SSC briefing on employment decision by Environment Ministry

State Services Minister Annette King says she has received information in a briefing from the State Services Commission on issues surrounding an employment decision at the Ministry for the Environment.

"I have informed Acting State Services Commissioner Iain Rennie that I am publicly releasing the briefing, as I said I would yesterday, because the issues covered in the briefing are matters of public interest.

"As State Services Minister, it is not appropriate for me to comment on the briefing, which covers an employment matter, but I have asked the Acting Commissioner to respond to media inquiries."

NB: Briefing continues below.

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State Services Commission Report

Briefing on Ministry for the Environment Employment Issues

To: Hon Annette King, Minister of State Services

Author: Iain Rennie,Deputy State Services Commissioner

Date: 20th July 2007

1 There has been media and public interest in the circumstances surrounding the recent departure from the Ministry for the Environment of Madeleine Setchell who had been appointed as Communications Manager. In view of this I am providing you with a briefing on this matter.

There are three issues that this briefing provides comment on:

• Whether decisions around Madeleine Setchell's employment were properly made

• The wider principles applying to perceptions of potential conflicts of interest

• The processes used by the Ministry for the Environment to identify potential conflicts of interest.

Decisions on Ms Setchell's employment

2 Madeleine Setchell applied for a senior position with the Ministry for the Environment and, I understand, made a disclosure of her personal connections. The Ministry for the Environment at first did not realize the significance of Ms Setchell's potential conflict of interest and the chief executive was certainly not aware of any potential conflict of interest at the time of her appointment to the position.

3 The possibility of an issue was brought to the attention of the Chief Executive, Mr Hugh Logan, by way of a phone call from the office of the Minister for the Environment after Ms Setchell had started work at the Ministry. This phone call enquired as to whether Ms Setchell's partner was a senior member of the Leader of the Opposition's staff. The staff member from the Minister's office indicated that it would be helpful to know whether this was true but also stressed that it was entirely the chief executive's responsibility to make decisions on the employment of staff.

4 Once the chief executive clarified the position that Ms Setchell's partner held he considered that there was the potential for a conflict of interest that required management. At that point he approached the State Services Commissioner for advice. Around the same time the Ministry informed the Minister's office about the exact nature of the relationship and noted that the Chief Executive was managing the situation.

5 The Commissioner's advice was based on two principles:

• That public servants should be considered on their merits, and their political loyalties should not normally be questioned.

• That senior public servants have an obligation to maintain loyal service to the government of the day - including, sometimes, discreet support on politically sensitive matters - without compromising their ability to serve future governments.

6 The Commissioner advised Mr Logan to manage any perceived conflict of interest, and encouraged him to make a decision in the best interests of his department and of a politically neutral public service, and his obligations as a good employer, consistent with these principles.

7 My understanding is that Mr Logan informed the Minister of the issue. However, Mr Logan is very clear that the Minister stressed that staff issues were the responsibility of the chief executive alone.

8 Mr Logan is clear that he made the decision independently and that the Minister was not involved in that decision. This is consistent with section 33 of the State Sector Act 1988 which stipulates that a chief executive of a Department must act independently in matters relating to decisions on individual employees. That is, there is no Ministerial responsibility for such decisions.

9 It is the chief executive's job to work with any employee around issues of conflict or perceived conflict of interest. It is my understanding that Hugh Logan and Madeleine Setchell did explore options which would have involved the offer to her of an alternative position. That is, Ms Setchell was not dismissed from the Ministry for the Environment. Ultimately, Ms Setchell declined to accept the alternative offered by Mr Logan and an agreement was reached for her to leave the Ministry.

Matters of principle

10 Given the extent of media comment the State Services Commissioner, Mark Prebble, decided to comment publicly on the principles involved. This piece has been published in the Dominion Post newspaper today.

11 Chief executives and senior managers always have to consider all individuals working in sensitive roles. Sustainability is one of this Government's defining policy (and political) themes and it is not surprising that the managers concerned saw sensitivities around roles in this area that involved close work with Ministers.

12 Whenever a chief executive considers that an employee has a potential conflict in a particular task they are obliged to work with that employee to arrive at an appropriate strategy to manage the conflict. Depending on the terms of the employment agreement, the chief executive may ask that person to take up an alternative role.

13 Though these issues hardly ever emerge as matters of public comment they are not rare. Senior managers are always asked to manage these conflicts and they require sensitivity and good judgement to successfully navigate.

14 It has been pointed out by the State Services Commissioner that his own career is an example. His brother has been active in politics throughout Mark Prebble's time as a public servant. The lesson learned from this experience is not that perceived personal conflicts should be ignored in our small society but rather should, and can, be managed with care and flexibility.

15 It would be wrong to conclude that that anyone with political family connections is unwelcome in the public service.

16 In maintaining a politically neutral public service we continue to expect that chief executives protect both their employees and their departments from situations that might expose them to conflicts of interest, perceived or actual.

Processes used by the Ministry for the Environment to identify potential for conflicts of interest

17 Mr Logan believes that he should have been made aware of the potential for a conflict of interest prior to Ms Setchell's appointment. This case has in his view demonstrated that the Ministry for the Environment should have a more formal registration of actual or potential conflicts of interest for senior staff both existing and those in the recruitment process. I concur with Mr Logan's judgement and Mr Logan is in the process of making necessary changes.

Iain Rennie
Deputy State Services Commissioner

ENDS

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