31 October, 2013
Address to China Executive Leadership Academy Pudong (CELAP), China
It is a privilege to be invited to address the China Executive Leadership Academy today.
New Zealand has a strong and growing relationship with China, and I welcome China’s continuous interest in the New Zealand experience. You have asked me to share with you today, the New Zealand model and experience of building a clean government.
Over the years, New Zealand and China have enjoyed many high level exchanges as we continuously further our relationship and build our understanding of each other’s models and experiences in a globalised world.
Politically, our two countries enjoy many high-level visits and exchanges. This symbolises the very good state of our bilateral relationship. New Zealand’s Prime Minister has met with both President Xi and Premier Li twice this year.
Last year marked the 40th anniversary of diplomatic relations between our two countries. However, our connections are much more long-standing.
New Zealand and China have enjoyed trade ties since 1792, when Chinese sealers landed on our shores to harvest sealskins for consumers in China. The knowledge of these pioneers led to trade eventually being boosted to include jade and gold.
Over time, these ties eventually led to two-way trading, with New Zealand importing Chinese tea, spices, fabrics and oils to sell to our early settlers.
Our modern trade story is another huge success. This month marks five years since our Free Trade Agreement came into force and it was China’s first comprehensive trade deal with a developed country. Since its signature, our bilateral trade has trebled. Our two countries have traded more in the last five years than all previous years to 1972 combined.
Our countries enjoy strong people to people links, which is another success story in the relationship. People flows are growing rapidly. Latest statistics show that New Zealand received over 229,000 Chinese visitors in the last year, supported by direct air links and a new multi-entry business visa scheme.
Chinese students make up the largest group of international students studying in New Zealand. This is part of New Zealand’s shifting demographic make-up, changing the way we connect with China. My home town of Auckland is likely to be more Asian than other Pacific Rim cities like Vancouver, San Francisco and Sydney.
The diversity of our population is one of New Zealand’s biggest strengths when it comes to marketing Kiwi businesses in international markets.
We have people with established networks and business connections in almost every country in the world, many who are willing to set up meetings and establish strongholds for other New Zealand businesses to expand.
A good bilateral relationship is not a relationship where there are no differences; it is a relationship where the differences are understood and well managed. New Zealand and China work well together because there is respect, a willingness to exchange ideas and a desire to look for new ways to cooperate.
But we need to make sure that we properly understand all of the changes taking place in both of our societies.
This is why I am glad to be speaking to you about the New Zealand model and experience for building a clean government. A clean, transparent Government that is free from corruption is one of New Zealand’s biggest assets.
It is the New Zealand government’s view that having a clean and transparent government helps to build trust and support among its people. This allows the Government to act with confidence and purpose in developing policy and making change. This in turn allows the country, its economy, and its people to prosper.
New Zealand is ranked first on Transparency International’s Corruption Perceptions Index consistently for seven years in a row. This reflects the integrity of our system and the people who work in it. It also means the people who live, do business and invest in New Zealand know that they can trust our laws to protect their rights and freedoms.
Given this, it isn’t a surprise that New Zealand is also ranked first on the Forbes list of best countries to do business. We offer a stable business climate in which businesses and investors are well-protected.
I believe these number one rankings -‘least corrupt’ and ‘best for business’ – are related. New Zealand’s transparency and lack of corruption are part of the reason we’re considered a great country to do business in.
But creating and maintaining a clean government requires ongoing work and constant vigilance, and even New Zealand cannot afford to be complacent.
In New Zealand we believe clean transparent government is built on three pillars: fighting corruption, having an independent judiciary that can be trusted, and a government that promotes transparency both domestically and internationally.
Fighting corruption is not easy, it is a complex offence that is difficult to detect.
Three tools are needed to fight corruption: Prevention, detection, and prosecution.
The New Zealand model provides an excellent example of international best practice in using these tools.
The first tool of prevention requires the development of a national all-of-government approach.
New Zealand is currently developing an anti-corruption strategy that will assess our current systems, identify where the gaps and risks are, and create a plan for addressing those gaps and risks.
The strategy will cover the prevention, detection, investigation and remedy of bribery and corruption across both private and public sectors.
New Zealand also has a State Service Code of Conduct that applies to all public sector employees. This ensures public servants are aware of their obligations and boundaries.
The Code is also available to the public, which increases the transparency and accountability of public servants and the public sector in general.
Accountability is also increased through the use of public monitoring systems.
We have two public sector surveys that monitor the integrity of the wider Government.
The first monitoring system is the ‘Kiwis Count’ set of surveys. These take place four times a year and look at the public’s experiences and satisfaction with the public sector. The results of the survey provide insight into the public’s level of satisfaction with government services and can potentially provide an early indication of whether instances of corruption are increasing.
