Transparency Times November 2018

From the Chair

Suzanne Snively ONZM Chair Transparency International New Zealand

Suzanne Snively ONZM
Chair
Transparency International New Zealand

Growing Awareness about the role of Transparency of Beneficial Ownership

Last month, accountants became the latest group to take up the opportunity to join the force in reducing New Zealand’s vulnerability to corruption via the Anti-Money Laundering and Counter Terrorism Financing Act.

A narrative of the requirements of the Act is that accountants, like banks before them, will be subject to compliance. The Ministry of Justice estimates that it may cost the accounting sector $25 million to $101 million this year. Their clients will notice this additional compliance both in terms of request for more information to confirm their identity and, potentially, the bite of larger accounting fees.

This focus on compliance misses the point about the magnitude of corruption from offshore. It is far less costly to protect against it than to litigate against it once it sneaks into the country.

Accountants are required to report all international wire transfers of more than $1000 that they facilitate for their clients and cash transactions worth more than $10,000.

Specific obligations include appointing an anti-money laundering compliance officer, producing written risk assessments, doing various due diligence on clients and reporting suspicious activity. Information relevant to AML is to be contained in an Annual Report filed with Internal Affairs.

The law change helps make money-laundering “front of mind” for accountants. This joins accountants with banks and other service providers in ensuring that their clients are not using their services to launder money.

Beneficial Ownership

Other key changes being addressed by the government relate to registration of beneficial ownership which – while it is the responsibility of investment owners – requires the oversight of financial services providers. TINZ’s well-researched submission to the Ministry of Business and Innovation sets out what needs to be done and why.

Training and preparation is now needed as a means of detecting when to apply “knowing your customer” and how to put clients into the picture of why it matters. This is an opportunity too for accountants to build knowledge to provide clients better services.

We all benefit from the ring of confidence where banks and accountants and their clients are keeping an eye out to ensure that the proceeds of corruption don’t make it to New Zealand shores. The amounts, estimated at 2% of the world’s GDP, would quickly swamp our economy.

Applying the AML to accountants elicited screams of agony that New Zealand was changing from one of the easiest places to do business into a sea of endless processes and forms.

These concerns did not deter the World Bank from again naming New Zealand the best country to do business in for 2019.

World Bank Survey

New Zealand has again topped the World Bank’s ranking of the best countries to start and run a business in their just released report Doing Business 2019. New Zealand is ranked ahead of Singapore, Denmark and Hong Kong. This puts us way ahead of Australia, ranked at 18th!!

It is particularly remarkable that New Zealand retained top ranking even though there were no new reforms for doing business, as specified by the World Bank, implemented in the past year.

Other countries are working to catch up, From June 2, 2017 to 1 May 2018, the World Bank reported that there were a record 315 regulatory reforms designed to improve conditions for doing business implemented in 128 countries.

Public beneficial ownership registry in New Zealand

Meanwhile, Commerce Minister Kris Faafoi is consulting about setting up a publicly searchable register of the “beneficial owners” of Kiwi businesses for New Zealand.

As with AML, a strong case can be made in support of this as it ensures New Zealand remains at the forefront of countries striving to prevent corrupt persons from bringing the proceeds of crime into their country.

Advantages of a central public register include:

  • Enhancing our ability to cooperation with international law enforcement
  • Strengthening our reputation for integrity by implementing a framework that helps keep business honest
  • Lowering compliance costs with information centralised in one place eliminating redundant know your customer research by banks and professional service organizations
  • Improving the accuracy of information provided about beneficial ownership

Add transparency to beneficial ownership

Currently, the Companies Office register lists the directors and some information about the shareholders of private firms. Initially TINZ was recommending that overseas owners meet the minimum requirements of the Companies Office register.

TINZ now recommends that more information be collected about the addresses of directors and shareholders so that beneficial owners cannot hide behind structures such as limited partnerships.

It is important that this information is more transparent given the Police’s latest annual report estimating that the proceeds of fraud and corruption are $1.35 billion a year. This costs New Zealanders in terms of disruption to their communities and to business, and the increased prices of goods and services.

It is our expectation that a well implemented beneficial ownership registry would prevent abuses such as the alleged abuse by Chinese businessman – and potential Parliamentary candidate – Colin Shijia Zheng from registering business interests using three different addresses in an apparent attempt to avoid detection.

TINZ position favours stronger sanctions when beneficial owners fail to register their details accurately.

Suzanne Snively, ONZM

Chair

Transparency International New Zealand Inc.

Transparency International New Zealand AGM 2018

The Transparency International New Zealand (TINZ) Annual General Meeting, held on 29 October 2018, was well attended by members in the company of non-voting invited guests. There were members zoomed-in from overseas. Stunning Wellington harbour views from ANZ’s Level 18 Board Room plus light refreshments, were conducive to a great networking occasion. TINZ Chair, Suzanne Snively, welcomed everyone and ably led the business activities of the AGM.

Master of Ceremonies, Bryce Edwards, then steered the guest speakers’ session with skillfully pertinent observations and introductions.

Changes to the Rules

The meeting approved changes to TINZ Rules. The significant change was to define the maximum term that can be held by elected directors, now limiting them to no more than three consecutive thee year terms.  This change was prompted by a recommendation from the Berlin-based Transparency International Secretariat during its recent 3-year re-accreditation of TINZ.

Other minor changes bring the rules up to date. Refer to The Rules of Transparency International New Zealand Approved October 2018.

