Third Party Eligibility

The will release next week its decision on whether the is eligible to be registered as a third party, under the .

I have deliberately been refraining from comment on the substance of the arguments, as I don’t think it is a good look to be trying a case in the media, at the same time as a quasi-judicial body is determining the issue. But as they have now made their decision (just not released it), I think it is appropriate to  make public the points I have advocated, so that they can serve as background information for when the decision is released.

My original letter is here.

Over the break, is a copy of my follow-up letter. It speaks for itself, and I’ll comment further once the decision is known and made public.

27 March 2008

 

 

Dr Helena Catt

Chief Executive

Electoral Commission

PO Box 3050

Wellington

 

Dear Dr Catt,

 

Thank you for your letter stating the Electoral Commission is seeking further information on the issue of whether the NZ Amalgamated Engineering, Printing & Manufacturing Union is ineligible to be a third party under sub paragraph 13(2)(f)(i) of the Electoral Finance Act 2007.

 

I would like to take this opportunity to provide some further information and arguments and also to respond to the arguments presented by Andrew Little in his letter to the Electoral Commission dated 13 February 2008.

 

In doing so I will deal with the following issues:

 

          Is the EPMU a person for the purposes of the Act?

          Dominant or determinative versus “Involved”

          The EPMU as a separate self determining body

          Is the Union involved in the administration of the affairs of a party?

 

Is the EPMU a person for the purposes of the Act?

 

I agree with Mr Little that the definition of the term “person” must be “ascertained from its text and in light of its purpose,” according to the Interpretation Act 1999.

 

In regard to the “text”, section 13 of the Act clearly incorporates both ‘natural person’ and ‘legal person’ definitions of the term ‘person’.

 

I would, however, point to sub-section 1 of section 13 which says, “A person is eligible to be listed as a third party if the person is:

 

(a)   a New Zealand citizen or ordinarily resident in New Zealand; or

(b)   a body corporate that is not an overseas person within the meaning of the Overseas Investment Act 2005; or

(c)   an unincorporated body of which the majority of its members are persons described in paragraph (a).”

 

Sub-section 1 of section 13 therefore uses the term ‘person’ in the legal person sense of the term, and this is the primary sub-section defining eligibility.  The rest of the section follows down from that.

 

On this basis I would argue that the inconsistency in meaning of the term “person” between a “natural person” and a “legal person” in the text of section 13 means that a textual interpretation is inconclusive, at best, as to whether or not the term “person” should in paragraph (2)(f) of section 13 be read as being a “natural person” or “legal person”.

 

In order to aid the interpretation of paragraph (2)(f) I would argue that you need to look closely at the purpose of the Act.

 

In the first instance I would direct you to the comments of the Ministers in charge of the Act as it made its way through the House. In introducing the Electoral Finance Bill on 26 July 2007 Hon Mark Burton said:

 

The bill contains a much stricter regime for third parties that choose to enter the campaign arena. During the 2005 election it became evident that third parties could mount campaigns that had the potential to undermine candidate and party expenditure limits. It is simply unacceptable to the general public that a third party should be able to, in effect, buy an election result.  … This will help to guard against parallel election campaigns.

 

Speaking at the beginning of the Committee of the Whole House’s consideration of Part 1 (which includes section 13) of the Bill, Hon Rick Barker said:

 

The purpose of this bill, to come back to it, is to ensure that New Zealanders have free and fair elections. As a candidate for an election, there is a cap on my spending. My party’s spending for the election has a cap on it, as well. It is unrealistic to expect that third parties can run campaigns with limitless amounts of money, and to go and campaign for political parties as they did in the last election. There is no doubt about that, at all. I saw the pamphlets from the Exclusive Brethren, and I saw that they were in collusion with the National Party. Members should look at those pamphlets: “Change the Government”, they said. It was all done in collusion with the National Party. It was done to increase the National Party vote, and they were going to spend limitless amounts of money—a minimum of $1.2 million—to change the Government, without actually having to put anything on the National Party’s vote.

