Part 2: Establishing the firearms buy-back and amnesty scheme

Implementing the firearms buy-back and amnesty scheme.

2.1
In this Part, we:

describe why and how the scheme came about;
provide our view on the Police's work designing and establishing the scheme; and
provide our view on the Police's programme design and planning for the scheme.

2.2
We conclude that the Police:

worked effectively with multiple government agencies in a tight time frame to provide advice to Ministers on the objectives and design of the scheme; and
planned the implementation of the scheme effectively, including identifying the main risks and establishing a robust governance framework.

About the firearms buy-back and amnesty scheme

2.3
On 15 March 2019, attacks at two Christchurch mosques resulted in 51 deaths and multiple injuries.

2.4
In response to the attacks, the Government re-classified some types of firearms as military-style semi-automatic firearms through an Order in Council. Parliament then passed the Arms (Prohibited Firearms, Magazines, and Parts) Amendment Act 2019 on 11 April 2019. The Act was supported by a set of associated statutory regulations. The Act introduced a temporary amnesty,⁷ and the regulations allowed for a compensation scheme.

2.5
The scheme ran from 20 June 2019 to 20 December 2019. The purpose of the scheme was to remove semi-automatic firearms from the community because of their potential for significant harm.

2.6
The scheme required people to hand in their newly prohibited firearms, magazines, and parts for destruction. They would then receive compensation from the Crown if they had a valid firearms licence. Dealers were also able to hand in their stock for compensation if they could not return it to their supplier for a refund.

2.7
The Police intended for compensation to encourage people to participate in the scheme. Compensation also recognised that licensed firearms owners had acquired these firearms legally, so they should be paid for handing them in. Deciding how much to compensate people for their firearms, magazines, and parts required finding a balance between:

an amount that would encourage people to participate in the scheme; and
being fair to the taxpayers providing public money for the compensation.

2.8
The Police provided five different ways for owners to hand in firearms, magazines, and parts. These were:

local collection events, which were generally held in community venues such as stadiums and community halls;
private venues, such as gun clubs;
collection from owners' property in exceptional circumstances (for example, if they had large quantities of firearms or parts);
retail outlets of dealers; and
police stations.

The Police established the firearms buy-back and amnesty scheme well

2.9
The Police worked quickly and effectively with multiple government agencies to set up the scheme so that it was consistent with the Government's policy decisions and regulatory requirements.

2.10
The Police's work included:

providing advice and preparing policy proposals;
supporting the Minister of Police to move proposed legislation through Cabinet and parliamentary processes;
advising Parliament's Finance and Expenditure Committee during its examination of the proposed legislation; and
working with the Parliamentary Counsel Office to draft legislation.

2.11
The Police met with their counterparts from Australia to find out about the scheme that Australia implemented after the 1996 mass shooting at Port Arthur. Two people from Australia worked with the Police to help develop the scheme. The lessons from the Australian buy-back scheme included:

being clear about the scheme's objectives and purpose;
being clear about the scheme's scope (that is, what is and is not included);
the need for an extensive public education campaign, including nationwide advertising to support compliance;
having magazines in the scope of the buy-back scheme;
allowing people who did not have a licence, or who possessed firearms that were illegal before the scheme, to hand in firearms without prosecution (but also without compensation); and
the need to use information technology to support the scheme.

2.12
The Police had to do a significant amount of work in a tight time frame to set up the scheme. Six days after the Christchurch attacks, an Order in Council declared certain firearms to be military-style semi-automatics. The first reading in Parliament of the Arms (Prohibited Firearms, Magazines, and Parts) Amendment Bill was less than three weeks after the attacks. The second reading of the Bill was about a week after that. The resulting Arms (Prohibited Firearms, Magazines, and Parts) Amendment Act 2019 took effect on 12 April 2019.

2.13
There was good cross-agency collaboration. Staff from several government departments were brought in on secondment to develop policy advice and draft legislation. The work also included more than 90 staff from multiple agencies working for three days to analyse about 13,000 public submissions on the Bill. The Police and others worked effectively to meet the Government's expectations about timing.

The Police's planning of the scheme was thorough

2.14
The Police planned and set up the scheme well. They engaged consultants to develop a programme management plan. The programme management plan:

was robust and followed many aspects of good practice that we expect;
included operational and reporting requirements for each work stream;
clearly described roles, responsibilities, and lines of accountability; and
had a clear and concise methodology that met the short- and long-term objectives of the scheme.

