Ombudsman warns on power selldown

Mercury Energy suffered the biggest losses, with 1640 of its customers moving to another company. Photo / Brett Phibbs

The Government's plan to block public scrutiny of partially privatised power companies is unjustified on commercial grounds and will see a valuable part of the democratic process lost, Chief Ombudsman Beverley Wakem has warned.

Under changes announced last month intended to prepare for the sale of up to 49 per cent of taxpayer-owned Mighty River Power, Meridian Energy, Genesis Energy and Solid Energy, the Government plans to remove their obligations under the Official Information and Ombudsman Acts.

Ms Wakem - whose office investigates public complaints against the Government - said the fact that the Crown was maintaining controlling stakes in the companies on behalf of the public demonstrated their importance to New Zealand's interests.

The sale of a minority shareholding in them did not affect the reasoning for them being subject to the independent oversight and accountability provided through the Ombudsman Act and the Official Information Act (OIA).

"They will carry on the same operations as they do presently which have significant scope to impact on individuals and communities and the environment. It's not just about commercial interests, the impact of these companies goes much wider than that and all of those interests ought to be protected."

Ms Wakem said the Government appeared to be saying that partially privatised SOEs should be treated exactly the same as private enterprises if they were to compete with them.

"However state-owned enterprises are different from private enterprises by necessary definition of their ownership and purpose - that is to make profits for the Government and to expand and promote the interests of the public."

Ms Wakem said there were plenty of safeguards in the OIA to protect against disclosure of commercially sensitive issues.

Partially privatised council-owned businesses had proved that ongoing obligations under the Local Government Official Information and Meetings Act and Ombudsman Act did not put them at a commercial disadvantage. "There's no evidence that continued coverage under the OIA would place these companies at a competitive disadvantage."

Green co-leader Russel Norman said that given there appeared to be no clear rationale for removing the companies from OIA requirements, the move suggested "the long-term direction is full privatisation".