Air New Zealand didn’t break export laws when its staff controversially repaired an engine on behalf of the Saudi Arabian navy in 2019.
The work, carried out via a third-party company, was problematic because a Saudi offensive in Yemen has led to hundreds of thousands of civilian deaths, as well as a refugee crisis. Prime Minister Jacinda Ardern later branded the project “completely wrong”.
However, on Tuesday, the flag carrier said the country’s Department of Foreign Affairs and Trade confirmed business permits were not required for exporting the specific type of engines (GE LM2500) it was working on.
Chairman Dame Therese Walsh added the announcement aligns with advice the airline received from its own QC.
“The legal advice we received from Mike Heron QC is that the export of the two engines to Germany for the Royal Saudi Navy did not require an export permit under the Customs Act, nor did it require a notification to the Secretary of Foreign Affairs and Trade,” Dame Therese said.
“The advice is that new notification requirements introduced in late 2020 do not apply to contracts entered into before September 2020 (when the notification requirement was expanded for certain military-related exports). The contract for this Royal Saudi Navy work was in May 2019.”
The work only became public knowledge after an investigation by local broadcaster TVNZ, and Air New Zealand chief executive Greg Foran has long maintained he only became aware of the work after it began.
“In late February, we took immediate steps to ensure all future work of a military or government nature is escalated to executive level for review, including ethical considerations, and approval before a contract can proceed,” Foran said.
“We will also work with relevant governmental agencies to ensure our understanding of issues for differing jurisdictions is kept up to date.
He added that an internal review has seen the business change its processes to “support us to make the right decisions as an organisation”.
“We are also committed to making further changes pending the outcome of the independent external review.”
At the time of the initial revelation, Prime Minister Jacinda Arden said the work didn’t “pass New Zealand’s sniff test”.
“This is something that has ramifications for New Zealand, its reputation, and that’s why we are making sure we are across how it happened,” Ardern said.
“We do have obligations as a country to make sure that we are applying, for instance, UN sanctions and so on. Whilst it’s not clear whether what happened here would have fallen within that, there are still reputational issues.”