Openness is the new coinage

10 July 2012 

To New Zealand’s baby boomers today’s date resonates.  Promotions for the introduction of decimal currency in 1967 were accompanied by a jingle about the “tenth of July, this year”. We now have two generations who are unlikely to recognise the meaning- or value – of a shilling, a florin or a half crown.

What surprised many at that time was the undramatic way in which substitution of notes and coins occurred.  But that seems to be a common characteristic of humanity.  We can adjust quickly and new ways can speedily become common place.

This is evident in the disclosure of State Services chief executives’ travel and hospitality expenses and declaration of gifts. Two years ago when the State Services Commissioner’s requirements were first published there was concern expressed by a number of those affected and great excitement by the media. The data was a fascination for weeks.

The disclosure regime is that the data for the preceding six months must be published on agency websites and on www.data.govt.nz every January and July. While the second tranche of disclosures received passing media interest, the third, in January this year proved to be wholly unnewsworthy.

Last week, agencies began posting the information for the last six months. The type of agencies showing on the website as having published promptly is noteworthy.  Three District Health Boards, one Public Service department and one Independent Crown Entity published their chief executives’ data within the first few days of the reporting period.  And there has been no media interest.  

All of which is encouragement for the principle of transparency and open government.  Disclosure is not an assurance of probity, but openness has a moderating effect.  Resisting disclosure creates prurient interest in information. With publication that information can become mundane.

www.ssc.govt.nz/sites/all/files/letter-ce-expenses-june2011.pdf

http://data.govt.nz/search/SearchForm?Search=CEexp Jan-Jun2012&action_doCustomSearch=

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July 10, 2012

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Should we celebrate not being Australian?

 9 July 2012

Today is a major constitutional milestone for New Zealand.  But of course we don’t celebrate it.  It is the anniversary of the Royal Assent being granted by Queen Victoria in 1900 following the passage through both Houses of the British Parliament of the Commonwealth of Australia Constitution Bill.  The Bill was developed during 1897-98 by a convention of the Premiers of the colonies. New Zealand had not signed up as an Original State by 1 January 1901 when the Constitution came into force, and seems unlikely to ever do so.

Australians don’t pay much attention to 9 July either.  Although there was confirmation cabled to Australia and New Zealand, the celebrations at the time were muted. (Australia had telegraph connections to Britain from 1873, and a cable linked New Zealand in 1876.)  Australia marked the centenary on 9 July 2000, but subsequent commemoration seems limited to the Australian National Archives and to citizenship ceremonies arranged by the Department of Immigration and Citizenship.

(Australia Day on 26 January marks the first settlement being set up at Port Jackson in 1788.)

New Zealand is described as one of the States eligible to be part of the Commonwealth;

“The Commonwealth” shall mean the Commonwealth of Australia as established under this Act.

“The States” shall mean such of the colonies of New South Wales, New Zealand, Queensland, Tasmania, Victoria, Western Australia, and South Australia, including the northern territory of South Australia, as for the time being are parts of the Commonwealth, and such colonies or territories as may be admitted into or established by the Commonwealth as States; and each of such parts of the Commonwealth shall be called “a State”.

9 July has more profile in New Zealand as the anniversary of the Parliamentary passage of the Homosexual Law Reform Bill in 1986. The first part of the Act decriminalising male homosexuality passed its Third Reading with 49 Ayes to 44 Noes today in 1986.

But of immediate interest today is the Annual General Meeting of the New Zealand Institute of Public Administration.  An address by Len Cook, the IPANZ President, to precede the AGM, is on the topic of  “Government Performance – Thought or Theatre”.

www.ipanz.org.nz/Event?Action=View&Event_id=54

http://en.wikipedia.org/wiki/Len_Cook

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July 9, 2012

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FOI has 46th anniversary in United States

 6 July 2012

The Freedom of Information Act was signed into law in the United States 46 years ago this week – symbolically on 4 July.  President Johnson commented at the time that “…this legislation springs from one of our most essential principles.  A democracy works best when the people have all the information that the security of the nation permits. No one should be able to pull curtains of secrecy around decisions which can be revealed without injury to the public interest.”

Enacting the FOI took 20 years of manoeuvring by a coalition of enthusiasts backed by a number of prominent newspaper editors. It didn’t come naturally.  Moreover, although President Johnson proclaimed that he “…signed this measure with a deep sense of pride that the United States is an open society in which the people’s right to know is cherished and guarded…” he had been an opponent of the Bill.

