Transparency Times October 2015

From the Chair

Suzanne Snively

Suzanne Snively
TINZ Chair

It's a good thing the Organised Crime and Anti-corruption Bill isn't a part of the All Blacks play list. Every time the Bill goes onto the Parliamentary Order Paper and gets close to the goal posts, the goal posts are moved. Let’s hope that we don’t have to wait for another Rugby World Cup before passing this legislation that puts it in a position to ratify the United Nations Convention against Corruption.

We need the Bill passed into law to prevent the potential corruption from the tsunami of laundered money out there looking for a place to wreak its destruction. The Bill's provisions add needed muscle to the recent Anti-Money Laundering Act.

After passage it will take some time for the banks to get systems in place to meet the additional requirements.

Along with tightening currency regulations, the Organised Crime and Anti-corruption Bill contains a number of provisions that will strengthen our integrity systems. Passage of the Bill with unanimous support of Parliament would send a strong signal that Parliament is committed to maintaining New Zealand's reputation for good governance.

Aside from the lengthy delays in getting this Bill passed into law, we are also disappointed that this critical piece of legislation fails to make bribes in the form of facilitation payments illegal. In rejecting an amendment to the Bill—by one vote—Parliament chose to ignore small bribes with the unconvincing and undocumented claim that they are necessary for competitive business abroad.

Facilitation payments have been illegal for UK businesses abroad since 1988 without holding back business growth.  On top of that, reputable business advocates such as Lee White, the new CEO of the now merged Australia/ New Zealand Association of Chartered Accountants (CAANZ), have argued for the need for legislation that clarifies facilitation payments are bribes.

The day when Parliament ran out of time for the third reading of the Organised Crime and Anti-Corruption Bill, Thursday 22 October, was also the day the former Green Party Co-Leader Russel Norman gave his valedictory speech.

Breaking with the tradition of light-hearted farewells, Norman took the opportunity to ask questions about the lack of transparency in key government decision-making and operations, voicing his concern for the state of democracy.

“In my view the Official Information Act is relatively moribund now in New Zealand. It is very, very difficult to get information from the Government that the Government does not wish to release – that is a problem.”

Norman has a point, but his point was made to a House well down on its numbers with several ministers off to the semi-final of the Rugby World Cup.

While many of us were glued to our television screens for the RWC, the annual Open Government Partnership (OGP) summit was being held in Mexico City on 27 and 28 October. We understand that Minister Louise Upston represented the Government at this forum.

With a membership of over 60 nations, the OGP offers an opportunity to learn from other countries and measure our plan and results against the other participants. We expect the importance of a strong grassroots-led OGP National Action Plan will be one message from the forum.

New Zealand’s reputation as a strong democracy was hard won. Condoning little transgressions, such a permitting facilitation payments, stonewalled Official Information Act (OIA) requests, and inattention to the OGP objectives undermines what we have. Let's not fall behind the pack and instead aspire to win the lead. We are well positioned to win the integrity world cup every year but to win requires determination, hard work and focus.

Suzanne Snively, Chair
Transparency International New Zealand Inc.

AFP PHOTO / FABRICE COFFRINIFABRICE COFFRINI/AFP/Getty Images

FIFA president Sepp Blatter looks on with fake dollars note flying around him throw by a protester during a press conference at the football's world body headquarter's on July 20, 2015 in Zurich. FIFA said Monday that a special election will be held on February 26 to replace president Sepp Blatter.

Regaining the beautiful game

The most widely played game with the biggest audiences, football is a powerful force around the world and it deserves a governing body that is free of corruption. Yet its ruling body, FIFA, is one of the world’s most discredited organisations. Allegations of corruption have plagued the organisation for decades.

On 25 September, the Public Ministry of the Swiss Confederation opened a judicial process against FIFA President Joseph “Sepp” Blatter for an alleged undue payment of around two million euros to the President of UEFA, Michel Platini. The payment made in 2011 was supposedly in compensation for work done between 1999 and 2002.

Blatter is also accused of having signed a contract contrary to the interest of FIFA with the Caribbean Football Union, presided by Jack Warner, ex-Vice President of FIFA and a close friend of Blatter.

The Ethics Committee of FIFA has suspended Blatter and Platini for 90 days as a temporary measure while the corruption allegations they are facing are being investigated. The 90 days suspensions have been extended to Worawi Makudi, President of the Federation of Thailand and ex-member of the executive committee of FIFA, and to the South Korean, Chung Mong Jon, ex-Vice President of FIFA.

