General
2.53 To protect the integrity of the decision-making process of executive government and to maintain public trust in the Executive, Ministers and Parliamentary Under-Secretaries must conduct themselves in a manner appropriate to their office. Accordingly, the guidance in paragraphs 2.55 - 2.114:
- explains the standards of personal conduct expected of Ministers;
- helps Ministers to identify personal interests that might be seen to influence their decision-making; and
- sets out options for managing conflicts of interest where necessary.
2.54 The guidance on conduct, public duty, and personal interests applies to all Ministers (inside and outside Cabinet) and Parliamentary Under-Secretaries. References to Ministers in this guidance include Parliamentary Under-Secretaries.
Conduct of Ministers
2.55 A Minister of the Crown, while holding a ministerial warrant, acts in a number of different capacities:
- in a ministerial capacity, making decisions and determining and promoting policy within particular portfolios;
- in a political capacity as a member of Parliament, representing a constituency or particular community of interest; and
- in a personal capacity.
2.56 In all of these roles and at all times, Ministers are expected to act lawfully and behave in a way that upholds, and is seen to uphold, the highest ethical and behavioural standards. This includes exercising a professional approach and good judgement in their interactions with the public, staff, and officials, and in all their communications, personal and professional. Ultimately, all Ministers are accountable to the Prime Minister for their behaviour.
2.57 Holding ministerial office is regarded as a full-time occupation and is remunerated as such. Accordingly:
- accepting additional payment for doing anything that could be regarded as a ministerial function is not permissible; and
- accepting payment for any other activities requires the prior approval of the Prime Minister.
Register of Pecuniary and Other Specified Interests of Members of Parliament
2.58 All members of Parliament are required to disclose certain assets and interests in an annual Register of Pecuniary and Other Specified Interests of Members of Parliament . The purpose of this register, administered by the Registrar of Pecuniary and Other Specified Interests of Members of Parliament, is to facilitate the transaction of business by the House by promoting the highest standards of behaviour and conduct by members, and thereby strengthening public trust and confidence in parliamentary processes and decision-making. The detailed requirements are set out in appendix B of the Standing Orders of the House of Representatives(the Standing Orders) and in the explanatory notes on members' financial interests provided to members by the Registrar (see also paragraphs 2.92 - 2.100 on gifts).
Ministers' interests
2.59 Additional requirements apply to Ministers' interests. Conflicts of interest may arise between Ministers' personal interests and their public duty because of the influence and power that Ministers exercise, and the information to which they have access, both in the individual performance of their portfolio responsibilities and as members of the Executive.
2.60 Ministers are responsible for ensuring that no conflict exists or appears to exist between their personal interests and their public duty. Ministers must conduct themselves at all times in the knowledge that their role is a public one; appearances and propriety can be as important as actual conflicts of interest. Ministers should avoid situations in which they or those close to them gain remuneration or other advantage from information acquired only by reason of their office.
2.61 The Cabinet Office, on behalf of the Prime Minister, supports Ministers in identifying and managing conflicts of interest that may arise in relation to their portfolios or other ministerial responsibilities. Accordingly:
- the Cabinet Office contacts all Ministers on appointment and provides them with a worksheet containing questions and guidance designed to prompt Ministers' thinking about a broad range of interests and possible areas of conflict, financial and non-financial;
- the Cabinet Office then meets each Minister for a confidential discussion about their worksheet and any issues that may arise;
- each year, following the publication of the Register of Pecuniary and Other Specified Interests of Members of Parliament, the Cabinet Office reminds all Ministers to review their interests in the light of their portfolio or other ministerial responsibilities, to consider any possible conflict issues, and to seek advice where necessary;
- the Cabinet Office is available during the year to provide guidance on any conflict issues that may arise, and on the acceptance of payments or gifts; and
- the management of any conflicts that are identified is agreed between the Prime Minister and the Minister concerned, with advice as required from the Cabinet Office.
2.62 Ministers themselves are responsible for proactively identifying and reviewing possible conflicts of interest, and ensuring that any conflicts of interest are addressed promptly by taking one or more of the measures set out in paragraphs 2.75 - 2.76.
Identifying conflicts of interest
Types of conflicts of interest
2.63 A conflict of interest may be pecuniary (that is, arising from the Minister's direct financial interests) or non-pecuniary (concerning, for example, a member of the Minister's family). A conflict of interest may be direct or indirect. Ministers must consider all types of interest when assessing whether any of their personal interests may conflict with, or be perceived to conflict with, their ministerial responsibilities.
