Impartiality in the run-up to the General Election

20 April 2011

About this time in each election year, the Cabinet Office issues the first of a series of Circulars about constraints which convention now imposes on governments in the pre election period.

CO 11 (02)  issued on 6 April 2011, confirms that the “pre election period” which covers the three months leading up to the general election, will begin in August.  Unusually, as the Prime Minister has already announced the election date, there is no uncertainty about when special measures come into force.

The Circular confirms the principle that the Government has the right to govern until election day, although a practice has developed that during the pre election period, it will restrict some decision-making.  In  particular the Government will avoid making significant appointments and not direct advertising which may create an impression that public funds are supporting a political party purpose.

The major implication, with the Government constrained from August from making appointments, is that agencies should now be supporting their Ministers consider whether to make or defer appointments.

The Circular indicates that the State Services Commissioner will shortly be publishing election guidance for State Servants. Similar guidance is published each election year, setting out the impartiality obligation of agencies and their staff.  It expands on the directive in the Cabinet Manual that “all employees in the State sector”… must be fair, impartial, responsible and trustworthy”.

That guidance in past election years has emphasised the provision in the Electoral Act that State servants seeking election to Parliament take leave, at the latest, from nomination day –  this election on 1 November.

Some guidance for officials wishing to be candidates has already been published on the Electoral Commission website;    “….section 52 of the Electoral Act contains special rules for any candidates who are state servants.  The term ‘state servant’ is widely defined as: public servants; other persons employed under the State Sector Act (although members of staff of a tertiary education institution teaching students preparing for examinations may continue to work and be paid); members of the New Zealand Police; members of the NZ Defence Force (other than non-regular forces).  To avoid the possibility of real or perceived conflict of interest, the Electoral Act requires state servants who stand as candidates to take leave of absence from 1 November 2011 (nomination day) until 28 November 2011 (the first working day after election day).”

An interesting piece of history is reflected in the Electoral Act  requirement that a candidate who is in the Cook Islands or Samoan Public Services must take leave from nomination day, as if they were employed in a New Zealand agency.

www.dpmc.govt.nz/cabinet/circulars/co11/2.html

http://cabinetmanual.cabinetoffice.govt.nz/3.50

www.legislation.govt.nz/act/public/1993/0087/latest/DLM307525.html#DLM307525

www.elections.org.nz/rules/parties/party-secretary-handbook-2011/part-2-nominating-electorate-and-list-candidates.html

Victoria debates the broad base of IBAC

19 March 2011

State jurisdictions in Australia have experienced distressing levels of corruption from time to time in all branches of government.  This has led to setting up specialist agencies to raise public awareness of the threat and to investigate and prosecute when incidents arise.

The New South Wales Independent Commission Against Corruption is most prominent – being both the first established and most active.

Successive governments in Victoria have been reluctant to follow the practice of other states and only with the change of government in 2010 has there been political will to establish a suitably empowered enforcement agency charged with operating independently of Ministers.  Despite good intentions, legislation cannot be enacted before August.  This delays the 1 July 2011 time frame for the new agencies to be in place.

Last week a consultative body of four judges was appointed to resolve the final shape and jurisdiction, including whether NGOs and government contractors should be subject to investigation and prosecution. The intended structure is for an overarching integrity and anti-corruption agency of  three commissioners specialising in police, the public service, and local government.  A  parliamentary commissioner will investigate misconduct by MPs and their staff, and a judicial commission will investigate wrongdoing by judges. A single commissioner will also be appointed with all the powers of a standing royal commission.

The agency is currently termed the Independent Broad-based Anti-Corruption Commission.

Constitutional issues that need to be addressed include powers of compulsion and coercion, interrogation of judges, confiscation of property, rights not to self incriminate, and the extent to which inquiries should be open to the public.

The Victorian Government has indicated that the Commission will have a staff of 300 and an annual operating budget of A$40 million.  But, first, a series of legal issues need to be resolved.

www.heraldsun.com.au/news/more-news/judge-to-lead-watchdog-plan-but-poll-promise-broken/story-fn7x8me2-1226040330135

www.heraldsun.com.au/news/more-news/investigators-to-hunt-public-crooks/story-fn7x8me2-1226040304683

Al Assad – just a very slow learner?

18 March 2011

“Trust will not be built except through transparency.”

