Reports and Publications

• Hunn Review
  • Contents
  • Executive Summary
  • Chapter 1
  • Chapter 2
  • Chapter 3
  • Chapter 4
  • Chapter 5
  • Chapter 6
  • Chapter 7
  • Chapter 8

Within this section

• The MoD, the NZDF and the Single Services
• Relationships between the CDF and the Chiefs of Staff
• New Organisational Arrangements at the HQ, Joint Forces NZ and the HQ NZDF
• Parliamentary Roles and Relationships
• Enabling Policy Advice on Defence Matters from a Variety of Sources

Hunn Review: 30 September 2002

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Chapter 6 (continued)

Review findings

The MoD, the NZDF and the Single Services

The MoD and the NZDF

74. Many of the working relationships between the MoD and the NZDF magnify the negative effects of the current division of responsibilities between the CDF and the Secretary. In creating two legally separated departments of State, substantial duplication, particularly in overhead functions, has resulted. For example, there are separate and inconsistent personnel recruitment, career and performance management policies and practices for MoD civilians, NZDF civil staff members, and NZDF military personnel. There are two sets of human resources, corporate finance and management, information technology and management staffs and systems, two corporate secretariat staffs, etc. Each agency has its own and different standards for classified information management and correspondence.
75. This level of duplication is not only inefficient, but also generates unnecessary and frustrating transaction costs. Transparency and seamless flows of information are essential, yet the organisational boundaries between the MoD and the NZDF have impeded cross-boundary information flows. It is widely accepted there is a need for co-ordinated strategic management and planning processes through which agreed activities are undertaken, all information inputs and resources are co-ordinated and the best organisational results are delivered. Much effort has already gone into developing a strategic management and planning system that meets the needs of all users both inside Defence, and its external customers and clients. However, the organisational boundaries, and their supporting cultures within Defence, have hindered these efforts, and led to disagreements, misunderstandings, and competing proposals that have delayed progress. It is important that this development work should be brought to a conclusion forthwith and an effective planning system put in place.
76. Similar difficulties arise from the two organisations having separate intranet information systems and Internet websites. The significant differential in size between the two has hindered collaboration on shared systems and processes -for example, an information management system that suits 60 users can tolerate greater diversity than one that must provide for 6,000 users. Further effort would be needed to harmonise the two information systems in any programme to achieve greater cooperation.
77. The divisive tendencies, built into two legally separate departments, have been reinforced by the physical separation of staffs in Defence House. When staff work closely with each other, they communicate and involve each other in their respective efforts: when they are physically separated, natural boundaries compound other social or cultural differences.
78. Each agency has developed ways of working that are to greater or lesser degrees, exclusive, reflecting the theoretical split in their responsibilities and tasks. This has led to both duplication and gaps in effort and results. There are situations where issues are continually re- litigated, not because the work done is inadequate, but because it was generated by one agency and therefore cannot be accepted by the other - described to me as "the-not-invented here" syndrome. I am told there are also situations where one agency is responsible for generating information or results, and when it does not (or works to a different timetable), the other agency that depends upon that information or result cannot fulfil its responsibilities.
79. Each agency maintains separate internal governance structures - the Secretary's Senior Management Group, and the CDF's Chiefs of Staff Committee, Defence Co-ordinating Committee and Branch Heads Committee. Inter-agency governance structures have been established by successive CEs mainly for the purposes of moderating the relationships between them rather than as mechanisms for joint management. A number have failed over the period of the two-organisation experiment. A few have survived because of formal MOUs between the two CEs, while others have continued only when the good-will of the senior executives has encouraged them. The two CEs have a standing arrangement for a formal meeting between them but this is only taking place irregularly. This arrangement has also been of limited success. Because it does not include the bulk of the senior management group of Defence, it cannot develop a sense of shared ownership of all senior management decisions. In my view current governance structures are only marginally effective in providing direction and setting priorities for staffs, and for co-ordinating and encouraging their collaborative efforts.

