Induction for Elected Members of Local Authorities John Edwards Barrister ©John Edwards Barrister...

Induction for Elected Members of Local AuthoritiesJohn EdwardsBarrister

©John Edwards Barrister 2013

This Briefing Covers• Legislation• Local Government Act• Local Government Official Information and Meetings Act• Local Government (Members Interests) Act

• Secret Commissions• Privacy Act• Ombudsmen Act


• Institutions – who they are and what they do• Auditor-General• Ombudsmen• Local Government Commission• Local Government NZ• Society of Local Government Managers


• Good Governance (and consequences for bad)• Consultation• Confidentiality (and breach of)• Accountability• Ethical Conduct• Code of Conduct• Public law obligations• Fairness• Natural justice• Lack of bias & predetermination• Vires – LGA, RMA, Building Act, etc


Local Government Act 2002

• Establishes purpose, role and powers of local authorities, Local Government Commission & Minister • Establishes principles for governance,

management and accountability of local authorities and community boards, and Council controlled organisations.• Provides lawmaking and enforcement powers• Regulates conduct of elected members• (together with code of conduct)


Local Government Official Information And Meetings Act• Provides for public access to official information• Principle of availability• Limited range of reasons for withholding• Review by Ombudsman

• Regulates the conduct of meetings• Notification requirements• Public accessibility (and exclusion)

• Right of access to personal information about corporates


LGOIMA• Presumption of availability to promote• Accountability• Participation• Transparency

• Subject to need to protect• Privacy• Commercial interests• Council processes (negotiation, free and frank advice,

confidential information flows)• Members can request, or be asked for

information. Assistance is available from Council staff.


Meetings• Must be properly notified• Must be open to the public - unless declared public excluded

by resolution, with reference to one of the reasons in ss. 6 or 7 of LGOIMA • Except 7(2)(g) – Free and Frank advice

• Workshops are OK but:• Can’t make decisions• Information still accessible under LGOIMA


Local Authorities (Members Interests) Act • Can’t be elected if you’ve earned more than $25000 in

contracts that year:• Unless prior approval• Or subsequent authority from audit office• Or other special exception

• Can’t vote on or discuss a matter where you have a pecuniary interest• Can be fined $100.00 (but see later discussion personal liabilities)


Privacy Act• Is about personal information• Is subject to other Acts, e.g.• Local Government (Rating) Act• Building Act• Resource Management Act• LGOIMA

• Is enforced by Privacy Commissioner & Human Rights Review Tribunal


Privacy Act (cont)• Based around 12 information privacy principles which require

council to:• Minimise personal information collection• Tell people why information is being collected• Store information securely• Give people access to, and allow them to correct personal

information about them• Limit council’s ability to use and disclose personal information


Ombudsmen Act

• Wide ranging power to investigate any administrative action that affects a person in their personal capacity.• Can lead to • findings that action was unlawful unreasonable,

unjust, oppressive, discriminatory based on mistaken understanding of law or fact or was wrong: and recommendations that:• matter should be reconsidered, rectified, cancelled set

aside, policy or law reviewed or whatever else Ombudsman thinks reasonable.


Institutions

• Auditor-General (Current – Lyn Provost)• Established (continued) under Public Audit Act 2001 • Is an Officer of Parliament• Provides assurance to Parliament and the public that

local authorities are operating and accountable in the way parliament expects.• Can carry out:

• financial report audits; • performance audits; and • inquiries (either on request or on the Auditor-General’s own

initiative) into any matter concerning a public entity’s use of its resources.

• other auditing or assurance services, at the request of a public entity.


Institutions• Ombudsmen (Current Dame Beverly Wakem, Professor Ron

Paterson)• Officers of Parliament• Authority under

• Ombudsmen Act• Official Information Act &LGOIMA• Protected Disclosures Act

• Inquisitorial, investigative, recommendatory (but note LGOIMA powers to impose duty)


Local Government Commission• Established under LGA 2002• To report on, and make recommendations to the

Minister on matters relating to local government. • To hear and determine appeals relating to decisions on

proposals for the alteration of boundaries of local authority districts or the transfer of functions between local authorities. • To consider proposals for the constitution or abolition

of territorial districts or regions, and proposals for the establishment of unitary authorities. • To consider appeals and counter-objections relating to

proposals for boundaries, and the number of its members.• To consider issues relating to the constitution of

communities.©John Edwards Barrister 2013

LGNZ• Local Government New Zealand• Is an incorporated society

• Objects• Promote national interests of local government• Lobby• Liaise with central government & Parliament• Provide resources and support to local government


SOLGM

• Society of Local Government Managers• Incorporated society whose membership is made up

of:• Chief Executives • Second tier managers reporting to the Chief Executive • Managers with significant management, policy or strategic

development responsibilities

• Objectives include • Encouraging better local government management• Advocacy on issues related to local government• Research and publishing advice and analysis.