Approval of the Annual Report

In her Statement from the Chair, Suzanne Snively, acknowledged the greater responsiveness of the Coalition government towards active support for robust policies based on principles of accountability and transparency, aimed both at preventing corruption and strengthening integrity systems. She outlined TINZ’s highlights, achievements and low points from the year. She described the evolving TINZ structure of involving Members with Delegated Authority (MDA). Elected directors and MDAs allow TINZ subject matter expertise to span over 80 transparency activities and topics.   

She thanked affiliates, public and private sector donors, Directors, staff and MDAs for their contributions. 

The meeting then approved the unqualified audited Financial Statements. See the  2018 TINZ Annual Report.

Ratification of new members

The meeting ratified 30 new members as full members of TINZ, raising overall membership to 180. 

Conferral of two Lifetime Members

The Right Honourable Sir Anand Satyanand

Sir Anand Satyanand and Murray Petrie and were conferred with lifetime memberships to TINZ in acknowledgment of their contributions to and continuing support of TINZ.

Rt. Hon Sir Anand Satyanand

Sir Anand is a former Patron of Transparency International New Zealand (TINZ) and was recently appointed to the International Anti-Corruption Conference (IACC) Council for a six-year term.  He is also a member of the Transparency International global Advisory Council.

He served as New Zealand’s 19th Governor-General between 2006 and 2011.

TINZ Patron, Lyn Provost, acknowledged Sir Anand “In presenting this life membership, the TINZ community recognise the commitment and expertise you have provided in NZ and globally, and thank you most sincerely”. In response he spoke of how TINZ has developed his understandings of key issues during his time as a member, Director and Patron, and will continue to do so. 

Dr Murray Petrie

Dr. Murray Petrie

Murray is a founding member of TINZ. He was the Co-Director of the 2013 Integrity Plus New Zealand National Integrity Systems Assessment (NIS) and a co-author of its predecessor 2003 NIS.

He is Lead Technical Advisor to the Global Initiative for Fiscal Transparency, leads GIFT’s work on fiscal transparency in the Open Government Partnership (OGP), and the development of a new norm on public participation in fiscal policy. Murray helped draft the International Monetary Fund (IMF)’s 1998 Code of Good Practices on Fiscal Transparency (updated version here) and the accompanying Manual, and has consulted extensively for both the IMF and the World Bank on public financial management and transparency. 

Murray was unable to attend the meeting and will be acknowledged at a future event.

Election of four new Directors

Transparency International New Zealand elected four new directors at the October Annual General Meeting. They are Avon Adams, John Hall, Stephanie Hopkins and Ann Webster.  All of them will serve a three year term from 2018 through to 2021.

TINZ and NZMAI sign affiliation agreement

Transparency International New Zealand (TINZ) welcomed the signing of the Affiliation Memorandum of Understanding with New Zealand Martial Arts Institute (NZMAI).  NZMAI is TINZ’s first Affiliation with a New Zealand sporting body.   

Appreciation to Suzanne Snively

TINZ Patron, Lyn Provost, thanked Suzanne Snively for her on-going, enormous commitment and energy towards raising the effectiveness and profile of TINZ last year as with previous years. 

Guest Speaker: Adrian Orr

Guest speaker, Governor of the Reserve Bank of New Zealand (RBNZ), Adrian Orr, was introduced by Adrienne Meikle, CEO of the Commerce Commission. Noting that people referred to her as “the other Adrienne” she augmented her introduction with comments about the key priorities of the Commission. 

The RBNZ Governor provided a most insightful, off-the-record address with ideas to stimulate thinking about the relevance of transparency, accountability and integrity for more-effective governance. 

The vote of thanks was delivered by Lyn McMorran, Executive Director of the Financial Services Federation, who has contributed an account of Adrian’s presentation below.  

AGM Presentation Slides

TINZ prides itself on effective and accountable AGMs completed over short duration to leave time for discussion. As well as providing detailed comment in its Annual Report , it also backs speakers with a more detailed presentation.

The AGM Presentation Slides are available here.

Long term outcomes vs short term goals

Lyn McMorran, Chief Executive of the Financial Services Federation

by Lyn McMorran
Lyn thanked Adrian Orr for his presentation

The members of TINZ were very lucky to have the Governor of the Reserve Bank of New Zealand (RBNZ), Adrian Orr, speak to them about what transparency means to him and how to achieve it, at their AGM held in Wellington on Monday 29 October.

Governor Orr has only been in the role for 6 months – fresh from his highly successful stint as CEO of the New Zealand Superannuation Fund – but of course he has had previous experience with steering the country’s monetary policy during his term as Deputy Governor of RBNZ.

Known for being a highly entertaining and thought-provoking speaker, Governor Orr was introduced by recently-appointed Commerce Commission CEO, Adrienne Meikle, and thanked by Financial Services Federation Executive Director, Lyn McMorran.

The Governor’s message to attendees started by saying that honesty and integrity in all sectors of society are critical for it to remain functional and, therefore, the work of TINZ is essential to maintaining these standards.

He said, however, that often constructs within society work against us doing the right thing. In terms of transparency he said that what gets measured gets managed. Too often what is measured are things that are short term and that managers are often being incentivised for the start line not the finish line.

It is, therefore, crucial to get the horizon right – determine what outcomes we want over time – horizons that matter.

Another excellent point Governor Orr made was about the principal/agent phenomenon where a manager owns the capital but is highly divorced from the managers and the managers of managers to whom they outsource this capital and it is hard for the person at the top to know how ethical all the layers are within their organisation.

In his view, it is important to focus capital on the long term to ensure transparency, integrity and ethical behaviour.

Governor Orr’s presentation included many aspects of his insightful September 2018 speech Geopolitics, New Zealand and the Winds of Change.

