Differential Justice.

datePosted on 14:41, December 17th, 2018 by Pablo

For some time now I have wondered about standards of justice in NZ. Coming from the US and Latin America it seems that all to often people convicted of serious crimes are handed fairly light sentences, including violent recidivists. I understand the importance of rehabilitation over punishment, but sometimes it seems that the Courts let very unpleasant people get away with their crimes.

I thought of this recently when I read the news about a teenager hit and run driver who killed a boy crossing a crosswalk on his bike and who not only did not show any remorse, but in fact posed for a social media photo in an orange jump suit and Halloween makeup, presumably as a joke on where she could be headed. She got 11 months home detention and 250 hours community service instead.

That seeming injustice brought home another recent court case, one in which a famous Blenheim winery was fined $400,000 for adding post-fermentation sugar to its export wine in violation of EU standards (to which much of the wine was headed). The winery owner, a general manager and a wine-maker were fined between $20,000 and $35,000 each for their role in the subterfuge, which involved 6.5 million liters of wine, 3.7 million of which was sent to the EU between mid 2013 and late 2015.

That seemed about right to me. The Crown argued for serious fines because it damaged the reputation of the entire NZ wine industry. The individual fines were high enough to send a message of warning to others so inclined to cheat for opportunistic advantage, and the company fine was presumably large enough to make a negative impression on its bottom line.

Contrast this judgement against that handed down to a Hamilton-based aerospace company that sold a utility aircraft to a Chinese aerospace company knowing that it would be on-sold to North Korea in violation of international sanctions. Because the plane had potential military as well as civilian applications (such as parachuting) and was seen at an air show in DPRK Air Force livery, the violation was of “tier one” seriousness. 

The Chinese aerospace company has in fact majority ownership of the Hamilton company and three of its executives sit on the company board of directors. The contract for the plane included post-sale parts supply and servicing by Hamilton-based mechanics, so the initial claims that the company had no idea that the plane was on-sold to the DPRK fell flat in court. In fact, the entire defence went from “we assumed it would be used in the PRC” to “we did not know where it would end up” to “we did not know about the sanctions” in a hurry. That also did not stand up to the light of prosecutorial scrutiny as the Crown demonstrated that the firm falsified export documents in order to get the plane on its way out of NZ. Selling the plane directly to the DPRK would have required a special export license and would have been prohibited by the international sanctions regime. Selling to the Chinese parent company incurred neither constraint.

In other countries similar “tier one” violations of the international sanctions regime have resulted in million dollar company fines and jail time for company executives involved in the sanction-busting. There are enough successful prosecutions of such violators in Europe, the US and the Commonwealth to provide the Courts with sentencing guidelines. So what did the rogue Hamilton company get for what is an egregious violation of international norms that potentially damaged the reputation of the entire NZ aviation industry?

A $50,000 fine and no punishment to any individual. In some circles where corruption is rife that would be considered to be the acceptable, if not normal price for conducting dodgy business dealings. But is that the way business is conducted in NZ?

In light of the very different sentences handed down in these two cases, my questions are this: which is worse, the sugared wine scandal or the sanctions-busting affair? Is deceiving commercial partners overseas worse than helping a rogue dictatorship with nuclear ambitions and an atrocious human rights record skirt measures emplaced to hinder its ability to continue unchecked? Is international sanctions-busting considered to be a lesser offence than playing sleigh of hand with a commercial export product?

Perhaps the laws on the books limit the types of punishment available to the Crown when it comes to sanctions busting by NZ firms but give wider and heavier range to the penalties for instances of corporate malfeasance that do not involve sanction violations. If so, then the laws needed to be amended because if anything violating international sanctions regimes is a worse reflection on a country’s governance than is cheating within private commercial networks . If not, then the justice meted out in these cases appears at odds with international precedent and compound the reputation damage done by the Hamilton aviation firm because it gives the impression that “tier one” international sanctions violators will be treated more leniently in NZ courts than unethical commodity exporters.

If one egregious Kiwi-based sanction-busting firm can get away with a financial slap on the wrist when caught, so too may others decide that is an acceptable price to pay in the pursuit of profit over principle. That is another area where the application of differential and universal justice comes into play.

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