2.15
The programme management plan identified key risks associated with implementing the scheme and detailed strategies to mitigate and/or minimise these risks. The risk management strategy aligned with the Police's wider risk-management approach, which included standardised and clear reporting requirements for regional teams to manage, mitigate, and own risk. The main risks to the scheme included the possibility of:

newly prohibited items not being handed in and remaining in the community;
an increase in illegal trade of newly prohibited firearms; and
relationships with the community of firearms owners breaking down.

The governance framework was effective

2.16
The Police established a clear and robust governance framework for the scheme. The framework included having four governing bodies to provide oversight. These were:

an executive steering group, which provided oversight of overall programme delivery and achievement of objectives;
a design authority, which provided oversight of the integration of the design and alignment of deliverables;
reference groups, which provided advice and guidance on areas of specific expertise; and
a programme management office, which provided programme management, including oversight of risks and issues, and support to the other governing bodies.

2.17
The governance and team structures were clearly defined and established, with clear definitions of work stream responsibilities and accountabilities.

2.18
EY recommended that the Police develop a reporting framework and associated reporting for Ministers and other key stakeholders that would bring together measures of the scheme's progress. Where applicable, the reporting framework would also refer back to the original assumptions that underpinned the original budgets and planning. EY suggested that the reporting could include the:

number and type of firearms handed in;
average cost;
average condition;
rate of firearms and parts collection;
references to other applicable benchmarks; and
stakeholder satisfaction measurements.

2.19
EY also recommended that the Police consider proactively releasing data and reporting to the public on the operation of the scheme.

2.20
In September 2019, the Police published a "performance dashboard" on their website. The information the Police reported on this dashboard included:

the number of firearm hand-ins completed;
the number of firearms, magazines, and parts collected (through both the buy-back and the amnesty aspects of the scheme);
the number of prohibited firearms that had been modified to be no longer prohibited;
the number of local collection events held; and
the total payments committed to, paid out, and pending.

Procurement of goods and services for the firearms buy-back and amnesty scheme was well managed and co-ordinated

2.21
The Police had to purchase a range of goods and services to implement the scheme. This included:

software to administer and record the collection of firearms, magazines, and parts;
assessors and support staff at local collection events;
venue hiring for local collection events;
equipment to make the collected firearms inoperative;
services to destroy the collected firearms, magazines, and parts; and
other items as needed (such as vehicles to transport collected firearms).

2.22
The Police also contracted consultants to help set up programme and project structures, and provide assurance over the scheme. The Police estimate that, once they complete the remaining work, administering the scheme will have cost up to $35 million in total.

2.23
The Police used a direct procurement process for services from professional services firms using existing panels of suppliers. Other services procured for the scheme were either procured centrally through Police National Headquarters (for example, uniforms, "bulldozer" machines for making firearms inoperative, and tags for firearms) or regionally by police staff who were informed by guidelines about what was required and the price (for example, venues for local collection events). Services for destroying firearms, magazines, and parts were provided by a supplier that had worked with the Police before.

Information systems

2.24
The Police learnt from their Australian counterparts that a good information system was critical to successfully implementing the scheme.

2.25
The Police had SAP develop the main system (the SAP system) that supported the recording and processing of prohibited firearms, magazines, and parts. We describe the performance of the SAP system in Part 3.

2.26
The Police procured SAP's services as an "opt-out" procurement under the Government Rules of Sourcing (now called the Government Procurement Rules). The Police told us that they spent, in total, about $9.4 million on computing services for the scheme, including third-party and SAP's services.

2.27
The use of an "opt-out" procurement meant that the Police did not have to openly advertise the services they were seeking and was able to approach SAP directly for those services. Under Rule 13(3)(m) of the Government Rules of Sourcing, the Police could procure goods and services directly as "measures necessary for the protection of essential security interests, procurement indispensable for national security or for national defence, the maintenance or restoration of international peace or security, or to protect human health".⁸

2.28
It is clear that going through an open-market procurement would have delayed the design and implementation of an information system to support the scheme. SAP already provided other services to the Police, including their finance system, and any system used for the scheme would need to work with the Police's finance system.

