Ministers miss point of code of conduct

Dean Nalder must be wondering why a different set of rules applied to him. Where was the investigation of Treasurer Mike Nahan’s private interests and how they interacted with his public duties by Department of Premier and Cabinet chief Peter Conran?

Where was Mr Conran’s confidential report, subsequently released to the media?

Nahan says he fully disclosed his interests to Parliament and the Cabinet secretary and we have no reason to doubt him.

The Conran review of Nalder’s interests found he did not fully disclose his interests, though Conran took some blame for that and Nalder said he had disclosed exactly what he had been told to disclose under advice from parliamentary and DPC staff.

But Nalder was chided because of his failure to manage perceived and actual conflict of interests between his job as Finance Minister and his private business interests.

For example, Nalder owned a share in novated leasing business Fleet Network, which sells car leases to public servants.

While Conran said this did not represent an actual conflict of interests, the likelihood of a perception of a conflict meant that he should divest himself of his ownership out of an “abundance of caution”.

Nahan owned shares in QBE and Telstra, and as has been highlighted in recent days, the Government had a range of dealings with both these companies.

Many of these were not directly under Nahan’s portfolio responsibility, but that didn’t prevent Bob Kucera from resigning as sport and recreation minister when he felt his ownership of Alinta shares had left him conflicted when Cabinet considered the possible sale to that company of the Dampier to Bunbury natural gas pipeline.

Regarding QBE, Nahan met the company’s lobbyists, who wanted to sell compulsory third party insurance to WA motorists — an opportunity that is not presently available to them, because that insurance is only offered by the Government-owned Insurance Commission of WA.

Nahan says that because the Government never intended to do that, there could be no conflict — but this rather misses the point.

He seems to be saying that because the Government would not contemplate allowing QBE to enter the market, QBE could not possibly benefit, and therefore he as a shareholder could not benefit.

But the test of whether an actual or perceived conflict of interests exists is not whether a personal benefit is created. Nahan, Nalder and indeed Colin Barnett seem to misunderstand this, which is why they keep coming unstuck.

What if, in his own mind, Nahan the Treasurer understood that Nahan the QBE shareholder would stand to benefit from a decision to open the CPT market to private sector entrants?

And what if Nahan the Treasurer, out of an abundance of caution, decided that this would not be appropriate, and therefore decided not to allow QBE to enter the market?

Is that decision in the best interests of taxpayers and the public? Did Nahan close off a public policy outcome because he feared he would be favouring his own shareholding by doing so?

Inside State is not saying that he did — the above is a hypothetical (albeit one that is not beyond the realms of possibility).

But it illustrates how private interests can come into conflict public duties — the exact thing that ministers are supposed to avoid by their adherence to the code of conduct.

Yesterday, the Opposition went further on QBE, highlighting arrangements in home indemnity insurance to which the company and the Government are a part. QBE and the other private insurer that operated in that market, Calliden, decided to exit, leaving the Government in a pickle.

Such insurance had to be provided but the private sector no longer wanted to take the risk.

What happened is that QBE and Calliden agreed to continue writing policies if the Government provided 100 per cent reinsurance, effectively underwriting the risk.

The initial agreement was struck when Nahan sat around the Cabinet table, and was extended through late 2016 when he was Treasurer.

It should not be difficult to see how the perception of a conflict arises here.

The Premier says Nahan is an honourable man, and there is no serious suggestion that this is not the case.

But the “good bloke test” doesn’t really do the trick and the point of a ministerial code of conduct is that it is there to set standards that ensure confidence in the conduct of the State’s administration.

A code of conduct is there to protect ministers from allegations of wrongdoing as much as it is to catch them out — probably more so.

Ignoring the code of conduct leaves the honourable Nahan vulnerable to the sort of charges that have been laid against him by the Opposition in the past couple of days.

Instinctively, Barnett knows this, which is why he prefaced his comments to the media and the House on Tuesday with the statement that he believes it is best for ministers to divest themselves of all shareholdings on appointment.

Nahan has bristled for the past two days — you can tell he is outraged and offended. He believes his personal integrity has been unfairly attacked.

The truth is that he has put himself in this position by his failure to appreciate a key principle in the code: that a perception of a conflict of interests is the same as an actual conflict — and that such conflicts should be resolved promptly and in favour of public duty.