Innocence lost: ANZ New Zealand demonstrates poor tone at the top
Photo by Eva Caprinay
Suzanne Snively TINZ Chair
From the Chair, July 2019
New revelations about the conduct of ANZ New Zealand Bank’s CEO, David Hisco, have emerged almost daily since the end of May.
While its Australian parent bank was caught out for inappropriate conduct by last year’s Hayne Review, it looked like ANZ New Zealand might be different.
Sadly, we are now looking at a failure at the top of ANZ.
The ANZ, along with the three other major Australian banks with subsidiaries in New Zealand, stood out as a trusted bank during the global financial crisis. They sustained high credit ratings while many of the world’s banks ratings plummeted.
ANZ Australia made it onto Ethisphere’s select list as one of the World’s Most Ethical Companies prior to 2012.
ANZ New Zealand does many things right
ANZ New Zealand actively promotes its social license through support of local teams including for the Olympics and Cricket as well as supporting local charities.
Turning specifically to its tone at the top:
ANZ stands out as one of the few New Zealand companies that publishes a Non-Executive Director Code of Conduct. This is intended to guide the ANZ’s Directors to follow ethical standards.
It has a strong code of conduct for its employees. that provides a set of guiding principles about making the right decisions.
The ANZ has an Anti-Bribery and Anti-Corruption Policy. It defines unacceptable behaviour and activity relating to bribery and corruption. Mandatory training is conducted with additional specific training tailored to individual roles.
Its Board has an Ethics Committee.
ANZ was responsive to the 2015 legislation that strengthened New Zealand’s anti-money laundering processes.
It has been showing leadership in gender diversity with woman appointed to its Board and Senior Management Team.
Tarnished reputation – poor tone at the top
As Warren Buffet says, it takes years to build a reputation and 20 minutes to lose it. Over the last month, the ANZ’s reputation has been severely tarnished.
With each revelation about ANZ New Zealand’s CEO and Chair, tone at the top has moved from being an abstract compliance-based concept to becoming a much discussed and analysed missing attribute. And this is about New Zealand’s largest registered bank, with over 40% market share.
The attributes where the ANZ appeared to be in a leading position to prevent and protect against corruption now look designed to provide a veil to inappropriate conduct at the top.
Everything that the ANZ has been doing right has been undermined by revelations that:
Its attestation, which the RBNZ trusted the ANZ to calculate its level of capital internally, has been incorrectly carried out since 2014.
Its CEO has been charging very large business expenses since he took the position, many of which appear to be for personal rather than business purposes.
Multiple whistleblowers have come forward since 2014 only to be rebuffed by compliance officers unwilling to challenge top management. Some lost and or chose to leave their jobs as a result. The protective disclosure process has been undermined.
And then there is the process of the bank selling one of its properties to the CEO for less than market value and then paying for some of the renovations.
What is the tone at the top of New Zealand financial organisations?
Are our other New Zealand-based financial sector organisations any better? Is there a distinction between the New Zealand based organisations and those with international ownership?
Transparency International New Zealand’s Financial Integrity System Assessment (FISA) provides a framework to define what ‘doing the right thing’ means, and to annually carry out a comprehensive good-conduct check.
It’s easy to do. It just requires that the CEO talk with his or her Board and key managers. In doing so, a robust tone at the top can be established.
Suzanne Snively, ONZM
Chair
Transparency International New Zealand Inc.
Ethical leadership online course – Registrations Open
Ethical Leadership in a Changing World
The Brian Picot Chair in Ethical Leadership offers you a Massive Open Online Course on Ethical Leadership in Organisations. This free and global 6-week course by Victoria University of Wellington starts on 3 July 2019.
“What does ethical leadership really mean? Discover the importance of an ethical approach, how ethical issues can be addressed, and how to become an ethical leader yourself.”
Late enrolments will be taken for the duration of the course. More details are available in the June edition of Transparency Times.
About this course
In this era of low levels of trust, increasing cynicism, fake news and rampant uncertainty, leaders who are committed to an ethical approach have never been more important.
But what makes an ethical leader, and why is their approach so important to organisations?
This course is an introduction to the theories and practices of ethical leadership, with a focus on organisations. Drawing on New Zealand case studies — one of the least corrupt countries in the world — this course will enable you to recognise the role of ethics in organisational decision-making, analyse the actions of leaders from an ethical perspective, and learn to become a truly ethical leader yourself.
Through the voices of recognised leaders from New Zealand’s private, public and NGO sectors, you will also hear about the main issues that ethical leadership should address.
Individuals, organisations and society all benefit from ethical leadership. This course will show you how and why this value-based leadership matters to us all.
Financial Leaders – FISA is essential to New Zealand
Henry Lynch
TINZ Director: Financial Sector
Financial sector leaders from around New Zealand gathered in Auckland on 5 June 2019 to launch Transparency International New Zealand’s world-leading method for measuring the robustness of New Zealand’s financial systems. Called the Financial Integrity Systems Assessment (FISA), this approach is the first ever review of a country’s financial systems.
Reserve Bank Governor Adrian Orr, Financial Markets Authority CEO Rob Everett and leaders from banks, credit unions, insurance, kiwi-saver providers, regulators, and professional organisations joined Transparency International New Zealand at the event.
