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New Zealand Human Rights Commission Submissions |
Last Updated: 27 June 2015
HUMAN RIGHTS COMMISSION
SUBMISSION ON THE
LOCAL GOVERNMENT ACT 2002 AMENDMENT BILL
Local Government and Environment Committee
Contact person: Jessica Ngatai
(09) 306 2653
1. Introduction
1.1 The Human Rights Commission appreciates the opportunity to comment on the Local Government Act 2002 Amendment Bill 2012. The Commission is an independent Crown Entity mandated by the Human Rights Act 1993 (HRA). The Commission’s primary functions include advocating and promoting respect for, and an understanding of, human rights in New Zealand society; encouraging harmonious relationships between individuals and the diverse groups in New Zealand; receiving complaints of discrimination; and leading, monitoring and advising on Equal Employment Opportunities (EEO).
1.2 Human rights underpin New Zealand’s system of government, our ability to have a say, equal opportunity and fair treatment. As the Commission has noted in the past when making submissions on local government legislation, the responsibility for promoting and protecting human rights is not limited to central government but also applies to regional and local government. Furthermore, these obligations include not only civil and political rights, such as democratic rights, but extend to the full range of rights, including economic, social and cultural rights. New Zealand has committed to both the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR).
1.3 Local government decisions, including how services are provided, are often the most direct concrete expression of the democratic process (or the lack of it). As Professor Josephs has noted recently, Democratic decision-making in local government is ingrained in the national psyche and a legitimate expectation of the citizenry.[1]
1.4 Good local governance requires the explicit incorporation of human rights values and standards. As the Institute of Human Rights Policy notes:[2]
... informed application of human rights principles and standards would improve local government performance further and help to institutionalise elements of rights–based local governance, including accountability, non-discrimination and participation... the long term systematic use of human rights criteria will improve policies and strengthen the legitimacy of local government.
1.5 The Commission has always promoted the importance of clear, transparent and accountable decision-making as integral to effective and democratic local governance. The promotion in local government legislation of concepts such as participation, transparency, equity and accountability – which are central to a human rights approach – increase public confidence and trust, and can ensure that core services would be delivered more effectively.
1.6 As such, the Commission supports measures to enhance accountability and improve the efficiency and effectiveness of local government. The Commission supports many of this Bill’s objectives, including improving the operation of local government and delivery of public services, and strengthening council governance.
1.7 The Commission notes that a defined legislative framework is one of the principles cited by the Commonwealth Local Government Forum in Good Practice for Local Democracy and Good Governance (“the Commonwealth Principles”)[3]. It refers specifically to local democracy requiring that local government has appropriate powers in accordance with the principle of subsidiarity, and noting that:
Democratic local government, with clearly defined powers, serves as the means by which the community can shape their livelihoods.
Effective devolution enables the views of the local community to be expressed and their views taken into account in decisions implemented to improve the quality of life of all citizens locally.
1.8 The Commission supports a number of the Bill’s proposed changes which improve local body governance but considers that others have the potential to undermine a truly participatory, human rights approach[4].
1.9 There are three major issues of significant concern from a human rights perspective.
COMMISSION’S CONCERNS
2. Changes to the Act’s purpose provisions
2.1 The Bill proposes to amend the Local Government Act 2002 to make better provision for effective, efficient, and democratic local governance by councils by redefining their purpose, giving them stronger tools to contain costs, and providing options for efficiency gains from council reorganisation. None of this warrants objection in and of itself.
2.2 Specifically, the Bill introduces a new purpose statement for local government, namely ... to meet the current and future needs of communities for good quality local infrastructure, local public services and performance of regulatory functions in a way that is most cost-effective for households and businesses. It is suggested that this will help define the role of councils, and assist them to plan and prioritise activity.
2.3 Again, the content of the revised purpose statement is, of itself, clear and useful. However, the proposed purpose statement seeks not to supplement the existing purposes, with their vital references to community wellbeing, but to replace them. The Commission considers there is little evidence to justify this significant change and recommends that the four well-beings are retained alongside the proposed new purpose.
