Proposed Improvements to the Local Government Act (2002)
Submission to the Ministry of Internal Affairs
by the Rotorua District Residents and Ratepayers Association
Reynold Macpherson,[1] RDRR Chairman, 9 December 2024
Submitted to Alicia Harris Alicia.Harris@dia.govt.nz, NZ Ratepayers and Residents ratepayersandresidents@gmail.com , Kate Barnes Kate.Barnes@dia.govt.nz, Lisa Mackay Lisa.Mackay2@dia.govt.nz Rowan Burns Rowan.Burns@dia.govt.nz, Kirsty Austin Kirsty.Austin@dia.govt.nz
Purpose
This paper is in response to the invitation by the Ministry of Internal Affairs (MIA) to discuss issues around conduct, transparency, and free speech in local government on 10 December 2024.
This discussion may include reviewing provisions in the Local Government Act 2002 (LGA 2002)[2] dealing with governance requirements (e.g. sections 39 and 40) and how councils and elected members are meant to conduct themselves (Schedule 7, Part 1), as well as options to clarify that elected members are entitled to the information necessary to carry out their roles.
Methods
The invitation to contribute advice was received via the NZ Residents and Ratepayers Association Friday 29 November. Feedback was immediately invited from all on the RDRR email list (866) and all followers of the RDRR Facebook page (3,565).[3] The issues they raised about the Rotorua Lakes Council (RLC) were collated, anonymised and shared with those on the Executive and who had contributed feedback, before being submitted to MIA officials on 9 December, prior to a Teams Meeting on 10 December.
To assist, a preliminary literature search of New Zealand sources focussed on accountability, transparency and governance in local government. Tentative conclusions were then drawn about potential improvements to the LGA 2002 (the Act). This advice must, therefore, be regarded as provisional and indicative and that further systematic policy research appears to be warranted.
Background
The Act establishes frameworks for accountability, transparency, and governance, emphasizing the responsibilities of councils and elected members. They are summarised below with references as footnotes and with feedback from RDRR respondents summarised and anonymised in compact prose.
Most notably, the language of the Act obscures the responsibilities of council officials, which constitutes a major limitation that needs to be corrected. References made to councils’ obligations are vague and will need to be unbundled to distinguish between the responsibilities of councils (defined as local government agencies) and the responsibilities of officials (defined as public servants employed by councils).
Finally, Tania Tapsell was elected mayor of Rotorua on October 8, 2022, succeeding the Hon (Mrs) Steve Chadwick who was elected in October 2013. Andrew Moraes was appointed as the Chief Executive (CE) of RLC on March 1, 2023, succeeding Geoff Williams. Many of the RDRR’s concerns about the quality of the LGA 2002 predate the 2022 local elections because it failed to prevent the abuses that ratepayers suffered from under the Chadwick-Williams regime and members would not wish to see replicated elsewhere.
Forms of Accountability and Transparency Required by the Act
1. Section 39: Governance Principles
Councils are required by the Act to operate in ways that:
· Ensure effective, open, and transparent processes.
· Hold themselves accountable to their communities.
· Foster effective and democratic decision-making that reflects the diverse interests of their communities.
· Clearly define and separate governance (policymaking) from management (policy implementation).
Feedback: The Act has not prevented processes and operations that contradict the purposes and spirit of the legislation and must be redrafted. The RLC was found by the Ombudsman[4] to have a history of public-excluded decision making to avoid openness, transparency and public accountability. It also has a history of favouring the interests of mana whenua who are a minority. According to the 2018 New Zealand Census,[5] approximately 42 percent of the population in the Rotorua District identified as Māori, though this figure includes those below voting age, impacting electoral representation. About 28 percent of eligible voters in the Rotorua electorate chose to be on the Māori roll for the October 2022 local elections,[6] with around 22 percent on the Māori roll for the 2023 general election.[7] Nevertheless, in 2022, the RLC sought to displace democratic majoritarianism with minoritarianism in the form of co-governance with local Māori. During the Representation Review, the RLC muddled policy making with policy implementation and tried to install 50/50 co-governance using two different strategies. The LGA 2002 proved inadequate as a defence of democracy. Eventually the Local Government Commission (LGC)[8] ruled out 50/50 co-governance proposed by the RLC in favour of equal suffrage by installing proportionate numbers of seats in general, Māori and Rural wards. The Auditor-General ruled against a Local Bill proposing 50/50 co-governance because it would have discriminated against non-Māori.[9] This sequence of events demonstrates that the LGA 2002 provided an inadequate defence against such attempts to corrupt democratic representation and decision making. Rotorua’s citizens had to rely on interventions by central government.
Feedback: The LGA 2002 lacks mandatory public accountability mechanisms, appeal mechanisms for citizens and penalties for councils that violate effectiveness and democratic governance principles in law, other that the graduated interventions available to the Minister of Local Government and the powers of the LGC and the Auditor-General.
Feedback: Internationally, codes of conduct for local government officials emphasize ethical behaviour, accountability, and political neutrality. Legislation commonly requires local authorities to adopt a code of conduct for officials and elected members. For example, the Localism Act 2011 in the UK mandates local councils to develop codes of conduct for officials and elected members that reflect the Nolan Principles of Public Life, which include selflessness, integrity, objectivity, accountability, openness, honesty, and leadership.[10] Political neutrality is also a tradition in New Zealand public service as reiterated by the Prime Minister’s Office:
The principle of political neutrality of the public service is long-standing but the Public Service Act 2020 enshrined it as a core principle, and following that last year a Code of Conduct for Crown Entity Board members set out this principle in more detail.[11]
What is very different is that New Zealand local government officials are not specifically required by the LGA to be politically neutral. In the RDRR’s view this is a significant anomaly that helps explain many of the violations of the principles of effective and democratic decision making by council as required by the LGA.