 

These comments show that one of the purposes of the Act is to prevent or restrict parallel campaigning. That is the intention of the Act is to prevent individuals and groups from being able to campaign in a way and on policies so similar to a political party so as to mean they are essentially extending the amount of funds that a political party is able to spend past the spending cap on the party. Mr Little acknowledges this is the intention of the Act when he states that the intent of the legislation is to ensure that individuals or sub-groups cannot “attempt to claim third party status with a right to spend within the third party spending cap as an extension of the party spending.”

 

If this is the intention of the Act then I believe that Mr Little’s contention that the term “person” means a natural person in sub-paragraph (2)(f) of section 13 would so frustrate the intention of the Act that it must be viewed as an untenable interpretation.

 

First of all if as stated by Mr Little only natural persons involved in the administration of the affairs of a party or candidate are barred from being a third party then a simple way for a financial agent of a party or candidate to get around the law would be for them to corporatise (for example by registering to become a limited liability company) and they could then be eligible to become a third party.

 

Secondly if only natural persons involved in the administration of the affairs of a party or candidate are barred from being a third party then this means that different types of groups that interact with and are involved with the administration of the affairs of a party would be allowed to register as a third party without limitation. For example a group such as the ‘Blue Libs’ which is aligned to the National Party but meets separately to the National Party and has no formal role under its constitution would be allowed to register as a third party but the financial agent of the National Party would not be able to register as a third party.

 

I understand from recent media reports that ‘ACT on Campus’ are affiliated to but a separate organisation to the main ACT Party. Under Mr Little’s interpretation, you could have the situation where a party’s youth wing can become a third party, because they are not a natural person. Indeed each of their individual campus clubs could also become a third party, if one accepts the assertion that the restriction only applies to natural persons.

 

I believe that these two consequences of Mr Little’s interpretation so frustrate the intention of the Act to prevent parallel campaigning that allows parties to artificially increase their spending cap that they cannot be viewed as tenable interpretations. Because I would argue that a textual analysis of section 13 shows that the term “person” is used in the sense of a “natural person” and a “legal person” I believe that the Commission needs to adopt an interpretation of the term “person” in paragraph (2)(f) of section 13 that ensures the purpose of the Act is able to be carried out. Only an interpretation which sees “person” in 13(2)(f) as a “legal person” avoids the two consequences raised above and means the purpose of the Act can be upheld.

 

Dominant or determinative versus “Involved”

 

I believe it is important to be clear about what is required under the Act. The Act states that “a person involved in the administration of the affairs of a party,” is ineligible to be a third party. The Act is clear that only involvement is required before the ineligibility test under paragraph (2)(f) of section 13 is triggered.

 

Mr Little states at several times throughout his letter that the EPMU does not play a dominant or determinative role in the Labour Party. For example:

 

The EPMU is represented at Labour Party conferences, but it cannot be said that it has a dominant or determinative role to play on any matter at the Conference. (Paragraph 20)

 

there is no guarantee that any affiliate, including the EPMU, can dominate the voting carried out by local Party members. It is, therefore, not correct to say that the EPMU has any determinative role to play in the selection of electorate candidates. (Paragraph 21)

 

Whether or not the EPMU is dominant or determinative is not the issue at hand as the Act sets the lower threshold of “involved.” The paragraph does not even refer to significant involvement or substantial involvement – just involvement.

 

I think the Electoral Commission needs to carefully consider the ramifications of trying to apply a test for significance or even dominance to the “involvement” disqualification. Apart from the lack of statutory backing for such a test, it could lead to a very unclear and subjective position.

 

In order to make value judgments about whether a level of involvement is sufficient for disqualification, the Commission would need to fully understand the internal dynamics of potentially how every registered party works.  You could end up with a situation where there is a ruling that in say Party A you can be a Electorate Chair without being barred as a third party, yet in Party B, you can not be an Electorate Chair and a third party as their Electorate Chairs are more involved in party administration than Party A’s.  The potential for confusion is significant. 

 

I would think that the law, as drafted, would at a minimum exclude all office holders and members of committees and executives in a party – from branch level upwards, plus of course staff. 

