Annual Report for the year ended 30 June 2005
Part 1: Overview
Secretary of Defence's overview
Introduction
The roles of the Ministry of Defence, which is founded on section 24 of the Defence Act 1990, are to:
- provide timely high quality advice to help the Government make well-informed decisions about the defence of New Zealand and its interests
- conduct audits and assessments of the New Zealand Defence Force and the acquisition activities of the Ministry of Defence
- arrange for the acquisition of significant items of military equipment needed to meet New Zealand Defence Force capability requirements.
The Ministry's high-level security goal, as outlined in the Statement of Intent for the period of this report, is a secure New Zealand that contributes to international security. The security of our territory and the Exclusive Economic Zone is a fundamental contributor to New Zealand's economic growth and social well-being. The ability of New Zealanders to enjoy safe and prosperous lives is also directly affected by physical threats to national security. In addition to defending New Zealand territory, and because the safety of New Zealand and New Zealanders is closely linked to international security, we also contribute to the security of other countries, and to global security efforts in general.
The Ministry also focuses on an intermediate-level goal, to assist in achievement of the high-level security goal. During the period under review this was that Ministry of Defence advice and actions are credible and respected, and the Government's defence policy objectives are achieved. The Government's defence policy objectives are paramount. These are set out in The Defence Policy Framework (June 2000). Other key policy guidance is in the:
- Government Defence Statement - A Modern, Sustainable Defence Force Matched to New Zealand's Needs (May 2001)
- 10-year Defence Long-term Development Plan (LTDP) (updated in November 2004).
During 2004/05 the Ministry played a key role in advancing plans to revitalise the Defence Force and enable it to meet the Government's policy requirements. The Defence Capability and Resourcing Review (DCARR), carried out during 2004, provided the stimulus for the Government's Defence Sustainability Initiative in May 2005. The initiative, which has been allocated operational funding of $4.6 billion over the next 10 years, is designed to achieve a long-term sustainability for Defence. The Ministry will also receive increased funding to develop its policy and purchase advice functions.
An important focus for the Ministry is the advice it gives the Government on national security matters. Advice is provided on security risk management, deployment of Defence personnel, purchasing equipment, international defence relations, and achievement of the Government's defence policy objectives.
The uncertainty underpinning today's international security environment provides an ongoing policy challenge, especially in respect of Defence Force deployments. New Zealand forces are actively involved in peace monitoring, peace-keeping and post-conflict reconstruction, but as events in 2004 showed, they are also required to contribute forces at short notice to disaster relief efforts, such as Operation Sumatra, in the wake of the Boxing Day tsunami in the Indian Ocean.
A key focus of security efforts for both New Zealand and other developed nations has been the ongoing struggle against terrorism around the world. Recent terrorist attacks in the United States (September 2001), Bali (October 2002), Madrid (March 2004) and London (July 2005) illustrate that the reach of terrorist organisations is considerable, and that New Zealand interests and New Zealand citizens can be directly involved in the consequences of terrorist action. With this in mind, New Zealand trains its Defence Force to undertake a range of military tasks, including combat, and also uses its resources to shape and influence attitudes in our region and elsewhere.
The work of New Zealand's Provincial Reconstruction Team in Bamian Province, Afghanistan, is a prime example of how New Zealand Defence Force personnel can put their military skills into practical use, both in securing a troubled country in the aftermath of a harsh and undemocratic regime, and in helping to build the infrastructure and institutions of a viable Afghan nation. Nearly 200 defence personnel are stationed in Afghanistan, contributing to the reconstruction in Bamian and working to secure the country against insurgent threats. This work in building a safer Afghanistan underlines New Zealand's commitment to global security, and to stability in regions far from home.
Policy and Planning
The Secretary of Defence is the principal civilian adviser on defence matters to the Minister of Defence and to the Government. The Chief of Defence Force, who commands the New Zealand Defence Force, is the principal military adviser. Development of defence, security and defence capability policy advice is a core activity for the Ministry.
