Bigger stakes this week for both the Pacific Forum and the World Cup

10 September 2011

Comparisons between the first Rugby World Cup and arrangements for this year’s event, and the first South Pacific Forum in Wellington, and this week’s meeting, reflect the way the World has changed. Arrangements for the initial World Cup in 1989 at Auckland and the initial Pacific Forum in 1971  (and even the 1982 Forum in Rotorua) were very under-developed from a perspective of this week’s events.

The first World Cup involved 16 countries (with no qualifying rounds) although South Africa and Samoa were not involved. The draw produced 32 matches. Slightly more than 600,000 ticket sales funded the event. This year’s event involved 86 countries in qualifying rounds, which with the 12 qualifying nations from the 2007 Cup mean that 98 countries have been involved. This year’s costs will exceed NZ$310m of which less than NZ$280m will come from ticket sales.

There were seven participant countries in the 1971 Forum. Only Australia and New Zealand had delegations of more than a Minister and 3 officials. There are now 16 member states and an additional 14 dialogue partners (together with Taiwan as a special status partner). The United States as a dialogue partner had a larger delegation attending the Forum this year than the total number of participants in 1971. The increasing attendance has brought substantially more formality. Original proposals were that annual meetings would rotate with the Chairmanship and meetings would reflect the setting of the host government (although Australia and New Zealand have always provided substantial funding and technical assistance to the smaller island states.) And the almost jovial atmosphere of the early Forum meetings, reflected in the floral shirts, has been lost along with the notion of consensus and the “Pacific way”. The party atmosphere of the Funafuti Forum in 1984 (David Lange’s first overseas trip as Prime Minister) which directed the development of the Nuclear Free Zone Treaty, is a thing of the past.

http://en.wikipedia.org/wiki/2011_Rugby_World_Cup
http://www.dfat.gov.au/geo/spacific/regional_orgs/spf.html

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September 10, 2011

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Leaks are a problem, but moon cakes are OK!

 9 September 2011

A heavy shower hit Shanghai yesterday afternoon.  The effect on the Shanghai Museum was interesting from a tourist’s perspective.  The scene that played out was of officials challenged by a problem for which they were clearly unpractised.  Water starting dripping into the top floor gallery where a feature on jade was screening.  In another part of that floor, the carpet darkened as water seeped from behind display cases.

On the third floor a large party of officials gathered anxiously as another climbed into the ceiling space  as water trickled near some of the museum’s treasured calligraphy collection, and in another part of that floor, a large quantity of water could be clearly heard flowing into a wall behind exhibits of ancient sculptures.  There were no signs of any water damage on the ground floor where Te Ao Maori is exhibited, on loan from the Otago Museum, and reputed to be a major attraction for Chinese audiences – although most people at the museum yesterday, appeared to be European tourists.

But another spill is perhaps of greater concern to good government.  Inadequate action from Conoco Phillips to contain pollution  from an oil rig in Bohai Bay, which has continued since early June, led yesterday to the Government ordering the suspension of further production in the oil field.  The polluted area is reported to exceed 5,500 sq kms and to have caused over $150m damage to the adjacent scallops fishery. An immediate response by Conoco Phillips has been to express regret about the incident  and apologise for the impact on the Chinese people and the environment.  Any compensation payments to those affected are unspecific at this stage. The leak involves about 700 barrels of oil; the BP spill last year in the  Gulf of Mexico involved about five million barrels.

On a brighter note, or as the Shanghai Daily notes, the darker side of mooncakes, inspections by food quality regulators of moon cakes produced by 289 companies, on sale in anticipation of the mid Autumn festival this weekend,  found only six to be substandard.  The defects related to a high bacterial content.

http://hua.umf.maine.edu/China/SMcalligraphy/index.html

http://www.otagomuseum.govt.nz/te_ao_m_257_ori_m_257_ori_treasures_from.html

www.voanews.com/english/news/asia/China-Orders-Investigation-into-Bohai-Bay-Oil-Spill-129446208.html

www.shanghaidaily.com/article/?id=482038&type=National

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September 9, 2011

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“…pursuit of World peace and development…”

8 September 2011

As a very small player on the international stage, New Zealand has marginal influence despite rating among the top countries for “peace, order and good government” on comparative surveys such as the World Bank Worldwide Governance Indicators (to be published next month) the Sustainable Governance Indicators, and the Global Peace Index. At the other extreme, China with its mediocre ratings has extreme influence.  What may well give a new perspective to “good government” is the White Paper issued by China’s Government on Tuesday. This announces the “path of peaceful development”  that China is to follow. As the China Post explains… ” China does not seek hegemony and is a reliable stakeholder in pursuit of world peace and development…”

This concept apparently means that … “China will seek development in a scientific, independent, open, peaceful, cooperative and common manner”.  The paper reports that the misunderstanding and suspicion aroused by its growing power and prominence is not what China wants.  The White Paper reflects the commitment …”to cooperation with others based on equality and reciprocity”.