Several conclusions can be drawn about principles of local governance required by the LGA 2002, in the light of feedback provided by RDRR:
1.1 Need for Legislation to require the Political Neutrality of Officials
Mandatory requirements with sanctions are needed in the LGA to install and sustain an administrative culture of political neutrality for council CEs and officials. They are essential to differentiate between the policy making responsibilities of mayors and elected members and the policy advisory and implementation roles of local government officials. These requirements would need to cohere with the terms of the Public Service Act to ensure ethical consistency between local and central levels of public service and thereby enhance functional inter-operability.
1.2 Need for Enhanced Enforcement Mechanisms
The absence of mandatory public accountability mechanisms, robust appeal mechanisms and penalties for council officials and elected members that fail to uphold democratic governance principles highlights a significant gap in the LGA 2002. Revised legislation is needed to guarantee public accountability and continuous organisational development. Without practical mechanisms and enforceable consequences, councils may continue to engage in practices that contradict the principles outlined in Section 39.
1.3 Challenges in Balancing Inclusivity and Equality
The RLC's history since 2013 of favouring mana whenua interests, including attempts to install 50/50 co-governance, reflects tensions between honouring the Treaty of Waitangi and maintaining equal suffrage principles. The Local Government Commission and Auditor-General's interventions demonstrate the complexities of balancing these priorities within a democratic framework, again indicating a serious limitation of LGA 2002.
1.4 Structural Weakness in Governance Clarity
Instances such as muddled policymaking and implementation processes during the 2022 Representation Review, point to challenges in adhering to the LGA's requirements to separate governance from management without a functional model of the policymaking and policy implementation cycle. This lack of clarity and ambiguity can undermine both transparency and effective and democratic decision-making.
1.5 Limited Transparency Practices
The Ombudsman’s finding of unacceptable public-excluded decision-making by the RLC suggests a need for stricter oversight mechanisms in the Act to prevent councils from circumventing transparency obligations. Such practices erode public trust and public accountability.
1.6 Call for Legislative Reform
The LGA 2002 could benefit from amendments introducing a standardized policy process (for annual and long-term planning and budgeting), citizen appeal rights, clearer standards for public-excluded decisions, and penalties for non-compliance. Such reforms would strengthen the law's ability to uphold democratic governance principles.
1.7 Importance of Equal Representation
The rejection of the RLC’s 50/50 co-governance Local Bill emphasizes the importance of upholding equal representation principles within local governance. While inclusivity is crucial, proposals must align with broader democratic values to maintain legitimacy.
1.8 Tension Between Local Initiatives and National Oversight
The interventions by national authorities such as the Auditor-General and the LGC highlight the need for a consistent framework for addressing governance challenges, especially when local initiatives conflict with national principles of equity and democratic governance.
1.9 Recommendations for Action by the MIA re Governance Principles
1.9.1 Strengthen the LGA Framework: Introduce penalties for non-compliance with governance principles, most especially political neutrality, and establish appeal rights for citizens.
1.9.2 Improve Oversight Practices: Mandate regular audits and reviews of council decision-making processes to ensure alignment with Section 39 principles.
1.9.3 Foster Public Engagement: Mandatory mechanisms for public participation in councils’ policy cycles to rebuild trust and transparency.
1.9.4 Develop Clearer Guidelines: Provide an explicit model of the policy cycle to separate governance (policy making) and management (policy implementation) and thereby avoid overlaps in responsibilities and confusion between the roles of elected members and council officials.
1.9.5 Balance Treaty Obligations with Democratic Principles: Engage in national discussions to develop frameworks that balance the Treaty of Waitangi commitments with equal suffrage principles.
These conclusions emphasize the need for stronger legal, procedural, and participatory mechanisms to enhance the accountability, transparency and political neutrality of officials in the local governance of New Zealand.
2. Section 40: Governance Statements
Councils in New Zealand are required by the Act to operate in specific ways:
· Councils must prepare and make publicly available a governance statement after each triennial election.
· This statement is to include details about decision-making processes, policies for liaising with the public, and ways that citizens can engage with council processes.
· The governance statement must also clarify how council meetings are conducted and the role of committees.
Feedback: Such a statement may have been issued or filed but nobody recalls the RLC ever sharing such information. There are no known mechanisms available to elected members to insist on authentic consultations and authoritative endorsement of new policies, to ensure enforcement and to provide for appeal. Instead, after local elections, the incoming mayor commonly issues a statement clarifying committee structures and memberships, and the allocation of leadership roles and salaries for elected members. All in the gift of the mayor and mindful of advice from the CE. The conduct of meetings reflects past practices, the determinations of the mayor and the advice of a senior official supposedly expert in meeting procedures, although who commonly justifies decisions on process and content as predetermined by the mayor’s power bloc. Hence, the RDRR advises that the Act needs to provide mandatory directions regarding the structural design of council committees, criteria and processes for public consultation, inclusive leadership appointment processes and criteria to reflect the expertise and experience of those elected, and appropriate meeting procedures.
Feedback: In addition to formal meetings involving elected members, the RLC also holds so-called ‘protocol meetings’ with many tribal groups but refuses to declare a schedule of meetings or to provide public access to agendas and minutes on the grounds that they are not formal meetings but merely consultations with stakeholders. However, Justin Adams asked a question under the Local Government Official Information and Meetings Act 1987 (LGOIMA) to have an agenda and draft minutes of a previous meeting of the Ngāti Whakaue Gifted Reserves Protocols Committee made public. They showed that a meeting attended by the current Mayor (who whakapapas to Ngāti Whakaue), her Deputy Mayor and Cr Trevor Maxwell, was dominated by twice the number of Ngāti Whakaue representatives. Senior officials were held accountable for their actions, such as project management, by the Ngāti Whakaue representatives far more rigorously than is permitted to elected members at RLC meetings. With regard to the Council’s Future Development Strategy, the Pukeroa Oruawhata Trust’s CEO Mark Gibb, who was in attendance, indicated that he would be submitting concerns to the Protocols Committee about how some district plan rules were restricting the use of some trust sites for new businesses, and thereby risking the loss of retailing to other BOP sites. It was not clear if his submission on this matter would be exposed to public scrutiny by elected members during the long-term planning process, as all other proposals are, and thereby provide democratic oversight and public accountability. There have also been examples where grants have been sought and agreed at protocols meetings under the previous administration, outside of the normal budgeting and financial management processes. The LGA 2002 needs to rule out councils entering into such arrangements in the future that allocate privileges to selected stakeholder groups.
