5.7 How the council makes decisions

General principles

A range of principles and requirements apply to how the council makes decisions, depending on the nature of the decision being made. As a general principle of governance, the council should ensure its structures and processes are effective, open, and transparent [1] 

In making decisions, the council should: 

• comply with the specific requirements in the legislation under which the decision is made 
• comply with the general requirements of the Local Government Act 2002 and the Local Government (Auckland Council) Act 2009 that apply to the particular decision, particularly any requirements to expressly consider alternative options and to consult the public and Māori 
• comply with any policy that applies to the decision or appropriately identifies and justifies any inconsistency with that policy 
• comply with the general requirements of public law, including ensuring decision-makers act lawfully, fairly and reasonably in the circumstances; in particular, decision-makers need to ensure decisions are not affected by conflicts of interest or predetermination 
• ensure decisions do not breach human rights legislation 
• ensure Governing Body and local board (or their committees) decisions comply with the relevant Standing Orders and other meeting procedure requirements. 

These requirements can be enforced by the High Court in judicial review. 

Legislative requirements under the Local Government Acts

The Local Government Act 2002 and the Local Government (Auckland Council) Act 2009 set out substantive decision-making principles and requirements that apply to council decisions.   

Specific legislative requirements under which decisions are made will make these general principles less important in some cases. For example, decisions under the Resource Management Act do not generally refer to the Local Government Act 2002 and the Local Government (Auckland Council) Act 2009, as the Resource Management Act contains its own comprehensive set of decision-making requirements.  However, all council decision-makers should be aware of Local Government Act principles and how they might apply to their decisions. 

General procedural requirements

The basic procedural decision-making requirements in the Local Government Act 2002 and Local Government (Auckland Council) Act 2009 are:  

• to identify all reasonably practicable options for achieving the objective of a decision, and assess the advantages and disadvantages of those options [2] 
• to consider the views and preferences of people likely to be affected by, or have an interest in the decision (this does not, of itself, necessarily require the council to undertake consultation) [3] 
• to conduct any consultation in accordance with the principles outlined in the legislation [4] 
• where an option involves a significant decision in relation to land or a body of water, take into account the relationship of Māori and their culture and traditions with their ancestral land, water, sites, waahi tapu, valued flora and fauna, and other taonga  
• to identify any significant inconsistency between the decision and any of the council’s policies or plans, and to provide reasons for the inconsistency [5] 
• to provide opportunities for Māori to contribute to decision-making, including providing relevant information for that purpose [6] 
• for the Governing Body to consider the views and preferences of local boards if the decision may affect their responsibilities or operation or the well-being of their communities [7] 
• for local boards to cooperate with each other when the interests of their areas are better served by doing so [8]. 

Decision-makers have discretion as to how to fulfil these requirements [9]. The more significant a decision is, the stricter the compliance should be. 

Consultation and engagement with communities

Public consultation and engagement are key parts of the council’s decision-making processes. The council’s Significance and Engagement Policy sets out how and when communities can expect to be engaged.  

The Local Government Act 2002 requires the council to consider the views and preferences of persons affected by or interested in a matter.  The council has discretion as to how to achieve this, which should be assessed in accordance with the council’s Significance and Engagement Policy. 

The Significance and Engagement Policy provides that the council may consider the following when assessing significance:  

• the number of people affected, the degree to which they are affected and the likely impact of the proposal or decision  
• whether this type of matter is likely to generate wide public interest within the local board area (for a local board decision or a Governing Body decision that affects a particular local board area) or Auckland or New Zealand generally (for a Governing Body decision)  
• the impact of the proposal or decision on the Governing Body's or a local board's ability to deliver on actions that contribute to the Auckland Plan or perform any statutory responsibility  
• the impact of the proposal or decision on intended service levels for a group of activities, including the start or stop of any group of activity  
• the degree to which the proposal or decision can be reversed should circumstances warrant [10].   