The Police took a principled and informed approach to compensation

2.29
The Police provided advice to Ministers on different options for how much to compensate people handing in newly prohibited firearms, magazines, and parts. Compensation was an important way of encouraging compliance with the new firearms regulations. It also recognised that newly prohibited firearms were previously legally owned property.

2.30
In advice to Ministers, the Police took a principled and informed approach to setting compensation prices. That is, the Police's objective was to set compensation prices that encouraged firearms owners to comply with the scheme while also being fair and reasonable to taxpayers.

2.31
In advice to Ministers in early April 2019, the Police assessed the fairness to firearms owners and the reasonableness of costs to the taxpayer of several pricing approaches.

2.32
The Police recommended an "individualised pricing approach [for each make and type of firearm] with new or used price points" or a version of that approach using three price points. This was similar to the approach used for the Australian firearms buy-back scheme.

2.33
On 4 April 2019, Cabinet agreed that the Police should seek independent advice to prepare the price list for the scheme. The Police commissioned KPMG to do that work.

2.34
KPMG prepared an initial base price list for more than 300 types and/or brands of firearms, identified potential buy-back options, and created a short list from those options. KPMG's process included speaking with retailers, wholesalers, importers, collectors, representatives of gun clubs, auctioneers, and specialists from the firearms industry. KPMG also reviewed the buy-back approach used in Australia.

2.35
Each buy-back option was assessed against how much it supported a set of particular principles, including effectiveness in removing firearms from the public, fairness to the owners of prohibited firearms, and cost to the taxpayer.

2.36
The option that the Police recommended to Ministers, and was agreed by Cabinet, involved a detailed pricing catalogue that contained base prices, by make and model, for each newly prohibited firearm. A three-tier percentage discount (95%, 70%, and 25%) was then applied to the base price depending on the condition of the firearm.

2.37
The three tiers were new or near-new condition (little to no use and maintained to a high standard), used condition (some to regular use but still operates as effectively as a new firearm because it has been well maintained), and poor condition (inoperative or in a condition where the firearm is not safe or comfortable). The Police's provisional information, as at 21 December 2019, showed that 58% of the firearms that people handed in were in new or near-new condition.⁹

2.38
Prices for the newly prohibited firearms, magazines, and parts reflected the market value just before March 2019. KPMG took into account retailers' prices and online prices and whether the firearm was a current, superseded, or discontinued model. KPMG also considered the risk of people dismantling prohibited firearms into parts and seeking compensation for them (the aggregate value of which could, in some instances, be more than that of an assembled firearm).

2.39
To ensure that pricing was appropriate (that is, within the context of what the industry considered to be a distressed sale situation), KPMG used a wide range of sources. These included:

price databases, TradeMe sales data, specialist valuations, and retailer price lists;
consultation with a range of specialists, including retailers, wholesalers, specialist dealers, and auctioneers; and
review by an independent data analytics team.

2.40
In a survey conducted for the Police, 78% of respondents felt that the compensation they received was fair. The survey took place between 31 August and 30 September 2019 at 19 local collection events and had 438 participants.

Changes were made to the price list part way through the scheme

2.41
The limited knowledge of the types of firearms and parts in the community resulted in the Police adding more types of firearms and parts to the price list over time. The first price list was published on 20 June 2019 and listed 314 firearms. The final price list was published on 25 October 2019 and listed 454 firearms.

2.42
These changes to the price list, and other changes introduced part way through the scheme (such as options to hand in firearms at dealers' retail stores or have them modified), were frustrating and confusing for some firearms owners. However, most firearms owners who participated in the scheme were not affected by these changes because mostly specialised or less common items were added to the price list.

2.43
The Police increased the payments for 273 items after hand-in. This included 56 payments as a result of additional models being added to the price list and 42 payments where there was an increase in price for a model on the price list when more information became available. The remaining 175 payments resulted from reassessments of firearms.

7: The amnesty meant that, for a fixed time, people possessing newly prohibited firearms, magazines, and parts would not be prosecuted.

8: The Government Rules of Sourcing were replaced by the Government Procurement Rules from 1 October 2019. Rule 12(3)(m) in the new rules is equivalent to Rule 13(3)(m) in the previous rules.

9: The Police’s provisional information is unaudited and subject to revision over time.