Occasional Paper Series: Foreign Policy Realignment, Issue Linkage, Institutional Lag and the New Zealand Intelligence Community.

New Zealand’s Government Communications Security Bureau facility in Waihopai, South Island (41° 34′ 35″ S, 173° 44′ 20″ E). Source: Shultz via Wikimedia Commons.


 This essay examines the subject of institutional lag after foreign policy realignment, using as an example the “core “ of the New Zealand intelligence community (the Security Intelligence Service (SIS), Government Communications Security Bureau (GCSB) and National Assessments Bureau (NAB)) after the end of the Cold War. The essay argues that New Zealand intelligence agencies have been slow to adapt to changes brought by the country’s foreign policy realignment in the mid 1990s as well as broader changes in the geopolitical and technological landscape.

The study focuses on the post-Cold War period because modern New Zealand’s intelligence community was born of and deeply influenced by the Cold War, which made the latter’s termination a milestone in the history of New Zealand intelligence community (NZIC). As will be elaborated ahead, how the New Zealand intelligence community responded to the changes wrought by the end of the Cold War and subsequent geopolitical shifts were not necessarily foresighted, seamless or responsive to the actualities of the moment. Instead it reflected the clash between old ways of viewing things, reliance on foreign intelligence partners (and their perspectives), as overlaid on the practical necessities of coping with new technologies, areas of focus, non-traditional threats and changes in foreign policy orientation.

The essay is organized as follows. The first sections explicate the concepts used as foundational stones of the argument. The essay then proceeds to brief case overviews before concluding with an explanation as to why things happened as they did.

 Institutional lag.

 Institutional lag refers to the time gap between external events or exogenous conditions and institutional (bureaucratic) adjustment or response. There is varying depth to the delay in organizational change given historical and contextual conditions both internal and external to the agencies involved.

Influenced by the work of Thorstein Veblen (1857-1929) on cultural lag, the term “institutional lag” was coined by philosopher and economist Charles Ayers in his Theory of Economic Progress (1944). “Ayres propounded a theory of “institutional lag” whereby technological changes inevitably kept economic technology one step ahead of inherited socio-cultural institutions. The process of Veblenian “evolution” Ayres envisaged was that technological changes were generated by spurts of instinctive inventive activity to innovate in technological processes but that the relatively slow, inherited socio-economic structures would be maladapted to these changes. With glacier-like gradualness, institutions would eventually respond to the new technology, but by the time they adjusted, the next round of inventive activity would have been skipping along further ahead, thus maintaining a permanent lag and thus incongruity between social structures and economic technology.”[1]

Used as a means of explaining the delayed response of firms to technological change in a cycle of perpetual catch-up, the concept has now been expanded to include slow or belated public bureaucracy responses to cultural, socio-economic, political and diplomatic change (as well as technological change). More specifically, policy shifts announced by governments as new initiatives often occur before the public agencies responsible for implementing them have undertaken the organizational reforms required to do so., which necessitates a process of institutional “catch up.”

Delays in bureaucratic responses to shifts in environmental conditions extend to foreign policy and security. This is particularly the case when nation-states have reoriented their international orientation due to external or internal factors (say, as the result of war, alterations in trade regimes or domestic political change). New Zealand’s response to the elimination of British export preferences in the early 1970s and declaration of its non-nuclear status in the mid 1980s are examples of external and internally motivated foreign policy realignment.

Foreign policy realignments can be brought about precipitously or after much deliberation. The former is often reactive to externalities whereas the latter is the product of calculations of longer-term costs and benefits. Either way, the institutional apparatus underpinning the old status quo has to adapt to the change in orientation. Given the inertial weight of institutional history and tradition, it may be something that takes time, especially if confronted with bureaucratic opposition within affected agencies.

Two further syndromes compound the problem of institutional lag following foreign policy realignment. On the one hand there is the issue of institutional rippling, whereby a government opts for realignment but does not involve agencies other than those most immediately and directly affected by and involved in the shift. Whereas the diplomatic corps and foreign affairs bureaucracy are integrally involved in implementing the details of foreign policy realignment, other affected government agencies are slower to follow and often do so in uncoordinated and uneven fashion. This is seen in military and intelligence agencies as well as those such as Customs and Immigration, which are often not fully involved in the decision-making process leading to a foreign policy realignment and yet have to engage organizational reforms in accordance with their own institutional traditions and structures that may not easily follow the dictates of diplomats or the pet projects of politicians.