The Swedish Freedom of the Press Act of 1766 was more or less the only “ right to know” legislation until the US development.  Australia New Zealand and Canada had laws in force by 1983, and approximately 90 other countries have followed suit.

There is no consistency in the extent to which jurisdictions have empowered their people to access official information. As in New Zealand many enable access to Executive information, but exclude any entitlement to information from the Legislature or the Judiciary – although some of these constraints are being eroded.   The surprise development in Australia two months ago, on one hand, when the Information Commissioner indicated that legislative agencies were not covered by the federal FOI Act is being countered on the other, by a Judicial Complaints Bill debated last week that precludes accessing information about judges who are the subject of formal complaints.

http://en.wikipedia.org/wiki/Freedom_of_Information_Act_(United_States)

http://en.wikipedia.org/wiki/Freedom_of_information_legislation

www.foi-privacy.blogspot.co.nz/2012/07/blanket-foi-exclusion-for-federal.html

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July 6, 2012

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Whistleblowers banking on Glaxo’s problems

5 July 2012

Is whistleblowing more about bounty hunting than the pursuit of ethical business?

In the US, to encourage the reporting of corrupt practices, the Securities and Exchange Commission has implemented a regime where informants can receive a percentage of the penalty resulting from successful enforcement action. Its informant fund has a published scale starting with a minimum payout of $100,000 where a settlement is worth more than $1 million.

The scheme was enacted in the False Claims Act during the Civil War to help reduce fraud and profiteering in procurement contracts. The Act has a new lease of life.

It was in the news this week when four former employees of GlaxoSmithKline who provided evidence used in an action against their employer, received US$250 million from a record settlement for false promotions.

Glaxo, Britain’s biggest drug maker, agreed to pay a US$3 bn fine after admitting fraudulently promoting medicines in the US. The marketing included providing luxury Caribbean holidays to doctors who prescribed those drugs.

Some benefit may have come from the ten years of negotiating the settlement. A Glaxo spokesman said: “In the last four years we have fundamentally changed procedures. We now encourage employees to seek help and discuss their concerns about ethical issues or suspected cases of misconduct.”  By contrast, British banks that promoted their ethical traditions have been uncovered as somewhat less than they claim to be.  Glaxo only got around to developing its integrity programme after its corrupt practices were exposed.

The retired lawyer whose advocacy about unlawful rating by Kaipara District Council and spending of $80 million in breach of statutory powers, may be disappointed there is no similar informant fund in New Zealand. The media reports that for a number of years information about unlawful practices that he referred to the council and to the Auditor General were ignored.  An OAG inquiry announced in March relates more to the precipitating Mangawhai waste water scheme than the underpinning rating issues.

The Auditor General is specified in the Protected Disclosures Act as an appropriate authority to whom a protected disclosure can be made –not that many employees working in agencies subject to the Protected Disclosures Act would be aware of that.  The statutory duty of each agency to publish its disclosures policy and regularly republish it, is seldom complied with.

But then again, protected disclosures though few and far between are often more related to a personal grievance than remedying serious wrongdoing.

http://tvnz.co.nz/world-news/glaxosmithkline-settles-healthcare-fraud-case-us3b-4954143

http://oag.govt.nz/media/201 2/inquiry-mangawhai-wastewater-scheme

http://www.ombudsmen.parliament.nz/index.php?CID=100018

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July 5, 2012

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Enforcing the OECD anti bribery convention

4 July 2012

Last night’s shake might have been felt across much of New Zealand, but the OECD report about the anti bribery convention published earlier in the day is unlikely to have any comparable media attention. 

The OECD  annual report set out measures taken by member states to comply with enforcement obligations under the Convention against the Bribery of Foreign Officials.  Out of the 38 members, only 14 are reported to have penalised offenders at any stage. New Zealand has always been in the corner of the least active enforcers who have never taken action against bribe payers.

Before the convention came into force in 1999 bribes in order to win foreign contracts were tax deductible in most countries, including New Zealand. Since then, 210 people and 90 businesses have been successfully prosecuted, resulting in 66 prison sentences.

The US, South Korea, Japan, Hungary, France, German and the UK are more enforcement oriented.

The OECD Secretary General has condemned the bribery of foreign public officials in international business transactions as a “…crime that distorts markets, undermines good governance, and, at the end of the day, hurts the world’s most vulnerable.”.

New Zealand is capable of meeting the OECD expectations of Convention members. However the statutory framework to conform to the requirements of the UN Convention Against Corruption can still not be met.  New Zealand is one of very few OECD countries not to be party to UNCAC.