2.4 As Local Government New Zealand and SOLGM note in a discussion paper on the amendment, the scale of changes signalled in the bill have the potential to create the most significant change to the sector since the amalgamations and accountability review in 1989.[5] If this is, in fact, the case then it should be based on a strong evidentiary platform, but this does not seem to be the case. The Regulatory Impact Statement notes that “there is limited evidence that the proposed approach will reduce local government spending or ensure resources are put into core local government services”.
2.5 The explanatory note to the Bill implies that the sector is not focussed on the provision of core services yet there is very little evidence to suggest this is the case and there is no analysis of why council rates are set at the level they are. In fact, one of the key findings of the Local Government Commission’s 2007 review of the Act was that empowerment of local government had not led to a proliferation of new activities.[6]The issue was also examined in the 2007 Independent Inquiry into Local Government Rates:
The panel received many submissions suggesting that the LGA 2002 has been a major driver of increased expenditures in that it encouraged councils to move into activities outside their “core business” by giving them a “power of general competence”. The Panel could find little evidence to support this. It notes that the provisions in the LGA 2002 are little different from those in the Local Government Act 1974. It also notes that many councils have been involved for many years in such activities as social housing, the provision of major cultural and sporting activities, and commercial operations such as parking buildings and other trading undertakings. Only involvement in economic development strategies appears relatively new, and this does not account for a significant portion of expenditure.
2.6 The RIS states that the amendments are aimed at curtailing the “expanding council scope” into areas and activities better done by other organisations. The recently enacted s. 11A seeks to provide adequate protection against such expansion, and as the RIS notes, “it is too soon to see the effects of this change”. The Commission submits that a proper evaluation of the impact of s11A is needed before such substantial changes are made to the Act and which remove important references to well-being.
2.7 The Commission also notes the need for equitable service delivery in the Commonwealth Principles and the importance of ensuring that the distribution of services reflects the diverse needs of the local community ...
Services provided by local government should be accessible to all.
Marginalised [groups] ... may in certain circumstances, require
local
government to adopt proactive policies to address their particular
needs.[7]
Local
government and well–being
2.8 The Commission considers that the references to “the four well-beings” in the Act are important provisions that clarify and confirm the role and responsibilities of local government in relation to economic, social and cultural rights. Any erosion of recognition of these human rights obligations risks undermining New Zealand’s international commitments.
2.9 As part of its own work to promote human rights and encourage harmonious race relations nationally, the Commission has significant relationships with local authorities (for example, through the New Zealand Diversity Action Programme). The reason for this is that diverse peoples interact and live together in local communities, with differing values, needs and priorities depending on the community. This is particularly significant in respect of the wellbeing(s) of Māori (especially for iwi who are tangata whenua of a particular locality), Pacific and migrant communities.
2.10 The Commission’s local engagement demonstrates the value of central government agencies having local partners to address local issues and foster the wellbeing(s) of local communities. A recent example of this is the establishment of a reporting system for racist incidents in the Nelson-Tasman region in 2010. Local community groups were concerned about the level of racist incidents in the region, which also had the potential to damage its social, cultural and economic wellbeing (particularly in respect of attracting international students to the area). The Nelson City Council and Tasman District councils played a key role in developing and establishing a local reporting system for racist incidents, supported by the Commission, central government agencies, and a range of local community organisations[8]. If responsibility for the four well-beings is removed from local government, then there is a real risk such vital proactive initiatives would not receive the support they need to succeed.
2.10 The LGNZ and SOLGM also
note that:
The usefulness of references to wellbeing in the Act, are that they provide a statutory signal to local authorities and the community, that service provision is focussed on achieving community wellbeing. All of the best examples of consultation focus the community’s attention on the value that they get from the proposed spending. Value is which is determined by the cost of something (i.e. the rates payable) and the benefit the community perceives (or the impact it has on their wellbeing).
