Marsden Maritime CE Rosie Mercer wears a variety of hats, and also provides advice to ministers. Photo / supplied
Rosie Mercer may have a sharper, more panoramic view across New Zealand’s economic development efforts than anyone in the country.
She’s chief executive of the publicly traded, port-related Marsden Maritime Holdings (MMH), a civil engineer, and an advisor to Government ministers.
This range in Mercer’s work also makes her something of a polarising figure. On one hand, those who have worked with her say she is exactly the kind of numerate and incisive thinker, with hands-on experience, the Government needs more help from.
Her networks are an asset, they say, and where there are conflicts of interest, there are good rules and processes in place to manage them.
On the other hand, are those who argue Mercer’s work and experience, and the interests with which it is freighted, provide far too much overlap with the areas across in which she is providing advice to the Government.
Bryce Edwards, research fellow at Victoria University’s School of Government, told the Herald Mercer’s work on the fast-track panel – advising ministers on which projects should be prioritised – is especially problematic.
Mercer is the chief executive of MMH, a Northland company that owns half of Northport, at Whangārei’s Marsden Point.
MMH also holds over 150ha of land adjacent to the port, which it develops and leases for commercial and industrial use. Northport has big expansion plans, including a major container terminal, and it is among 384 projects under consideration for fast-track treatment.
The Government’s still evolving fast-track legislation will create a special “one-stop shop” consenting process for infrastructure projects with “significant regional or national benefits”.
The process will allow designated projects to side-step conventional consenting and permitting processes under more than half a dozen laws, including the Resource Management Act, and it is expected to save selected projects considerable time and money, all the more so for those which are prioritised to be considered by decision-making panels first (these panels will be constituted project by project after the fast-track legislation passes).
Northport’s application for fast-track treatment
In April, Minister for Economic Development, Shane Jones, and Minister for RMA Reform, Chris Bishop, chose a six-member “independent advisory panel”, including Mercer, to advise them on which projects to include in their Fast-Track Approvals Bill (the Cabinet Appointment and Honours Committee signed off the appointments).
In May, Northport confirmed its fast-track application. It was not a surprise. Northport was among some 180 organisations which, in early April, received a form letter from the ministers about the fast-track plans, given their likely interest and the project’s size (the port says its expansion plans will add more than $1b a year in wider economic activity; consenting was recently refused through the conventional local council-based route).
Mercer declined to be interviewed, but the Ministry for Business Innovation and Employment (MBIE) secretariat for the fast-track panel said she declared her interests with the Northport project, and she didn’t view the application or take part in the advisory group’s discussions around it, including making recommendations.
Edwards, however, said he believed a much broader approach should have been taken to avoid the conflict.
In his view, because Mercer is the chief executive of a company with a clear interest in a related fast-track approval, she was in a position to assist “with inside information and connections” which could help the related bid: “that’s simply not acceptable in any democracy that wants an even playing field for business”.
In Edwards’ opinion: “really just being both a bidder and a judge of the [other] bids is incompatible. If the public is to have any confidence in the process then Mercer should have chosen which role she was going to keep. To stay on the panel, she really should have stepped down from her chief executive role at Marsden Maritime for the period that the fast-track bid was being developed and decided upon”.
Edwards said it appeared to him that ministers had appointed Mercer to the advisory panel in full knowledge she was likely employed in a position that would produce a serious conflict.
In Edwards’ view: “that reflects poorly on the ministers involved. And it also reflects poorly on Mercer that she believed the conflict of interest could be so easily managed.”
He said that Northport’s bid should now be rejected because of the unfairness in the assessment system.
To be clear, Mercer and the panel submitted advice to ministers and have no decision-making power (their advice was provided in early August). Bishop, with input from other ministers, will decide what projects receive fast-track treatment, and yet-to-be-appointed expert panels will make the final decisions, project by project.
Until recently it was anticipated that final decision-making would sit with ministers, but a wave of opposition to various aspects of the fast-track plan, including its concentration of power, prompted the Government to make changes.
Jones told the Herald the process for declaring and managing conflicts of interest for the panel is “robust”, and that “the necessary guardrails” are in place. He also said David Tapsell, chairman of the advisory panel, had decades of lawyering under his belt, and was well able to competently manage all conflicts.