Good GovernanceSome Important Elements• Confidentiality

• Members need good information to make good decisions. That information • Should only be used for Council purposes & not used or disclosed for an improper purpose.

• Accountability• Members are accountable to their communities, but can also be called to account in the High

Court, in Parliament, and by the Auditor General

• Code of Conduct• Members must abide by the code of conduct which is prepared and adopted by Council.

• In carrying out any statutory function, members must act with: • Fairness• Natural justice• Lack of bias & predetermination• Within statutory powers (e.g. LGA, RMA, Building Act, etc)

• Any failure can result in• Bringing Council into disrepute• Decisions overturned by Court• Legal costs imposed on Council.• Personal liability on members.


ConsultationLGA s.82

(1) Consultation that a local authority undertakes in relation to any decision or other matter must be undertaken, subject to subsections (3) to (5), in accordance with the following principles:

(a)that persons who will or may be affected by, or have an interest in, the decision or matter should be provided by the local authority with reasonable access to relevant information in a manner and format that is appropriate to the preferences and needs of those persons:

(b) that persons who will or may be affected by, or have an interest in, the decision or matter should be encouraged by the local authority to present their views to the local authority:

(c) that persons who are invited or encouraged to present their views to the local authority should be given clear information by the local authority concerning the purpose of the consultation and the scope of the decisions to be taken following the consideration of views presented:

(d) that persons who wish to have their views on the decision or matter considered by the local authority should be provided by the local authority with a reasonable opportunity to present those views to the local authority in a manner and format that is appropriate to the preferences and needs of those persons:

(e) that the views presented to the local authority should be received by the local authority with an open mind and should be given by the local authority, in making a decision, due consideration:

(f) that persons who present views to the local authority should be provided by the local authority with information concerning both the relevant decisions and the reasons for those decisions.

http://www.legislation.govt.nz/libraries/contents/om_isapi.dll?clientID=568984322&hitsperheading=on&infobase=pal_statutes.nfo&jump=a2002-084/s.82-ss.3&softpage=DOC%23JUMPDEST_a2002-084/s.82-ss.3

http://www.legislation.govt.nz/libraries/contents/om_isapi.dll?clientID=568984322&hitsperheading=on&infobase=pal_statutes.nfo&jump=a2002-084/s.82-ss.5&softpage=DOC%23JUMPDEST_a2002-084/s.82-ss.5

Consultation (Cont)• Consultation must be meaningful:• Must provide sufficient information about proposal• Must give sufficient time to receive comments• Must take comments into account in an open minded mannerWellington International Airport Limited and others v Air New Zealand [1993] 1 NZLR

671 • Failure may mean Council decisions are overturned and

council liable for damages and costs


Conflicts of Interest• Secret Commissions Act• Members Interest Act• Bias• Confidentiality/ improper use of information


Local Authorities (Members Interests) Act • Can’t be elected if you’ve earned more than $25000 in

contracts that year:• Unless prior approval• Or subsequent authority from audit office• Or other special exception

• Can’t vote on or discuss a matter where you have a pecuniary interest• Can be fined $100.00


What is a conflict of interest?• A conflict of interest exists where two different interests

intersect; in other words, where your responsibilities as a member of the local authority could be affected by some other separate interest or duty that you may have in relation to a particular matter.

Would a reasonable, informed observer think that your impartiality might

have been affected?

Guidance for members of local authorities about the law on conflicts of interest – Office of the Auditor-General June 2007


That other interest or duty might exist because of:• your own financial affairs;• a relationship or role that you have; or• something you have said or done.• employment with another organisation;• involvement in another business;• professional or legal obligations owed to someone else;• holding another office;“Managing Conflicts of Interest in the Public Sector” Edrick Child Senior Solicitor, Office of the Controller and Auditor-General Lexis Nexis In-

House Counsel conference 2005

• membership of another organisation;• investments and property ownership;• beneficial interests in trusts;• gifts and hospitality;• debts;• family or close personal relationships; and• strong political or personal beliefs or public statements that

may indicate predetermination.

Managing conflictsSome (not all) conflicts can be effectively managed• enquiring as to whether all affected parties will consent to the

person’s involvement;• imposing additional oversight or review over the person;• withdrawal from discussing or voting on a particular item of

business at a meeting;• exclusion from a committee or working group dealing with the issue;

Managing conflicts (cont)• re-assigning certain tasks or duties to another person;• agreement or direction not to do particular acts;• placing restrictions on access to certain confidential

information;• transferring the person (temporarily or permanently) to

another position or task;• relinquishing the private interest; or• resignation or dismissal from one or other position or entity.