TINZ elects four new Directors

Transparency International New Zealand elected four new directors at the October Annual General Meeting. They are Avon Adams, John Hall, Stephanie Hopkins and Ann Webster. All of them will serve a three year term from 2018 through to 2021.

Avon Adams

Avon Adams

Avon Adams is a member of the Institute of Directors and a Fellow of the Public Relations Institute of New Zealand. She holds an MA Hons in Political Studies from the University of Auckland.

She is a communicator, broadcaster and academic and one of the industry’s most experienced and respected PR professionals. She has worked in communication roles in the UK, Australia as well as New Zealand leading communications and corporate affairs for some of New Zealand’s best known brands including Air New Zealand, Vodafone, TVNZ, the Auckland District Health Board and the Department of Conservation. She has worked for a number of television networks around the world as a journalist, presenter and director, consulted for many government and private sector organisations and lectured at universities in journalism and communications.

Avon has a strong interest in communications as a key driver of business excellence.

Avon Adam’s TINZ Special topic areas: Communications, Parliamentary Liaison, Auckland Events

Ann Webster

Ann Webster

Ann currently works in the Crown Entity Governance, Performance and Investment division of the Ministry of Business, Innovation and Employment. Prior to this, she worked for Office of the Auditor-General from 1999 as Sector Manager Local Government, and from 2004 as Assistant Auditor-General, Research and Development until October 2017.

Prior to joining the Office of the Auditor-General, Ann worked in public sector corporate planning, research, and public policy in both central and local government. She has a Bachelor of Arts, a Diploma of Social Science Research and a Master of Public Policy from Victoria University of Wellington.

Ann is particularly interested in public sector strategy, performance, management, planning, governance, accountability, long-term public sector sustainability, and asset and resource management.

Ann Webster’s TINZ Special topic areas: New Zealand Constitution, National Integrity Systems (NIS), Parliamentary Liaison

John Hall

John Hall

John is a general practice lawyer from a multicultural background fluent in the Korean language. He is a member of the Auckland District Law Society’s ‘Newly Suited’ committee and  a member of several Korean community organisations. He is a founding trustee of Fortress Social Services Charitable Trust – an organisation devoted to assisting migrants to access legal services.

TINZ has a major responsibility in New Zealand civil society to call attention to corruption and prevent it’s spread. John has  a passion for ensuring that all citizens are provided with the information and training necessary for them to understand how our society works. Empowering citizens to understand corruption and transparency combats corruption. As we become a super-diverse country we need to ensure that all citizens are equipped with the knowledge to understand our system so that they are not vulnerable.

John grew up in Auckland and is proud to call it home.

John Hall’s TINZ Special topic areas: Civics & Human Rights, Open Government Partnership (OGP), Auckland Events

Stephanie Hopkins

Stephanie Hopkins

Stephanie’s background includes experience in central and local government and private sector finance and general management across a range of industries including financial services. Recently, she has been working with not-for-profit organisations in senior management and consultancy/advisor roles. 

She has been associated with TINZ since mid-2013, previously serving on the board; contracted to TINZ as the GM Operations and was a Member with Delegated Authority prior to becoming a TINZ Director at the AGM.

Stephanie is a born and bred New Zealander growing up in rural NZ. She has travelled extensively and had the good fortune to work in Africa, the Pacific and Melanesia.

Stephanie Hopkins’ TINZ Special topic areas: Pacific, Financial Integrity Services Assessment (FISA), Affiliations

TINZ and NZMAI sign affiliation agreement

The New Zealand Martial Arts Institute (NZMAI) and Transparency International New Zealand (TINZ) formalised an agreement at the recent TINZ AGM, that recognises NZMAI’s commitment to ethical behaviour in sport.

TINZ is very happy to sign this first Memorandum of Understanding with a New Zealand sporting body.   

The NZMAI is established to build the credibility of Martial Arts within New Zealand.  TINZ and NZMAI have common interests in promoting ethics in sport and advocating for effective integrity systems to maintain trust and confidence in New Zealand. Both organisations have zero tolerance to violations of integrity and care about good governance, robust codes of conduct and effective systems for the prevention of corruption.

Signing the affiliation Memorandum of Understanding between TINZ and NZMAI.
L to R: Suzanne Snively, Chair TINZ; Kyoshi Angelina Carden, President NZMAI (NZ Martial Arts Institute); Kyoshi Aaron Carden, NZMAI; Lyn Provost, Patron, TINZ; Luke Qin, TINZ Member with Delegated Authority, Affiliations; Henry Lynch, TINZ Board Director.

Pictures from the TINZ 2018 AGM

Pictures from he 2018 Transparency International New Zealand Annual General Meeting. Click on any image to expand.

 

Transparency International Secretariat Annual General Meeting

International Anti-Corruption Conference 2018

Sarah Mead
TINZ Board Legal Secretary
with Delegated Authority for Environmental Governance

Sarah Meads

TINZ Board Legal Secretary

with Delegated Authority for Environmental Governance

Between 22 and 24 October, over 1800 people – including representatives from Transparency International New Zealand (TINZ) – convened in Copenhagen to participate in the 18th International Anti-Corruption Conference (IACC). The three day conference (22-24 October 2018) was a chance for people from around the world involved in the fight against corruption to come together, exchange ideas, discuss strategies and build relationships. To facilitate this engagement, the conference included plenary sessions, workshops, an anti-corruption film festival and a fair play concert.

