This is the second paper issued by the OFCANZ Establishment Team on risk management for organised crime. It takes account of feedback provided in response to the initial proposal paper, and the outcomes of a multi-agency workshop on this subject held in late May.

1.2 Background

In March 2008, Cabinet endorsed the establishment of OFCANZ as a discrete service agency, hosted within Police, with a mission of improving the safety and security of New Zealand by combating serious and organised crime and serious or complex fraud through an inter-agency partnership approach.

OFCANZ operations will be undertaken by multi-agency taskforces, which have specifically identified and approved objectives, targets, and timeframes.

As part of the OFCANZ establishment process, a series of papers are being developed outlining how the agency might work. These papers, once agreed, will inform the shape of OFCANZ, specifically the organisational structure, staffing levels, and detailed processes that will be followed.

1.3 Issue faced

OFCANZ will face the challenge of determining how it should seek to intervene in the New Zealand crime environment in order to achieve the greatest effect in the disruption of organised criminal activity. In the future OFCANZ will also need to consider how emerging organised crime risks should be watched for, identified and assessed. This document focuses on the current challenge only.

It is anticipated that a range of criminal activities and a number of criminal individuals and groups (hereafter referred to as organised crime entities) will be identified in intelligence assessments and other material provided to OFCANZ. It will be crucial to have a robust mechanism for assessing these activities and entities, and deciding what priority is applied to them when it comes to operational activity.

Various models already exist for assessing such matters. OFCANZ’s international counterparts have developed models for their own use, as have various domestic New Zealand agencies. These have been reviewed as part of the process associated with the preparation of this paper.

Section two of this paper sets out the approach OFCANZ will take in assessing and prioritising the organised crime environment in order to determine what operational activity to undertake.

1.4 Terminology

For the purposes of this document all terminology related to risk management is deemed to be consistent with that utilised in the Australia / New Zealand Standard for Risk Management: 4360:2004. Other key terms used in this document are:

Term	Meaning
Crime type	A crime type involving organised crime (e.g. Drug offending, Intellectual property, people smuggling) as opposed to a specifically identified individual or group (e.g. an entity)
Focus Area	An identified ‘risk’ within the New Zealand organised crime landscape that is prioritised and endorsed by ODESC for OFCANZ action.
Organised Crime Entity	An individual or group who engage in organised criminal activity.
Police National Intelligence Centre (NIC)	The Police National Intelligence Centre, being established along similar timeframes to OFCANZ, with the aim of providing whole of government intelligence to Police and OFCANZ.
Strategic Assessment	An assessment produced by the Police NIC that provides a high-level context to the organised crime environment within New Zealand.
Taskforce	A joint agency operation to combat a serious organised crime problem. A taskforce has an agreed target, objective, approach, and timeframe.
Taskforce Operations Plan	Document guiding an individual taskforce operation, with a specific target, objective, and approach
Tasking Framework	The framework outlined in OFCANZ paper "Tasking Framework (Organised Crime)"
Terms of Reference	Document guiding the intelligence gathering and refinement phase for individual focus areas.

2 Prioritisation approach

2.1 Foundation

OFCANZ set-out to develop a process that is robust, defendable, understandable and sufficiently simple in application that it will prove useable and useful. To help deliver these requirements OFCANZ has chosen to base its approach on the Australia/New Zealand Standard for Risk Management: 4360:2004. This standard will be used to provide the principles that will inform and guide the prioritisation process.

This foundation will be adapted to apply to the issue at hand, namely how to risk assess and prioritise organised criminal activity and entities. This may require specific elements of the generic risk management framework to be altered, but not in a way that takes the model away from the core principles detailed in 4360:2004.

The OFCANZ assessment and prioritisation process will involve a series of four steps:[1]

1. Establishing the context concerning organised crime;

2. Identifying the risks arising;

3. Analysing, Evaluating and Prioritising the identified activities and entities that give rise to the identified risks; and

4. Treating the risks through targeted OFCANZ operational activity against the prioritised activities and/or entities, and leadership of a co-ordinated inter-agency approach for any other interventions deemed appropriate (e.g. in areas such as policy, legislation or other agency specific operational activities).

The diagram attached at Appendix A depicts these steps in the form of a flow chart, which also presents the core elements of 4360:2004 in diagrammatic form.

