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Intelligence services

by Peter Clayworth

Despite being a small, generally peaceful country, New Zealand has several security intelligence agencies. Much of their work is secret, and they have come under consistent criticism by civil liberties activists.


Intelligence services, 1800s to 1945

Intelligence is information, often secret, which is likely to be useful in dealing with potential enemies or rivals. All countries have some need to acquire intelligence and to keep their own secrets. Intelligence services are involved in the gathering and in the protection of information. They may spy on foreign countries and their agents or on local groups perceived to pose some threat to government or society.

The beginnings of intelligence gathering

From the earliest days of Māori settlement inter-tribal rivalry motivated tribes to spy on each other. After New Zealand became a British colony, in 1840, the government and military, and their Māori allies and enemies, all carried out intelligence operations. The British gathered information from a range of agents including government officials, interpreters and some missionaries. Missionary Carl Völkner’s spying was a key factor in his execution by followers of the Pai Mārire faith in 1865.

Detecting the German Pacific squadron

In September 1914 Clive Drummond was a radio operator at the ZLW Tinakori Hill Morse code station in Wellington. The radio operators were experienced men who could recognise the ‘signatures’ of individual Morse telegraphers. Drummond intercepted a coded message from the German Pacific cruiser squadron. Realising this particular signal was unusual, he sent it to Melbourne for decoding. As a result, the departure of troopships for the Middle East was delayed to ensure they were safe from German cruiser attack.

Intelligence in the First World War

During the First World War the New Zealand military had intelligence units at brigade and battalion level. Each battalion had a 30-man intelligence platoon.

Within New Zealand, Britains Royal Navy officially took over the Post Office’s Morse radio stations for the duration of the war. The network was used to listen for enemy electronic signals.

New Zealand in 1914 had no civilian intelligence service. A small number of Police detectives were designated to keep watch on the activities of enemy aliens (people originally from countries that New Zealand was at war with), peace activists and trade union leaders who were opposed to the war. They looked for any signs of spying, sabotage or sedition. Undercover detectives attended meetings such as British-Australian peace activist Adela Pankhurst’s anti-conscription speaking tour of 1916.

Monitoring ‘sedition’ between the wars

Political surveillance intensified in New Zealand after the First World War. Police monitored trade unionists and Irish nationalists, but from 1921 the newly formed Communist Party of New Zealand became the focus of surveillance. Police in plain clothes attended public meetings and a number of police agents infiltrated Communist Party branches.

Intelligent spies

In the Second World War the army set up a New Zealand Intelligence Corps and a number of field security sections, based in the Middle East, Europe, the Pacific, and in New Zealand itself. The senior intelligence officers attached to General Bernard Freyberg’s 2nd Division headquarters were of a particularly high calibre. They included brilliant linguist Paddy Costello, journalist Geoffrey Cox and writer Dan Davin. Later Costello, who was attached to the New Zealand embassy in Moscow, was subject to unproved allegations of spying for the Russians.

Intelligence services in the Second World War

During the Second World War the navy carried out signals intelligence work (gathering intelligence by the interception of communications) through their ‘Y’ organisation. This used the Post and Telegraph Department’s network of high-frequency direction-finding (H/F D/F) stations to monitor the movements of German and Japanese submarines and warships. With the entry of the USA into the war in December 1941, the New Zealand signals intelligence system became aligned to the American-run network.

The police continued their role of surveillance within New Zealand, watching those considered to be subversives, including ‘enemy aliens’ and pacifists. The Communist Party initially opposed what they called the ‘imperialist war’ and was among those targeted. With the German invasion of the Soviet Union in June 1941, the Communist Party shifted to ardent support for what they then called the ‘people’s war’.

In February 1941, at the suggestion of British military intelligence, New Zealand established the Security Intelligence Bureau (SIB). Modelled on the British MI5, the SIB was intended to manage internal security. Major Kenneth Folkes, a British army officer, was sent from the UK to take charge. The SIB lost all credibility in mid-1942, when convicted conman Sidney Gordon Ross persuaded Folkes that the Nazis were carrying out a sabotage and invasion plan in New Zealand. A police investigation proved that the plot was a fabrication, and Folkes was removed from his post. The police took over management of the SIB, which was disbanded at the war’s end.


The Cold War, 1945 to 1984

With the end of the Second World War, in a struggle for power and influence, the Soviet Union squared off against its former allies: the US, Britain and France. The USA, Britain, Canada, Australia and New Zealand agreed on cooperative intelligence operations, based around the UKUSA agreement of 1946. The need to be seen as a trustworthy Cold War ally was probably the main factor in New Zealand setting up its intelligence service.

