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Minister ignores plea for financial expertise

Belinda Vernon National Transport Spokesperson

Sunday 13 May 2001

Minister ignores plea for financial expertise

The consultation process associated with the appointment of Dave Morgan as New Zealand's director on the board of shipping company Pacific Forum Line has been exposed as a sham, National's Transport spokesperson, Belinda Vernon said today.

"Documents obtained by National under the Official Information Act show the Minister completely disregarded the skills needed by the Pacific Forum Line (PFL) board.

"The Minister consulted Board Chairman Dan Tufui, and was told that the Board needed someone with 'a strong financial background' and with the capability to do 'strict critical financial assessment'. The Minister ignored that advice together with Mr Tufui's comments that '[the Board already] has representatives with good seagoing background and experience and knowledgeable of union affairs...'.

"The Minister also ignored concerns raised by the Minister of Foreign Affairs and Trade, Phil Goff, about whether Mr Morgan had sufficient commercial knowledge and experience.

"Instead the Minister appointed a person whose nominator (Ross Wilson, President of the CTU) said in June last year that PFL could look forward to 'continued union protest action' because of its lack of co-operation with the trade union ban on trade to Fiji.

"Mr Morgan is supported by an organisation that tried to cripple PFL. How can the other Board members have confidence he will act in the best interests of the company?

"There are obvious conflicts of interest between the PFL and Mr Morgan. Yet, papers covering off the conflicts of interest issue give no confidence that these were dealt with adequately.

"At least 3 out of 5 of the roles required of Mr Morgan on the Board create a potential conflict of interest. None of these was addressed in detail in the Minister's advice to his Cabinet colleagues. Instead he blandly advised that 'appropriate enquiries have been carried out and no conflict of interest that could reasonably be identified has been identified'. No evidence of clearing or even being aware of the potential conflicts was presented.

"The Minister has certainly not acted in the 'good faith' manner his government advocates for everyone else.

"The papers also show that the CV supplied to support Mr Morgan's nomination was 'doctored up' to suit requirements. The accompanying email said of the CV: 'I found it in the system and have doctored up to suit your requirements'.

"It is also clear from the documents that Mr Morgan thought he was seeking an appointment to the Maritime Safety Authority. Or is he in the running for that appointment, due to come into effect on 1 July, as well?

"This is blatant jobs for the boys without any consideration for the skills or needs of the organisation involved.

"New Zealand had a responsibility to supply a director with the skills needed by the Board, not someone whose backers advocate continued protest action against the company.

"The Government has let down New Zealand and the other Pacific Island shareholding countries of the PFL," Belinda Vernon said.



Background Note:

The Pacific Forum Line was established in 1977 to provide shipping services for the development of the South Pacific region. The New Zealand government is a shareholder in the PFL along with eleven other South Pacific nations.

The New Zealand government appoints one of the seven directors to the Board of the PFL. In December 1994 Price Waterhouse, in its report to the South Pacific Forum's Regional Shipping Council, found that the ways in which the directors had been individually appointed had resulted in an imbalance of skills and experience on the board. This was one of several factors contributing to a series of losses that the PFL had incurred for several years.

At a meeting to consider this report in July 1995, South Pacific Forum Ministers agreed that in making appointments shareholders should consult with the Board Chairman about the range of skills required.


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