Table of Contents

OUTCOME STATEMENTS

Primary Outcomes

The Service has two primary Outcomes:

New Zealand’s interests are protected from acts of terrorism, espionage, sabotage and subversion; and
New Zealand’s international wellbeing and economic wellbeing are advanced and protected from foreign threats.

The following Intermediate Outcomes contribute to the Service’s achievement of the two Primary Outcomes.

Intermediate Outcome 1A:

Threats to New Zealand Interests from acts of terrorism, espionage, sabotage and subversion are identified and frustrated

The aim of the Service’s counter terrorism effort is that New Zealand is neither the victim nor the source of an act of terrorism, and plays an appropriate role in international efforts to combat terrorism. The Service does this by monitoring - focussing on the analysis, assessment, targeting, collection and intelligence dissemination - both the environment and individuals with links to terrorists and/or terrorist organisations and their activities. The Service also investigates the process of radicalisation.

Counter Espionage

The Service is the only organisation in New Zealand undertaking counter espionage work and attempting to disrupt the work of hostile foreign intelligence services. Work undertaken by the Service during this year has resulted in advice to Government on espionage threats to New Zealand posed by hostile intelligence services, and disruption of these threats.

Combined Threat Assessment Group (CTAG)

The Combined Threat Assessment Group (CTAG) is hosted by the Service. The group comprises staff seconded from the Service, New Zealand Police, New Zealand Defence Force (NZDF), Government Communications Security Bureau (GCSB), New Zealand Customs and Maritime New Zealand. CTAG is tasked with providing assessments on terrorist or criminal threats of physical harm to New Zealand and New Zealand interests at home or overseas, based on all sources of information and intelligence available to the New Zealand Government. During the year CTAG produced 212 reports on a variety of threat related issues. CTAG continues to monitor the domestic and international threat environments and reports any changes detected.

Intermediate Outcome 1B:

New Zealand’s classified information and assets are protected

Personnel Security Advice (Vetting)

The aim of the Service’s personnel security advice (vetting) is to help protect the Government’s classified information and assets by providing recommendations on candidates’ security trustworthiness. It does this by ensuring through a rigorous vetting process that the Chief Executives of government agencies may make informed decisions about the suitability of a candidate for a security clearance.

Physical Security Advice

The Service provides physical security advice to government departments and agencies on measures required for the protection of classified material, personnel and physical assets.

The aim of this group is to help protect the Government’s classified information and assets, national economic wellbeing and national infrastructure by developing an awareness of protective security and its application, amongst government agencies and, where appropriate, other public and private organisations.

Intermediate Outcome 2A:

Government decision makers are better informed through foreign intelligence

Foreign Intelligence

Since the last Annual Report, the Service has been working to build its capacity and capability to deliver timely and actionable Foreign Intelligence reports to the New Zealand Government, customers and stakeholders in the wider New Zealand Intelligence Community (NZIC), as well as other government entities and agencies.

Intermediate Outcome 2B:

Foreign threats to security are identified and frustrated

Counter Proliferation

The Counter Proliferation Joint Section (CPJS) continues to be the vehicle for development of counter proliferation (CP) policy, coordination and operations. The Service has initiated, and managed, a range of significant operational work relating to CP activities in New Zealand and internationally. This operational work, as well as the Counter Proliferation Reports (CPRs) provided to Government, outreach activities, and involvement in policy activity with other government departments, contributes directly to advancing New Zealand’s awareness of proliferation.

CORPORATE

Finance and Planning

Financial Management

A project is underway to purchase a modern integrated financial management system. This system will not arrive until the new financial year, but will make a significant difference to the Service’s ability to carry out quality financial management and monitoring.

Facilities

Accommodation

Work was completed on the new purpose built Defence House on Aitken Street in March 2007, with staff moving in on 10 March 2007.

Human Resources

Service Structure and Staffing

Over the year, the Service’s staffing increased from 150 to 183 as at 30 June 2007.

As the Service has expanded better Human Resource processes have been achieved by recruiting an organisational capability specialist. In addition, increased emphasis is being placed on more professional training of staff.

Staff recruitment continues to be an issue in a tight labour market however this is offset, in part, by low attrition rates.

Organisational Change

The Service is currently engaged in a major organisation development process. Senior managers have redefined the Mission and Vision and, using achievement of these as the goal, have set about realigning the Service functions to better reflect business requirements.

The need to realign the organisation has been apparent for some time as rapid growth has seen the Service move from being a small organisation to one that is now medium sized. This realignment seeks to improve lines of accountability, build in resilience (making for a more flexible organisation) and sharpen processes to better enable the provision of information to Government.

Recruitment and Capability

The Service is building its capability and this includes additional IT capability. The Service will also be recruiting for a number of senior appointments to increase the strength of the executive team.

Equal Employment Opportunities

The Service demonstrates its commitment to being an equal opportunity employer through several avenues:

Staff ratio

a very close ratio between male and female employees;
two of the Service’s top four positions were filled by women as at 30 June 07; and
applications for positions in the Service are open to any New Zealand citizen who can satisfy the security clearance requirements.

Information Management

Information Technology

The Service planning is taking account of the exponential growth in the amount of electronic information being gathered by the global intelligence community, and the higher expectations placed on intelligence agencies.

Upgrading of the infrastructure and network equipment has continued to improve the speed of response and the range of applications, while maintaining appropriate levels of security for accreditation purposes.

Open Source Centre

The move to the new building has enabled the Service Library to again operate from a single site, and be reconfigured as an “Open Source” information centre. This recognises the value of unclassified sources of information and is designed to meet current research and analysis needs. This development has required significant investment in electronic resources including database, news-wire and periodical subscriptions, and the electronic delivery of information.

