Ryall Tony: Questions for Oral Answer — Questions to Ministers 
Ryall Tony: Questions for Oral Answer — Questions to Ministers 
[Volume:639;Page:9733] 
8.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: When he appointed Ken Douglas as deputy chair of the Capital and Coast District Health Board did he make any checks as to potential conflicts of interest; if so what were those checks? 
Hon PETE HODGSON (Minister of Health) 
: 
 Yes I did make some checks. They are the same ones I always make on the advice of the ministry. 
Hon Tony Ryall 
: What precisely are the potential conflicts of interest involving Ken Douglas that have required the Capital and Coast District Health Board to seek legal advice from its lawyers? 
Hon PETE HODGSON 
: Mr Douglas is a member of a company called HealthCare of New Zealand Holdings Ltd which has a bunch of interests in the health sector. My advice is that Mr Douglas considers it appropriate and prudent for him to withdraw from both the district health board and the board of HealthCare during any contracting processes that might arise between them. 
Lesley Soper 
: Do any members of other district health boards have a conflict of interest or a potential conflict of interest; if so what does the law say about that? 
Hon PETE HODGSON 
: There are I suspect as many board members with a conflict of interest—or a potential one—as there are without. The issue is not the conflict of interest in law; it is the honest declaration of that conflict and its subsequent management. That was the problem identified in the High Court decision on the Auckland laboratories; the conflicted board member did not tell enough of the truth soon enough to allow for proper management. 
Hon Tony Ryall 
: To what extent was Ken Douglas—a director of HealthCare the biggest provider of home-care services in the country—involved in any way whatsoever in pushing promoting or considering proposals for the Capital and Coast District Health Board to contract out its community services a contract that could be worth tens of millions of dollars to HealthCare? 
Hon PETE HODGSON 
: I will just say again that Mr Douglas sought advice from the chair of the Capital and Coast District Health Board as to the appropriate level of abstention he should exercise in relation to matters involving HealthCare. Mr Douglas considered it appropriate and prudent for him to withdraw from both the district health board and the board of HealthCare during any contracting processes between them and I am assuming that is what happened. 
Hon Tony Ryall 
: Would it be wrong for a board member to be shaping board thinking or policy on the contracting out of particular services when that board member is a director of a company that will bid for those contracts? 
Hon PETE HODGSON 
: The member forgets that Mr Douglas was elected a member of the board by the public at large some time ago—I am not sure just when—and has been involved as an ordinary board member since then. What has happened is that in recent weeks I have made him the deputy chair of the board. I imagine that all of the things the member is referring to have got nothing to do with my appointment of Mr Douglas as deputy chair so much as with management of conflict of interest within the Capital and Coast District Health Board in general. I might just say— 
Hon Tony Ryall 
: Answer the question. 
Madam SPEAKER 
: Please be seated. Ministers are to be given an opportunity to answer questions. When they are in the process of doing so to constantly interrupt them does create disorder. Would the Minister please address the question. 
Hon PETE HODGSON 
: Just to conclude the member may be interested to know that earlier this month the Ministry of Health sent out new guidelines which actually are a repetition of New Zealand law to all the district health boards so that they could keep themselves abreast of New Zealand law. 
Hon Tony Ryall 
: I raise a point of order Madam Speaker. I ask you to reflect on the answer the Minister gave because it was lengthy it solicited one additional comment from me during it but he did not actually answer the question. The question was whether it was wrong for a member to try to shape board policy when he was a director of a company that would benefit significantly. That goes to the heart of the concerns that I am sure Dr Aitken raised directly with Ken Douglas because he was probably doing that. 
Madam SPEAKER 
: I think the Minister did address the question but if he wishes to add to it and to go over it again then I am sure the House would be appreciative. 
Hon PETE HODGSON 
: I simply say that schedule 3 of the New Zealand Public Health and Disability Act 2000 includes a very lengthy legal treatment of how conflicts of interest must be managed. The fact that conflicts of interest exist is accepted and I said earlier that I think many people on district health boards have a potential or real conflict of interest. That is not the point; the point is how they are managed. 
Hon Tony Ryall 
: Has he sought any assurances or had any comments from the chairwoman of the Capital and Coast District Health Board that have assured him that Mr Douglas was not using his position in any way whatsoever to encourage the board to contract out those community services for which HealthCare New Zealand would in fact be one of the bidders; and has the Minister met Mr Douglas recently to discuss these issues? 
Hon PETE HODGSON 
: Management of the conflict of interest is the job of the board; that is its job. The chair of the district health board said—I read it in the newspaper—she thought she needed some legal opinion on that. She will have no doubt sought it; no doubt Mr Douglas will have too. My advice from the Ministry of Health is that Mr Douglas does have a serious conflict of interest and it should be managed properly. There is no suggestion that it has not been managed properly.