In their speeches, they both covered the need for a greater focus on organisational self assessment and reporting along with independent verification, across the financial sector. These actions reduce the need for regulation – as long as findings are acted on.
Rob Everett highlighted, “The FISA assessment is attempting to cover broader ground and using very different methodology than the RB/FMA Conduct & Culture reviews. Indeed it goes so far as to attempt to assess regulatory oversight mechanisms. The assessment goes beyond customer treatment and the mechanisms within banks and insurers to achieve the best possible outcomes for customers, which is where the Conduct and Culture reviews were primarily targeted.
The event was well attended by key stakeholders and the tool, developed with the benefit of considerable consultation and feedback, was received warmly. The audience was focused and attentive. Last week’s ANZ capital inadequacy events certainly gave them more reason to pay attention and brought forth several of the questions from the floor for the speakers.
“Financial Services affect every single New Zealander. It is vital we can trust our financial partners in life. I am heartened and encouraged that so many of our financial organisations want to demonstrate their integrity to New Zealanders through actions, not just words,” says Transparency International New Zealand Chair Suzanne Snively.
Suzanne Snively Chair Transparency International New Zealand at FISA Launch
Rob Everett Financial Markets Authority CEO at FISA Launch
Reserve Bank Governor Adrian Orr at FISA Launch
Financial Integrity System Assessment Launch Audience Auckland 5 June 2019
Are New Zealand audit firms sufficiently transparent?
Professor Roger Willett
Professor Roger Willett
School of Accounting and Commercial Law
Victoria University of Wellington
Recent articles in the business press have commented on the refusal of the large New Zealand audit firms to share the results of a review of their audit work by the Financial Markets Authority (FMA). They raise the question of whether there is sufficient transparency to protect the interests of investors and other users of the audited financial statements of large corporates.
The FMA is charged with regulating the financial services industry in New Zealand. Since 2015, it has produced annual reports reviewing key aspects of the quality of audit work carried out by audit firms. These include the ‘big four’: Deloittes, KPMG, Ernst and Young and PriceWaterhouseCoopers.
Trans-Tasman differences
The latest FMA’s Audit Quality Monitoring Report 2017-2018, like its predecessors, finds fault with some aspects of New Zealand audit firms’ work. The concerns relate to various aspect of the audit including whether there is good quality control of audit work and risk assessment, and whether accounting estimates are reasonable. Underpinning the problems identified, are the fundamental issues of auditors’ independence and the level of scepticism they bring to their work.
A similar review of audit firms’ practices in Australia raised questions about the quality of audit work. The audit firms agreed to disclose the results, which were not entirely uncritical. This forces us to consider what are the benefits and costs of transparency in these situations. It also begs the question of why the New Zealand arms of audit firms took a different attitude to disclosure of information compared to their Australian counterparts.
Extent of disclosure
One of the difficulties in resolving where to draw the line with disclosing FMA review information, is that transparency related benefits of disclosure are social or ‘public goods’. However, the potential costs are private, mostly borne by the audit firms. The FMA would argue that transparency in its audit quality assessments promotes the integrity of, and confidence in, New Zealand’s financial markets, thereby underpinning New Zealand’s economic prosperity. The audit firms claim, however, that disclosing a league table of their FMA judged performance, breaches the confidentiality conditions of their agreement with the FMA to participate in the review.
Information asymmetry problem
The proponents of greater transparency are in a weak position here. The FMA are provided access to information relating to the work of New Zealand audit firms. The audit firms participating in the review have the right to impose an embargo on publication of this information. There is thus an important ‘information asymmetry’ problem, since those who might have an interest in how well audit work is being done, have no way of finding out such ‘facts’.
Large audit firms are privileged to be able to earn high fees from their clients. Furthermore, the financial statements they audit potentially have the ability, through the decisions of shareholders and others, to affect the wealth of a large proportion of the New Zealand population.
Consequently, we should ask:
Is this type of information asymmetry between powerful, private interests on the one hand and large numbers of less powerful users of audited financial statements on the other, acceptable in a democratic, egalitarian society?
Some might argue that rather than relying on greater voluntary disclosure, it should be mandated by regulation. The latter would then create a more level playing field to support the integrity of New Zealand’s financial system. A newspaperman once famously said that the best way to protect the freedom to publish is to publish.
Perhaps, in this case, the best way to promote transparency is to be transparent?
Tax information sharing causes 25% drop in IFC bank deposits: OECD
Automatic exchange of information (AEOI) on financial accounts has reduced bank deposits held in 46 key international financial centres (IFCs) by 25% since 2008. This is revealed in an Organisation for Economic Co-operation and Development (OECD) report. The findings suggest that exchange of information is promoting tax compliance and reducing offshore hidden wealth.
“The international community has brought about an unprecedented level of transparency in tax matters, which will bring concrete results for government revenues and services in the years to come,” said OECD secretary-general Ángel Gurría.
According to the OCED report to the recent G20 in Japan, countries worldwide have recovered over EUR 95 billion in taxes from taxpayers that came forward and disclosed formerly concealed assets and income. This was done through voluntary compliance mechanisms and other offshore investigations. Anadditional EUR 2 billion has been recovered since November 2018.
