Post-Cabinet Press Conference: Monday, 7 March 2022

Thank you, Prime Minister. And can I say that, as this is a targeted sanctions bill that will be passed under urgency, although the legislative framework will be broad, it will enable us to impose and enforce sanctions. The other aspect of the approach that we’re taking is that the sanctions that we will develop will be in line with international law. And, as has been mentioned, sanctions will be apply to classes of individuals, entities, assets, or services that are responsible for, or have been associated with, or are economically or strategically relevant to a country making threats—in this instance Russia—against the sovereignty and territorial integrity of the Ukraine.

Can I also highlight that, in terms of the specific regulations being worked through at pace, a public register will be published outlining the specific individuals, entities, and assets targeted. This will ensure transparency regarding those impacted by the targeted sanctions regime. I just need to make clear that, while the legislation is broad, it doesn’t mean that someone who is Russian and wealthy will automatically be a target. We’re not looking to target every individual or company simply for being Russian. We’re looking to target people, services, and entities responsible for, or associated with, Russia’s aggression. We want to target those who are economically or strategically important to Russia, and we want to respond to those States or individuals who might help Russia in their aggression against Ukraine—like Belarus. It’s also important—in addition, Prime Minister, to the points that you’ve made—that the creation of this targeted sanctions bill will send a very clear signal that New Zealand will not be a safe haven for those wishing to move their investments here to New Zealand. And I’m happy to take questions alongside you.

Thank you, Minister. We are now happy to take questions.

Prime Minister, can you give us an idea of how widespread the Russian investment influence is here in New Zealand? There’s not a whole lot going on. What about private jets flying in, and superyachts, and perhaps ships as well?

Two really important points. The amount of Russian investment currently in New

Zealand is limited: up to $40 million, with no pending overseas investment applications that would be relevant to this sanctions regime currently. But it’s not just about what is already invested here, but what might be invested here, what assets might be moved to New Zealand—making sure that we do not become the haven for those who are already being sanctioned overseas. We need to move pre-emptively to ensure that we stop that from occurring.

Do you wish that you’d acted sooner, implementing some of those sanctions and perhaps not pushing it to the side?

Well, what I would say is we never pushed it to the side. What we looked at was: what are the fastest levers that we have available to us? So we, at the same time, got advice on a bill like this that we are presenting today whilst also looking at whether or not our existing overseas investment legislation could’ve been an alternative mechanism to try and stop the inflow of investment we might see into New Zealand in order to escape other sanctions regimes. In the end, it was determined that we would progress with the bill that you see before you today. The question over a wider autonomous sanctions regime—there has been a bill that’s been sitting in Parliament since 2017. It is not as comprehensive as this. It would not allow us to target Russian oligarchs. It would not allow us to target airspace or those that might move into our maritime area. It does not allow us to do some of the more extensive things that we have designed specifically for this invasion in Russia.

How are you going to identify who is an oligarch and who should be sanctioned, and who is simply a wealthy Russian in New Zealand?

So the first tranche—that that we’ll move most quickly on; so after the bill’s in place, in that first week—are the more straightforward extension of travel bans, because this bill allows us to go further than we’ve already gone; restrictions on banks; any relevant asset freezes to stop the movement of assets from those that’ve already been sanctioned. So that’s where we can draw on the international evidence and intelligence that already exists. The second tranche, the next, longer piece—that will take a little longer—is our own investigations to try and identify anyone further that should be added to those lists. So that’s a process that the Ministry of Foreign Affairs and Trade goes through and could take a little bit longer. Minister, do you want to want to speak to that process?

I think, in terms of the identification, which is a very good question, the legislation provides the framework for information sharing and intelligence gathering, which hasn’t been available previously, which will be used in these specific conditions to be able to identify Russian oligarchs, family members, those who are covered by the definition of classes of person.

And this very much is the first tranche of sanctions, is it not? We can expect to see more to come in the future?

So this bill sets up a framework. Within that framework now, we have the ability then to start rolling out a series of sanctions. The first tranche of those—where some of that work and intelligence gathering has already been done. The second tranche will take a little bit longer, as we go through additional information, but the point is it always gives us the ability to extend to individuals new asset classes where we identify we need to extend our targeted sanctions. So it’s a framework that we can then work from.

It still won’t be until next week that we actually see any of these sanctions; are you moving fast enough on this?

Yes.

Many of our allies have already implemented all their sanctions last week.

We are very much in line with what our international partners have done in many areas: the travel bans; the export sanctions stopping, for instance, any dual-use technology that might be used to support the military or the military regime or the invasion. So we’ve already moved on them very quickly. In addition, we were one of the first countries to move on humanitarian assistance. Now we’re changing our laws, and even though we are not a country that, like many other countries, has a large amount of Russian investment within our borders, we want to make sure that that doesn’t become the case. So this is still very timely for us.