2.11 The RIS notes that:
There may be some risk that deleting all references to the four well-beings may result in some councils emphasising some objectives at the expense of others. If too narrowly focused, a new purpose statement could also be interpreted as a signal to withdraw from activities that currently have a positive effect on the economy.
2.12 The Commission is concerned that with the removal of these references, the new purpose statement may be narrowly interpreted to exclude services that are critical to healthy and effectively functioning communities.
2.13 New Zealand, as a party to the International Covenant on Economic, Social and Cultural Rights has obligations to respect, protect and fulfil these rights (eg, in relation to health, education, housing etc). Where functions have been delegated to local government, the Crown’s human rights obligations, including the provisions of ICESCR, apply to those local authorities[9]. Local government should be recognised as a sphere of government.[10]
2.14 While central government is ultimately responsible for fulfilling its international human rights obligations, the Commission believes that local government plays an important and complementary role to that of central government. Local government has been described as a “vital counterbalance to the weight and power of central government in a democratic society”.[11] Local authorities may also be better placed to carry out many functions or provide services that meet local needs.
2.15 The significance of local government in advancing the right of citizens to participate in the conduct of public affairs, is recognised in the European Charter of Local Self-Government, which states in its preamble that “it is at local level that this right can be most directly exercised” and that “the existence of local authorities with real responsibilities can provide an administration which is both effective and close to the citizen”.
2.16 Strong and effective local democratic institutions are an underlying basis for a healthy democracy. When state institutions and government are closer to the people, they are more likely to be responsible and held accountable. Local levels of democracy are more accessible for citizens to question local officials, monitor what they do, present their interests and concerns and resolve their disputes in a fair, just and impartial manner, and can be an arena for attracting new political actors, including women and young people.
2.17 Comparable systems, notably the U.K. are moving towards greater
empowerment and participation at local level. Commentators have
noted New
Zealand’s divergence from those that hold that strengthening governance
and democracy at the local level is crucial
to advancing overall economic
efficiency. [12]
...the British government has taken quite the opposite view, identifying the country’s high level of centralisation (second only to New Zealand’s in the OECD) as the problem, not the solution.
2.18 The Commission considers that, if there is evidence that the core functions of local government require further emphasis, a better option would be to add this provision to s.3 (rather than removing the four well-beings). An amended s.3 would provide that the Act contains both well-being and what is proposed in clause four. The revised purpose statement would then read as follows:
The purpose of this Act is to provide for democratic and effective local government that recognises the diversity of New Zealand communities; and, to that end, this Act -
(a) states the purpose of local government; and
(b) provides a framework and powers for local authorities to decide which activities they undertake and the manner in which they will undertake them; and
(c) promotes the accountability of local authorities to their communities; and
(d) provides for local authorities to play a broad role in promoting the social, economic, environmental, and cultural well-being of their communities, taking a sustainable development approach
(e) provides for local authorities to play a broad role in meeting the current and future needs of their communities for good-quality local infrastructure, local public services, and performance of regulatory functions.
The Commission opposes the removal of the reference to promoting the
social, economic, environmental and cultural well being of communities.
It
suggests that the current provision s. 3(d) is retained, and the new purpose
proposed in clause 4 added to s.3 as new s.3(e).
3. Reorganisation proposals
3.1 The Bill will change the rules relating to the reorganisation and amalgamation of local authorities. Of particular concern to the Commission, is the removal of a mandatory poll on reorganisation proposals. Under the Bill, a poll will only be held if a petition of 10 percent or more of the electors across the total affected area is received. The success of a proposal depends upon it receiving 50 percent or more of the vote across the total affected area.