The theme of the conference – ‘Together for Development, Peace and Security’ – highlighted the myriad of links between corruption and sustainable development. As noted in the Joint Statement of the high-level segment of the IACC, “anti-corruption measures are an integral part of the 2030 Agenda to promote sustainable development and growth”. If we are to achieve the Agenda, “long term, systemic and comprehensive anti-corruption efforts at local, national and international levels continue to be critical for progress”. The interconnected nature between corruption and various global threats, including climate change, was highlighted.

For TINZ, the conference served as an opportunity to discuss challenges and fresh strategies on issues that we have been working on domestically. For instance, the conference brought together individuals from around the world leading the campaign for a global norm of beneficial ownership. TINZ has consistently called for a public, beneficial ownership register of all legal entities to enhance transparency of New Zealand companies and trusts. The Panama Papers highlighted the importance of such a register by revealing how criminals are misusing companies and trusts in New Zealand for money laundering, tax evasion, corruption and other crimes. The conference also served as a reminder of the need to remove exceptions in our domestic legislation for facilitation payments.

The conference also saw the presentation of the Transparency International 2018 Anti-Corruption Award. In a moving ceremony, the award was presented to Spanish whistleblower and campaigner, Ana Garrido Ramos, and family members of murdered Maltese journalist Daphne Caruana Galizia. This award honours remarkable organisations and individuals, including journalists, prosecutors, government officials, and civil society leaders who expose and fight corruption. This year’s winners highlighted the crucial role citizens and journalists play in shining the light on corruption, but also the real and often fatal risks associated with doing so. Following the conference, the IACC declared a unanimous commitment “to collaborate, build coalitions and unite so we can act together to end impunity for the corrupt.”

TINZ was represented at the conference by former Governor-General and former TINZ Patron, Sir Anand Satyanand, TINZ Chair, Suzanne Snively ONZM, TINZ CEO, Julie Haggie, TINZ Director, Josephine Serrallach and TINZ Board Legal Secretary, Sarah Mead. At the conference Sir Anand presented on Prevention of corruption in the Judiciary.

Son of Assassinated Journalist Daphne Caruana Galizia accepts 2018 Anti Corruption Award for his mother
Danish Prime Minister Lars Løkke Rasmussen Opens the 2018 International Anti-Corruption Conference
2018 International Anti-Corruption Conference opening plenary

State Sector Act reform: having our say

TINZ CEO, Julie Haggie

Julie Haggie

TINZ Chief Executive Officer

Time for change

The State Services Commission has run a short consultation on proposed changes to the 30-year old State Sector Act. This Act is based on a model of single department delivery from one Chief Executive to a single Minister, with strong lines of vertical accountability.

The government is seeking more collective, inter-agencies action, and greater accessibility to, and citizen focus of, public services. It aims to strengthen the quality and leadership of the public service while enabling much more cross-agency work and accountability. It also heralds a stronger ethic of public service.

In practice this could mean an Executive Board of Chief Executives, and greater enablement for joint ventures and ‘one-stop shops’. There is also a desire to ensure the purpose, principles and values of the Public Service are embedded within the legislation.

Observations and recommendations

Transparency International New Zealand (TINZ) is broadly supportive of the changes, but has suggested more work is needed to clarify problems and options. We noted that an enlarged scope plus increased collaboration and agility across the public sector, will result in a worrying shift in power. This will increase risks in areas such as efficiency, effectiveness, public engagement, management of conflicts, transparency and accountability. These risks must be identified and mitigated. Along with the Institute of Internal Auditors, TINZ encouraged much greater use of independent evaluation and internal audit. This would be useful where decision-making around regulatory change is being shifted to groups of senior leaders, to support more transparency around the impact of regulatory changes.

TINZ’s submission refers often to the Integrity Plus 2013 New Zealand National Integrity System Assessment (NIS) including its recommendations around:

  • strengthening of integrity and accountability systems in public sector entity operations
  • reporting and monitoring of misconduct and breaches of integrity
  • regular integrity and conduct surveys
  • best practice options in fulfilling Te Tiriti o Waitangi obligations
  • increased activity to deepen reporting of tax expenditure
  • deepen public debate about fiscal policy.

The changes currently proposed in the State Sector Act Reform consultation provide for a general improvement in integrity and transparency, but TINZ considers these need to be more specifically identified.

TINZ also seeks more visibility and accessibility for the public and greater ethical competency in relation to public finance, and data integrity, including the use of personal data.

Documentation

All submissions including the TINZ submission will be published on the State Services Commission website in the near future. Refer also to background press releases from Minister of State Services, Hon Chris Hipkins.

Ethics at work: Survey of employees 2018

Philippa Foster-Back, Director of the Institute of Business Ethics

The first ever New Zealand findings from the international survey ‘The Ethics at Work: Survey of Employees 2018′ will be revealed on 28 November.  This event will analyse employees’ perceptions of ethics in the workplace and the challenges faced by organisations. 

Speakers

Philippa Foster-Back, CBE, Director of the Institute of Business Ethics, from the UK, will set the scene and share the key findings of this global survey which includes Asia-Pacific countries. 

A commentary on the New Zealand data will be provided by Professor Karin Lasthuizen. Professor Lasthuizen is the Chair of the Ethics Committee at Transparency International New Zealand (TINZ) and holds the Brian Picot Chair in Ethical Leadership at the School of Management, Victoria University of Wellington. 

The survey

The survey included the following questions which were put to employees across the private and public sector during February 2018:

  • What are employees’ attitudes to and perceptions of ethics in their place of work?
  • Do they feel able to speak up if they have been aware of misconduct?
  • Are formal ethics programmes and ethical leadership effective in embedding ethical values into organisational culture and influencing behaviour?
  • What are the challenges for organisations and what should be the focus going forward?