“The transparency initiatives we have designed and implemented through the G20 have uncovered a deep pool of offshore funds that can now be effectively taxed by authorities worldwide. Continuing analysis of cross-border financial activity is already demonstrating the extent that international standards on automatic exchange of information have strengthened tax compliance, and we expect to see even stronger results moving forward,” Gurría added.
Deposits of non-bank financial institutions, households, and corporations were assessed. The IFCs considered in the study were taken from an amended IMF list, as follows: Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Barbados, Belize, Bermuda, BVI, Cayman Islands, Cook Islands, Costa Rica, Curacao, Cyprus, Dominica, Gibraltar, Grenada, Guatemala, Guernsey, Hong Kong, Isle of Man, Jersey, Lebanon, Liechtenstein, Luxembourg, Macau, Malaysia, Malta, Marshall Islands, Mauritius, Monaco, Montserrat, Nauru, Niue, Palau, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Seychelles, Singapore, Switzerland, Turks and Caicos Islands, United Arab Emirates, Uruguay, and Vanuatu.
Transparency Times was unable to determine why New Zealand is not included among the countries included in the survey.
Julie Haggie
Chief Executive Officer
Transparency International New Zealand
I attended the Asia-Pacific regional meeting of Transparency International in Kuala Lumpur at the end of June. This event provided chapters of the Transparency International Asia Pacific Region with a rare opportunity to meet face to face to talk and plan.
Each of the Asia Pacific chapters faces challenges unique to their country, and each runs projects to improve integrity and fight corruption. Despite the differences, the common sense of purpose is amazing.
The highest value for me from the group sessions was learning from our colleagues, not only their stories, but their deep thinking and debate about how to tackle really tough issues.
1MDB Scandal
A highlight was the presentation from veteran journalist, P Gunasegaram, who penned ‘1MDB, the Scandal that brought down a government’. 1MDB started out as a government plan to fund infrastructure projects in Malaysia but turned into a swindle estimated at more than $US4.5 billion.
This scandal involves political leaders at the highest levels of government including Malaysia’s former prime minister Najib Razak. One of the prime suspects, Jho Lo, is still on the run. Goldman Sachs is facing criminal charges with its lead banker on the deals having already pleaded guilty in a US court to participating in the bribery and money laundering schemes.
Weakening democracy in Asia
Other chapters in the Asia Pacific region face weakening of democratic institutions and political rights. Since 2017, several countries in the region declined by two or three points in the Corruption Perceptions Index, including Bangladesh, Maldives and Vietnam. Each of these countries have Transparency International chapters.
Vietnam has taken a strong approach towards prosecution and punishment of corrupt individuals over the last few years. However, this is not enough to fight corruption effectively.
There are promising political developments within the region, particularly in Malaysia, Pakistan and India that will be important to watch moving forward.
Pacific nation challenges
Pacific nations have major work to do to address corruption. This is reflected in the amazing work by marvellous activists in Vanuatu, Papua New Guinea and the Solomon Islands.
The Solomon Islands successfully passed a comprehensive anti-corruption law, including provisions for a new anti-corruption commission. TI Solomon Islands, played an important role in advocating for the bill’s passage and is now advocating for a sister bill on whistleblower protection.
TI – Papua New Guinea runs some amazing youth programmes.
Despite many challenges, including resourcing and a reducing civil society space, the Transparency International chapters in Asia and Pacific are in good heart. They remain active in speaking the truth, to shine light on wrongdoing on behalf of their fellow citizens.
Sustainable Development Goals progress
Transparency International New Zealand supports the Sustainable Development Goals
Sustainable Development Goal 16 - Peace Justice and Strong Institutions
Julie Haggie
Chief Executive Officer
Transparency International New Zealand
Two reports and a new website focusing on the United Nations Sustainable Development Goals (SDGs) have recently been launched.
Voluntary National Review
The first is the Government’s first Voluntary National Review report (VNR) on its achievement against implementation of the ‘2030 Agenda for Sustainable Development’ and achievement of the 17 Sustainable Development Goals (SDGs). This will be presented at the High-Level Political Forum (HLPF) in New York on 17 July.
The HLPF is the United Nation’s central platform for country-specific follow-ups and reviews of the 2030 Agenda for Sustainable Development and the SDGs.
TINZ submitted on the VNR during the very brief period of consultation in late May. We commented then that the Government should highlight the very good anti-corruption work that has occurred and which fits well within SDG-16 ‘Peace, Justice and Strong Institutions’. These include more recently, the development of a cross agency anti-corruption workplan and establishment of the Police Financial Crimes Unit. These are detailed in the TINZ National Integrity System Assessment 2018 update.
It is good to see that the final report has picked up some of our suggestions under Goal 16 although not surprisingly, given the Wellbeing Framework, its main focus remains on actions needed to reduce family violence and to transform the justice system.
TINZ would like to see a stronger link drawn between anti-corruption work and people’s lived experience. By increasing measures to fight organised crime and money laundering, New Zealand can improve its economic base. TINZ also supports social cohesion through preventing engagement in crime and the impact of that on our citizens. We would also like to see a stronger alignment with plans developed under the Open Government Partnership including the development of the 3rd National Action plan. Refer to SDG-16, target 16.7 ‘Ensure responsive, inclusive, participatory and representative decision-making at all levels’.
