The Government will make sweeping changes to laws governing spy agency GCSB that are likely to cement its ability to spy on New Zealanders after a report raised legal questions over dozens of operations in the past 10 years.
Yesterday's report by Cabinet Secretary Rebecca Kitteridge found the bureau may have acted unlawfully 88 times since 2003 when it monitored communications of New Zealanders on behalf of the domestic spy agency the Security Intelligence Service and police.
Ms Kitteridge's Government Communications and Security Bureau review was sparked by concerns in the months after the police raid on German internet tycoon Kim Dotcom that the bureau may have been spying illegally on New Zealand citizens and permanent residents such as Mr Dotcom.
Prime Minister John Key, who is responsible for both spy agencies, said he would announce details of law changes to "remedy the inadequacies of the GCSB Act" when he returned from China next week.
"It is absolutely critical the GCSB has a clear legal framework to operate within," he said.
Deputy Prime Minister Bill English said those legislative changes would be comprehensive, while Mr Key said they would form part of "proposals to significantly strengthen the oversight regime across the intelligence community".
Ms Kitteridge said she had found 88 instances where the spy agency's surveillance may have been illegal. All of those instances related to work done by the bureau for the SIS and police.
While the GCSB is forbidden by law to intercept New Zealanders' communications, it was a longstanding and widely held belief in the bureau that it could do that under warrants obtained by the SIS and police.
Advice from Solicitor-General Mike Heron suggested the bureau was on shaky ground and there was "risk of an adverse outcome if a court were to consider the basis of that assistance".
Yesterday Barry Wilson of the Auckland Council for Civil Liberties said Ms Kitteridge's report raised questions about whether convictions that may have been achieved through use of information obtained by the GCSB on behalf of police or the SIS could be challenged.
But Mr Key said police had conducted a "thorough check of all their systems" and advised that "no arrest, prosecution or any other legal processes have occurred" as a result of the information supplied to the SIS by the GCSB.
He had asked Inspector-General of Intelligence and Security Paul Neazor to look into all 88 cases "to determine in each case whether or not GCSB has acted in compliance with the law" and to "determine whether any individuals have been adversely affected and, if so, what action he recommends be taken".
GCSB director Ian Fletcher has confirmed the bureau won't assist the SIS or police in matters involving New Zealand citizens or permanent residents until the legislation is changed.
Last night he told the Herald he would not reveal details of the cases identified in the report or when the cases occurred.
Labour Leader David Shearer said Ms Kitteridge's report added weight to his call for a thorough independent review of intelligence agencies to restore public confidence.
He said Mr Key's "failure of leadership" over the spy agencies had been exposed with his admission yesterday that he was briefed on the potential illegal surveillance of New Zealanders in July last year but took no action.
Reading of section crux of problems
Most of the problems with the GCSB's potentially unlawful spying discovered by Rebecca Kitteridge and a team of Crown Law lawyers involved the application of section 14 of the GCSB Act 2003.
That section forbids the bureau from intercepting communications of New Zealand citizens or permanent residents.
Ms Kitteridge found bureau personnel did not believe section 14 applied when the GCSB had been asked to assist the SIS or the police when those agencies were working under a warrant. The GCSB believed it was operating under the legal authority of those warrants.
Ms Kitteridge also noted the GCSB's understanding that it could legally provide "metadata", such as the information that appears on telephone bills, to the SIS or police because that data were not a "communication" as set out in section 14.
A legal opinion from Solicitor-General Mike Heron challenged those views.
But the fact the issues had not been identified since 2003 reinforced the point that interplay between the GCSB Act and SIS and police legislation "is not straightforward".
The upshot was "that the lawfulness of some of the GCSB's past assistance to domestic agencies is now called into question".