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Inquiry reveals mining regulator captured by industry

Thompson and Clark Inquiry reveals mining regulator captured by industry

The Government agency charged with regulating mining under the Crown Minerals Act has been captured by industry, the State Services Commission (SSC) inquiry into private spies Thompson and Clark revealed today.

According to the Inquiry into the use of external security consultants by Government agencies released today by the SSC, New Zealand Petroleum and Minerals (NZPAM) lacked the necessary objectivity and professional distance for a public agency.

“One of the biggest threats to nature in New Zealand is Government agencies not doing their jobs. This inquiry reveals that NZPAM appears to have gone rogue and put private interests ahead of sound public policy and the Civil Service Code of Conduct,” says Forest & Bird CE Kevin Hague.

“MBIE’s mining agency was captured by the minerals industry and adopted an ideological framework provided by Thompson and Clark that categorised environmental advocates as the enemy. It then invited private spies paid for by private oil and gas interests to help attack its environmental stakeholders.”

“Forest & Bird understands that NZPAM opposes the Prime Minister’s proposed ban on new mines on conservation land. What this inquiry shows is that the Government cannot trust NZPAM to provide objective advice or rely on it to put the Government’s programme ahead of special mining interests."

“MBIE needs a thorough overhaul and NZPAM needs to go. An agency that is so in bed with the private sector that it uses private spies paid for by industry to attack its stakeholders has lost its social licence to operate,” says Mr Hague.

“We will be seeking explanations from MBIE early next year."

Key findings about NZPAM from the Inquiry include:
• Interactions between MBIE (specifically New Zealand Petroleum and Minerals – NZPAM) and Thompson and Clark lacked the necessary objectivity and professional distance (pg 10).

• MBIE’s leadership of ‘Operation Exploration’, a key interagency governance mechanism, did not sufficiently ensure that Thompson and Clark, who were acting on behalf of the oil and gas industry, were kept at an appropriate arm’s length from the operational and planning processes of the government’s enforcement of the Crown Minerals Act 1991 (pg 10).

• MBIE uncritically adopted the construct of ‘issue motivated groups’ to guide the design of its enforcement function, and this was problematic (pg 10-11).

• This mechanism enabled Thompson and Clark to embed itself as a crucial participant within the regulatory and enforcement function, despite the fact they represented private economic interests (pg 11).

• Some interactions between MBIE staff and Thompson and Clark further indicated a lack of appropriate professional distance (pg 11).

• Overall the Inquiry found that MBIE’s conduct, considered as a whole, breached the Code of Conduct by failing to maintain the level of objectivity and impartiality that the Code requires. The close nature of this relationship can be compared to the limited evidence of any relationship between MBIE (including NZP&M) and environmental and other groups opposed to petroleum and minerals exploration over the same period… It is with the benefit of hindsight that a failure to establish and maintain a relationship with diverse sector interests has been a misjudgement on MBIE’s part (pg 66).

• The enforcement approach enabled Thompson and Clark to embed itself as a crucial participant within the regulatory and enforcement function, despite the fact they represented private economic interests. The Inquiry found this to be poor regulatory practice. The closeness of this relationship was in contrast to the absence of a relationship with interests that opposed petroleum and minerals exploration. This had the further effect of fuelling a perception of bias (pg 67-68).

• The Inquiry was required to look at the cumulative effect of the relationship, the actions that were taken, and the role MBIE as an organisation had to play in that dynamic. Overall the Inquiry found that MBIE’s conduct considered as a whole breached the Code of Conduct, by failing to maintain the level of objectivity and impartiality that the Code requires (pg 68).

• Receiving information, for example in the form of a regular newsletter, that aggregates the views of minor groups within a protest movement with more extreme elements (often lone individuals) can further perpetuate an ‘us and them’ mentality that is unhelpful to state servants as it can lead to an overstatement of risk. The State Services should usually consider constructive relationships with the non-governmental sector, including NGO activists who oppose government policy, to be part of their role as neutral state servants (pg 70).

• Government agencies should not use the concept of ‘issue motivated groups’ uncritically to determine their relationship with non-governmental organisations and groups (pg 70).

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