New Zealand People’s Report
A group of civil society organisations, working under severe resource and time constraints, has collaborated on a NZ People’s Report. The TINZ contribution focused on SDG-16.
The People’s Report contains 35 recommendations and calls for action to address major equity and sustainability challenges, and to take a more coordinated ‘implementation plan’ approach towards NZ commitments under the SDG 2030 Agenda.
Sustainable Development Goals Website for New Zealand
A New Zealand Sustainable Development Goal’s website has been developed by the School of Government of Victoria University of Wellington with oversight by a multi-sector group in Aotearoa New Zealand (representing academic, business, public, and non-government communities).
This is a place to read about and share developments and progress. It also showcases an interactive model of New Zealand’s progress towards the SDGs set out by the United Nations in 2015.
Whistleblowing in the news…
Steve Snively
Co-editor
Transparency Times
World Whistleblowers Day – 23 June
World Whistleblowers Day is an international observance held on June 23 every year. Its main goal is to raise public awareness about the important role of whistleblowers in combating corruption and maintaining national security.
According to the Transparency International media release“This year, we celebrate World Whistleblower Day, 23 June, with some serious wins for whistleblower protection already behind us in 2019, and some encouraging developments on the horizon.”
In Europe, over half a billion people have been assured protection for reporting wrongdoing at work, thanks to an EU directive which was agreed in March.
Protection of Whistleblowers endorsed at the G20 Summit
“The G20 High Level Principles for Effective Protection of Whistleblowers endorsed at the June 2019 G20 Summit in Osaka are a welcome acknowledgement of the crucial role whistleblowers play in bringing wrongdoing to light, and the retribution they often face. G20 countries should now move quickly to turn words into action, and pass national legislation that matches or goes beyond the level of protection recommended by the Osaka principles,”Transparency International media release.
Govt delays upgrade of weak and unclear whistleblower law
In New Zealand, updated Whistleblower legislation was placed on hold in May. We are still unable to find more information about why.
Scoop.co.nz: ‘Changes to whistleblower legislation to make it easier for employees to report everything from bullying to fraud have been delayed. This also pushes back moves to potentially bring the private sector into a critical part of the legislation.
The delay comes despite a damning Ombudsman report last month showing less than 10 percent of people know they can be protected if they report wrongdoing under the Protected Disclosures Act.
State Services Minister Chris Hipkins said last year that he would report back in April on ways to beef up the act, following a six-week consultation period.
“Officials have summarised the comments received and are preparing preliminary advice for Minister Hipkins on the policy choices for his consideration,” a spokesperson said. “They will also provide him with advice on a revised time frame.”’
What are we to think about Julian Assange?
Meanwhile, Julian Assange of Wikileaks is in British custody pending extradition to the United States or Switzerland.
He allegedly assisted in hacking highly secure United States government computer systems, willingly cooperated with foreign government intelligence services, and published stolen documents.
The whistleblowing component – at least on Chelsea Manning’s part – is a pronounced example of the fundamental whistleblowing dilemma. The unauthorized and in this case, illegal (according to United States law) release of sensitive corporate or government data, illustrates the feeling. It is in direct conflict with the public good derived from exposure to potentially bad, illegal and immoral behavior.
It is clear that whistleblowers who focus on what is “classified information” will continue to face severe repercussions. Efforts to improve, encourage and protect whistleblowers are challenged by the power held by those agencies traditionally holding classified information, and some will argue the security of nations.
Press freedom is an imperative of democracy
One has to feel conflicted in defending Julian Assange and WikiLeaks. Whatever you think about Assaunge, publication of sensitive information without repercussions is a foundation of democracy. Many of Wikileaks actions have destabilised western democracies. Assange and WikiLeaks form an outlier member of the fourth estate. Just the same, it is unacceptable for the US Government to prosecute Assange for the publication of stolen documents – once stolen. This is a step too far; publication of such information is an essential element of freedom of the press and a transparent non corrupt society.
New Police report sheds light on data often asked about
New Zealand Police has released a report that proactively shares answers to common data requests made under the Official Information Act. Our Data – You Asked Us is based on the most frequent data requests made by members of the public under the Official Information Act and is informed by data available on policedata.nz.
“Our Data – You Asked Us covers the 2018 calendar year and is the first report that proactively shares answers to common data requests made under the Official Information Act.
“Police is committed to being accessible and available to all,” says Mark Evans, Police’s Deputy Chief Executive Service Delivery.
“Our Data – You Asked Us fits within our strategy to increase the public’s trust and confidence in Police simply by making the data we often get asked about, more accessible and easier to understand.”
Frequently asked questions directly from the report:
Why has Police decided to produce this report? Police has produced Our Data – You Asked Us as part of its strategy to build the public’s trust and confidence in Police through increased transparency and accessibility to Police data. It is based on the most frequent data requests made by members of the public under the Official Information Act and is informed by the library of regularly updated Police data also available on policedata.nz. Our Data – You Asked Us ultimately seeks to enable the public to better understand and appreciate the demands and varied work of Police in New Zealand communities, building trust and confidence in Police services, and ensuring everyone in New Zealand is safe and feels safe.