Feedback: Section 40 of the Act lacks robust mechanisms that would actively prevent corruption, nepotism, inappropriate power sharing through hidden forms of co-governance, or other inappropriate forms of local governance. Central government codes of conduct for government officials internationally focus on political impartiality, integrity, and maintaining public trust at local, state and federal level:
United States: The U.S. Standards of Ethical Conduct for Employees of the Executive Branch outline obligations such as preventing conflicts of interest, conserving federal property, and acting with integrity and impartiality.[12]
Australia: The Public Service Act 1999 establishes the Australian Public Service Code of Conduct, which includes ethical behaviour, transparency, impartiality, and responsiveness to government policies and the public.[13]
New Zealand: The Public Service Act 2020 mandates public servants serving national government to adhere to values like integrity, impartiality, accountability, and respect. The Code of Conduct developed by the Public Service Commission[14] emphasizes political neutrality, fairness, and public trust, but does not currently apply to local government officials.
Several conclusions can be drawn based on the governance statements required by the LGA 2002, as well as the feedback provided about the RLC’s practices and from international sources:
2.1 Adherence to Section 40 Requirements:
Councils in New Zealand are legislatively obligated to issue a governance statement following each triennial election, outlining decision-making processes, public engagement mechanisms, and committee structures. However, the RDRR feedback highlights that the RLC may not consistently fulfill this requirement. This raises concerns about compliance with statutory obligations and the transparency of council operations.
2.2 Transparency and Public Engagement:
Section 40 aims to promote openness and citizen participation. However, the RDRR feedback suggests that RLC's practices, such as ‘protocol meetings’ with tribal groups, lack transparency due to undisclosed schedules, restricted access to agendas and minutes, and decisions made outside standard budgeting and management processes. These practices may undermine public trust and the perception of equitable governance.
2.3 Concentration of Power:
The RDRR critique describes a significant concentration of decision-making power in the hands of the mayor, who determines committee structures, leadership roles, and significantly differentiated remuneration for elected members. This centralization may conflict with the principle of collective governance and reduce the effectiveness of council meetings in scrutinizing decisions to ensure that they respect the diversity of the community.
2.4 Issues of Accountability:
The RDRR asserts that tribal protocol meetings may provide greater accountability for senior officials than the RLC's own processes. If true, this highlights potential weaknesses in the council's decision-making and oversight mechanisms, which should ensure systematic scrutiny and accountability within its formal processes.
2.4 Potential Governance Risks:
Feedback from the RDRR suggests that Section 40 lacks specific mechanisms to prevent governance risks such as nepotism, corruption, and inappropriate power-sharing. For example, decisions about grants and stakeholder engagements conducted outside formal council processes create opportunities for perceived or actual conflicts of interest.
2.5 Alignment with International Standards:
International codes of conduct emphasize transparency, impartiality, and integrity as foundational principles of governance. While these principles are echoed in New Zealand's national governance framework, the reported practices at RLC suggest potential gaps with regard to political neutrality, and in enforcement and alignment with such standards. Strengthening mechanisms locally for compliance, accountability, and public scrutiny could enhance adherence to these values.
2.6 Recommendations for Action by MIA re Governance Statements
2.6.1 Enforce Compliance: Introduce stronger oversight to ensure councils meet Section 40 requirements, including mandatory public reporting, expert audits of governance statements and extending the Code of Conduct for officials developed by the Public Service Commission to local government officials to emphasize political neutrality, fairness, and public trust.
2.6.2 Enhance Transparency: Make all stakeholder meetings subject to formal council procedures, including published agendas, minutes, and financial bids.
2.6.3 Improve Accountability: Strengthen systems to scrutinize council decision-making and ensure equitable distribution of power among elected representatives.
2.6.4 Prevent Governance Risks: Introduce measures to address risks of corruption, nepotism, and hidden co-governance arrangements, such as mandatory conflict-of-interest declarations and independent oversight.
2.6.5 Align with International Standards: Embed principles of integrity, impartiality, and public trust in local government codes, mirroring successful aspect of frameworks from countries like the United States and Australia.
These conclusions highlight the need for a robust, transparent, and accountable governance framework that reflects both legislative requirements and public expectations national and internationally.
3. Schedule 7, Part 1: Conduct of Elected Members
Clause 15 specifies the code of conduct that councils must adopt to guide elected members' behaviour, focusing on:
· Respectful and professional interactions.
· Ethical decision-making and integrity.
· Clear protocols for resolving disputes or addressing misconduct among elected members.
Schedule 7, Part 1, outlines responsibilities for elected members, emphasizing:
3.1 Governance and Oversight: Elected members must focus on strategic oversight rather than interfering in day-to-day operational management.
Feedback: This is a common but pejorative statement related to elected members ‘interfering’ with policy implementation. The stress given to this issue appears to be intended to deflect attention from more common instances when officials manipulate policy making (to install their priorities in the LTPs to evade budgetary controls intended to limit the growth of debt and to advance co-governance[15]) and to resist rigorous evaluation (to avoid accountability for outcomes). The more fundamental problem is there is no model of the policy making and policy implementation cycle provided to clarify the differences between them and an appropriate distribution of responsibility for their functional components that also enables continuous organisational development.
