Bryce Edwards: Is Simon Bridges’ NZTA appointment a conflict of interest?

Bryce Edwards: Is Simon Bridges’ NZTA appointment a conflict of interest?

Last week former National Party leader Simon Bridges was appointed by the Government as the new chair of the New Zealand Transport Agency Waka Kotahi (NZTA). You can read about the appointment in Thomas Coughlan’s article, Simon Bridges to become chair of NZ Transport Agency Waka Kotahi

The fact that a former top politician and Transport Minister has been given this highly important role hasn’t raised enough debate about politicised appointments – although former Labour prime minister Helen Clark has suggested online that Bridges’ appointment creates an unacceptable conflict of interest.

The two big questions that need to be asked are:
1.    Is Simon Bridges qualified for this role, and therefore been appointed on the basis of merit?
2.    Is it a conflict of interest that Bridges will be the top government transport boss while also chairing three lobby groups representing private sector transport interests – Auckland Business Chamber, the National Road Carriers Advisory Group, and the Northern Infrastructure Forum?

Furthermore, the larger question could be posed as to whether New Zealand governments are going down the track of appointing too many partisan cronies, thus putting too many people with too many fingers in the pie into crucial decision-making roles.

Simon Bridges role as a transport lobbyist

New Zealand has the least regulated corporate lobbying sector in the Western world. There are no rules preventing or regulating politicians leaving office and going straight into lobbying careers where they can assist the private sector in the very same sectors that they were responsible for as ministers or senior parliamentarians.

Therefore, when Simon Bridges left Parliament in 2022 he was able to go straight into the lobbying role of Chief Executive of the Auckland Business Chamber. This was widely regarded as a good hire by the business lobby group. Being headed by the former Transport Minister and Leader of the Opposition would bring huge influence, connections, and clout to the Auckland Business Chamber, especially on transport and infrastructure issues.

Since then, Bridges has become chair of other lobby groups. The Northern Infrastructure Forum was set up last year with Bridges as chair, to give greater voice on public construction projects in the Auckland region. It involved a coalition of lobby groups including the Employers and Manufacturers Association, Port of Auckland, Wilson Parking, Civil Contractors NZ, Stantec, the Automobile Association, and National Road Carriers.

Bridges’ lobbying work for the National Road Carriers Association

Bridges has also been appointed as the chair of another lobby group, the National Road Carriers Advisory Group, which advocates for the trucking industry. On the National Road Carriers Advisory Group website, Bridges’ profile has recently been locked – when you click on his page it now says: “Portfolio – Private. Sorry, this profile is not accessable”.

However, the organisation does provide detail about its lobbying purposes. Describing itself as “NZ’s leading road transport association”, the Group says: “We provide a strong voice to address the issues and concerns of our members and influence decisions at at levels of local, regional and national government through submissions, committees, forums, technical groups and safety initiatives.”

As to Bridges coming in to chair their Advisory Group, the organisation welcomed him proclaiming he would be a powerful advocate for the industry because of “His knowledge of the inner workings of Government”. They also said: “Questioning and challenging decision-makers on the direction on transport is going to be critical.” They hoped that Bridges would be an effective voice in Wellington for their transport company members, noting that, “We need greater investment in New Zealand’s road and wider freight infrastructure. It needs to be a much higher Government priority”.

The CEO of the lobby group, Justin Tighe-Umbers, elaborated on how they hoped Bridges would help achieve their goals with central government: “Having Simon Bridges chairing the Advisory Group gave us a head start, with his insights as the former Minister of Transport bringing a unique perspective on how to get government to set the rebuilding and resilience of our critical highways as the number one priority.”

In the role, Bridges has focused on the NZTA’s funding operations. The lobby group reports on one of Bridges’ talks to members: “He drew members attention to the fact the National Land Transport Fund (NLTF), funded by road users and netting billions into the kitty every year, should over time significantly improve roading… But currently the NLFT is not being well spent. Compounding this, the fund was originally intended to improve roading, but it is now going towards public transport subsidies and rail – with the predictable outcome of repeated under-investment leading to more roading in disrepair and an increase in road accidents”.

Bridges as chair of NZTA

Now as chair of the NZTA board, Bridges is in a strong position to influence their funding decisions. Prior to Bridges’ appointment last week, BusinessDesk’s Dileepa Fonseka explained this: “The NZTA board decides on the allocation of the multibillion-dollar national land transport fund (NLTF), a funding pot that is made up of fuel taxes, road user charges and track charges on the rail network. Money from the NLTF can only be spent on national land transport plan (NLTP) priorities and will invest an estimated $24.3 billion between 2021 and 2024, according to NZTA’s figures” – see: Simon Bridges frontrunner for New Zealand Transport Agency chair (paywalled)

Fonseka has also looked at Bridges recent pronouncement on transport issues since leaving Parliament: “Bridges has advocated for greater investment in more resilient, high-quality roading infrastructure but has been critical of the previous government and Auckland Council’s past priorities when it came to spending on public transport and active modes of transport such as walking or cycling.”

As to whether this creates a problem, Fonseka says yes and no: “It is unlikely Bridges would need to resign from his current position as chief executive of Auckland Chamber of Commerce since NZTA board members typically serve on multiple boards. However, there could be the potential for conflicts of interest given the business lobby group often comments on transport-related issues and its members include companies operating within the transport sector.”

Is Simon Bridges qualified to chair NZTA?

In announcing that Bridges will take the top role at NZTA for three years, Transport Minister Simeon Brown that “Bridges brings extensive experience and knowledge in transport policy and governance to the role.” And, on his own LinkedIn profile, Bridges refers to himself as a “company director” and “a non-executive chair and director on a number of company and public boards.” However, in his LinkedIn CV there is no mention of any such director positions presently or in the past.

