But, by a series of snakes and ladders through the stated functions and objectives of the act, it convinced itself it was allowed to help the SIS and police spy on New Zealanders.
It has not been rampant, if the Rebecca Kitteridge review on the GCSB is to be believed. Since 2003 there have been 88 cases of the GCSB involving itself in the investigations of New Zealanders.
And 58 involved the collection of metadata (information about communications rather than the actual communication) on individuals while helping other agencies.
The GCSB advised itself that metadata was not a communication, and so not only did it believe there was nothing in the act preventing it from collecting such data, it justified doing so on the grounds that as long as the group it was helping was acting lawfully, it must be, too. The law said no such thing. But the new law is about to say exactly that.
The bill will spell out the entities the GCSB can help - Defence, the SIS and the Police are specified - but also allow the Government to add to the list by regulation - essentially the agreement of the Cabinet.
They are among the many contentious issues within the Government Security Communications Security Bureau and Related Legislation Amendment Bill.
Changes to the law have been proposed in the bill that is to come under parliamentary and public scrutiny next week when hearings begin.
The euphemistic conclusion of Kitteridge and the Inspector-General of Intelligence and Security, Paul Neazor, is the law needed "clarifying."
The gulf between the bureau's activities and its empowering legislation is reinforced in a Cabinet paper on the proposed law change.
It says not only is the act not now fit for purpose, it may never have been, citing even exchanges of foreign intelligence reports. The law, it says, does not support its legitimate activities.
Opponents of intelligence agencies argue the behaviour of the spies should change to fit the law, but that has never been seriously contemplated. The bill changes the law to fit the behaviour. In short, it lets the agency spy on New Zealanders under more circumstances.
As submissions begin to emerge, concerns are being voiced not just from people who are generally against intelligence agencies but organisations such as the Law Society and internetNZ.
But civil libertarians may have a hard job galvanising young people against an expansion of state intrusion when their private communications and internet movements are already fed daily to giant internet corporates with tacit acceptance.
The present law was drafted in 2001 under the watch of former Labour Prime Minister Helen Clark, who wanted to give the agency legal standing but set strict parameters.
The new bill is more open-ended, gives much wider powers and is written with a view to future-proofing it against fast evolving technologies.
But taken together with a companion bill, the Telecommunications (interception Capability and Security) Bill, expanding the Government's powers to make networks accessible for interception, it is seen as widening the potential for abuses of power.
GCSB core business
The GCSB's main function is to collect foreign intelligence and protect Government-held information and systems and maintain good international relationships. It is allowed to help private entities in that pursuit in a non-specific way.
Under the bill, the GCSB will still be responsible for gathering foreign intelligence, but two other functions have been given equal emphasis - information assurance and cyber-security of public authorities and private ones authorised by the Minister of GCSB, and co-operating with other entities (Police, Defence, SIS and any other Government entity signed off by the Cabinet).
The cyber function gives it responsibility to protect the integrity of "information infrastructures" important to the Government and any other entity the Government authorises.
Spying on Kiwis
The ban on spying on New Zealanders remains as far as intelligence gathering goes - unless they are deemed agents of a foreign country or organisation.
The new bill will widen its powers to investigate and collect information - spy - on New Zealanders under its "information assurance and cyber security" function.
That means it can act if it has cause to believe the integrity or security of communication and information systems is at risk. It does not need the permission of the private sector entity. The Government encouraged the GCSB to expand its specialist skills in cyber security to the private sector including establishing a National Cyber Security Centre within the GCSB in 2011.
Incidental spying
The act and the proposed law both allow for the collection of intelligence on New Zealanders as an incidental byproduct of spying on a foreigner but it will be easier to keep that intelligence in the future.
The law says irrelevant information must be destroyed unless the director thinks it might help in the prevention or detection of serious crime in New Zealand or overseas, then he can pass on that information to whom he thinks should have it.
The proposed law broadens the reasons for keeping it to include if the director thinks the information might help identify, prevent or to respond to threats "or potential threats" to the national security of New Zealand or any other country.
Interception warrants
Interception warrant and computer access authorisations by the GCSB are allowed for the purpose of conducting foreign intelligence.
