Prime Minister John Key admits drones occasionally hit the wrong targets and kill innocent civilians, but he's comfortable with New Zealand's indirect involvement in the programme.
The Government Communications Security Bureau doesn't give the United States information for the express purpose of carrying out strikes, Mr Key said on Firstline this morning - but it does pass on intelligence that could be useful.
"There are environments like Afghanistan where our people have gathered information, and that's information on people of interest to our ISAF partners, and we've passed that information onto ISAF partners - and one of those is the United States - and ISAF have passed that information on," says Mr Key.
"What happened next, I can't be 100 percent sure but almost certainly that's been used as the Americans and others have targeted those individuals."
But the GCSB didn't pass on information that led to the killing of Kiwi and alleged member of al-Qaida, Daryl Jones, says Mr Key.
"The claims that were made by this journalist on The Nation on Saturday morning in relation to Yemen, and prior knowledge or involvement of New Zealand in relation to the drone strike that killed the New Zealander, are - on the best information that I have - factually incorrect. That's not true.
"We weren't aware, we didn't have that information and we didn't play a part."
Despite not officially being a part of the programme, Mr Key says New Zealand benefits from the use of drones – so he's comfortable with it, despite its failings.
"I don't want to sound cold and calculating about these things but these are people that are al-Qaida operatives, they're Taliban operatives, they set bombs, they deliberately go out to kill our people and others," he says.
"There's been situations where drone attacks have backfired and have gone after the wrong target. No one's arguing that they're absolutely failsafe, but they've been a way of prosecuting those targets with less risk to our people."
But could the claims, true or not, damage New Zealand's reputation and hurt our chances of getting a seat on the UN Security Council in 2015? Otago University international relations expert Robert Patman thinks so.
"New Zealand sets great store by its adherence to international law; drone strikes are of dubious legality. Critics say it's a form of assassination," he said on Firstline this morning.
"New Zealand sets great store by its ability to present itself as an independent international actor. One of the criticisms of our indirect involvement in the drone programme is that we may be providing information which culminates in actions which compromise our ability to present ourselves as an independent actor."
The GCSB was recently implicated in spying on the Brazilian government, in documents released by NSA whistleblower Edward Snowden. Combined with the alleged links to the drone programme, Dr Patman says it's not a good look for New Zealand.
He's calling for greater oversight of the GCSB, calling the current setup a "conflict of interest".
"The Prime Minister appoints the director of the GCSB, but he also appoints the Inspector-General, the watchdog body which is responsible for overseeing it," says Dr Patman.
Dr Patman says this goes against the convention in other democracies, where there is more separation between the appointment of intelligence agency heads and their oversight body.
source: newshub archive