That brings into play the second syndrome, that of institutional “depth.” Institutional depth refers to the historical legacies of institutional tradition and practice. Some public agencies, such as the police and the military, have long traditions and standards of practice that often date to the days of independence or state foundation. Others, such as agencies involved in the oversight and regulation of information technology and telecommunications, are relatively new to the scene and do not have the accumulated “weight” of institutional mores and practices to deal with when confronting significant change in their operating environments.

Institutional rippling in response to policy realignment often begins with agencies directly involved in the transition and “newer” agencies lacking in relative institutional depth, which are then followed by agencies less directly involved in the realignment decision and/or which have greater institutional depth. The overall effect is that institutional lag becomes a process as well as a distinct organizational phenomenon, with some agencies suffering less institutional lag than others depending on the level of involvement in implementing the realignment and the degree of institutional depth encountered in each.

To summarise: Significant change in a nation’s foreign relations often leads to a process of institutional lag that is determined by the relative institutional depth and degree of involvement of the agencies affected. Front-line agencies such as foreign affairs ministries and recently created agencies with connections to priority aspects of foreign relations may undertake immediate organizational reforms in response to the policy shift, but other agencies, including security and intelligence agencies, may lag behind in reorienting their institutional gaze as well as their internal conformation.

Foreign policy realignment.

 Foreign policy realignment refers to a shift in a nation-state’s geopolitical and diplomatic relations. It can be the product of internal factors such as political regime change or an alteration in government perspectives on global affairs, or it can be the consequence of changes in the external environment such as the beginning or termination of conflict, the emergence of new actors, markets or areas of resource contestation, diplomatic shifts by allies or enemies, and more.

Foreign policy realignments may be sudden and/or forced upon states or they may be the product of lengthy deliberation. The end of the Cold War is an example of an external event that produced rather quick foreign policy realignments on the part of many states, while New Zealand’s decision to broaden its trade relations in the mid 1990s is an example of an internally-directed foreign policy realignment that was deliberate and measured in light of systemic changes in the international environment over the previous decade.

Foreign policy realignment does not come easily. Whether they are consulted in advance or not, government agencies must adapt to the change in posture. This can well involve significant and discrete organizational and policy changes as well as alterations in their relationship with private sector and public interest groups, some of which may be resistant to change.

The end of the Cold War illustrates the reality of institutional lag in the wake of foreign policy realignment. Although the international community first shifted from a tight bipolar to a unipolar system, then to a loose multipolar configuration, many defense and security organizations, to include intelligence agencies on both sides of the Berlin Wall, continued to view the world and organize themselves according to Cold War precepts. As this proved inadequate for confronting the new security and intelligence challenges of the 1990s and 2000s, only then did military and intelligence agencies begin to undertake the organizational, doctrinal and perspective changes required in order to do so. This slow and reactive response to changing global externalities was evident in the New Zealand intelligence community.

Issue Linkage.

 Issue linkage in international relations refers to the tying together of two or more foreign policy concerns in a “holistic” approach to bilateral and multilateral relations. During the Cold War the most important example of issue linkage was that of trade and security, whereby security partners on both sides of the ideological divide traded preferentially with each other, thereby reinforcing their alliance commitments.

After the Cold War there was a move to uncouple trade and security. This was primarily due to two factors, these being the loosening of security alliances in a unipolar security environment dominated by the United States and the globalization of production, communications and exchange connected by international commodity chains. It was believed that security and trade relations could be uncoupled and dispersed across a wider array of partners, thereby avoiding undue dependence on any one of them (Buchanan and Lin 2006).

They key to success of this new paradigm was to ensure that the new trade and security relationships were not juxtaposed in a contrary or contradictory manner (say, by attempting to trade with a state at war while maintaining security relations with its main antagonist). So long as that did not occur, states were free to loosen the linkages between their trade relations and national security. As shall be discussed below, this was the dilemma posed to New Zealand after its foreign policy realignment in the mid-1990s.

 The New Zealand Intelligence Community (NZIC).

This essay focuses on the three “core” intelligence agencies in New Zealand, the Security Intelligence Service (SIS), Government Communications Security Bureau (GCSB) and National Assessments Bureau (NAB, formerly titled the External Assessments Bureau), which is part of the Department of the Prime Minister and Cabinet (DPMC). There are a number of other agencies that serve as intelligence collection and analysis units. This includes the Officials Committee for Domestic and External Security Coordination (ODESC), which coordinates assessments and responses to a wide range of potential threats ranging from natural disasters to cyber warfare. The New Zealand Defense Forces have military intelligence branches in all three services (Army, Navy and Air Force) as well as military intelligence units (Directorate of Defense Intelligence and GEOINT) serving the NZDF as a whole. These agencies, especially the service branch intelligence units, produce tactical intelligence in areas in which the NZDF operates or from where armed threats to New Zealand interests may originate.