The Police Special Branch

The Police Special Branch was established in December 1949. It concentrated on surveillance of the Communist Party and other ‘radicals’. The limitations of the Special Branch in a small society became clear during the 1951 waterfront industrial dispute. Undercover work was extremely difficult; all the branch detectives were well known to the unionists and their supporters.

In November 1956 the government set up an independent intelligence organisation – the New Zealand Security Service, with the Police Special Branch being disbanded by August 1957. This move followed a series of damning reports on the Special Branch from the controller general of police and from British and Australian security service officers. There were also concerns over corruption at top levels of the police. Security fears were heightened by a Soviet defector in Australia, Vladimir Petrov, who alleged that an informer was operating at a high level in the New Zealand government.

The SIS and the Cold War

The Security Service, in 1969 renamed the Security Intelligence Service (SIS), was closely modelled on the British MI5. It gathered intelligence to counter espionage, sabotage and subversion. Counter-espionage largely consisted of monitoring the Soviet and East European embassies. From 1973 the newly established Chinese embassy was added to the list. The SIS also carried out security checks on government personnel and on people entering the country.

Most SIS activities were carried out discreetly, but some cases received publicity. In 1962 the service exposed two Soviet diplomats who were expelled for attempting to obtain information through bribery. In 1974 William Sutch, an economist and former senior public servant, was arrested and charged with espionage, following an SIS investigation. He was suspected of passing intelligence to the Soviet Union, but was later acquitted. In 1980 an SIS investigation led to the expulsion of Soviet ambassador Vsevolod Sofinsky for allegedly passing money to the Socialist Unity Party.

Spying on ‘subversives’

Counter-subversion involved investigating communist, pro-Soviet or pro-Chinese groups, along with activist groups the SIS saw as being significantly influenced by members of subversive groups. These included groups such as Campaign against Foreign Control in New Zealand, the New Zealand China Friendship Society and HART (Halt All Racist Tours). In the late 1950s a Security Service agent infiltrated the William Morris Society, an arts and culture group. The SIS is reported to have recruited Victor Wilcox, former general secretary of the Communist Party, as an informant in the 1980s, despite his expulsion from the party in 1978. During the 1981 Springbok rugby tour the SIS supplied a list of eight ‘subversives’ and seven ‘radicals not positively known to be members of subversive groups’ to Prime Minister Robert Muldoon. He published the list in an attempt to discredit the protest movement.

Pie and Penthouse

The SIS suffered public embarrassment in December 1981 when one of its agents mislaid his briefcase. The case was found by a 10-year-old boy who gave it to his mother, Fran O’Sullivan, who happened to be a parliamentary journalist. Reports stated that among the items in the brief case were ‘three cold oval meat pies, two slices of cake, copies of the latest Listener and Penthouse, three identity cards, the man’s letter of appointment to the SIS … and pages from what appeared to be a notebook’.1

Public concerns

In the early years of the Cold War most New Zealanders believed intelligence services were acting in the nation’s interest. However, by the 1970s civil liberties groups and many citizens were questioning the need for spy agencies in an open society. Following the Sutch case and a scandal over leaked documents, the ombudsman investigated the SIS. His report, released in 1976, endorsed the need for the service, but recommended that it concentrate on counter-espionage rather than counter-subversion. The subsequent New Zealand Security Intelligence Service Amendment Bill 1977 aimed to expand the service’s powers to intercept communications, while revising their counter-terrorism role. Critics remained bitterly opposed to the SIS, launching large-scale protests during the bill’s passage through Parliament.

Signals intelligence: the GCSB

The New Zealand Combined Signals Organisation (NZCSO) was set up in 1955. It was responsible for all signals intelligence, including the navy’s Waiōuru listening station. From 1955 to 1974 New Zealand posted signals intelligence officers to a base in Singapore. They played a significant role providing information to the military during the Vietnam War.

In 1977 Prime Minister Robert Muldoon replaced the NZCSO with the Government Communications Security Bureau (GCSB), which was responsible for communications security, technical security and signals intelligence. New Zealand acted as part of the SIGINT (signals intelligence) network, linking the USA, the UK, Canada, Australia and New Zealand.

Footnotes
  1. Press, 10 December 1981, p. 6. Back

New Zealand goes it alone, 1984 onwards

Nuclear-free New Zealand – the end of the alliance?

Following the election of a new Labour government in 1984, nuclear-powered and -armed warships were denied entry to New Zealand ports. While the USA officially suspended security cooperation with New Zealand after the nuclear-ship ban, the GCSB continued to operate as part of the SIGINT network (also known as the Five Eyes) with the UK, the US, Canada and Australia. The GCSB expanded its capabilities, opening signals interception stations at Tangimoana, in Manawatū, in 1982, and in Marlborough’s Waihopai valley in 1989.

In 1985 NZSIS helped police apprehend the French agents who bombed the Rainbow Warrior.

