Wednesday, 11 May 2016

The revelations from the Panama Papers have dominated the news this week. As a result, the foreign trust tax regime has been placed under intense scrutiny, and while no king-hits have yet occurred in respect of New Zealand, it is a virtual certainty that there will be changes to the disclosure rules for such trusts listed here, and more active oversight by the Inland Revenue Department than has been the case previously.

But the Panama Papers release raises another and potentially far more significant issue than their particular content. In recent years, the world has seen the Wikileaks revelations orchestrated by Julian Assange, and more recently the massive security leaks from Edward Snowden. The Panama Papers add an additional element, not seen in the earlier cases. Rather than just one crusading journalist (Snowden’s Greenwald, for example) being the vehicle by which the information becomes public, investigative journalists from hitherto competing media are now combining to produce a coherent and thorough narrative and analysis of the welter of material they have sifted through. (The release this week was the result of work by the international body representing investigative reporters, a German newspaper, and television, radio and newspaper journalists locally.)  We can expect the pattern of these types of revelations to intensify, and with it, the level of media co-operation we saw in this instance to become the norm in the future.

(This is not to encourage the proposed APN/Fairfax merger in the least – the risks of news being channelled through a single source are a major threat to freedom of expression in an open society.)

Rather, the issue now splits into two distinct aspects. First, how do governments deal with the likely new normal of the mass release of data they may be simply unaware of, and certainly not expecting, in a way that is credible and gives citizens an assurance that they are on top of the issues being disclosed? No doubt around the world this issue is front of mind for many governments right now. One part of the solution is likely to be more global co-operation, both in resolving issues that emerge, but also in terms of trying to get on top of, or at best perhaps stay abreast of, the next round of mass revelations.

And that raises the next (and arguably most important) issue thrown up the Panama Papers. How is the protection of individual privacy fitted into all this? On the one hand, it is reasonable that no-one, or no organisation, or government, that has behaved illegally  should be protected from disclosures of this type. Indeed, they should be exposed and held accountable. But equally, individuals who have done nothing wrong have a right to expect their privacy to be protected. And that is increasingly a far more difficult, yet pressing proposition. As it happens, this week is Privacy Week, and, as the author of the Private Member’s Bill some 25 years ago that became the Privacy Act, I have a special interest in this. The digital world has introduced challenges to individual privacy that were inconceivable in the early 1990s and public concern about the protection of its privacy is as high as ever.

Some may argue whether there is anything of value in the release of the Panama Papers. Of course there is. At its most basic, they prove again that no-one should presume to be above the law or legitimate scrutiny. Aside from that, and the prospect of change to the rules around foreign trusts in New Zealand as an immediate likely consequence, the release has also served to focus afresh on individual privacy and its legitimate protection in the age of mass data. Privacy is a fundamental right every citizen should be able to enjoy, yet it is not provided for in our Bill of Rights. And there are still those politicians threatening to “amend” the Privacy Act if it does not meet their needs for more data agglomeration. One way of giving citizens confidence about the protection of their privacy in an era of widespread (and often legitimate and beneficial) information sharing would be to include the right to privacy in the Bill of Rights.

That would not stop, nor should it, the whistleblowers, but it would certainly protect the innocent. And that is the balance we must strike.







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