The NZDF and the Single Services

80. Many of the problems of poor co-ordination, communication, and duplication between the MoD and the NZDF are mirrored in similar problems within the HQ NZDF between the single Service staffs and CDF's staff. Evidence presented to the review confirms that a number of staff functions, currently carried out within each of the Service staffs are duplicated, requiring co-ordination and management by CDF's functional staffs.
81. At the organisational level where collaborative effort is vital to achieve jointness, i.e., the strategic level, the NZDF is as disjointed as it was at the operational level prior to the establishment of the Joint Forces HQ. For instance, problems for MoD staffs in co-ordinating with HQ NZDF are multiplied when there are four force development staffs, one for the Naval Staff, the Army General Staff, and the Air Staff, and a CDF functional staff. Despite efforts to achieve consensus on management policies, it would appear that inconsistencies escalate when NZDF-level management policies are ex post facto "re-interpreted" at single Service staff level apparently take into account perceptions of single Service difference.
82. Naturally enough single Service staffs are responsive first to their Chiefs of Staff, and only then to the needs of CDF's functional staffs. For so long as single Service staffs are held within their vertical silos, it will be impossible to develop the truly cross-functional and cross-Service teams essential for jointness at the HQ NZDF level. I am told that as the pressures on personnel resources have increased, so too has the attachment of single Service personnel to CDF's functional staff taken second priority to staffing single Service staffs. Such signals as to where values and loyalties should lie have to be reversed if jointness is to be promoted.
83. The emphasis on the vertical streams within HQ NZDF has allowed the single Services to generate separate visions for their future organisation and capabilities. These single Service "visions" and I would acknowledge that some good work has gone into them, have not been, but should be, derived from a cohesive "NZDF future vision" that is linked to Government's defence policy and priorities. I understand the current CDF has begun work to achieve this direction.
84. Devolution of resource management authorities through the command chains of the single Services, i.e., from the CDF through the Chiefs of Staff, has reinforced the separate authority of the single Service staffs. The relationship between the CDF's functional staffs and the three Service staffs can be likened to a small corporate headquarters trying to manage and co-ordinate three business lines determined to operate as independently as they can, with substantive authority and control over their own resources, culture and results.
85. The effectiveness of senior level committee structures within HQ NZDF - particularly the Chiefs of Staff Committee (COSC) which is a creation of the Defence Act -have been dependent upon the degree to which strong personalities are prepared to work together. It would seem to be generally accepted that in recent years the COSC has not achieved the functionality expected of such a body. In addition to the rigidities of single Service attitudes, concerns have been raised as to whether the membership is sufficiently inclusive and whether the right issues are coming before the Committee. Again, the current CDF is considering means of improving the management of the COSC, and I am aware has invited the Secretary to attend its meetings.

A need for Integration and Jointness

86. Just as with the Secretary and the CDF, the various components of the Defence Organisation -MoD and HQ NZDF -rely on each other. At a basic level, there are significant opportunities for integration and jointness between the MoD and the HQ NZDF and within the HQ NZDF.

Relationships between the CDF and the Chiefs of Staff

87. In the previous paragraphs I have commented on what I see to be the effect of the current single Service emphasis. In terms of the relationship between the CDF and the Chiefs of Staff, current legal and structural arrangements - particularly the provision for single Service Chiefs to have direct access to the Minister - can dilute the authority of the CDF. They can also affect the working relationship between the Minister and the CDF.
88. There is no argument with the proposition that a full range of advice should be available to the Minister and this should include opportunities for the Minister to be aware of the views of the Chiefs of Staff where these differ from those of the CDF on major matters. It is important at the same time that the process by which these differing views are made known to the Minister does not detract from the command and leadership authority of the CDF. Recent history would suggest that the existing procedure in New Zealand should be revised. In doing so we might well consider relevant international experience. For example, in the United States, the Chairman of the Joint Chiefs of Staff as the principal military adviser to the Secretary of Defense and the President is obliged to put forward the alternative views expressed to him by the Service Chiefs when they differ from his own.

