Thompson and Clark probe - all you need to know

A report into the use of external security consultants is set to cause a shake-up within the public service and has already led to the resignation of Southern Response chair Ross Butler. Emma Hatton explains the background to the issues that have been raised so far.

In the wake of a report released on Tuesday by the State Services Commission on government agencies' use of external security consultants, words like "explosive", "scandal" and "disturbing" were prominent in news media coverage.

But what was the big deal and who is Thompson and Clark?

Here's what you need to know:

What happened?

In March this year State Services Commissioner Peter Hughes appointed Doug Martin to lead an inquiry after questions were raised about whether Southern Response Earthquake Service had used a private security company (Thompson and Clark) to conduct surveillance of individual insurance claimants.

This would be a breach of the code of conduct issued by the State Services Commissioner.

The inquiry was broadened to 131 government agencies and Simon Mount QC was brought in to help after a flurry of Official Information Act requests raised questions about Thompson and Clark's dealing with the New Zealand Security Intelligence Service, the Ministry of Business Innovation and Employment and the Ministry for Primary Industries.

On Tuesday the findings of the report were released and it was found that while there was no evidence of widespread inappropriate surveillance, the public sector had fallen well short of the code of conduct in some areas.

Who is Thompson and Clark?

Thompson and Clark Investigations Ltd is a private investigation and corporate intelligence company. Its two founding directors, Gavin Clark and Nick Thompson, are former police officers.

The company hit the headlines in 2007 and 2008 after the State Services Commissioner at the time found it had used paid informants to infiltrate "issue motivated groups" on behalf of Solid Energy.

At the time the Commissioner warned departmental chief executives that this type of action was beyond what was required for the state and doing so could bring it into disrepute.

The Commissioner has laid a police complaint over Thompson and Clark's covert recording of a meeting attended by insurance claimants.

A complaint has also been laid to the Private Security Personnel Licensing Authority over the use of an unlicensed private investigator.

The company is no longer able to undertake work for the government.

Who is Southern Response and why were they spying?

Southern Response Earthquake Service was formed in 2012 from AMI's earthquake claims division in order to respond to claims arising from earthquakes in Canterbury between September 2010 and April 2012.

The inquiry did not find that Southern Response had used Thompson and Clark to spy on individual claimants, however, it did find that from 2014-2016 it asked Thompson and Clark to attend five closed meetings for claimants.

At least one of those meetings was secretly recorded and the transcription given to Southern Response. That transcription has since been destroyed.

The motivation for this was to assess the risk to Southern Response staff in a "highly charged" post-earthquake environment.

Southern Response worked with its staff to mitigate any risks, however, it continued to use Thompson and Clark. The Commission found during the latter period the motivation for doing so had switched from safety, to reputation management.

The Commissioner found that Southern Response had breached the code and he laid a complaint with the police over the secret recordings.

On Tuesday night the Southern Response chair Ross Butler resigned.

Operation Exploration

The entire Ministry of Business Innovation and Employment (MBIE) was also found to have breached the State Services Standards of Integrity and Conduct (code of conduct) by failing to maintain an appropriate level of objectivity and impartiality.

MBIE led the charge in a change to the Crown Minerals Act 2013 creating offences for damaging or interfering with structures or ships being used offshore in mining activities.

The design of Operation Exploration was influenced by the concept of "issue motivated groups". The Minerals Exploration Joint Intelligence Group (MEJIG) was set up and tasked with identifying activities that might lead to interference with offshore petroleum and minerals exploration. Thompson and Clark was a key participant in MEJIG.

The Commissioner found that Thompson and Clark established a very close relationship with Operation Exploration and the information it provided - particularly surveillance of Greenpeace - was most likely paid for by the private sector with interests in petroleum and minerals exploration.

The Commissioner has asked MBIE to consider whether Operation Exploration should be discontinued and requested that the chief executive review MBIE's internal policies to ensure they are consistent with the code.

What next?

Peter Hughes has given all departments until the end of April 2019 to make sure they are fully compliant with new standards he has introduced ensuring agencies do not undertake surveillance or information gathering without careful consideration and a consistent process.

The standards set out the minimum expectations the Commission has around how public servants should gather information.

Agencies need to be clear about why the activity is necessary, transparent about the kind of activity the agency undertakes, ensure rigorous and independent oversight and have in place a fair and effective complaints or review process.

The police have confirmed the complaints have been received this week but will not confirm yet whether they will be pressing charges.

The Serious Fraud Office investigation into MAF's secondary employment is ongoing.

Key events timeline

• 2005/2006 - The Ministry of Agriculture and Forestry (MAF) pays Thompson and Clark to attend two conferences run by animal rights activists.
• 2007 - Thompson and Clark, working for Solid Energy, pay an informant to infiltrate the Save Happy Valley Coalition, an activist group opposed to Solid Energy's coal mining plans on the West Coast.
• 2007 - The Crown Law Office, on behalf of the Ministry of Social Development (MSD) told private investigators (not Thompson and Clark) to assist with a state care abuse case. Indications are that at least one person was covertly surveyed.
• 2008 - The State Services Commissioner warns government departments against using information covertly gathered by third parties.
• 2011-2012 - A MAF employee takes up secondary employment with Thompson and Clark.
• 2011 - An NZTA employee gives information to a MAF employee who then passes it on to Thompson and Clark.
• 2012-2017 - The New Zealand Transport Agency (NZTA) allows Thompson and Clark access to its motor vehicle register. It undertakes thousands of searches in this time. Thompson and Clark no longer has access to this database.
• 2013-2014 - Another MAF employee takes up secondary employment with Thompson and Clark. These secondary employments are currently being investigated by the Serious Fraud Office.
• 2014-2016 - Southern Response uses Thompson and Clark to attend five insurance claimant meetings, some of these were recorded.

Breaches of the Code of Conduct identified in the report

• Southern Response - On instruction from Southern Response Thompson and Clark attended several closed meetings of insurance claimants. At least one meeting was recorded and not retained. The Commissioner has laid a complaint with police.
• The Ministry of Agriculture and Forestry - On instruction from MAF Thompson and Clark attended two animal rights conferences.
• Crown Law - Gives broad instructions to Thompson and Clark to survey people for a case involving allegations of state care abuse.
• The Ministry of Social Development - Was aware of the surveillance instructed by Crown Law.
• The New Zealand Transport Agency - Lack of oversight in giving Thompson and Clark access to its motor vehicle database.
• The Ministry of Business Innovation and Employment - Failed to maintain the level of objectivity and impartiality that the code of conduct requires.
• New Zealand Security Intelligence Service - Email contact between an NZSIS employee and a Thompson and Clark director risked harming the reputation of the NZSIS.