Prime Minister, appreciating there’s still more tranches to go in the future, but is there any current Russian oligarchs or nationals living within New Zealand that would likely be targeted by the sanctions that you’ve outlined today?

We want to allow the team of officials to go through the process and identify whether or not that’s the case. So we’re not going to rule that in or out at this point in time.

In order for the integrity of the legislative framework to take its course, it is going to be very important that the regulation-setting mechanisms and the thresholds therein to identify who is covered by the legislation can occur. I think it would be misplaced to come up with a range of names here, today, and then say whether or not they’re in and out. The regulatory process will enable a robust approach to the way we deal with this.

Can you give us some sort of time line as to when we can expect a list of names?

Well, obviously we’re releasing today the list of names of those who are already covered by our travel bans. We expect with this legislation for that list to grow. Tranche one, I’ve already said, we expect which could include extension to those travel bans within a week of the legislation passing, but it will be another few weeks again, I think, for an extension beyond that into tranche two.

How long is this legislation in place for? I mean, what happens if Russia evacuates and takes its troops out of Ukraine? Does it all stop?

Well, we hope that is the case. We hope that, over the next period of time, Russia will not only de-escalate but stop its aggression that is incurring on the Ukraine. But the period of time for which the regulations are effective will be a three-year period, and they can within that period of time be renewed.

When do you anticipate the Government will make a decision on whether or not to move ahead with a wider autonomous sanctions regime? And, going back to the legislation you talked about, in hindsight was it a mistake not to look at amending that, even if you accept there were problems with it—amending it and making it fit for purpose rather than—

Do you mean amending it in this process?

No. The 2017 legislation.

So when we first came into office, amending that—

Yeah.

So a couple of comments, and then I’ll get the Minister to talk about the work that’s already been under way. The first point, as you well know, is that the National Party themselves first talked about this, I believe, in 2012 but didn’t produce a bill till 2017. Now, when we came into office, we had concerns that the bill as it stood didn’t cover cyber-security issues; didn’t cover, for instance, human-rights abuses. So the Minister started a process to work through “Well, if we did have an autonomous sanctions regime, how do we make sure that it adequately covers those issues but also acknowledges that New Zealand has always, otherwise, used a multilateral system?” So it’s a big change, and we didn’t take that change lightly. Fast forward to this situation: that bill as a draft, as it stood, was not fit for purpose for what we needed to do. So we’ve created our own bespoke response, and now we’ll continue the wider autonomous sanctions work.

So, parallel to this process of a targeted sanctions bill for Russia, I’ll be stewarding through, with the consideration of Cabinet, the approach to a broader autonomous sanctions bill. But we stand by the approach that we took, which was: you had a bill drafted in 2012, languished for some time, could have been put forward by the then Government, wasn’t, and so, in 2013, we saw that it wasn’t fit for purpose, we undertook to take a broader approach, with human rights at its core but also favouring multilateralism, and also ensuring that our independent foreign policy stance could be considered within the creation of an autonomous sanctions bill. I’m hopeful—

Sorry, just—

consider that approach

I’m hopeful that, in the next few weeks, Cabinet will be able to

I’ll let you follow up, Sam.

And, in terms of naming the individuals, previously MFAT and the Government have said it does not name those, typically, subject to travel bans. What made you change your mind in this case? Why have you decided that the public interest outweighs any privacy factors?

Well, that was the limitation of our own process, of not having a sanctions regime. What this process does is it enables us, in a very transparent way, to be able to name and have a public register, for transparency purposes, of individuals and entities made very public by way of registering their names. I think what we’ll see over time is that the international community, in sharing the information of who is on their register, will be well served in terms of, again, information sharing, intelligence gathering, and greater transparency into how we apply these sanctions from a global perspective.

So we also have those obligations that, where we’re drawing on international intelligence or information, we are open with our partners around the public release of those names. But, with this bill, we’ll also have the ability to have a broader range of individuals who may be covered by travel bans, and that may actually be drawn from our own work rather than just on international partners as well. And it’s a broader category of people that could be included, too. I see some questions that might be on that—yeah, Thomas, and then Jessica.

How far could the sanctions go? I mean, you’ve said you could apply them to countries supporting the conflict. China and India, for instance, might be considered to be propping up the rouble, or voting alongside or voting in a helpful way to Russia in the UN. Could it apply to countries that aren’t directly involved in the conflict but are supporting Russia while it wages war?