The Ministry of Defence and the New Zealand Defence Force cooperate and consult closely together. This coordination is facilitated through the Office of Chief Executives, which brings the Secretary of Defence and the Chief of Defence Force together to discuss policy issues of mutual interest; the Executive Capability Board, through which senior military and civilian officials provide guidance for major capital acquisition projects; and weekly meetings between the Vice Chief of Defence Force and the Ministry's Deputy Secretary (Policy and Planning) that are designed to exchange information and improve collaboration within the defence establishment.
The Ministry's Defence Policy and Planning Division is staffed by Ministry and New Zealand Defence Force personnel. It consists of the Strategic Policy Branch, the International Defence Relations Branch and the Strategy and Capability Analysis Branch. Its principal role is to provide consistent information and policy advice to both the Secretary of Defence and the Chief of Defence Force, and through them to the Minister of Defence and the Government.
Policy development
Reviewing Defence capability and resourcing
A key development during the year was the Defence Sustainability Initiative (DSI), announced in May 2005. The DSI had its genesis in the Defence Capability and Resourcing Review, which was a major review of Defence Force staffing, funding, infrastructure, and corporate systems needed to fulfil all the missions and tasks required to meet defence policy objectives. The Defence Capability and Resourcing Review identified the key issues that the New Zealand Defence Force and the Ministry of Defence face in delivering the capability outcomes required by the Government. It also identified options by which the New Zealand Defence Force's operations may be configured to deliver on the required capability and addressed, in broad terms, the additional resources that may be required.
Defence Sustainability Initiative
The Defence Sustainability Initiative is a 10-year defence funding package to enable the New Zealand Defence Force and the Ministry of Defence to rebuild capacity, and to fulfil the Government's goal of achieving a modern sustainable defence force matched to New Zealand's needs. A total of $4.6 billion has been allocated by Government, to be directed towards:
- personnel issues, including additional recruitment, improving retention, conditions of service, allowances and developing special training (including trades training) in all three services
- implementing government capability plans in the Defence Long-term Development Plan
- reviewing the Army's configuration
- developing a real estate strategy, accommodation policy, and a policy on maintenance of the New Zealand Defence Force's property portfolio
- addressing the backlog in minor capital projects, for example, in infrastructure, equipment and IT
- expanding the Ministry of Defence's policy and purchase advice functions.
To manage this additional funding and the associated remedial work programme, the Government has directed the New Zealand Defence Force and the Ministry of Defence to enhance their management and organisational processes. A mid-term review will be commissioned to examine the Initiative's progress and determine, among other things, the appropriateness of the level of funding for the remainder of the funding period.
The Defence Long-term Development Plan update
First released on 11 June 2002, and updated annually, the Defence Long-term Development Plan is a planning tool to enable decisions on defence acquisitions to be assessed, prioritised and measured in the context of current defence policy and affordability. The Plan, which links defence policy objectives with capability requirements in the 2001 Defence Statement, contains a comprehensive list of major projects (projects over $7 million).
In November 2004 the second update of the Plan was released, detailing an up-to-date and comprehensive list of projects and their associated preliminary costings, timings and priorities.
Other policy issues
The Ministry has provided background briefings to the Minister of Defence on a number of defence-related issues, such as the tsunami on Boxing Day 2004, and defence policies in Australia and Japan.
Capability development
The Defence Policy and Planning Division has provided policy advice on several capability development issues over the past 12 months, including:
- C-130 Hercules and P-3 Orion upgrades: Final Cabinet approval was obtained for projects that are revitalising the Air Force's C-130 Hercules transport aircraft and P-3 Orion maritime patrol aircraft. The upgrade to the five C-130s is designed to extend the life of the aircraft by replacing avionics and aircraft systems and undertaking structural refurbishment work. The upgrade to the six P-3s will improve the surveillance sensors and mission management systems. Communications and navigation systems are also being upgraded for both the Hercules and the Orions, to address equipment obsolescence and to ensure compliance with evolving international air traffic regulations.