Bridges doesn’t appear to have any significant experience as a director or a chair of government agencies. His lack of experience is particularly apparent when compared to his predecessors, who have all had extensive board of director experience.

Brian Roche was the inaugural chair of NZTA when established in 2008. He carried out the role for many years, including 2019 to 2022. As well as being a senior PWC partner, he’s had extensive governance experience, including as the inaugural chairman of the Auckland Regional Transport Authority, chief executive of New Zealand Post, chief Crown negotiator for Treaty of Waitangi claims and settlements, and chairman of Antarctica New Zealand. Notably, Roche was also the chair of the Wellington Gateway Project, which he stood down from because it was a transport project and therefore a potential conflict of interest for him as chair.

Roche was temporarily replaced as NZTA chair by Michael Stiassny, 2018 to 2019. Stiassny had a pedigree governance background, as a former President of the Institute of Directors, a Fellow of Chartered Accountants Australia and New Zealand, and he had a high-profile career in accounting and finance involving chairing numerous businesses.

And then NZTA was chaired by Dr Paul Reynolds until December last year. Reynolds had a long history in very senior public service role, including as Chief Executive of the Ministry for the Environment, Deputy Director General at the Ministry of Agriculture and Forestry and Chief Policy Adviser at the Ministry of Research, Science and Technology.

Bridges’ background and qualifications for the job chairing the government agency appears to be only a shadow of those that have gone before him. Being Minister of Transport, 2014-17, seems to be his only real experience for this key governance position.

Online praise and critique of Bridges’ appointment

Publicly, there has mostly been praise for Bridges’ appointment. For example, Mark Cairns, the Chair of Freightways Limited, NZ’s biggest courier transport company, has gone on LinkedIn to say it’s a “Great appointment”. And, the NZ Bus and Coach Association has put out a press release to congratulate Bridges on the appointment, saying “This is an excellent appointment, and we look forward to the wealth of knowledge, experience and strategic leadership he will bring to this critical role.”

Others have been less impressed. Financial journalist Bernard Hickey tweeted to ask: “Is there a conflict of interest in Simon Bridges being both the chair of Waka Kotahi-NZTA and the chair of the National Road Carriers Advisory Group, which lobbies for the trucking industry?” Former Labour Prime Minister Helen Clark replied: “One would have thought so….”.

On LinkedIn there’s been more debate about whether the appointment is some sort of conflict of interest. For example, one professional governance specialist, Karen Martyn, wrote about NZTA and the Auckland Business Chamber: “This appears to be a conflict of interests. Haven’t both entities’ governance policies got clauses to exclude conflicted directors from voting? They ought to.”

Similarly, transport journalist Richard Edwards wrote that the appointment was a problem, as the Auckland Business Chamber “has a strong interest in infrastructure being built on its turf.”

The toughest comment, came from the pro-railways group, The Future Is Rail, which has condemned the appointment, saying “to make sure the road lobbyists are in key decision making positions Simon Bridges has been appointed chair of Waka Kotahi-NZTA while still the chair of the National Road Carriers Advisory Group, an organisation that lobbies for the long-haul trucking industry. This organisation wants more of these giant trucks on our roads. This appointment is an unacceptable conflict of interest.”

What should be done about the politicisation of government agencies?

Governments have the legitimate right to make appointments to state agencies, and it’s no surprise that they might want to appoint someone like Simon Bridges, who they trust will be able to help the bureaucracy implement the agenda of the democratically-elected government. Not surprisingly, there is a long history of governments of all colours putting partisan individuals into many positions, and there shouldn’t be any blanket prohibition on it.

There does, however, need to be some strong scrutiny of these appointments. The use of such partisan mechanisms can be over-used, making them look blatantly like cronyism. And certainly, the last government made some very questionable appointments. So, if too many partisan and egregious appointments are made, then it won’t be surprising if the public loses even more trust in the political process and the bureaucracy.

Part of the problem is on the side of former politicians. In other countries, the “revolving door” of former ministers going into problematic public and private roles is carefully regulated. For instance, in the UK, the Advisory Committee on Business Appointments was established precisely for this purpose. Former ministers are required to seek the advice and consent of this group before taking up any new role that might relate to politics and business.

Then in terms of the appointments to positions of significant power and influence, there needs to be some mechanisms to ensure probity has occurred in appointments. The Public Service Commission needs to adopt appointment processes to ensure that the public can have confidence that all appointments are done on merit, regardless of political affiliations. A transparent process of publicly-advertising positions, and then an independent process to short-list qualified candidates needs to occur.

Once appointed, there also needs to be better scrutiny of conflicts of interest in these senior state entity roles. And the management of conflicts of interest needs to be very transparent to the public.

In the case of Simon Bridges’ appointment, it’s clear that none of this has happened. As a result, there will continue to be questions about his suitability for the role. But the biggest issue is about whether Bridges can legitimately continue to chair the board of NZTA while also chairing three transport-related lobby groups. It seems obvious that he needs to pick which ones he will continue with. Currently, Bridges lists his Auckland Business Chamber CEO position as being “full-time”. So, it seems that he’s just got too many fingers in too many pies now, and he clearly needs to step away from a number of them – ideally, this should be from all his lobbying roles.

Of course, the current government isn’t the first to make politicised appointments to crown entities. But in this case with Simon Bridges, the conflicts of interest seem much larger than those made by Labour during the last six years. “Jobs for mates”, especially those involved in lobbying, shouldn’t be allowed to escalate. The result will be that more and more of the public will conclude that there is something very rotten in the system.

Dr Bryce Edwards
Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington