Customs and Excise Bill (No 2) First Reading


The Green Party will be supporting the referral of the Customs and Excise Amendment Bill (No 2) to a select committee. The bill has some good things in it, and some other things that the select committee will have to scrutinise a bit more fully — for example, the extra powers that are being granted to customs officers to detain people, and also the exchange of information between the Customs Service database and the Ministry of Social Development’s database.

I want to talk particularly about a good extension of powers here: the ones that the Minister mentioned to control the export of strategic goods, or goods for strategic uses. As the Minister said, we have been a little behind some other countries in controlling the export of strategic goods, and it is good that the bill contains a definition of “strategic use”. It goes from the lowest level of goods that may be civilian in their use but have military applications, up a step to those that have an intended military use, and up to a higher — and more dangerous — level of goods being used in the development, production, or deployment of biological, chemical or nuclear weapons. Of course, the legislation ties in with our New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987 in prohibiting the export of strategic goods related to nuclear weapons.

I want to particularly talk about the debate that has happened this year over Rakon’s export of crystal oscillators that have military uses. Those crystal oscillators are in shells and missiles and are tied in with Global Positioning System (GPS) guidance devices; they are part of those guidance devices. Under the definition of “strategic use” in this bill, we could control and prevent the export of some of those crystal oscillators, which are not going to be used for civilian purposes but for military purposes. It means that we would not have another situation like the one we had before, where the Government apologised for Rakon’s export of those goods.

On 15 June Phil Goff issued a press statement that the Government was “satisfied that based on information Rakon has provided, the crystal oscillators Rakon exports are not covered by the Strategic Goods List. They therefore do not require an export permit.” He said: “For electronic components of guidance and navigation equipment, such as crystal oscillators, to be covered by the Strategic Goods List, they must be ‘specially designed’ for military use. This means that they have unique properties distinguishing them for a predetermined military use.” Well, under the definition of “strategic use” in new section 56(2A) in clause 8 that is no longer the case, because paragraph (d) includes the words: “may have military applications”. As Minister Goff admitted at the time, the crystal oscillators are used for military as well as civilian purposes.

If we then go up a level of seriousness, in terms of strategic use, we find that is what is defined in paragraph (d) of that clause as something “intended for military use”, I think it is true that Rakon developed certain of its crystal oscillators to a military standard. As Rakon admitted in its own documents — emails that were reproduced in the New Zealand Herald a month or two ago — Rockwell Collins, a military subcontractor to the US Air Force, gave Rakon hundreds of thousands of dollars to develop G-shock hardened crystal oscillators. Clearly, they were for specific military use. The documents describe them as being guidance systems for smart shells for the United States military.

Then, if we go up the scale of strategic use, we see items that may be used in the development, production, or deployment of nuclear weapons. In Rakon’s internal documents, it admitted that under United States contracts it was developing nuclear-hardened crystal oscillators that had to have a specification to operate at a depth of 135 metres. The House may exercise its mind as to what sort of weaponry may have to operate at a depth of 135 metres, and the two things I can come up with are probably nuclear missiles in silos or nuclear missiles in a US nuclear submarine. If Rakon is developing crystal oscillators to those military specifications for use in actually launching a nuclear weapon, or even a weapon that is not nuclear-tipped — a weapon that is used in a nuclear exchange, perhaps to knock out nuclear weapons or missiles on the other side — then it would be contrary to this legislation that we are discussing today. So this is good legislation in that respect.

New section 56(2B) in clause 8 allows the Government to move against people who export strategic goods where that is contrary to New Zealand’s interests. That is a very good bit to put in the legislation, too. Clearly, if Rakon is exporting crystal oscillators produced to a specific military standard under US military contract, to be placed in US Air Force missiles or shells, and if those are then used — as they are likely to be — in bombing places like Fallujah or Ramadi in Iraq, given that our Government was against going into the Iraq war, then clearly the oscillators are being used in ways contrary to New Zealand’s interests. So the law we are talking about today is good in that respect. We can even update that problem. We read in the papers over the last day or so that the United States is resupplying Israel with more missiles and weaponry. It may be that some of Rakon’s crystal oscillators will soon rain down upon the people of Lebanon, via our export to the United States.

Under new section 56(2E) in clause 8, people are liable if they are reasonably aware of the uses of their exports. Rakon, unfortunately, engaged in a cover-up when the debate first started around its crystal oscillators last year. It did not tell the truth in relation to what was happening. When asked by the New Zealand Herald, Rakon said it “has not developed any technology specifically for the US military.”, and “No technology has been specifically developed by Rakon for use in smart bombs or missiles”. When asked whether the crystal oscillators could be used as such, the sales manager, Justin Maloney, said: “We don’t know for certain one way or the other.” That was a lie, as was exposed in the documents the New Zealand Herald put out earlier this year, with all the internal emails from Rakon in them. I think that under this legislation, certainly the Government could move more strongly against Rakon, in a way that it has not moved previously.

I will finish off by talking about the additional powers of the Customs Service to detain people for up to 24 hours. That provision should be scrutinised in the select committee. When detention concerns infectious diseases or breaches of the Biosecurity Act, it may be best not to let people just wander through the green exit, and to have some powers there. But the extent of those powers is a matter we will discuss in the committee.