The State Services Commissioner, Mark Prebble, and I have commented about the principles behind the advice that has been provided to Hugh Logan, the chief executive of the Ministry for the Environment.

There has been some suggestion that the principles around managing conflicts of interest have changed, or been extended. This is not the case. The three principles that have informed our advice to Mr Logan are consistent with long standing State Services Commission guidance:

1. That, as the chief executive of the Ministry, he must act in accordance with section 33 of the State Sector Act - and act independently in matters relating to employment decisions on individual employees.

2. That the State Services Commissioner has a statutory obligation to provide guidance around standards of integrity and conduct and conflicts of interest.

3. That issues of conflicts of interest, actual, potential or perceived need to be actively and carefully managed by chief executives, where senior public servants in sensitive roles are concerned.

As Hugh Logan said, the decision as to whether there was a potential conflict in this case was his and his alone, to make.

Hugh has been clear as to his understanding of this, and equally clear that he was not subject to improper influence in his decision.

During my discussions with Mr Logan in preparing my July 20 briefing for the Minister of State Services, I wasn't made aware of the full details of Mr Logan's recollections of his conversation with Mr Benson-Pope.

Mr Logan volunteered his full recollections to me earlier this week. In hindsight, it would obviously have been desirable for this to have been made clear to me before this week.

However, viewed in the context of all Mr Logan's actions in coming to a view about the potential conflict of interest, and how he should manage that issue, the most recent information does not alter my judgement that Mr Logan made his own decision.

With regard to the wider issue of conflict of interest, I want to stress that it was the nature of this specific role and the particular nature of Madeleine and her partner's professional positions that led to Hugh's decision that there was a potential conflict of interest to be managed.

The particular circumstances in this case meant that Hugh Logan was quite right to respond to a query from his Minister's office, and under the 'no surprises' principle, that he was managing an issue involving a potential conflict of interest.

Chief executives need to take great care in this area. They need to maintain their working relationship with their Minister and meet their obligations under the law and the long standing conventions that guide the behaviour of politically neutral public servants.

The outcome from this matter, however, has not been good for Madeleine Setchell. The subsequent publicity has not been good for the Ministry for the Environment. And it has not been good for the reputation of New Zealand's politically neutral public service.

Madeleine Setchell's experience in the Ministry for the Environment is something that I am deeply concerned about. I want to stress that Hugh Logan's decision should have no impact on Madeleine's ability to get employment on merit in the State sector.

In terms of the Ministry for the Environment, I need to be satisfied about the chief executive's management of the critical employment issues. I am not yet in a position to make that judgement.

Accordingly, I have asked that Hugh Logan provide me with a report on the following employment processes, covering:

• the reasons why he was not made aware of the potential conflict at the time Madeleine's appointment was made;
• the steps taken to manage the potential conflict; and,
• any proposals to improve the Ministry's processes to ensure that this type of issue does not recur. 

As some of the information that has been collated to date - and the likelihood of similar material in Mr Logan's report to me - will be touching on confidential employment matters, I will not answer questions of this nature today, nor release any of this type of material in any published report.

It is my intention to ensure that Madeleine Setchell is given the opportunity to provide her input into the process to ensure we have a comprehensive account of the lessons that can be learned and shared in order that this is not repeated.

The lessons from the report will be made public, and I aim to be in a position to do this as soon as is practicable.

Iain Rennie
Deputy State Services Commissioner