Mahuta welcomed the report and said it, “draws a line under the sand in terms of all the issues that have been raised about me”.
She said she was particularly pleased that it found no favouritism, bias or undue influence.
She said, “the report clearly demonstrates that government departments have been inconsistent in the way that they’ve managed perceived conflicts of interest” and that the scrutiny is “a good thing” for the Public Service.
Details of contracts between the companies and the four government agencies, and the political fallout, prompted first the Opposition and then the Government to ask the PSC to look into the matter.
The Herald first reported on the contracts in May of this year; the PSC probe (shy of a formal review) was called in September.
At the time the contracts were signed, Mahuta was an Associate Minister for three of the four public agencies involved: the Ministry for the Environment (MfE), Kāinga Ora (KO), and Te Puni Kōkiri (TPK)/the Ministry for Māori Development
Mahuta had no responsibility for any of the related areas of operation.
She has never had any ministerial responsibilities for Department of Conservation (DoC), the fourth agency involved.
Specific concerns
The review noted the agencies have taken steps to address specific issues, but it recommended that the Public Service Commissioner, Peter Hughes, seek an assurance that its wider recommendations are adopted.
The contracts were worth $243,000 (excluding GST). One contract was a grant, the others were for services and awarded on a sole source basis. The DoC contract was incomplete when it was closed, and the value was never fully paid.
The review noted that conflict of interest rules cover perceived, potential and actual conflicts. And that the relevant MfE contracts (one was with KAS and one was with KC) entailed a “significant” perceived conflict of interest, while the perceived conflict was “moderate” in the case of TPK, and minor in the case of KO.
In late 2020 MfE hired Gannin Ormsby, Tamoko Ormsby and Waimirirangi Ormsby, through their respective companies, to form part of a Māori technical experts group related to waste strategy.
It found that the MfE missed three distinct opportunities to deal with the perceived conflicts the contracts, worth $91,000 (excluding GST), entailed.
Gannin Ormsby had the experience required for the work, it said, but given his relationship with the Minister that work “required careful management”.
The management plan deployed was, “not as detailed and targeted as the circumstances required.” And while PSC advice was sought on the matter, it was only done at the eleventh hour, and the MfE only disclosed the contract anticipated for Gannin Ormsby and not the second contract anticipated for KC.
The PSC found that “self-created” urgency drove the MfE’s procurement rather than the process required for “effective and robust” procurement.
In April, 2021, TPK awarded a $28,300 grant to KAS to run a three-day event for Māori youth from its broadly scoped suicide prevention fund.
The report found that TPK failed to appropriately assess or actively manage the perceived conflict of interest involved in its approval of a grant.
While KAS declared the conflict in its grant application, “[the conflict] was not appropriately assessed or actively managed by TPK”, the report said.
It also noted that the conflict risk was heightened because the application named “Nanaia Mahuta” as a potential paid panellist in the project.
The panel component of the project did not go ahead as originally planned, but the inclusion of Mahuta’s name in the proposal “compounded the perception risks”, the report said.
In October 2020, Kāinga Ora contracted Rama Ormsby (brother of Gannin Ormsby) to backfill a parental leave position and facilitate local iwi involvement in KO housing work. The contract was for $73,000 (excluding GST).
The main issue identified for Kāinga Ora was that it did not ask about conflicts of interest in discussion with its contractor, or through its contracting process. The contract was signed with KAS.
The Crown housing agency is “arms-length” from Government, in that it is responsible through a Board to ministers. This, the PSC noted, diminished the risk of perceived conflict.
The report also noted, however, that given there were “heightened perception risks” for both Kāinga Ora and MfE, that the sole source procurement approach should have been better justified.
In late 2020, DoC contracted KAS to provide advice in developing possible models for improving the department’s engagement with young Māori. The contract was worth $60,000, but paid out only $11,800 before it was closed. Both figures exclude GST.
The review found no conflict in the case of DoC, but it described poor procurement and contract management.
It said oversight and management of the contract was “particularly weak” during the delivery stage, and while contracted services “continued to be delivered...at a certain point DOC stopped engaging with the project. This left the project incomplete but not formally at an end.”
Opposition
The National Party’s spokesman for the Public Service, Simeon Brown, said the report “exposed serious flaws” in how the Public Service deals with conflicts of interest.
He said the report indicated that a “culture of carelessness” exists in the way public agencies procure services and manage perceived conflicts of interest, which he said undermines public confidence.
He said “sloppy practices” across public agencies may be endemic, given how inadequately existing rules and guidance was followed in cases where the perceived conflict related to a high profile minister.
No purview over politicians
The purpose of the review was to determine whether Public Service agencies had “appropriately identified, assessed, managed and documented any conflict of interest in their contractual relationships with KAS and or KC or their directors [Gannin, Tamoko and Waimirirangi Ormsby]” the PSC said in September.
The scope expressly excluded the examination of any individual appointments by the Cabinet or employment agreements, including Waimirirangi Ormsby’s 2019 appointment to the working group which produced the contentious He Puapua report, a roadmap of ideas to achieve Māori self-determination.
Government documents indicate that Minister Mahuta selected Waimirirangi Ormsby for the shortlist of candidates for the working group that was approved by the Cabinet’s Appointment and Honours Committee.
Mahuta declared the relationship to the committee, however it remains contentious because the Cabinet Manual appears to recommend more thoroughgoing treatment than a simple declaration of the conflict.
Mahuta said: “I stand by my former statements that I have declared and acted in accordance with the Cabinet Manual when it comes to these matters. I take them very seriously.”