Throughout these steps a parallel processes of monitoring, review and communication with and between partners and stakeholders will be on-going (refer diagram at Appendix A). This will ensure that as knowledge or risks change the prioritisation process can be reviewed and re-assessed.

2.2 Establishing the context

The Police National Intelligence Centre (NIC) is responsible for providing OFCANZ with strategic intelligence products necessary for it to fulfil its mission. These products will identify the organised crime context confronting New Zealand, and describe at a high-level a range of thematic issues within that context, with accompanying high-level summaries of particular identifiable organised crime entities that are associated with them. The strategic assessment will inform steps 1 and 2 of the prioritisation process detailed above.

2.3 Identify the risks

Understanding the risk(s) to be managed is fundamental to risk management. The Organised Crime Strategic Assessment will provide a significant degree of further insight concerning the risks confronting New Zealand.[2] OFCANZ, in consultation with partner agencies, will use the strategic assessment, and other available information provided to it, to determine what organised crime risks exist for New Zealand.

2.4 Analysis, evaluation and prioritisation

OFCANZ will lead a process, in consultation with partner agencies, to analyse and evaluate the information available through the strategic assessment and from elsewhere. In the first instance this process will aim to identify the Focus Areas that OFCANZ will seek ODESC endorsement of, before then undertaking additional work (and probably further information gathering) to determine the most appropriate operational interventions.

In undertaking this work the following set of impact criteria (focused on the current state of affairs) will be used to help assess the various elements of the information contained in the strategic assessment:

(a) National interests – are there impacts on New Zealand’s national interests?

· Maintenance of sovereignty and international reputation [3];

· Safety and security of citizens [4];

· Protection of the economy and ability to trade and travel [5];

· Living in accordance with nationally accepted culture and values [6]; and

· Support for recognised international institutions or other national jurisdictions which provide NZ with the ability - as a small nation - to influence international affairs and/or to protect its wider interests in the international arena - with a particular focus on the immediate neighbourhood of the South Pacific region [7].

(b) Community harm – are there impacts on the community (at either the local or national level)?

· Is violence, or the potential for violence, associated with the activity? (For example: does it result in deaths or injuries - directly or indirectly?);

· Does it create significant pressure on local community services? (e.g. Health, Mental Health or other social services);

· Does it damage the community's values and cohesiveness?; and

· Does it damage financial institutions or processes at the community level (or threaten this)?;

· Does it actively target vulnerable individuals (particularly youth) for recruitment into criminal activity - as either participants or customers?

(c) Multi-agency activity – is there an impact by this entity or thematic issue on a number of NZ government agencies (e.g. Immigration, Customs, MAF, MFish, Inland Revenue etc)?

Also taken into consideration at this point will be the current controls in place to address the activities under consideration. The controls will include current policy settings, legislative powers, and agency mandates and operational activities (i.e. business-as-usual work).

In assessing the information against the above criteria, judgement on the part of those doing the analysis, supported and informed by consultation with partner agencies, will be used to determine the conclusions and recommendations that will result.

2.5 Focus areas

Organised criminal entities and/or activities that impact a significant number of the criteria described above will be agreed across all agencies as key Focus Areas for OFCANZ. Discussions with agencies will also identify how other risk areas could be dealt with. This provides the opportunity to identify what controls currently exist to manage the entities or issues and to signal any perceived gaps.

Significant gaps will need to be picked up by the various responsible agencies for additional action, allowing OFCANZ and its partners to devote their energies to addressing the identified Focus Areas.

OFCANZ will then present all risk areas to ODESC, identifying those that become OFCANZ Focus Areas and those where a response may be led by another agency. Once agreed by ODESC, OFCANZ embarks on more detailed and specific examination of each area, and subsequent development of intervention strategies.

Monitoring of all entities or thematic issues will continue (not just on Focus Areas) for any sign that the level of priority afforded to them needs to be reconsidered.

Paragraph 2.7 expands further on how future or potential threats will be managed.

2.6 Operational prioritisation and action

The final area of work required under this approach is for operational action to be initiated by OFCANZ through its Taskforces (Step 4). These taskforces will operate according to the processes described in the Taskforce Operations paper published separately by the OFCANZ Establishment Team.