 

The EPMU as a separate self determining body

 

Mr Little’s letter states:

 

The EPMU is a longstanding, separate and distinct body with its own membership and governing body. It is fully self-determining and independent of the Labour Party. The EPMU does not make decisions for or on behalf of the Labour Party and the Labour Party is not dependent on the EPMU for any decision it takes. (Paragraph 25)

 

This argument is, I believe, irrelevant to the legal test in section 13 of the Act which refers to whether a person is involved in the administration of a party’s affairs. This is a totally different question to whether that person is self determining.

 

Is the Union involved in the administration of the affairs of a party?

 

Mr Little claims in his letter that “It is simply not correct to say that the EPMU plays a role in the administration of the NZ Labour Party,” and “The EPMU has no representation in its own right on any constituent part of the NZ Labour Party.” In response to this I would like to quote the EPMU National Secretary, Andrew Little, from his appearance on Agenda on TV One on 2 September 2006:

 

LISA OWEN: So is the union losing its clout with Labour, is that relationship sort of pulling back a little bit?

 

ANDREW LITTLE: No I don’t think so at all, I think we are represented at all levels in the party, at electorate committees, at some of the national committees, on the New Zealand Council, we’ll continue to do that.

 

This is a very clear statement that the EPMU itself believes that it has representation at all levels of the Labour Party.

 

The statement on Agenda is also backed up by numerous rules in the Labour Party Constitution which give the EPMU, as an affilitiate, a constitutional right to involvement in administering the affairs of the Labour Party.

 

I draw special attention to Rule 13(ii) which states that an affiliate is actually part of the Labour Party organisation (as opposed to solely their members being part), and has a similar status to a branch or electorate committee. 

 

            13. The Party organisations shall consist of:

      i. General Branches and Special Branches

      ii. Affiliates

      iii. Labour Electorate Committees

 

This clearly makes the EPMU not just an ordinary member but as an affiliate member, they are part of the actual Labour Party organisation which administers the affairs of the party.

 

Involvement with the Parliamentary Party

 

Mr Little in paragraph 16 of his letter states that my previous assertions that there is no “affiliates council provided for in the Labour Party Constitution and affiliates are a group are not recognised as a group within the party. There is no formal liaison with any specific MP or group of MPs.”

 

In response to this I would first point to the following text from the NZ Labour Party website at the following page: http://staging.labour.org.nz/labour_team/party_groups/affiliates/index.html

 

Trade Union Affiliates

 

The New Zealand Labour Party was formed in 1916 on the basis of broad industrial support. That support continues today and trade union interests and issues are represented in the Party through the Affiliates Council. 

 

The Council meets regularly throughout the year, and maintains a close liaison with members of Parliament through the Transport and Industrial Relations Caucus Committee.

 

Trade Unions affiliated to the NZ Labour Party are: Engineering, Printing & Manufacturing Union (EPMU), Service & Food Workers Union (SWFU) and the Dairy Workers Union (DWU).

 

Members of any of the Affiliate Unions are automatically members of the Labour Party if they wish.  This means they have exactly the same rights and responsibilities as ordinary Labour Party members and can become office holders, take part in selection meetings or stand as Labour candidates themselves.

 

Affiliate Vice-President Andrew Little represents union interests on NZ Council.

 

 

EPMU members as individual party members

 

Mr Little asserts in paragraph 17 that “The significance of some members of the EPMU also being members of the Labour Party is no more than that; some members of the union are also members of the Party.” A reading of the rules, however, makes it very clear they are delegates and representatives of the EPMU.  The fact they are individuals is a truism.  These individuals participate as of right for the EPMU and not in a personal capacity.

 

Rule 48 states affiliates are either directly members of a LEC or if branch based they appoint delegates to the LEC.

 

Membership

            48. A Labour Electorate Committee shall consist of either:

Financial members who are appointed as delegates by Branches and affiliates and a women’s liaison officer co-opted on to the Labour Electorate Committee as a delegate, (known as a Branch based LEC);

or

      i. representatives who are financial members, resident in the electorate and who are elected by financial members, in the electorate

      ii. affiliates, and

      iii. a women’s liaison officer co-opted to the LEC as a representative,

                        (This alternative structure is known as a Membership based LEC)

 

The affiliate (in this case the EPMU) has the same status as an actual branch of the Labour Party – except more powerful with the weighting giving for representation given in Rule 44(b).