Principles of the consultation

Consultation should be undertaken in accordance with the principles in the Local Government Act legislation [12]. These are that:  

• people affected by, or interested in, a decision will be provided with clear information and that they are encouraged to and are given reasonable opportunity to present their views to the council in a way that is appropriate to them 
• the council will receive and consider their views with an open mind 
• people who present their views to the council will have access to a clear record of, and reasons for, the decisions 
• the council must have processes in place to consult with Māori. 

The council has discretion as to how to comply with those principles, which should be assessed in accordance with the significance of the decision. 

For some types of significant decisions (for example bylaws and the long-term plan), the council is required to use the special consultative procedure set out in the Local Government Act 2002 [13]. Where this applies, the special consultative procedure overrides the general requirements for consultation [14]. 

Decision-making duties to Māori

The Local Government Act 2002 and Local Government (Auckland Council) Act 2009 gives the council general decision-making responsibilities relating to Māori and Houkura - Independent Māori Statutory Board. These duties include:  

• providing opportunities for Māori to contribute to its decision-making processes [15]  
• supporting Māori in contributing to the council’s decision-making processes [16] 
• consulting Houkura on matters affecting mana whenua groups and mataawaka of Tāmaki Makaurau, ensuring their input is reflected in the council’s strategies, policies, and plans, and on other matters [17] (visit Houkura (Independent Māori Statutory Board) for more).
• providing information to Māori and Houkura for the purpose of allowing them to contribute to the council’s decision-making processes [18] 
• taking into account the relationship of Māori with their ancestral land, water, sites, waahi tapu, valued flora and fauna and other taonga [19]. 

In practice, the council needs to ensure all decisions should consider the impacts on Māori. 

General decision-making requirements of public law 

All council decision-makers are subject to public law principles which are enforced by the High Court in judicial review. They require public decision-makers to act lawfully, fairly and reasonably. 

The concept of acting lawfully includes: 

• having the necessary power or delegation to make the decision 
• acting in accordance with the purpose of the power being exercised, and within the scope of the discretion granted to the decision-maker 
• taking into account all relevant considerations and ignoring any irrelevant considerations 
• exercising independent judgement in making the decision rather than rubber-stamping the recommendation of another person. 

The concept of acting fairly includes: 

• ensuring a proper process is followed, including consulting where appropriate 
• being unbiased and free from conflicts of interest [20] 
• fairly considering all relevant views put forward and not predetermining the decision [21] 
• complying with the public’s legitimate expectations (for example keeping a promise to do something in a particular way that has been relied on) 
• complying with any applicable principles of natural justice (although what this will require depends heavily on the context, as discussed below). 

The concept of acting reasonably includes ensuring the decision is: 

• rational, based on legitimate reasons and one that a reasonable decision-maker could make 
• proportionate to the purpose being served by the decision (the idea that a legal sledgehammer should not be used to crack a nut, especially if it affects human rights). 

These public law obligations vary by context. The exact obligations that apply depend on the nature of the decision [22]. 

Conflicts of interest, predetermination and bias 

It is a general rule of law that all council decision-makers should make decisions for a proper purpose, unaffected by personal interests. This principle gives rise to the rules about conflicts of interest and bias.  

A decision-maker should not participate in a decision in which they have a financial or non-financial conflict of interest. 

For elected members, the rules about conflicts of interest are contained in the Elected members' code of conduct, the relevant standing orders for the decision-making body they are on, and (for financial interests only) the Local Authorities (Members' Interests) Act 1968. They are also found in general public law. Guidance on these rules can be found in the Office of the Auditor-General’s Guidance for members of local authorities about the Local Authorities Members Interest Act 1968. 

For other decision-makers, the rules about conflicts of interest are derived from general public law, the council’s policies and any specific requirements of the legislation under which they make a decision. Guidance about the general principles can be found in the Office of the Auditor-General’s Managing conflicts of interest: Guidance for public entities. 