For another perspective, we also survey public servants themselves. Every three years the Integrity and Conduct Survey measures the level of trustworthy behaviour observed by public servants in their organisations. The results of this survey have consistently shown a strengthening culture of integrity in the New Zealand public sector.
The Government in New Zealand also works closely with civil society groups to help prevent corruption. For example, many government departments are currently working with Transparency International New Zealand (an anti-corruption group) to assess New Zealand’s governance frameworks.
The assessment will consider every aspect of New Zealand’s governance structure and every aspect of New Zealand’s integrity and anti-corruption system. It will result in a report and a set of suggested improvements to increase the transparency of both the public and private sectors.
We have found that engagement with civil society has helped us to promote clean government, increase transparency, and reduce corruption.
The second tool in the fight against corruption is increasing public education and awareness. People need to know what corruption looks like, and what to do if they see it.
Corruption, by nature, is a surreptitious offence; it will always be difficult to detect. As with illness, prevention is the best cure. But where prevention fails, good detection mechanisms are necessary.
New Zealand has a comprehensive whistle-blower regime that applies to both the public and private sectors. If anyone suspects that corruption is occurring, they are able to report this, anonymously, and without fear of punishment.
The regime ensures that if someone reports serious wrongdoing (including corruption), they cannot be fired or mistreated by their employer, they cannot be charged with a criminal offence, they cannot be sued for damages, and they cannot be subjected to any disciplinary action. Importantly, these protections cannot be altered by employment contracts or other agreements.
Another important detection-mechanism is an effective and comprehensive anti-money laundering regime.
You may be interested to know that New Zealand recently overhauled its anti-money laundering regime.
Many forms of corruption will result in illicit gains – for example, if an official accepted a $100,000 cash bribe to make a decision, the result is that he or she is left with $100,000 of illicit cash.
This illicit cash will need to be laundered. Under New Zealand’s new anti-money laundering regime, banks are required to know enough about their customers so they can pick up on anything unusual in their customers’ accounts. This means that if the official deposited the illicit cash into a bank account, the bank would know that a $100,000 deposit was not normal. The bank is required to report suspicious transactions to the Police, who could then investigate the official’s corrupt behaviour.
If the Police do detect corruption, they need to be able to prosecute and punish this behaviour. Prosecution is the third tool used to fight corruption, but it works best with comprehensive prevention and detection measures.
For prosecuting authorities to have the tools they need to tackle corruption, corrupt conduct must first be criminalised. New Zealand’s legislation ensures that a wide range of corrupt conduct can be prosecuted. This includes offences related to public sector corruption (including bribery and corruption of both domestic and foreign public officials) and private sector corruption.
We carefully monitor these provisions to ensure they are modern, effective, and consistent with international best practice.
In June this year the Government announced a number of legislative amendments to strengthen our bribery and corruption offences. These amendments will be contained in the Organised Crime and Anti-Corruption Legislation Bill, which will be introduced by the end of the year.
New Zealand’s public sector corruption offences are punishable by 7 to 14 years’ imprisonment. Compared to other crimes these are very serious penalties.
In addition to these penalties, New Zealand has an effective criminal proceeds regime. Our legislation allows New Zealand authorities to freeze and confiscate the proceeds of corruption.
A proceeds recovery regime is an important mechanism for taking the profit out of corruption and removing the incentives to commit such offences.
Transition to judicial independence
The anti-corruption initiatives I’ve touched upon comprise only one part of New Zealand’s strategy for maintaining our clean and transparent government. In New Zealand we believe that another important element is the independence and accountability of our judicial branch, which we believe contributes to ensuring the viability of our anti-corruption laws, and continuing public and international trust in our legal system.
New Zealand views judicial independence as indispensable to our governance structures and to our concept of the rule of law. It is also a key element of the separation of powers, where the executive cannot interfere with the decisions of the judiciary.
We believe that the concept of the rule of law is protected by an independent judiciary. It means that people are confident that when they appear in court, they will be treated equally regardless of who they are or what their status is in society. This is a safeguard that protects the principle that no-one is above the law.
Judicial independence requires both personal and collective independence.
Personal independence means that judges have security of tenure, remuneration and immunity. When judges have security in their roles (both in length of term and in remuneration), it helps eliminates the risk they might be open to undue influence.
In New Zealand, permanent judges hold office until the age of retirement. Financial security is also guaranteed by the right of a salary and superannuation allowances established by law and a separate agency - the Remuneration Authority – which is independent from the Executive.
Judges salaries also cannot be reduced during their terms in office. And their pay does not depend on what or how their decisions are made.
Judges also have absolute immunity from civil suits while undertaking their judicial function. This means that if someone is unhappy about the decision made in their case, they cannot sue the judge. This allows the judge to focus on the legal principles of each case without worrying about anything else.
This personal security afforded by New Zealand’s governance system allows judges to be impartial, and to decide cases solely on legal principles.
