2008/09 financial review of the Ministry of Foreign Affairs and Trade

Transcription

1 2008/09 financial review of the Ministry of Foreign Affairs and Trade Report of the Foreign Affairs, Defence and Trade Committee Contents Recommendation 2 Introduction 2 Organisational changes 2 New Zealand and the Pacific 3 NZAID 3 Trade 4 Single economic market 5 United Nations Declaration on the Rights of Indigenous Peoples 5 Consular services 5 Appendix 7

2 2008/09 FINANCIAL REVIEW OF THE MINSITRY OF FOREIGN AFFAIRS AND TRADE Ministry of Foreign Affairs and Trade Recommendation The Foreign Affairs, Defence and Trade Committee has conducted the financial review of the 2008/09 performance and current operations of the Ministry of Foreign Affairs and Trade, and recommends that the House take note of its report. Introduction The Ministry of Foreign Affairs and Trade is the Government s lead adviser on foreign and trade policy, international law, and diplomatic, consular, and development assistance issues. The ministry s portfolio areas are foreign affairs, trade, and disarmament and arms control. We note that the ministry is in transition as a result of changes in Government policy, new institutional arrangements pertaining to the New Zealand International Aid and Development Agency (NZAID), and the retirements of Simon Murdoch, former Secretary of Foreign Affairs and Trade and Peter Adams, former Executive Director of NZAID. Organisational changes John Allen was appointed as Secretary of Foreign Affairs and Trade in July We are aware that Mr Allen is the first secretary to be appointed from outside diplomatic circles or the ministry. We thought it pertinent to ask, therefore, about his approach to his role, and any changes he envisaged to the ministry s work. Mr Allen believes that he brings a fresh perspective to the role, which is proving useful for finding ways to enhance the ministry s work, and to enable people to achieve their potential within the organisation. The secretary and the senior management team have decided that the work of the ministry should be reviewed, and initiated work in a number of areas. Critical aspects of the work to be undertaken are deciding New Zealand s longer-term foreign policy strategy, measuring the ministry s performance accurately, and developing and maintaining better working relationships with the Government, Government agencies, and other key stakeholders. We are encouraged by the enthusiasm and energy indicated by the review undertaken by the ministry s senior management group. We hope, however, that any resulting change will be balanced to ensure stability in the performance of the ministry s core functions. Measuring performance We recognise that the absence of failure is one measure of the success of diplomatic effort, but asked the ministry to elaborate on what it defines as success in terms of its performance. The secretary favours a balanced scorecard model for performance measurement, and believes that any organisation requires multiple performance measures to ensure good cost control, the human resources capability to undertake its work, and an organisational understanding of its purpose, and to set and measure progress against milestones for major programmes. The ministry has few such measures at present, and the senior management group is exploring this issue. We note that the Office of the Auditor-General recently rated the ministry as needing improvement in its service performance information and associated systems, and that deficiencies recorded in the 2007/08 year have not yet been resolved. We encourage the 2