Conflicts of interest

Conflicts of interest are natural and unavoidable. They will inevitably arise from time to time in a country as small as New Zealand. The important thing is to manage them effectively. 

Public perception is important when managing conflicts of interest. Decision-makers should ensure their decisions are unaffected by personal interests and that it appears that way to reasonable members of the public. This protects the integrity and reputation of the council as a decision-maker. 

There are two types of interest: 

• A financial interest is one where a decision or act of the Governing Body or local board could reasonably give rise to an expectation of financial gain or loss to an elected member (and that interest is not in common with the public). 
• A non-financial interest arises from a relationship, involvement or role with an individual or organisation, or duty to an individual or organisation, where that individual or organisation is involved in or affected by a matter coming before the council. 

Once an interest is identified, the key question as to whether that interest gives rise to a conflict of interest and so requires the decision-maker to step-aside from the decision-making is [23]: 

Would a fair-minded observer reasonably think that a member of the decision-making body might not bring an impartial mind to the decision, in the sense that they might unfairly regard with favour (or disfavour) a particular position due to their financial or nonfinancial interest? 

In addition, all elected members are required by the Code of Conduct and the Local Government Act to declare their interests every year.  This must be done by the last day of February each year, or 120 days after the date on which the member comes into office. Visit Declarations at start of term to learn more.

Predetermination and statements by decision-makers

Predetermination is concerned with closed mind decision-making and is not dependent on the relationships or interests of the decision-maker.  It usually arises when a decision-maker makes comments that suggest they made up their mind prior to considering all relevant views or refusing to read or listen to reports or submissions presented to the council on the matter. 

The test for pre-determination is an actual closed mind.  In a local authority context, elected members may approach their task with a legitimate predisposition to decide in accordance with particular views on certain issues that they have previously articulated. What is critical is that an elected member is “prepared, despite predisposition, honestly to consider whether to change its mind”. 

All public decision-makers should be careful when commenting on decisions before and after they are made. Any public statements that suggest the decision-maker made up their mind in advance, or considered something they should not have, may lead to allegations of predetermination. 

Elected members should not criticise Governing Body or local board decisions in council-funded communications [26]. Elected members and staff should also avoid publicly criticising decisions made by staff, especially when such criticism may reflect on the employee’s competency [27]. Concerns of this nature should be raised with the chief executive. 

Human Rights

The council’s decisions are subject to the New Zealand Bill of Rights Act 1990 and the Human Rights Act 1993 [28]. Council decision-makers need to take into account the requirements of human rights legislation when making decisions. 

The Bill of Rights Act

The Bill of Rights Act affirms a number of rights and freedoms existing in New Zealand. The rights affirmed by the Bill of Rights Act include the rights to:   

• the freedom of expression, peaceful assembly, movement and association [29] 
• be secure against unreasonable search or seizure [30] 
• freedom from discrimination (discussed in more detail in relation to the Human Rights Act) [31].   

The Bill of Rights applies to all acts or omissions by the council [32]. 

Council decisions should not limit the rights and freedoms affirmed in the Bill of Rights Act unless the limitation is reasonable, prescribed by law and can be demonstrably justified in a free and democratic society [33]. 

In practice, the council imposes a range of justified limitations on rights contained in the Bill of Rights Act, for example managing nuisances and public spaces requires the council to limit the freedoms of expression, peaceful assembly and movement. 

It is important any limits on rights affirmed in the Bill of Rights are properly considered and justified. The process of justification can be technical and may require legal advice. However, there are some broad principles that apply to this [34]. The council should identify when a decision impinges on an affirmed right or freedom. If it does, the council should consider if the objective obtained by the decision is proportionate to the limitation on the rights, including whether the objective is sufficiently important to justify infringing the right in question or if there are other, less rights-infringing ways to achieve the same objective.   

Human Rights Act and unlawful discrimination

The Human Rights Act protects people in New Zealand from discrimination because of certain personal characteristics (known as prohibited grounds of discrimination [35]) in a number of areas of life (including public bodies performing public functions). 