The investigation being carried out in the US for previous corruption cases involving directors and collaborators of FIFA  ended up with the indictment of 14 football officials. The Swiss Government is conducting a separate investigation into the process of awarding the rights to host the world championships of 2018 and 2022 to Russia and Qatar.

What has been the role of Transparency International?

TI has followed the FIFA story for more than five years, starting in 2010, by denouncing the lack of transparency of the FIFA executive committee when voting for Qatar and Russia. In 2011, TI criticised the FIFA presidential elections because of the bribery and counter bribery scandals that led to Bin Hamman dropping out of the contest and leaving Blatter standing unopposed.

TI’s constant message has called for a substantial reform of FIFA and for the need of independent oversight.

Recently, however, TI has concluded that FIFA cannot reform itself and needs an independent reform commission.

TI is now part of the NewFIFANow coalition that brings together the International Trades Union Confederation, Avaaz (the petition organisation), and activists including the UK member of Parliament, Damian Collins, and the head of a sportswear company, SKINS, Jaimie Fuller. This coalition is advocating that sponsors force FIFA to act now to end its corrupt practice. So far, the Coalition has been successful in bringing Visa, Coca-Cola, McDonald’s and Budweiser together to support that view.

TI is researching the 209 Football Associations that are members of FIFA to assess their public accountability, such as what they publish on their websites and how they are run. We expect this assessment will highlight the need for reform throughout.

Josephine Serrallach

Director

MFAT agrees to AID funding in Pacific for one year

During the past year, TINZ collaborated with the United Nations Development Programme (UNDP) to develop a proposal to support TI’s four Pacific chapters (Fiji, Papua New Guinea, Vanuatu and Solomon Islands) anti-corruption activities. This was in response to an invitation by New Zealand’s Ministry of Foreign Affairs and Trade (MFAT) that suggested a five-year programme to maximise the achievement outcomes. The bid was for upwards of NZ$4.8M over five years. Various versions of the proposal were submitted, the most recent in late June this year. These were developed in conjunction with the Pacific chapters and were designed to strengthen the local integrity systems and enable the chapters to effectively secure reduction in corruption.

MAFT has a long tradition of supporting Transparency International’s Pacific chapters; TINZ and UNDP were engaged in order to improve management and accountability for the programmememe.

Unfortunately, MFAT advised TINZ in September that the proposal would not proceed. This is a set-back as real change to the Pacific corruption landscape depends on the anti-corruption initiatives of local grassroots organisations, such as TI’s Pacific chapters. The Pacific chapters were hopeful that MFAT’s NZ Aid funding would provide them with the much needed funding stream. Uncertainty of ongoing funding compromises the anti-corruption activity and the ability to secure a real lasting reduction in corruption.

Pictured above are representatives from Transparency’s Pacific and NZ Chapters and TI Berlin who attended Transparency International’s Membership meeting in Malaysia late August. Past TINZ Patron and recently appointed Transparency Advisory Council member Sir Anand Satyanand also attended (second from right) along with TINZ Chair Suzanne Snively (third front left)

For TINZ, developing the proposal has established and strengthened TINZ’s relationship with the UNDP Pacific Office. The proposal was developed by UNDP’s Pacific group under the leadership of Peter Batchelor. UNDP brought to the proposal its corruption expertise and knowledge of the Pacific, while TINZ drew upon its corruption prevention experience and networks with the Pacific chapters, including Australia.

While MFAT’s decision was not to proceed, it agreed to provide the Pacific chapters with one-off transitional funding for the current year 2015/16. TINZ’s role is as the fund holder with the bulk of the funding to go to the four Pacific chapters. TINZ will receive a very small management fee for its role.

Securing long-term funding is a real challenge for Transparency chapters in the Pacific and in New Zealand. While the level of anti-corruption may differ, constant vigilance and prevention focus is critical. In New Zealand, complacency is the greatest risk to our reputation of being one of the few nearly corrupt-free countries.

Advisory Group for Open Government Partnership appointed

On 4 August 2015 State Services Commissioner Iain Rennie announced the appointment of a new Stakeholder Advisory Group formed to provide input into New Zealand’s Open Government Partnership (OGP) Action plan.

According to the announcement “The Stakeholder Advisory Group will assist with the development, implementation and evaluation of the commitments in New Zealand’s Action Plans by providing constructive advice, communicating openly and engaging with the New Zealand public.”