- Replacement helicopter capability: Cabinet has agreed to replace the Air Force's Iroquois helicopters with new NH90 medium utility helicopters from NH Industries. Aside from a considerably greater carrying capacity, the new helicopters will also be able to operate from the helicopter decks of the Navy's ANZAC class frigates, the new multi-role vessel and the offshore patrol vessels.
- Improvised explosive device disposal: Approval has been given to enhance the existing conventional improvised explosive device disposal capability and to establish a chemical and biological improvised explosive device disposal capability. In developing appropriate options, the Policy and Planning Division also assisted the Defence Force to define the need for a national radiological improvised explosive device (R-IEDD) capability.
- Boeing 757 modification: Final proposals were developed for the programme to modify the two Air Force Boeing 757 aircraft to a combined passenger/freight configuration. The modification programme will provide a main cabin cargo door and associated floor strengthening; ancillary modifications, including an increase in engine thrust, internal air stairs, interchangeable seating arrangements and an aeromedical evacuation capability; and a communications and navigation avionics equipment upgrade.
- Joint Command and Control System: The Policy and Planning Division provided advice to Cabinet to enable of the project to be progressed. The project provides Defence Force commanders with the means to command and control their forces individually, in groups, within a combined force, and in coalition environments.
International Defence Relations
Closer Defence Relations with Australia
Our defence relationship with Australia is a uniquely close one. We share common regional security interests. We work together to safeguard and promote those interests. Both defence forces' rapid, collaborative response in support of the humanitarian relief effort following the Boxing Day 2004 tsunami in the Indian Ocean typified the ANZAC spirit and the close friendship and military links between our two countries. Regular discussions between officials ensure a deep understanding of each other's policies and strengthen the sinews of defence cooperation.
It is our joint objective to develop areas of collaboration and information sharing in logistics, communications and personnel. In addition, we both continue to identify and advance projects that support a high level of interoperability between our respective defence forces, such as modernising our general service vehicle fleets and the Orion and Hercules upgrade programmes. The decision by both governments to acquire NH90 helicopters has opened up further collaborative opportunities that are being explored. To promote closer defence relations between our respective defence forces, New Zealand and Australian Defence Ministers ratified a Status of Forces Agreement in 2005.
At the operational level over the last year, both forces contributed to a range of exercises such as Predators Gallop, Tasmanex, Fincastle, and Ocean Protector. Such exercises are the prerequisite to maintaining the complementary skills and capabilities necessary to operate together in any emergency. We continue to work together in the Regional Assistance Mission to Solomon Islands and are now working more closely on coordinating our respective defence assistance programmes with our South Pacific neighbours and with Timor-Leste.
South Pacific
New Zealand is linked to the South Pacific by strong bonds of geography, history, and culture. We have a substantial interest in a safe and secure region, founded on good governance, professional defence and police forces, and respect for the rule of law. We have formal constitutional obligations for the defence of the Cook Islands, Niue and Tokelau, and a Treaty of Friendship with Samoa. In the wider Pacific region, we have additional international obligations, including assistance with maritime surveillance, disaster relief, maritime search and rescue, and peacekeeping.
We are seeking to improve our delivery of defence assistance to the South Pacific through the Mutual Assistance Programme. This includes working within the framework of the Government's Pacific Security Strategy and in partnership with other New Zealand agencies and especially the New Zealand Police. We are also working closely with other donors to avoid duplication and competition and to maximise the benefits of cooperation. Some of the major developments over the last 12 months in terms of New Zealand's defence relations with the South Pacific include the following:
Fiji
Mutual Assistance talks with the Republic of Fiji Military Forces were held in Suva in late November; the first since the suspension of bilateral defence ties in 2000. The meetings provided the opportunity to put in place a new training assistance programme. We also reached agreement on a targeted approach to our assistance, focused on professional development.
Papua New Guinea
The visit to New Zealand by the Acting Secretary of Defence for Papua New Guinea provided an opportunity to signal our willingness to provide continued support and assistance to the Papua New Guinea Defence Force, where practicable, especially through the Mutual Assistance Programme. We reaffirmed our support for efforts to downsize and reform the Papua New Guinea Defence Force and the Department of Defence.
