6 Jun 2019

Conflict of interest claim a conflict of interest - VINZ

10:37 am on 6 June 2019

Vehicle Inspection New Zealand is accusing a New Zealand Transport Agency board member of a conflict of interest in his pursuit of a policy change involving conflicts of interest.

Wof, Warrent of Fitness generic

Wof, Warrent of Fitness generic Photo: 123RF

The proposed changes would prevent a company from certifying a vehicle, if it had an interest in that vehicle.

NZTA director Mark Darrow and the Agency's board want conflict of interest policy beefed up, after VINZ was purchased by a Japanese company that also imports and sells cars here.

The company didn't declare the conflict of interest immediately, but there is no evidence of any other wrongdoing.

NZTA officials told the board they could not find any sound basis for the proposed policy changes, because perceived conflict of interest was already managed appropriately.

The board pushed ahead with asking NZTA management to implement a new approach to the policy.

VINZ, which along with car importer Nichibo and car lender Auto Finance Direct, is owned by the Japanese company Optimus, would not be able to certify vehicles imported by its parent company.

VINZ chief executive Gordon Shaw said without evidence of wrongdoing, there is no sound basis for policy change.

"Our point has been that there is no evidence, there's no reason for concern," Mr Shaw said.

"The Agency has undertaken a number of covert operations, one which was called Operation Dockside where they covertly followed vehicles through the entry certification process and reported to the NZTA board during 2018 that there was no evidence that VINZ or a VINZ related inspection was putting at risk safety."

Emails obtained under the Official Information Act show NZTA staff cautioned against a policy change.

In one instance, a senior manager laid out the implications of a legislative change.

"The entire system is build on a premise of identifying and managing conflicts of interest, not preventing them in the first place," the email reads.

"The only way one could completely prevent all financial interests would be to put all existing vehicle certifiers out of business and directly employ, inside government, all vehicle certifiers."

Mr Shaw said the board has acted against advice in attempting to change the policy.

"Counter to official's advice which the board have been ignoring, they've been listening to the industry drums beating and other parties with vested interests that are targeting our business around the perceived conflict."

Mr Shaw said he thinks there is a clear conflict of interest within the NZTA board, specifically with Mark Darrow.

"To find out that we were being targeted, especially where there was no supporting evidence for that targeting," Mr Shaw said.

"And then to find out that, at an Agency level, their board was ignoring advice from officials and essentially taking their own pathway.

"And then to find one of the directors, who seems to be conflicted himself around his auto industry interests, was astounding to us."

Mr Darrow said he has always disclosed his interests during his time as an NZTA board member.

Mr Darrow was formely a director with Motor Trade Association and Vehicle Testing New Zealand, which is one of the main rivals of VINZ.

In an email, Mr Darrow said he is acutely aware of the obligations of his role.

"I resigned my directorship of VTNZ as a condition of joining the NZTA Board in 2017, and my intention to remain on the Board of the MTA at that time was noted," Mr Darrow said.

"I resigned my directorship of MTA in 2018, based on my self-assessment of potential conflicts in light of the Transport Agency's increased regulatory activity.

"Deliberations by the Board on industry conflicts and regulatory decisions took place after my resignations, so there was not a conflict position."

Mr Darrow said he continues to fully disclose all interests, including historic ones.

NZTA interim chair Nick Rogers supports Mr Darrow's position.

"The NZTA Board is satisfied that Mr Darrow has declared all of his interests appropriately at all times, and that he took appropriate action to avoid any actual or perceived conflicts, including resigning his directorship of the MTA in 2018.

"The Transport Agency's operational policies regarding the management of potential industry conflicts of interest were identified by the NZ Transport Agency board as an area of concern in 2018.

"The Board unanimously agreed that the policies needed to change, and tasked the Transport Agency management team with implementing a new approach.

"The Transport Agency has sought feedback on the proposed amendments to its policy for managing potential conflicts of interest of used vehicle entry certification inspectors and organisations."

The board is expected to make a decision on the change of policy at a meeting in July.