Pecuniary interests
2.64 Pecuniary interests are financial interests such as assets, debts, and gifts. A pecuniary conflict of interest may arise if a Minister could reasonably be perceived as standing to gain or lose financially from decisions or acts for which they are responsible, or from information to which they have access. A pecuniary conflict of interest could, for example, relate to the value of land or shares that a Minister owns, or the turnover of a business in which a Minister has an ownership interest. Ministers’ investments in managed funds will not usually create a conflict of interest for a Minister (where those funds are broadly diversified, and the Minister has no control over investment decisions).
Interests of family, whānau, and close associates
2.65 A conflict may arise if people close to a Minister, such as a Minister's family, whānau, or close associates, might derive, or be perceived as deriving, some personal, financial, or other benefit from a decision or action by the Minister or the government. Ministers must therefore be careful not to use information they access in the course of their official activities in a way that might provide some special benefit to their family members, whānau, or close associates. Passing on commercially sensitive information, or encouraging others to trade on the basis of such information, may also breach the insider trading regime (see paragraphs 8.14 - 8.16). Such a breach may result in a significant fine or term of imprisonment.
2.66 Similarly, it may not be appropriate for Ministers to participate in decision-making on matters affecting family members, whānau, or close associates, for example, by:
- attempting to intercede on their behalf on some official matter;
- proposing family members for appointments; or
- participating in decisions that will affect the financial position of a family member.
2.67 Whether someone is a “close associate” will involve questions of judgement and degree. New Zealand is a small and interconnected country. Simply being acquainted with someone, having worked with them, or having had official dealings with them will not usually create a conflict of interest, but a longstanding, close, or very recent association or dealing might.
2.68 Public perception is a very important factor. If a conflict arises in relation to the interests of family, whānau, or close associates, Ministers should take appropriate action (see paragraphs 2.75 - 2.76).
Association
2.69 Ministers do not act in isolation from their political, constituency, and community networks. Indeed, some Ministers are elected to Parliament because of their close association with and advocacy for particular interest groups. Participation in decision-making by such Ministers allows Cabinet to consider diverse viewpoints in reaching a collective decision.
2.70 Ministers should take care, however, to ensure that they do not become associated with non-government organisations or community groups where:
- the group's objectives may conflict with government policy;
- the organisation is a lobby group; or
- the organisation receives or applies for government funding.
2.71 Any possible conflict arising from association with a non-public body should be dealt with using the measures set out in paragraphs 2.75 - 2.76.
2.72 A conflict will not generally arise from a generic interest held as one of a class of persons or held in common with the public: for example, an interest in education issues where the Minister has school-age children.
Iwi and hapū interests
2.73 Ministers may have a whakapapa connection with certain iwi and hapū. A Minister's whakapapa will not, of itself, create an interest. However, an interest may arise where a Minister's whakapapa is accompanied by a pecuniary, family, whānau, or close association interest. In those cases, the guidance in paragraphs 2.63 - 2.72 should be considered.
Managing conflicts of interest
2.74 Ministers must ensure that any conflicts of interest are addressed promptly. The Secretary of the Cabinet (and, where appropriate, the chief executive of the agency concerned) should be kept informed of conflicts of interest as they arise. In addition, the Prime Minister should be advised in writing of conflicts that are of particular concern or that will require ongoing management. If in doubt about the appropriate course of action, Ministers should consult the Prime Minister or the Secretary of the Cabinet.
2.75 If a conflict between a Minister's portfolio responsibilities and a personal interest is substantial and enduring, it may be necessary to consider a permanent change to some or all of the Minister's portfolio responsibilities.
2.76 Most conflicts can be managed by taking one or more of the following measures, in consultation with, and on the advice of, the Cabinet Office.
- Declaration of interest: Where a Minister has a conflict of interest that arises during general decision-making (for example, at a meeting of Cabinet or a Cabinet committee), but the Minister does not have ministerial responsibility for the issue, a declaration of interest will generally be sufficient. Having declared the interest, the Minister should either withdraw from the discussion or seek the agreement of colleagues to continue to take part. The declaration of interest will be recorded. (Withdrawal from a Cabinet or Cabinet committee discussion on the grounds of conflict of interest does not absolve a Minister from collective responsibility for any decision resulting from the discussion.)