Pipitea House, Home of the GCSB, SIS and NAB.


The GCSB is a signals (SIGINT) and technical (TECHINT) intelligence gathering agency that is part of the Anglophone 5 Eyes or Echelon alliance. Its primary focus is foreign intelligence collection but in specific circumstances and increasingly as of late it can undertake domestic SIGINT and TECHINT work in a “partner” role at the behest of other New Zealand government agencies (such as the Police or Customs). The SIS is responsible for domestic intelligence gathering, counter-intelligence operations and foreign human intelligence collection. It also has a “hand in glove” relationship with other New Zealand security agencies when the occasion warrants. The NAB is the ultimate recipient of intelligence streams from all of the NZIC, where it prepares assessments for the Prime Minister within the confines of the DPMC.

The terrorist attacks of 9/11 produced a proliferation of intelligence “cells” in a host of New Zealand public agencies. New Zealand Police, Immigration New Zealand, the Ministry of Business, Innovation and Enterprise, New Zealand Customs Service, and Treasury have their own specialized units. There are also interagency intelligence cells such as the Counter-Terrorism Assessment Group (CTAG), Security and Risk Group (SRG), Intelligence Coordination Group (ICG), and the National Assessments Committee (NAC), with the intelligence from all of these agencies as well as the SIS and GCSB flowing to the NAB, which in turn answers to the Cabinet Strategy Subcommittee on Intelligence and Security (CSSIS). In total, there are 12 intelligence agencies encompassed with the NZIC.

The question is whether the proliferation of these intelligence agencies has increased the accuracy, efficiency and reliability of the information obtained and processed by the New Zealand intelligence community. That raises the issue of how the New Zealand intelligence community sees the world around it, how it frames and assesses threats and how it responds to them. In order to determine this, mention must be made of the research methodology underpinning this analysis.


 The focus of this essay is on the SIS, GCSB and NAB because the first two are the lead human and signals/technical intelligence agencies in New Zealand and the latter is the ultimate intelligence assessment and evaluation unit in the country. The perspectives they have on international security matters and New Zealand’s geopolitical context constitute the core of the NZIC’s current assessments and future forecasts of risks and threats. To study what these are, the essay uses the secondary literature dedicated to the theme as well as summary diachronic analysis of the annual reports of the NAB, GCSB and NZSIS (where available), which postulate what are perceived as New Zealand’s most pressing security and intelligence concerns.

The summary analysis is diachronic in that it is both chronological and covers four separate governments: the National government led by Jim Bolger from 1990-1996, the Jenny Shipley-led National/New Zealand First government of 1996-99, the 5th Labour government led by Helen Clark from 1999-2008, and the John Key-led National government of 2008-2015. Viewing core NZIC assessments over time and across governments allows us to determine if there were variations in threat perception under each or if they remained constant regardless of who was in power.

The Bolger Years.

 The Bolger government was confronted with significant shifts in its domestic and foreign environment. Domestically, it inherited and was charged with deepening market-oriented economic reforms initiated by its Labour predecessor. Externally, it witnessed the official end of the Cold War.

It focused on the former rather than the latter for two reasons. First, because the transition from the welfare state to a market economy was contested, controversial and polarizing, something that demanded the full attention of policy-makers as they embarked on efforts to “deepen” and institutionalize structural reforms. Secondly, because the collapse of the USSR and its Warsaw Pact allies was not seen as directly or fundamentally altering New Zealand’s (largely pro-NATO) foreign policy orientation, regardless of the tensions between New Zealand, France and the US over the issue of nuclear weapons testing and the presence of nuclear powered and armed warships in the South Pacific.

This had an interesting effect on the two main intelligence agencies. Under the terms of the 5 Eyes/Echelon signals intelligence alliance “reciprocity agreement” that saw it collect information on the Pacific region (and elsewhere when designated) in exchange for global intelligence collected from its larger signals partners, the GCSB basically served as the local storefront for them. It continued to focus its attention on targets of interest mainly to the partners rather than those of New Zealand itself. This included the communications of former Warsaw Pact members as well as Pacific and Eastern Asian nations and Iran in particular, with the emphasis placed on military, political and diplomatic communications. It included (and includes) monitoring of French communications in the Pacific.[2]

It was important for New Zealand to continue to support its Anglophone partners in the 5 Eyes/Echelon signals intelligence network because that was one of, if not the primary method of secure and trustworthy contact after the diplomatic and military fallout from New Zealand’s 1985 decision to adopt a non-nuclear policy (which had the effect of banning nuclear powered and armed vessels from New Zealand waters, which in turn led to the dissolution of the Australia-New Zealand-US (ANZUS) defense alliance). The SIS likewise maintained a special relationship with its Anglophone partners, but given its small size and domestic orientation this was not as crucial to alliance relations as was the reciprocity agreement within 5 Eyes.