Well, the framework is broad in its ability to consider a range of things. However, through the regulation-making process, there will be thresholds within that to consider as to how far a sanction would apply.

Is it regrettable that economic sanctions could cause hardship for everyday Russians?

I think one of the things that, personally, I find really disturbing amongst all of the devastation we’ve seen from the invasion itself is the disinformation within Russia, particularly when you see those in Ukraine who have family members in Russia—that they’re explaining to them what is happening and their own family members don’t believe it. There is a role to play for citizens knowing what is happening at the hands of their own country’s leadership. So the question around whether or not you’d want to impact on the everyday lives of Russians—ultimately, we’d want to impact on those who are decision makers, we’d want to create influence around those decision makers, and having the Russian people themselves fully aware of the situation, equally, would have a huge impact, and there the impact of State television and State media into other countries is really important as well.

Sadly, Russia is the aggressor, and their aggression will not only impact severely and harmfully on the Ukrainian people but also their own people, and there’s no winner in war.

And Putin’s on the travel ban list, obviously—he’s at the top of the list. Do you know if he’s ever actually been to New Zealand or holidayed in New Zealand?

I couldn’t answer that for you, but I’m happy to find out.

Do you think it’ll be disappointing for him?

I think he’s probably focused on other things right now, but nor would I diminish the importance of the collective stance, either. Yeah, sorry, I did say I’d come back to Jessica.

Minister, where are you at with the expulsion of the Russian ambassador? Are you any closer to doing that, and at what point would you look to do that?

Yeah, I think there are some international obligations that we need to be mindful of: the Vienna Convention but also legislation in relation to the diplomatic corps. What we have done is called the ambassador in, expressed our significant concern and distress about the actions Russia has taken. We also have people still in Russia who require our support or consular support; so we have to weigh all those things up as we take next steps. I think the overall point, however, is that the aggression that Russia is currently showing will require strategic endurance. And so this approach to targeted sanctions will enable us to ramp up a range of sanctions in response to Russia’s aggression, or, hopefully, wind back in the event that international diplomacy and the weight of international diplomacy will actually bring Russia to a point of conceding.

There’s been some concerns raised that, once a general autonomous sanctions regime is in place, it could come under pressure from the likes of our traditional Five Eyes partners over our approach to China, for example. How do you ensure that that doesn’t happen?

By maintaining the same independent foreign policy that we’ve had for decades.

But we do want to give consideration to how we can embed within any future regime both that independence but also draw, as we have in the past, from a multilateral approach. And that’s why, whilst we’ve had the autonomous sanctions regime issue sitting before us, we’ve also been engaged in reform of the United Nations. Ultimately, if we had a Security Council that was more functional, we would not be facing this issue in the first place. And so that’s at the top of our minds, as well.

And is there going to be any employment flow-on effects from sanctioning oligarchs? For example, there’s one that’s financing construction buildings up north.

Yep, and look, it is possible, of course, and here I would just separate out: I’m not speaking to any individual at this point in time. We do need to make sure that the legislation is in place and that the Ministry of Foreign Affairs and Trade go through the process that they’re required to before establishing any sanctions on individuals, entities, or assets. There is the ability, however, to be very specific in the targeting of particular assets or investment. So, even if you had an individual in scope, you could be targeted within that. You could target their super yacht, for instance, and not target a business enterprise if you so chose, for example.

Following on from Charlie’s question, obviously, in the past New Zealand’s opposed autonomous sanctions and, as you mentioned, supported the multilateral systems. Why is this situation different? Has anything changed?

Well, here we’re confronted with where the multilateral system has failed. And New Zealand continues, of course, to be an advocate for that UN reform, and we will continue to do so, but we need a way to work in tandem, to continue to call for that reform but also make sure that we have the tools available to us to send a strong message that all New Zealanders want us to send. Now, that doesn’t mean that we aren’t able to construct, going forward, an autonomous sanctions regime that sits well with our foreign policy approach, and that’s what the Minister had already started but had not yet completed. We want to go through that proper process before we just shape our entire response around one conflict.

Are you able to comment on how that might work—on how such a regime might still, I guess, favour the multilateral approach?

Well, let’s be mindful: in this context, in relation to Russia, while the Security Council failed to some extent to apply sanctions against one of the members who had the right to veto, the UN General Assembly voted 141 members against five in relation to Russia’s actions. That is a strong signal. We also have a strong signal from countries who would formerly take a neutral stance, such as Switzerland, forming a position— and also Singapore, who have many common values as us. They too are looking at a targeted sanctions regime. So, while the institution of multilateralism has had its failings, the international community have still expressed strong condemnation of Russia’s actions, which is why we’re doing what we’re doing.