With the expansion of the core business of the GCSB to cyber security - public and private - warrants and authorisations will be required for that function, too, and may include New Zealanders.
The warrants will have to be approved by the GCSB Minister (usually the Prime Minister) and he will have to consult the Minister of Foreign Affairs.
If a warrant or access authorisation is for a New Zealander or NZ permanent resident, it must be approved by the GCSB Minister and the Commissioner of Security Warrants.
Double approval must also apply if the warrant or authorisation is for the purpose of spying on a New Zealander in the intelligence gathering function.
While the bill is littered with references to the ban on spying on New Zealanders for the purposes of gathering foreign intelligence, it also specifically contemplates it.
The exception would be when New Zealanders are deemed to be foreigners for spying purposes because they are agents of a foreign country or organisation.
Such a situation could arise if the GCSB discovered a foreign terrorist organisation had a New Zealand member or a New Zealander was conspiring with a foreign embassy against New Zealand's interests.
Such spying was allowed by implication in the existing law. But it is now explicitly allowed if both the Prime Minister and commissioner approve it.
What can be intercepted
As well as private communications of the person subject to warrant and authorisation, the GCSB can gather intelligence from, and about, information infrastructures described as including "electromagnetic emissions, communications systems and networks, information technology systems and networks, and any communications carried on, contained in, or relating to those emissions, systems or networks".
The term "information infrastructure" may be an attempt to future-proof the law.
Interception and access without warrants
Some interceptions in the gathering of foreign intelligence is already allowed to take place without a warrant or computer access authorisation.
That applies when there is no physical connection of an interception device to a network, such as the communications picked up the Waihopai listening station near Blenheim, part of New Zealand's contribution to Echelon, a global system of data collection within the Five Eyes intelligence network (UK, US, Australia, Canada and New Zealand).
The new law will allow warrantless interception capability to be extended to work in the information assurance and in cyber security.
The ban against using it for the purpose of intercepting New Zealanders is repeated in the new bill. That suggests it could happen, as long as the purpose is to intercept, say, a foreign intruder's communications.
Oversight
Oversight provisions are beefed up but from a low base. The GCSB will have to keep records of all warrants and authorisations.
The chief oversight officer, the Intelligence and Security Commissioner, will be required to undertake unscheduled audits to make sure it is operating within the law, undertake independent inquiries into the propriety of particular activities, be limited to two three-year terms in office and will now have a deputy. The parliamentary committee will be required to report to Parliament.
What happens next
Submissions on the bill closed on Friday and public hearings to the Intelligence and Security Committee are due to begin next month. The committee is chaired by Prime Minister John Key, who is also taking the bill through the House. Labour leader David Shearer is on the committee and he has nominated another member, Greens co-leader Russel Norman. Mr Key nominates two members, Act leader John Banks and Tony Ryall, to replace United Future leader Peter Dunne.
The committee is due to report back on the bill on July 26.
The spy work that the GCSB has done with the SIS and the Police has been suspended until Parliament has passed a law giving explicit authority for it to do so.
Political support
The Government does not necessarily have the numbers to pass the bill. It has 60 votes, its own 59 and Act's one. It needs one more. New Zealand First leader Winston Peters has made supportive noises about the need to sort out the legal issues but did not vote for the first reading.
Labour will oppose it, arguing a full inquiry into all intelligence services is required, and the Greens oppose it.
United Future and the Maori Party, like New Zealand First, are reserving judgment.
What is the GCSB?
* New Zealand's foreign intelligence agency. Charged with protecting NZ Govt information and systems and national infrastructure.
* Directed by Ian Fletcher since February 2012, the first non-Defence appointee.
* Sir Jerry Mateparae was director of GCSB before he became Governor-General.
* Part of the Five Eyes network of international agencies of UK, USA, Australia and Canada.
* Runs a satellite communications interception base at Waihopai and radio communications interception base at Tangimoana.
* Works with Defence Intelligence Directorate when NZ has overseas deployments.
* Uses its interception capability to help domestic intelligence agency SIS and the police.
* Total staff: 294.
Tomorrow
Big impact from telco law changes.
