MBIE chief executive Nic Blakeley has denied the ministry deliberately attempted to mislead Parliament over the cancelled $35 million Biometric Capability Update (BCU) project, telling the Privileges Committee that the decision not to disclose the project's axing to a select committee was driven by budget and commercial sensitivities rather than any intent to deceive.

Blakeley appeared before the committee on Tuesday evening, chaired by National MP Chris Bishop, to answer questions about why MBIE failed to tell Parliament's Education and Workforce Committee in March that the BCU project had been cancelled. The project, contracted to Japanese technology company NEC, was intended to upgrade Immigration New Zealand's biometric systems. RNZ

In June, Speaker Gerry Brownlee referred MBIE's conduct to the Privileges Committee after Labour's Phil Twyford and the Education and Workforce Committee raised the non-disclosure as a matter of privilege. The referral followed RNZ reporting by senior journalist Gill Bonnett, who revealed in a 23 June article headlined "Immigration New Zealand head didn't tell select committee $35m IT project had been axed" that the committee had not been informed of the cancellation. RNZ

Blakeley told the committee that MBIE had a genuinely held belief that Budget and commercial sensitivities limited what it could say in a public forum. He said the ministry was still in negotiations with NEC over a final payment at the time of the March committee appearance, which contributed to the decision not to disclose. RNZ

Pressed on the matter, Blakeley acknowledged MBIE got it wrong. He accepted that, in hindsight, the ministry should have taken a different approach, and conceded that MBIE could have requested a secret hearing with the public removed from the committee room to discuss the cancellation privately. That mechanism would have allowed MBIE to brief the committee on sensitive commercial details without exposing active negotiations with NEC. RNZ

Blakeley said the non-disclosure was not an active decision but rather an understanding between himself and then-Immigration New Zealand head Alison McDonald, who has since retired. RNZ

Blakeley has previously apologised to MPs over the matter. Public Service Commissioner Sir Brian Roche has outlined the scope of a broader inquiry into government IT upgrades, which includes the failed MBIE project. RNZ

RNZ also published a follow-up investigation on 21 July, titled "From achievable to unlikely in nine days: Immigration NZ's botched $35m project," which traced the rapid deterioration of the BCU project's viability. RNZ

Following the Privileges Committee hearing, Blakeley refused to answer questions from media. RNZ

The hearing centred on a core obligation of the public service: agencies appearing before select committees are expected to be forthcoming with Parliament, and the Privileges Committee exists to enforce that expectation. The contention is not over whether the BCU project failed, nor over the $35 million cost, but over whether MBIE's silence in March constituted a contempt of Parliament. Blakeley's defence rests on the distinction between a deliberate act of deception and a misjudgment rooted in genuine, if misplaced, concern about commercial confidentiality.

The broader context here is the tension between commercial sensitivity and parliamentary accountability, a recurring friction point for agencies managing large, failing procurements. Blakeley's concession that MBIE could have used a closed session undercuts the ministry's primary justification, since the Standing Orders provide a mechanism precisely for situations where disclosure in a public forum is genuinely constrained. The Privileges Committee will need to weigh whether the gap between what MBIE could have said in closed session and what it chose not to say at all amounts to a contempt. The fact that the non-disclosure arose from an informal "understanding" rather than a documented decision is unlikely to strengthen the ministry's position with the committee, which will also have to consider the precedent set for other agencies navigating similar commercial constraints. With the Public Service Commission's wider IT inquiry running in parallel, the BCU case is being scrutinised on two separate tracks, and the committee's eventual finding will likely shape expectations around how forthcoming public servants must be when projects collapse mid-procurement.