A recent facial recognition technology (FRT) model trialled by a New Zealand supermarket chain has been found to comply with the nation’s Privacy Act.
Privacy Commissioner Michael Webster found that while Foodstuffs North Island’s (FSNI) FRT model is compliant, his inquiry report points out that any business considering or using FRT needs to set it up correctly to stay within the law.
“While the use of FRT during the trial was effective at reducing harmful behaviour (especially reducing serious violent incidents) it has also shown that there are many things that need to be taken into account,” Webster said.
“FRT systems have potential safety benefits, but they do raise significant privacy concerns, including the unnecessary or unfair collection of people’s information, misidentification, technical bias which can reinforce existing inequities and human bias, or the ability to be used for surveillance.
“These issues become particularly critical when people need to access essential services such as supermarkets. FRT will only be acceptable if the use is necessary and the privacy risks are successfully managed.”
Webster then listed nine key factors that kept Foodstuffs’ FRT trial in line with the Privacy Act, including the immediate deletion of images that did not result in a positive match, and setting up the system to only identify people who had engaged in seriously harmful behaviour.
Staff were also not permitted to add images of children or young people under 18, or people thought to be vulnerable, to the watchlist, and there was no sharing of watchlist information between stores.
During the trial, the operational threshold that triggered an FRT alert was raised from 90 per cent to 92.5 per cent likelihood of the images matching, reducing the chances that people would be misidentified while managing down the “computer says yes” risk.
Match alerts were verified by two trained staff, ensuring that human decision making was a key part of the process.
Access to the FRT system and information was restricted to trained authorised staff only.
Images collected were not permitted to be used for training data purposes.
Systems were reviewed and improved during the trial where misidentifications or errors occurred.
Peak body Retail NZ welcomed the findings from the Privacy Commissioner, adding this should pave the way for responsible use to help tackle rising retail crime.
“Retailers are crying out for proactive solutions that prevent crime and enhance the safety of their staff and customers,” Retail NZ CEO Carolyn Young said. “Our members continue to face high rates of violence and crime, putting both their employees and the public at risk, as well as threatening the financial sustainability of retail businesses.
“We know that retailers across Aotearoa New Zealand have been watching the trial with great interest and a number are investigating FRT for their own operations in the near future.”
Young added that FRT is not going to be the solution for all businesses or all crime. She said that retailers may decide that it is not suitable for particular stores or locations, but that it should be considered alongside other crime prevention tools such as security guards, fog cannons, staff training and body cameras.
Webster said there is still some work to do to increase the safety and effectiveness of FRT software use in the New Zealand context, noting that FRT technology has been developed overseas and has not been trained on the New Zealand population.
In Australia, many retailers have actively declared that they don’t use FRT across any of its stores. In 2022, Bunnings and Kmart halted the use of the technology across its stores amid privacy concerns, with other retailers such as Big W, Myer and Rebel stating they do not use it and had no plans to do so in the future.
Due to the minimal use of FRT in New Zealand thus far, Webster said it’s impossible to be completely confident FRT has fully addressed technical bias issues, including the potential negative impact on Māori and Pacific people.
“This means the technology must only be used with the right processes in place, including human checks that an alert is accurate before acting on it,” Webster said.
“Some improvements will also need to be made by FSNI before the use of FRT is made permanent or expanded to more stores. These focus on ensuring the documented processes and system settings are updated to match what happens in practice, including ongoing review of the use of FRT to make sure its use is justified as an effective tool for reducing serious harm offending.”
Webster said he also expects FSNI will put in place monitoring and review processes to evaluate the impact of skin tone on identification accuracy and store response, and to provide confidence to the regulator and customers that key privacy safeguards remain in place.
“The trial findings will help other businesses to ask the right questions about whether FRT is necessary and appropriate for them and to understand what they would need to do to set FRT up and run it in a privacy protective way.”
Retail crime reportedly impacts more than 99 per cent of retailers and costs well over $2.6 billion a year, according to Retail NZ.