Good afternoon. Thank you for your introduction and for the opportunity to speak to you all today.  As you know I have only been in the new job for a week.  The past week has been a whirlwind of briefings and meetings and I am gradually coming up to speed with my portfolios.  

I can tell you that it is a great honour to have been appointed as a member of John Key's Executive team.  Our Government is determined to grow the economy and create prosperity, security and opportunity for all New Zealanders - and I am looking forward to playing my part in the achievement of those goals.

So, speaking to you as the Associate Minister of Justice, I will today be focusing my attention on the Private Security Personnel and Private Investigators Bill.

First I would like to acknowledge all the work that the New Zealand Security Association has put into helping with the review of the existing legislation, and getting the Bill to where it is today.

It is generally acknowledged that the security industry is currently being regulated by outdated legislation that is overdue for replacement, namely the Private Investigators and Security Guards Act 1974.  

The new Bill was introduced into Parliament by the former administration to replace that Act.  This Government has taken the view that the Bill should be referred to a Select Committee, where it will be given detailed consideration and subjected to public scrutiny.  

I would like to restate that the Government is not necessarily committed to the Bill in its current form.  However, we were concerned that withdrawing the Bill for another review would slow down reform of the security industry.  We don't think that's desirable with major events like the 2011 Rugby World Cup coming up.  

Instead, we plan to use the Parliamentary process, and particularly the Select Committee process, to examine whether the Bill does what it needs to.

For those unaccustomed to the Select Committee process, most Bills that are introduced into Parliament are referred to a Select Committee after their first reading in the House.   (This Bill had its first reading in April.)

The Select Committee process enables a small group of MPs to examine a Bill in greater detail than is possible during debates in the House of Representatives.  

It also enables members of the public to have direct input into a Bill by making a submission to the Committee.

The Select Committee will usually call for submissions, as it has in this case.  Anyone can then provide a written submission setting out their own insights, observations and opinions.  They may also ask to appear before the Committee to give an oral submission.

Submissions on this particular Bill closed two weeks ago on 12 June. If you were unable to meet the closing date but still want to make a submission, you should call the main Parliament number and ask to speak to the Clerk of the Justice and Electoral Select Committee to see whether they will accept a late submission.  There is no guarantee that a late submission will be accepted.

The Committee will consider the matters raised in submissions and receive advice from government officials.  It will report back to the House with a recommendation on whether the Bill should proceed and whether any amendments are needed.  The Select Committee's role is then over.

Once the Bill is back in the House it will have its second reading.  The second reading offers an opportunity for the House to debate any changes recommended by the Select Committee.  

Then it will proceed to what is known as the Committee of the Whole stage.  The whole House will engage in detailed debate on each part of the Bill.  The Bill can also be amended at this stage.

The final parliamentary stage is the third reading.  The House will be asked to vote on whether the Bill, with any amendments made during the Committee of the Whole stage, should be enacted into law.  

If the majority of MPs vote in favour of the Bill, it will be referred to the Governor-General for Royal assent, then it becomes law!

If the Private Security Personnel and Private Investigators Bill is enacted, further work will follow to set up the new regulatory bodies and regulations that must be in place before the new system can actually commence.

The Select Committee working on this Bill has a particularly important job.  It will need to pay close attention to whether the Bill creates a proportionate, efficient and cost-effective regime, and one that properly responds to the risks it needs to address.

The security industry is a complex and important one.  It offers a wide range of services and there is a wide range of groups with competing interests in the industry.  

As you know, the industry consists of business people operating a mix of small and large firms.  Their clients, and the public, depend on security personnel for their own protection and the protection of their property.  

Security personnel protect properties, ensure public safety in licensed premises and at major sports events and concerts, and operate within workplaces to help businesses protect themselves from theft and fraud. The industry, its clients and the public have an interest in ensuring that security services are provided in a safe and professional manner.

However, the fact that an industry provides important services does not in itself justify legislative intervention to regulate that industry.

Poor quality services create risks for consumers in any industry, but the general law, including contract, negligence and privacy law, already imposes a number of obligations on service providers.

So, three key questions need to be asked when deciding whether the Government should intervene to regulate an industry.  

1.  Do the services in question carry a risk of significant harm?  Significant harm includes harm that is irreversible, such as permanent disability.    

2.  If there is a risk of significant harm, can that risk be adequately addressed by the market and the general law?  There is no need to intervene if the existing law already imposes sufficient obligations on members of the industry.

3.  If the existing restrictions aren't sufficient, how effective are alternative forms of intervention likely to be and how much will they cost?  The direct costs of operating any regulatory regime should be kept to the minimum necessary and there should be minimal negative impact on competition and consumer choice.

Sometimes the best option is not to regulate at all, although this is not the case for many of the services provided by the security industry.  

The reforms proposed in the Bill - in general - represent an increase in regulation from the 1974 Act.  

However, the proposed new regulatory regime is still much simpler than, for example, the regulatory regimes for lawyers, conveyancing practitioners and real estate agents.  Members of those industries must meet relatively high entry standards and must also comply with a number of specific standards when performing their services.  

In contrast, the main drive of the Private Security Personnel and Private Investigators Bill is to ensure that only suitable individuals enter the industry, although licensees and certificate holders will obviously still have to comply with their obligations under the general law when providing security services.