 

Rule 69 (i) states delegates to an LEC must be authorised by the affilitate – they can not simply choose to participate without sanction from the affilitate.

 

            69. The test of eligibility to participate as a voting delegate at the Annual General Meeting of a branch-based Labour Electorate Committee shall be:

      i. Each individual delegate representing a branch or an affiliate must demonstrate that the branch or affiliate has duly authorised delegates to represent the Branch for the ensuing year at the Labour Electorate Committee.

 

This makes clear that the EPMU is mot just a passive vehicle for members to participate as individuals. The EPMU must approve any delegates to a Labour Electorate Committee AGM.

 

Rule 84 covers local body committees – one per territorial local authority area.

 

            84. Each Affiliate will have representation on the Labour Local Body Committee within which its members reside.

 

Again I draw attention to the fact the affiliate itself is a member of the Committees.

 

            110. A Labour Regional Council shall consist of delegates from constituent bodies and affiliates within the designated region.

 

Rule 110 in relation to Labour Regional Councils refers to affiliates as having delegates on the Regional Council.

 

Further it is inarguable that when it comes to National and Regional Conferences, that the EPMU is represented as an organisation, rather than as suggested merely being a vehicle for individuals to choose to participate.

REPRESENTATION

Annual and Regional Conferences/Congresses

            163. a) Representation at Annual and Regional Conferences/Congresses shall be on the following basis

 

Affiliates with membership from 1001-1500

4 delegates

4 votes

 

Rule 163 gives an affiliate not only delegates, but multiple votes in its own right.

 

Involvement in the general affairs of the party

 

I again quote Mr Little from Agenda:

 

… we are represented at all levels in the party, at electorate committees, at some of the national committees, on the New Zealand Council…

 

This is itself proven by Mr Little’s letter where he says:

 

… the maximum number of votes that the EPMU can exercise at a conference of the Labour Party is 41. This is out of a total delegateship to the Party Conference of around 700. The EPMU is represented at Labour Party conferences …

 

In these quotes Mr Little admits that the EPMU has an involvement in the affairs of the New Zealand Labour Party.

 

I have attached a spreadsheet which calculates, the entitlement rights the EPMU has on all 69 Labour Electorate Committees (Rule 44(b).  It calculates this based on both the EPMU membership registered with the Dept of Labour and on Mr Little’s assertion of a lesser number being the basis for affiliation. On the basis of Mr Little’s 18,000 members as the basis for affilitation the EPMU is entitled to 289 delegates over the 69 current Labour Electorate Committees. If the Dept of Labour figures are used then it is 474 delegates.

 

Rule 51 gives clear administrative duties to LECs, including election organisation activity, and fund raising.

 

The EPMU also has a very significant number of votes (4 votes for 1st 1,500 members and 1 extra vote for every additional 500) at the Labour Party National Conference, and Rule 147 (xvii) gives the National Conference the power to set manifesto policy – a key aspect of a party’s affairs.

 

It is also worth considering that the EPMU has significant input into the election or selection of 15 of the 18 voting members of the ruling NZ Council of the Labour Party (Rule 136).

 

They, along with other affiliate members, directly elect the Affilitate Vice-President. Their representatives at National Conference (larger than any other affiliate member, or electorate) vote for the President and the other six Vice-Presidents (or equivalents). They also get to vote within every Region on the seven regional representatives on the NZ Council, with five votes in every Region. (Rule 186).  No other member of the Labour Party has as great an influence on the shape of the top administrative body – getting to vote on 15 of the 18 voting members of the Council.

 

Again I would stress that I believe the Commission only needs to apply a test of “involvement” as detailed in the statute.  But hopefully the above paragraphs have demonstrated that the nature and level of involvement is massive and comprehensive.

 

Involvement in the selection of candidates

 

Finally I would like to bring the issue of involvement in the key task of selecting candidates under scrutiny.  Again Mr Little has suggested that the EPMU is not involved directly in Labour affairs – just that its members choose to participate.