Register to attend (only limited remaining places)

5:30 – 6:30 pm, Wednesday 28 November 2018
Lecture Theatre 3 (RHLT3), Rutherford House
Pipitea Campus of Victoria University of Wellington 
Bunny Street, Wellington.  

Canapés and soft drinks will be served after the seminar. A cash bar will be available for the purchase of alcoholic beverages.

Copies of the survey publication will be available to take away.

Ethics officers in all large companies?

Emmanuel, Senior Vice-President and Chief Ethics Officer at L’Oréal

Emmanuel Lulin, Senior Vice-President and Chief Ethics Officer at global cosmetics giant L’Oréal, predicts we will soon be seeing ethics officers in most large companies.

Once companies and other organisations were subject to the law to reinforce ethical behaviour. Nowadays the rapid speed of scientific and technical innovation is far outstripping the law’s ability to keep up. So said Lulin at a public presentation co-hosted by Professor Karin Lasthuizen, Brian Picot Chair in Ethical Leadership at Victoria University of Wellington, with Transparency International New Zealand.

The full length article about this presentation available is worth reading.

Member Profile Professor John Hopkins

John Hopkins, TINZ Director – Responsible for Governance

Professor John Hopkins

TINZ Director – Responsible for Governance

John Hopkins was appointed to take over the directorship vacated by Conway Powell, with a term extending until the 2020 Annual General Meeting.

Dr. John Hopkins is a Professor of Public Law at the University of Canterbury with a long record of working in the fields of public integrity and the Rule of Law. He has previously worked at a number of other universities in New Zealand and the UK and held visiting positions in the field of global governance at the Central European University, Budapest and Georgetown University, Washington DC.

John is currently a national rapporteur in the Global Justice Project’s Rule of Law project and more recently has worked on the Rule of Law and corruption issues in a Pacific context. He jointly heads a European Union funded project examining corruption in the Pacific.

John offers insights to the following questions put to him.

Q: How do you think corruption affects New Zealand?

A: Corruption affects New Zealand in a variety of ways but it primarily hidden. The appearance that domestic financial corruption is small, leads people to assume that corruption is also minimal. But in fact, corruption in New Zealand takes place in non-monetary forms, through favoritism, nepotism and “old boys/girls” networks. Such corruption is equally damaging but difficult to detect and monitor.

New Zealand’s record in stopping overseas corruption which emanates from these shores is poor. There is significant circumstantial evidence that the proceeds of corruption are finding their way to New Zealand.

Q: What steps do you think we can take to safeguard us from corruption in New Zealand?

A: New Zealand is far too complacent about placing safeguards on corrupt practices. Recent examples of corrupt behavior in NZ have been portrayed as sophisticated (the Ministry of Transport example being the most recent). In reality they were amateurish and the fact that they were able to take place, shows a lack of rigour in our protection mechanisms.

Q: How do you think we minimise corruption in New Zealand?

A: There needs to be a much greater understanding of the danger which corruption poses globally and to New Zealand. On a practical note, improvements around whistleblowing and foreign corruption (particularly around active investigations) would also assist.

Q: Why do you feel that Transparency International is an important organisation globally?

A: Corruption touches almost every aspect of international and domestic governance. If the international community is to effectively address the huge environmental, developmental and political problems that face the world’s population, it must also address the endemic corruption which affects much of the globe.

Q: What do you think the focus of Transparency International New Zealand should be in New Zealand?

A: The focus should be on building New Zealand’s reputation internationally, to reflect it’s domestic success in defeating corruption. This requires pressure on government to develop effective legislation and enforcement mechanisms.

Q: Why are you motivated to be a Transparency NZ Director?

A: I have a long history as a public law academic working in the area of governance and the Rule of Law. My involvement in TINZ allows me to turn my academic interest to more practical use.

Q: What TINZ initiatives will you be contributing your time and expertise to?

A: Governance and legislative issues, including the improvement of whistle blowing protections and greater enforcement of NZ’s commitments under the OECD Foreign Bribery Convention.

Porous line between political access and political influence

Dr Michael Macaulay, Associate Dean Professional Education, Acting Director, MBA, Associate Professor (Public Management), Victoria University of Wellington Business School

Dr Michael Macaulay

TINZ Member with Delegated Authority

Open Government Partnership

Associate Professor Michael Macaulay is in the School of Government at Victoria University of Wellington and has written extensively about integrity, ethics and anti-corruption.

OPINION: The latest furore about political party donations is yet another manifestation of an ongoing issue.  It is not, sadly, anything new.  At present that issue is, predictably, being reduced to the actions of individuals. But the real problem lies in the political system rather than with particular MPs. The problem with political donations is inherently structural. 

Confidence or scepticism

The nature and structure of political party funding is crucially important in building trust in the political system. People must be confident their votes are equally important as those of large donors. Current evidence suggests this is not the case. Public trust surveys from Victoria University of Wellington show political party funding is consistently distrusted by around 70-75 per cent of New Zealanders.

There are numerous reasons for this distrust, other than natural scepticism towards politics. Not least are concerns that large private donations enable policy capture by the donor. In other words, vested interests buy political influence to benefit their own agenda. We would not expect to see the kinds of links that, for example, the United States National Rifle Association has with the Republican Party (annual contributions of around US$1million to Senators and Congressmen). Even so, are we confident that New Zealand doesn’t have people effectively buying a seat in Parliament?