However, when the Berlin Wall fell the SIS was left without a mission. Its primary focus was (and is) domestic espionage, and in the Cold War period that meant identifying reds under beds. With that concern removed, the SIS was hard pressed to justify its existence beyond assisting the Police on criminal matters, at least when it came to domestic intelligence gathering and counter-espionage (since the thrust of SIS counter-espionage efforts during the Cold War were directed at Soviet intelligence gathering activities in New Zealand and, in the wake of the Rainbow Warrior bombing by French operatives in Auckland harbor, on French clandestine activities in the South Pacific).

The SIS assigned itself the task of uncovering new domestic threats, and fortuitously for the agency this was provided by the move to market-driven economics. Besides an ongoing interest in criminal enterprise, opponents to the market-oriented policy shift became the new focus of domestic intelligence concern. These came in the form of unionists, environmentalists, human rights, fair trade and social welfare activists, community organisers, Maori separatists, anarchists and other domestic Left activists unconnected to the former Soviet Union and its satellites.

The trouble for both spy agencies was that with the end of the Cold War the ideological conflict between East and West largely died, especially with the adoption of capitalist economics by former communist countries such as the People’s Republic of China and Vietnam. This meant the end of “exporting” revolution by supporting indigenous Left groups, particularly those who advocated armed struggle. As for the French, the arrest, trial and conviction of two French agents over the Rainbow Warrior bombing signaled the downsizing of French intelligence operations in New Zealand in exchange for improved diplomatic relations. The combined result meant that the SIS no longer had foreign-based espionage or subversion to be concerned about when it came to domestic intelligence and counter-intelligence operations.

The result was that threat assessments provided by the (then) EAB focused on domestic actors, regional instability and criminal enterprise. Little emphasis was placed on foreign conflicts further afield and little to no mention was made of terrorism beyond the potential for low-level violence on the part of domestic militants.

The Shipley Government.

 The first elected government under MMP, the Jenny Shipley-led National/New Zealand First coalition “deepened” market-oriented policies, the most significant being making trade the centerpiece of foreign policy and developing export markets in Asia, Latin America and the Middle East. This ran in parallel with further opening of the New Zealand market to foreign imports and investment. What this meant in practice was significant foreign policy realignment, arguably one that was built upon and yet more significant than those occasioned by the end of the special trade relationship with the UK and the declaration of nuclear free status.

Foreign policy otherwise ran in concert with the “independent and autonomous” stance favoured by both major parties, with continued emphasis on non-proliferation, disarmament and peacetime military operations (particularly regional conflict resolution, humanitarian assistance, and peace-keeping). But the dye was recast: henceforth New Zealand would put trade at the center of its foreign policy and it no longer would privilege the Anglophone world when it came to commercial relations.

There was no “issue linkage” between the shift in foreign policy and the orientation of the New Zealand intelligence community. Issue linkage is pursued in order to provide coherency in the approach to foreign affairs. The problem for New Zealand was that its intelligence orientation did not match the new trade-based approach to the international system. Instead, it remained focused on pre-existing domestic threats and the external preoccupations of its foreign partners.

The GCSB focus continued to respond to the strategic requirements of its 5 Eyes partners, especially the US and UK. It shared eavesdropping duties in the South Pacific with Australia and traded selected intelligence with France even as it monitored French military and diplomatic communications in the region. Emphasis shifted to include communications in failed, failing and rogue states and those of non-state armed actors. But the mainstay of its eavesdropping and intercepts were focused on South Pacific states, North and Southeast Asia, extra-regional diplomatic communications, international and non-governmental organizations and telemetry from non-5 Eye satellites that disclosed military, particularly naval, communications.

The SIS maintained the focus it had under the preceding government, to include monitoring of anti-status quo ideological activists, Aian criminal organizations, and foreign spy networks operating in New Zealand and the English speaking South Pacific. It’s foreign intelligence collection efforts centered on the South Pacific, specifically focusing on domestic sources of instability and the growing influence of extra-regional actors. Foreign terrorism was not a priority even though it began to impact on New Zealand’s major security partners. All of this was reflected in (then) EAB reports.

