The Inquiry found both agencies, but to a much greater degree, the NZSIS, received many intelligence reports obtained from detainees who, it was subsequently revealed, had been subject to torture. On one occasion the NZSIS provided questions to the CIA to be put to a detainee. While the NZSIS was not aware that detainee interrogations involved torture, it was known that the individual was being held by the CIA in an undisclosed location.
As the report notes, this should have been a red flag for human rights abuse, but it wasn't treated as such (which ought to raise serious questions about the types of people working at SIS). Neither were the widespread public reports that the US was engaged in torture and disappearance, or the fact that partner agencies were launching inquiries into it. Instead, the SIS seems to have culled all mention of those facts from its files of media reports - as if they were deliberately turning a blind eye. The report also notes that the directors of the SIS and GCSB did not inquire with the Americans about the allegations, or seek assurances from them. And it is said explicitly and repeatedly that the reason for that is that those directors did not want to upset the Americans:
...Directors also noted the risk of compromising intelligence flows of vital importance to New Zealanders... if they had challenged their US counterparts...
...there was an unspoken general rule that one did not ask direct questions about the operations of Five Eyes counterparts...
...[the directors] felt constrained not to do anything which would have risked or reduced New Zealand’s role as part of the alliance or to the flow of intelligence...
...they saw other risks, particularly the risk of compromising vital intelligence flows at a vital time, if they asked questions of their partner agencies...
...As one of the former Directors said, it was not realistic to think that New Zealand could have said “please explain” to the United States, the most powerful country in the world. Realistically the response would have been that New Zealand would again have been cut out of the recently resumed intelligence flow, at a time when it most needed it.
Its the same problem we've had all along: it turns out that the people at the top of "our" spy agencies are more loyal to America than they are to us. They're good little vassals to their foreign masters. And we were were paying them for that.
The inspector-General is very clear that the directors had a duty to assess the risks of torture and complicity and raise them with Ministers. They didn't. And that's a dereliction of duty right there. Not raised in the report, because it is outside the Inspector-General's jurisdiction: but equally important: where was the Minister? Because faced with those media reports in 2003, I'd have expected a popular and competent Minister to seek assurances from her agencies that everything was alright and that they were neither complicit in nor contaminated by criminal American behaviour. There's no evidence that she did. Even when interrogation reports of a "senior Al-Qa'ida detainee" were landing on her desk. So perhaps the spies weren't the only ones who were wilfully blind to this.
The report notes that it is "not possible to know" whether the SIS's questions resulted in the detainee - Khalid Sheikh Mohammed - being tortured to extract responses to their questions. But to me, it looks like complicity. The legal framework has changed since then, and you'd hope that this review has made them more aware of the issues and their legal and moral duties. OTOH, given that everything these agencies do is secret, how would we ever know?