APEC which has a close association with OECD, published two codes in 2009 for officials and for businesses.  Although committed by APEC membership to giving effect to these codes no New Zealand agency has responsibilities to promote awareness and compliance with these codes. Few are aware of the Conduct Principles for Public Officials, and even fewer are likely to have heard of the APEC Anti Corruption code of conduct developed the year Australia was the APEC chair..

http://futures.tradingcharts.com/news/futures/DJ_OECD__Only_14_of_38_Signatories_Have_Punished_Bribery_Since_1999_181132012.html#footerclose

www.geonet.org.nz/news/archives/2012/jul-4-2012-deep-7-shakes-central-new-zealand.html

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July 4, 2012

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Victoria gets its anti corruption commission

3 July 2012

Victoria now has its Independent Broad-based Anti Corruption Commission, about a year later than anticipated. But criticism is that it will not be capable of investigating as planned as some powers have yet to be enacted, and the Commission’s scope will not be as broad as is desirable.

The State Government appears not to have found a suitable candidate to head the Commission –  little interest being shown by those with the judicial prerequisites for appointment. The Premier’s comment was the Government couldn’t get an anti corruption body off the shelf from the local supermarket!.

The interim Commissioner chairs the Office of Police Integrity which is being combined with IBAC. But OPI is currently being investigated by the State Ombudsman!  The interim Commissioner has indicated that some staff are likely to move from OPI to IBAC as “…there’s a tremendous reservoir of talent in the OPI, a lot of technical skill as well…”

He said that “…corruption is an insidious business that seeps into honest endeavour, that upsets the level playing field, adds cost to public works and infrastructure and generally undermines the faith of the citizenry in its public administration…Victoria … deserves a competent anti-corruption body that focuses on that field specifically…”

Victoria has taken a long time to accept the necessity of an anti corruption body – the New South Wales ICAC has been in place since 1988 and Queensland and Western Australia have had equivalent agencies for 9 years. And the Victorian Government seems less than keen to build on the experiences of these agencies; it has not given IBAC the broad jurisdiction over misconduct in public office of those other agencies.

However the Commission will oversee the conduct of Victoria’s 250,000 public sector employees including police, local government officers ,contractors, MPs,and judges.

Successive New Zealand governments have not considered that a single anti corruption body is necessary – that the Police, the Auditor General, the Independent Police Conduct  Authority, and the Serious Fraud Office (although it was being folded into the Police in the last days of the Clark Government ) have appropriate capability. The report to be published shortly by the SFO about the economic impact of fraud may add momentum to the support shown by the Maori Party for a national body.  The SFO is collating the sort of information published by the UK National Audit Office which in its January.2012 report estimated the “value” of economic crime at more than £73 bn annually.

www.theaustralian.com.au/national-affairs/politics-news/ron-bonighton-to-be-acting-head-of-victorian-anti-corruption-commission/story-fn59nqld-1226410925226

www.stuff.co.nz/timaru-herald/business/7014411/NZs-fraud-costs-may-shock

www.actionfraud.police.uk/fraud-costs-the-UK-over-73-billion-says-National-Fraud-Authority-Mar12

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July 3, 2012

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Are bankers showing their true colours?

2 July 2012

Britain’s biggest banks are being described as “…greedy, shoddy, deceitful, and a massive cesspit…”  This follows the acknowledgment last week that Libor banks have been rigging interest rates. The Libor affects more than NZ$750 trillion worth of financial contracts.

Barclays agreed to pay £291m in penalties to US and UK regulators, hoping their problems may go away. The UK Financial Services Authority and the US Commodities Futures Trading Commission in a coordinated action, have about 20 other banks under investigation.

The British Prime Minister urged regulators to use all the powers at their disposal. “This is a scandal. It is extremely serious. ..How did this happen? Who was responsible? Who’s going to be held accountable for it?”

Rigging the Libor confirms the suspicion of many that senior bankers are not merely intellectually acute entrepreneurs but are, in effect, institutionalising corrupt practices.  Contempt is raining on them from high places.  The Chancellor of the Exchequer has described it as “…systematic greed at the expense of financial integrity and stability”.  The Governor of the Bank of England criticised “…excessive levels of compensation, shoddy treatment of customers, and a deceitful manipulation”. The Secretary of State for Business has referred to “…a massive cesspit”.