The Bill needs to be a proportionate response to the risks associated with the provision of security services and I am sure the Select Committee will look at whether the Bill meets that objective.  

I will now go through the key features of the Bill, focussing on the perceived problems in the current system and how the Bill proposes to address them.

• First, some people simply should not be involved in the industry, either in operating a security business or doing security work. In particular, a serious criminal conviction for violence or dishonesty indicates that the person is not suitable for security work, which involves a high level of trust.

It is in the interests of the public, clients, and anyone working in the security industry that such people are excluded from the industry.

Like the current Act, the Bill limits who may provide private security services.  It does that by requiring security personnel to hold a licence or certificate of approval, and sets criteria that must be met before they can obtain a licence or certificate.  Those criteria include screening for certain criminal convictions.

The Bill will also extend the obligation to hold a licence or certificate of approval to a new category of security personnel, ‘crowd controllers'.  Crowd controllers will include bouncers at bars.  

Crowd controllers will need a licence or certificate of approval to provide security services even if they are directly employed as "in-house" security by a bar or other business.  

This recognises the interaction between crowd controllers and the public, and the associated risk to the safety of the both the public and the crowd controller.

• Secondly, the Bill is intended to address the risks posed by untrained or inadequately trained staff. A lack of training may have severe, even catastrophic, consequences.

Last year, the Wellington Regional Coroner, Ian Smith, called for compulsory training following his investigation into the death of Cedric Joyce in Blenheim in 2005.  Mr Joyce died after he was restrained by bouncers outside a pub.   

It is inevitable that members of the industry will, from time to time, find themselves involved in situations that could result in a physical confrontation.  It is in the interests of the public, employers of security personnel and the security personnel themselves, that staff are properly equipped to deal with such situations.

The Bill allows regulations to be made requiring security personnel, or particular classes of security personnel, to undertake training.  If the Bill is enacted, decisions will have to be made about who needs to be trained and what type of training is appropriate.

• Thirdly, the Bill is intended to address the problem of unlicensed operators providing security services, and also that of staff undertaking security work without certificates of approval.

One way in which the Bill does that is by increasing the penalties for operating without a licence or certificate of approval.  The penalty for operating an unlicensed security business will go up from $2,000 to $40,000 for an individual and $60,000 for a company.  This should make operating without a licence less attractive.  

However, penalties are unlikely to be an effective deterrent unless sufficient priority is also given to enforcing them.  For this reason the Bill establishes a dedicated enforcement unit, the Complaints, Investigation and Prosecution Unit.  

Some changes proposed in the Bill should make the costs of regulation lower than they would otherwise be.  In particular, there is the proposed move to five-yearly re-licensing.  Licences and certificates of approval will only have to be renewed every five years, rather than annually as at present.

In each of the other four years, licensees, although not certificate holders, will still have to submit an annual return to the licensing authority.  The annual return will update their contact details and the details of any employees with certificates of approval.  

This will reduce the cost of the licensing process because the licensing authority must perform a number of checks every time a licence or certificate is renewed.  Reducing the cost of licensing will reduce the licence fee.  

Five-yearly licensing will also reduce the associated costs for the security industry, such as the cost of publicly advertising applications for renewals of a licence.  Under the current legislation, which requires licensees to renew their licences annually, licensees must advertise in newspapers every year.

Having annual returns will ensure that the licensing authority can maintain up-to-date records of licensees' contact details and whom they employ.  The Bill also allows the licensee to be charged a fee with their annual return.  This will allow the licence fees to be spread over the five-year period.

The Bill hasn't changed the restrictions on the way private investigators carry out their day-to-day work.  The provisions in the Bill are essentially unchanged from the corresponding provisions in the 1974 Act.  The only real change is to the amount of the maximum financial penalty for breaches.

I am aware that these provisions, and especially section 52 of the current Act, are rather contentious - particularly for private investigators.

Section 52 prohibits private investigators and their employees from taking photographs or making audio-recordings of a person without that person's consent.  This is intended to protect the privacy of the persons being investigated.  

This prohibition applies to most circumstances where the photography or audio-recording is for the private investigator's business.  It applies even in circumstances where an ordinary member of the public would be allowed to make such a recording without permission.

Private investigators perform a valuable role, particularly investigating fraud and other criminal offending, and the work of the courts and tribunals is made easier when they have access to good evidence.  While section 52 is designed to protect the privacy of individuals, it does make the job of private investigators more difficult.

The issues around section 52 were referred last year to the Law Commission to look at as part of its wider review of privacy law.

The Law Commission is expected to report back towards the end of this year, so hopefully its recommendations on section 52 will be available before the Bill is enacted.

Finally, there has been some comment on the indicative fees in the regulatory impact statement for the Bill.  It is important to emphasise that those fees are just that, indicative.  The actual fees cannot be set until the Bill is enacted.  

When they are set, they will need to comply with Treasury guidelines.  These guidelines dictate that fees cannot be set at a level higher than is necessary to recover costs, which in this case will include the costs of operating the regulatory regime, including the enforcement unit.

As I have outlined today, when the government intervenes to regulate an industry, we must take care to ensure that the level of regulation is proportionate to the risks that we are trying to mitigate.  As this Bill progresses through Parliament, we will be looking carefully at whether it strikes the right balance.  

Thank you very much for your time today.