In addition to protecting judges individually, New Zealand’s constitutional arrangements protect the institution of the judicial branch as a whole.
The judicial branch is preserved by both formal arrangements such as the Constitution Act 1986 and also by convention. The government has to provide adequate resourcing and administrative support services for the judiciary, so that it functions as an autonomous branch of government.
We view the independence of the courts from the executive as especially important, because the executive has an interest in much of the litigation heard by the courts. In New Zealand it is the constitutional responsibility of the courts to hold the executive within its lawful powers.
This checks and balances system helps to ensure that no branch of government acts beyond what it is authorised to do by law, and promotes a clean and transparent government.
A key characteristic of judicial independence is administrative independence. This is the judiciary’s ability to have control over administrative decisions related to the exercise of judicial functions, such as the assignment of judges, court sittings and instructions to court staff.
In New Zealand we have found that having different, separate branches that check their counterparts’ powers and hold each other accountable has helped to promote a clean and transparent government. This open accountability builds public trust into our system of governance.
Judicial independence does not however mean that judges can do whatever they please. Judges must be responsive to society’s needs and demands, and their decisions and judgements must reflect what is expected of them – as long as this is done in accordance with the law.
This judicial accountability goes hand in hand with judicial independence, together, they build the necessary confidence in the legal system.
We believe that the type of accountability judges must face should not undermine their independence to deliver decisions which uphold the law and principles of justice; however it is accountability that allows the public to have full confidence in their legal system and the neutrality and objectivity of their judges who decide their fate in court.
In New Zealand the judiciary is, as an institution, accountable to society to resolve disputes in a manner that is fair, just and in accordance with the law. Further, the judiciary is accountable to the public to be efficient, professional and cost-effective when carrying out their duties.
Accountability also means being transparent. The more information the public has about the judiciary, the more open the judiciary is to upholding the standards expected of them by society. This allows the New Zealand public to have confidence in the judiciary and the law – so that court users that go into court believing that the law is fair and that they will be treated justly by judges. This principle goes to the heart of the legendary saying in the common law system that “Not only must justice be done, but it must also be seen to be done.”
New Zealand judges are accountable to the public for their decisions. First, if a party to proceedings is not happy with the decision of the case they may appeal that decision to a higher court, where the judge’s decision and reasoning is scrutinised and examined by a higher court, which then may overturn the decision.
Judges are also accountable for their conduct in court. Complaints may be made to the Independent Judicial Conduct Commissioner who then undertakes a judicial review process, conducts preliminary investigations and decides what further actions, if any, are to be taken.
Finally, judges and the decisions they deliver are accountable to academic scrutiny, commentary from the media and public opinion.
These days, citizens are receiving information faster than ever. Judgements and judicial conduct is not limited only in the court room and interested observers. If something goes wrong in court, then everyone in New Zealand can hear about it within a few minutes.
This open flow of information to and between members of society encourages greater debate and allows judges to receive feedback from the people they serve. This feedback builds expectations into the system which judges must then meet.
As part of our Government's commitment to modernising our courts, I intend to work with judiciary to make all court decisions available to the public online. A modern, accessible, people-centred justice system should give people ready access to court judgments. In keeping with the principles of open justice, such access makes court processes more transparent and increases public understanding of the law and the reasons for judicial decisions.
This work is an important part of raising the level of public trust and confidence in the Courts, and providing access to information for all New Zealanders.
The New Zealand system is built upon the belief that this is the most effective way of ensuring that citizens and court users receive the justice they deserve and pay for.
This accountability, of course, ties in with the third pillar to build a clean government.
The third pillar of clean government is transparency – both domestically and internationally. The New Zealand system of governance is based on the belief that government should be is open to the scrutiny of the public, not merely to that of an independent judicial branch. A variety of open channels allow people to find out how they are governed and how government decisions are made.
One of the foundations of New Zealand’s efforts to ensure transparency is our freedom of information legislation. In 1982 we introduced the Official Information Act, which has been credited with contributing to a culture of openness and transparency.
This law provides mechanisms for the public to find out what different branches of the government are doing. We believe that this builds trust and confidence in our system.
The guiding principle under the Act is that information must be made available unless there are good reasons under the Act for withholding it. This meets the purpose of increasing the availability of official information to promote effective public participation in the making and administration of law and policies, to promote the accountability of government officials yet at the same time to protect sensitive information when necessary, either for personal privacy or in the public interest.
If a government department or public body denies a request for official information, the requester may make an official complaint to the Ombudsman.
The Ombudsmen are independent Officers of Parliament who can investigate complaints concerning government agencies across government departments.
An Ombudsman’s recommendation is then relayed to a government department, agency or Minister – who usually accept it.
China has also embarked on similar efforts with the introduction of the Regulations of Open Government Information in 2008. I also note the announcement last month by the State Council, for plans for further efforts to improve the transparency of government agencies in China.