 

I would like to quote one of Mr Little’s own staff members in the Otago Daily Times of 31 January 2008.  The article says:

 

EPMU organiser Mike Kirwood said in an interview he was working hard to get as many members as possible along to the selection meeting on Saturday where Mr Benson-Pope, the MP for the nearly nine years, will face a hotly-contested selection process.

The union had more than 500 members in the electorate, with Fisher and Paykel the largest site.

The union would propose someone from the floor to be part of the six-person selection panel and hoped to have enough members to win the floor vote, Mr Kirwood said.”

 

This is a paid EPMU organizer stating the union is using its staff to get as many union members along to a Labour Party selection meeting as possible, and that they hope to “win the floor vote”.

 

I can not conceive how anyone could argue that this is not involvement with administering a party’s affairs.

 

The NZ Herald on 29 January 2008 reports:

 

Mr Pryde said the EPMU was strongly supporting his bid to become the candidate and was planning to have enough members attend on Saturday to win the floor vote, a crucial part of the process. The EPMU usually has the most influence within the party of any union grouping.

 

And Mr Little himself is quoted in the earlier ODT article as saying:

 

EPMU national president (sic) Andrew Little said Mr Pryde had the support of the union’s national executive for the nomination.

 

‘‘The union’s support for Don is about ensuring that the interests and values of working people are properly reflected in the Labour Party caucus and in the decision-making pro cesses of our country.’’

 

This is a clear statement by the EPMU National Executive of their involvement in Labour Party affairs. There are numerous other media clippings I could supply which give further examples – that this is not an isolated example.

 

The NZ Herald reported on 31 October 2007 that

 

The EPMU is a major fundraiser and provider of campaign workers for the Labour Party. Mr Little was credited at the last election for motivating his members in the West Auckland electorates to get out and vote and swing the election result to Labour.”

 

This would also seem to qualify in a major way as involvement with the administration of a party’s affairs.

 

DETERMINING THE APPLICATION

 

Finally I would like to draw attention to the specific wording of s17(1) which effectively states that the Electoral Commission must refuse a third party application if it is “not satisfied … that the applicant is eligible …”.

 

Now as with any matter under dispute it is possible to conceive of three basic scenarios –

  • that you are satisfied an applicant is eligible
  • that you are satisfied that an applicant is ineligible
  • and the borderline cases where it is difficult to conclude whether they are eligible or ineligible.

 

I believe that under the Act, the Commission is required to refuse the application unless it is positively satisfied the applicant is eligible. If the Commission is not able to conclude they are satisfied that an applicant is eligible, then the duty under the Act appears to be to refuse the application.

 

I do not believe this is a marginal call or a borderline case. I just point out that in such cases, the Act requires an application to be declined if the Commission is not satisfied the person applying is eligible. 

 

SUMMARY

 

In summary I highlight:

 

  • The EPMU is “represented at all levels in the party”
  • The EPMU is guaranteed representation on every local body committee within the party
  • The EPMU is guaranteed representation on all six Labour Regional Councils
  • The EPMU has dozens of votes at Labour Party Annual and Regional Conferences.
  • The EPMU is entitled up to at least 289 delegates on the 69 Labour Electorate Committees
  • The EPMU has significant input into electing or selecting 15 of the 18 members of the NZ Council
  • The EPMU endorses and supports candidates within the Labour Party
  • The EPMU is actively involved in selection meetings and has paid staff working to get EPMU members to selection meetings so they can win the floor vote, influencing selections
  • The EPMU actively raises money for Labour, provides campaign workers for Labour, and assists with “get out the vote” activities for Labour

 

The EPMU has a constitutional and irrevocable right to be represented within the Labour Party.  As such it clearly falls within the legal test for section 13 of the Act and is “a person involved in the administration of the affairs of a party” and not eligible to be registered as a third party.

 

Once again, I hope this information is useful in helping the Electoral Commission make a decision with regard to the eligibility of this applicant to be a registered third party.

 

Yours Sincerely,

 

David Farrar

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