Mai Chen: Supermarket owner learns hard lesson

Progressive Enterprises, which owns Countdown, may be asked questions by a select committee at a later date. Photo / Richard Robinson

Backfire shows parliamentary select committees are not law courts and can produce unexpected outcomes.

The furore regarding the letter sent by Progressive Enterprises' lawyers to the commerce select committee is a reminder that parliamentary select committees are not courts of law. Select committees are not only New Zealand's most powerful legal body, but they are also political. Even Progressive Enterprises looked like David fighting Goliath when it tried to get access to statements made at the committee on complaints about alleged retrospective payments, bullying and intimidation.

Progressive got caught in the cross hairs of the committee's regular financial review of the 2012/13 performance and operations of the Commerce Commission. The breadth of the review allowed Opposition MPs to extensively question commission members appearing about its investigation into allegations made against Progressive/Countdown of anti-competitive behaviour. The committee was not "undertaking an inquiry into alleged market misconduct by Progressive's supermarket business, Countdown," as Progressive thought.

Progressive's lawyers tried to get natural justice for their client by requesting all material, evidence and other information the committee possesses about Progressive under Parliament's Standing Order 232. Anybody whose reputation may be seriously damaged by the proceedings of a committee is entitled under Standing Order 232 to request that information, and the committee may "... if it considers it to be necessary to prevent serious damage to that person's reputation, furnish such material".

The committee's publicly available summary of the business before it shows there was no inquiry into Progressive, just a financial review of the commission. The acting chair of the committee, who is an opposition MP, criticised the tone of the letter as "bullying" and tried to get Progressive senior management "invited" to appear in front of the committee. Although this was blocked by the Government majority, the committee did make an interim report drawing the attention of Parliament (and the public) to the lawyer's letter and the entire transcript with all adverse comments about Progressive in it.

This was the information Progressive had asked for, but I doubt their risk assessment of making the request to the committee extended to the entire transcript being brought to the attention of the world in quite this way.

The question is whether the committee's decision to publish the entire transcript, including all the remarks about which Progressive was concerned, coupled with the debate around the tenor of the lawyers' letter, has done more damage to Progressive's reputation than the remarks. There is nothing Progressive can do about the transcript since it is protected by parliamentary privilege. So it might have been better to stay quiet.

Under Standing Order 234, provisions are intended to minimise the risk that a person's reputation will be damaged by allegations in evidence given to a Select Committee - such evidence being protected by parliamentary privilege.

But it is very difficult to invoke these provisions unless a select committee is minded to be co-operative. They are innately political creatures and if members dislike the tone of a request - even one framed consistently with Standing Orders - members will have no hesitation in publicly saying so, as Opposition MPs have done this week. And having an Opposition MP as acting chair (while the Government MP is away) in the run-up to an election increases the risk of unexpected outcomes.

The commission makes it clear there is still some way for its investigations to run, but equally clear is the signal by Opposition MPs they will be seeking to invite the commission back once it has finished its investigation to take the committee through its report. The committee can also undertake its own inquiry into how supermarket businesses treat suppliers in future, even though that was not what it was doing this week. Standing Order 192 also allows committees to request any person to attend and give evidence, so Progressive may be asked to answer questions at a later date. The only restrictions on committee inquiries are matters awaiting or under judicial decision, and allegations of criminal wrongdoing against identifiable individuals.

So Progressive may have another opportunity to reflect on how best to deal with Parliament in future and what happened to them this week is a cautionary tale for anyone dealing with Parliament.

Mai Chen is a founding partner in Chen Palmer lawyers and an adjunct professor at the Auckland University business school.