“Corruption is a threat to morality and to the country’s potential for development.”

“It is important to eliminate this gap and fill it with the trust of the citizens in their state.”

These observations, standard fare in places like the OECD Governance committee and numerous transnational NGOs, are astounding when coming from Syria’s president. His is the single party state that Global Integrity had awarded “the dubious distinction of being the worst performing country vis-à-vis anti-corruption and accountability mechanisms since Global Integrity conducted its first national assessments nearly a decade ago”.  It is rated 127th on the Transparency International Corruption Perceptions Index, and, on the Worldwide Governance Indicators is placed in the bottom quartile of countries in the Middle East / North Africa region, having declining scores over the last ten years on five of the six elements measured.

Assad is being compelled through civil unrest, to recognise the consequences of fifty years of ruling through emergency regulations to preserve his family’s interests. He has not been noted for a concern about good government until this weekend. Is it possible that a speech revolving around trust, transparency, morality and anti corruption has a basis other than in a rear guard action to preserve power?

Ironically, as Syria contemplates transparency, budget constraints in the United States will reduce by 75% (approximately US$24 million) the funding for Federal government transparency websites. Of course an ability to scrutinise the specifics of government action doesn’t necessarily follow from a process for making information accessible. South Africa, New Zealand and the United Kingdom are rated in the 2010 Budget Openness survey as the countries with processes allowing for the best scrutiny of government spending, but even in these top rated administrations, much can be opaque.

http://gulfnews.com/news/region/syria/syria-will-lift-emergency-law-al-assad-says-1.794015

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

http://transparency.org/policy_research/surveys_indices/cpi/2010

http://internationalbudget.org/what-we-do/open-budget-survey/?fa=Rankings

http://blogs.lse.ac.uk/politicsandpolicy/2010/10/19/budgeting-in-the-uk-is-highly-transparent-but-that-does-not-mean-that-budget-decisions-are-carefully-scrutinized-nor-that-the-right-policy-judgements-are-made/

New Zealand playing offside?

15 April 2011

Is New Zealand a tax haven?   By opposing the conversion of the United Nations Tax Committee into a specialist enforcement body, New Zealand is seen as a supporter of tax havens and those who move illicit funds into such jurisdictions.  Nicholas Shaxson, a campaigner and author of books about tax avoidance claims New Zealand is “letting down the developed world” and within a few years will join rogue nations listed on the Financial Secrecy Index, published annually by the Tax Justice Network.

The 60 countries on the current index “qualify” because of banking secrecy laws, and the aggressiveness shown in protecting that secrecy. It is not just traditional secret banking countries like Switzerland and  Liechtenstein that are identified. Britain and its satellite jurisdictions feature– including Channel Islands, Guernsey, Jersey, Isle of Man, Gibraltar, Cayman Islands, Bermuda, British Virgin Islands, Turks and Caicos, Belize and Montserrat.  But so too do some of our neighbours, Cook Islands, Samoa, Nauru, Vanuatu, and the Marshall Islands.

The New Zealand support for OECD rules is seen as reinforcing systems which favour rich countries over the poor.  The move to strengthening UN capacity is seen by its advocates as combating massive sums being expropriated from the developing world.

New Zealand to date has also stood out from ratifying the UN Convention against Corruption – one of a small group of developed countries to do so – although  Japan, Germany, and Singapore haven’t  ratified either. However many member states of that convention appear to make little effort to give effect to its obligations – including India, which indicated this week that it will become a full member despite little evident commitment to moderating rampant corruption.)

The founder of the Tax Justice Network agrees with Shaxson.  His view is that “New Zealand likes to play all innocent on this issue but it’s pretty pernicious. And opprobrium should follow”.

www.stuff.co.nz/business/4868884/NZ-slated-by-activist-over-tax-haven-problem/

www.financialsecrecyindex.com/

www.unodc.org/unodc/en/treaties/CAC/signatories.html

 

Facebook causes red face

14 April 2011

Where is the boundary between your private life and your duty to your employer?

State servants have an obligation not to harm the reputation of their employer or the State Services. The 18th standard in the State Services code of conduct requires that We must avoid any activities, work or non-work, that may harm the reputation of our organisation or of the State Services. The explanation is that as a general principle, what we do in our personal lives is of no concern to our organisation unless it interferes with our work performance or reflects badly on the integrity or standing of the State Services. But our employer has a legitimate interest in any of our activities if they are likely to affect relationships with Ministers, other Members of Parliament, or the public. We have a problem if what we do may diminish public trust in government agencies.