The FSA found that there has been serious, widespread, and extended rigging of Libor interest rates over a number of years, with traders at the banks co-ordinating to make false bids as daily  interest rates were set.  This criminal action may well lead to serious charges against senior bankers.  But of course no bankers have yet been imprisoned for behaviour that contributed to the global financial crisis – a point that Prof Niall Ferguson made in his Reith Lecture last week..

All of which brings business ethics into question.  How genuine is the commitment trumpeted by boards and their chief executives?

Barclays code of conduct states that “.best practice governance, controls and compliance are essential … We must therefore act with the highest standards of integrity and honesty in all our operations, to ensure that customers can entrust their business to us with confidence…. and are committed to enforcing best practice…. Barclays has an internal policy in place to ensure our employees conduct themselves with the highest standards…”.

The Lloyds TSB Group Code of Business Conduct commits to setting “…an example in the conduct of our business. We demand honesty and integrity in everything we do, and will not do business if our standards are endangered.  We greatly value our good reputation. High ethical standards are of crucial importance to us, and… our core values which apply equally to all members of the Group…”

And at HSBC, “  Honesty and integrity in our dealings with customers are of paramount importance and make good business sense – they are prerequisites for a successful and sustained relationship. ..HSBC has long espoused high ethical standards in the conduct of its business. Honesty, integrity and a strong sense of responsibility have been our hallmarks… So ingrained are these standards that for much of our history it was considered unnecessary to articulate them. However, the Group’s international expansion and higher profile around the world has coincided with increasing public scrutiny of multinational companies. We have therefore decided to make explicit what was previously implicit…. and to provide additional evidence of our adherence to internationally accepted standards of conduct. ..”

All of which may be seen to give weight to the view that business is your opportunity to create wealth, corrupt practice is the opportunism of others.  What was it Samuel Johnson once said about patriotism and scoundrels….?

www.independent.co.uk/news/business/news/banking-scandal-greedy-shoddy-deceitful-a-modern-cesspit-7901949.html

www.personal.barclays.co.uk/BRC1/jsp/brccontrol?task=articleFWsocial&value=12588&target=_self&site=pfs

www.lloydsbankinggroup.com/community/code_of_business_conduct.asp

www.experts123.com/q/does-hsbc-have-a-code-of-good-ethical-conduct.html

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July 2, 2012

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Calling an uncivil service to account?

29 June 2012

The House of Lords Constitution Committee is conducting an inquiry into the accountability of civil servants. On each Wednesday through June the Committee has been considering the constitutional position of the Civil Service following the changes of 2010. The Committee is exploring how the traditional strengths of the Civil Service may have been affected by those statutory changes.

What is the impact on the convention of ministerial responsibility -that civil servants are responsible to Ministers, and Ministers in turn are responsible to Parliament?

A growing perception is that the convention is no longer effective in holding the government to account, and that it does not adequately reflect the distribution of power and responsibility between Ministers, civil servants and special advisers.

The Committee’s concerns include:

  • whether the convention of individual ministerial responsibility remains the most appropriate and effective way of holding the government to account? If not what should replace it?
  • do the civil servants’ and special advisers’ codes of conduct require amendment? Should they be set out in statute?
  • what influence, if any, should Ministers be able to exercise over Civil Service appointments?
  • to what extent does the Civil Service act as a constitutional check on the actions of Ministers?
  • are there any circumstances in which civil servants should be directly accountable to Parliament? Could that risk the politicisation of the Civil Service?
  • should the Osmotherly Rules, covering civil servants and their relationships with select committees, be redrafted?
  • what is the influence exercised by special advisors both in theory and in practice?
  • what are the current accountability mechanisms for special advisers? Is there a case for increasing their accountability to Parliament?
  • are the accountability mechanisms for non-ministerial Departments effective? Where should the balance lie between accountability and independence?

Submissions from an impressive list of experts have been considered. Much of what is said has relevance to the New Zealand State Services. A cat was put among the pigeons this week when the Chair of the UK Public Accounts Committee accused senior civil servants of  hiding behind their Ministers to avoid accountability for maladministration. This, in the same week that the Head of the Civil Service, when asked to evaluate his effectiveness gave himself (“a tough marker”) a 7 out of ten.

www.independent.co.uk/news/uk/politics/senior-civil-servants-avoid-scrutiny-by-hiding-behind-ministers-says-margaret-hodge-7570377.html

www.parliament.uk/business/committees/committees-a-z/lords-select/constitution-committee/news/

www.guardian.co.uk/public-leaders-network/2012/jun/28/no-magic-bullet-civil-service-accountability

www.guardian.co.uk/public-leaders-network/2012/jun/26/bob-kerslake-civil-service-head-committee

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June 29, 2012

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IPANZ -Gen-i Public Sector Excellence awards

28 June 2012

The IPANZ Gen-I Public Sector Excellence Awards were awarded at a Wellington function last night.  From the 29 finalists, eight category winners were announced – together with two special awards including a recognition of special endeavour related to the Christchurch Earthquake.

