Is ethics training a fundamental duty of agencies?

6 April 2011

The importance of ethics training is central to the decision of Justice Ginsburg in the US Supreme Court judgment in  Connick v. Thompson published last week.

As in New Zealand, US prosecutors and police have an affirmative duty to provide the defence with information which is material to it – to disclose exculpatory evidence to a defendant.

This is one of the most difficult ethics requirements there is. It goes against the adversarial character of a prosecution.  Acting with integrity means putting the public interest in giving an accused person a fair chance against the public interest in convicting an offender. It can mean losing a case that could otherwise be won.

But as noted by the Court, “The role of the prosecutor is to see that justice is done. It is as much a prosecutors duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one.”

Justice Ginsburg commented on the ethics of disclosure noting that  “failure to provide training may be so egregious that, even without notice of prior constitutional violations, the failure could properly be characterized as deliberate indifference to constitutional rights.”

But the majority opinion was that a municipality is not liable where the evidence is of only a single failure to train.

Arguably officials exercising statutory discretions have an analogous responsibility. State servants need to be constantly reminded of the duty to act with integrity. It is not enough to have standards, but staff must be familiar with them, standards must be integrated into the way duties are carried out, and managers must be exemplars of the relevant ethics.

www.supremecourt.gov/opinions/10pdf/09-571.pdf

www.legalethicsforum.com/blog/2011/03/us-supremes-issue-connick-decision-prosecutors-office-has-no-section-1983-liability-for-failure-to-t.html

Should State servants criticise Ministers?

5 April 2011

The report yesterday that the Teachers Council Complaints Assessment Committee will take no further action against a teacher for stridently criticising the Minister of Education, was made with a focus on professional standards set by the Teachers’ Council. The media statement recognised that the comments were intemperate, but that teachers ”must also be entitled to express their views on political issues in an appropriate manner and context.”

State school teachers, as employees of a Crown entity, are State servants. They are subject to the direction in the Cabinet Manual (Ch 3.50 ) that… “Employees in the state sector must 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.” Impartiality refers to political neutrality. Public criticism of a Minister is not impartial behaviour.

http://www.stuff.co.nz/national/education/4843025/Principal-entitled-to-express-view-Teachers-Council http://www.cabinetmanual.cabinetoffice.govt.nz/3.50

That sinking feeling

 4 April 2011

The Tongan Supreme Court has sentenced the officials convicted last week for the parts they played in the mismanagement of the Princess Ashika. Seventy four people drowned when the unseaworthy ferry sank.  Findings of an inquiry into the sinking and the subsequent trial of some of those involved, exemplify the importance of officials acting with integrity.  This is expressed in the New Zealand Cabinet Manual direction that those working in the State sector must be fair, impartial, responsible and trustworthy . 

3.50 Employees in the state sector must 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.

 

The Tongan Court has found that those principles of public service were sadly lacking among key actors in the Princess Ashika saga.

The report last week of fraud within the Ministry of Social Development indicates that no agency can rest on its laurels. Over the last five years, 13 employees have either lied to procure welfare payments or deliberately defrauded the system from within.  Some consolation is that, in an agency which is rigorous in its scrutiny of practices, fraud was only committed by a tenth of 1 per cent of staff.  Most have a commitment to being fair, impartial, responsible and trustworthy.

http://www.stuff.co.nz/world/south-pacific/4839715/Kiwi-guilty-of-manslaughter-in-Ashika-disaster

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

www.stuff.co.nz/national/crime/4839741/WINZ-unit-fails-to-stop-staff-fraud 

What’s normal in business is not good enough

1 April 2011 

Most State servants will be astounded by a comment from Bayleys Real Estate that a $9,000 business class trip to the Singapore Grand Prix given to an ACC manager is normal business practice. Malcolm Mason, imprisoned for corruption and bribery, clearly didn’t.  Bayleys  took the ACC national property manager on the trip in return for his involvement in securing a long-term lease for an ACC building.

