It’s not enough for big companies to say they are transparent about their lobbying and political donations; New Zealanders want them to prove it.
That’s according to the findings of an Ipsos survey, commissioned by a new trans-Tasman service certifying corporate engagement with government.
Newsroom has talked to ministers-turned-lobbyists, and with companies seeking to influence government policy – they agree that transparency is key.
This is at no time more apparent than in the election campaign, when big companies – some of whom have hired or contracted former Cabinet ministers to advise them – are lobbying and donating furiously.
It comes after controversies in New Zealand and Australia about backroom conflicts between business and government.
A report last week into the Australian arm of global giant PwC has criticised a culture where “revenue is king” and ethics questionable, after the firm admitted making millions of dollars sharing confidential information about multinational tax policy with private sector clients – information obtained while consulting to the Australian Treasury and Taxation Office.
Meanwhile, back here, minister Stuart Nash was sacked for disclosing confidential information from a Cabinet meeting to two businessmen, both former donors. Recruitment company Robert Walters last week announced it has appointed Nash its commercial director, starting on the Monday after the election.
“With Stuart in charge of Government relations … he will be able to provide insightful counsel and employment solutions in a market being negatively impacted by a lack of productivity,” said the firm’s managing director Shay Peters.
It’s revelations of backroom lobbying and political donations that have shaken New Zealanders’ confidence, and prompted the creation of accreditation platform Openly. Its creator is expat New Zealander Nick Booth, and its advisory board includes former Parliamentary Speaker Sir David Carter.
Booth said the ExxonMobil and PwC disclosures on both sides of the Pacific had highlighted the need for greater assurance. “Reflecting recent scandals, New Zealanders are also starting to take notice, with investors and consumers indicating that they will reward good conduct in private-public engagement,” he says. “There’s a big opportunity for corporations that act with integrity in this space.
Based in Sydney, Booth previously headed government relations for the Australian arm of British American Tobacco. “In my experience of being in that corporate-government interaction for nearly 20 years in the tobacco industry, I think engagement between corporations and government is good. It’s fundamental to democracy.
“Sunlight is always a good disinfectant.”
– Kris Faafoi, lobbyist
“But with corporations engaged in government, there’s usually more resources and teams involved. And often with that comes greater influence. And I believe with a greater influence comes greater responsibility.”
The independent Ipsos research asked New Zealanders if they agreed that businesses with nothing to hide needn’t keep lobbying a secret. 81 percent agreed.
More than three out of five respondents would be more likely to buy from, or invest in, a company that is accredited as being open about its government engagement.
|OPENLY ACCREDITATION CHECKLIST|
Applicant corporations lodge a Disclosure Statement that answers a series of questions based on positions from the OECD and UN Principles for Responsible Investment:
1 / Does your organisation have policy positions that have been presented to policy-makers; if so, what are they?
2 / Has your organisation lodged any submissions with governments? If so, please upload.
3 / Did your organisation make any political donations, loans or gifts; if so, how much and to whom?
4 / Is your organisation owned wholly, or in part by a foreign government; and if so, which?
5 / Does your organisation have staff or directors who hold a political office; if so, who and what?
6 / Does your organisation have senior staff or directors who have previously held a political office in the past 5 years; if so, who and what?
7 / Does your organisation engage lobbying/public policy/law/consulting firms or similar to engage governments or policy-makers; if so, which?
8 / Is your organisation a member of any industry associations/interest groups that engage governments or policy-makers on your behalf, if so, which?
9 / If your organisation is a member of industry associations/interest groups, did it/they make any political donations, loans or gifts on behalf of your organisation; and if so, to whom?
10 / Does your organisation hold any government contracts; if so, which?
11 / Does your organisation have a code of conduct governing interactions with governments and policy-makers?
In particular, they would like to see banks and finance companies accredited as being committed to integrity in government engagement.
The need for this assurance coincides with a Commerce Commission investigation into competition in the banking sector that is asking whether banks are “clear and transparent” with their customers.
Behind banks and investment companies, the other sectors New Zealanders would like accredited are electricity and gas suppliers, insurance companies, healthcare providers, tobacco or vaping businesses, and construction and property development firms.
Prime Minister Chris Hipkins has directed officials to report back next year on policy options for regulating lobbying activities.
Hipkins has already taken steps to introduce greater transparency around lobbying at Parliament. He’s asked Parliament’s Speaker to remove swipe-card access for union and business lobbyists, and ordered that the Cabinet Manual be updated to make it clear that, while in office, ministers’ conduct and decisions should not be influenced by the prospect or expectation of future employment with a particular organisation or sector.
He’s also calling on third-party lobbyists to develop a voluntary code of conduct that would enhance transparency by, for example, including the names of the clients they represent on their websites.
But that proposal has been greeted with caution by one lobbyist who, until recently, sat around the Cabinet table with Hipkins.
Former minister Kris Faafoi, of Agenda Partners, says he would disclose his clients only if required to do so – but it’s not something firms and lobbyists should fear. “The principal thing is, if you’re doing everything above-board then you have nothing to worry about.”
He confirms he has clients in the sectors the Ipsos research identifies as a priority for openness, though he says he doesn’t have their authorisation to name them. “They’re pretty open about how they do their business,” he says.
“If you’re a bank, at the moment you’re probably a target, just because of economic conditions. It doesn’t surprise me that that’s the way people would feel,” he says. “Sunlight is always a good disinfectant.”
Faafoi says he does, personally, support greater transparency around political donations. An an MP, he previously declared donations from donors including the late unionist Ken Douglas, and the Tauranga finance firm owned by conservative former United Future MP Paul Adams
Former National deputy prime minister Paula Bennett is now national director of customer engagement and advisory at Bayleys Realty Group, which donated $160,000 to the National Party last year. Director John Bayley donated another $50,000 to NZ First this year.
And four months ago, former finance minister Steven Joyce was appointed to the board of property developer Winton Land, whose owner Chris Meehan donated $153,260 to National and Act this year.
The company is working with housing agency Kāinga Ora on a development at Lakeside Te Kauwhata, while simultaneously suing the agency for $137 million after it refused fast-track consent for the firm’s big Sunfield development in Papakura.
“I personally have made political contributions to National and Act for a number of years to support the democratic process,” Meehan told Newsroom in August.
“As a Winton board member, Steven’s economic, financial and strategic credentials will add considerable value around the board table. He has not been appointed for government relations or political lobbying.”
Former Labour Cabinet minister Iain Lees-Galloway has set up his own lobbying firm, Elmbank Engagement Partners. Prior to that he was stakeholder engagement and Government relations manager for Ocean Flyer, the seaglider transport start-up whose owner Shah Aslam was a Labour Party donor.
He says most of his lobbying work is for not-for-profits, but not all of it. “I’ve done some work for some small to medium-sized businesses. I can’t imagine any of them would have had an issue with a transparency scheme if one was put in place.
“I have had conversations with clients about donations. And of course, my advice has been to be completely open and upfront about about who you might donate to, and not to have any expectations because the New Zealand system just doesn’t work that way.
“You shouldn’t have any expectations that a politician will do you any favours if you donate to them, because in the overwhelming majority of cases politicians aren’t going to do that.”
Companies should be similarly open about lobbying: “My advice to them at the moment would be, if you are asked, just be honest and open about it. These things are probably best regulated by some sort of system that requires transparency, and then everybody’s on a level playing field.”
He acknowledges Winton as an example of a company that, despite supporting the other side of politics from him, is open about its donations and lobbying – even to the extent of taking out full page adverts in newspapers to put their arguments.
“They have been completely transparent and people can determine their own opinions on that. I think that it is good that the information is made publicly available.”