The conflict of interest cloud is still hovering above the head of Hawke's Bay regional councillor Debbie Hewitt and her involvement in discussions and decisions on the Ruataniwha dam.

Two weeks ago Mrs Hewitt announced she would not be participating in any future discussions or decisions regarding the water storage scheme with Greenpeace calling on the Office of the Auditor-General to investigate her potential pecuniary interest in the project, her property sitting in what appears to be a part of the dam's footprint.

As such, while Mrs Hewitt was noticeably absent from last week's extraordinary regional council meeting, she fronted up hours later to chair the corporate and strategic committee meeting.

Both meetings had items on their agendas dealing with the scheme.

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When asked about why she saw fit to attend the second meeting, Mrs Hewitt advised Hawke's Bay Today to "have a chat" with chief executive Liz Lambert about it.

However, the reason the question was put to Mrs Hewitt was off the back of advice penned by the Controller and Auditor-General Lyn Provost in her 2010 Guidance for members of local authorities about the Local Authorities (Members' Interests) Act 1968, in which she notes the Act regulates the actions of individual members of authorities, not the actions of their authorities.

In essence while a member is encouraged to work closely with staff and seek advice on any matter in dispute, it is up to the individual councillor to decide whether to participate in debate or not.

The issue was put to Ms Lambert who said the discussion on the HBRIC statement of intent was not a decision on whether the dam would proceed or not.

"Therefore whether or not [Mrs] Hewitt has a potential pecuniary conflict of interest is not relevant," she said. "It is around council's good governance of its investment company."

However, Local Government New Zealand president Lawrence Yule said he did not agree with that analysis.

"You need to take this back and look at the perception from what a member of the public would think," he said.

"If you declared a conflict of interest on a particular item and it's being investigated then everything around that item you should withdraw yourself from until the outcome of that."

He said this would be the advice he would give to anybody in this situation.

Transparent Hawke's Bay spokeswoman Meg Rose said this was another opportunity for the regional council to take people's concerns seriously and for Mrs Hewitt to do the right thing.

"[To] follow not just to the letter but the spirit of what she has been advised to do and take herself out of these discussions and conversations," she said.

Mr Yule said in these processes, members had to be clear.

"If you are getting an issue identified and investigated by the Office of the Auditor-General on a topic, then while that investigation is going on the Office of the Auditor-General will usually say you should not participate in anything to do with this topic," he said.

Ms Hewitt would not confirm if she would stay away from any discussion concerning the Ruataniwha dam while the investigation was being carried out by the Office of the Auditor-General.

A spokeswoman from the Office said it was still considering the application for a conflict of interest exemption for councillor Hewitt.