A newly-appointed KiwiRail board director is associated with a company which donated to NZ First.
Scott O’Donnell is one of the four directors of Dynes Transport Tapanui, which donated $20,000 to NZ First in July 2024.
The company is also involved in a project which recently received a government regional infrastructure loan of $8 million.
Political scientist Bryce Edwards said even though party donations are not considered to be a conflict of interest, he believed it was a “perfect storm” of factors, which can erode trust in the political system.
“It’s definitely this type of relationship that leads to, at the very least, a perception of a quid-pro-quo arrangement whereby donations give the donors special treatment in government.”
Minister for Rail Winston Peters’ announcement of Scott O’Donnell’s appointment to state-owned KiwiRail last week noted a conflict of interest plan was in place related to O’Donnell’s business interests.
“The company’s road freight operation is primarily south of Oamaru, and as such Mr O’Donnell will recuse himself from KiwiRail activities in this part of New Zealand,” said Peters in the press statement.
He said O’Donnell “brings actual experience to the role” and would bolster KiwiRail’s freight expertise and that his commercial interests were disclosed during the appointment process.
Information about the donation was not included in Peters’ announcement.
“Dynes Transport is a company, not an individual, and its donation was declared to the Electoral Commission and in full public view while Mr O’Donnell’s directorship was considered,” said Peters.
Dynes Transport was also a recipient of a government loan for a transport hub project in Mosgiel.
The Southern Link Logistics Park received an $8 million loan towards creating an “inland port”. The project would connect Dunedin’s Port Chalmers to Mosgiel by track and potentially cut 19,000 truck trips through Dunedin streets a year.
The hub would be developed by Southern Link Property Limited, which is owned by Port Otago and Dynes Transport.
NZ First’s Shane Jones announced the government loan for the project days after a competing project was revealed.
Calder Stewart had plans for a 55-hectare development on heavy industrial-zoned land near Milton, which would be approximately 50 kilometres southwest of Dunedin. It would be connected to State Highway 1 and the South Island’s main trunk line and its development would be privately funded.
Jones told RNZ to the best of his knowledge he was not aware of another proposal for an inland port. He said five ministers were involved in making the decision regarding the Regional Infrastructure Fund loan, including National’s Nicola Willis, Chris Bishop, Tama Potaka and Simon Watts.
Conflicts of interest regarding donations were handled in a similar manner to Fast Track Applicants, said Jones, where only donations made to candidates directly were considered to be a conflict. “Just because someone contributes to the party doesn’t necessarily mean that I, as a member of New Zealand First, one of five ministers would be in a conflict situation.”
KiwiRail’s executive general manager freight markets supplied a letter of support to Dyne Transport’s unsuccessful fast track proposal in April 2024.
Are party donations a conflict of interest?
A recent investigation regarding the handling of conflicts of interest and the Fast Track Approvals Act conducted by the Office of the Auditor General backed Jones’ stance, that party donations are not currently considered to be a conflict of interest.
The report, however, noted that further thought could be given to making decisions which tangibly benefit a party donor, rather than confer a generalised benefit, and recommended the Cabinet Manual could provide more guidance on the matter.
The Auditor General stated: “These issues are beyond my mandate, but I note that the recent Independent Electoral Review considers that there is a need to protect against the perception that large political donations are a way to obtain undue access and influence.”
Edwards said he believed situations like this can dent public confidence in the coalition government, “especially because it’s a donation to the party that has the two ministers that have been making these decisions”.
He would like to see some debate about reforms to the way donations and conflicts of interest are handled.
He believed there was a case for more transparency around party donations when announcements about loans, or board appointments were made.
“We might even need to start talking about cooling off periods whereby, when companies make donations to political parties, especially those in government, they shouldn’t be eligible for government contracts or funding for a period of time.”
He agreed with the Auditor General’s suggestion that new conflict of interest procedures could be instituted when companies or people who have donated to a party may benefit from government decisions.
RNZ has requested comment from Scott O’Donnell.