And that’s what a New Mexico police officer has found.  To give edge to his Facebook entry he described his job as “human waste disposal”.  This created media excitement after has he was involved in a fatal shooting incident while on duty.  He acknowledged that the entry was quite inappropriate.

The general view seems to be that the right of free speech is constrained where activities like this affect trust and confidence in an agency, where personal interests conflict with employment duties. A New York Times article however suggests lower court decisions are not clear cut about how Supreme Court rulings on free speech are to be applied in this area.

The Albuquerque police office is now on desk duties!

www.nytimes.com/2011/04/07/us/07police.html

www.ssc.govt.nz/display/document.asp?docid=7902&pageno=5#P277_25160

 

Once a con man, always….

13 April 2011

Bernie Madoff, whose 150 year  fraud sentence means he is unlikely to ever be released from prison, has created a media stir.  In an interview he claims that business schools were asking him to teach ethics courses.  A Harvard spokesman suggested that such an approach was highly unlikely.  However a number of the top MBA courses include lectures from convicted executives.  Businessweek suggests that “The hope is that hearing how business types strayed from the straight and narrow, and paid the ultimate price for their crimes, will scare the bejeebers out of MBA students as they embark on their post-MBA careers, or at the very least provide fodder for ethics discussions.”

Few find real rehabilitation, even through the speaking circuit. A “fallen angel” back in the news is Eliot Spitzer. The former New York Attorney General who resigned three years ago in a media circus about his association with “high end” escorts has regained prominence not only as the anchor on a high profile interview show on CNN, but through the movie “Client 9 – the rise and fall of Eliot Spitzer” showing now in New Zealand cinemas.  Unlike Madoff, Spitzer also teaches a class every Friday – at City College, New York.

www.guardian.co.uk/world/2011/feb/27/eliot-spitzer-wall-street-fallen-angel

www.businessweek.com/bschools/blogs/mba_admissions/archives/2011/04/bernie_madoff_lecturing_mbas_on_ethics.html

 

Rewarding information

12 April 2011

Although something of an ethical challenge, a number of regulators pay informants. Internationally, it is a long standing Police practice. Recently there has been considerable debate about new provisions for the US Securities and Exchange Commission to make bounty payments to informants.  A concern is that employees will be discouraged from advising management about unlawful activities.  Instead they may well bide their time until offending gets to the extent that reporting to SEC will bring a substantial reward.

A British Government website notes that there should be no stigma attached to being a Police informer. It helps to keep the community safe and provides Police with information that will assist in their role. The Serious Fraud Office, Revenue Service and Office of Fair Trading  in the UK  have longstanding informant reward programmes. Crimestoppers in Britain also offers payments for information leading to arrest and prosecution.  The money is paid through a bank on a coded instruction, without the need to provide details disclosing the informant’s identity.

The US Inland Revenue Service has had a whistleblower reward scheme for several years.  The first payment under the scheme was made last week, when a company accountant received a $3.2 million cheque (tax having been deducted from the 22% “cut” on tax recovered!) for reporting tax evasion by the financial services firm where he worked.

IRD in New Zealand has an on line form encouraging the reporting of tax evasion.  There is however, no suggestion of a bounty payment, and the form anticipates that informants will usually wish to remain anonymous to the IRD.

Although there is no legal duty to report offending, most State services agencies have a policy obliging employees to disclose workplace misconduct.  The Protected Disclosures Act provides some assurance of identity protection in those circumstances.

www.washingtonpost.com/business/apnewsbreak-irs-pays-45m-in-1st-award-under-2006-whistleblower-program-for-tip-worth-20m/2011/04/08/AFGecTzC_story.html

www.ird.govt.nz/online-services/service-name/services-a/online-anonymous-info.html?id=righttabs

Trust in government needed for effective e-services

11 April 2011

Last week Professor Rowena Cullen’s paper on trust in Government in the digital age was published on line by SSRS. She has a Chair at the School of Information Management at VUW. The paper, written with Siggi Jottkants of NMIT, observes how government use of IT to communicate with citizens is transformational but its effectiveness depends on public trust in government. The paper includes a succinct review of literature on trust in government, and proposes a model  based on the intersect between trust in government and trust in the online environment. The authors advance their model as a support at a time when public confidence in government is declining.

