Summary

Local authority codes of conduct.

Since 1 July 2003, each local authority has been legally required to adopt a code of conduct for its elected members. This is a new requirement for councils, introduced by the Local Government Act 2002 (the Act).

We decided to examine how councils have implemented the requirement to have a code of conduct, and how codes of conduct are being used by councils, their members, and the public. The purpose of the study was to:

  • assure Parliament that councils have properly implemented the requirement to have a code of conduct;
  • examine how councils have given effect to the requirement to have codes; and
  • report to Parliament and the local government sector on councils’ experiences in using their codes, to enhance general understanding of codes and to assist councils in addressing conduct issues in the future.

Local government’s response to the code requirement

All councils have a code. Overall, the concept of a code is not particularly contentious. Most councils accept that it is better to have a code than not to have one. Several councils found discussion and debate among members about what should be in the code to be valuable.

Councils consider codes to be most useful as:

  • a prompt;
  • a documented reference;
  • a tool for educating new members; and
  • a risk management tool.

Councils acknowledge that formal enforcement is difficult, but that the other benefits of codes make them worthwhile.

In practice, many councils and members do not refer to their code often. They consider it is meant to be a document that sits in the background.

Council officers tend to view the code more positively than members. This reinforces the importance of the code as a governance mechanism. Codes can help to explain the distinction between governance and management, and to make clear the requirements about members’ conduct in relation to staff. Codes have an important role in reducing legal risk for councils in the area of employment disputes with their chief executives, as they can be used to remind members of the rules in this area. Employment law risks can also arise for chief executives if they do not take steps to address complaints from staff about elected members’ behaviour. We were pleased to see that the councils we spoke to were very aware of those risks, and the usefulness of codes in managing them.

The Act does not automatically apply the requirement for a code of conduct to community boards. It is unclear whether this issue was given any detailed consideration in the policy development process.

Some community boards have agreed to comply with their parent council’s code or have adopted their own. We suggest that councils and community boards that have not considered this approach could usefully do so. We suggest too that the Department of Internal Affairs (DIA) consider whether the Act should be amended to require community boards to adopt their own code.

The Act requires each council to have a code, and sets out the matters a code must address. However, it is for each council to determine whether it wishes to agree to a set of principles or aspirations, or a set of rules and obligations (or both). Councils also have discretion about whether to provide for enforcement and penalties. When exercising their discretion in these matters, councils should have regard to the purposes they seek to achieve.

Concerning implementation of codes, we consider that:

  • chief executives should ensure that they cover the code of conduct at the first council meeting after each triennial general election;
  • the DIA should consider whether the Act should be amended to specify a council’s code of conduct as one of the matters that must be covered in the briefing to members at the first meeting after triennial elections; and
  • councils should “re-adopt” their codes after each triennial election, to ensure the “buy in” of newly elected members to the code and to give the opportunity for the rules and principles to be reconsidered and debated.

We found a range of practices about the availability of codes of conduct. While codes are generally available to members and senior staff, they are less available to other staff and members of the public. Our study has prompted some councils to consider making their codes more widely available. We recommend that all councils consider doing this, in the interests of openness and transparency.

Substance of codes

Overall, the material included in codes meets our expectations. Most codes contain guidance about the main topics we expected to see covered.

The councils we met with told us that the contents of their codes had not been regarded as particularly contentious when they developed them. Many considered the contents of codes to be “common sense”.

Most councils used, as their starting point, a model code prepared jointly by Local Government New Zealand, the Society of Local Government Managers, and the DIA as part of guidance on the new Act. It is clear that councils have also copied from each other a great deal.

Codes are well focused on the activities, issues and practices of concern to local government. The length and depth of codes varies a lot, but in general we consider that the material in codes is:

  • clear and informative;
  • consistent with the governance principles in section 39 of the Act; and
  • not inconsistent with other laws.

No council’s code covers all of the topics we mention in Part 3 of this report. We consider that most councils could benefit from a review of those topics, to see whether there are any other matters that could usefully be added to their own code when they next review it. There may be scope for codes to contain more cross-references to further sources of guidance about particular regulatory, policy or good practice matters (both internal and external). We also consider that some codes could be more thorough in their explanations of:

  • the Local Government Official Information and Meetings Act 1987; and
  • non-financial conflicts of interest.