- Not receiving papers:A Minister's personal interest in an issue may mean that it is inappropriate for the Minister to receive official information on the issue. In this case, the Minister should instruct the Cabinet Office (and/or other officials, as appropriate) to ensure that the Minister does not receive official papers or reports about the issue.
- Transferring responsibility to another Minister: A Minister with a conflict of interest concerning a particular issue within their portfolio may, with the agreement of the Prime Minister, transfer responsibility for that issue to another Minister. In this case, the Minister with the conflict of interest should instruct officials to ensure that briefings and papers on the issue are directed to the other Minister. The Minister with the conflict will also need to declare the interest if the matter is discussed at Cabinet or a Cabinet committee, and should consider whether it is appropriate to receive Cabinet or Cabinet committee papers on the issue, or to remain at the meeting. In these situations, the Minister who receives the transfer should be referred to as the “Acting Minister of xx /for xx”.
- Transferring responsibility to the agency: If a conflict arises in the Minister's portfolio concerning a minor issue, the Minister may be able to handle the matter without further difficulty by passing the issue on to the agency. The Minister should take care to ensure, however, that there is no attempt to influence the agency inappropriately. The Minister should declare the interest if the matter is discussed at Cabinet or a Cabinet committee. The Minister should also consider whether it is appropriate to receive Cabinet or Cabinet committee papers on the issue, or to remain at the meeting.
- Divestment: Where a conflict of interest is significant and pervasive, the Minister may need to divest themselves of the interest.
- Blind investment vehicles: Ministers with complicated or extensive shareholdings may wish to consider placing their investments in a blind investment vehicle (for example, a blind trust), as a precaution against inadvertent conflicts of interest.
- Resignation from an organisation: Where a conflict of interest arises from association with a non-government organisation, the Minister may need to resign from that organisation.
Conflicts of interest in the House
2.77 The Standing Orders require a member of Parliament who has a financial interest in an item of business in the House to declare that interest before consideration of the item. The member need not declare an interest that has already been disclosed in the Register of Pecuniary and Other Specified Interests of Members of Parliament. The Standing Orders define a financial interest as including an interest held by a member's spouse, partner, or dependent child. The Speaker can decide any dispute about whether a conflict exists. The rules are set out in the section entitled “Declaration of financial interests” in the chapter on general procedures in the Standing Orders.
2.78 Occasionally, a Minister may find that they have a conflict concerning a bill, or part of a bill, for which they have portfolio responsibility. The Standing Orders do not preclude a Minister who declares a financial interest (as defined in the Standing Orders) from moving motions relating to a bill of which they are in charge. Nonetheless, a Minister with any conflict concerning a bill for which they have portfolio responsibility may choose to arrange for another Minister to move formal motions relating to that bill. Any issue of this sort must be discussed in advance with the Prime Minister, the Leader of the House, and the relevant whip. The portfolio Minister must be absent from the House for another Minister to move the motions on the portfolio Minister's behalf, but may declare the conflict in a subsequent speech.
Constituency interests
2.79 A member of Parliament is always entitled to make representations to a Minister on an issue of concern in the member's electorate or an issue of general constituency concern.
2.80 Where a member of Parliament is also a Minister, but has no portfolio responsibility in the areas relating to the issue of interest to them as a member of Parliament, the Minister may make representations to the Minister with the portfolio responsibility. Ministers representing the concerns of constituents (or the concerns of other sectors of the community, for example in the case of list members) should be clear at all times, however, that they are acting in their capacity as members of Parliament (for example, by signing correspondence as a member of Parliament and not using ministerial letterhead).
2.81 Where the member also holds the relevant portfolio or is the Associate Minister, further measures, as set out in paragraphs 2.75 - 2.76, are likely to be needed to manage any possible conflict. If the matter is minor, the Minister may be able to pass it to the agency. If the matter is more significant, the Minister may instead pass ministerial responsibility for it to another Minister.
2.82 Alternatively, the Minister may retain ministerial responsibility for the matter and ask another member of Parliament (for example, a local list member, the member from a neighbouring electorate, or a member with a particular interest in the issue) to represent the constituency on the matter.
2.83 As with all conflicts of interest, Ministers should exercise careful judgement about possible conflicts between their constituency interests and their ministerial roles. They need to be alert at all times to the possibility that a conflict might exist or be perceived to exist. The Secretary of the Cabinet is available to advise in cases of doubt.