Scott O'Donnell Photo: Otago Daily Times / Luisa Girao
KiwiRail's chair questioned the extensive conflicts of a newly-appointed board member, suggesting they would test his loyalty, documents obtained by RNZ show.
Scott O'Donnell's appointment went ahead, but with a slew of measures in place to manage any conflicts between his new role and the 10 companies he is involved in - many of them in transport.
O'Donnell is also one of the four directors of Dynes Transport Tapanui, which donated $20,000 to NZ First in July 2024.
Minister for Rail and NZ First party leader Winston Peters said the donation played no part in O'Donnell's appointment.
Documents released under the Official Information Act show KiwiRail chair Sue Tindal, also newly appointed, expressed unease about O'Donnell's business interests and recommended he be removed from a process to make his role official while the conflicts were analysed.
Tindal said Scott's interest in HW Richardson (HWR), which owns 46 companies, could prove a test of loyalties to him.
"Her initial impression is that Scott has financial and beneficial interests in HWR which would significantly conflict with KiwiRail (given he is also a shareholder in many of HWR's business)," an email between Treasury officials reads.
"There are also questions around where his loyalties would lie in many different types of decisions that would overlap between HWR and KiwiRail (HWR is a large family business and Scott is part of that family)."
O'Donnell's appointment was announced by Minister for Rail Winston Peters in July 2025.
Some of the 10 companies he is involved with supply services to KiwiRail, and the conflicts required Treasury to put a management plan in place.
The seven measures in the plan include eliminating access to sensitive information, the vetting of board agendas and papers before they are sent to O'Donnell, the requirement for O'Donnell to declare if any agenda items pose a conflict before board meetings, and recusal from discussions.
In an emailed response, Peters said the donation from Dyne's Transport played no part in O'Donnell's appointment to the board and that he was aware of the extent of the conflicts of interest.
Despite the restrictions on what O'Donnell could be involved in, Peters said O'Donnell would be effective in his role.
"As Mr O'Donnell has direct experience in the freight sector among other things, a conflict-of-interest management plan has been developed and will be followed while he is a director of KiwiRail," he said.
Peters said Treasury did not advise against the appointment of O'Donnell.
When O'Donnell's appointment to the board was announced, Peters said his business interests were south of Oamaru and he would recuse himself from activities in that area. The announcement also noted Dyne's Transport had received a government loan for a rail siding in a new rail and freight hub.
Political scientist and Integrity Institute director Bryce Edwards said Treasury had done the right thing by putting a conflict of interest management plan in place, but described the situation as "Mickey Mouse".
"It's incredible. There are lots of logistical experts that are well-qualified to be appointed to the KiwiRail board. It's bizarre that they've gone with one that is also a competitor to KiwiRail."
Edwards said while O'Donnell may be qualified for the role, he believed the conflicts of interest made his involvement "ludicrous". It could cause problems for the chair of the board and slow down decision-making, he said.
The situation highlighted weaknesses in New Zealand's rules about political donors and appointments, Edwards said.
He suggested a cooling-off period be implemented between donations and consideration for roles on boards.
"That would give the public more confidence in these board appointments."
O'Donnell did not respond to RNZ's questions about his appointment or why Dynes Transport donated to NZ First in 2024.
He also did not explain why he originally supplied the Treasury with a list of only four companies where a conflict of interest might exist, in his initial declaration of conflicts.
The OIA documents showed Sue Tindal checked publicly available information in the Companies Office register and hand-drew what she described as an "interests diagram", which included 11 companies.
"It includes those entities disclosed to TSY [Treasury] plus those from Companies Office records where media, lobby groups etc could perceive there to be a conflict based on the entity name," she said, when asking Treasury officials to turn her drawing into a proper diagram.
The final conflict of interest management plan includes the10 companies outlined below.
The mitigations for these companies outlined in the plan include:
- Where appropriate, limiting or eliminating access to sensitive, confidential or restricted information on issues or work relating to KiwiRail, including rail network options or Cook Strait ferries.
- Additional scrutiny of board agenda and papers prior to sending to Scott O'Donnell.
- At the beginning of every Board meeting, or prior as necessary, Scott O'Donnell would be required to declare if any item on the agenda could create a conflict for which he feels recusal is necessary. Such instances would need to be documented.
- Where appropriate recusal from any meeting or part meeting/agenda item with the Board or Ministers on these issues where confidential information giving rise to the conflicts discussed, (noting that this may impact on quorum arrangements)
- At the Board's discretion Scott O'Donnell would be recused or refrain from participating in, any discussions and decisions, where a personal interest is determined.
- The Board reserves the right to invite Scott O'Donnell to recuse himself if the Board feels it is inappropriate to include him in discussions and decisions.
- Advising KiwiRail, the Minister for SOEs of these actions
O'Donnell's term on the KiwiRail board started on 1 September and finishes on 28 August 2028.
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