3 2008/09 FINANCIAL REVIEW OF THE MINISTRY OF FOREIGN AFFAIRS AND TRADE ministry to improve the quality of its principal measures and standards in its next statement of intent in order to address these issues in 2009/10. New Zealand and the Pacific We consider that New Zealand s relationships with Pacific nations are amongst our closest and most important. The ministry agreed that New Zealand needs the Pacific to be prosperous, which means these countries developing the capability of their own people to provide economic opportunities and employment, and to redress trade imbalances. This is not only a matter of economic or security concerns, but reflects New Zealand s responsibility for this part of the world. Achieving these goals in the Pacific requires New Zealand to build deep long-term relationships in the region, founded on understanding of the various opinions, history, and aspirations of Pacific countries. New Zealand s role should be to support and work with them, rather than impose its own vision of their future. Trade disparities We asked the ministry what is being done to reduce the trade disparities between New Zealand and Pacific countries. Government agencies such as the Ministry of Agriculture and Forestry and the New Zealand Food Safety Authority are working with Pacific countries to help them build their capacity to meet New Zealand s biosecurity standards. We were told that export volumes of agricultural produce in some countries have decreased as better prices have been obtained domestically, rather than as a result of barriers to external trade. Development assistance in the Pacific In keeping with the Government s foreign policy objectives, New Zealand s Official Development Assistance now revolves around sustainable economic development, with a particular focus on the Pacific. We were interested in the effect of the change in focus from the alleviation of poverty to sustainable development on our activities and initiatives in the Pacific. The ministry confirmed that the aim of development assistance is to develop economic prosperity and opportunities as well as alleviating poverty. While there will always be a need to ensure access to education and adequate healthcare, a large number of new programmes are now specifically aimed at promoting economic development in the Pacific. The region has three real economic assets: fisheries, tourism, and people. The ministry is working intensively to create an environment to maximise the economic potential of each country s assets. For example, it has embarked on a native fisheries programme in the Solomon Islands, and a major initiative to develop tourism in Tonga. The ministry commented that the policy and regulatory environment of the region still needs improvement in order to attract investment and to ensure that people have the skills to participate fully in the economy. NZAID We note that NZAID s status as a semi-autonomous body was removed following a review of its institutional arrangements with the ministry and its policy settings; and the strategic objective and mandate for New Zealand s Official Development Assistance has changed to sustainable economic development in developing countries, in order to help them develop 3

4 2008/09 FINANCIAL REVIEW OF THE MINSITRY OF FOREIGN AFFAIRS AND TRADE their economies, reduce poverty, and contribute to a more secure, equitable and prosperous world. The shift in focus from poverty alleviation to economic development has led to a reprioritisation of funding, with more now going to Polynesia and less to Micronesia. The ministry is working with Australia and with South East Asian multilateral agencies to deliver economic development programmes to Pacific countries. Measuring the success of aid programmes NZAID has been making good progress on measuring the outcomes of its aid programmes, some of which are delivered over many years. We understand that these measurements include prosperity, poverty alleviation, equity, and security. The high-level intended outcomes of each bilateral programme have been agreed at Government level, and progress is monitored annually. As these programmes are updated, their performance measures are also revised. We asked how the success of an aid programme is measured. The ministry uses macroeconomic indicators for this purpose, such as the number of children enrolled in school, or the number of new businesses established. We also heard that New Zealand works with Australia, the Pacific Forum, and the Secretariat of the Pacific Community to monitor progress towards the United Nations Millennium Development Goals. Effectiveness of aid We asked the ministry to elaborate on the effectiveness of New Zealand s aid assistance. We were told that New Zealand works in partnership with a wide range of organisations, some of them multilateral, to deliver aid programmes; their effectiveness is determined to an extent by the capability of the recipient country to utilise the aid delivered. The effectiveness of New Zealand s aid is measured against internationally agreed effectiveness indicators, including how well New Zealand collaborates with other countries. We are aware that the ministry disputes the findings of a recently released report by ActionAid (an international organisation which aims to fight poverty worldwide) which gave New Zealand s international efforts to reduce poverty a poor ranking. The ministry responded to ActionAid, outlining concerns about the methodology used and the data collected to determine New Zealand s ranking. We asked whether the ministry believes ActionAid s methodology was flawed regarding all the countries it assessed, or if the errors related only to New Zealand. The ministry said it was not in a position to know what data was used to measure other countries performance. Trade Free trade agreement India We are pleased to note the ministry s progress towards negotiating a free trade agreement with India. India has recently commenced a trade liberalisation programme, which will take some time to get established. New Zealand s priority has been establishing a relationship with India as a basis for commencing trade negotiations; it has a negotiating team ready to go. The two countries have a political agreement to commence talks but India has yet to secure the agreement of its Parliament. The ministry told us that Asia is moving towards more inclusive free trade agreements, which might include India, and that New Zealand would need to be strategic in its negotiating to ensure that it is included in these agreements. 4

