﻿Mr SPEAKER: Question No 2, James Shaw.
JAMES SHAW (Co-Leader—Green) to the Minister of Foreign Affairs:
Did he ask for, or receive, any advice or assessment from officials about
the stated legal threat of up to $30 million from the Al-Khalaf group;
if so, what was the nature of that advice?
Hon MURRAY McCULLY (Minister of Foreign Affairs):
I received advice from ministry officials prior to meeting with Mr Al Khalaf,
in relation to both legal advice that Mr Al Khalaf was known to have taken
regarding a compensation claim and the risks of a claim being in breach
of NZ's World Trade Organization obligations. These formed part
of an oral briefing.
James Shaw: Does he stand by his statement to me in this House
on 28 May 2015 that "The Government took advice from very senior officials
"in the Ministry of Foreign Affairs and Trade, including from the legal division."?
Hon MURRAY McCULLY: I would want to see the full context of any statement,
but I would generally be happy to stand behind all of my statements in this regard.
James Shaw: What, then, is his response to the Auditor-General's finding that
"There was no assessment by ministry officials of the substance of that legal risk."?
Hon MURRAY McCULLY: I agree with that assessment. I have always been clear,
in relation to the Cabinet paper, that we made no such claim,
and I repeat what is in the introduction to this piece of the Cabinet paper,
where it says: "While the Saudi parties would have preferred
"to enter discussions on the basis of seeking compensation for commercial loss
"as a result of Government decisions, it indicated that they had received
"legal advice suggesting they pursue a claim of between $20 million and $30 million."
The Government has made it clear that we would not be a party to such negotiations.
Those sentiments are reflected in the report of the Auditor-General.
James Shaw: Now that the Auditor-General's inquiry is complete, will he now give us
his response to claims made by George Assaf on The Nation on 3 July that he had
"no appetite or intention" of ever suing the Government of NZ?
Hon MURRAY McCULLY: I am aware that the member and others wish to cast doubt
on what has been said in that respect, and I simply draw his attention to page 8
of the Auditor-General's report, where, as a matter of fact, the Auditor-General found:
"The Al-Khalaf group indicated that it considered it should be paid
"compensation of $24 million."
James Shaw: I raise a point of order, Mr Speaker. My question was
whether Mr McCully would answer a claim by George Assaf on The Nation; it was not
in relation to what he was quoting from the report.
Mr SPEAKER: I think on this occasion I am going to give the member
the benefit of the doubt. I think it has been addressed, but I will allow
the member to ask the question again so that we are absolutely sure
that it has been addressed.
James Shaw: Now that the Auditor-General's inquiry is complete, will the Minister now
give us his response to claims made by George Assaf on The Nation on 3 July
that he had "no appetite or intention" of ever suing the Government of NZ?
Hon MURRAY McCULLY: I am aware of many different claims that have been made
in relation to the history of this matter. The Auditor-General had the opportunity
to view all of the paperwork and talk to any parties that she felt she should talk to,
and she recorded her finding on page 8: "The Al-Khalaf group indicated that
"it considered it should be paid compensation of $24 million."
James Shaw: I raise a point of order, Mr Speaker. My question was in relation
to a specific claim by Mr Al-Khalaf's business partner George Assaf.
Mr SPEAKER: Order! I have heard quite enough. The essence of the question
was "will the Minister now give his response to that statement",
and the Minister has certainly given his response—clearly not to the satisfaction
of the member, but I think on this occasion, when I hear the answer
that has been given, it was actually addressed on the first occasion.
James Shaw: Was Mr Al-Khalaf's business partner George Assaf lying
when he said that they had "no appetite or intention" of suing the NZ Government?
Hon MURRAY McCULLY: I have no responsibility for what Mr Assaf
or anyone else, including various television programmes, might have said
about this matter. The member and others kicked up a large fuss,
used some very florid language, and made some very strong accusations
to provoke an audit office inquiry into this matter. The Auditor-General
spoke to everyone she wanted to speak to, looked at all of the paperwork
that was available, and made it very clear that the Al-Khalaf group indicated
it considered it should be paid compensation of $24 million—
that is the direct quote from the Auditor-General's report.
James Shaw: Does he accept the finding in the Auditor-General's report that
"settlement of a grievance was provided under the guise of a contract for services"?
Hon MURRAY McCULLY: I have made it clear that I accept all of the conclusions
of the Auditor-General's report, including those referred to by the member, and also,
in particular, the statement made by the Auditor-General that the contract
for services was a fully lawful contract for services and that all of the elements
of the contract were discharged in relation to the appropriation granted by Parliament.
James Shaw: Given that response—that he does accept that the deal was a settlement
of a grievance—why was it not signed off by the Crown Law Office or by a court judgment,
as is required by Cabinet Office circular CO(15)4?
Hon MURRAY McCULLY: The Auditor-General has made very clear her finding
as to the legality of the arrangement. The report makes it very clear that
the contract for services was a fully lawful contract for services
and that it was undertaken in a manner that was consistent
with the appropriation granted by Parliament.
James Shaw: I raise a point of order, Mr Speaker. My question
was quite specific, outlining a quote in the Auditor-General's report,
about the requirement for payments above $75,000 to be signed off
by the Crown Law Office or a court judgment. Mr McCully has not
responded to that question.
Mr SPEAKER: No, no. Mr McCully, in my opinion, has responded
and has addressed it clearly—not to your satisfaction, but he has,
effectively, said that it met the requirements. So that is his answer
that has been given to the House today.
Question No 3.