The Search and Surveillance Bill passed its third reading in Parliament last night, and is intended to give consistency to search, surveillance and seizure laws.

But Labour lost its battle to have the powers of the Serious Fraud Office included in the law and to have journalists exempted from powers that could compel them to reveal their sources.

It voted against it with the Greens, New Zealand First, Maori Party and Mana.

It said the SFO routinely used its internal powers compelling people to answer questions (examination orders) and compelling evidence to be produced (production orders) - such as demanding that the National Business Review hand over its material on South Canterbury Finance.


Labour believed it should be brought under the regime in the bill that required warrants before exercising such powers.

Justice Minister Judith Collins said the SFO believed "ad hoc changes" to its powers could have an adverse impact on its investigations.

"This is not desirable at a time when the SFO is investigating fraud in the collapse of several financial companies."

She said the act achieved "the right balance between the need for effective and modern search and surveillance powers and protecting the rights of citizens".

The production order regime formalised a common police practice of executing search warrants against people who were willing to assist. It avoided the need for police to enter the premises and to disrupt businesses or occupiers.

A new declaratory order regime recognised that criminals were finding new ways to evade detection. It would allow enforcement officers to ask the court to test a new technique or device or activity for its reasonableness before using it to investigate criminal activity.

She said journalists presented with an examination order or production order could refuse to answer questions or produce documents that would reveal the identity of their source.

In such cases where privilege was claimed and disputed by the enforcement office, the information or document could not be viewed by the officer until a High Court judge had decided that privilege should not apply.

Mana leader Hone Harawira said the bill was draconian and dangerous.

Instead of streamlining search and surveillance procedures it gave police powers to 70 Government agencies.