New Zealand believes that public access to government information enables better participation in our democratic process.
Underpinning this is the belief that greater participation by civil society leads to better decision making, accountability and ultimately, better outcomes for the country.
One way where greater participation by civil society is increasing exponentially, is on the internet. The internet is a place where people connect, form groups, discuss ideas, criticise policies allowing information to be shared so rapidly, that the expression coined for information which is spread instantly all over the world is said to be “going viral”.
In an ever increasing globalised world, where we are linked together by the internet and information sharing, the New Zealand government believes that laws should be framed in a technology neutral manner. This means that our laws treat all information sharing across all technologies and platforms in the same way – another way of putting it is that all technologies are equal under the law!
However, with emerging technologies such as the internet, there are some instances where some government intervention is warranted. In New Zealand we take a very specific and targeted approach when regulating the internet, because we do not want to infringe on technological neutrality and the freedom of expression. For example, we have specific offences relating to unauthorised access of a computer system or network of computers.
Another example where we have targeted specific problems with the internet is cyber bullying. Cyber bullying is a worldwide phenomenon. No country is immune. It covers a wide range of behaviour such as harassment, cyber-stalking, “trolling”, posting of private videos or photographs, spreading malicious rumours and anonymous attacks.
While technology provides us so many possibilities, and it also provides some people an effective way to harm others. Who knew 30 years ago that we would be able to bully people more easily, quickly, anonymously, by letting the entire world know and also making sure that anything we did left an almost permanent record? This is one example of where online behaviour can and should be treated differently.
This is why New Zealand is moving quickly to tackle cyber bullying with a range of measures. I will soon be introducing legislation to create a quick, effective and cheap way for people to deal with cyber bullying.
Complaints that are relatively low level can be dealt with by negotiation and persuasion by what is called an “approved agency.” This agency will establish good relationships with internet service providers, intermediaries and other people online to help it to resolve disputes in a non-intrusive way.
Where the agency can’t resolve the issue, a person can apply to the court to make orders to deal with the problem. The court could order a website to take down material, or order a person to stop sending abusive text messages, or order an anonymous person to be revealed. The court will operate quickly, free of charge and informally, because we know that so many of the victims of cyber bullying are our children and teenagers.
The most serious cases of cyber bullying will be prosecuted with a new criminal offence specifically targeted at posting harmful communications online.
This shows one instance where legislation can and should cover the internet for very specific and compelling reasons.
The importance of open and transparent government to trade and business also cannot be understated.
Let’s take New Zealand’s food safety systems as an example.
A single government agency – the Ministry for Primary Industries – oversees New Zealand regulatory systems governing food, farming, fishery and forestry.
These safety, sustainability and animal welfare systems are oriented around a central principle of New Zealand’s government – transparency. They apply to all consumer products, whether they are in New Zealand or exported from New Zealand.
New Zealand has a strong set of laws and regulations that set strict standards that New Zealand’s food products need to meet.
The New Zealand system delivers high quality products that are safe. The reviews of the system that are currently underway are intended to take a system with a world class record and make it even better.
We believe being open with consumers and not hiding problems earns trust.
We believe it is our obligation to the people who buy and consume New Zealand’s food. And we are committed to the continuous improvement of the system so that it continues to meet the needs of all consumers in New Zealand and around the world.
Companies in New Zealand understand this and play an important role in ensuring their reputations are upheld, which contributes to New Zealand’s standing as a consistent producer of high quality and safe foods.
This was illustrated with Fonterra’s recent whey protein powder event.
Final scientific testing has confirmed that initial tests produced a false positive. There was never a botulism contamination of New Zealand dairy products.
However, New Zealand decided that it could not risk waiting for the final test results before sounding the alarm. In a position of uncertainty, we made the decision to be precautionary and to withdraw product.
The New Zealand Government has launched two enquiries in to this event. These enquiries will assist New Zealand in making a food safety system with a world-class record even better.
New Zealand realises the importance of domestic transparency laws and their effect in our international relations. This transparency is not only important in trade, but also in enhancing the global reputation and influence of our country.
Our nation continues to work with governments in a range of regional and multilateral initiatives to share information about clean and open government to ensure that we are constantly revising our own best practice, as well as to enable us to share our experience with others. One example of that is the Open Government Partnership, which New Zealand is in the process of joining.
I hope that sharing the New Zealand experience with you has deepened the common understanding between us.
Both New Zealand and China have a lot to offer each other, and New Zealand is delighted that we enjoy such a close relationship with China. New Zealand has much experience that it is willing to share with China based on our own experiences in building a clean government, and I have just come from Beijing where I held a number of good discussions, including with Minister of Justice Wu and I look forward to continuing to exploring future avenues for co-operation continue long into the future.