Solomon Islands
The Regional Assistance Mission in Solomon Islands (RAMSI), now close to its second anniversary, has successfully met its initial goals. There is a strong and ongoing public support for the mission, but the long and difficult task of rebuilding the machinery of government lies ahead. The deployment of police and military personnel and civilian advisers has restored law and order and stabilised government finances.
With the restoration of law and order, the military presence in Solomon Islands, including that of New Zealand's contribution, has been scaled back. Along with Australia, Fiji, Papua New Guinea and Tonga, New Zealand now deploys a military platoon on a rotational basis. While we are confident that this is an appropriate level of ongoing support to RAMSI, the Government has signalled that it would consider sympathetically any request for additional military support should circumstances warrant it.
Cook Islands
We have constitutional responsibilities for the defence and security of the Cook Islands. Under the Mutual Assistance Programme we provide training for the Cook Islands Police, including support to the Pacific Patrol Boat programme. Other defence cooperation includes maritime surveillance support and disaster relief assistance. The Government and people of the Cook Islands appreciated the New Zealand Defence Force's assistance in the wake of Cyclones Meena, Nancy, and Olaf, which caused extensive damage, particularly to the northern islands of Pukapuka and Nassau.
Southeast Asia
Five Power Defence Arrangements (FPDA)
The FPDA brings Defence Ministers, officials and defence forces from Malaysia, Singapore, New Zealand, Australia and the United Kingdom together to exercise, train and exchange views on defence issues of relevance to all the members. The FPDA continues to evolve to meet the challenges of the changing security environment.
New Zealand takes part in the full range of FPDA activities, with emphasis now being given to combating non-conventional threats, such as maritime terrorism, piracy and people smuggling. Scenarios based around such threats are being introduced into FPDA exercises. The Minister of Defence met with his FPDA counterparts following the International Institute for Strategic Studies (IISS) Asia Security Conference in Singapore in June 2005 to discuss these developments and prospects for strengthening maritime surveillance cooperation.
ASEAN Regional Forum (ARF)
The ARF, which brings together 24 countries and the European Union, is the only Asia-Pacific pan-regional body devoted to cooperation on security issues. New Zealand values the ARF and actively supports greater defence participation under its auspices. The first Security Policy Conference, a new meeting for senior defence officials, took place in China in November 2004, marking an important step for dialogue among defence officials. New Zealand was represented at this conference and at its successor in Laos in May 2005. New Zealand defence officials attended the Ministerial Meeting in Indonesia in July 2004, the Intersessional Group Meetings in Cambodia in November 2004, and in Germany in February 2005, and the Senior Officials' Meeting in Laos in May 2005. New Zealand also participates in a range of ARF confidence-building measures.
Singapore
New Zealand's extensive and long-standing defence links with Singapore are an integral part of the wider relationship between the two countries. We sustain active defence engagement through exercises, training and exchanges, and through an annual schedule of meetings. Our defence ties continue to grow, for example, through the introduction of new army-to-army activities and deepening defence industry links. The Minister of Defence held a bilateral meeting with his Singaporean counterpart, Rear Admiral Teo Chee Hean, at the IISS Asia Security Conference in Singapore in June 2005.
Malaysia
New Zealand has a long history of defence association with Malaysia. We share a constructive defence relationship, based on an annual programme of exercises, bilateral meetings, multilateral cooperation within the FPDA and training provided to the Malaysian Armed Forces through the Mutual Assistance Programme. Malaysia also offers training to the New Zealand Defence Force at its United Nations Peacekeeping School. The Minister of Defence met the Malaysian Deputy Prime Minister and Minister of Defence, Dato' Sri Mohammed Najib, for a bilateral meeting in Singapore in June 2005.