In its work OFCANZ will seek to target strategically important ('Centre of Gravity') aspects of the organised crime environment, in particular entities or activities that OFCANZ and its partners agree are the most appropriate use of the operational capability contained within their combined resources.

Additional prioritisation may well be required in this phase of OFCANZ work - particularly if multiple criminal entities are identified as operating within a specific Focus Area. A more traditional threat assessment process will be applied, if necessary, to help determine the degree of criminal intent and capability that resides within particular entities in order to help determine which is most deserving of disruptive action.

In these threat assessments the dimensions and attributes outlined in Appendix B will be used to help define and compare the relative organised criminal activities.

2.7 Challenges

Several challenges regarding this process have been identified as a result of feedback to the original proposal paper, and through the Risk Prioritisation workshop. The three most significant of these are:

· Assurance concerning the intelligence picture - what assurance is there that the intelligence picture will be accurate and can be acted upon with confidence? There is a link between this issue and the Unknowns item that follows.

· Unknowns - how to address the issue of what we do not know about a particular entity, activity or area, which can arise at the Focus Area or operational activity level.

· Ability to re-prioritise and to be flexible in the face of new or changing information - OFCANZ will need to have a degree of flexibility to cope with emerging operational issues, and also be able to re-prioritise and adapt to changes in its understanding of the organised crime environment.

· Potential for new threats to develop, or current ones to get worse - while an organised crime issue or entity may be prioritised as of low current threat, its potential to develop into a significant (and difficult to tackle) threat in the future needs to be addressed.

2.7.1 Assurance

While it is clear that those responsible for developing the intelligence picture are applying sound methodology to their work, it is acknowledged that the assessments produced will never include all the information relevant to the subject. Sometimes the information will be known about but not accessible for a variety of reasons; at other times it may simply be an unknown. Furthermore, the level of confidence that the drafters will have in their final product will be very dependant upon the nature and credibility of the sources of the information they have available to them, in conjunction with the degree to which the information can be corroborated.

The level of assurance that OFCANZ will have in the material presented to it, will be directly dependant upon the same issues. It is anticipated, however, that the level of assurance concerning organised crime intelligence reporting will increase over time as greater focus is placed on the subject, centralised analysis and evaluation of the information is undertaken, and wider ranging sharing and consultation across agencies is incorporated into the process.

Enhanced processes associated with setting intelligence requirements and collection activities (as proposed in the Police National Intelligence project) will also provide additional layers of assurance - as they develop over time - to the picture painted about organised crime issues.

2.7.2 Unknowns

What is not known about a particular organised crime activity or entity will in many cases be just as important as what is known - in some cases more important. The unknowns may screen or distort a significant issue and therefore impact the prioritisation afforded it, or the intervention approach taken. The reality is that unknowns exist and the number of them can be expected to grow through the work of OFCANZ and others, at least in the short-term.

The approach OFCANZ will take to unknowns is to focus attention on them through highlighting them as organised crime intelligence requirements, or, where possible, through specific information gathering activities utilising its own or partner agency resources.

The importance placed upon any particular unknown/s by OFCANZ will be determined on a case-by-case basis in consultation with partners and those charged with intelligence collection.

2.7.3 Re-Prioritisation and flexibility

As in any operational system, a degree of flexibility will be important within OFCANZ activities. Linked to this will also be the need to be able to re-prioritise activities as further information comes to hand directly through operational activities.

The prioritisation approach outlined above has a monitoring, review and communication process operating in parallel to it, to specifically address these two issues. Therefore, while a systematic approach will be taken to determining priorities and subsequent interventions (including investigations), the approach will allow for changing circumstances and new information.

Associated with the need for ability to re-prioritise and to be flexible, is the need for OFCANZ operations to remain within scope and available resources. This requirement will be managed through the Operations Management aspect of OFCANZ which is outlined in greater detail in the Taskforce Operations paper released by the Establishment Team.

2.7.4 Potential future risks

The Risk Prioritisation workshop identified that some current organised crime activities or entities, which fail to reach the level necessary to prioritise them as a Focus Area, may ultimately develop into risks of significance, and due to them not being addressed at an early stage, become a much more difficult issue to tackle. This challenge has a clear link to the earlier discussion on re-prioritisation and flexibility and the means of addressing those issues.