A definition of good government from a New Zealand perpsective would include reference to a respect for the rule of law, support for the democratic process, and commitment by officials to the spirit of service. These have a variable application in China.  China expects loyal service from its officials, and increasingly is combatting corrupt practices. A leading article in The China Daily yesterday reflects a growing focus on the rule of law, through a criticism of poor legal services… “Wrong court decisions have to be corrected and incompetent judges must be disqualified… If our judicial apparatus cannot protect justice, our society will be irredeemably damaged”. Not the complete package sought by the World Justice Project, but “getting there”.

Nonetheless China remains at arms length from the advantages of the democratic process. This is evident from the China Daily yesterday.  Pages 16, 17 and 18 contain the full text of the White Paper on China’s peaceful development. This is may be good stuff, but its publication in this way demonstrates how a commercial newspaper may well be an organ of the State when required.  Except for three photographs, the pages comprise 18 columns of what many may consider a comforting commitment by China’s Government to spur economic development and cooperation around the globe. In democratic societies, few since the demise of Victorian pamphleteers, would consider it the stuff of a daily newspaper.

The heartening sentence that concludes the White Paper is that …”The Chinese people will make unremitting efforts with other peoples to bring about a bright future for mankind…” The content suggests a commitment to peace, order and good government on an international scale.

http://info.worldbank.org/governance/wgi/index.asp

http://www.visionofhumanity.org/info-center/global-peace-index-2011/

http://pub1.chinadaily.com.cn/cdpdf/cndy/

http://worldjusticeproject.org/

 

 

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September 8, 2011

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China watcher

7 September 2011

Visiting Shanghai this week, I have been fascinated by lengthy queues at very many outlets about the city, waiting for the opportunity to buy moon cakes. With the holiday weekend ahead, the Zhongqiu festival is celebrated with the giving and receiving of moon cakes; a delicacy which to a western palate has little appeal. But the diligence of locals is admirable. The long weekend gives the opportunity for many to return to families living at a distance. Moon cakes are the expected marker of this major festival in the Chinese calendar. And in the Chinese style, it isn’t just the content that is important, but the appearance. Ornate packaging is part and parcel of the tradition.

At a time when some senior officials in New Zealand government agencies are apparently objecting, again, to the State Services Commissioner’s guidance about not accepting gifts and benefits, there is contrasting news here about a large transnational commercial operation. Based in one of the largest, newest and most impressive of the many large, new and impressive Shanghai towers, the company is enforcing rules that preclude staff from receiving gifts of moon cakes (and the company is not providing any for gifting) because to do so conveys an unacceptable impression of the professional relationship the company wants with its clients. In what can be an ethical swamp, being principled is seen as a priority.

Being principled is what is meant to underpin the spirit of service in New Zealand, the spirit that epitomises the State Services. But reports of senior officials wanting to accept offers of tickets to Rugby World Cup events seems to belie this and these leaders seem to be resiling from their duty to set an example. Something more usually associated with the Chinese environment than in New Zealand.

Gifts and hospitality reportedly accepted by senior Ministry of Economic Development staff (and interestingly the benefits are always offered to staff who are in influential and decision-making roles) are reminescent of the bad old days when that agency, in a former guise as the Department of Trade and Industry encountered troubles with some of its employees being unable to navigate an ethical course.

Do some need reminding of the 6 trust elements that agency leaders are expected to be entrenching in their organisations? These are;
– setting standards of integrity
– promoting those standards
– integrating those standards into operations
– managers modelling those standards
– agencies taking decisive action when standards are breached
– agency staff knowing the consequences of breaching standards

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

http://tvnz.co.nz/national-news/ceos-tackled-over-world-cup-freebies-4382978

http://www.ssc.govt.nz/integrity

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September 7, 2011

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Not much trust in G men

1 September 2011

In a curious juxtaposition, websites this week have featured aspects of government ethics in the United States.

A Gallup survey rating public trust in 25 sectors of the economy found that Federal agencies are considered the least trustworthy. Other sectors viewed most negatively are real estate, healthcare, banking, oil and gas, and the legal profession. Federal agencies were rated positively by only 17% of respondents. The figure has continually declined from a 41% rating in 2003.  By contrast, the computer industry has a 72% positive rating.

Next week the US Office of Government Ethics will re-launch its website.  OGE, with 80 staff, is an exceptionally small agency by Federal Government norms.  Its role is to ensure agency decision-making is not influenced by personal interests.  It does this through training programmes and reviewing compliance with integrity standards. Last year it reviewed the Interior Department at the time of the BP oil spill when there were widespread reports that the department’s staff accepted gifts from the oil and gas sector, a sector now rated almost as untrustworthy as Federal agencies.

