More than two dozen people whose refugee claims turned out to be false will be allowed to keep their New Zealand citizenship and remain in the country.
The Department of Internal Affairs has so far refused to explain its decision not to revoke citizenship in 27 cases, but said it was strengthening its approach in cases where refugee status has been cancelled by Immigration New Zealand.
Immigration New Zealand's refugee and protection unit and its appeal tribunal were unhappy with the decision and said it undermined the protection of the refugee system from fraud, according to documents seen by Radio New Zealand.
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Labour's immigration spokesperson Sue Moroney has called on the Minister of Internal Affairs, Peter Dunne, to explain what happened. "New Zealanders need confidence in the integrity of the system,” she said.
Twenty-seven genuine families could have had refugee status if the frauds had not occurred, she said.
Internal Affairs had described some cases as historical, but papers obtained by Radio New Zealand showed Immigration New Zealand blamed the department for inaction.
The department said in a statement that other cases were being actively pursued, and it was making changes, including amending a citizenship application form so an applicant must confirm they had not given false information to immigration officials.
Internal Affairs said the criteria for losing citizenship is different to those used for cancelling refugee status in fraud cases.
"The legal criteria for cancellation of refugee status and the deprivation of citizenship are different and are determined independently by the two agencies based on their respective legislation," the department and Immigration New Zealand said in a statement.
"Immigration New Zealand is charged with ensuring the refugee system is protected from abuse and that those who do not need or deserve protection do not benefit from their fraud.
"DIA is charged with determining whether the circumstances of the case meet the standard required to proceed with deprivation of citizenship."
The department said it was making changes to strengthen the process around revoking citizenship in such cases.
In the minutes of one meeting, Immigration New Zealand pointed to Internal Affairs' "continuing reluctance to deprive cancelled refugees of citizenship."
Immigration New Zealand pointed out that those who have their citizenship cancelled revert to having residence status, so would then be in a position to appeal against any attempt to deport them - which should allay humanitarian concerns.
Internal Affairs Minister Peter Dunne said it would not be appropriate for him to comment further on something that was a policy or operational matter for his department and Immigration New Zealand to determine.
A version of this story was first published on radionz.co.nz.