9 Nov 2023

Revolving door for lobbyists 'can result in unfair access' - Justice Ministry

7:03 am on 9 November 2023
Stylised illustration of person walking in and out of a revolving door

Photo: RNZ

A 'revolving door' between the Beehive and lobbying roles can result in the misuse of privileged information and unfair access, the Ministry of Justice says.

In April, Prime Minister Chris Hipkins responded to RNZ's investigative series on lobbying, Mate, Comrade, Brother, by asking the ministry to investigate improving transparency in political lobbying.

Since then, Kiri Allan resigned as Justice Minister and has started her own consultancy and lobbying firm. Stuart Nash also quit as a Cabinet Minister and now has a role which includes lobbying for global recruitment firm Robert Walters.

A Ministry of Justice (MOJ) paper, 'Update on Political Lobbying Project' sent to Justice Minister Ginny Andersen in August, highlights the 'revolving door' between the Beehive and the lobbying industry.

"Movement between roles in government and lobbying agencies can result in misuse of privileged information and unfair access."

Another former Cabinet Minister, Kris Faafoi, started lobbying three months after leaving Parliament in 2022. Andrew Kirton resigned from his lobbying job the day before he became chief of staff to Prime Minister Chris Hipkins, a position with top secret clearance and access to Cabinet papers.

As National prepares to take office, its former chief of staff Wayne Eagleson has been called in to train new MPs and ministers. Eagleson is a director of the lobbying firm Thompson Lewis.

Former NZ First deputy leader Fletcher Tabuteau, an Under Secretary for Foreign Affairs last time the party was in power, has been appointed a director of the lobbying firm Capital.

While many countries have stand down periods preventing ministers and top officials moving directly between lobbying and government - 18 months in Australia and five years in Canada - New Zealand has no restrictions.

As part of the changes Hipkins announced in April, the Cabinet manual was updated to "make clear that ministers conduct and decisions should not be influenced by the prospect or expectation of future employment".

The Speaker has also removed the swipe card access to Parliament that dozens of lobbyists previously enjoyed.

Read more from RNZ's investigation into lobbying:

  • Lobbying firm's 'wildly inappropriate' contracts at Commerce Commission
  • Public money going to lobbying firms
  • The lobbyist, the liquor industry, and the Beehive's revolving door
  • 'Section 61 C needs to be deleted': The former minister telling Beehive staff to change legislation for his clients
  • Lobbyists in NZ enjoy freedoms unlike most other nations in the developed world
  • Ministry's lobbying concerns

    The MOJ paper says issues can arise when there is a real or perceived imbalance in who gets access to decision makers.

    "This can lead to a lack of trust in democratic process and could ultimately affect social cohesion."

    It says those with limited resources can be marginalised and decision makers can become over-reliant on lobbyists' research or perspectives.

    "Uncertainty about motivations, origins and influence of lobbyist groups can erode trust in democratic process."

    The briefing also raises concerns about the potential for rogue lobbyists.

    "Some behaviours could be unethical or illegal, for example if lobbyists falsely claim to represent groups when they do not, use bribery or donations to obtain special treatment or deliberately manipulate public opinion with false information."

    The MOJ is working on a voluntary code for lobbyists but also looking at "policy options for regulating lobbying activities" which could usher in much stricter rules.

    About 180 people with a stake in the industry - including lobbyists, business people, academics and NGOs - met with MOJ officials in recent months.

    MOJ documents show those meetings focused on access, transparency, integrity and accountability.

    "New Zealand's 'mates calling mates' culture lacks transparency. New Zealanders are complacent about indirect harmful lobbying techniques such as pretending to be a grass-roots organisation," the documents say.

    They also say that "larger, better resourced organisations are getting better access to decision makers" and there is "limited monitoring of lobbying activities with no dedicated watch-dogs".

    More transparency is required and greater integrity would result from "avoiding conflicts of interests, promoting ethical standards and disclosure of financial relationships between lobbyists and public officials".

    Stylised illustration an office worker spying into another's cubicle space

    Photo: RNZ

    'Chilling effect' of lobbying on policy, law changes

    Academics and think tanks told justice officials at a meeting in August that a voluntary code would not go far enough.

    "Attendees thought that a voluntary code would be ineffective, noting that it may be a window dressing exercise or like a fox guarding the chicken coup," and asked if a mandatory code would be possible.

    They were concerned about "capture by commercial interests". One said they had "experienced numerous challenges in achieving legislative and policy change due to the chilling effect of lobbying" by vested interests in certain sectors.

    "One attendee spoke about the fact that in New Zealand there is an issue of cash for access - giving an example of a law firm charging $250,000 as a starting point to work for clients to promote a change to a law."

    A 'solution in search of a problem'

    But some lobbyists told justice officials at meetings in July that the project was "a solution in search of a problem".

    Lobbyists opposed to reform said "New Zealand is different from other countries" and doesn't have the same issues. "Corruption is also a very small problem here compared to other countries."

    Lobbyists were also concerned about being forced to disclose their clients on a public register, as lobbying firms in Australia and other countries do.

    "Some considered that any requirements around disclosure of clients could create a competitive disadvantage to those who sign up to the code."

    The MOJ documents show that "on balance" lobbyists supported a voluntary code of conduct to improve transparency - if only to improve understanding and perceptions of the lobbying industry.

    "Those who were supportive noted that addressing the public perception of the industry was important," the documents say. "Some said that if done well, a code could help to create better outcomes and that it was less about solving a problem and more about taking the opportunity to improve public understanding and perception."

    Ex-tobacco lobbyist's transparency tool

    While some lobbyists are pushing back on reform, one former tobacco lobbyist has spotted a gap in the market.

    Nick Booth, who spent nearly 20 years lobbying for British American Tobacco, has developed a startup called Openly, where companies disclose their interests and lobbyists.

    "It's market driven. It's about providing businesses with the tools to manage risk and drive sustainable growth that will hopefully set a new standard for open and ethical business-government interaction," Booth told RNZ.

    Businesses entered information such as what lobbyists they used, whether they had donated to political parties and whether the firm employed people who had recently held government positions.

    The information was reviewed and then published on the Openly webpage.

    "It is for companies to just go on the front foot and say, 'look, yes, we do engage with the government and that's a fundamental part of democracy and we're doing it with integrity and we're being transparent about what we're doing.'"

    Booth, a Kiwi living in Australia, says there is a "stark difference" between Australia's regulation of the industry, including a public register and stand down periods, and New Zealand, which had no regulation at all.

    "I think, gone are the days where it could be said that we don't need such things in New Zealand, where we're all mates, we're clean and green. I think the majority of lobbyists would probably agree that there needs to be change in this space."