Part 7: Confidentiality Issues

Inquiry into certain events concerning the New Zealand Tourism Board.

Under our terms of reference, we state that we will report on the appropriateness of the confidentiality arrangements put in place in respect of the payments made to the former Chairperson, Deputy Chairperson and Chief Executive Officer of the New Zealand Tourism Board consequent upon their resignations.

Chairperson and Deputy Chairperson

We have dealt elsewhere in the report with the origins of the confidentiality provision in the Deed of Resignation in respect of Messrs Mogridge and Wall. There is no dispute that the purpose of the confidentiality clause was to protect their reputations from possible adverse public criticism following their resignations, and to enable Board members and staff to "get on with the job".

The context was that the resignations were made in the interests of the Board, without any implication that the departing members had done anything wrong or that grounds existed for the Minister to remove them from office under the Tourism Board Act.

It will also be recalled that, although the Minister declined to become a party to the Deed of Resignation, he wrote a letter on 18 December 1998 in which, among other things, he agreed to be bound by the confidentiality requirement in the deed. In legal submissions made on behalf of Messrs Mogridge and Wall it was noted that, except for the initial press release referred to in the Minister’s letter of 18 December 1998, no consent had been sought from either Mr Mogridge or Mr Wall in respect of public comments made by the Minister. This was a requirement of the Deed of Resignation.

Chief Executive

In respect of Mr Winter, the circumstances are different in that he was an employee of the Board. The terms of his resignation amounted to a severance package which was negotiated and agreed within the context of his contract of employment. The settlement agreement contained a clause with the following effect:

  • the contents of the terms of settlement would be strictly confidential to the direct parties (the appointed members of the Board and Mr Winter) and the Minister26; and
  • strict limitations were imposed on how statements about Mr Winter and his achievements as Chief Executive could be made either publicly or to prospective employers.

We are satisfied that the reason for this confidentiality arrangement was to avoid possible damage to Mr Winter’s reputation resulting from his resignation. The context in which the resignation took place was that the incoming Chairperson, Mr Allport, considered it was in the interests of the Board to have a new chief executive.

Lawfulness and Appropriateness

There is a question as to whether either of these confidentiality arrangements was appropriate and, in particular, whether the Board (as a Crown entity and subject to the provisions of the Official Information Act 1982) was entitled to enter into such arrangements.

We are satisfied that both the Board and the Minister had the power to enter into obligations of confidence with Messrs Mogridge, Wall and Winter. In relation to Mr Winter, we note that confidentiality provisions of this kind are common practice in the employment law area, and that the question of confidentiality was the subject of independent advice received by both Mr Allport and Mr Winter. An agreement for confidentiality designed to protect the reputation of an individual would be consistent with the principles of the Privacy Act 1993, to which the Board is subject.

We also accept that the parties acted in good faith and with the predominant purpose of protecting the reputations of the persons who were resigning and enabling the Board to "get on with the job" without public criticism from the Minister.

Application of Official Information Act 1982

The Official Information Act 1982 applies to the Minister (in his official capacity) and the Board. Under that Act any information held by them is open to request (under section 12). And in accordance with the principle of availability (section 5) the information must be made available unless there is a good reason, in terms of the Act, not to do so.

Among the reasons to withhold official information are that the withholding of the information is necessary to protect –

  • the privacy of natural persons (section 9(2)(a)); or
  • information which is subject to an obligation of confidence, where the making available of the information –
    1. would be likely to prejudice the supply of similar information, or information from the same source, and it is in the public interest that such information should continue to be supplied; or
    2. would be likely otherwise to damage the public interest (section 9(2)(ba)).

In either case, however, "good reason" for withholding the information exists only if, in the circumstances of the particular case, the withholding of the information is not outweighed by other considerations which render it desirable, in the public interest, to make that information available.

In other words, were a request to be made to either the Board or the Minister under the Official Information Act for access to details of either deed of resignation, the existence of the confidentiality clause would be a factor in favour of withholding the information. But a confidentiality clause would not preclude the making available of the information if it was ultimately considered to be in the public interest.

What We Consider Should Be Reported

The Controller and Auditor-General has the power under section 33 of the Public Finance Act 1977, when making a report to the House, to report such matters as he thinks fit relating to any accounts or transactions that are required to be audited by the Audit Office. In doing so, he is not bound by the principles of the Official Information Act or the Privacy Act – but these principles are obviously relevant in deciding what should be disclosed in the public interest.

During the course of our inquiry we were informed by the solicitor acting for Messrs Mogridge and Wall that they were prepared to waive the confidentiality of the terms of the Deed of Resignation to which they were parties. We have therefore included a copy of the Deed as Appendix 9 pages 131-133.

We received submissions from Mr Winter’s counsel opposing the disclosure of the amount of the monetary payment that Mr Winter received under the terms of settlement. However, for the following reasons we consider that it is in the public interest to disclose the amount:

  • disclosure would be consistent with the policy (which applies to the Board) of disclosing senior executive remuneration in annual reports of Crown entities;
  • the amount of the payment is large by ordinary standards, and its disclosure would promote the accountability of the Board; and
  • the amount of the payment has been the subject of public conjecture which should be put to rest.

That disclosure is made at paragraph 518.

This report does not, of course, reflect what the position would be under the Official Information Act were a request to be made under section 12 of that Act for access to other details of the settlement with Mr Winter. It is not our function to determine such matters.

26: The Minister was offered, but declined, information as to the terms of settlement.

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