The double garage behind a tidy suburban house looked like any other, but the roller doors masked a hive of illegal endeavour. When police following a tipoff called, they found more than they bargained for. “We thought there was one [stolen] car there; when we found nine it was the jackpot,” says Constable Phil Saville of Howick police.

It was the kind of operation that would keep many mainstreet mechanics in new overalls: two cars being dismantled and rebuilt, two more ready to go, parts from another five scattered around. The police call them chop shops – this one catered to the top end of the market. Being taken to bits was a shiny new Holden HSV GTO valued at $120,000. Black, two-door, six speed, it was nicked from a car groomer’s yard while being readied for its buyer. When police walked in, its front body panels, dashboard, doors and seats had been put on an older model Commodore, stripped to its shell. The 6-litre engine was about to go. The chop shop was connected to a gang with a penchant for HSVs, says Saville.

About 30 per cent of car theft is linked to organised crime.

The market is varied: cars may be chopped up for parts; the “jewellery” on high performance models switched to standard cars, as in this case; some are stolen to order and shipped overseas; others are sold within days at a knockdown price after the vehicle identification number (VIN) and plates are swapped. But in the case of the HSV GTO, microdot identification had been sprayed on to all parts. The microdots helped police return the car, and all its parts, to the importer, Schofield’s.

The identification procedure is called whole of vehicle marking: thousands of microscopic dots encoded with the car’s make and VIN number and contained in an adhesive film are sprayed on to all parts, including the engine, wheels, inside of panels and seats. The procedure takes minutes and can be done during assembly or on assembled cars. Police equipped with ultraviolet magnifying torches can quickly read the pinhead-size dots to tell if a car is legitimate. Microdots are difficult to remove – and it takes only one to establish a case. The technology is not new – microdots were first used in 1948 by spies.

Two years ago, the Government promised to introduce whole of vehicle marking on all cars as they enter the country as part of a major crackdown on vehicle crime. Police and Justice officials see enormous potential to cure one of the country’s biggest crime sores. In the year to June 30, according to Statistics NZ, 22,890 motor vehicles were stolen, up nearly 20 per cent in a year. Police records suggest only one in five were recovered.

Overseas, whole of vehicle marking has led to dramatic falls in thefts of high performance vehicles when introduced by manufacturers as an option for car owners. But New Zealand was poised to be the first country to introduce mandatory whole of vehicle marking.

Car theft is not exactly a top priority for hard-pressed police, given the painstaking detection work involved, the limited chances of success and the fact most owners can claim insurance. But it costs the country about $80 million a year and adds to the insurance premiums of every motorist. It is also increasingly linked to organised crime – gangs use the proceeds to import drugs and finance other crime. Police say whole of vehicle marking could save thousands of hours spent tracing stolen cars and parts, freeing them to solve violent crime cases and other priorities. “We talk to criminals – they know about them and don’t want to touch them,” says Senior Constable Mark Gibson, a motor vehicle crime investigator with Wellington CIB. “Crooks are concerned these cars have thousands of dots on them which you can’t get rid of. If the car’s going to sit in the backyard or in the chop shop for a couple of days they run the risk of being caught.”

There is also the potential to solve other crimes: it’s not unusual for parts to fall off vehicles during hit and runs, car chases and aggravated robberies, which often involve stolen vehicles. Gibson cites an aggravated robbery at a petrol station in which the getaway car clipped a fence, leaving behind a bumper. “It took us 10 days to identify the make and model, year of manufacture, whether it was an import or New Zealand new, the number in New Zealand … If the car had microdots that would have taken 10 minutes.”

Jeremy Wood, director of the Justice Department’s crime prevention unit, also says microdotting has implications for organised crime. “It would have a significant impact on vehicle theft and the resale of parts. Speeding up investigations can help to prevent further offending.”

But two years on, proponents of whole of vehicle marking are wondering whether the initiative, supposed to be in place by the middle of last year, has hit a dead end. If the delay is frustrating police and potential industry players, the response of Cabinet ministers serves only to fuel emerging conspiracy theories. The Herald approached Minister of Police Annette King’s office for comment, but was directed to Minister of Transport Harry Duynhoven. “They’re handling it,” said King’s spokesman.