Philippines
New Zealand's defence relationship with the Philippines is centred on training provided to the Armed Forces of the Philippines through the Mutual Assistance Programme. In April 2005 the Secretary of National Defence of the Philippines, Avelino Cruz Jr, made an official visit to New Zealand to discuss our approach to capital acquisition and the formulation of defence policy with a view to applying some of the lessons learned to his reform programme for the Philippines Armed Forces.
Timor-Leste
The Security Council approved the establishment of a Special Political Mission (UNOTIL) to replace the United Nations Mission in Timor-Leste (UNMISET) when its mandate expired on 20 May 2005. UNOTIL will have a one-year mandate, as a transitional mechanism towards a standard UN development presence in Timor-Leste. New Zealand is providing one military liaison officer as part of this follow-on mission.
The Mutual Assistance Programme has been expanded to include Timor-Leste. New Zealand has been assisting in an advisory capacity with logistics, human resource support and small arms training since the fledgling force was established. The Mutual Assistance Programme, at least initially, will maintain that focus. The Minister of Defence discussed New Zealand's plans for this assistance when he met his Timor-Leste counterpart, Dr Roque Rodriguez, in Singapore in June 2005.
Other Southeast Asian Nations
New Zealand's defence relationship with Brunei is centred chiefly on the Mutual Assistance Programme and exercises in Brunei. The Commander of the Royal Brunei Armed Forces visited New Zealand in April 2005.
Defence links with Vietnam are growing, primarily through New Zealand Defence Force visits to Vietnam. We maintain regular defence contact with Thailand, the focus of which is the Mutual Assistance Programme. New Zealand and Thailand share a recent history of cooperation in peace support operations. We have considerable interaction with all South East Asian countries through the ARF defence dialogue process.
North Asia
The stability of Northeast Asia is central to the security of the entire Asia-Pacific region. It is a region where the economic and security interests of major powers converge and is particularly important to New Zealand's continued prosperity. Strategic realities, economic interests and regional connections compel New Zealand to deepen its defence and security understanding of, and engagement with, North Asia.
China
Notable developments in New Zealand-China defence relations over the past year include the visit to New Zealand by the People's Liberation Army Chief of General Staff, General Liang Guanglie, in November 2004. The Vice Chief of Defence Force, Air Vice Marshal David Bamfield travelled to China in June, and in November 2004 the Chief of Navy, Rear Admiral David Ledson, paid the first ever visit by a Royal New Zealand Navy Chief of Navy to China. HMNZS Te Mana and HMNZS Endeavour visited Shanghai in June 2005.
Republic of Korea
The New Zealand Defence Force remains connected to the security of the Republic of Korea (ROK) through bilateral military contacts and through continued participation in the multinational United Nations Command (UNC). Our commitment to the UNC has been underlined by the extension of the deployment of a New Zealand Defence Force officer to the UNC Military Armistice Commission (UNCMAC) through to 2006, and the additional deployment of two New Zealand Defence Force officers to the UNCMAC through to 2006.
In June 2005 the Minister (accompanied by the Secretary of Defence) travelled to Seoul and met with his South Korean counterpart, Mr Yoon Kwang Yoong. Chief of Defence Force, Air Marshal Bruce Ferguson visited the ROK in October 2004. In February 2005 United States General Leon J. LaPorte, Commander of the UNC, of the Combined Forces Command and of US Forces in Korea, visited New Zealand for talks on the Korean Peninsula.
We conduct bilateral exchanges with the ROK armed forces. In May 2005 a Royal New Zealand Air Force P-3 Orion conducted anti-submarine exercises with the ROK Navy and Korean special forces personnel trained in New Zealand in December. For the first time, a ROK officer is attending the New Zealand Defence Force Command and Staff College. A Korean National Defence University delegation made an inaugural visit to New Zealand in June 2005.
Japan
In April 2005, a New Zealand Defence Attaché post was established in Tokyo, reaffirming the value New Zealand places on its defence relations with Japan. As Japan seeks to enhance its role in multinational peacekeeping and military operations, the prospects for interaction with the New Zealand Defence Force will increase.