The Fifth Labour Government.

 The Fifth Labour government headed by Helen Clark looked to be serious about abandoning its Euro- and Anglo-centric view of the world and embracing the notions of trade internationalism, security multilateralism and a diplomatic independence marked by commitment to human rights, non-proliferation and disarmament, regional development in the South Pacific and environmental sustainability. This was evident among other things by its cancellation of a purchase order for F-16 tactical aircraft to replace the aging A4 fleet, which left New Zealand without a combat air wing. It reduced the defense budget across the board and ramped up the trade component of its foreign affairs bureaucracy as it moved to expand and deepen the initiatives begun under the Shipley government.

The NZIC perspective did not change significantly immediately after the Clark government was installed in 1999, although increased attention was given to international disarmament, non-proliferation and support for peace-keeping and military missions other than war. Both the GCSB and SIS continued a priority focus on instability in the South Pacific while tending to the requirements of foreign partners, on the one hand (GCSB) and the necessities of domestic espionage on the other (SIS).

9/11 changed that.

The unconventional attacks by al-Qaeda on New York and Washington DC, precipitated the global “war on terrorism.” The US opted for pre-emptive war on al-Qaeda, saber rattling at the so-called “Axis of Evil” and other rogue states, and started a war of aggression on Iraq. It sent out a call for solidarity and assistance to the international community, and given its traditional ties to the US, New Zealand could not refuse the request. The question for the Clark government was how to do so without betraying the Left wing of the Labour Party and other Left parties in Parliament (especially the Greens). The answer was found in image management and quiet diplomacy.

Security conservatives in the NZDF, MFAT, NAB and DPMC urged the Clark government to use the opportunity to finally repair ties with the US strained since the 1985 non-nuclear declaration. This extended to supporting specialized defense niche businesses based in New Zealand, but was primarily centered on improving bilateral military-to-military and intelligence links with the US as well as strengthening security training and cooperation agreements with Australia, the UK and other Western powers (including France).

For the intelligence community the impact was two-fold. The SIS re-directed its energies towards counter-terrorism, specifically in detecting so-called “home grown” jihadis who might be planning attacks on New Zealand soil as well as those who supported al-Qaeda and other Islamicist extremist groups financially or politically (such as via the use of non-profit organizations as fronts for extremist recruiting or for sending money to al-Qaeda affiliated NGOs). Later, under the Key government, this concern turned to the subject of so-called returning “foreign fighters, that is, New Zealand citizens and permanent residents who left to Middle Eastern war zones and were suspected of trying to return to New Zealand having been radicalized and trained by violent extremist groups like the Islamic State. This tasking extended to monitoring the activities of suspected Islamicists in the English-speaking South Pacific and became the dominant preoccupation of its domestic espionage program.

The problem with the sudden focus on domestic Islamic terrorists was that there were few to be found. This led to some awkward moments, such as when the 2005 SIS annual report claimed that the primary threat to domestic security were “home-grown” jihadis and al-Qaeda supporters, only to have the 2006 report, under a new Director, abandon the claim entirely in favor of foreign espionage on New Zealand soil (Buchanan, 2007). Likewise, there was a brief media frenzy about a New Zealand based plot to bomb targets in Australia to which the government replied cryptically (thereby fueling public speculation about local jihadis), but in the end not a single person was detained, much less charged for Islamicist-inspired terrorist offenses during the entire term of the 5th Labour government, as well as that of its successor.

The SIS continued monitoring of non-Islamic domestic radicals, particularly Marxists, Anarchists, Maori separatists, environmental and animal rights activists. This culminated in the “anti-terrorist” raids of October 15, 2007 where 18 individuals fitting these descriptors (including one with pro-Palestinian sympathies) were arrested on grounds that they were part of an armed criminal conspiracy plotting to commitment politically-motivated violent acts against high profile targets (all terrorism charged were eventually dropped and only four were convicted and sentenced for firearms related charges).

It also increased its counter-espionage activities, as growing numbers of Chinese migrants brought with it a concern about PRC espionage activities in New Zealand. Although the SIS did not name the countries it believed were engaged in foreign espionage in New Zealand, successive annual reports indicate that it remained a primary concern for the duration of the 5th Labour government. One effect of the focus on counter-terrorism and domestic extremism is that the SIS lost some of its ability to engage in South Pacific based human intelligence collection. This was particularly evident in its failure to anticipate the 2006 Fijian coup or the 2009 hardening of the military bureaucratic regime installed by it.