Does this data help Police as well? Police strives to take every opportunity to prevent harm in our communities. Taking an evidence-based approach to policing, New Zealand Police focuses its efforts on the areas that have the biggest positive impact in our communities and for our staff. The data in this report, as well as other evidence and insights, helps inform our constables and staff to make decisions every day that prevent harm and keep everyone in New Zealand safe.
Are all the key topics in this report – family harm, mental health, youth, road policing, organised crime and gangs – top priorities for Police? Our Data – You Asked Us is organised according to the largest areas of demand that Police responds to. Family harm, mental health, youth, road policing, and organised crime and gangs are all priorities for Police, and are also areas often asked about by members of the public. Tackling these areas is essential to achieving Police’s mission for New Zealand to be the safest country; by preventing crime and victimisation, targeting and catching offenders, and delivering a more responsive community-focused Police service.
How many requests under the Official Information Act (OIA) does Police get each year? Police received 28,702 requests for information under the OIA in 2018. Police receives the most OIA requests out of all government agencies by a large margin; almost 10 times more than Corrections, which has the second-most requests.
What does Police get asked about under the Official Information Act? Police is a very high profile organisation and its operations cover a huge range of activities in the public interest. A lot of requests come from the media, but Police also receives many from private individuals with an interest. As well as recent statistics and information – from national figures to a very local level – Police is also regularly asked for information about old cases and historic events.
‘Think Broad’ public service sector changes ahead
State Services Commission
State Services Minister Chris Hipkins announced broad changes to boost public sector performance and responsiveness. At a 26 June event he released planned reforms to the State Sector Act 1988.
Minister Hipkins emphasized the need for government to put wellbeing at the forefront of public service delivery. He noted that major goals such as child wellbeing can’t be addressed by one Agency or Department or separate agencies working independently. He emphasized that the legislation is intended to be change-enabling rather than restrictive.
The proposed outcome now accepted by Cabinet is for a new Public Services Act and a culture change programme. The act will include provisions in five areas to help the public service join up services, and to secure public trust and confidence:
Purpose statement; five foundational principles for the public service (political neutrality, free and frank advice, merit-based appointment, stewardship and open government); ‘spirit of service’ and values; and a code of conduct.
Expanding the scope of the Act to include 46 Crown Agents (including agencies such as ACC, Housing New Zealand, New Zealand Transport Agency, New Zealand Trade and Enterprise, Tertiary Education Commission, PHARMAC and district health boards)
Requiring public service to periodically provide long term insights to parliament.
Prominent clarification of the expectations of the public service in relation to its Treaty partner.
Expectations on the Commissioner and chief executives to be accountable for supporting the Māori/Crown relationship, based on several core responsibilities.
Enabling the Commission to negotiate common terms and conditions for groups of public servants, to have oversight of pay equity bargaining and to provide Workforce Policy Statements that help align agencies on employment issues and workforce priorities.
Enabling portability of employment benefits.
Inclusiveness and diversity are fostered via additional duties for chief executives and the Commissioner.
Public Service Leadership Team (all CEs) to drive a connected system, led by the Commissioner
Functional CEs leading system improvement
Stronger leadership and governance structure via additional statutory Deputy Commissioner
Senior leadership strategy to enable leaders to move across the system, and development of a strong core of leaders with portable leadership/knowledge.
Interdepartmental Executive Boards comprising CEs with direct funding to align strategy, planning and funding on cross-cutting policies, problems or priorities.
joint ventures between departments that can deliver joined-up functions.
Flexible departmental agency model that can be used in a wider range of situations than is currently possible.
In the regions this is likely to mean:
Shifting organisational boundaries to a more common basis built around communities of interest, to reflect territorial authority boundaries in general.
Designation of regional leaders to provide system leadership. They will have the mana and mandate to convene cross-agency decision making forums.
Communicating public service focus areas through regional profiles and priorities for the whole Public Service. This will be developed with leaders within local government, iwi, business and community groups.
Developing shared property and IT models to support the operation of regional offices and the greater integration of services for communities.
Existing Provincial Growth Fund (PGF) delivery will be maintained, including the effective ongoing engagement with regional partners in delivering PGF objectives.
The Bill is expected to be enacted before the end of 2020, with implementation phased in over time.
This follows a consultation process in October 2018 which received more than 300 written submissions including from TINZ. The State Services Commission (SSC) has proactively released an analysis of the submissions, copies of all submissions, a series of cabinet papers, and an impact statement that works through the problems, opportunities and challenges of change.
Hon. Grant Robertson presenting to Budget 2019 media lock-up
Wellbeing budget gold nuggets of transparency and accountability
David Dunsheath
TINZ Member with Delegated Authority for Open Government
Transparency Times Newsletter Co-editor
The Coalition Government’s Wellbeing Budget 2019 was announced on 30 May as reported in the June edition of Transparency Times. It contains various initiatives to enhance transparency and accountability in our nation which are summarised below.
Wellbeing Indicators
The Budget document reminds readers of the Treasury’s ‘Living Standards Framework’ (LSF) which is structured around Wellbeing Indicators. The Indicators of particular interest to Transparency International New Zealand (TINZ) are:
Voter turnout, Trust in government institutions and Perceived corruption, respectively. These are three of the 38 ‘Indicators of NZ’s current quality of life (Domains of wellbeing)’, all under the subheading of Civic engagement and governance.