Bayleys do not regard the incident as unethical,  considering this sort of corporate hosting  ais “normal practice” for people who “created business for the company”.

That is why agencies are required to have clear policies on the acceptability of gifts and hospitality, and  transparent processes for their disclosure and registration.  The State Services Code of Conduct includes a standard that officials must “decline gifts or benefits that place us under any obligation or perceived influence”. Guidance in Understanding the Code of Conduct explains what the standard means:

“We must be very careful about accepting any form of gift or benefit that is not provided by our organisation. There will usually be perceptions of influence if we accept gifts, hospitality or ‘quid pro quo’ exchanges of favours.

  • We can accept something gifted to us in connection with our work only if specifically permitted by the policies of our organisation. To avoid perceptions of influence, it is essential that we are open about accepting any gifts or benefits.
  • We must not seek or accept favours from anyone, or on behalf of anyone, who could benefit from influencing us or our organisation. This prohibition applies equally when gifts and opportunities are offered to organisations as a whole – for example, donations to social clubs and staff discount arrangements.
  • When we are presented with ceremonial gifts, we should ensure that they remain the property of our organisation, reflecting the relationship that gave rise to the gift.
  • We must be careful to comply with our organisation’s policies relating to air points and other product loyalty promotions, to avoid any perception of personal benefit.
  • Hospitality is sometimes offered by businesses seeking access to decision-makers or to acquire an implied endorsement through association with government. It is usually inappropriate for us to accept hospitality that extends beyond common courtesy.
  • We must not receive personal benefits or gratuities from third parties for carrying out our organisation’s functions, representing our organisation or undertaking work-related speaking engagements. We must decline any payments or pass them to our organisation.

Staff at ACC, together with other State Services agencies, “must comply” with this standard. 

  http://kiwi247.com/news/trip-for-acc-man-normal-practicehttp://www.ssc.govt.nz/display/document.asp?docid=7902&pagetype=content&pageno=5

Leaky standards at Sydney Water

31 March 2011 

NSW’s Independent Commission Against Corruption has reported on its investigation into staff fraud at Sydney Water. Employees in several parts of the business have been illicitly paid for misusing their powers.  Incidents include using agency resources for contractors’ advantage, unfairly exercising discretions, and false invoicing. One case involved the unauthorised spending of $300,000.  ICAC  has proposed prosecutions and disciplinary action . It has recommended 18 corruption prevention measures to avoid recurring incidents at Sydney Water. 

None of the incidents has any novel characteristics.  Manipulation by untrustworthy staff was facilitated by inadequate systems and poor  instilling of trustworthy behaviour throughout the agency by leaders. The recommendations made by ICAC are common to many corruption reports.  All fit within the “6 trust elements” mantra of the State Services Commission – that agencies have standards,  that they promote them, that they integrate them into the way the agency operates, that managers model integrity, that decisive action is taken on breaches and that staff know the consequences of misconduct. 

ICAC  expects that Sydney Water  will periodically promote awareness of protected disclosures legislation and the employee rights it provides. That recommendation has universal application and is almost universally disregarded.

 http://au.news.yahoo.com/nsw/latest/a/-/article/9053472/icac-delivers-sydney-water-findings/

http://www.ssc.govt.nz/display/document.asp?DocID=7815

Anti bribery measures in APEC region

30 March 2011

Last week the Asian Development Bank and the OECD jointly published “The Criminalisation of Bribery in Asia and the Pacific” at a meeting of parties to a regional anti corruption  Initiative.

Criminalisation is a key component of all international anti-corruption instruments. The OECD Anti-Bribery Convention and the UN Convention against Corruption  both require members to enact specific criminal offences on bribery. The ADB/OECD Anti-Corruption  I nitiative commits countries to implementing sanctions to actively combat the bribery of public officials. .The APEC Anticorruption and Transparency Task Force is supporting these efforts.  Criminalisation can be a challenging task, as experienced by many countries party to the OECD Anti-Bribery Convention.  This ADB/OECD report reviews measures taken to give effect to UNCAC by countries taking part in the Initiative.  

