MBIE chief executive Nic Blakeley has conceded before the Privileges Committee that the ministry "got things wrong" when it did not tell MPs about the cancellation of a $35 million biometric IT project. The admission, made under questioning from MPs, centres on the Biometric Capability Update (BCU), a programme that was axed after costs ballooned beyond its original budget. RNZ

The breach of parliamentary privilege arose in March, when MBIE told Parliament's Education and Workforce Committee there was no public review of the BCU project's progress. At that point the project had already been cancelled. In June, Speaker Gerry Brownlee referred the failure to disclose the termination to the Privileges Committee after Labour's Phil Twyford and the committee itself raised the matter as one of privilege. RNZ

Blakeley told the committee the ministry had a "genuinely held belief" that Budget and commercial sensitivities limited what could be said publicly. At the time, MBIE was in ongoing final-payment negotiations with Japanese technology firm NEC, the vendor contracted to deliver the system. Blakeley conceded those constraints did not prevent the ministry from using mechanisms within Parliament to provide the information privately. He acknowledged MBIE could have sought a hearing with the public removed, colloquially known as a "secret hearing," to disclose the BCU cancellation while managing the commercial sensitivities, and accepted that failure to do so was a mistake. RNZ

The decision not to disclose the cancellation to the committee was, Blakeley said, not an "active decision" but rather an understanding between himself and then-Immigration New Zealand head Alison McDonald that commercial sensitivities limited what they could say. RNZ

McDonald, who has since retired, gave evidence to the committee via Zoom from the UK. Her account diverged from Blakeley's framing. McDonald told MPs that in her mind the BCU programme "had not stopped," a striking characterisation given the project had been terminated and final-payment negotiations were underway. The exchange laid bare a gap between how the two senior officials understood the status and obligations of the programme. RNZ

Privileges Committee chair Chris Bishop did not hold back in his assessment. Bishop told Blakeley the situation "beggars belief" and described the BCU project itself as "a disaster." The language reflects the frustration among committee members at a public service agency's apparent failure to meet its basic obligation to be forthcoming with Parliament. RNZ

The scale of the problems with the BCU project was set out in a review MBIE published on its official website in April. The review, titled "Review of the Biometric Projects: Biometric Capability Update (BCCU) and IPE Projects," found the initiative was "largely treated as an IT project rather than a business-driven" one, a framing that often signals weak strategic ownership from end-user departments and an over-reliance on technology to solve operational problems. MBIE

That review also confirmed the financial dimension. Estimated costs for the BCU were expected to exceed the $35 million figure, underscoring the fiscal stakes that went undisclosed to the Education and Workforce Committee in March. MBIE

For those working around Parliament and the public service, the episode raises pointed questions about how agencies balance commercial confidentiality against their duty to be forthcoming with select committees. The Privileges Committee process itself serves as the mechanism for testing that balance. Blakeley's concession that a confidential hearing was available, and that MBIE failed to use it, is the crux. The machinery exists for agencies to disclose sensitive information without compromising negotiations; MBIE did not deploy it, and the ministry's chief executive has now conceded that was wrong.

McDonald's evidence adds a further complication. If two officials at that level held genuinely divergent understandings of whether a programme had stopped, it suggests weak internal communication at precisely the moment when accountability to Parliament was at stake. Bishop's characterisation of the project as a disaster, and of the disclosure failure as begging belief, signals that the committee is unlikely to view the matter as a minor administrative oversight.

The broader context here is the expectation, long understood in the Wellington system, that select committees can compel and receive truthful information from departments. When an agency withholds a material fact from a committee, the commercial-sensitivity defence is available, but it is not absolute. The Privileges Committee is the body that polices that boundary, and MPs on all sides have shown little patience for agencies that fall short. The BCU case will test what consequences, if any, follow from a chief executive's admission of error.