Acceptable bounds for gifts and hospitality for public officials

Findings by Judge Sally Fitzgerald in the Auckland Transport case of R vs Borlase & Noone provide insight about about what falls within the acceptable bounds for gifts and hospitality for public officials. The Judge made clear, there are no ‘hard and fast rules’ and in each case the value and the context will have to be considered.

Gratuity examples from the Borlase & Noone case

Acceptable?

Payments for travel, accommodation and attendance at industry-related conferences in Australia and New Zealand by the official (even where accompanied by the official’s spouse), were consistently found by the Judge to be acceptable, despite a range of views having been put forward at trial about what conference costs were acceptable. The context was that much of the travel was ‘partnered’, i.e. the conference was attended also by a representative of the supplier.

Paying for business class upgrades for the official, even to an industry conference in Singapore, was not acceptable. The Judge considered there was no reason to pay for such an upgrade other than to influence the official in respect of future management of the supplier’s work; given its value and context it was a bribe.

Payments for personal overseas travel (for leisure) by the official (including travel with or solely by family members) crossed the line: they were consistently found to be bribes, without any legitimate rationale for payment. The value ranged from NZ$1,748 per trip to over NZ$10,000.

Payments for repeated (over 50) overnight stays in Auckland hotels were, in the context, inappropriate. It was clear that the hotel stays were because of the official’s marital difficulties, rather than being needed for work reasons.

A ‘long lunch’ or dinner – if relatively infrequent or for a specific celebration, and particularly if disclosed in compliance with the organisation’s gifting policy – may be acceptable, and may in some cases fall within the ‘de minimis’ exception to the Crimes Act offence (i.e., being just one of the ‘usual courtesies of life’). The meals in this case, none of which exceeded NZ$304, were found to be unobjectionable.

However, the Judge noted that meals on a very regular basis and for no apparent reason may be an offence under the Crimes Act.

 

✘​

Three sets of nine or ten taxi charges over several years, each set totalling just over NZ$1,000, were not considered bribes.

But 47 taxi charges totalling almost NZ$3,500 were found to be a bribe. The frequency and scale of these taxi charges, and the lack of any control over the official’s use of taxi vouchers, meant this was a bribe and did not fall within the ‘de minimis’ exception.


 

Various gifts, including the occasional bottle of wine or whisky, were considered to be acceptable and fell within the ‘de minimis’ exception.

Cases of wine, including a case of Chardonnay sent to the official’s wife at home - were considered a bribe. The context and value of the cases of wine pushed them outside the ‘de minimis’ exception.9

Technology gifts of iPads, and an iPhone for the official’s daughter, were considered bribes. The Judge found that their nature and value made them inappropriate and there was no logical reason to supply them, other than in an attempt to influence the official.

Payment of the official’s personal phone bills (totalling almost NZ$15,000) were also bribes. The Judge considered that there was no legitimate reason someone would pay the personal phone bill of an official.

The following table is ©Bell Gully and reproduced with permission.  It was produced by former TINZ Director and current Bell Gully Senior Associate Fiona Tregonning who works with organizations in managing corruption risks.  The full article is here: New Zealand public sector on top - but fight against corruption real

Managing your organisation’s corruption risks

Having appropriate policies and procedures in place to deal with corruption risks is essential - despite New Zealand’s good CPI ranking and generally ‘clean’ image, recent cases show the importance of avoiding complacency. Factors your organisation should consider in relation to whether it is appropriately managing its corruption risks, whether at home or abroad, include:

  • Whether your organisation has assessed its corruption risks?

  • Does your organisation have an anti-bribery and corruption policy in place and internal procedures to back it up? 

    • Is the policy appropriate for your industry/sector, the people you do business with and the jurisdictions you operate in?

    • Does the policy cover your organisation’s agents or intermediaries?

  • Does your organisation have a gifts and hospitality policy, and declarations register? Is it consistent with the approach to what is/is not acceptable as set out in R v Borlase & Noone?

  • ​Are staff aware of and do they understand the policies and what they can/cannot pay, offer or receive?

    • ​​Do they know from whom to get any necessary internal approvals?

  • Do you monitor compliance with the policies?

  • Do you have mechanisms to encourage internal reporting of suspected breaches of the policies?

Please contact our team if you would like any advice or assistance on developing appropriate anti-corruption policies and training staff, or on any other anti-corruption matters.

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