The law should explicitly prohibit foreign spying out of New Zealand, a constitutional lawyer says.
An official investigation shows the Government Communications Security Bureau (GCSB) allowed a foreign agency to spy from here for seven years till 2020 without the government knowing.
The system could be used for military targeting - and while the bureau had an agreement to allow it to keep track of how it was used, there is no record that it did, leaving the spy watchdog, Parliament and the public in the dark, the inquiry report shows.
Politicians say that law changes in 2017 provide for tighter scrutiny of the bureau now, and it is better run.
But independent foreign policy lobby group Te Kuaka member Fuimaono Dylan Asafo said those laws did not cover foreign operations.
"This should be of major concern to all New Zealanders because we are not in control here," Asafo said in a statement on Friday.
"We do not know what military activities were undertaken using New Zealand's equipment and base, and this could make us unknowingly complicit in serious breaches of international law."
Te Kauka is calling the spy agencies to front up to ministers in a public setting to ensure the public that military operations are not conducted.
Asafo said the stakes were even higher given New Zealand's interest in joining the tech-sharing pillar two of AUKUS with US, UK and Australia.
A key focus of the pact is the accelerated development of AI-driven surveillance and targeting systems.
"Pacific countries will be asking legitimate questions about whether this revelation indicates that spying in the Pacific was happening out of NZ, without any knowledge of ministers", Te Kuaka co-director Marco de Jong said.
Joining pillar two would raise questions if the country's intelligence agencies would "become entangled in other countries' operations, and other people's wars, without proper oversight".
Former minister responsible for the GCSB, Andrew Little, admitted it may never be known whether a foreign spy operation run out of New Zealand's security bureau was supporting military action against another country.
Former prime minister Helen Clark, who was the minister in charge of the GCSB from June 2003 until November 2008, said staff who signed off on hosting a foreign agency's intelligence system should face disciplinary action.
The current GCSB minister, Judith Collins, declined to be interviewed Friday morning, as did the GCSB.