Legal Matters

The Service’s legal team provides advice on legal and statutory matters.

During the year the team provided advice on the application and interpretation of the New Zealand Security Intelligence Act 1969 and other relevant legislation.

Official Information Act and Privacy Requests

In the period under review 15 applications for information were considered under either the Official Information Act 1982 (five requests) or the Privacy Act 1993 (ten requests). Because the Service is obliged to safeguard security and have regard for privacy, it is not always possible to meet such requests. Those denied access to information have the right to appeal to the Ombudsmen or the Privacy Commissioner.

In one case an Official Information Act request for biographical information could not be met. All the other requests were able to be met either by the release of information or, in a few instances, referral to a more appropriate agency. No complaints were made to the Ombudsmen or Privacy Commissioner in the review period. One outstanding complaint to the Privacy Commissioner was resolved with the release by the Service of a brief account of the information held, and its significance.

An outstanding complaint with the Office of the Ombudsmen concerns Service records relating to Dr W B Sutch. The question of releasing those records has been the subject of discussions with the Office of the Ombudsmen and the Privacy Commissioner. Interest in the Sutch case was revived by the publication in 2006 of a book on the subject. This was written, against the express wishes of the Service, by a former staff member who received no official assistance with his research and was not given access to any restricted Service information.

Parliamentary Questions

Thirty Parliamentary Questions were addressed to the Minister in Charge of the Service, with most relating to the Zaoui hearing. A further twelve Parliamentary Questions were addressed to the Minister in Charge of the Service, including a number that were generic questions of all Ministries, related to the administrative functioning of the Service.

Legislation and Treaties

There have been no amendments to the New Zealand Security Intelligence Service Act 1969 in the current year. Nor have there been any consequential amendments made by amendments to other Acts. There have been no other significant legislative amendments during the past year that have the potential to affect the Service.

The Service was consulted on a number of proposed amendments to Acts, where this was relevant to security. These included proposed amendments to the Civil Aviation Act 1990, the Births, Deaths and Marriages Registration Act 1995, the Terrorism Suppression Act 2002, the Transport (Vehicle and Driver Registration and Licensing) Act 1986, the Protected Disclosures Act 2000, and the Immigration Act 1987.

Oversight and Review

Intelligence and Security Committee of Parliament (ISC)

The Intelligence and Security Committee is a statutory committee of Parliamentarians established by the Intelligence and Security Committee Act 1996. The functions of the Committee include examination of the policy, administration, and expenditure of the Service and GCSB, to receive any bill or other matter referred to them by the House of Representatives in relation to the Service or GCSB, and to receive and consider the annual reports of the Service and GCSB.

The Director of Security appeared before the Committee as part of consideration of the Service’s Annual Report, budgetary estimates, and the Statement of Intent.

Inspector-General of Intelligence and Security

The Service (in common with the GCSB) is subject to oversight by a retired High Court Judge, the Inspector-General of Intelligence and Security. The present Inspector-General is the Hon. Paul Neazor. The Inspector-General is responsible for the oversight and review of the Service, including ensuring that the Service actions comply with the law. He also investigates complaints about the Service.

The Service has continued to be involved in the Review of the Security Risk Certificate about Mr Ahmed Zaoui by the Inspector-General.

Apart from Zaoui related matters the Inspector-General carried out enquiries with the Service on six matters. Three of the matters related to vetting issues; and the Inspector-General recommended no alteration to the Service’s original response. Three other matters related to individuals who were unknown to the Service or were known only through their own approaches to the Service.

ORGANISATIONAL INFORMATION

The Service's head office is in Defence House, 2 Aitken Street, Wellington. There are regional offices in Auckland, Wellington and Christchurch.

All the offices collect information and undertake vetting duties. Research and analysis is a head office responsibility. Major administrative matters such as finance, staffing, and liaison with other government departments and agencies and Ministers are also handled by the Service's head office.

The Corporate governance is overseen at five levels:

Executive Group;
Leadership Team;
The Audit and Evaluation Committee;
Information Management Committee; and
The Staff Consultative Committee.

STATEMENT ON WARRANTS

In accordance with section 4K of the New Zealand Security Intelligence Service Act 1969 ("the Act"), I submit the following Statement on Warrants for the year ending 30 June 2007, the year under review.

This report includes information on domestic and foreign interception warrants issued under subsections (1) and (2) of section 4A and in force at any time during the year under review.

Domestic

During the year under review twenty (20) domestic interception warrants were in force. Of those, twelve (12) were issued during the year under review, and eight (8) were issued during the previous year but remained in force for some part of the year under review. Action was taken under all domestic warrants during the year under review. The average length of time for which those warrants were in force during the year under review was 142 days. There were no amendments under section 4D of the Act. The methods of interception and seizure used were listening devices and the copying of documents.

The information so obtained has materially contributed to the detection of activities prejudicial to security, or has produced foreign intelligence essential to security, that was not likely to have been obtained by other means.

Removal

No removal warrants were in force during the year under review.

Foreign

Foreign interception warrants were in force during the year under review.

[SIGNED]

Dr Warren Tucker
Director of Security

DATED at Wellington this 6th day of September 2007

I have reviewed all warrants in force during the period beginning 1 July 2006 and ending 30 June 2007 and certify that the information set out in the above Statement on Warrants is correct.

[SIGNED]

Rt Hon Helen Clark
Minister in Charge of the New Zealand Security Intelligence Service

DATED at Wellington this 6th day of September 2007