It is intended to specifically address this issue through the ongoing organised crime environment monitoring process which will be led by those charged with intelligence gathering responsibilities. This will see an annual strategic assessment being produced, and as part of that work, the regular re-evaluation of each element of the organised crime environment. Emerging or changing threats within that environment will form a significant part of the assessment process, with the opportunity for any fast-moving threats to be communicated separately outside the more cyclic annual assessment.

John Beaglehole

OFCANZ Establishment Director

June 2008

3 Appendix A

4 Appendix B

Operational Threat Assessments:

Two dimensions of an entity will be assessed. These are its intent and capabilities.

The intent dimension will be based upon the analytical judgement of those preparing the assessment, informed by the nature of the entities capabilities and consultation with partner agencies for their views. It will, in essence, describe the level of desire and confidence the entity has to engage in criminal activity.

The capability dimension will be based upon analysis of available intelligence and information concerning the following list of attributes:

Core criminal activities and impacts of the entity (what crime types does the entity engage in? A link exists at this point to the earlier described organised crime impact statements - pp. 7-8 when considering these activities).
Linkages to other criminal entities (what alliances, partnerships or other arrangements/relationships exist between this entity and NZ based or international criminals).
Geographic influence of the entity (where does it operate and exert its influence).
Resources available to the entity (what wealth, people, specific skills/expertise and property assets can the entity draw upon in pursuit of its activities).
Recruitment / Retention and bonding (what brings the entity membership together and holds them together - assuming the entity is not an individual).
Violence (is it used to enforce, intimidate or otherwise support the entities activities).
Corruption (is corruption, or attempted corruption, of public officials or processes part of the entities method of operation).
Infiltration of legitimate business activities or processes in support of the core criminal activities (does the entity use apparently legitimate (or actually legitimate) businesses or processes - including financial institutions - to launder or move illegitimate money, move illegal commodities or disguise other illegal activities).
Insulation from law enforcement activity (does it posses an ability to protect itself from intervention in its affairs by enforcement agencies).

[1] Steps 1-3 are likely to occur once during OFCANZ annual business cycle, whilst step 4 (and the monitoring and review process) will be an on-going activity over the entire period, and in some instances the activity generated may span more than one annual business cycle.

[2] This will further supplementing the information already available, from sources such as the Organised Crime Strategy and NZ Police's draft Organised Crime Strategy.

[3] Sovereignty in this context is deemed to include NZ’s ability to control its borders and determine who and what crosses them and under what conditions, and to issue and control the legitimacy of important national documents pertaining to NZ citizens and entry to the country (e.g. passports, visas, driver licences and other identity related documentation). Some activity may also place at risk NZ's international reputation - as viewed by international institutions (e.g. the UN), other nations (e.g. our immediate neighbours) or the international community (i.e. tourists or business people wishing to visit or trade with NZ).

[4] A government's role in protecting the lives of its citizens is integral to its reason for being. This applies to citizens at home and also, to a degree, those who travel beyond its borders.

[5] Being an island nation dependant upon legitimate and fair international trade and travel for both economic and recreational activity, NZ must protect the range of institutions and activities that support its economic well-being, and the abilities of its citizens to undertake trade and travel activities with the least amount possible of inconvenience. This includes protection of legitimate financial institutions and the revenue collected via the taxation system. It must also work cooperatively with others through international organisations to support legitimate trade and to protect the intellectual property rights of NZ and international business people.

[6] NZ is a democratic nation with a strong relationship with its history and culture. As a nation we have a desire for transparent, fair and just government and associated processes. Attempts to pervert, corrupt or otherwise avoid various lawful processes could be considered an attack on our culture and values. Furthermore, NZ places great value on its history, taonga, and the environment and seeks to protect these from those who seek to make profit from their unlawful exploitation.

[7] Institutions such as the United Nations, International Customs Organisation, International Civil Aviation Organisation and International Maritime Organisation to name but some, and other national jurisdictions.

About OFCANZ

Structure

Publications

Public info

FAQs

1 Introduction

1.1 Purpose

2.7 Challenges

2.7.1 Assurance

2.7.2 Unknowns

2.7.3 Re-Prioritisation and flexibility

2.7.4 Potential future risks

How To