Trust held in others, Perceived corruption, and Trust in government institutions, respectively. These are three of the 23 ‘Indicators of New Zealand’s sustainable and intergenerational wellbeing (Capitals)’, all under the subheading of Social capital.
TINZ looks forward to the development of direct linkages updated regularly by process, between Wellbeing Indicators and Budget items. In the 2019 Wellbeing Budget, the Budget categories have yet to be aligned with the LSF sub-categories.
Wellbeing Budget initiatives of particular interest to TINZ
Scrutiny of The Wellbeing Budget 30 May 2019 revealed the following positive new transparency, accountability and anti-corruption initiatives. These are briefly listed below with the relevant page numbers from this budget document designed to give an overview of the Government’s wellbeing approach.
Bridging the venture capital gap and supporting innovation
Digitally connect businesses with central and local government to establish a catalogue of services, business rules and information that can be reused by agencies across government (page 80).
TINZ comment: This supports the strengthening of open data and the free flow of public information.
Skills for the future
School Leavers’ Toolkit development will better equip young people for life after leaving school, including civics knowledge and skills (page 81).
TINZ comment: A core part of a strong integrity system that prevents corruption is civics education.
A secure digital nation
Investment in Cyber Security will enable a lift in cyber security capability to meet the expectations of customers and to protect systems from external threats (page 82).
Supporting the continuing operation of RealMe will provide a secure way for New Zealanders to access a range of online services and prove their identity (page 82).
Delivering national statistics and enhanced wellbeing data
New Zealand Census funding will ensure Stats NZ completes its 2018 Census products and services, and the first year of fundamental work required to deliver the next census in 2023 (page 83).
TINZ comment: Robust census information is central to a strong democracy.
Maintaining and investing in public services
Leading New Zealand’s public services to deliver transparent, transformational, and compassionate government. This will ensure the State Services Commission has the capability and capacity to contribute to government priorities, the wellbeing domains and to perform its statutory functions (page 108).
Supporting our communities
Leading New Zealand’s Public Services to deliver transparent, transformational, and compassionate government. This will ensure the State Services Commission has the capability and capacity to contribute to government priorities, the wellbeing domains and to perform its statutory functions (page 108).
Supporting our Pacific Neighbours
Increasing New Zealand’s investment to deliver on the Pacific Reset will help address regional and global challenges, including increased support globally for effective governance, peace building and stability (page 114).
Justice and democratic institutions that work for all New Zealanders
Ensure stable delivery of New Zealand’s electoral system and provide enrolment services on election day. This is to maintain voter confidence in a secure, transparent, accurate and impartial electoral system (page 115).
Maintaining the capability of the Office of the Inspector-General of Intelligence and Security. This will maintain public confidence in the intelligence agencies by providing effective monitoring, reviewing and reporting on the agencies to ensure they are acting lawfully (page 115).
New Zealand’s history and national identity
Funding of Archives New Zealand and National Library of New Zealand to meet their core statutory responsibilities to maintain public access to, and use of, New Zealand’s documentary heritage materials and public accountability of government (page 116).
Strengthening Radio New Zealand (RNZ) as the cornerstone of public media in Aotearoa to continue to provide quality New Zealand programming and journalism, and also assist RNZ’s use new platforms (page 117).
The fiscal strategy
The government remains committed to transparency about its fiscal management and responsibility, and to establish an Independent Fiscal Institution to measure progress against the fiscal strategy (page 123).
Local government committed to transparency through CouncilMARK™
Dan Henderson
Dan Henderson
CouncilMARK™ Programme Manger
Local Government New Zealand (LGNZ)
CouncilMARK™ is a programme designed by the local government sector to show and grow the value of local government in New Zealand and embraces the principle of continuous improvement to deliver ratepayer value.
The programme was launched following the New Zealand Local Government Survey completed by LGNZ in 2014. This found that local government is increasingly seen as important for New Zealand’s prosperity and well-being. But perceived areas of weakness were around providing good value for rates dollars and trust in councils to make good spending decisions. Based on these findings, the programme’s methodology is based on what ratepayers expect from their council. It leads into an assessment of where the council should focus its attention and how to keep customer experience alive in all decision making and operations.
Assessment priorities
CouncilMARK™ provides councils with an independent assessment. This covers four priority areas to highlight things that are going well, those requiring attention, and to chart a way forward:
governance, leadership and strategy (“Leading locally”)
transparency in financial decision-making (“Investing money well”)
service delivery and asset management (“Delivering what’s important”)
engagement with the public and businesses (“Listening and responding”).
Participating councils are assessed by independent experts every three years in a process overseen by an Independent Assessment Board.
Assessment results
Councils receive an overall rating from AAA to C, grades for each of the four priority areas and the results are publicised and targeted at ratepayers.
Whilst the performance assessment provides the public with transparency on council performance based on its “rating”, this is not the end-game. Rather, the focus is on a long-term lift in council and sector outcomes, performance and reputation.
CouncilMARK™ encourages the sharing of good practice amongst the sector. It provides not only a journey of continuous improvement for councils to embark on, but also gives councils the opportunity to learn from each other and reinforces collegiality amongst the sector.