3.2 In the Commission’s view this proposal erodes the democratic rights of citizens and has the potential to be less transparent. This is because it shifts the onus from local government to seek the views of electors on a reorganisation proposal, to the electors themselves to initiate a petition and obtain the support of 10 per cent of people in order for a poll to be held. Citizens will need to have a high level of knowledge and perseverance to initiate a petition and obtain the necessary 10 percent approval at a time when public engagement in local government has been in long term decline[13]. The need for promotion is recognised in the Commonwealth principles which note,
There is also a need to promote civic education and build the capacity of civil society organisations to enable them to engage in and participate effectively in the local democratic process.[14]
3.3 A human rights approach to democracy requires that people should be able to have an influence over public decisions and decision makers. Removal of the mandatory poll substantially limits the opportunity for New Zealanders to exercise their democratic rights to have a say in their own governance and requires a greater degree of knowledge of local government processes. The Commission considers that a principled approach to any reorganisation of local authorities needs to ensure genuine public and political consultation.
Democracy implies far more than the mere act of periodically casting a vote... it covers the entire process of participation by citizens in the political life of their country[15].
3.4 Recent research on consolidation in Australian and New Zealand local government, examined Australian and New Zealand legislation, literature, interviews and case studies. Consolidation in local government: a fresh look found that structural reforms do not necessarily result in lower rates and there was little evidence that amalgamation generated economies of scale greater than other forms of consolidation. The report also noted the importance of effective consultation.[16]
Consolidation almost always works best after extensive consultation with, and wherever possible with the imprimatur of, the local community (broadly defined to include a wide range of local and regional stakeholders). The case studies reveal that inadequate engagement and consultation with all those affected reduce or offset potential benefits of consolidation, especially by increasing uncertainty and anxiety about the future, and compounding the inevitable disruption associated with significant change.
The Commission is opposed to the removal of the mandatory poll
provision and its replacement with a burdensome process for public
participation
in reorganisation proposals. Lack of adequate consultation is also likely to
impact on the success and acceptance of
any reorganisation. If the bill proceeds
without amendment, the Commission submits that a review is required to ensure
that the public
are adequately and fully consulted on reorganisation proposals
and that a public education campaign is required to inform voters.
4. Powers of the Minister of Local Government
4.1 Clause 21 will repeal and replace Part 10 making it easier for the Minister to intervene in the affairs of local government. It will do this by replacing s.253, which currently confers a power on the Minister to institute a review or make certain appointments if local authorities “cannot perform or are not properly performing their functions, duties and responsibilities”, if there is:
4.2 What is proposed extends Ministerial discretion and erodes the autonomy of elected local representatives. Rather than allowing the Minister to review the performance of local authorities, the Minister will be able to assist or intervene in the local authorities’ affairs if he or she has reasonable grounds for believing that there is, or may be, a “significant problem” that the authority is unable or unwilling to effectively address.
4.3 There is a specific definition of “problem” as “a matter or circumstance relating to the management or governance of the local authority that detracts from, or is likely to detract from, its ability to give effect to the purpose of local government within its district or region”[18]including imprudent fiscal management[19]. This is clearly not an exhaustive definition. The use of “includes” – rather than for example, “means” – implies that the situations in which the Minister could intervene are not necessarily limited to fiscal issues. The Commission’s concern in this regard is compounded by the proposed definition of “significant”.
4.4 “Significant” (in relation to a problem of a local authority and for the purposes of the new Part 10) means that the problem will have actual or probable adverse consequences for residents or ratepayers within the district.
4.5 This is different from the way in which “significant” is presently defined. Section 5 of the principal Act defines “any issue, proposal, decision that has a high degree of significance” as significant. Significance itself is defined as the degree of significance of an issue, as assessed by the local authority, in terms of its likely impact on, and consequences for:
(a) the current and future social, economic , environmental, or cultural wellbeing of the district or region (to be replaced with “the district or region” if the amendment goes ahead);
(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal , decision or matter;
(c) the capacity of the local authority to perform its role and the financial and other costs of doing so.
4.6 It follows that what is significant is no longer aligned with assessment by the local authority but is left to the judgement of the Minister.[20]
4.7 Given the possibility of greater Ministerial intervention in a wider range of relatively poorly defined circumstances, the Commission sees the Bill as having the potential for democratic control of local government to be undermined by central government intervention, and the transfer of wide, discretionary powers to non-elected appointees. This would conflict with a central purpose of local government which is to enable democratic local decision-making and action by, and on behalf of, communities.
