UPDATED: Huawei's New Zealand public affairs manager Mark Champion has defended his company against Labour Party allegations, made yesterday, that his company compromised Crown Fibre Holdings board member Murray Milner by hiring him as a consultant.

RAW DATA: Milner's Huawei conference presentation (PDF)

Mr Champion told NBR that Mr Milner's consultancy work for the Chinese company was related to retail services only and therefore "not directly related" to the government's $1.35 billion ultrafast broadband (UFB) project.

Mr Milner's contract with Huawei was for a period of three months, and ended two months ago. The company currently has no relationship with the consultant.

Asked to define retail services, Mr Champion said, "Retail means parts of the industry not related to the wholesale mandate of CFH [Crown Fibre Holdings].

"I don’t really want to mine down into the detail of the contract any further because it’s a commercial arrangement between Dr Milner and ourselves – but we can categorically say it was not directly related to the CFH mandate."

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The perception of conflict of interest issues surrounding a director of the Crown company established to roll out ultrafast broadband must be urgently addressed by Communications Minister Steven Joyce, Labour’s communications and IT spokeswoman Clare Curran said today.

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“Revelations that Crown Fibre Holdings’ director Murray Milner acted as a consultant for Chinese telecommunications firm Huawei whilst simultaneously serving as a director for Crown Fibre Holdings represents a potential conflict that ICT Minister Steven Joyce must address," said Ms Curran.

Crown Fibre Holdings - the state-owned company charged with choosing partners for the government's $1.35 billion ultrafast broadband project - barely needs any more controversy. 

This week, it has already conceded to NBR that it has yet to meet its end-of-October deadline to submit its first partner recommendations to cabinet - but refused to elaborate further on its timetable as rumours about under-resourcing and a cold war with the MED swirl.

Eyebrow-raising appointment
Mr Milner has previously raised eyebrows as an appointee to Crown Fibre's board because of his past employment with Telecom - as CTO - plus his subsequent consultancy work, which formed a centrepiece of Telecom's original national fibre proposal to the government.

Huawei, which is vying to win lucrative contracts to provide equipment for the rollout of ultrafast broadband, hosted a seminar in partnership with CFH in September (read: Joyce joins Huawei Crown fibre pow-wow). Murray Milner represented and promoted products from Huawei at the seminar while making no mention of his position as a CFH board member, Ms Curran said.

The high-profile presence of Crown Fibre Holdings staff, and Communications minister Steven Joyce, at the Huawei event was a poke in the eye to Huawei rivals Nokia-Siemens, Alcatel-Lucent and Ericsson, all of whom are also chasing business with UFB bidders.

At the event, Mr Joyce said declined to comment on the prime minister's seeming endorsement of Huawei. He told NBR his appearance was purely to support the UFB project.

PM's favourite
The Chinese telecommunications maker has already caused a mini-controversy after Prime Minister John Key, speaking from the Shanghai Expo where he met Huawei executives, said Huawei would be capable of supplying gear for the Crown fibre project at keen value, and noted the company's initiatives in the US and the UK.

The PM told Q&A host Guyon Espinor that "No one's saying [Huawei] they would be the final selected partner in New Zealand but they've certainly got the capacity if they wanted to."

“Steven Joyce has attempted to distance himself from the conflict of interest by saying in a media report in early November that ‘(Huawei) is one step removed from government. They are not a bidder in their own right, they're a technology partner. It's not like there's going to be any screwing the scrum in a particular way.
"We've got safeguards in place and Crown Fibre are running a process full of probity’.”

Clare Curran said a document obtained by the Labour Party clearly shows that Crown Fibre Holdings is managing the tendering process to provide ‘coordination assistance, and commercial and technical advice’ to the UFB selected partners in electing the equipment suppliers for passive infrastructure and layer 2 equipment for UFB.

“Huawei will almost certainly be a bidder for the equipment and services.
“Steven Joyce has ultimate responsibility for making the decision on who gets the broadband contract,” Clare Curran said.

“At the very least Joyce needs to ask the chair of CFH for an explanation and demand that Milner stand aside from any decision-making on UFB contracts."