised crime and serious fraud;
• the experience and/or role the Police currently have in dealing with serious fraud.

Comment

The Organised Crime Strategy (Appendix A)

9 Responsibility for the strategic oversight will be provided by an inter agency Chief Executive Group chaired by the Secretary for Justice with the Police Commissioner as the deputy chair. The inter agency group will draw membership from a range of agencies who have a role in delivering the strategy and combating organised crime in New Zealand: these include: Ministry of Social Development, Department of Prime Minister and Cabinet, Department of Internal Affairs, Te Puni Kōkiri, Ministry of Pacific Island Affairs, Department of Corrections, New Zealand Customs Service, Department of Labour, Inland Revenue Department and the Ministries of Health and Fisheries.

10 The OCS is the first in an on-going cycle of strategies that will establish a cross-government approach to combat organised crime in New Zealand. The strategy outlines four strategic areas with specific initiatives to be achieved by June 2009. The strategic areas are Community, Prevention, Intelligence and Enforcement.

11 A range of government departments are undertaking the initiatives contained within the four objectives. The proposed establishment of OFCANZ is a specific initiative contained in the OCS.

12 The OCS provides the framework for all future government action to tackle organised crime. The focus of this work ranges from territorial gangs, through national organised crime groups to the trans-national level. The extent of organisation and sophistication of criminality in these groups varies considerably. At the lower end, sophistication is lower but scale and visible public impact is greater. At the upper end the covert nature of activity limits public awareness but the long term impact of offending behaviour may be more significant.

13 The establishment of the OCS and the on-going risk analysis to be carried out under OFCANZ will enable cross government agreement about the focus of attention and prioritisation of effort to different areas of organised criminality and to different types of response. Over time, the OCS is expected to grow in depth as each of the four objective areas is further developed.

14 All future action to manage organised crime groups and behaviours should be consistent with the OCS to ensure that effective prioritisation, resource allocation and coordination takes place on a cross government basis.

15 This first OCS extends to June 2009 to allow for the proposed establishment of OFCANZ and disestablishment of the SFO and the first year of OFCANZ operation. It also allows for further developmental work in the Community and Prevention areas. The OCS will thereafter be produced in three year cycles.

16 A report on the progress of the OCS will be provided to Cabinet in May 2009 and this report will include a proposed strategy for the 2009-2012 period. The report back date of May 2009 is prior to the completion of the strategy period but allows time to finalise the agreement of the proposed full term strategy to take effect from July 2009 to June 2012.

The Scope of the OCS and OFCANZ

18 As outlined in the OCS, organised crime in New Zealand involves large scale financial transactions in relation to drug trafficking, money laundering and other offences. The methamphetamine market alone is estimated at more than $1 Billion. Organised criminals also make significant use of mainstream commercial mechanisms and fraud methodologies. The more income generated through organised crime, the more likely that legitimate business enterprises and complex transactions will be established to launder the profits as well as to make legitimate investments with criminal profits. Therefore, the amalgamation into OFCANZ of the SFO skills and abilities in forensic accountancy and other transactional investigation will bring significant advantages in the successful prosecution of large scale organised crime.

19 This advantage can be achieved without loss of focus on serious or complex fraud by the establishment of a standing Serious Fraud Taskforce within OFCANZ. The investigation of serious or complex fraud will be enhanced by the functions of the SFO moving more firmly into the mainstream coalition of crime fighting agencies and by the use of additional Police investigative tools not currently available to the SFO.

20 The following diagram outlines the scope of the OCS and that proposed for OFCANZ. OFCANZ will have responsibility for aspects of the OCS in conjunction with its role in tackling serious and complex fraud currently within the parameters of the SFO. The OCS does not provide the work programme for OFCANZ, nor is OFCANZ responsible for delivering the entire OCS. Some of the OCS, particularly in the community and prevention areas, will involve only limited contribution from OFCANZ.

22 OFCANZ will have fraud responsibilities beyond its work in organised crime. However, the function of the OCS is to establish a whole of government response to organised crime, not to articulate the broader work programme of OFCANZ. This will be established through on-going work on the establishment of OFCANZ and its work programme, including how it will perform its responsibility for the investigation and prosecution of serious and complex fraud.

Community Empowerment

24 ‘Building Community Resilience and Empowerment through Engagement’ has been identified as a key objective of the OCS (refer page 4 of Appendix A, the OCS). Specific initiatives to achieve this goal have also been identified (refer page 9 of Appendix A, the OCS).

Overcoming Privacy Act Concerns

26 The multi-agency group established to investigate models for an organised crime agency identified that coordination and information sharing is often difficult due to an inconsistent application of the Privacy Act 1993, rather than inhibitions of the Act itself.

27 A key objective of the OCS will be to seek improvements to the gathering, secure sharing and effective use of information. A need has been identified for a more formal framework to achieve this. A specific initiative has been identified which involves the development of intelligence protocols to be led by OFCANZ (refer page 10 of Appendix A, the Organised Crime Strategy).

28 Cabinet has directed the Ministry of Justice and the Privacy Commissioner, following the passing of the Privacy Amendment Bill, to jointly develop guidelines for information sharing under the Privacy Act in consultation with the government agencies that are high users of personal information [POL Min (07) 13/12; CAB Min (07) 22/5]. The guidelines will assist public sector agencies to determine which information sharing provisions they should use in different situations thereby improving consistency of the Acts use. This work will provide a response to the second part of the Cabinet directive.

Paper 2: Establishment of an Organised Crime Agency and Disestablishment of the Serious Fraud Office

30 The paper proposes that the future organised crime agency located within Police be known as OFCANZ (Organised and Financial Crime Agency New Zealand). This paper outlines the links between organised crime and serious fraud and the proposed new powers required to deal with modern offending patterns. It then outlines how the agreed integration of the existing Serious Fraud Office (SFO) functions and resources into OFCANZ will maximise the efficiency of responses to both offence types.

31 Finally the paper establishes the role and function of OFCANZ and the mechanisms for its establishment. This latter aspect includes the establishment of interim powers to maintain the ability of OFCANZ to continue to effectively investigate serious or complex fraud in advance of the enactment of the search and surveillance legislation which will provide all of Police with new production and examination powers.

Paper 3: Recommendations for Legislative Reform

Consultation

Organised Crime Strategy

Financial implications

Publicity

Human rights

Legislative implications

Regulatory impact and business compliance cost statement

Gender implications

Disability perspective

Recommendations

1. agree the Organised Crime Strategy.
   
   
2. note that strategic oversight of the strategy will be provided by an inter agency Chief Executive Group chaired by the Secretary for Justice with the Police Commissioner as the deputy chair.
   
   
3. agree that the Organised Crime Strategy be made available to the public immediately on the Ministry of Justice and New Zealand Police websites.
   
   
4. agree that the Organised Crime Strategy provide the framework for all future government action to tackle organised criminal groups and behaviours in order to ensure appropriate prioritisation, resourcing and coordination.
   
   
5. invite the Ministers of Justice and Police to report back to the Cabinet Policy Committee by May 2009 with a progress report on the Organised Crime Strategy and a proposed Strategy for the 2009 to 2012 period.
   
   
6. note that paper 2 provides further information on the establishment of an organised crime agency and the disestablishment of the Serious Fraud Office.
   
   
7. note that paper 3 provides options for immediate legislative reform in relation to organised crime.

Hon Annette King
Minister of Justice
Minister of Police

Date signed:

Appendix A