Auditor-General's overview

In July 2009, we received a complaint that three councillors at Environment Canterbury (the Council) had breached section 6(1) of the Local Authorities (Members’ Interests) Act 1968 (the Act), by discussing and voting on a proposal to recover the costs of managing water resources in Canterbury (the proposal). In October 2009, the complainant told us that a fourth councillor might have breached the Act.

Section 6(1) of the Act prohibits members of a local authority from discussing or voting on a matter if they have a financial (or “pecuniary”) interest in it. Section 6(4) enables the Auditor-General to give a declaration that this prohibition will not apply if its application impedes the business of the local authority or is against the interests of electors.

The Auditor-General is also responsible for taking enforcement action when the requirements of the Act are breached. A breach of section 6(1) is a criminal offence and the Auditor-General is the sole prosecuting authority.

Therefore, we investigated the complaints made to us about the potential breaches of the Act. This report sets out our findings and conclusions.

We have concluded that the four councillors have breached section 6(1) by participating in a decision when they had a financial interest in it. However, we have decided that a prosecution would be unlikely to result in a conviction and that it would not be appropriate in these circumstances to seek to have the councillors prosecuted.

We consulted the Crown Law Office before finalising our view. That Office agreed that the Act had been breached and that a prosecution was not warranted.

We are concerned at the lack of awareness of the Act and of guidance on conflicts of interest that has been evident in this case. We intend to work with the Council and the individual councillors as necessary to help them deal more appropriately with any conflicts of interest in future decisions on water management issues. In particular, we are continuing to discuss with them whether it would be appropriate to grant a declaration to enable these councillors to participate in future decisions on water management issues.

I am conscious that decisions on water management are very significant for the Canterbury region. All those in the region need to be able to have confidence in the decisions of their elected decision-makers. It is important that procedural matters such as possible conflicts of interest are carefully and openly managed in advance, to avoid procedural issues distracting the debate from the substance of these important and difficult questions.

I thank the councillors and Council staff involved in this investigation for their co-operation.

Lyn Provost
Controller and Auditor-General

22 December 2009