Cranmer
Lawyer with over 25 years experience in some of the world’s biggest law firms. I divide my time between the UK and NZ. This Substack explores issues facing NZ at present under my nom du plume, Cranmer.
The revelations that the Race Relations Commissioner, Meng Foon, made donations to politicians during the 2020 election cycle, including to the then Labour backbench MP, Kiri Allan, is the latest is a series of self-inflicted mini-scandals which are plaguing the government.
Just as the Prime Minister had caught his breath from Minister Stuart Nash’s resignation for disclosing confidential information from a Cabinet meeting to two businessmen, who were also former donors, Hipkins is now faced with the headache of dealing with Foon’s donations to Allan’s election campaign.
Despite Foon and Allan each stating on Friday that they were “comfortable” with the situation they both seem to have missed the fact that the donations, on their face, run afoul of the Public Service Commission’s “Conduct For Crown Entity Board Members” which clearly states the need for political impartiality.
From her perspective, Allan believed that declaring donations from the Race Relations Commissioner was enough to address any potential conflict of interest. However, she appeared to underestimate the harm this situation has caused to both herself and the integrity of the Labour government.
Foon seemed to be oblivious to the fact that the donations shred any perception of independence that he needs in order to fulfil his role. In fact, it only served to confirm for many the widespread belief that he is too close to this government.
As Bryce Edwards pointed out yesterday, “The Foon-Allan donations case shows that the Beehive simply doesn’t have adequate procedures in place to make sure conflicts of interest are identified and managed.”
This is undoubtedly the case. Conflicts are not being clearly identified and when they are, there appears to be a misapprehension across government that all conflicts can be dealt with by simply declaring them. They have, for the most part, been reduced to a tick-the-box exercise.
By contrast, best practice should dictate that once a conflict is identified, it should trigger some consideration as to whether it can be managed by disclosure or whether it is too severe or sensitive a conflict to proceed with the matter.
Conflicts are always a pain to deal with, and they do require discipline and good faith judgment to make the right call. Increasingly, it has become clear that this government lacks the rigour to enforce the rules set out in the Cabinet Manual. A large portion of the blame must, however, lie with the former Prime Minister, Jacinda Ardern.
Indeed, it is clear that a significant driver for Mr Fix-it getting the top job was not only to jettison unpopular policy initiatives but also to address discipline within Cabinet. At the time of the mini-reshuffle midway through 2022, Ardern promised a more fulsome reshuffle to freshen up the front bench later in the year. That reshuffle never eventuated but significant issues continued to fester within Cabinet.
It is well known in the Beehive that Ardern was formally advised that personal issues meant that one of her Cabinet ministers should be removed from a portfolio. From all accounts, she ignored the advice but it probably wasn’t a coincidence that in his first Cabinet announcement at the beginning of this year, Hipkins made that change as previously advised.
Likewise, the sting in the tail of the Nash resignation was the revelation that Ardern’s office was aware of an OIA which uncovered Nash’s conversations with donors but did nothing about it at the time. In her defense, Hipkins reiterated that neither Ardern nor her chief-of-staff was aware of the email although there is now an inquiry into the matter.
Ardern also let the conflict of interest questions that bedevilled Minister Mahuta last year run for far too long. When eventually a review was commissioned it found that Te Puni Kokiri and the Ministry for the Environment failed to properly manage “perceived conflicts” over contracts with two companies operated by Nanaia Mahuta’s family.
Those conflicts were obvious to officials from the commencement of the projects but there was a lack of senior oversight that was willing to make tough calls at an early stage when issues could have been addressed. For instance, when reviewing the proposed waste strategy ropu for the Ministry for the Environment one official simply exclaimed, “Yikes, agree with the conflicts issue not passing the sniff test.”
Two agencies, Kainga Ora and the Department of Conservation, also faced scrutiny. The Public Service Commission said DOC’s contract management was “poor” and it criticised Kainga Ora for not asking about conflicts of interest during its contracting process.
The PSC did not have the authority to review any potential conflict issues connected with the appointment of Mahuta’s sister to a role with the new water regulator, Taumata Arowai nor the appointment of another family member to the working group which authored the controversial He Puapua report despite concerns being raised by National and Act about both of these appointments.
During this period, one of Ardern’s Cabinet colleagues, Kris Faafoi left Parliament to immediately become a lobbyist. The move provoked widespread calls from commentators for the introduction of rules around lobbying that would bring New Zealand in line with Australia, Canada and the UK.
At the time Ardern dismissed the suggestion for more regulation. New Prime Minister Hipkins has, however, taken a different view, acknowledging that, “New Zealand is an outlier internationally in our regulation of lobbying”. As a result, Hipkins has announced the removal of swipe card access for lobbyists and is also calling on third-party lobbyists to develop a voluntary code of conduct.
However, whilst this government is claiming to be cleaning up political donations and lobbying laws, there does urgently need to be a complete and comprehensive overhaul of the laws and regulations relating to conflicts of interests, political donations and lobbying complete with independent oversight. Whilst this government is belatedly making a start, it will, no doubt, be the job of the next government to finish the task.