3.2 Adherence to the Code of Conduct: Elected members must operate within the boundaries of the adopted code of conduct.
Feedback: The standardized code of conduct offered by Local Government New Zealand,[16] and adopted uncritically by most councils, is
o Obsolete, because it has not been reconciled with the Harmful Digital Communications Act 2015 which stresses problem solving and resolution related to social media posts instead of disciplinary procedures, prosecution and punishment emphasised in the LGNZ’s standardised code.
o Politically biased in favour of senior officials seeking to silence, marginalise, and/ or prosecute elected representatives with a view to their exclusion and vilification, instead of awaiting democratic decisions by the electorate.
o Yet to be reconciled with the Code of Conduct introduced for national government officials by the Public Service Commission in 2020.[17]
3.3 Fiduciary Duty: Elected members are expected to act in the best interests of their communities and to exercise reasonable care, diligence, and skill in decision-making.
Feedback: Since mayors’ powers were strengthened in 2012, the fiduciary duty of elected members of the RLC has been systematically undermined by mayors unilaterally determining committee structures, appointing elected members to chair/ deputy-chair/ co-chair committees, and allocating leadership responsibility payments in addition to standard salaries. These powers have been used to reinforce personal loyalty to the mayor, strongly encourage acquiescence to the ‘party line’ developed by the mayor’s power bloc (including senior officials),[18] strongly discourage independent thinking and lobbying on behalf of legitimate yet less powerful stakeholder groups, and have been enforced by the mayor firing elected members from leadership duties,[19] and by subjecting them to Code of Conduct complaints and penalties, and vilifying them prior to elections.[20] The Act provides no protection or appeal process when elected members are prevented from serving their fiduciary duty by mayoral authoritarianism.
3.4 Collaborative Governance: Elected members must foster constructive relationships with other council members, management, and the public.
Feedback: The definition of what counts as ‘collaborative governance’ in the RLC has long been the prerogative of the mayor’s power bloc. Collaborative governance arrangements are more properly defined as where public agencies engage directly with non-governmental stakeholders (such as community groups, private entities, and individuals) in a collective decision-making process. This approach emphasizes shared responsibility, mutual trust, and the pooling of resources to address complex public issues that no single entity can effectively resolve alone. Key characteristics include inclusivity in stakeholder participation, deliberative dialogue and consensus-building and joint accountability for outcomes. Collaborative governance is often applied in contexts like environmental management, urban planning, and public health initiatives, where diverse perspectives and cooperative efforts enhance problem-solving and policy development. The Act therefore needs to define collaborative governance with precision and add mandatory requirements for councils.
3.5 Codes of Conduct (COCs) could explicitly address the rights and responsibilities regarding information sharing, including provisions for addressing grievances when information is withheld.
Feedback: CoCs have been weaponized in the RLC for political purposes. Thirteen Code of Conduct complaints against the RDRR’s Chairman when serving as an elected member and were coordinated by RLC’s Mayor and CE in 2020 and 2021. He was subsequently banned from two subcommittees of council and publicly vilified.[21] There were no further code of conduct complaints after the Ombudsman strongly criticised the RLC’s avoidance of transparency in 2023, as cited above. Nevertheless, the Mayor and her CE refused to comply with the Harmful Digital Communications Act 2015[22] which promotes reconciliation instead of prosecution and punishment, even though the Audit and Risk Committee of the RLC recommended new policy to reconcile the two Acts.
Feedback: Nicki Preston’s LGOIMA[23] found that almost a third of the country’s 78 councils had had to deal with conduct complaints against elected members since October 2019 when new councils were elected. There were many reasons cited for the complaints, far too complex to generalise, but they alerted the public to the accelerating rate at which complaints had been found to breach the code and to the escalating costs to ratepayers. However, while the author was listed amongst those found guilty of a breach, and implicitly blamed for the associated and excessive legal costs incurred by the RLC, no attention was paid to the quality of natural justice involved or the undermining of democracy.
Feedback: Preston’s LGOIMA also revealed that at least half the complaints had been made either by chief executives or elected council colleagues, and when investigated, had found that no breach had been made, or if it had, it was not considered material, and no further action had been taken. A 50-percent prosecution failure rate should have suggested there was something inappropriate about the use of the Code of Conduct complaints process. Such a conclusion would have been a reasonable interpretation of what happened in Rotorua, if external sources are given credence. Democracy Action, an Auckland-based organization with national reach, cited democratic principles to call for a removal of Codes of Conduct, citing RLC as an extreme example of their abuse.[24] New Zealand’s Free Speech Union asked the Controller and Auditor-General to investigate a “disturbing trend in local government – the weaponization of codes of conduct for purposes which appear to be antidemocratic.” [25]
3.6 Recommendations for Action by MIA re Conduct of Elected Members
3.6.1 Clarify Roles and Responsibilities in Governance and Oversight
Develop and disseminate a model outlining the policymaking and policy implementation cycle to distinguish the responsibilities of elected members from officials, with appropriate conduct. Establish training programs for elected members and officials on strategic governance versus operational management to address misconceptions and improve collaborative decision-making.
3.6.2 Reform Codes of Conduct (COCs)
Update the standardized Code of Conduct provided by the LGNZ to align with the Harmful Digital Communications Act 2015 by emphasizing reconciliation, problem-solving, and non-punitive approaches. Introduce a Code of Conduct for Local Government Officials similar to the Public Service Commission's 2020 Code of Conduct, promoting political neutrality, accountability and integrity for officials.
3.6.3 Protect Fiduciary Duties of Elected Members
Revise the legislation to include safeguards for elected members' fiduciary responsibilities by providing appeals processes for members removed from leadership duties, protections against politically motivated Code of Conduct complaints, and mechanisms to address mayors’ unilateral power to allocate leadership roles and stipends.