Advisory Group members are:

  • Fuimaono Tuiasau, Transparency International New Zealand (chair)
  • Michael Macaulay, Victoria University of Wellington
  • Miriam Lips, Victoria University of Wellington
  • Dave Henderson, Hui E! Community Aotearoa
  • Karaitiana Taiuru, Digital Media Advisor
  • Colin James, Political Journalist and commentator

“To meet our OGP commitments, it’s important we continue to work closely with New Zealanders. The Advisory Group brings a range of perspectives that will deliver fresh thinking and a variety of experiences that will help us to deliver New Zealand’s Action plan commitments,” Rennie said.

Stakeholder Advisory Group update

Iain Rennie, the State Services Commissioner, recently hosted a meeting of officials and the Stakeholder Advisory Group (SAG) to review the progress of the 2014 OGP New Zealand Action Plan commitments and the Self Assessment Report draft to be completed by mid October. The SAG Chairman Fuimaono Tuiasau, also a Director of TINZ, said “the current 2014 Action Plan which runs out mid 2016, is being assessed on whether it has delivered on its four commitment areas of Better Public Services, TINZ National Integrity System recommendations, Government ICT Strategy Action Plan and the Kia Tutahi Accord. The SAG is closely monitoring the assessment report and process, which is to be completed mid October.”

Pictured from left to right: Andrew Royle, Manjula Shivanandan, Christine Lloyd (State Services Commission), Michael Macaulay (VUW School of Government), Andrew Ecclestone (Ombudsman Office), Fuimaono Tuiasau (Chair), Isabel Evans (Ministry of Social Development), Miriam Lips (VUW and Deputy Chair), Gareth Ellis (Office of the Auditor-General), Iain Rennie (State Services Commissioner), Gary Bulog (Privacy Commission), Dave Henderson (HUI’E), Karaitiana Taiuru (digital media advisor), Tim Blackmore (Stat Services Commission)

However the SAG—made up of civil society leaders—will be meeting soon in earnest to develop new commitments for the June 2016 OGP NZ Action Plan. Since the SAG was formed in late July the 2014 Action Plan commitments are a starting point for a more collaborative approach and for bolder ideas to be included in the 2016 OGP NZ Action Plan. The SAG will be working hard to ensure this happens by consulting widely, tapping into the myriad of civil society networks and building ongoing relationships. This will ultimately provide for a bold 2016 Action Plan that will build partnerships across a broad range of areas from the environment, Māori, accountability and transparency practices, enhancing political and social engagement with local communities.

EU trade negotiations to focus on greater transparency

TINZ welcomes the European Commission’s (EU’s) pledge to increase transparency in all future trade deal negotiations, a commitment which was announced last month (14 October 2015, New Zealand time) as part of its new trade and investment strategy, Trade for All: Towards a more responsible trade and investment policy.

The strategy is important for New Zealand in light of the European Commissioner of Trade Cecilia Malmström’s recent announcement that she is seeking approval from the EU member states to launch trade negotiations with New Zealand. For the EU, any such negotiations will proceed on the basis of the principles set out in this strategy, which will represent a significant point of difference from the recently agreed Trans-Pacific Partnership Agreement (TPPA).

In January this year, the European Ombudsman called upon the Commission (after launching an own-initiative inquiry) for greater transparency and public access to negotiating texts in the ongoing free trade negotiations between the EU and the United States. The Ombudsman’s final report recognised that the Commission had made “real efforts” to be more transparent, but had not gone far enough.

The Commission’s strategy is a response to a demand for more transparency in trade negotiations, particularly when they encroach on traditionally “domestic” policy areas.

The new trade and investment strategy recognises that transparency should apply at all stages of the negotiating cycle from the setting of objectives for trade agreements, to the negotiations themselves and during the post-negotiation phase. Therefore, on top of existing measures, the Commission will:

  • invite the Council (comprising the heads of state or government of the member states) to disclose all free trade agreement negotiating directives immediately after their adoption;
  • during negotiations, extend Transatlantic Trade and Investment Partnership practices of publishing EU texts online for all trade and investment negotiations and make it clear to all new partners that negotiations will have to follow a transparent approach; and
  • after finalising negotiations, publish the text of the agreement immediately, as it stands, without waiting for the legal revision to be completed.

The Commission also commits to engage more actively with civil society and the public at large in the context of the civil society dialogueues and citizens’ dialogueues.

Court quashes ‘blanket approach’ to rejection of request for TPPA information

The Honourable Justice Collins has quashed the Minister of Trade’s decision not to release information relating to the TPPA under the OIA to Auckland University Law Professor Jane Kelsey, “one of New Zealand’s most assiduous critics of the TPP Agreement”.

Professor Kelsey, along with several other applicants, challenged the Minister’s decision in the High Court to refuse her request for information associated with the TPPA negotiations which was recently agreed.