Tapsell is no longer a practising lawyer, but his legal career spanned more than 25 years, including a stint as a commercial partner at Bell Gully.
Murray Jagger, chairman of MMH said, in addition to MBIE’s conflict management, his company has, “a robust and well managed conflicts policy. This meant that Rosie was excluded from participating with Northport in its fast-track application.”
He said MMH and Northport were separate companies with different management teams and were governed separately.
The two companies are, however, closely linked. Of Northport’s four board members, two (including Jagger) also serve on the MMH board; Jagger serves as chairman of both companies.
The system for declaring conflicts
A secretariat spokesperson told the Herald all members of the fast-track advisory panel: “declared any potential and actual conflicts of interest as part of their appointment process through the Cabinet’s Appointment and Honours Committee.”
In addition, a “conflict of interest register” was established and used to help manage any conflicts that arose.
Under the OIA, MBIE declined to release the conflicts declared by panel members, citing privacy reasons.
Panel’s advice will help ministers rank fast-track priority
The fast-track process is expected to create winners and losers. Depending on the advisory panel’s advice and on ministers’ discretion, projects will either be rejected outright, or included in the fast-track legislation, likely to be passed by the end of the year.
Of those listed in the bill, some will be referred directly to an expert panel (almost undoubtedly in ranked order), and some will be subject to ministers’ further deliberation on whether they should progress to consideration by an expert panel.
Advisory panels and commercial nous
So-called independent advisory panels and groups have been used by governments of all political stripes in recent times; and it has not been unusual for such advisors to hold multiple and successive roles, as Mercer has done.
From 2018, she was one of an eight-member panel that provided investment advice to ministers responsible for the $3b Provincial Growth Fund (PGF), and in 2020 she was appointed to the six-member, Covid-era Infrastructure Reference Group, that advised ministers on infrastructure and construction projects.
Mercer’s appointments appear to have been Shane Jones’ choice (he was then Minister for Economic Development and Minister for Infrastructure).
During this period Mercer was a manager at the Ports of Auckland.
Since 2022, she has also been a director of Crown Regional Holdings Ltd (CRHL), a Schedule A4 company, that holds the investments, primarily loans and equity stakes, made by the regional development arm of MBIE.
Cabinet papers anticipate CRHL directors will now advise Jones and other ministers on the loan and equity investments made from the Regional Infrastructure Fund, a new $1.2b contestable pot of money, open to public and private sector entities.
David Wilson told the Herald advice from figures such as Mercer, working outside central Government, brings both area expertise and commercial nous to ministers’ decision-making.
Wilson, who heads the boutique regional development-oriented consultancy, Cities and Regions Ltd, worked alongside Mercer in providing advice on the PGF.
He described her contributions as “short, sharp and to the point… she brought an engineering approach to assessing projects that was especially useful for infrastructure”.
In particular, he said Mercer provided extensive work and analysis on the Ōpōtiki Harbour development, a project considered critical for developing aquaculture and other marine related industries in the region – after reworking its business case the Ōpōtiki District Council received $79.4m from the Crown.
Jagger, who hired Mercer in mid-2022 to take the reins at MMH, described her to the Herald as a “world-class leader”, who has earned the respect of both industry peers and colleagues.
Taking the politics out of advice
Robert MacCulloch, professor of economics at the University of Auckland, warned against the extensive use of political appointee advisors.
He said ministerial decision-making – in choosing projects, whether for funding or fast-tracking – would be best informed by competent, numerate public servants who don’t have extensive commercial interests.
“This whole process of panels is thoroughly politicised, and it’s not necessary. There are 644 Treasury staffers. Have the Treasury or the Infrastructure Commission evaluate and rank projects, ideally they’d use cost-benefit analysis and the Cabinet could choose projects from that ranking,” MacCulloch said.
“If the ranking is released then the public can see where politicians deviate from it, and then, of course, they have to explain themselves.”
Kate MacNamara is a South Island-based journalist with a focus on policy, public spending and investigations. She spent a decade at the Canadian Broadcasting Corporation before moving to New Zealand. She joined the Herald in 2020.
The change may add $25m annually to costs during a cost-of-living crisis.