3.6.4 Define and Mandate Collaborative Governance
Introduce a clear legislative definition of collaborative governance, emphasizing stakeholder inclusivity, mutual accountability, and deliberative decision-making processes. Require councils to establish formal mechanisms for stakeholder engagement, ensuring that diverse perspectives inform policy development.
3.6.5 Enhance Transparency in Information Sharing
Amend Codes of Conduct to include explicit provisions on the rights and responsibilities regarding access to information and grievance mechanisms for addressing disputes over withheld information.
3.6.6 Independent Oversight of Conduct Processes
Establish an independent national body to review and resolve Code of Conduct complaints to mitigate perceived or actual conflicts of interest at the local level. Set clear guidelines to ensure that Code of Conduct complaints follow principles of natural justice, are resolved impartially, and are cost-effective.
3.6.7 Review and Audit Code of Conduct Usage
Conduct a nationwide audit of Code of Conduct complaints to evaluate their effectiveness in addressing misconduct, identify patterns of misuse, particularly where complaints are politically motivated or fail to meet material breach thresholds, and publish findings to inform future reforms and enhance public confidence in local governance processes.
3.6.8 Promote Education and Public Awareness
Develop educational campaigns for the public and elected officials about the purpose and appropriate use of Codes of Conduct, the Harmful Digital Communications Act, and collaborative governance principles. Provide guidance on democratic rights and responsibilities to prevent the weaponization of Codes of Conduct.
By addressing these systemic issues, the MIA can foster an environment where local governance is more equitable, transparent, and accountable, promoting public trust and democratic integrity.
4. Access to Information by Elected Members
Elected members are entitled to the information they need to fulfill their governance responsibilities. The Act requires councils to ensure elected members can access timely, relevant, and accurate information to inform their decision-making.
Options to Clarify Access to Information
4.1 Strengthened Policies on Information Rights
Councils could adopt explicit policies outlining elected members' rights to access operational and governance information necessary for evaluation and decision-making.
These policies could clarify that denying or delaying access to information is contrary to governance principles in the LGA 2002.
Feedback: The RLC has yet to publicly clarify the role of formative evaluation in annual policy making and implementation processes that enable organisational development. It may be a priority for the new CE appointed March 1, 2023.
4.2 Formal Requests for Information
Councils could formalize processes for elected members to request information, including timelines for responses, escalation procedures for disputes, and guarantees of confidentiality when necessary.
Feedback: The RLC has significantly improved its responses to LGOIMA requests since late 2022.
4.3 Training for Elected Members
Training programs could emphasize elected members’ rights to access information under the LGA 2002, their responsibilities under the Official Information Act 1982, and their obligations to use information responsibly.
Feedback: This approach is unbalanced because it fails to clarify the rights of elected members to freedom of speech and association. It also needs to be balanced in the LGA 2002 with the obligations of local government officials to provide full and accurate answers to legitimate questions asked by stakeholders under LGOIMA, and to avoid releasing misinformation and disinformation intended to ‘manage the narrative’ on behalf of the mayor’s power bloc.
4.4 Independent Oversight Mechanisms
Establishing an independent Local Government Accountability Ombudsman or advisory body could ensure impartial resolution of disputes over information access.
Feedback: This proposed development is essential to the reconstruction of trust between RLC, and the residents and ratepayers represented by the RDRR, and between many other councils and their local constituencies across New Zealand.
4.5 Guidance from the Office of the Auditor-General (OAG)
The OAG could issue guidance on best practices for councils and elected members regarding access to information, ensuring consistency across local authorities.
Feedback: This proposed development is also essential to the reconstruction of trust between RLC and the residents and ratepayers represented by the RDRR, and between many other councils and their local constituencies across New Zealand.
4.6 Recommendations for Action by MIA re Access to Information by Elected Members
4.6.1 Develop and Enforce Explicit Policies on Information Access
Mandate that councils adopt formal policies clarifying elected members’ rights to timely, relevant, and accurate information for decision-making, in line with governance principles outlined in the LGA 2002. Require councils to explicitly define the role of formative evaluation in policymaking and implementation to enhance transparency and organizational development.
4.6.2 Strengthen Procedures for Information Requests
Establish standardized protocols for formal requests for information, including clear timelines for responses, defined escalation processes for disputes, confidentiality guarantees for sensitive requests when appropriate. Encourage councils to adopt systems to track and report on the responsiveness to information requests, ensuring accountability.
4.6.3 Balance Training Programs for Elected Members and Officials
Develop training programs for elected members that emphasize their rights to information under the LGA 2002, their responsibilities under the Official Information Act 1982 (OIA) and their rights to freedom of speech and association. Include modules for local government officials to ensure they provide complete, accurate answers to legitimate questions under LGOIMA and avoid releasing misinformation or disinformation to manipulate public narratives.
4.6.4 Establish Independent Oversight Mechanisms
Create an independent Local Government Accountability Ombudsman or an advisory body to mediate disputes over information access, ensuring impartiality and fostering trust between councils and their constituencies.
4.6.5 Enhance Guidance and Support from the Office of the Auditor-General (OAG)
Collaborate with the OAG to issue best-practice guidelines for councils on information access, ensuring consistency across local authorities, and transparent and fair practices that align with legislative requirements. Ensure these guidelines address the rights of both elected members and the public to receive accurate and complete information.
4.6.6 Monitor and Evaluate Council Practices on Information Access
Require councils to conduct annual audits of their information access processes, reporting publicly on their compliance with LGA 2002 and LGOIMA requirements. Develop performance benchmarks for councils to evaluate the timeliness, relevance, and accuracy of their responses to elected members' and public requests.
4.6.7 Reinforce Accountability for Misinformation and Disinformation
Incorporate explicit provisions in local governance legislation to hold officials accountable for disseminating misinformation or disinformation intended to manage narratives or marginalize dissenting voices.