The winners were;

Excellence in Public Sector Communications
Smokefree Prisons – Department of Corrections

Improving Performance through Leadership Excellence
Leading from where you stand – Statistics New Zealand

Excellence in Improving Public Value through Business Transformation
Blood is a Gift – Auckland District Health Board

Excellence in Networked Government
Earthquake Employment Support – Ministry of Social Development

Excellence in Recognising Ethnic Diversity
Maori Pacific and Ethnic Services Cultural Response Team – New Zealand Police

Excellence in Working Together for Better Services
Resolving historic claims of child abuse and neglect – Ministry of Social Development, Department of Internal Affairs, Ministry of Education

Excellence in Crown-Maori Relationships – joint winners

Te Upoko Taiao – a partnership for resource management in the Wellington Region – Greater Wellington Regional Council and Te Ara Tahi Maori,

Pacific and Ethnic Wardens – New Zealand Police

The overall winner, presented with the Prime Minister’s Public Service Excellence Award for 2012 by the Minister for StateServices was for Resolving historic claims of child abuse and neglect – Ministry of Social Development, Department of Internal Affairs, Ministry of Education.

http://ipanzawards.org.nz/events/awards-night-2012/

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June 28, 2012

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Reith Lectures propose austerity and deregulation

27 June 2012

In the first of this year’s Reith Lectures, Niall Ferguson found few admirers on the BBC blog. Last night’s second lecture fared little better!

Professor Ferguson’s theme last week was that a society governed by abstract, impersonal rules will become richer than one ruled by personal relationships. The rule of law is crucial to the creation of a modern economy. Its early adoption is the reason why Western nations grew so powerful in the modern age.

He asked whether the institutions of the West are now degenerating because of a breakdown in the compact between generations. Is the transfer of the costs of today’s society to future generations a fatal flaw in our democratic system?

He went further last night. He argued for deregulation, indicating that the financial crisis is a result of over-complex law making. The failing was a sense of impunity within the banking industry. Offenders were not punished. The cause was a failure to apply the law. In this second lecture, there was an undercurrent of ethics. Too few bankers were imprisoned. “There will always be greedy people around banks, after all they are where the money is – or should be … but greedy people will only commit fraud or negligence if they feel their misdemeanour is unlikely to be noticed or severely punished.”

Ferguson made three proposals to reform government finances. Two (already in force in New Zealand) are public sector accounts that enable liabilities to be compared with assets, and using Generally Accepted Accounting Principles, now standard in commerce. The third is the duty of governments to be clear about the inter-generational implications of fiscal policy. 

However he doesn’t want these practices entrenched in law.  That won’t improve the economy. The benefit will go to lawyers. The legal profession will get lucrative business explaining to financial institutions what the inevitably dense rules mean.

In what may be an unreal perception, he thinks that young people should welcome austerity.

Some might see greater excitement in the ideas of his spouse.  While Ferguson is concerned about enemies of the rule of law, his wife, Ayaan Hirsi Ali (a Somali-born former Dutch MP) is encouraging ways to anchor the changes initiated by the Arab Spring.  At a conference on ”Tomorrow” in Jerusalem,  with what some consider to be Islamophobia, she spoke about a need to embrace personal autonomy and abandon the Arab subservience to paternal, religious and political authority. Women must be free from constraints. There is a need for compromise. Arabs must give up the pursuit of total victory, and their fear of losing face. They must stop looking to the Koran for the answers to every problem.

Ali was advocating the strengths of the West – personal autonomy, willingness to compromise in political situations, and rejection of religious rules in public life, while contemporaneously Ferguson was expressing concerns about the decline in the West of those principles on which its institutions – and its advantage – have grown.

www.bbc.co.uk/programmes/b01jmx0p/features/transcript

www.bbc.co.uk/blogs/radio4/2012/06/reith_lectures_1.html

www.bbc.co.uk/blogs/radio4/2012/06/darwinian_economy.html

http://warped-mirror.com/2012/06/23/ayaan-hirsi-ali-and-a-respectful-look-at-the-history-of-sharia/

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June 27, 2012

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