All council decision-makers should ensure their decisions do not unlawfully discriminate against people in a manner that breaches the Human Rights Act. 

The prohibited grounds of discrimination are sex (including pregnancy and childbirth), marital status, religious or ethical belief, colour, race, ethnic or national origins, disability, age, political opinion, employment status, family status and sexual orientation [36]. 

The council’s decisions must not discriminate against people on a prohibited ground unless this can be demonstrably justified in a free and democratic society (i.e. the test that applies under the Bill of Rights Act, discussed above) [37]. 

This requirement is relevant to all council decisions, including decisions about [38]:   

• the provision of services 
• about council policies 
• employment (there are special provisions in the Human Right Act) [39]. 

In considering whether a decision is discriminatory, decision-makers should assess its intention and effect. It is important to be aware that a decision may indirectly (and impermissibly) discriminate against people on a prohibited ground [40]. Even when a decision does not expressly discriminate against people, it may do so (again, impermissibly) if the effect of the decision is different for different people. 

The council can take measures that would otherwise be considered discriminatory if they are taken in good faith to assist or advance an individual or group disadvantaged because of unlawful discrimination [41]. This concept is sometimes known as affirmative action. 

Footnotes

[1] Local Government Act 2002 s 39(b). 

[2] Local Government Act 2002, s 77(1)(a) and (b). 

[3] Local Government Act 2002, s 78. 

[4] Local Government Act 2002, s 82. 

[5] Local Government Act 2002, s 80. 

[6] Local Government Act 2002, s 81. 

[7] Local Government Auckland Council Act 2009, s 15(2)(c). 

[8] Local Government Auckland Council Act 2009, s 16. 

[9] Local Government Act 2002, ss 79(1), 82(3). 

[10] Local Government Act 2002, s 82(3). 

[11] Local Government Act 2002, s 82(4). 

[12] Local Government Act 2002 s 82(1). 

[13] Local Government Act 2002 s 83. 

[14] Local Government Act 2002 s 82(5). 

[15] Local Government Act 2002 s 81(1)(a).  

[16] Local Government Act 2002 s 81(1)(b).  

[17] Local Government Auckland Council Act 2009 s 88(1). 

[18] Local Government Act 2002 s 81(1)(c); Local Government Auckland Council Act 2009 s 88(1)(a). 

[19] Local Government Act 2002 s 77(1). 

[20] Predetermination and conflicts of interest are a special topic addressed at 10.4.4. 

[21] Predetermination and conflicts of interest are a special topic addressed at 10.4.4. 

[22] For example Wolf v Minister of Immigration (2004) 7 HRNZ 469; [2004] NZAR 414 at [47]. 

[23] Saxmere Company Ltd v Wool Board Disestablishment Company Ltd [2009] NZSC 122, [2010] 1 NZLR 76.

[25] Auditor General Managing Conflicts of Interest: Guidance for Public Entities (June 2007) at [2.42] and [2.43]. 

[26] Auckland Council Communications Policy, para 16. 

[27] Code of Conduct for Elected Members, para 7.2. 

[28] New Zealand Bill of Rights 1990 ss 14, 16, 17 and 18. 

[29] New Zealand Bill of Rights 1990 s 21. 

[30] New Zealand Bill of Rights 1990 s 19. 

[31] New Zealand Bill of Rights 1990 s 3. 

[32] New Zealand Bill of Rights 1990 s 5. 

[33] R v Hansen [2007] NZSC 7. 

[34] Human Rights Act 1993 s 21. 

[35] New Zealand Bill of Rights 1990 s 19(1); HRA s 21. 

[36] New Zealand Bill of Rights 1990 s 19(1); HRA s 20L. 

[37] New Zealand Bill of Rights 1990 s 3; HRA s 20J. 

[38] Human Rights Act 1993 ss 22 – 35. 

[39] For example, see Human Rights Act 1993 s 65. 

[40] New Zealand Bill of Rights 1990 s 19(2).