The GCSB also refocused its energies on the terrorist threat, but its role included using its assets in support of and supplying personnel to the US-led wars in Afghanistan and Iraq (Hager, 2011). GCSB involvement in locating, identifying and targeting al-Qaeda and Taliban “high value” individuals in Afghanistan and Pakistan occurred in spite of the government’s claim that New Zealand was only engaged in non-combat roles (a claim that it also used when questioned about New Zealand Defense Force deployments in Afghanistan and more recently Iraq).

The push to show concrete support for the war on Islamicist extremism made for a difficult juxtaposition. By the early 2000s New Zealand was firmly committed to expanding its commercial relations with Asia and the Middle East, yet some of the countries that it was working to establish deeper commercial ties with such as Pakistan and Saudi Arabia were hotbeds of violent Wahhabist and Salafist thought. The contradiction was evident in New Zealand signing bilateral education agreements with Pakistan and Saudi Arabia by which thousands of students from those countries were given visas to pursue university studies in New Zealand without any security vetting.

Moreover, the move to re-establish security ties with the US and its allies in the War on Terrorism brought with it the possibility of alienating Chinese economic and diplomatic interests that saw better New Zealand-US security ties as a threat to China’s growing role as a great Pacific power. Since New Zealand was the first Western country to sign a bilateral trade agreement with the PRC, the reaffirmation of its security relationship with the US placed New Zealand in a particularly awkward diplomatic position vis a vis the two rival powers, one that has a distinct possibility of becoming a “Melian Dilemma.” (Buchanan 2010 b)

The reassertion and extension of New Zealand’s security ties with the US counterbalanced the thrust of New Zealand’s trade-oriented foreign policy realignment away from its traditional sources of patronage and alliance. For the NZIC there was no contradiction inherent in the juxtaposition of an East-focused trade policy and a West-focused security policy and was, in fact, seen as having the best of both worlds (Buchanan 2010a). Even so, there was an increased awareness within the NAB that in spite of claims about New Zealand’s “benign” strategic environment, the country was increasingly exposed to the repercussions of foreign conflicts, something driven home by the deaths of Kiwis on 9/11 and in the 2002 Bali and 2005 London bombings perpetrated by affiliates of al-Qaeda (none of which were foreseen by the NZIC or its major allies). This forced the NZIC to focus priority attention on irregular threats originating or inspired from abroad, to include domestic sources of funding and recruitment for foreign extremism.

 The Key Government.

 The process of rapprochement between New Zealand and the United States came to fruition with the election of the John Key-led National government in late 2008. Key makes no secret of his affection for the US and was determined to overcome the final barriers to full restoration of bilateral security ties with it.

The task was accomplished with the signing of the Wellington and Washington Declarations in 2010 and 2011 respectively. These restored New Zealand as a first tier military partner of the US. In parallel, after a number of breaches and spy scandals, then the Edward Snowden leaks, the GCSB saw a series of systems and protocol upgrades designed to address the problem of cyber security while increasing its ability to engage in mass surveillance and hacking operations against targets of interest to the US and other 5 Eyes partners.

The GCSB was fully integrated into the 5 Eyes mass data collection schemes as well as providing technical support for US drone operations in the Horn of Africa, Arabian Peninsula, Afghanistan and Pakistan (Hager, 2011). Beyond that its targets include foreign diplomatic and commercial communications, notably those of neighboring Pacific states, diplomatic allies, trade partners, other friendly nations as well as international and non-governmental organizations, interest groups, charities and foreign regulatory agencies.

The SIS continued its attention on counter-terrorism, accentuating its focus on Muslim extremists (including so called foreign fighters and home grown jihadis) while continuing its long-standing interest in Maori separatists, Marxists of various persuasion and anti-free trade groups and individuals. As had occurred under the Fifth Labour government, the heightened concern with counter-terrorism continued to divert resources away from overseas human intelligence operations, particularly within the South Pacific.

One area that continued to grow in importance for the SIS was counter-intelligence operations. These are mainly directed at Chinese espionage, which includes economic as well as military-diplomatic targets. In concert with GCSB efforts to thwart Chinese and other foreign based cyber-espionage and theft, the SIS focus on counter-espionage became the fourth pillar of its institutional orientation (along with counter-terrorism, domestic political espionage and criminal investigations). Added to issues such as fisheries poaching, whaling, arms proliferation and people smuggling, these concerns comprised the bulk of the threat assessment packages delivered to the Prime Minister by the NAB.

