An independent watchdog is blasting the NZ Security Intelligence Service (NZSIS) for spying on individuals based on possible conclusions about them that might be reached, from information that might be acquired.

Inspector-General of Intelligence and Security Brendon Horsley, in a report released today, said the NZSIS use of class warrants instead of individual ones may have been unlawful, while avoiding external oversight.

This had opened the door to an “intolerably imprecise basis” on which individuals could be spied on, though he added that he wasn’t necessarily saying the NZSIS was targeting anyone inappropriately.

The NZSIS has responded, saying it would be inappropriate not to seek to use the full suite of tools available to stop terrorist threats.

A class warrant needs to be externally approved but once that is done, the NZSIS can include a person under that class and then start spying on them with the “most intrusive techniques”, Horsley said.

“Under these warrants, individuals can come under maximum surveillance without anyone outside the NZSIS having seen the case for it.”

Inspector-General of Intelligence and Security Brendan Horsley. Photo / RNZ

His report follows scrutiny of the spy agencies following their bosses’ appearance before parliament’s intelligence and security committee yesterday, and revelations of China-sponsored hacking into New Zealand parliamentary systems in 2021 - which China has denied.

Last week Horsley also slammed the Government Communications Security Bureau (GCSB) for hosting a foreign agency’s spy operation for seven years without telling its minister, and without proper auditing, monitoring, or visibility over whether it was contributing to military targeting.

In his latest report, Horsley looked into three NZSIS class warrants in 2022 and 2023, two of which “did not meet the legal tests for necessity and proportionality”.

One of the two was the first of its kind, agnostic of the type of terrorism or violent extremism. This meant that it was not concerned with specific ideologies, with decisions about who to spy on made by the NZSIS on a case-by-case basis.

Those decisions, for both warrants, were based on certain indicators including “conclusions the Service might reach, in respect of particular individuals, at some time in the term of the warrant, on the basis of information it might acquire,” Horsley said.

“Nor are they the only conclusions the Service might reach, about yet-to-be-identified future targets, as the list was ‘non-exhaustive’. Apparently the Service could reach other conclusions, beyond those signalled, that would lead it to assign people to a target class and commence operations against them.”

This was an “intolerably imprecise basis” on which to authorise covert activities “up to the maximum possible level of intrusion”.

“It appeared that any person of interest to the Service relating to the purpose of investigating terrorism and violent extremism, at any level from target discovery to maximum investigative effort, could fit under the current warrants, although I have not observed it used in this way,” Horsley said.

“This gave the Service, in my view, too wide a discretion to operate without any external scrutiny of the case against any particular target before activities are undertaken.”

Horsley said the NZSIS should have applied for individual warrants, which provide for better oversight of NZSIS activities, greater protection of individual rights, and a greater safeguard against agency overreach.

“I had found the first two warrants did not meet the requirements of the law. I also considered that, even if such a warrant was legally available, I would have thought it improper in the circumstances ... I had been unable to see any reason why a class warrant was necessary.”

NZSIS Director-General Andrew Hampton defended the use of class warrants, saying the cases that Horsley looked into related to a “very small number of individuals within a defined class”.

“It would be irresponsible of me, given the increasingly complex and dynamic threat environment that New Zealand faces, not to seek to use the full range of legislative tools available to the NZSIS,” Hampton said.

Government Communications Security Bureau director general Andrew Clark (left) and NZ Security Intelligence Service director general Andrew Hampton. Photo / Mark Mitchell.

The NZSIS sought Crown Law advice on the two warrants in question, which said that some aspects of the class definitions “were overly broad but some were sufficiently certain under the ISA (Intelligence and Secutiry Act)”.

“Crown Law considered that changes could be made to meet the tests under the ISA and to ensure the lawfulness of the warrants,” Horsley said.

The third class warrant Horsley looked at, in September 2023, was signed off by the then-Minister and the Chief Commissioner of Warrants - an improvement that followed Crown Law advice, and which “can reasonably be argued” to be lawful.

‘I questioned whether it was lawful’

Horsley said his findings did not invalidate the two warrants of concern, nor has he recommended that information obtained under them be destroyed.

“I remain concerned that it is not proper as a matter of policy for the Service to apply for such a warrant as I have been unable to see any reason why individual warrants cannot be obtained in the circumstances.

“My concerns rather go towards the integrity of the authorisation system in the ISA and ensuring proper use of intrusive powers.”

Horsley raised similar concerns over the NZSIS’s use of class warrants in his annual report, released at the end of last year.

“I reviewed in depth a particular NZSIS class warrant emblematic of my concern. I questioned whether it was lawful or proper,” Horsley said in that report.

Hampton responded then by giving the same line that he gave today in response to Horsley’s latest report, that it would be irresponsible of him not to use the full range of tools available.

He added that the NZSIS was “mindful” of Horsley’s observations, and had made changes to documentation when seeking class warrants. Horsley’s concerns were also taken into account in the issuing of the most recent class warrants, which must be approved by the overseeing minister and the Chief Commissioner of Intelligence Warrants.

Derek Cheng is a senior journalist who started at the Herald in 2004. He has worked several stints in the press gallery team and is a former deputy political editor.