Following closely upon the Prime Minister's visit, the Minister of Defence (accompanied by the Secretary of Defence) visited Japan in June 2005, meeting Defence Minister Yoshinori Ohno in Tokyo. The Chief of Defence Force, Air Marshal Bruce Ferguson, visited Japan in October 2004 for the United States-Japan hosted Chiefs of Defence Conference.
United Kingdom
Our longstanding defence relationship with the United Kingdom plays a central role in the professional development of the New Zealand Defence Force. Cooperation extends across a range of activities, including training, exercises, individual and unit exchanges, and specialist training, particularly for Royal New Zealand Navy officers. New Zealand continues to contribute to British peace support operations in Bosnia.
The Minister of Defence met his United Kingdom counterpart, the Rt Hon Dr John Reid, in Singapore in June 2005. The First Sea Lord, Admiral Sir Alan West, travelled to New Zealand in February 2005 as a guest of the Chief of Navy.
North America
United States
New Zealand continues to work alongside the United States in a number of international operations in pursuit of shared interests. We remain one of a handful of countries contributing military forces to the stabilisation effort in Afghanistan. United States forces play an important role in providing logistic and in extremis support for our Provincial Reconstruction Team in Afghanistan.
Canada
Canada and New Zealand enjoy a warm defence relationship characterised by a significant sharing of interests and views. This is reflected in our extensive counter-terrorism commitments, our collaborative efforts in various multilateral forums, and in a small but important programme of exercises and exchanges. Our respective armed forces are also going through an important period of renewal and investment in new capabilities.
Peace Support Operations
New Zealand has been a consistent contributor to peacekeeping missions for half a century. The Asia-Pacific region remains New Zealand's first priority for peacekeeping contributions, but our commitment to collective security and the rule of law requires ongoing contributions well beyond our region. Our commitments are global in reach, with approximately 250 New Zealand Defence Force personnel carrying out peacekeeping or nation building activities in the Pacific, Middle East, Asia, Europe and Africa.
Afghanistan
New Zealand supports international efforts to help Afghanistan eliminate terrorist groups and develop its own capabilities through the deployment of Special Air Service personnel, contributions to the International Security Assistance Force, and training of the Afghan National Army. A Military Liaison Officer is working with the United Nations Assistance Mission in Afghanistan.
New Zealand is also providing a Provincial Reconstruction Team of over 120 personnel, a commitment that has been extended to September 2006. Working in Bamyan Province, this team aims to assist the Afghan authorities extend their influence beyond Kabul. The Provincial Reconstruction Team's focus is on improving the security environment, as well as assisting with providing humanitarian support and development assistance to the Afghan people.
Iraq
In December 2004 New Zealand deployed a Military Liaison Officer to the United Nations Assistance Mission in Iraq. His main tasks are to liaise with and co-ordinate the activities of the UN mission, the Multinational Force and the Iraqi security forces, and provide advice to the UN's Special Representative for Iraq on military matters. This deployment underlines New Zealand's support for the UN's involvement in Iraq at this critical juncture in the Iraqi political process. This officer will be in theatre through 2005.
Proliferation Security Initiative (PSI)
Launched in 2003 and based on a series of multilateral activities, the primary purpose of the Proliferation Security Initiative is to take new and stronger actions to prevent the proliferation of weapons of mass destruction, their delivery systems and related materials. A set of Interdiction Principles consistent with national and international law and frameworks has been developed and New Zealand signed up to those principles at the Krakow meeting in May 2004. New Zealand defence officials have since attended several plenary and operational experts' meetings and the New Zealand Defence Force has contributed to an ongoing series of workshops and training exercises.
Acquisition
The Ministry is responsible for procuring all major items of capital equipment for the New Zealand Defence Force. The procurement process is often lengthy. It commences with the Government giving its approval in principle to an acquisition on the basis of a concept of operations and functional performance specifications determined principally by the Defence Force and external agencies. The Acquisition Division develops the necessary documentation for tender purposes, invites tenders, evaluates tender responses, undertakes risk assessments, and identifies preferred bidders. Once Government approval is given, the Division negotiates and manages the contract arrangements through to the delivery of the equipment to the New Zealand Defence Force.