Gaining traction
Thirty Councils have already participated in the programme, with many of those now gearing up for their second assessment. The programme continues to gain traction as many more councils have registered to be assessed in 2020. This highlights local government’s commitment to transparency, delivering value and continuous improvement in everything they do.
Feedback to date shows that CouncilMARK™ has been an increasingly powerful tool to engage not only with ratepayers, but with central government agencies, business and investors in the regions involved. It provides a message for prospective partners that councils are committed to transparency and progression. Is your council participating in CouncilMARK? Visit www.councilmark.co.nz or enquiry with your local council.
Short takes
State Sector Act 1988 reforms
On 26 June, State Services Minister Chris Hipkins announced reforms to the State Sector Act 1988.
According to the State Services Commission “Following the public consultation last year, Cabinet has approved making changes to the State Sector Act 1988. These decisions will help deliver better outcomes and services for New Zealanders by:
creating a modern, agile and adaptive Public Service
affirming the constitutional role of the Public Service in supporting New Zealand’s democratic form of government.”
The bill is due to be introduced at the end of August, 2019 and expected to be law by mid 2020.
Human Rights Measurement Initiative data portal is now live
Wellington based Human Rights Measurement Initiative (HRMI) just announced the availability of their 2019 human rights country data within a brand-new data portal.
HRMI is an international team working for global change. Frustrated by the lack of human rights data available for investors, wellbeing experts and other analysts, this team has developed the world’s first initiative to track the human rights performance of countries.
The data portal can be accessed from the front page of the HRMI website, or by going directly to https://data.humanrightsmeasurement.org. Explore by country or compare countries and for example, see which groups of people are more at risk of rights violations in various countries. New Zealand’s Human Rights Report offers interesting insights to ponder.
TINZ support appreciated in Fiji anti-corruption work
From 7-11 June, the Chairperson of Integrity Fiji, Dr Joseph Veramu, hosted a visit by Transparency International. The global body was represented by Melbourne-based, Mr Daniel Webb, the Coordinator for Pacific Chapters, and Mr Alejandro Salas from the Berlin Head Office.
They attended meetings with the Fiji Independent Commission Against Corruption, the Fijian Parliament Public Education Section and the Supervisor of Elections. These are some of the agencies that Integrity Fiji has worked closely with over the last 3 years.
In his meeting with Mr Webb and Mr Salas, Dr Joseph Veramu acknowledged the affirming and constructive assistance provided by Transparency International New Zealand (TINZ) in facilitating advice and support in their governance and anti-corruption work. The Board of Integrity Fiji, which works closely with Transparency International, was also thankful for the support provided by TINZ in the February Wellington visioning meeting where Pacific TI Chapters met to progress their anti-corruption activities.
“We also appreciate it that when we want advice on our anti-corruption work, we can chat or email our TINZ partners and are provided proactive responses to help us with our anti-corruption work in Fiji”, Dr Veramu said.
Submissions schedule
TINZ encourages you to exercise your democratic responsibilities by making submissions and responding to government consultation processes with your opinions on future direction-setting and legislation.
The following two centralised websites invite and facilitate public submissions on a variety of legislation, policies, levies, plans and projects currently being processed, together with updates about progress for recently closed submissions:
Not all government agencies utilise one or both of these facilities. Many government agencies conduct their own publicity when seeking submissions. In the spirit of the new and joined-up open government, TINZ’s ideal is a single submissions website link where all requests for submissions are listed. TINZ would also like the same website to constantly improve frameworks for making submissions and the process for following up submissions. This latter process would include an analysis of the number and content of submissions, how the content is included in policy development and legislation and the timeline/milestones as the results of submissions go through the process.
Submissions currently being sought
The following invitations to submissions of relevance to TINZ, are currently open for public comment by their stated deadline. We encourage our readers to take the time to draft a submission, even if it is a short one. The submission process is an opportunity to exercise your democratic rights.
Climate Change Response (Zero Carbon) Amendment Bill
May 2019: Draft Voluntary National Review (VNR) entitled ‘He Waka Eke Noa. Towards a Better Future, Together New Zealand’s Progress Towards the SDGs 2019′, on progress towards achieving Agenda 2030 and the Sustainable Development Goals (SDGs). Submitted to Ministry of Foreign Affairs (refer background). The finalised report will be presented to the United Nations in July.
For all earlier submissions by TINZ, search for ‘Submissions’ category at the bottom of TINZ homepage www.transparency.org.nz
Coming events
3 July 2019, free global online Massive Open Online Course (MOOC): ‘Ethical Leadership in a Changing World‘, Brian Picot Chair in Ethical Leadership, School of Management, Victoria University of Wellington. Course runs for 6 weeks during which late registration can be made.
ANZ claims safety threat led it to hide Hisco’s mansion address The address of the $7.5 million Auckland mansion bought by ANZ for now-departed chief executive David Hisco was kept off the public record because he feared for his safety. The Companies Act requires all directors to list their home address on the public Companies Register, which is designed to promote transparency in business. But the ANZ Bank New Zealand Companies Register entry only lists Hisco’s residential address as: “Held By Registrar, Auckland, 1010 , New Zealand”. Stuff.co.nz.