In 2010 a reform process was initiated within the NZIC under the banner “one community, many agencies.” The ICG was created and along with the NAB and SRG was re-located in the same building as the GCSB with an eye towards improving information sharing and coordination between them. The SIS was urged to improve its coordination with domestic security agencies and other members of the NZIC in an age of globalized threats. Based on recommendations made in the 2009 Intelligence Agency Review commissioned by the State Services Commission (known as he Murdoch Review), the reforms were driven by the understanding that the NZIC was the product of historical legacies that included adoption of doctrines, precepts, perceptions and policies from foreign intelligence partners that led to a patchwork approach to intelligence gathering and analysis and some “tribal” outlooks on inter-agency dynamics. (Whibley 2014).

Notwithstanding these reform efforts, subsequent reviews of the GCSB and SIS found serious issues with legal compliance, organizational dysfunction and misunderstanding or uncertainty about specific responsibilities within the larger division of labour within the NZIC. Public revelations of these failings led to the creation of the Intelligence Review committee whose review and recommendations will be published in early 2016.


The New Zealand intelligence community suffered some but not a particularly uncommon degree of institutional lag after the Cold War and the foreign policy realignment of the mid 1990s. Its priorities slowly changed over the 20 plus years that followed the end of the Cold War, but its core areas of interest remained largely unchanged. That was because it did not engage in issue linkage following the foreign policy realignment of the mid 1990s and basically followed the lead of its larger intelligence partners when it came to foreign intelligence priorities and assessments and, at their behest, added terrorism to its list of domestic intelligence priorities. It was slow to react to the threats posed by Islamic extremism and cyber warfare as well as the use of social media for untoward ends, but that was a common problem for all of its intelligence partners prior to 9/11 and the subsequent introduction of “smart” mass communication technologies.

Institutional lag in the New Zealand intelligence community is the product of five factors: over-reliance on foreign intelligence streams for information; subservience to allied intelligence requirements and priorities; limited autonomous signals and human collection capabilities; organizational sclerosis and misplaced focus (on the nature of domestic “threats”). The combination saw the NZIC respond reactively rather than proactively to the emerging threat environment in which it is located.

In addition, institutional lag in the SIS and GCSB appears to derive from three organizational pathologies: bureaucratic insulation, inertia and capture. Both agencies were until recently very insulated from outside scrutiny, to include that of the Ministers responsible for their oversight and direction. This allowed them to conduct their affairs and determine their priorities in relatively unchecked fashion, to include engaging in operations that stretched the boundaries of their legal charters. In part this was due, and in turn contributed to, bureaucratic inertia.

Bureaucratic inertia in the NZIC was characterized by collector bias, organizational complacency, operational redundancy (especially within the GCSB) and resistance to internal and external criticism, administrative change or outside advice. Much of this was rooted in organizational features dating back to the Cold War and recruitment patterns that favored a specific demographic. Until the mid 2000s both agencies were characterized by an “old boys” culture, with limited recruiting outside of pakeha (white European) males, many of who had previous military or police experience.

A partial exception is in the GCSB, which fields a significant number of translators. Because of the requirements for native or near-native fluency, recruitment in the GCSB tends to reflect the listening priorities of its 5 Eyes partners more so than those of New Zealand itself. That includes Farsi speakers as well as those who have command of Mandarin and Korean, which means that the recruitment base for translators extends beyond the traditional pool of European males with military or police experience.

SIS recruitment of Asians and Maori, while ongoing due to concerns about Asian based organized crime and Maori separatists, was expanded post 9/11 to include females and people of Middle Eastern descent. Although females are now a significant component of both the SIS and GCSB (over 30 percent in each agency), Maori, Pacifika and other ethnic minorities remain a very small percentage of these agencies’ staffs (New Zealand Herald, January 3, 2016). The same can be said for the NAB. More importantly, the overall mindset, again until very recently and perhaps extending to this day, was one that emphasized group cohesion and shared perspectives and logics that placed a career premium on “team players” rather than those who might challenge the status quo or rock the boat. Given the very small size of the NZIC (approximately 600 people, of which 500 work in the GCSB and SIS) this mitigated against substantive reform within it.

This organizational culture would not matter, or may not have been allowed to persist, had there been effective oversight of these agencies. But the contrary occurred (and still occurs). Rather than having Ministers and independent oversight agencies such as the Inspector General of Intelligence and Security (IGIS) of and Parliamentary Committee on Intelligence and Security (PCIS) effectively acting as overseers of the agencies that provided a check on their activities, the reverse occurred: ministers, IGs and parliamentary committees were essentially “captured” by the logic and expertise of the intelligence managers who ostensibly reported to them.