Our two biggest parties both have private clubs for funding – whether this is Labour’s President Club or National’s Cabinet Club – which do not promote the openness needed to ensure individuals are not unduly influencing policy. The typical response to this is these clubs grant political access rather than political influence. The same rationale is offered in the United Kingdom, in defence of the ‘Leaders Club’, which buys access to the Conservative Party meetings with Prime Minister Theresa May, for anyone willing to donate £50,000.

The problem is that even assuming it isn’t true, the line between access and influence is far too porous for anybody to confidently believe it cannot be crossed. 

Building on this, there is unease that some votes are worth more to political parties than others. We know from research last year that over half of political party donations came from contributions above $15,000. A ‘gold membership’ for Labour’s President’s Club costs $5,000 per year. Despite arguments at its 2017 launch that it is “not remotely exclusive” and anyone was “welcome to join”, it is difficult to see who actually has the money to do so.

Nobody can expect political parties not to maximise the funding opportunities at their disposal. It is therefore crucial to change the way we think about those opportunities.

There is a different way

A radical approach is to adopt 100 per cent public funding for political parties. This is not a new idea – Transparency International New Zealand raised it as far back as 2013 in its assessment of the country’s national integrity system – and it is one that has some obvious objections. 

Will New Zealand taxpayers want to fund political parties? We should ask them.  

We know New Zealanders do not trust current arrangements and we should find out the extent to which people will feel more connected to parties that do not rely on large donations or exclusive memberships.

Public funding need not be a huge burden: the total funds parties raise and declare amount to 0.0001 per cent of the government budget. It also builds on current arrangements that make public funding available for party electoral broadcasts, which at the moment stands at $4 million. Furthermore, public funding would enable party supporters to refocus their energies: not on fundraising but on developing public policy for the decades to come.  

Most importantly, though, we need to be able to have a free and frank discussion on the merits and drawbacks of our current model. Party donations are not an issue that is going to go away and the more we focus on individual behaviour the more we ignore the systemic flaws in funding. The problem of New Zealand political party funding is a wholly unnecessary evil. We need to address the system, rather than simply point the finger.

Possible reform

Sport NZ seeks public views on sport integrity

Peter-Miskimmin, CEO of Sport NZ

31 October 2018

Sport NZ has launched nationwide public consultation on its review into sport integrity, calling on anyone involved in sport to share their thoughts on a range of integrity issues through an online survey that will be open for the next six weeks.

“There’s no question New Zealanders love sport, but we also know that the integrity of sport is increasingly threatened at grassroots and elite levels by issues such as sideline behaviour, failure to protect children, match-fixing, corruption and doping,” says Sport NZ CEO, Peter Miskimmin.

“There are already various controls in place at different levels of the sporting sector to address these. This review is about determining whether these measures are sufficiently robust and appropriate, so that any weaknesses can be addressed to ensure our sport remains clean, fair, and safe and enjoyable for everyone.”
 
Miskimmin encourages anyone involved in sport to have their say through the online survey or by making a written submission.  
 
“Research indicates that sport creates happier, healthier people, better connected communities, and a stronger New Zealand. We can’t afford for there to be integrity issues which discourage New Zealanders from participating in sport and realising the many benefits it offers,” says Peter.
 
“That’s why we need as many people as possible to contribute to this review.”
 
The online survey and a SportNZ discussion document are available at sportnz.org.nz/integrity. The survey runs through to 11 December. Members of the public can complete any or all of six survey modules, each of which should take around 15 minutes to complete. Those modules are: 

  • Organisational culture, whistleblowing, and the institutional arrangements for sport integrity in New Zealand
  • Member protection
  • Integrity issues in children’s sport, including at secondary school
  • Anti-Doping
  • Protecting against corruption
  • Protecting against match-fixing. 

Sport NZ will analyse survey responses and written submissions before making recommendations on priority areas for further work, to its Board in early 2019.
 
Also forming part of the Sport Integrity Review is a stock-take of elite athlete rights and welfare, which commenced in June. The findings of this are expected to be released next month.  

Media release from Sport New Zealand

Submissions Schedule

TINZ encourages you to exercise your democratic responsibilities by responding to invitations from government agencies, with your opinions on future direction-setting and legislation.

Submissions currently being sought

The following invitations of relevance to TINZ, are currently open for public comment by their stated deadline. While TINZ intends to respond to these as an organisation, we encourage everyone to become involved directly as important opportunities to exercise your democratic responsibilities.

Open Government Partnership, 2nd National Action Plan (2016-2018) 

  • Deadline Monday 12 November 2018 at 5pm
  • Refer to the draft report and feedback details issued by State Services Commission.  
  • Comment is invited on the Government’s self-assessment Report of its performance under this recently completed second OGP NAP2 plan.
  • All feedback will be considered and the Report refined before delivery to the Washington-based OGP Secretariat for its critique and international publication.

Protected Disclosures (whistleblower) Act 2review

  • Deadline Friday 7 December 2018 at 5 pm
  • Refer to key issues and feedback/submission form
  • State Services Commission (SSC) seeks feedback on five options for change that were informed by our earlier engagement with stakeholders in February and March 2018  2018.

Sport NZ seeks public views on sport integrity

  • Deadline Tuesday 11 December 2018
  • Refer to Additional details in this issue of Transparency Times
  • The online survey and a Sport NZ discussion document are available at sportnz.org.nz/integrity.
  • Sport NZ has launched nationwide public consultation on its review into sport integrity, calling on anyone involved in sport to share their thoughts on a range of integrity issues through an online survey that will be open for the next six weeks.

Reserve Bank Act review stage 2

  • Deadline Friday 25 January 2019
  • Refer to five key issues and submission process
  • The first round of consultation for Phase 2 of the ‘Reserve Bank Act Review: Safeguarding the future of our financial system’, seeks feedback to The Treasury on five key issues.