The OGE website is described as “ too packed with pages and columns of documents to demystify the rules of professional conduct.”  Simplified presentation may make material more accessible for the 300,000 civil servants targeted by its guidance.  The refreshed website, will carry reports of the ethics reviews conducted by OGE. This will obviate the need to request material under the Freedom of Information Act.

There is no specification of the survey definition of Federal agencies, but it is unlikely to include the armed forces.  In the US, the military rates among most trusted professions.   New Zealand Armed Forces find similar favour.  But yesterday’s news may have a substantial impact on perceived trustworthiness.  An former employee in the Army museum appeared in court on charges of thieving  more than $250,000 worth of medals gifted to the museum. Descendants of medal winners, whose decorations were among the thefts, trusted the museum (and indirectly the Army) to safeguard these symbols of service and sacrifice.  The Army is very apologetic, knowing the likelihood of a loss of public trust and confidence.

www.gallup.com/poll/149216/Americans-Rate-Computer-Industry-Best-Federal-Gov-Worst.aspx

http://oge.gov/

www.nextgov.com/nextgov/ng_20100830_3089.php

www.stuff.co.nz/dominion-post/news/5542301/Man-arrested-for-stealing-800-medals

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September 1, 2011

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Should the ostrich be our national bird?

31 August 2011

The low priority given to anti-bribery measures in the All of Government Response to Strengthening New Zealand’s  Resistance to Organised Crime, published this month, possibly reflects disbelief that any serious bribery occurs in either the New Zealand commercial sector or in government. As things like that don’t happen here there is no enthusiasm for OECD Anti Bribery Convention measures or need to enact measures needed to implement the UN Convention Against Corruption.

The Response does indicate that agencies will “Develop a national anti-corruption policy covering prevention, detection, investigation and remedy of corruption and bribery across the public sector (including to local government and Crown Entities) and private sector”.

But the scandal associated with Australian Reserve Bank subsidiaries paying bribes to obtain bank-note printing contracts indicates that even blue chip companies trading internationally may subsist on dubious practices.

Media reports about senior staff of the National Broadband Network in Australia suggest that practitioners in the art of bribery are not that far away. The chief executive and chief financial officer at NBN previously worked for Alcatel.  Last year Alcatel had a $137 million fine imposed by a US court after pleading guilty under the Foreign Corrupt Practices Act for its bribery of officials to obtain contracts.

A recognised process is involved.   “It begins as gifts. Then there are payments for introductions. At every step, the dealings are handled by third-party consultants who are paid exorbitant amounts for their services. No one questions what they do with the loot. The model established by Alcatel has been replicated throughout the world, although the modern version involves a more arms-length approach than that engaged in by Alcatel employees, some of whom extracted multi-million dollar kickbacks from their own bribes.”

Media reports comment that there is no connection between the NBN officials and bribery by Alcatel.
www.smh.com.au/business/bribery-corruption-a-world-of-deceit-20110829-1jicn.html#ixzz1WW6lIe1S

www.sec.gov/litigation/litreleases/2010/lr21795.htm

NZ response to organised crime August 2011.pdf

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August 31, 2011

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They should know better

30 August 2011

A former assistant director of the New South Wales Crime Commission was convicted of corruption last week .  After a five month trial he was found guilty of a conspiracy to import 300 kg of pseudoephedrine worth about $120 million. He was arrested in 2008. This incident will revive the perception that most Australian Police forces are corrupt which must be a morale shattering experience for honest cops.  The evidence indicates that several officers in the Australian Federal Police and New South Wales Police may have been involved.

The New South Wales Government has initiated an inquiry to assess the extent of corruption in the Crime Commission which was set up in 1985 and whether there is a need for an oversight body.  The irony in Australia seems to be that each level of oversight created seems to need yet another to scrutinise  its activities.  Most States now have a corruption commission although measures in Victoria to set up its Independent Body Against Corruption have not yet come to fruition.

All the investigations undertaken by the convicted officer while at the Crime Commission are now being reviewed.  His association with organised crime suggests that other serious offences may have occurred.

www.abc.net.au/news/2011-08-12/standen-corruption-case-could-spread-to-afp/2836928/?site=sydney

www.smh.com.au/opinion/editorial/how-to-police-the-supercops-20110814-1iswl.html

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August 30, 2011

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Central banks leading by example?

29 August 2011

Trust surveys over the last few years show that bankers have lost the reputation for trustworthiness traditionally afforded to them. In the US confidence is down to the 20% level. In the most recent UMR survey in New Zealand, investment bankers ranked as the least respected occupation, beneath politicians and real estate agents.

