Explainer: Minister Peeni Henare and the handling of a potential conflict of interest with his partner

*This article was updated after a clarification of its original advice from the Cabinet Office. A spokesperson said Henare had “advised” them he had not been involved in any decisions relating to contracts for his partner’s company - the Cabinet Office does not and can not separately verify such matters, but relies on advice from ministers.

The Cabinet Office has confirmed Minister Peeni Henare disclosed his relationship with his partner Skye Kimura as a potential conflict of interest in 2018 – and had advised he had not been involved in any decisions relating to government department contracts for her company Tātou.

The National Party’s Simeon Brown had questioned whether the potential conflict of interest was being appropriately managed after discovering Tātou had been awarded government contracts worth about $593,000 in the past two years. That included $249,000 in contracts from the Ministry of Health for work relating to the Covid-19 response and Smokefree 2025. Henare was the Associate Minister of Health.

Brown questioned why the relationship was not included on the public register of ministers’ conflicts of interest: a register set up by the former National Government in 2012 which summarises the instances in which ministers have had to take steps to manage a potential conflict of interest.

The Cabinet Office said that register was not an exhaustive list of ministers’ potential conflicts of interest. Instead, it summarised the cases in which action had to be taken – such as a minister delegating responsibilities on an issue to another minister, or where there was a standing agreement they would not receive papers on an issue.

Neither of those applied to Henare’s situation.

“No transfers of responsibility or arrangements not to receive papers have been required. Hon Henare has advised* he has not been involved in any decisions regarding awarding contracts to his partner, or her agency and is confident he has managed his interests in accordance with the Cabinet Manual.”

It said the management plan in place to deal with Henare’s situation including his agreeing not to be involved in any decisions around contracts to his partner or her business interests, and not suggesting Tātou to any agencies he had ministerial responsibilities for.

Brown had said assurances were needed that it was being appropriately managed – and pointed to other problems Labour ministers faced with conflicts of interest, including Michael Wood having to step down for failing to sell shares he held, despite repeated requests from the Cabinet Office for him to do so.

Was Henare’s conflict declared?

Henare’s potential conflict was not listed publicly – but the Cabinet Office has confirmed it was lodged with it in 2018 and updated by Henare when required, such as when Kimura’s employment or business interests changed.

However, it is not on the public register of ministers’ conflicts of interest.

That is because the public register only includes instances in which a potential conflict came into play and had to be managed by delegating a matter to another minister because of a conflict, or where there was a standing arrangement for a minister not to receive Cabinet papers on an issue.

In 2017, the summary of ministers’ conflicts of interest does include mention of a potential personal conflict for Henare – that related to a different situation, rather than Kimura.

How is Henare’s potential conflict managed?

According to the Cabinet Office, the plan to manage it is for Henare not to take part in any decisions involving Kimura or her business interests and not to suggest or recommend her company to any government agencies he had responsibilities for.

It is similar to the plan used by successive governments and successive ministers to handle situations where a conflict might come into play in Cabinet discussions or a minister’s work: such as a partner or friend trying to get a government contract or appointment.

In the event a conflict does become relevant for a minister’s decisions, further steps are available ranging from delegating an issue to another minister to stopping the minister getting papers on a topic in which they have a conflict.

Was it managed in practice?

When Michael Wood was under fire for his shares in Auckland Airport, PM Chris Hipkins at one point noted that potential conflicts of interest have to be both declared – and managed.

Judging the extent to which a conflict has been managed in practice can be difficult from the outside, since the disclosure is limited. Cabinet and the Cabinet Office are a check and balance.

However, it is up to the minister themselves to identify and manage a conflict: such as by flagging it at a Cabinet meeting when it comes up and removing themselves from the room for the discussion, unless the other ministers agree they can stay.

The Cabinet Office has confirmed Henare was not involved in any decisions around the awarding of contracts to Tātou or Kimura.

The contracts for her business had not required ministerial or Cabinet sign-off, so there had been no need to invoke measures such as holding back papers, or for Henare to recuse himself from Cabinet meetings.

Should we know more?

Part of National’s suspicion around the Henare conflict was because it had not been publicly disclosed on the conflicts register – and Brown said assurances were needed that it had been managed.

Brown has so far stopped short of calling for a wider disclosure regime or for all ministers’ declared conflicts of interest to be listed, rather than just those which had required steps to be taken.

The issue does raise the question of whether more details on potential conflicts should be publicly released, or whether the existence of a potential conflict should be disclosed when a person or business is pitching for government contracts.

The Prime Minister’s office has noted that Ministers’ partners and family members are allowed to bid for Government contracts. New Zealand is a small country so conflicts of interest do arise - and have done under all governments - and need to be managed.

The Cabinet Office says the current limited disclosure scheme was set up in 2012 to provide reassurance that conflicts were being managed, while still protecting the privacy of individuals and Cabinet confidentiality, as well as confidentiality of discussions between ministers, the Prime Minister and the Cabinet Office.

The same system has applied under both National and Labour since 2012.

What is the public register?

Cabinet’s full record of ministers’ conflicts is confidential, but in 2012 the then National Government set up a summary of instances in which ministers have had to take steps to manage a conflict of interest has been published.

The Ombudsman’s Office checks the summary against the detailed record of conflicts of interest held by Cabinet Office to ensure it is accurate. There is no public register of all conflicts of interest.

In the register, the name of the other person is often withheld from the public record.

Such conflicts only have to be declared once on that register and the plan to deal with them stays in place unless/until the conflict ends or their portfolio changes and makes it irrelevant.

What is a conflict of interest?

Ministers can have either financial conflicts of interest (through shares or business interests they have which might be relevant to their portfolios) or personal conflicts of interest – such as family members, close friends or other associates who might get government jobs or contracts, or otherwise benefit from a decision by the minister.

They are expected to disclose them to the Cabinet Office to ensure that they are managed if need be.

The Cabinet manual gives as examples of inappropriate behaviour, including “attempting to intercede on their behalf on some official matter, proposing family members for appointments; or participating in decisions that will affect the financial position of a family member.”

It also notes that the appearance of a conflict can be as serious as an actual conflict.

There are a range of ways to manage conflicts – including delegating an issue to another minister. For example, when the Civil Aviation Authority was doing an inquiry into then Transport Minister Gerry Brownlee’s use of a restricted gate at Christchurch Airport, it was delegated to another minister.

Others include ministers directing the Cabinet Office not to give them papers on some issues and removing themselves from discussions, to selling shares or dropping community or business interests that conflict with their portfolios. For example, at one point then Revenue Minister Stuart Nash had a business interest which was a potential conflict with a discussion on a certain tax. He delegated responsibility for that tax to David Parker. He then got rid of the business interest, so took back the responsibility.

* Clarification: this quote was amended on July 12, 2023 by the Cabinet Office.

The original quote stated “Hon Henare has not been involved in any decisions regarding awarding contracts to his partner, or her agency and is confident he has managed his interests in accordance with the Cabinet Manual.”

Claire Trevett is the NZ Herald’s political editor, based at Parliament in Wellington. She started at the NZ Herald in 2003 and joined the Press Gallery team in 2007. She is a life member of the Parliamentary Press Gallery.