New Zealand gets a mention, and the paper concludes with reference to Barnes and Gill research in 2000 about declining public confidence in government.  The statistics used by Barnes and Gill were from the 1995 World Values study. No mention is made of the subsequent, 2005, study in the World Values series which found the trend reported by Barnes and Gill had reversed. By 2005, in New Zealand, public confidence in government was little different from 1985 levels – in 2005 46.9% of respondents said they has a “great deal or a lot of confidence in the Government”. That survey shows a considerably greater number had “a great deal of confidence” than the 2.5% reported in 1995.  Similarly, in 2005, public confidence in Parliament was at 45.6% whereas Barnes and Gill used a 1995 figure of 10%.

The paper did however use the latest (2009) Transparency International Corruption Perceptions Index figures indicating that New Zealand is seen, equally with Singapore, as having the least corrupt public administration.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1800889

www.ssc.govt.nz/display/document.asp?docid=5057

www.shore.ac.nz/projects/Public_Life_Values.pdf

http://transparency.org/policy_research/surveys_indices/cpi

 

Fraud control best practice

8 April 2011

Coinciding in late March with the release of the ICAC report into corruption at Sydney Water, the Australian National Audit Office has published comprehensive  guidance on Fraud Control in Australian Government Entities. This revision of 2003 material, described as a Best Practice Guide, is an important tool for senior management and those who have direct responsibilities for fraud control.  ANAO also promotes its usefulness “to a wider audience, including employees, contractors and service providers and others with an interest in sound public administration”.

The importance of leadership and of managers modelling integrity is emphasised in the guidance. “The establishment of an ethical culture is a key element of sound governance and plays an important role in preventing fraud and helping to detect it once it occurs”.

New Zealand doesn’t have a comparable Best Practice guide, although similar content is packaged in “Controlling sensitive expenditure: Guidelines for public entities”, Managing conflicts of interest: Guidance for public entities” and “Fraud- the responsibilities and duties of public entities”.  All managers should be familiar with the content of these resources and  give effect to the expectations set out in them.   Managers modelling standards is one of the “6 trust elements” needed to maintain a trustworthy organisation.

www.anao.gov.au/Publications/Better-Practice-Guides/2010-2011/Fraud-Control-in-Australian-Government-Entities

www.oag.govt.nz/2007/sensitive-expenditure

www.oag.govt.nz/2007/conflicts-public-entities

www.oag.govt.nz/central-govt/2003-04/part8.htm/?searchterm=Fraud%20part%208

 

Is unplanned change good government?

7 April 2011

The UK Civil Service is undergoing major change. At the Public Administration Select Committee (PASC) in March, Cabinet Minister Francis Maude and his supporting officials said that they were seeking “intense change” and a “dramatic change in culture”. “The civil service will inevitably become much smaller, flatter and less hierarchical, as it should do.” The intention is to centralise the way senior officials work.

A report is that there was quite a lively debate about whether the ‘change programme’ would be successful without some sort of plan. The Minister and his officials, including Gus O’Donnell, Head of the Civil Service, said that there was “no blueprint” and they proposed to implement the changes “for the first time without a White Paper”, although there would shortly be a White Paper on Public Sector Reform. “A lot of this is just common sense – not revolution”. They wanted to “reduce the audit culture which stops good as well as bad things”. And budget cuts would invigorate the service by encouraging innovation.

The PASC members were sceptical. Surely every successful change programme needed to be planned? “Having a plan is an act of leadership.” In response, senior official Ian Watmore declared that he was a change expert, recruited from the private sector, and saw no need for a plan. An example of a good but unplanned change would be that civil servants would now be encouraged to work in temporary project teams, rather than in fixed hierarchies. Gus O’Donnell added that “change will only be successful if it is being done by them, not to them”,

The NZ State Services code of conduct requires that we are responsible in what we do and how we use agency resources. Guidance on Understanding the code of conduct refers to the statutory duty to be efficient, effective and economical, but doesn’t explicitly refer to a need to plan the way we work. Is it responsible to undertake major change without a plan?

www.civilservant.org.uk/csreform.shtml

www.ssc.govt.nz/display/document.asp?docid=7902&pageno=4#P208_18769