One for you, Minister Mahuta. You were out of the country when the Russian ambassador was first called in. Have you spoken to the Russian ambassador personally?

No, I haven’t. And it was important that the ministry, at a [Inaudible] level, that a senior ministry official reflected our concerns. I also had a call prior to leaving with my Foreign Minister counterpart, which was not returned—with Minister Lavrov.

So who from the ministry spoke to the Russian ambassador?

It was at a senior, DCE level.

OK, and what was the—

Which is not unusual.

Yeah—which is very common.

What was the response from the Russians?

Well, obviously, they expressed their own view, but it was really important for New Zealand, given the stance we have taken and are currently taking, to let them know that we did not support the actions of their Government and of their leader.

Prime Minister, Chinese State-owned banks and State-owned commodities companies have been trading and helping Russian exporters and banks get around the sanctions. Are you concerned that China may frustrate the world’s attempts to impose these sanctions?

At this stage, at senior officials level, there’s ongoing engagement with their counterparts in China and ongoing encouragement at that level to engage with the international community and the pressure that’s being applied to Russia around the actions that they’ve taken, and we do want to continue to encourage that China uses the influence that it has. You’ll know that they’ve often taken a policy of non-interference in other countries’ foreign policies. Here’s an example, though, of many countries who have taken that position in the past who have been very forthright on this occasion.

Are you disappointed that they have not joined the rest of the world in trying to get Russia out of Ukraine?

We will continue to encourage China to take a stand on what’s happened in Ukraine, and at this stage our preference would be to continue to encourage that addition of pressure, rather than make an assumption that they’ve already settled on a final position here.

And, just finally, on whether or not New Zealand is now vulnerable to some sort of East-West split where China falls into the same camp as Russia and New Zealand’s exposure to China, because it’s our largest trading partner, puts us at risk in the same way that Europe now finds itself at risk because it’s so reliant on Russia for—

Those tensions aren’t new—is all I would say.

Prime Minister, on travel bans, what’s the Government’s view on how the border shift from MIQ to self-isolation has gone over the last few days, and is there an update to the time table on when you might allow more than just Kiwis to come into the country?

Not at this stage, but that is something that we want to make sure that we work through in a timely way. So I hope soon that we’ll be making those decisions. On the change at our borders, I want to acknowledge our border staff. I visited Auckland Airport a couple of weeks ago now, and, you know, you can’t imagine what’s it’s like to work at an airport where, for the past two years, it has been—you know, it’s been empty. It’s not been the vibrant, exciting place that so many are used to working in, and so their excitement about the return of travellers was really clear. I spoke with the head of our border agency today, and she was very positive about the new transition. There’ll always be things we can iron out, but overall— and I’ve had a couple of mystery shoppers share with me—overall, a good experience.

Can I also ask: is there any suggestion—back on Ukraine. Is there any suggestion that Russian money is flowing through New Zealand’s financial system at the moment, or is it hypothetical at this stage?

Hypothetical, I would say, at this stage. We’ve seen no such reporting, but that doesn’t mean we shouldn’t be prepared. Of course we do have mechanisms through the OIO to understand what may be coming in, and, as I say, there’s no pending applications there at that threshold.

What’s the latest advice that you’ve got just generally in terms of modelling around peaking—whether Auckland’s kind of, you know, that bit ahead—

Yep.

—how long it might be sustained, etc., and how’s that feeding into any decision making that’s going on around whether that isolation period is going to end up being shortened?

Yes. So two things: I’d say the decision around whether or not we shorten isolation periods is actually, I would say, broadly based on a number of factors that aren’t just around case load. What we’re seeing in international evidence and so on is equally important, as well as the impact on different industries and our ability to keep those critical supply chains going. So, as soon as we have any advice formally to Ministers and decisions made, we’ll speak to that.

On where we are: currently, one of the issues we have, of course, is since we’ve switched over to rapid antigen testing, we cannot guarantee that every test that has been taken that is positive is being reported. Now, we won’t be alone in that issue, but it means using testing as a way to demonstrate where we are in the Omicron peak is difficult. So we are now tracking hospitalisations as our signal to whether or not we are at a peak and then coming down. There’s a lag for that, though. So the lag is anywhere between, you know, five to 10 days between peak cases and when you would expect to see that flow through to your hospitalisations. That is what we’re now keeping an eye on. They continue to rise in the northern region, but we do expect the northern region to peak first and then for others to follow. So we may have, but we won’t know until we see the hospitalisations change.

So, for people who are looking at, you know, when the traffic light system might start to move and that other stuff that comes later, what are you sort of banking on at the moment? We had that sort of initial three- to six-week period. Where are you at with that at the moment?