Key projects over the last year have covered all three services.
Upgrading the Army
Vehicles
Light armoured vehicles (LAVs)
We have purchased 105 LAVs from General Dynamics Land Systems, Canada. One hundred and four vehicles are now in service with the Army. One vehicle will remain in Canada until 2007 for test fitting of add-on armour. Contracted training has been completed, and almost all of the ordered spare parts and special tools have been delivered.
Light operational vehicles (LOVs)
This project involves the acquisition of 321 LOVs in six variants to meet the Army's motorisation requirements. Deliveries commenced in October 2004 and 131 non-armoured LOVs were in service with the Army as at 30 June 2005.
Tactical communications
This project covers tactical communications for the Army and supporting Royal New Zealand Air Force units. The project has progressed as planned with deliveries of additional radios and associated equipment nearing completion. Final deliveries are expected in the fourth quarter of 2005.
Weapons
Very Low Level Air Defence
This project provides an alerting and cueing system for the Mistral very low level air defence system, which is already in service. A contract for the Identification of Friend or Foe system was signed in October 2004. Delivery of all equipment is expected by the third quarter of 2006.
Medium Range Anti-armour Weapon
This project is to procure a medium-range anti-armour weapon, the Javelin missile, manufactured by Raytheon/Lockheed Martin Joint Venture. The project is proceeding as a Foreign Military Sales procurement. Training equipment system is due in June 2006 to coincide with the delivery of missiles and launch units. Deliveries of the project should be completed by August 2006.
Upgrading the Navy
Following the Government's endorsement of the Maritime Forces Review, Project Protector was initiated to purchase new vessels for the Royal New Zealand Navy. A contract with Tenix Defence Systems was signed in July 2004, for one multi role vessel (MRV), two offshore patrol vessels (OPV) and four inshore patrol vessels (IPV). The first steel for the OPV was cut in February 2005 at Tenix, Williamstown Yard, Melbourne. Two OPV modules are under construction. The first steel was cut for the MRV in April 2005 and construction is underway. The first steel was cut for the first IPV in June 2005 at Tenix's Whāngarei Facility. Construction is also underway on the first OPV superstructure module in that facility.
Upgrading the Air Force
C-130 Life Extension
A contract was signed with L-3 Communications Spar Aerospace in December 2004. Preliminary design reviews are underway prior to the commencement of work on the first C-130H in the last quarter of 2005.
Boeing 757 Purchase and Modifications
Detailed planning for the modification programme (cargo door, strengthened floor, air stairs and communications/navigation equipment upgrade) is complete. A Request for Tender was issued to the preferred contractors in April 2005. An evaluation of contractors' bids has been completed. Cabinet approval to proceed with the project will be sought in the third quarter of 2005. The modification programme is expected to start in the second quarter of 2006.
Replacement Helicopter Capability
Evaluation of the Medium Utility Helicopter Invitation to Register was completed in July 2004. Due diligence on selected responding companies was completed in November 2004. The Government approved NH Industries as the preferred tenderer in March 2005. The Ministry continues to engage with NH Industries for full costings for the NH90, and the Australian Department of Defence on matters of mutual interest and collaboration on the purchase and support of the NH90, which Australia has also contracted to acquire. Cabinet approval to proceed with the project will be sought in the fourth quarter of 2005.
An Invitation to Register was issued to industry in June 2005 for the Training/Light Utility Helicopter.
P-3 Orion
L-3 Communications Integrated Systems was invited to submit a best and final offer for the project to enable options to be presented to the Government in August 2004. A contract was signed with L-3 Communications Integrated Systems in October 2004. The first aircraft for early electro-optics installation arrived at Safe Air, Woodbourne, in late June 2005. Preliminary design reviews are underway prior to the commencement of work on the first P-3 in the last quarter of 2005.