4.6.8 Promote Trust-Building Initiatives
Encourage councils to engage with community groups and stakeholders, such as the RDRR, to rebuild trust through collaborative dialogue and transparent information-sharing practices.
By implementing these recommendations, the MIA can ensure equitable and effective access to information, improve governance standards, and restore trust in local government processes.
5. Options to Clarify Accountability Requirements
The LGA 2002 specifies the forms of public accountability required of councils as follows:
5.1 Community Engagement
· Councils must engage with communities in decision-making, particularly through consultation procedures outlined in Part 6 of the Act.
Feedback: The RLC has a history of insincere consultations[26] with iwi and senior officials converting a judicial direction to consult into fake entitlements for Māori to participate in council’s decision making. Other stakeholders have struggled to be heard. Part 6 of the Act is inadequate with regard to embedding community engagement and accountability mechanisms, along with an appropriate public service administrative culture of helpful neutrality and integrity.
5.2 Annual Reports
· Councils are required to publish annual reports to inform the public about financial and non-financial performance against long-term plans (LTPs) and annual plans.
Feedback: Council is compliant with these publishing requirements although sometimes without data-based evaluations against programme KPIs.
5.3 Triennial Agreements
· Councils are required to collaborate and work in consultation with other local authorities in their region.
Feedback: The RLC had a history of antagonism and adversarial legal relationships with the Bay of Plenty Regional Council during the previous administration, in RDRR’s view often wasting precious resources. The new Mayor elected in October 2022, and the new CE appointed early in 2023, could be improving matters in this area although it does not appear publicly to be a priority. The Act may need to be strengthened in this regard.
5.4 Treaty Obligations
· LGA 2002, s4 directs that “In order to recognise and respect the Crown’s responsibility to take appropriate account of the principles of the Treaty of Waitangi and to maintain and improve opportunities for Māori to contribute to local government decision-making processes, Parts 2 and 6 provide principles and requirements for local authorities that are intended to facilitate participation by Māori in local authority decision-making processes.”
Feedback: It is crucial that these references to preferential and automatic participation in decision making without being elected be deleted from the Act because they were taken to mean by a previous mayor, her power bloc and senior officials that Māori have a right to co-governance or to participate in council policy making and decision making. It caused intense public controversy when the Chadwick-led council in Rotorua attempted to install co-governance, until ruled out as contrary to equal suffrage by the Local Government Commission[27] and as potentially enabling discrimination against non-Māori by the Attorney General.[28]
5.5 Recommendations for Action by MIA to Clarify Accountability Requirements
5.5.1 Enhance Community Engagement Mechanisms
Revise Part 6 of the LGA 2002 to include explicit requirements for transparent and inclusive consultation processes with all community stakeholders, not privileging one group over others, and mechanisms to ensure consultations are genuine, neutral, and integrity-based, fostering trust and respect across all stakeholder groups. Develop clear definitions and standards for meaningful engagement that focus on evidence-based decision-making and unbiased administrative culture. Develop guidelines for embedding a public service culture of neutrality and integrity that upholds equal treatment and prevents misuse of consultation directives.
5.5.2 Improve Annual Reporting Standards
Amend the Act to require councils to include data-driven evaluations against KPIs for both financial and non-financial outcomes in annual reports. Establish external auditing processes to verify the accuracy and completeness of reporting. Promote greater accessibility by mandating the publication of reports in plain language formats, ensuring transparency for all community members.
5.5.3 Strengthen Triennial Agreements
Require councils to formalize and operationalize collaborative frameworks with regional local authorities to promote shared resource management and coordinated strategic planning, and mechanisms for dispute resolution to minimize resource wastage and reduce adversarial relationships. Encourage the MIA to oversee and evaluate triennial agreements, ensuring compliance and fostering best practices in regional collaboration.
5.5.4 Clarify Treaty Obligations
Amend Section 4 of the LGA 2002 to clearly define the extent and limits of Māori participation in local government decision-making to avoid misinterpretation as co-governance rights. Emphasize that participation opportunities must align with principles of equal suffrage and democratic representation. Develop protocols that ensure Māori contributions are valued while preserving democratic processes and preventing potential discrimination.
5.5.5 Embed Accountability Mechanisms in the LGA 2002
Introduce provisions that hold councils accountable for compliance with community engagement, reporting, and Treaty obligations by establishing an independent review body to assess councils’ adherence to accountability standards and mandating regular public reporting on engagement quality and responses to community feedback.
5.5.6 Establish Public Oversight Mechanisms
Strengthen public oversight by creating a Local Government Accountability Ombudsman tasked with monitoring councils’ compliance with LGA 2002 provisions and addressing grievances from stakeholders regarding inadequate or biased accountability practices.
5.5.7 Training for Local Government Officials and Elected Members
Develop training programs to ensure officials and elected members understand the distinctions between governance and operational responsibilities and uphold principles of neutrality, integrity, and inclusivity in all decision-making processes.
5.5.8 Rebuild Public Trust Through Enhanced Transparency
Require councils to implement feedback loops in consultation processes, ensuring stakeholders understand how their input influenced decisions. Encourage councils to publish detailed response plans for controversial or high-stakes policy proposals, demonstrating accountability and responsiveness.
By implementing these recommendations, the MIA can strengthen accountability requirements, ensure equitable participation, and promote transparent governance across New Zealand’s local authorities.
6. Financial Management
The LGA 2002 requires councils to maintain prudent financial management.
6.1 Exception to Councils Balancing their Budgets
· Councils are required by the Act to balance their budgets unless justified by long-term plans and community engagement. Balancing a budget refers to the practice of ensuring that a council’s expenses do not exceed its income or revenue.