Duynhoven’s office asked that questions be put in writing. One day later the Herald received a brief written response – from King’s office. It said a consultant was being engaged to undertake a cost-benefit analysis. Before imposing such a scheme on New Zealanders, it was necessary to understand the compliance costs and benefits to consumers and the industry. King expected to report back to Cabinet in March.

Just why has it taken two years to get around to a cost-benefit analysis on an initiative hailed by former Justice Minister Phil Goff as “proven [as] a strong deterrent to professional criminals”? One potential operator, DataDot Technology, says reluctant vehicle importers have spread misinformation that it will cause unacceptable delays and add hundreds of dollars to the cost of newly imported vehicles. The right answer may be that the wrong Government department – the Ministry of Transport – was charged with implementing the scheme.

Steve Plowman, editor of the Police Association magazine Police News, suggested in an October article that differing agendas were behind the delay. “Police and the Ministry of Justice are in the business of crime reduction whereas the Ministry of Transport focuses on traffic safety … Transport may be tending towards pushing it towards the ‘too hard basket’.”

The ministry’s land safety legislation manager, Leo Mortimer denies a Government U-turn. “New Zealand will be the first country in the world to mandate whole of vehicle marking – it’s pretty important we get it right. “It’s important to have a system that meets requirements but doesn’t slow down vehicles coming into the country and doesn’t impose horrendous compliance costs.”

While whole of vehicle marking undergoes tortuous analysis, the second main plank of the Government’s vehicle crime reduction package is stalled. Vehicle immobilisers, which prevent cars being hotwired, were also to be fitted to all imports, Goff said in January 2005.

While immobilisers were now standard on most new vehicles, they were fitted to only 5 to 10 per cent of used imports. Immobilisers would deter “opportunistic” theft – thought responsible for three-quarters of vehicle crime – while whole of vehicle marking would close down the professional theft rings. But the Government believes whole of vehicle marking should be phased in ahead of compulsory immobilisers. Debate is focused partly on the cost of microdotting and partly on the logistics of treating an estimated 190,000 cars a year as they enter the country.

Motor Industry Association chief executive Perry Kerr, who represents new vehicle importers, puts the cost to motorists of applying the dots alone at “around $399 to $500 before GST”.

DataDot NZ managing director David Lumsden estimates the cost at $70 a car – lower if tests on new robot application technology prove effective. He says car owners will quickly recoup the cost through reductions in insurance premiums. The insurance industry agrees. Lumsden is frustrated by the lack of progress and suspects the transport ministry has been “got at” by car importers touting out-of-date information and misrepresenting the facts.

“The $70 tag is for only one part of the process,” Mortimer told the Weekend Herald. The length of time needed to apply the dots was also an issue, he explained. “We are looking at the wider benefits. There are professional thefts and opportunist thefts – for opportunists, it may not necessarily matter.”

That statement echoed views expressed by the motor industry’s Perry Kerr who told the Herald whole of vehicle marking should be confined to high value, high performance vehicles targeted by professionals. “There’s no doubt that it’s effective but we don’t believe you have to apply it to everything from Daihatsus to $400,000 vehicles. The [theft] problem lies at the higher end. “The Government has decided to treat all vehicle owners as part of this nanny state and impose a mandatory fee for data dotting your vehicle.”

DataDot’s Lumsden counters that Kerr’s $390-$500 estimate is mischievous and that he is choosing to ignore updated pricing information. He says whole of vehicle marking needs to be across the board or thieves will simply move on to unmarked makes and models.

Police figures suggest theft by professional rings accounts for more than a third of stolen vehicles and the rate is rising sharply. Senior Constable Jeff Haynes, one of the country’s few police specialists in stolen vehicles, says car thieves are not that picky. “Cars that young guys drive are by far the biggest market for spare parts – the most common car stolen is 10 to 12 years old.”

Haynes says microdots will make it easier to detect stolen parts. But he warns that the measure will have little impact unless police are directed, and funded, to investigate theft. “We’ve changed the rules with car dealers and second-hand dealers but no one visits the wreckers’ yards and looks at the books.” Few professional rings are caught because they maintain a low profile, he says. “There’s no way they’re going to get looked at by police unless someone dobs them in. Police have to be alerted that there’s something dodgy about the car in the first place.”

Haynes’ pessimism is not shared by his Wellington counterpart, Mark Gibson. “Police really have limited means of identifying cars. “The microdot system is the best investigative tool we’ve ever had.” Saturday January 06, 2007