Although data from Fiji, Samoa, Vanuatu and the Cook Islands form part of the report,  actions in New Zealand are not included as New Zealand is not an Initiative participant and has not ratified the UNCAC.  New Zealand like others in the region, has obligations as part of its APEC membership to promote anti corruption through the APEC Conduct Principles for Public Officials and the APEC code of conduct for business.  However, it is unlikely that more than a handful of New Zealand officials are aware of the Principles for Public Officials, and the code for business is almost unheard of!

www.oecdbookshop.org/oecd/display.asp?sf1=identifiers&st1=9789264097438   

www.apec.org/en/Web-Search.aspx?cx=012092251120059988616%3A3vkpvgstsae&cof=FORID%3A10&ie=UTF-8&q=complementary%20code

Tax efficient, but tax effective?

29 March 2011

The overriding reason we require integrity from public servants is to strengthen confidence in government. Trustworthy officials promote public trust. That trust enables the State to function effectively.  Paying tax is a good measure of effective government, and the extent to which citizens have confidence in it.   

Data published by the OECD this month compares the efficiency of GST/VAT collection in a range of countries.  New Zealand is identified as having the most efficient system,  encompassing 98% of potential revenue. The evaluation in diminishing order is  New Zealand, Luxembourg, Switzerland, Canada, Korea, Japan, Austria, Netherlands, Germany, UK, and France.  The rating of these countries is not dissimilar to placings in the 2010 TI Corruption Perceptions Index.  The 98% efficiency of New Zealand’s GST however is quite different from the effectiveness of its administration.   

www.oecd.org/document/21/0,3746,en_2649_37443_47348373_1_1_1_37443,00.html

transparency.org/policy_research/surveys_indices/cpi/2010/results

More fraud in NZ than Australia?

28 March 2011

The KPMG fraud barometer published today suggests that fraud in New Zealand may be increasing. In the six months to December 2010, the incidence and value of fraud increased.  This may be a temporary trend as a result of a number of large prosecutions. The value of large fraud cases totalled  $100 million (up from $72 million in the first half of 2010). There were 30 cases in total (up from 36 in the first six months of 2010). Five cases relating to investors and financial institutions involved more than $3million each. Interestingly KPMG also published the fraud barometer for Australia today . That shows fraud levels have dropped over the past year, possibly because businesses have stepped up their detection systems in the wake of the financial crisis. In the second half of last year fraud cases totalling $116 million went before the courts. That compares to $132 million in the first half of last year.In Australia, most cases involved accounting fraud, with the perpetrators tending to be employees who knew how to get past internal controls and falsify records.

www.kpmg.com/NZ/en/IssuesAndInsights/ArticlesPublications/Fraud-barometer/Documents/Fraud-Barometer-March-2011.pdf

www.abc.net.au/news/stories/2011/03/28/3175297.htm?section=business

   
   
     

Potted corruption

25 March 2011

An article in today’s Telegraph reports a process said to be commonly used in China to make corrupt payments. A typical scenario would see the person who wants to be bribed putting an artwork or antique of little value up for auction. The briber then buys the agreed piece for a huge sum.  Research suggests this is the reason why traditional Chinese vases are reaching high prices.  One case in Nanjing involved a property developer buying two paintings directly from a government official. The appraised value of the paintings was about $500, but the developer paid more than 300 times that amount.

www.telegraph.co.uk/news/worldnews/asia/china/8406314/Chinese-vase-frenzy-bribery-and-the-auction-house.html

Railroading corruption

24 March 2011

A Chinese Government audit indicates that about 10% of the cost of the Beijing – Shanghai high speed railway has been lost to corruption.  A former Railways Minister has been arrested for his involvement in  more than $30 million of those losses. A related report is that Chinese law about the bribery of foreign officials has been strengthened.

www.bbc.co.uk/news/world-asia-pacific-12828057?

m.trust.org/trustlaw/news/business-ethics-and-anti-corruption-update-from-norton-rose/