Feedback: RDRR has campaigned for a decade against this exception because it has permitted elected members and officials to use imprudent practices, such as debt-based planning without a debt reduction strategy. For example, the RLC's Long-Term Plan for 2021-2031 forecasted debt to exceed $400 million. Concerns have been raised by stakeholders, such as the RDRR, regarding the adequacy of financial strategies and the potential risks associated with these debt levels.[29]
Feedback: This is a problem with many district councils. They apparently don't care about being prudent or about the dramatically escalating burden on ratepayers. They appear to be living in some sort of parallel world where budgets don’t have to be balanced and where debts do not have to paid off. Only a fundamental change to the Act will change this mindset about financial management. Councils’ financial management policies need to be restructured by the LGA to ensure that stakeholders regaining control over community financial affairs, perhaps amalgamated at regional levels to re-establish an administrative culture of financial prudence.
6.2 Auditing and Oversight
· The LGA 2002 requires that local authority performance is subject to audit by the Auditor-General, ensuring an external check on financial and operational performance.
Feedback: In the RDRR’s opinion, these checks have proved inadequate. In December 2018, the Office of the Auditor-General reported[30] that it had gained “the full cooperation of Council” to conduct a preliminary investigation into Mudtopia, a festival mounted by the RLC against expert advice. It reported 19 serious concerns and yet had decided not to inquire further or to conduct a forensic audit.
7. Performance Monitoring and Transparent Reporting
The LGA 2002 mandates councils to monitor the effectiveness and efficiency of their services and provide transparent reports to stakeholders. It emphasizes performance management to ensure local councils deliver on their obligations and meet community expectations.
7.1 Annual Reports
· Councils must report on their performance against objectives outlined in their Long-Term Plans (LTPs) and Annual Plans, providing transparency about financial and non-financial outcomes.
Feedback: RLC officials have long controlled the criteria and processes used for reporting against the objectives in the LTPs and Annual Plans. For example, the reporting to elected members in late 2019 was cursory, lacked commitment to the formative evaluation of programmes and displayed an administrative culture resistant to public accountability. It appears that these practices and attitudes may have been under development since the appointment of the new CE in March 2023. The LGA needs to reiterate appropriate criteria and processes for reporting against the objectives in council plans.
7.2 Performance Measures
· Councils must establish performance measures to track progress toward strategic goals, particularly for service delivery and community outcomes.
Feedback: Key performance indicators (KPIs) of programmes and for individuals in the RLC were steadily reduced under the previous administration to minimalist and qualitative measures. The previous CE had one KPI – no successful judicial reviews of council decisions. This approach undermined the purpose of programme evaluation, annual performance evaluations and transparent reporting to stakeholders. The new CE appointed nine months ago is apparently reforming evaluation and reporting systems. The LGA 2002 needs to clarify mandatory obligations regarding evaluation methods and metrics and reporting processes and criteria.
7.3 Community Consultation
· Councils must engage with communities to ensure performance aligns with public priorities.
Feedback: The prior condition of delivering on this obligation is that council’s planned performances align with public priorities. Since LTP and Annual Plans invariably reflect the priorities of the mayor’s power bloc, including senior officials, the RLC will consistently fail to satisfy this obligation, unless and until a revised LGA forces the reform of council consultations, decision making, planning, budgeting and program management.
Feedback: A recent example of how public priorities can be displaced and undermine the legitimacy of council’s consultations was about MHUD’s request to extend the consents of seven motels to provide emergency accommodation to homeless people. The council out-sourced hearings to a commissioner they selected. Hundreds of submissions from the public rejected the proposal, with one in favour. The hearings held two years earlier, when MHUD sought consents for 13 motels, had attracted thousands of objections. It was widely concluded that council officials had used it to reconstruct public priorities, but that their actions had caused the legitimacy of the process to collapse. The LGA needs to set strict conditions for the engagement of commissioners to ensure due process, natural justice and that responsibility for the decision and public accountability remains with elected members.
7.4 Transparency Requirements
· The LGA 2002 requires open decision-making. Council meetings must generally be open to the public, as stipulated in LGOIMA. Decisions must be supported by clear, accessible documentation explaining the reasoning, costs, and alternatives.
Feedback: Recall, in June 2023, the RLC was found by the Ombudsman to have systematically misused public-excluded meetings to minimise transparency over many years. It is critical to note that the Ombudsman then determined a series of remedial actions to be taken by council that he retained oversight of, apparently intended to reconstruct the council’s administrative culture and relationships with Rotorua’s diverse communities. It may be a coincidence, but three months later, CE Williams resigned, ten years after his appointment in July 2013 and nearly two years in advance of his contract expiring. It is suggested that the Ombudsman’s determinations concerning transparency merit close attention by any parties commissioned to redraft the LGA 2002.