OECD claims tax transparency initiative delivers ‘impressive results’ The automatic exchange of tax information under the common reporting standard are improving tax compliance and delivering concrete results for governments worldwide, the OECD said, citing new data released last week.
UK crown dependencies agree greater tax transparency Guernsey, Jersey and the Isle of Man plan by 2023 to publish the currently secret information on ownership of companies registered in the UK crown dependencies, they announced Wednesday, heeding calls for greater tax transparency.
New G20 principles on whistleblower protection must be urgently implemented The G20 High Level Principles for Effective Protection of Whistleblowers was endorsed at the G20 Summit, held in June in Osaka. These are a welcome acknowledgement of the crucial role whistleblowers play in bringing wrongdoing to light, and the retribution they often face. G20 countries should now move quickly to turn words into action, and pass national legislation that matches or goes beyond the level of protection recommended by the Osaka principles.
New Beneficial Ownership Toolkit will help tax administrations tackle tax evasion more effectively The first ever beneficial ownership toolkit has been released by the Organisation for Economic Co-operation and Development (OECD). The toolkit is intended to help governments implement the Global Forum’s standards on ensuring that law enforcement officials have access to reliable information on who the ultimate beneficial owners are behind a company or other legal entity. This approach makes it harder for criminals to hide their illicit activities behind opaque legal structures.
Combating graft is key to Asean growth Prime Minister Tun Dr Mahathir Mohamad led the Malaysian delegation for three days at the 34th Asean Summit from June 20 in Bangkok. Corruption was on the agenda to ensure future growth and prosperity in this region.
New Zealand transparency, integrity and accountability
Online ethical leadership course a first for New Zealand With the ethics of business, political and sporting leaders under scrutiny globally, Victoria University of Wellington is offering a free online course in ethical leadership as part of its programme of Massive Open Online Courses (MOOCs) that is a first for the country.
Time to regulate the lobbyists Recent revelations around lobbyist-turned-chief-of-staff GJ Thompson reinforce the urgency for change, writes Kate Nicholls. Opinion thespinoff.co.nz.
Twyford not upfront about Ministerial meeting National’s spokesperson for Local Government (Auckland) Denise Lee says.“The Housing and Urban Development Minister met with Environment Minister David Parker and Auckland Mayor Phil Goff on March 2, 2019. This meeting was included in Minister Parker’s diary release but not Phil Twyford’s. National Party Release on scoop.co.nz
Time for an independent stand-alone watch dog commission Press Release – Maori Council. The New Zealand Maori Council has opened a public discussion on whether it is time New Zealand moved with the times when it came to a stand-alone body to investigate corruption and the misuse of office by Public officials.
Government rejected a code of conduct for staff in 2013 The government has been told it could have avoided the abuse and bullying revealed in the Debbie Francis review of Parliament if it had listened to recommendations in Transparency International New Zealand’s 2013 National Integrity System Assessment to enforce a code of conduct five years ago. RNZ, TINZ quoted
New Police report sheds light on data often asked about New Zealand Police releases report that proactively shares answers to common data requests made under the Official Information Act. Our Data – Your Asked Us is based on the most frequent data requests made by members of the public under the Official Information Act, and is informed by data available on policedata.nz.
Audit firms pour cold water on transparency Attempts to find out the quality of audit work done by the country’s largest financial service firms have been blocked by the industry, despite them disclosing their regulatory performance in Australia.
‘Hidden’ currency conversion fees costing Kiwis billions New Zealand consumers and businesses have paid $5 billion in fees and “hidden charges” to banks and others just to transfer money between different currencies over the past five years, according to a study paid for by British-based company TransferWise.
New Zealand Government Justifies Ongoing Racing Sports and Racing Industry ReformsAP: insert source identity. Reforms which relate to the racing industry and sports funding will not result in losses for sporting organisations in the country, says Grant Robertson, Sport and Recreation Minister. On the other hand, Racing Minister Winston Peters has also defended the shortened public consultation process at a time when Transparency International NZ has strongly criticised it after claiming that the period of five days available for public submissions is not long enough.
Government moves to allay concerns from sporting organisations over racing industry reforms Sport and Recreation Minister Grant Robertson is promising that reforms of the racing sector and sports funding will not lead to national sporting organisations, including NZ Rugby and NZ Cricket, losing out. Racing Minister Winston Peters defends the truncated process for public consultation, despite criticism from Transparency International NZ that the five-day period for public submissions is too short.
Transparency International
Two principles Open Government Partnership needs to embrace to end corporate secrecy Scratch the surface of any of the big cross-border corruption scandals of the last decade — the Russian, Azerbaijani and Troika laundromats, Lava Jato — and it won’t take too long to discover the critical role of shell companies, and the anonymous individuals behind them, in facilitating corruption on a vast scale.
TINZ engages New Zealand and New Zealanders in a broad range of issues related to building stronger integrity systems to mitigate the impact of bribery and corruption. TINZ Directors, Members with Delegated Authority and staff provide subject matter expertise in the topic areas of interest.
TINZ Subject Matter Experts, current at the time of this newsletter publication, can be can be found at TINZ Team July 2019. To view by topic, visit the category page which lists TINZ topics and respective current subject matter experts.