Given the limited scope of authority and powers made available to IGs and the PCIS (which excluded them from scrutinizing operational matters, among other things), this left them at the mercy of senior intelligence officials for information about agency activities. With such emasculated oversight that provided no counter-weight to what the agencies claimed to be in the legitimate national security interest, the ministers responsible for them (until this year the Prime Minister acting as Minister of Intelligence and Security) were left to their own devices when it came to critically evaluating intelligence assessments and operations (when they were aware of them). Again, this led to their bureaucratic “capture” by their senior intelligence managers and advisors, with Ministers having to take more on faith than knowledge that what the IC was doing was in fact legal, timely when it came to emerging threats and in the national security interest. This was as true for the NAB and other intelligence consumers within the government at large.

In practice the quid pro quo for government acceptance of bureaucratic capture by the IC appears to be the supply by the latter (specifically the SIS and GCSB) of politically sensitive domestic intelligence for partisan use by the government of the day. Again, until very recently in light of the Snowden revelations and Kim Dotcom scandal, both major parties seemed confortable with that arrangement, although recent evidence suggests that the Key government was particularly adept at using intelligence agencies for partisan purposes (Hager, 2014).

The combination of external dependency and internal conformity contributed the most to the NZIC’s institutional lag. Added to that was the significant depth of organizational culture and practice within the SIS and GCSB, which was resistance to change even after the 2010 reforms and which focused on either debatable domestic threats or the external concerns of New Zealand’s main intelligence partners.

This ran counter to the thrust of New Zealand’s mid 1990s foreign policy realignment, particularly with regard to its relations with China and a variety of Central Asian and Middle Eastern nations. That has left New Zealand in the unenviable position of straddling the fence when it comes to its trade and security orientation and partners, something that is arguably untenable over the long term given the divergence interests of and growing strategic competition between the larger partners (Buchanan 2010b).

2016 represents a potential watershed moment for the NZIC. An Intelligence Review will be published that is anticipated will recommend legal and organizational changes to the SIS, GCSB and perhaps other members of the NZIC. Two female lawyers now head the SIS and GCSB, and their tenures have been marked by more transparency and critical self-reflection than in previous eras. Efforts to broaden the recruitment base for the NZIC are underway within the limits of what secrecy and security allow.

It remains to be seen if any changes are made to the PCIS and the relationship between it and the NZIC, as well as that between the Minister of Intelligence and Security, the Commissioner of Security Warrants, IGIS and the agencies they oversee. They key to improving oversight and quality control mechanisms is to make them proactive as well as reactive in their scrutiny of agency operations and to give them powers of compulsion under oath (Buchanan 2014). Some measures have been taken in this regard with respect to the authority of the IGIS, but oversight currently remains thin at best.

The primary solution to the problem of institutional lag within the NZIC is to develop more autonomous priorities and capabilities. Although doing so in the context of the 5 Eyes system is difficult given alliance commitments, it is not impossible to add a New Zealand centric focus to signals and technical intelligence targeting that does not interfere with ongoing alliance priorities. Even more so, the SIS has the opportunity to redefine its role in a way that is more in line with its relatively limited capabilities, for example, by divesting itself of domestic espionage duties (to the Police) in order to concentrate on foreign human intelligence and counter-intelligence work.

For all the good intent of the 2010 reforms and proliferation of intelligence agencies and cells through government departments, it remains unclear if the intelligence gathering, analysis and assessment process in New Zealand has improved or been streamlined to the point of increased efficiency and accuracy of intelligence products. The 2016 Intelligence Review may help shed light on whether that is the case.

One thing is certain. If the NZIC is going to confront the security challenges of the 21st century it will have to continue to adapt and reform. Only by doing so can it overcome the problem of institutional lag and the contradictions inherent in issue de-linkage. Because being small and distant is not a secure barrier to global threats, and be they foreign or domestic, the threat environment in New Zealand is constantly evolving and posing new challenges to those entrusted with its safe-keeping.



[1] Anonymous correspondent Phillip H. quoted in Charles Hugh Smith, Institutional Darwinism: Adapt or Perish, www.oftwominds.com, February 18, 2010.

[2] The French Pacific Fleet is headquartered in Papeete and the French Pacific Army is headquartered in Noumea. Concern with French nuclear testing and instability in former French territories drove New Zealand’s interest in them.



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An edited version of this essay appears in R. Patman, ed., New Zealand and the World. Singapore: World Scientific Publishing, 2016.