[1] Reynold Macpherson helped found the Rotorua Pro-Democracy Society in December 2014 and led its transition to become the RDRR in October 2015. His PhD is in the strategic leadership of systems. He led the turnround of Waiariki Institute of Technology and the startup of Abu Dhabi University. He has held two personal chairs and four ministerial commissions to assist with system reforms. He has published 17 books and 76 research papers. He can be contacted at 07 346 8553, 021 725 708, reynold@reynoldmacpherson.ac.nz
[2] https://www.legislation.govt.nz/act/public/2002/0084/latest/DLM170873.html
[3] https://www.facebook.com/RDRRInc/
[4] Office of the Ombudsman, New Zealand (June 2023, released October 2023). Final Opinion of the Chief Ombudsman: Meeting and Workshop Practices at Rotorua Lakes Council, Wellington: Te Kaitiaki Mana Tangata Aotearoa. https://www.ombudsman.parliament.nz/sites/default/files/2023-10/Rotorua%20Lakes%20Council%20FO.pdf?fbclid=IwAR3NTqB9uzknH0HzDzyDBnj-cIvuV1XEQoCgREo0wlsthmbTVhhLVmpgl-E
[5] Stats NZ. (2018). 2018 Census place summaries: Rotorua District. Stats NZ. Retrieved from https://www.stats.govt.nz/tools/2018-census-place-summaries/rotorua-district
[6] Stats NZ. (2018). Māori population estimates: At 30 June 2018. Stats NZ. Retrieved from https://www.stats.govt.nz/information-releases/maori-population-estimates-at-30-june-2018
[7] Stats NZ. (2023). 2023 Census population counts by ethnic group, age, and Māori descent and dwelling counts. Stats NZ. Retrieved from https://www.stats.govt.nz
[8] Local Government Commission (8 April 2022). Public Notice: Decision on the
representation arrangements for the election of the Rotorua District Council to
be held on 8 October 2022, https://www.lgc.govt.nz/commission-news-andcontact-
information/media-releases-and-notices/decision-on-the-representationarrangements-
for-the-election-of-the-rotorua-district-council-to-be-held-on-8-
october-2022/
[9] Attorney-General. (2022, April 22). Legal analysis of the Rotorua District Council Representation Arrangements Bill. New Zealand Government. Retrieved from https://www.parliament.nz
[10] Local Government Association. (2020). Model councillor code of conduct 2020. Retrieved from https://www.local.gov.uk
[11] Office of the Prime Minister (8 March 2023). Public service neutrality for Crown Entity Board Chairs and members, Press Release. https://www.beehive.govt.nz/ release/public-service-neutrality-crown-entity-board-chairs-and-members
[12] U.S. Office of Government Ethics. (2023). Standards of ethical conduct for employees of the executive branch. Retrieved from https://www.oge.gov
[13] Australian Public Service Commission. (2022). APS values and code of conduct in practice. Retrieved from https://www.apsc.gov.au
[14] Public Service Commission. (2020). Code of conduct for the public service. Retrieved from https://www.publicservice.govt.nz
[15] Desmarais, F. (2022b, November 26). Māori ward process ‘manipulated’ to achieve desired outcome - Lakes councillor. Rotorua Daily Post. Retrieved from https://www.nzherald.co.nz/rotorua-daily-post/news/maori-ward-process-manipulated-to-achieve-desired-outcome-lakes-councillor/TKJ2I2OGTZCPRGPELVD6OXHDVM/
[16] Local Government New Zealand. (2019). Code of conduct for elected members: A template for councils. Retrieved from https://www.lgnz.co.nz
[17] Public Service Commission. (2020). Code of conduct for the public service. Retrieved December 7, 2024, from https://www.publicservice.govt.nz/resources/code-of-conduct
[18] A power bloc refers to an informal coalition formed among political parties, interest groups, or influential individuals and officials who collaborate to influence policy or electoral outcomes.
[19] Anonymous (10 December 2015) Update: Searancke stood down from council roles, Rotorua Daily Post. https://www.nzherald.co.nz/rotorua-daily-post/news/update-searancke-stood-down-from-council-roles/YPWAEK3RVFUAGG5AEAM6NGNOQQ/
[20] Desmarais, F. (10 February 2022). Code of conduct breaches: Rotorua councillor Reynold Macpherson removed from committees, RNZ. https://www.rnz.co.nz/news/ldr/461225/code-of-conduct-breaches-rotorua-councillor-reynoldmacpherson-removed-from-committees
[21] Desmarais, F. (2022a, February 10). Code of conduct breaches: Rotorua councillor Reynold Macpherson removed from committees, RNZ. Retrieved from https://www.rnz.co.nz/news/ldr/461225/code-of-conduct-breaches-rotorua-councillor-reynoldmacpherson-removed-from-committees
[22] https://www.legislation.govt.nz/act/public/2015/0063/latest/whole.html
[23] Preston, N. (11 January 2021). In-house fighting costs ratepayers thousands of
dollars in investigations, NZ Herald. https://www.nzherald.co.nz/nz/in-housefighting-
costs-ratepayers-thousands-of-dollars-in-investigations/NYMS5BAGX4
KMGG3O5B5PSLQDNM/?fbclid=IwAR3Yp_g-QVZ3M7mxE_sUua6knwa2
ZOjocMBe1B_3Nu6kDwIlm6iME7T3BP8
[24] Democracy Action (6 April 2022). Council Codes of Conduct – A Tool for
Muzzling Councillors? Cancelled Free Speech, April Newsletter.
[25] Free Speech Union (8 February 2022). Antidemocratic Use of Local Government
Codes of Conduct, email to John Ryan, Controller and Auditor-General from
Jonathan Ayling, Chief Executive, FSU.
[26] [2013] NZEnvC116, the Hon Justice J.A. Smith, May 24,
[27] Local Government Commission (8 April 2022). Public Notice: Decision on the representation arrangements for the election of the Rotorua District Council to be held on 8 October 2022, https://www.lgc.govt.nz/commission-news-andcontact-information/media-releases-and-notices/decision-on-the-representationarrangements-for-the-election-of-the-rotorua-district-council-to-be-held-on-8-october-2022/
[28] The Hon Parker, D. (30 August 2023). Report of the Attorney-General, under the New Zealand Bill of Rights Act 1990 on the Rotorua District Council (Representation Arrangements) Bill, Parliament of New Zealand. https://bills.parliament.nz/v/4/501ce8d2-20d9-40bf-b8f7-d504ab8e5427
[29] RDRR (2021). Feedback regarding Rotorua Lakes Council Draft Long-Term Plan 2021-2031, retrieved from https://rdrr.nz/feedback-regarding-rotorua-lakes-council-draft-long-term-plan-2021-2031/
[30] Office of the Auditor General (2 August 2018). Inquiry into Mudtopia: Request to the Office of the Auditor General for an Inquiry into Rotorua Lakes Council’s Mudtopia. https://rdrr.nz/inquiry-into-mudtopia-2/