Recent TINZ submissions

  • Contrary to best intentions, TINZ was unable to resource the preparation of a formal ‘Trade for All Policy’ submission to New Zealand Foreign Affairs and Trade but notes the on-going opportunity to provide comment.

In case you missed it

New Zealand transparency, integrity and accountability

Many of the more radical ideas for encouraging and protecting whistleblowing appear to have received little support during “targeted consultations” run by the State Services Commission. However, the commission says there is still an opportunity for people to put their views forward. Public feedback will be sought before the Minister of State Services intends to report back to Cabinet in April 2019 to seek agreement on final policy proposals.

4 Crucial Benefits Of Tax Transparency In New Zealand

Sport NZ seek whistle blowers to help with review into sport integrity Sport NZ are seeking the public’s views to contribute towards a nationwide review into sport integrity.The sports governing body is calling on anyone involved in sport to share their thoughts on a range of integrity issues through an online survey that will be open for the next six weeks.

New Zealand politics: foreign donations and political influence

New Zealand politics: how political donations could be reformed to reduce potential influence In the aftermath of the controversy surrounding former MP Jami-Lee Ross and opposition National party leader Simon Bridges, discussions have focused on possible reforms of political donations in New Zealand. Several of these proposals warrant further discussion and contextualisation.Simon Chapple Director, Institute for Governance and Policy Studies, Victoria University of Wellington

NZ politics: foreign donations and political influence One dimension of the controversy that has attracted less attention is the connected issues of political party donations and foreign influence on New Zealand’s democratic system. TINZ mentioned.

New Zealand lawmaker accuses opposition leader of corruption New Zealand opposition leader Simon Bridges speaks to reporters on Tuesday, Oct. 16, 2018, in Wellington, New Zealand. New Zealand’s conservative opposition party was in turmoil after one of its own lawmakers, Jami-Lee Ross, accused Bridges of corruption for hiding a donation from a wealthy Chinese businessman. Video

Justice Minister Andrew Little says there is ‘scope for debate’ around political funding rules Justice Minister Andrew Little is considering looking into changes to the way political parties are funded, and areas such as donation transparency could be part of the discussion

Bid to clean up NZ’s business reputation divides submitters Stuff highlights comments received from the Ministry of Business Innovation & Employment discussion document on beneficial ownership

Algorithm stocktake: “need to take care in their use” . The first ever stock-take into government agencies’ use of algorithms and predictive modelling to deliver their services to citizens, indicates it must be done with caution. The Government Chief Data Steward Liz MacPherson, along with the Government Chief Digital Officer have looked at how fourteen government agencies use algorithms.

New Zealand lawmaker accuses opposition leader of corruption

New Zealand Lawmaker Reports China-Linked Political Donation to Police A New Zealand lawmaker has accused the opposition National Party leader of corruption, claiming that he sought to hide the source of a donation from a Chinese businessmen who has been linked to Beijing’s international influence strategy under the ruling Chinese Communist Party’s United Front Work Department.

Four Crucial Benefits Of Tax Transparency In New Zealand Oxfam

Corruption isn’t a Kiwi value so let’s not bring it here OPINION: Bruce Cotterill

Pacific

Call for transparency in PNG government luxury car deals Transparency International in Papua New Guinea has urged the government to come clean on how it procured a batch of luxury vehicles for the APEC summit. – RNZ

Sustainable Development

New Zealand signs global declaration to cut plastic waste New Zealand has joined an international pledge to cut plastic wastes from our economy and environment, Associate Environment Minister Eugenie Sage announced today.

News: PWYP calls for commitments on beneficial ownership disclosure and protection of civic space   In many countries which are rich in natural resources, the revenues generated from the extraction of these resources don’t benefit the country’s population. Revenues are sometimes lost through mismanagement; but in other cases, they are lost as a result of corruption.

Court decision on greenhouse gas emissions a warning for NZ. Sarah Mead (TINZ Secretary) reports on a landmark judgment by the Hague Court of Appeal which ordered that the Dutch state’s target to reduce greenhouse gas (GHG) emissions was in breach of its duty to protect its citizens’ human rights, and was deemed illegal. In the absence of ambitious action by world leaders on climate change, the case points to the growing tendency by citizens to force action through the courts.

Business Ethics

Ethics officers in all large companies? Emmanuel Lulin, Senior Vice-President and Chief Ethics Officer at global cosmetics giant L’Oréal, predicts we will soon be seeing ethics officers in most large companies.

International

The Struggle Against Corruption Timothy K. Kuhner Associate Professor, University of Auckland, Faculty of Law and TINZ member produced this documentary with the UN Office on Drugs and Crime. The Struggle Against Corruption is a powerful 20-minute documentary piece featuring interviews with members of UNODC staff.

How transparency can help the global economy to grow According to the UN’s Office on Drugs and Crime and the Organisation for Economic Co-operation and Development (OECD), 10-25% of the value of public contracts is lost to corruption.This means that corruption – such as fraud, waste and abuse by government contractors – costs up to $2.35 trillion globally on an annual basis.

Democratic establishments across the world continue to fall like dominoes under waves of popular anger and resentment against the decay of institutions riddled with corruption or captured by organized special interest. On Sunday, it was Brazil’s turn.  “The revolt against a moribund political class transmutes into a revolt against democratic governance itself”.  

Research identifies the need for vastly improved on-line voting systems’ transparency and auditing to restore observable vote counting and electoral integrity as the basis of democracies, without which concealed, computerised vote counting systems are overly vulnerable to fraud.  

