Firstly, while the law has a section allowing for the appointment of a "special advocate" for non-government defendants, the law really only applies to cases against the crown. However it applies to "any criminal or civil proceedings (including public law and judicial review proceedings)" under the Act. So not just to (unlikely) prosecutions by MBIE, but to private prosecutions and claims for compensation or to enforce duties. So, this is aimed squarely at those who seek to hold government bodies to account for their failures.
Secondly, while the law supposedly restricts "classified security information" to operational information or information supplied by other governments on a confidential basis (and which furthermore would be prejudicial to security, international relations, or the maintenance of the law if released), it also makes the designation unreviewable:
The court must keep confidential and must not disclose any information provided as classified security information, even if it considers that the information does not meet the criteria set out in clause 3(2) and (3), unless the head of the specified agency that holds the information consents to its release.Which means that in practice, government defendants can apply it to anything they want, and it will be kept secret.
Thirdly, the law doesn't just apply to defence and intelligence agencies (who BTW are already in practice exempt for actual deployments anyway), but to the police or any government department named in Schedule 1 of the State Sector Act 1988. So, it applies to Corrections and Immigration, but also to the Ministry of Health, or even to Internal Affairs (who are the nominal employer of the Beehive's politicised "ministerial advisers").
Combined, this is a recipe for government agencies who kill people through clear and obvious failings to co-opt the Judiciary to cover up the details.
As for how it might be used, think of some notable health and safety cases or civil suits against government agencies in the past. Here's a few examples:
- The Army doesn't train its drivers properly, resulting in three men dying when their truck plunges into a river. Information on the army's training (or lack thereof) would obviously be "prejudicial to security" and revealing it would expose NZDF methods, so any trial can be cloaked in secrecy.
- The RNZAF tolerates "a dangerous and deadly culture of rule-breaking" and allows unqualified pilots to fly, leading to three unnecessary deaths in a helicopter crash. Similar logic applies, so the evidence of this can be declared secret, hampering any private prosecution.
- The police shoot and kill an innocent bystander during a gunfight on the Auckland motorway. Police information about exactly what happened is of course operational and might expose police methods (and incompetence), which of course would "prejudice the maintenance of the law". So any court case for compensation would be hampered by secrecy and likely not get off the ground.
- Corrections doesn't bother to segregate high- and low-risk prisoners during transport, resulting in a young man being murdered in the back of a van while being taken to court. Information on prisoner transport policies is of course operational, and its exposure could help prisoners escape, which is clearly prejudicial to the maintenance of the law, so it can be classified and kept secret, preventing any OSH prosecution.