Complaints and enforcement processes

Members have a statutory duty to comply with their code, and it is for councils to decide for themselves whether – and, if so, how – to enforce the provisions of a code against an offending member.

Some councils appear to have made a policy decision not to provide for any enforcement of their codes, and may prefer not to have any available remedies for “breaches” of the code. That is an entirely legitimate choice, and enables a code to sit simply as part of the council’s governance framework.

However, most of the remainder have provided for enforcement, with remedies. If councils do provide for remedies, then they need to design processes and penalties that are clear, lawful, fair and efficient. They need to be prepared to use those processes in suitable cases, and to follow their processes properly.

Most councils use a 2-step process, with an investigation by a person or committee, and then a decision by the full council. Nearly all councils regard any decision to impose penalties as one which warrants the involvement of the full council.

In the detail, however, councils have designed a variety of different processes. Enforcement is the area where councils have most commonly departed from the text of the model code. Councils have often rewritten (or deleted) the model code’s provisions to suit their own preferences. We do not have any concerns about the fact that a range of processes exists.

We have not identified significant concerns about the processes set down in councils’ codes. It is clear that many councils have given careful thought to the processes they wish to apply. The key issue is that any process must be fair. From our review, councils appear generally aware that enforcement processes need to be fair to all affected parties, and they have designed their processes accordingly.

We consider that it may be better to use independent external people, rather than elected members, for the investigation stage. However, this is for each council to decide.

Views are often strongly held on the question of whether the Act should provide for penalties. However, we did not identify a consensus or clear majority view on this question.

Experiences of councils that have used their code

Most councils use their codes only rarely, if at all. But a code ought to be a document that is not used frequently. In most councils, if conduct issues do arise, they are usually dealt with informally and privately.

Alleged breaches of codes commonly related to offensive or disparaging remarks, or leaks of confidential information. Councils are most quick to react when the matter relates to staff. The penalties imposed have been light.

Some members and officers who have been through a formal enforcement process end up bitter and frustrated about their code. We do not consider that code complaints necessarily indicate that a council is dysfunctional.

Many councils have not yet considered whether they would permit a complaint under their code to be made by someone outside the council. Most, when asked, said that they probably would. However, some people expressed concern about the risk that their code might become widely abused by members of the public as a means of pursuing political or personal arguments.

Sometimes a code is invoked for matters that may not truly be matters of conduct, or that may be petty or trivial. Councils may have felt themselves to be under an obligation to undertake a full, formal enforcement process for a matter that may not really be significant enough to justify being taken so far. We consider that it may be useful for codes to allow for some sort of preliminary assessment of complaints, with a discretionary power to dismiss those that do not warrant being taken further.

It may be useful for more codes to explicitly encourage issues to be raised and resolved at the lowest possible level. Many councils consider this to be the most successful and constructive way of resolving most issues. The full, formal enforcement process can then be reserved for only the most serious cases.

Managing the process effectively

For a council attempting to manage an enforcement process through to a just result, with as little disruption as is necessary, maintaining the balance between fairness and timeliness can be critical.

Some complaints become bogged down for extended periods of time. However, the processes councils have followed in the early days of using their code are not fundamentally flawed. Recent case law can give councils confidence in their processes, and in their substantive decisions. In our view, councils can afford to have confidence in their codes, and in their enforcement processes, should they have to deal with enforcement matters.

We consider that the key factors for councils to bear in mind when dealing with future code complaints (or in reviewing their codes) are:

  • attempting to resolve issues informally and privately wherever possible, and reserving use of the formal enforcement mechanism for only the most serious cases;
  • providing in their code some method of preliminary assessment of complaints, with a discretionary power to dismiss those that do not warrant being taken further;
  • where applicable, carefully selecting the personnel to be involved, to ensure that they have the appropriate skills and experience for the task required of them;
  • paying careful attention to following a fair process (including, but not necessarily limited to, whatever steps or entitlements are specified in their code), and seeking legal advice if necessary; and
  • proactively managing the process, to ensure that the matter is dealt with promptly (without compromising the need to act fairly).