Action point 3: Better Manage Conflicts of Interest
New Zealand has weak management of conflicts of interest for government appointees who work on policy development but have (or have recently had) other employers or clients who have a financial vested interest in the outcome of that policy.
People outside government are frequently paid to play a role in public policymaking, for example, by serving on government boards or advisory groups, or doing consultancy or contract work. In a small country like New Zealand where people are closely connected it’s inevitable that commercial conflicts of interest will arise. Both personal and commercial interests need to be declared, avoided where possible, and closely managed where they cannot be avoided.
Guidelines provided by The Office of the Auditor-General currently identify four main types of conflicts of interest:
- Financial Conflicts of Interest – when a person stands to gain or lose financially from a decision.
- Non-Financial Conflicts of Interest – when personal relationships, affiliations, or reputational concerns could create bias.
- Conflict of Roles – when another organisation that the person is involved in which may benefit or lose from policy decisions
- Predetermination (bias) – when people have already made up their minds and will not listen fairly to all the information.
Added provisions are needed to make commercial conflicts of interest explicit.
Conflicts of interests that involve the commercial interests of people or businesses influencing government policy, law making and procurement are particularly serious. If people are paid by a firm, they may use their position advising government to covertly advance the interests of that company or industry.
If commercial conflicts of interest in the public sector are not recognised and controlled appropriately, they can undermine the integrity of policy making, compromise the reputations of officials and agencies and erode public trust in government.
Managing both sides of the revolving door
The “cooling off” period proposed in Action Point Two would limit the ability of former ministers or their staff to abuse insider knowledge and access to confidential state information for the benefit of private interests. But the revolving door effectively moves in both directions, with lobbyists frequently moving into government roles, especially ministerial staff roles.
The potential conflicts between the interests of their previous employer and/or clients and their new employer, the government, need to be more transparent and better managed.
Senior public service appointees who have come from the private sector should face much stronger scrutiny over potential conflicts of interest that their previous private sector work might create in their new role. e.g. A former alcohol lobbyist appointed to the PM’s Office might favour their ex-colleagues by making pro-alcohol decisions.
What we are asking for
- Require the Public Service Commission to revise their codes of conduct and related guidance for implementation to ensure that potential commercial conflicts of interest are explicit. This would include the codes and guidance for public servants, secondees, and appointees to government agency boards or advisory groups. This will help to prevent people using their positions to advance specific commercial interests.
- Manage the other side of the revolving door – lobbyists seeking to become senior public servants. This warrants far greater scrutiny and management of potential commercial conflicts of interest (including major commercial clients in their previous lobbying role).
- Provide for ministers to create extra protection for the development phase of certain policies when there is a high risk of commercial lobby pressure on policymaking. The UN Framework Convention on Tobacco Control has a clear section (5.3) which protects policymaking from tobacco industry lobbying beyond the usual public processes like writing submissions. Similar provisions can be applied to protect the policymaking around other harmful products e.g. alcohol, unhealthy food, gambling and fossil fuels.
- Create an independent Integrity Commissioner to provide oversight for these policies and procedures for commercial conflicts of interest.
What these measures will achieve
It makes sense for standard policies and procedures to apply to all non-public servants who are involved in the development of public policy. This would include routine declarations of any conflicts of interest (i.e. any potential commercial interests that the person’s employer, clients, or employer’s clients may have in the policy being developed). Standard risk management processes should also apply.
A strengthened code that is explicit about the commercial conflicts of interest will help to improve the transparency and management of those risks.
Providing extra protection for the development of certain policies at risk of commercial lobbying pressures would reinforce the lobbying regulations recommended in point one of this action plan. An independent Integrity Commission is needed to enforce these rules.
These measures follow the latest recommendations of the OECD on international standards for regulating lobbying, which advocates for OECD nations to call for, “rules and procedures for identifying, managing and resolving conflict-of-interest situations, and for a system that manages the conflict-of-interest risks posed by individuals both entering and leaving the public sector, including at the international level.”
Why action is needed
Until recently New Zealand was consistently ranked as one of the least corrupt countries globally, but its ranking on Transparency International’s Corruption Perceptions Index (CPI) has been declining since 2015 and fell a further two points in 2024.
The perception of corruption can be almost as harmful as corruption itself.
Even if corruption is not widespread, the perception that government decisions are influenced by private interests can be just as damaging as actual misconduct. When people believe that policymakers are prioritising commercial or political connections over the public good, it erodes trust in government, weakens democratic engagement, and undermines confidence in public institutions.
A decline in trust can lead to:
- Lower public participation: people may disengage from democratic processes, believing their voices don’t matter.
- Reduced policy effectiveness: even policies designed for the public good, may face resistance if people suspect hidden agendas.
- Business uncertainty: investors and businesses rely on transparent, fair governance. Perceived corruption can discourage investment and harm New Zealand’s international reputation.
Protecting against corruption – and the perception of it – is essential to maintaining a fair, transparent, and accountable democracy.
Growing concern about potential conflicts of interest
Recent media reports have raised public concerns about potential conflicts of interest in government roles. These reports highlight:
- Multiple instances where individuals moved directly between government and lobbying roles without adequate safeguards to protect against conflicts of interest.
- Confidential information being shared in ways that raised questions.
- Private-sector consultants working in public roles while maintaining commercial interests.
While there is no suggestion of intentional wrongdoing, these situations show how unclear rules and insufficient oversight can create doubt about decision-making.
Stronger measures benefit everyone
No system is perfect, but clearer guidelines on commercial conflicts of interest would provide certainty for both officials and the public. Strengthening transparency, disclosure, and oversight would:
- Protect public servants and advisors from unnecessary suspicion or reputational risk.
- Help ensure decision-making is seen as fair, impartial, and free from undue influence.
- Strengthen public trust in government institutions.
Implementing these safeguards isn’t about punishing individuals or assuming wrongdoing – it’s about creating a system where integrity is unquestionable.