Personal Liability• Generally, members are exempt/indemnified from liability to

third parties if• Acting in good faith; and• in pursuance (or intended pursuance) of the responsibilities or

powers of the local authority (LGA s.43)• BUT

Where Auditor-General finds the local authority has• Unlawfully expended money; or• Unlawfully sold or otherwise disposed an asset; or• Unlawfully incurred a liability; or• Intentionally or negligently failed to enforce the collection of

money it is lawfully entitled to receive.

“Unlawful Expenditure”• Negligence or bad faith not required• Objective- no fault required• Examples:• Extravagant and unjustified payment of wages in excess of

prevailing rates to staff (Roberts v Hopwood)• Wilful failure to increase rent on council dwellings in accordance

with statutory duty

Individual Council Members are liable• Jointly and severally unless the liability was

incurred:• without the defendant's knowledge; or• with the defendant's knowledge but against the

defendant's protest made at or before the time when the loss occurred; or

• contrary to the manner in which the defendant voted on the issue at a meeting of the local authority; or

• in circumstances where the member acted in good faith and in reliance on information prepared or supplied by:• an employee of the local authority whom the defendant

believed on reasonable grounds to be reliable and competent in relation to the matters concerned:

• a professional adviser or expert in relation to matters that the defendant believed on reasonable grounds to be within the person's professional or expert competence.

Therefore• Take an active role in voting on resolutions• Ensure dissent to illegal expenditure is recorded• Take advice from Council solicitors

Liability for conflict of interest• In addition to personal liability for damages discussed above,

members can be:• Prosecuted for breach of Local Government (Members Interest)

Act (fine – loss of office)• Prosecuted under Secret Commissions Act (2 years imprisonment

- $1000.00 fine – loss of office)• Prosecuted under Crimes Act s.105 (corruptly obtain

bribe/reward for official acts – 7 years imprisonment

Code of Conduct• Required under LGA 2002 Schedule 7 Part 1• Must include• understandings and expectations adopted by the local

authority about the manner in which members may conduct themselves while acting in their capacity as members, including—• behaviour toward one another, staff, and the public; and• disclosure of information to elected members that is received

by, or is in the possession of, an elected member in his or her capacity as an elected member; and relates to the ability of the local authority to give effect to any provision of the Act; and

• a general explanation of the Local Government Official Information and Meetings Act 1987 and other enactment or rule of law applicable to members.

Code of Conduct• A member of a local authority must comply with

the code of conduct of that local authority (doesn’t apply to community boards – should you consider adopting?)• Codes of Conduct – Cover• Roles and responsibilities

• Elected members• Mayor, Deputy Mayor, Committee Chairs• Chief Executive

• Relationships and behaviours• Relationships with other members, staff, community, news

media• Confidential information• Conflicts of interest and other ethical matters

Code of Conduct (Cont)• Key Messages• Avoid actual and perceived impropriety• If in doubt, declare, discuss• Avoid bias and predetermination – approach issues with an open

mind• Treat others with courtesy, respect and dignity.• Attend and vote at meetings

Governance/Management

• Council Governs (concerned with ends – hands off)• Chief Executive manages (concerned with means –

hands on)• Must be a good employer

• Elected members should deal with Chief Executive not direct with individual staff

• Members should• Stand behind decisions of Council (respect lawful

decisions)• Not criticise management – or sponsor emotive

resolutions• Maintain confidentiality

Standing Orders• All members must comply with standing orders• Standing Orders :• Reflect/paraphrase various statutory requirements inc:

• Local Government Act 2002, LGIOMA, Members Interests, Resource Management Act

• Regulate the conduct of meetings and voting procedures

Meeting Procedure• Governed by• LGA• LGOIMA• Code of Conduct• NZS 9202:2003

• Generally must be formally notified with sufficient notice to inform public.

• Late agenda items can be considered

Late items

Standing Order 3.7.5. (LGOIMA s.46A)Subject to Standing Order 3.7.5.1, where an item

is not on the agenda for a meeting, that item may be dealt with at that meeting if—(a) The local authority by resolution so decides; and(b) The presiding member explains at the meeting at a

time when it is open to thepublic,—(i) The reason why the item is not on the agenda; and(ii) The reason why the discussion of the item cannot be

delayed until a subsequent meeting.

Late items (cont)Standing Order 3.7.5.1 (LGOIMA s.46A)Where an item is not on the agenda for a meeting,—

(a) That item may be discussed at that meeting if—(i) That item is a minor matter relating to the general business of

the localauthority; and(ii) The presiding member explains at the beginning of the meeting,

at a timewhen it is open to the public, that the item will be discussed at the

meeting;but(b) No resolution, decision, or recommendation may be made in

respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.

For More Information• In-house governance/democratic services/legal team• www.legislation.govt.nz

http://www.legislation.govt.nz/

Induction for Elected Members of Local Authorities John Edwards Barrister ©John Edwards Barrister...

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