Conflict of interest management practices at several government agencies falls short of expectations, a report from Public Service Commissioner Peter Hughes says.
Hughes looked into how government departments and agencies awarded contracts to relatives of senior Cabinet minister Nanaia Mahuta while she was associate minister for those agencies.
Four agencies were found to have awarded contracts to Ka Awatea Services Ltd (KAS) and Kawai Catalyst Ltd (KC), since 2017: Kāinga Ora, the Ministry for the Environment, the Department of Conservation (DOC) and Te Puni Kōkiri Ministry of Māori Development.
More of an investigation than an inquiry, Hughes’ review came at the request of Mahuta herself in September.
She and Public Service Minister Chris Hipkins ordered the review after questions about perceived conflicts of interest were raised in the media and by the opposition.
Mahuta said she had been “assiduous” regarding declarations of potential conflicts and their management.
Hughes found Te Puni Kōkiri and the Ministry for the Environment failed to properly identify and manage perceived conflicts, as they didn’t follow what were otherwise sound agency policies and processes.
He also found a perceived minor conflict with Kāinga Ora wasn’t identified, as the agency failed to ask about conflicts during the contracting process.
He found there were no conflicts of interest in relation to DOC contracts, but its contract management was poor.
“Perceptions can erode trust and confidence so the public service must have high standards when procuring services on behalf of New Zealanders,” Hughes said in a statement.
“Poorly managed perceived conflicts of interest can be just as damaging to public trust and confidence as poorly managed actual conflicts of interest.”
But his review found no evidence of favouritism, bias, or undue influence over agency decisions in relation to KAS or KC due to a connection with any minister.
Mahuta this afternoon said she stood by her former statements that she declared potential conflicts, and acted in accordance with the Cabinet manual.
“I take them very seriously and so it’s important to ensure that now that the public service commissioner’s findings have been made public that we get on with it,” she said.
“I’m pleased that there’ll be consistent guidance to public ministries and departments in the way that they handle these issues … and the report highlights that there was no favouritism, bias or undue influence attributed to any minister in the way contracts were dealt with.”
“I think that will be a good thing for the public sector, it draws a line under the sand in terms of all the issues that have been raised about me.”
She said people following the accusations would know there had been particular motivations in relation to “a number of the challenging issues that I’ve been stewarding through”.
Hipkins said it was important the public service take a good look at the way conflicts of interest were managed.
“I think conflicts of interest will always exist in a country like New Zealand, it’s about how these are managed,” he said. “It’s a good reminder to the broader public sector that management of conflicts of interest is really important.”
“I’ve seen no evidence to suggest Nanaia Mahuta has done anything wrong here, if anything I think she’s been very very aware of the potential for there to be a conflict and has managed that very well.”
The actions of ministers, the directors of KAS and KC, and members of the public, were outside the scope of the review, but Hughes did not identify any matter which would require referral to another oversight body.
National’s Public Service spokesperson Simeon Brown had raised some of the initial concerns about conflicts of interest with Hipkins, and said the investigation should have been broader.
“That’s the real issue here but the reality is that it has shown a number of serious issues in terms of how they’ve been contracting, the fact is Kainga Ora didn’t even ask for a conflict of interest. Ministry for the Environment had a number of opportunities to address these issues but didn’t.”
“If you look at the recommendations, all of these rules were actually already in place and so what he’s saying is actually ‘follow the rules’, and so the reality now is they need to actually follow the rules and make sure this doesn’t happen again.”
“When it comes to taxpayer money, New Zealanders expect high standards.”
In an earlier statement, he said the report “suggests the public service has developed a culture of carelessness in how it procures contracts”.
The agencies involved have taken steps to address the issues Hughes identified.
He will now issue expanded conflicts of interest model standards to agencies, strengthen the controls around identifying and managing conflicts, and write to all chief executives outlining his expectations.