A joint approach
Joint command and control system
The acquisition of a joint command and control system will provide New Zealand Defence Force commanders at strategic, operational, and tactical levels, with the means to execute, command and control their forces singly, jointly, within a combined force, and within a coalition environment. It will ensure a sustainable interoperable framework, including that with relevant, non-defence organisations.
The New Zealand Defence Force has considered the findings of the study and has developed the system specifications. Cabinet approval to progress the project was received in June 2005, and an Invitation to Register is expected in late 2005.
New Zealand industry involvement
New Zealand Defence Industry Association
The Ministry has continued to support local companies seeking to obtain defence work from major acquisition projects and through exports. The main conduit for this assistance has been through the local association of member defence companies, the New Zealand Defence Industry Association, as well as the Manawatu Defence Cluster, both of which have focused on defence work. During the year, the Ministry provided regular briefings at New Zealand Defence Industry Association meetings. Assistance was also provided to the New Zealand Defence Industry Association as sponsors of the annual Defence Industry Seminar, as well as organisational input for the annual two day seminar held at Te Papa Museum in Wellington in late October.
Defence Industry Committee of New Zealand (DICNZ)
The Ministry provided support for the DICNZ. This Ministerially-appointed committee provides industry feedback to Defence and briefs the Minister on industry issues.
The DICNZ sponsors the Defence Industry Committee Awards of Excellence, awarded annually to companies that have provided Defence with excellence in products or services. The awards have recently been restructured to allow recognition of smaller organisations that provide excellent service to the New Zealand Defence Force, as well as to those involved in larger procurement projects.
DICNZ commissioned the New Zealand Institute of Economic Research (NZIER) in 2004 to undertake research into the effects of government procurement policy on the defence industry. NZIER was also asked to consider how industry is affected by other government procurement policies such as the Growth and Innovation Framework. NZIER presented the final report on its research to DICNZ in February 2005.
Evaluation
Under section 24(2)(e) of the Defence Act 1990, the statutory role of the Evaluation Division is to carry out assessments and audits of any function, duty or project of the New Zealand Defence Force. The Division also conducts audits of the Ministry of Defence's activities relating to the procurement of major military capability.
These assessments and audits are undertaken when required by the Minister of Defence, or to a programme approved under authority delegated by the Minister to the Secretary of Defence and the Chief of Defence Force. Reports of completed audits are submitted to the responsible chief executive and the Minister.
The Secretary of Defence and the Chief of Defence Force, together with an external member, met twice during the year as the Defence Evaluation Board, to approve the programme of work for the Evaluation Division, receive reports on audits completed, and to monitor follow-up action on past audits. The Evaluation Division also undertakes internal audits of the Ministry for the Secretary of Defence.
In addition to undertaking audits to meet the Secretary's responsibilities under the Defence Act, the Evaluation Division undertakes audits under section 3(6) of the Hazardous Substances and New Organisms Act 1996. During the year the Division completed a report on the New Zealand Defence Force's controls on hazardous substances not contained in weapon systems.
Corporate
Corporate Division provides support services and policy advice in the areas of human resources, information management and technology, and legal. The Division is responsible for all aspects of Ministerial services and support, including the handling of Ministerial correspondence, requests under the Official Information Act 1982, and miscellaneous enquiries.
A major emphasis over the last year has been on progressing the new Defence building that will accommodate the two Defence organisations, which is scheduled for completion in 2007.
Alongside this, there has been work to develop an electronic collaborative working space that will allow the Ministry and the Defence Force to produce joint information.
Conclusion
It has been a challenging and rewarding year for the Ministry. As well as the continued focus on work associated with the Defence Force's many deployments and capability acquisition programmes, substantial efforts were devoted to the Defence Capability and Resourcing Review and the Defence Sustainability Initiative, which will shape the rebuilding of the Defence Force for the next ten years.
The Initiative will provide greater certainty for defence planning and guide the reconstruction of defence capability to meet the Government's policy objectives. The Ministry is working closely with the Defence Force to implement the Initiative.
Graham Fortune
Secretary of Defence
30 September 2005