The Judge directed the Minister to reconsider his decision in relation to six of the eight categories of information requested after concluding that the Minister’s “blanket approach” to the OIA request, which was based upon his knowledge of the categories of information, did not comply with the Act.

In coming to his decision, the Judge said that the OIA “plays a significant role in New Zealand’s constitutional and democratic arrangements”, and that it is therefore “essential the Act’s meaning and purpose is fully honoured by those required to consider the release of official information”.

When reconsidering the request, the Judge instructed the Minister to ensure he adhered to his obligations under the Act by requiring officials to “assess each piece of information requested that is in the possession of the Minster and MFAT against the criteria in the Act for withholding information.” This is despite the Court being told that the relevant documents may number “roughly 30,000 documents” – a figure challenged by the applicants.

Ending impunity and promoting accountability

Recently, the international media has reported on a number of corruption scandals at the global level, which are currently under investigation, a situation that shows a change of attitude demanded by civil society of zero tolerance to corruption and abuse of power.

These scandals that are coming now to light have been brewing for many years without detection, investigation or punishment. An attitude that has prevailed in the past of turning a blind eye to corruption or covering up at the board level, behaviour that was normalised in many businesses and governments. This is hopefully coming to an end.

FIFA is again in the spotlight after a judicial process that has been opened in Switzerland against Sepp Blatter for alleged corruption and abuse of power. In addition to Blatter agreeing to a contract contrary to FIFA’s interest, there has been the discovery of an unwarranted payment of 1.8 million euros to the President of UEFA, Michel Platini, now candidate to succeed Blatter as President of FIFA.

Another big scandal resonating worldwide has been the legal and criminal charges against the Volkswagen for the installation of a sophisticated software in a number of models with diesel motors that provided an erroneous reading of the emissions of toxic gases.

At the annual membership meeting (AMM) of Transparency International 2015 that took place in Malaysia, there was an overwhelming approval for a strategy (“Together against Corruption”- Strategy 2020) with great emphasis on ending impunity for the corrupt. This is not only a direction for the movement but also a clear mandate from civil society of not tolerating corruption at any level and calling for the end of impunity.

Some years ago there was no talk of corruption, although it already existed, and it is good news that  corruption cases are now being exhaustively investigated and covered by international media while judicial systems are engaged on major prosecutions involving people who were in high positions of power.

What does this mean for New Zealand?

The Volkswagen scandal has damaged the image of a country with a reputation of producing good quality products. The brand “made in Germany” was recognised all over the world as a guarantee of quality. Now this brand has received a huge knock.

One single incident can damage the reputation of a country and damage the brand that has been built over many years.

The lesson for New Zealand is that we should be vigilant and working on prevention systems. In addition to the “green and clean” branding New Zealand should capitalise on its “corruption free” image. It is now a valuable asset. Together we should keep it that way.

Josephine Serrallach
From Europe

In case you missed it

‘Facilitation payment’ does not condone bribes – Govt

Political commentary from Radio New Zealand: The New Zealand government says it is not condoning bribery and corruption in other jurisdictions by allowing some so-called 'facilitation payments' to foreign officials.

‘Corruption is an issue of our times’ says TI head

Corruption is truly a key global issue, the head of Transparency International has told students at an elite international relations school in Switzerland. Read more.

NZ Tops Open Government Budget Survey

Government’s books top transparency list

FIFA

Transparency International: Criminal investigation must force Sepp Blatter out of FIFA

FIFA reform campaigners call on SFO to ‘follow the money’ more urgently

FIFA reform campaigners have called on the British authorities to do more to “follow the money” and help United States and Swiss investigators tackle corruption at world football’s governing body. The Guardian.

TPPA transparency

Even TPPA supporters want more transparency

Why September 2015 matters much in the global battle on routing out corruption. By Frank Vogl a co-founder of Transparency International

Corruption crisis in Malaysia

Transparency International: Malaysia facing major corruption crisis.

Prime Minister’s commitment to anti-corruption

Prime Minister attempt at humour raises questions about his commitment to eliminating corruption.

Auditor-General’s Saudi sheep probe

Auditor-General Lyn Provost probes Saudi live sheep scandal article by Pattrick Smellie.

OGP editorial

Government transparency consultation period an 'insult&#39 Pattrick Smellie.

Suzanne Snively radio interview regarding Saudi sheep

Click here to listen to Suzanne's Radio Interview

Letter to the editor

The Charter Accounts magazine Acuity published a letter to the editor by Suzanne Snively in August 2015. Read a copy of her comments.