4.8 The proposed changes, by increasing ministerial discretion and decreasing local government autonomy, run counter to the spirit of the Commonwealth Principles which emphasise partnership between spheres of government and co-operation among local and national government. Effective democracy demands respects between the different spheres of government and recognises the defined roles that they play in serving their citizens.[21]
4.8 The Commission questions the need for these changes, when there are existing review and intervention powers in the current legislation, and as the RIS notes, are designed to be used in exceptional circumstances. This is likely to remain the case for the new powers to intervene; the thresholds remain high, and, as noted above, most councils run their affairs satisfactorily, and generally there is little or no need for the Government to step in.
The Commission opposes the extension of Ministerial intervention and derogation of the autonomy of local elected representatives. The current provisions are adequate for review and intervention when it is warranted - particularly given that, in so far as fiscal mismanagement is concerned, the Auditor-General has the ability to report on any loss incurred under ss.44 to 46.
In summary the Human Rights Commission believes that proposals in the Bill to remove the four well-beings, to remove the mandatory poll on reorganisations process and to reduce local government autonomy while strengthening ministerial intervention are retrograde steps that impact on democratic decision-making in local government.
[1] Joseph , P Environment
Canterbury Legislation NZLJ June 2010 at
196
[2] International Council on
Human Rights Policy (2005) Local Government and Human Rights: Doing Good
Service, Geneva: ICHRP
[3]
Commonwealth Local Government Forum, Time for Local Democracy - The Aberdeen
Agenda: Commonwealth Principles on Good Practice for Local Democracy and Good
Governance, Commonwealth Local Government Forum (2005)
[4] For further on this issue see
International Council for Human Rights, Local Government and Human Rights:
Doing Good Service, Geneva (2005) at
4
[5] The Local Government Act
2002 Amendment Bill 2012: A Local Government New Zealand and Society of Local
Government Managers discussion
document, (2012). Available online at: http://www.lgnz.co.nz/news/pr1340233977.pdf
[6] Local Government Commission,
(2008), Review of the Local Government Act 2002 and Local Electoral Act
2001 summary report, Wellington: LGC,
p6.
[7] Supra, fn 3 at 9
[8] Visit the Speak Out: Nelson
Tasman website for more information. Available at http://www.speakout.org.nz/supporters.html
[9]
The UN Committee responsible for the ICCPR has highlighted the role of local
government noting that: “the obligations of the
Covenant ... are binding
on every State Party as a while. All branches of government (executive,
legislative and judicial), and
other public or governmental authorities at
whatever level – national, regional or local – are in a position to
engage
the responsibility of the State Party.” The inclusion of local
government amongst the bodies identified in section 3 of the
Bill of Rights Act
1990 and subject to Part 1A of the Human Rights Act 1993 further supports the
notion that local government is
subject to human rights
standards
[10] Supra fn 3 at
1
[11] Cheyne, C
”‘Reforming local government a delicate affair”, Dominion
Post, 22 March 2012 Available at: http://www.stuff.co.nz/dominion-post/comment/6616715/Reforming-local-government-a-delicate-affair
[12] Reid, M, ‘Does the
reform of English local government contain lessons for New Zealand?’,
Policy Quarterly, 7(4), p
55.
[13] Voter turnout is well
under 50 percent
[14] Supra fn 3
at 9
[15] Secretary General of
the United Nations A/46/609 and Corr.1,
para.76
[16] Aulich et al,
Consolidation in Local Government: A Fresh Look, (2011), Australian
Centre of Excellence for Local Government.
[17] s. 254 (2) LGA
2002
[18]Cl. 254(a)(i). Cl.254
(a)(ii) refers to a state of emergency
[19] Cl.254(b)
[20] Clauses 255 & 256
(1)(b)
[21] Supra fn 3 at 6
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