5 2008/09 FINANCIAL REVIEW OF THE MINISTRY OF FOREIGN AFFAIRS AND TRADE World Trade Organisation Doha Round We were informed that the Doha Round of the World Trade Organisation has been largely static for some time, reflecting changes in the Governments and political priorities of the major players. Although the pace of the negotiations has recently increased, the remaining decisions are likely to be difficult and political. The G20 countries have met recently and have indicated that they would like the round to be completed by the end of Over the next few months the G20 will be reviewing progress to date. The ministry expects some progress to be made in the Doha Round by December Single economic market We are also interested in the trans-tasman relationship and progress towards a single economic market. The ministry told us that over the last several years good progress has been made towards a single economic market between New Zealand and Australia. Improvements have been made in such areas as SmartGate electronic border clearance, corporate law, and securities documentation. The ministry believes that there are still opportunities for collaboration between the countries on defence, free trade agreements, and coordinating aid distribution and trade promotion. Australia and New Zealand could also work together to encourage tourism and investment in the region. United Nations Declaration on the Rights of Indigenous Peoples For many years New Zealand has fully supported the principles and the aspirations of the United Nations Declaration on the Rights of Indigenous Peoples and has implemented most of its standards. We were told that the ministry has provided the same advice to the current and previous Governments regarding the ratification of the United Nations Declaration on the Rights of Indigenous Peoples. This advice pertains to the intent of Articles 19, 26, 28, and 32(2) of the declaration, which would affect New Zealand s domestic legislation. We understand that the Government is considering the Australian decision to ratify the declaration, before making its own decision on ratification. Consular services We are aware that in the last year New Zealand s consular services responded to a range of international crises that affected New Zealanders abroad, such as the bombing in Mumbai, the riots in Bangkok, and the crash of an Air New Zealand plane off the coast of France. The ministry told us that for some years the demands on and expectations of its consular services and staff have been increasing. All staff attend a compulsory training course before being posted overseas. The ministry also has emergency response teams, which respond at short notice during events such as the recent tsunami in Samoa. Recent experiences have taught the ministry to ensure that its offices are well-staffed during such a crisis, so that staff are not overwhelmed by the demand for service; many of the diplomatic posts regular teams are small. The ministry has a safe travel website which provides information for New Zealanders travelling overseas. It is also establishing an electronic call-centre database, which ministry staff around the world can use to respond to calls from concerned relatives when New Zealanders are caught up in international incidents. New Zealand is a member of the Five Nations Group (with Australia, Canada, the United Kingdom, and the United States), which provides consular support where New Zealand does not have a post. 5

6 2008/09 FINANCIAL REVIEW OF THE MINSITRY OF FOREIGN AFFAIRS AND TRADE We congratulate the ministry on its exemplary work in helping New Zealanders caught up in international crises during the last year and commend its prompt and thorough response to recent events in Tonga and Samoa. 6

7 2008/09 FINANCIAL REVIEW OF THE MINISTRY OF FOREIGN AFFAIRS AND TRADE Appendix Approach to financial review We met on 29 October and 19 November 2009 to consider the financial review of the Ministry of Foreign Affairs and Trade. Evidence was heard from the Ministry of Foreign Affairs and Trade and advice was received from the Office of the Auditor-General. Committee members John Hayes (Chairperson) Hon Chris Carter Jacqui Dean Hone Harawira (non-voting member) Hon Pete Hodgson Dr Paul Hutchison Todd McClay Keith Locke Hon Maryan Street Evidence and advice received Ministry of Foreign Affairs and Trade, Annual Report Ministry of Foreign Affairs and Trade, Response to written committee questions, dated 16 November 2009 Ministry of Foreign Affairs and Trade, Statement of Intent Office of the Auditor-General, Briefing on the Ministry of Foreign Affairs and Trade, dated 29 October Organisation briefing paper, prepared by committee staff, dated 28 October