Perceptions will be influenced by the global financial crisis and the opportunist behaviour disclosed by numerous investigations into the part played by banks. This won’t be helped by major international banks paying staff bonuses at levels viewed as incredible by ‘ordinary’ people whose lives have been disrupted by international economic uncertainty.

But are central banks different?

Corporate ethics of Australia’s Reserve Bank may be as dubious as any bank. This is evident in a report about the Reserve Bank board members’ awareness of corrupt practices at its subsidiary note printing companies. A report this week disclosed that the board knew about bribes (ultimately of nearly $50 million) to obtain new business manufacturing plastic banknotes. The Reserve Bank made sure that it avoided the publicity that befell the Australian Wheat Board when it was found to be involved in evading Iraqi oil sanctions. The board made no referral to the Police about the bribes although internal inquiries were initiated.

After extensive media coverage earlier this year, the former Reserve Bank Governor commented that he was pretty sure that there was no awareness of bribes being paid by subsidiaries. This tests belief now that those subsidiaries have indicated that they will be pleading guilty to corruption charges!

The New Zealand Reserve Bank has a unique position in the machinery of government. It is part of the State services, although not subject to the State Services standards of integrity and conduct. Its employees, as part of the State sector are required by the Cabinet Manual, to “… act with a spirit of service to the community and meet high standards of integrity and conduct in everything they do. In particular, employees must be fair, impartial, responsible, and trustworthy.”

www.smh.com.au/business/who-knew-what-when-in-bank-bribe-scandal-20110810-1imtu.html#ixzz1WJRGxr9B

http://www.transparency.net.nz/2011/03/

www.dailyfinance.com/2011/05/18/trust-in-banks-falls-back-to-financial-crisis-lows/

www.umr.co.nz/Reports/UMR%20Mood%20of%20the%20Nation_2010.pdf

www.ssc.govt.nz/sites/all/files/Guide-to-NZCGA-1July2011_0.pdf

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August 29, 2011

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National Anti Corruption Policy around the corner?

26 August 2011
 
“Strengthening New Zealand’s Response to Organised Crime”  published this week confirms that some government attention is being given to strengthening institutional controls on bribery and corruption.  There may be more good intention than political commitment.  New Zealand remains one of a handful of developed economies still to become members of the UN Convention Against Corruption (together with Germany, Japan, Czech Republic and Ireland ).
 
The Convention imposes obligations on its members.  New Zealand to date has not had the domestic law in place to comply.  In practice of course, the vast majority of member states have poor anti corruption reputations and neither the legal frameworks nor the executive commitment to give effect to them. The Plan indicates that action is underway to amend the bribery and corruption provisions of the Crimes Act.  This will facilitate progress in ratifying UNCAC and strengthen compliance with the OECD Anti Bribery Convention.
 
UNCAC requires member states to have a dedicated anti corruption agency, separate from the Police.  The Plan does not mention how that obligation will be met.
 
A heartening characteristic is the unspecific but well meaning statement that the Government will develop a national anti-corruption policy covering prevention, detection, investigation and remedy of corruption and bribery across the public sector, “including local government and Crown Entities and the private sector”.  This may lead to agencies again focusing on their obligations in both statute and convention to maintain standards.  The reference to Crown Entities seems extraordinarily specific, when SOEs  and the hundreds of publicly funded agencies that don’t form part of the State sector are not mentioned.
 
 

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August 26, 2011

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The perspective depends on where you stand

25 August 2011

 We take for granted those things we are used to. It may be axiomatic, but what we consider ordinary, others consider extraordinary.

What is surprising for an audience of New Zealand officials is to hear an American public sector specialist list as admirable and unusual, practices in place in New Zealand throughout their working lives.

Jonathan Karp, an analyst with the Securities and Exchange Commission is an Ian Axford Fellow who has spent a year attached to the Securities Commission and the Companies Office. Yesterday he presented his observations to a Wellington audience. He has studied information availability and disclosure procedures of these market regulators.

His paper, “Can the US import ‘sunlight’ from NZ? An assessment of NZ’s model for corporate disclosures” explores the superiority he perceives of NZ processes over those of the SEC. Karp is impressed by the NZ framework for a”clearly missioned, transparently resourced, technologically advanced disclosure operation”. He suggests that the SEC should consider approaches based on the NZ model.

‘Sunlight as the best of disinfectants’ was the transparency metaphor of Justice Brandeis of the US Supreme Court almost a century ago. It seems almost like carrying coals to Newcastle that NZ practices should now be advocated as the tool to open up the SEC, that quintessential US regulator, at the heart of capitalism.

www.fulbright.org.nz/voices/axford/2011_karp.html

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August 25, 2011

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