International Anti-Corruption Conference opens with renewed commitments to action from governments, businesses, international orgs Transparency International Media Release

Seoul to host 2020 global anti-corruption conference

Dirty Money, Fraud and Tax Evasion Rock Corruption-Free Denmark

Daphne Caruana Galizia and Ana Garrido Ramos winners of 2018 Anti-Corruption Award Transparency International Media Release

 

 

TINZ Team

TINZ engages New Zealand and the 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. Below is a list of TINZ Subject Matter Experts as of November 2018.

To view by topic, visit the category page which lists TINZ topics and respective current subject matter experts.

PersonLocationResponsibilitiesTerm

Patron

Lyn ProvostWellington2018 – 2021

TINZ Elected Directors

Suzanne SnivelyWellingtonCHAIR, Financial Integrity System Assessment (FISA), National Integrity Systems, TINZ Governance2017 – 2020
Tim GoodrickInternationalBusiness Integrity and Ethics2016 – 2019
Charles HettWellingtonCorruption Perceptions Index, Ethics Committee2015 – 2018
John HopkinsChristchurchChristchurch events, Corruption, Indexes and Surveys, OECD2017 – 2020
Henry LynchAucklandBusiness Integrity and EthicsMay 2018 – 2019 (Replacing Mark Sainsbury)
David McNeillAucklandIT Systems2016 – 2019
Josephine SerrallachPalmerston NorthCorruption Perceptions Index, Global TI Relationships, Sport2017 – 2020
Christine StevensonWellingtonTreasurer2017 – 2020
Karen WebsterAucklandDefence and Defence Anti-Corruption Index, Local Government2017 – 2020
Brendon WilsonWellingtonBusiness Integrity and Ethics, Small and medium enterprises2017 – 2020
Gus van de RoerWellingtonInvestments Attraction2015 – 2018

TINZ Members with Delegated Authority

Ferdinand BalfoortInternationalAnti-Corruption Pledges, Fundraising, Governance19 Sept 16 – 18 Sept 18
James BrownAucklandCorporate Partnerships, Financial Integrity System Assessment (FISA), Sport20 Nov 17 – 19 Nov 19
Liz BrownWellingtonFinancial Integrity System Assessment (FISA), Local Government, National Integrity Systems17 Oct 16 – 16 Oct 18
James BushellWellingtonBusiness Sector, Civil Society20 Dec 16 – 19 Dec 18
Tod CooperWellingtonProcurement, Training, Whistleblowing22 May17-21 May 19
Karen CouttsAucklandMaori Caucus, Te Tiriti o Waitangi17 Oct 16 – 16 Oct 18
David DunsheathWellingtonDemocracy, Newsletter production, Open Government Partnership (OGP), Parliamentary Liaison, Sustainable Development Goals (SDGs)24 Jul 17 – 23 Jul 19
Daygan EagerPalmerston NorthOpen Government Partnership (OGP), Palmerston North Events10 Apr 17 – 9 Apr 19
Bryce EdwardsChristchurchAnti-Corruption, Democracy, Legislation, Media20 Nov 17 – 19 Nov 19
Debbie GeeWellingtonCommunications, Open Government Partnership (OGP), Partners and Affiliations, Whistleblowing24 July 18 – 23 July 20
John HallAucklandCivics, Human Rights, Open Government Partnership (OGP)20 Nov 17 – 19 Nov 19
Nichola HodgeWellingtonChristchurch events, Newsletter production, Wellington Events, Youth Membership10 Apr 17 – 9 Apr 19
Stephanie HopkinsWellingtonFinancial Integrity System Assessment (FISA), Pacific / Pasifika, Partners and Affiliations7 August 18 – 6 August 20
Claire JohnstoneWellingtonMaori Caucus, Pacific / Pasifika20 Dec16 – 19 Dec 18
Karin LasthuizenWellingtonBusiness Integrity and Ethics, Ethics Committee, Wellington Events2 Jan 18 – 1 Jan 21
Michael MacaulayWellingtonOpen Government Partnership (OGP), Whistleblowing10 Apr 17 – 9 Apr 19
Sarah MeadWellingtonBoard Secretary, Constitution, Official Information Act (OIA)20 Dec 17– 19 Dec 19
Declan MordauntInternationalCivil Society, Partners and Affiliations, T20 Professional Services Network20 Dec 16 – 19 Dec 18
Mark NicholasTaranakiMaori Caucus, Sport, Taranaki Events, TINZ Membership20 Dec16 – 19 Dec 18
Luke QinWellingtonAnti-Money Laundering, Financial Integrity System Assessment (FISA), Partners and Affiliations25 Sept 17 – 24 Sept 19
Vicki SquiresChristchurchChristchurch events, Parliamentary Liaison15 Dec 17 – 14 Dec 19
Fuimaono TuiasauAucklandOpen Government Partnership (OGP), Pacific / Pasifika1 Dec 16 – 30 Nov 18
Ann WebsterWellingtonConstitution, National Integrity Systems, Parliamentary Liaison20 Nov 17 – 19 Nov 19

TINZ Staff

Julie HaggieWellingtonCEO10 Sept 2018 – 9 Sept 2019
Helen BewleyWellingtonAdministration, Financials, TINZ Membership2015 – June 2019
Anne GilbertWellingtonLeaders Integrity Forums (public sector), Local Government, TINZ Project Manager2015 – March 2019
Lucy JonesWellingtonAdministrationUntil Feb 2019
Autumn ProwWellingtonAdministration2018 – Dec 2018
Steve SnivelyInternationalCommunications, Newsletter production, Website2012 – ongoing