So we are going to—we’re continuing to do the policy work regardless, and then, as we get close to the decision making, we’ll be able to see, we hope, from what’s happening with our hospitalisations, where we are. So, as I say, we’re not there yet. We’re doing the policy work to be prepared regardless.

Can I also just ask: have you have any feedback—there seems to be have been quite a bit of reporting over the weekend around, you know, supermarkets are quite low on stock, people obviously being affected by supply chains and things, businesses as well, local hospitality. What is the advice you’re getting, and how bad are things?

Yeah, so I get a mixture—of course, we don’t have formal reporting across all industries, and it’s variable, but some of the feedback that we’re getting is both supermarket chains aren’t necessarily affected in the same way, and that’s simply, I would say, a mixture of how they’re using the critical worker exemption regime and also where they have a large number of store locations and whether those areas are more heavily impacted by COVID or not. One of the other factors is that a number of them—their workers don’t have COVID themselves but their children do, and they’re, of course, required to isolate. Whilst they could leave, they don’t have the ability for anyone else to care, and this will be the situation in a number of households where repeatedly I’m hearing that family have children with COVID and that they are all isolating as a result of that. You can see that in the profile of the outbreak, and I know a number of you will have anecdotally heard that, too. I’m also hearing, though, that perhaps—perhaps—in some quarters it may be easing a bit in Auckland, the absenteeism, but again I don’t want to get ahead of where we are. We need to just let it continue—to watch, hear, and track what we’re seeing in our hospitals—to know.

Back to sanctions, what sanctions have been imposed on any particular individual or asset or investment? What’s the threshold for removing the sanctions? Is it complete Russian withdrawal? Does it require a commitment from Russia around the territorial integrity of the Ukraine? You know, what will you use to judge, to say that you can withdraw sanctions?

Well, I think largely that will be guided by the international community, because de-escalation and withdrawal of military forces are in and of themselves separate moves. So we will be informed by the international community by way of how to deal with the revoking or stepping back from sanctions.

Just going back to what you were saying around looking at hospitalisations rather than testing, the Ministry of Health is concerned that people aren’t reporting their RAT test results. Do we actually know what the case load is at this point or how wide the outbreak is, and does that actually matter if you’re not looking at tests?

Look, we do want people to report if they have a positive rapid antigen test, and there’s a number of reasons why. We want to make sure that we’re giving support to those who are isolating at home who may need it, either be it healthcare support or, for instance, if they have welfare needs. If they are a low-income family, for instance, who need support, that’s a way that we can make sure we’re in contact with them. But, if people aren’t reporting, of course, we can still use hospitalisations as a way to see what is happening overall with the outbreak. That will be a secondary signal to us as to whether or not we’ve peaked, even though there is a delay in hospitals tracking following cases.

And, in terms of monitoring that, doctors have told us that they are within weeks of burning out or running out of personnel. Are you worried that we might actually lose that or that our primary health providers will not be there at the peak—

Yeah, just to be—was that a primary health provider or within a hospital?

Doctors.

Just doctors generally? Look, I mean, one of the things we’ve been really focused on is making sure that, in our hospital network in particular, where they really are bearing the brunt, particularly in Auckland, they have the support they need to deal with what is often critical staff shortages and not just the COVID cases they have coming through. We’ve been in regular contact. The feedback I have is that they are managing. They are doing a sterling job of covering where they need to where staff are absent, and that over the next week, though, it is going to be particularly tough going for our health sector. That’s why all of the measures we have in place right now to try and still slow Omicron down is so important. I hear the calls from people around wanting to lose the restrictions, but, please, do keep in mind, for our hospital staff, this is a critical point in the outbreak. Those measures are still really important to us. There will be a time when they can go, but now is not it.

A question here for the Minister with her local government hat on: what advice have you got from your governance group on three waters, and what impact is that going to have on the Government’s position?

I’m scheduled to formally receive that advice tomorrow.

However, given the wide range of soundings that the group have heard across the local government sector, I understand that there has been broad input into the thinking of the governance working group and focus on improving governance representation and local voice aspects of the reform programme.

So what does that mean therefore for the proposals?

Well, I’ll wait to receive the proposals, and that’s the whole point. The whole idea of establishing the governance working group was to engage with the local government sector, take on board the eight weeks of feedback from the sector, but also ensure that, in the areas where there was most concern, the governance working group was further able to consider the issues raised by the sector. So I’m looking forward to their recommendation.

So when will that be released to the public?

I’m due to receive the report tomorrow, and then I’ll ask the officials to consider and provide some advice on those recommendations, and then in due course I’ll be making that report public.

OK. Thanks everyone.