The fight against drift netting

Drift-net fishing was a form of large-scale fishing, involving kilometres of nets in a ‘wall of death.’ The fishing fleets of Japan, Taiwan and South Korea used drift netting to catch tuna in the South Pacific. In 1989 New Zealand launched an international campaign against the destructive fishing method. New Zealand used information gathered by the GCSB to prove the massive scale of drift-net catches. This in turn helped in bringing about the Wellington Convention of 1991, which effectively banned drift net fishing in most of the Pacific.

The SIS after the Cold War

The collapse of the Soviet bloc from 1989, with the subsequent demise of most of New Zealand’s small communist groups, forced major changes on the SIS. Its new areas of emphasis were now terrorism and ‘economic espionage’. In the1997 ‘Pacific Rose’ case, they helped stop a Chinese delegation from stealing a premium New Zealand apple variety.

The SIS carried out tasks such as risk analysis to ensure the safety of world leaders gathered for the APEC (Asia Pacific Economic Cooperation) summit meeting in Auckland in 1999.

Counter-terrorism work was boosted by the ‘War on Terror’ after the 11 September 2001 attacks in the US. Another important role has been to protect the integrity of New Zealand passports. The SIS helped prevent the theft of passports by Soviet agent Anvar Razzakovich Kadyrov in 1991, and by Israeli agents Elisha Cara and Uriel Kelman in 2004.

New Zealand’s intelligence services in the 2000s

Security Intelligence Service

The SIS continues to provide intelligence to the government on internal security issues. It is responsible to the minister in charge of the SIS – traditionally this is the prime minister. The SIS is a civilian organisation, with powers of investigation but not of arrest. In 2011 it had a staff of around 200.

Government Communications Security Bureau

The GCSB collects and reports on foreign signals intelligence. The GCSB processes, decrypts or decodes intercepted communications, but does not analyse them – that is done by the National Assessments Bureau and relevant government departments. The GCSB also works to keep New Zealand’s own information systems secure. The minister in charge of the GCSB is the prime minister. In 2011 the GCSB had about 300 staff.

National Assessments Bureau

The National Assessments Bureau (NAB), which was until 2010 called the External Assessments Bureau (EAB), provides assessments to the government on overseas events that may affect New Zealand’s interests. It uses public information, diplomatic reports and information from the SIS and the GCSB. The NAB is part of the Department of the Prime Minister and Cabinet, and is accountable to the prime minister. In 2011 it employed about 30 staff.

Directorate of Defence Intelligence and Security

The Directorate of Defence Intelligence and Security (DDIS) is the combined intelligence service for the three armed services – army, navy and airforce. With a staff of around 30, it directs and coordinates the work of intelligence personnel within the armed services. The chief of defence force is responsible for the DDIS.

Strategic Intelligence Unit

The Strategic Intelligence Unit is a police unit established in 2002 in response to terrorism overseas – in particular the 11 September 2001 attacks in the US. Its job is to provide intelligence on domestic and international security. This includes information on terrorism and on transnational criminal activities.

SIS burglars

In July 1996 University of Canterbury lecturer David Small visited the Christchurch home of his friend, anti-free trade activist Aziz Choudry. Small interrupted two ‘burglars’, who were in fact SIS agents. Choudry sued the attorney general over the SIS break-in. The Court of Appeal found that the SIS had acted unlawfully, trespassing on Choudry’s property. Constitutional lawyer Geoffrey Palmer, a former prime minister, argued that the case proved New Zealand’s legal system ensures that the intelligence services are not above the law. Opponents of the SIS saw the case as an example of the service overstepping its powers.

Official monitoring of the intelligence services

The inspector general of intelligence and security, a retired High Court judge, ensures that the activities of intelligence agencies comply with the law and that any public complaints are investigated independently. The inspector general has extensive powers to investigate such complaints.

The commissioner of security warrants is also a retired High Court judge, who, along with the prime minister, must co-sign any authorised interception warrants.

Oversight on the activities of the SIS is provided by the Intelligence and Security Committee of Parliament, the ombudsman, the privacy commissioner and the controller and auditor general.

Public concerns with intelligence agencies

Citizens’ groups continue to question the activities of New Zealand’s intelligence agencies. Protests have been held against the GCSB Waihopai facility since before construction started. The activities of the SIS have raised concerns, with high profile cases such as the 1997 Aziz Choudry break in and SIS efforts, from 2002 to 2007, to deport Algerian former MP Ahmed Zaoui. The police also made the news through intelligence work, with controversial arrests of political activists on terrorism charges in October 2007.


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How to cite this page: Peter Clayworth, 'Intelligence services', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/intelligence-services/print (accessed 15 December 2017)

Story by Peter Clayworth, published 20 Jun 2012