New Organisational Arrangements at the HQ, Joint Forces NZ and the HQ NZDF

89. The creation of the Joint Force Headquarters New Zealand (JFHQ NZ) has been a major step forward in achieving the "jointness" desired by the Government. However, it is clear that further changes at the strategic level, i.e., at HQ NZDF, will be required in order to give full effect to the new direction. These include:
    • establishing clear civilian and military responsibilities for strategic-level inter-agency relations management in support of military operational planning and on-going operations;
    • ensuring appropriate information channels between HQ NZDF and the HQ JFNZ staffs and the Commander Joint Forces New Zealand (COMJFNZ);
    • developing planning processes for contingencies and responses to national and international security crises that integrate inputs from MoD and HQ NZDF;
    • improved performance measurement and reporting on operational missions; and
    • establishing clear lines of resource management authority for joint exercises and training as between the JFCOMNZ and the single Services.
90. The Defence Act does not specify organisational structures, but rather personal responsibilities. Neither the establishment of the JF HQ nor the position of COMJFNZ is provided for in the legislation (although appointing joint force commanders for particular operations is) - a situation which led the previous CDF to comment that these developments "stretched the Act to its limits". I have not sought a separate opinion on this matter but the Government may wish to satisfy itself that no legal difficulties are likely to arise.
91. The COMJFNZ is the principal operational "customer" of the HQ NZDF's staff work, and the single Services' "raise, train and sustain" outputs. In working day to day with the products of these staffs, in carrying out operations and undertaking operational readiness training, the COMJFNZ and his staff are gathering important information on "lessons learned" -what worked and what did not. This information needs to be fed back into the work of defence policy and capability staffs. I understand that early work is currently underway to ensure this is done. Over time this feed-back loop should enhance CDF's ability to provide direction on continuous improvement of the NZDF's overall strategic capacity for operations, and to give good advice to Government when major operational decisions have to be made.
92. At the same time, care needs to be exercised. It is critical that the operational demands of the moment, as presented by the JF HQ, are balanced against the longer-term development of the NZDF's strategic capacity. While current operations will always tend to dominate, because of the immediate hazards to personnel, there is an inherent risk of remedying the problems and deficiencies in today's force structure, at the expense of creating a force capable of handling missions in the future.

Parliamentary Roles and Relationships

93. I was asked to consider the relationship between the Executive and Parliament in respect of roles in defence decision-making and planning. Defence is a capital-intensive function. Therefore, Government's investment plans for defence stimulate close Parliamentary scrutiny. Equally, the deployment overseas of New Zealanders on military operations, often in dangerous and difficult circumstances, raises issues of national interest and personal safety on which Members of Parliament wish to be informed and to debate.
94. In addition to discussions with Members of Parliament themselves, I have looked at the experience of other jurisdictions. In the United States, the "checks-and-balances" distribution of power between the Executive and the Legislature, empowers Congress to "raise and support Armies and provide and maintain a Navy, and to make Rules of government and Regulation of the land and naval forces". While the Executive proposes expenditure budgets and resource plans, following often lengthy negotiations in and between the Senate and House of Representatives Armed Services Committees, it is Congress that enacts an annual Defense Authorisation Act for the US Armed Forces and Department of Defense.
95. American analysts themselves have reservations about this system. They note there is a long history of these powers being used in strongly interventionist ways to manipulate expenditure items to suit Congressional agendas. Authorisation Acts are focused on line-item inputs and costs in great detail. Some consider this approach does not lead to the most effective and efficient use of US defence assets and resources and can contribute to mismatches between defence policy and military capabilities. In any case, from our perspective, the difference in size and military power offers little by way of precedent.
96. In the four countries studied that have "Westminster" systems, Parliaments and their Committees are empowered to oversee Government activities and decisions in the defence area. They are responsible for reviewing and making recommendations on legislation, examining performance reports, and conducting inquiries into defence matters.
97. Particularly in Australia, the UK and New Zealand, reforms in public sector management have influenced the type of information on Government activities that is presented for scrutiny. In the past, Parliamentary Committees exercised a micro-oversight role of checking individual items of budgets and expenditures. Public sector reforms have established purchaser and ownership relationships between Government and public sector departments and agencies. These relationships are expressed in contracts that are focused on what departments and agencies should be producing, and increasingly upon the effects of those goods and services, rather than how Departments intend to go about achieving delivery through the use of a variety of inputs. It is these contracts (Purchase Agreements, and Departmental Forecast Reports) that are subject to Parliamentary oversight. This trend is likely to be reinforced with the current shift in focus from "outputs" to "outcomes" as the results to be measured.
98. For Defence, this oversight function is primarily managed through Select Committee hearings that are attended by the Defence CEs and supporting staffs, and on occasions by Ministers. In recent years, the Select Committee has taken a particular interest in the strategic and governance issues that provide the framework for New Zealand's defence effort. This is particularly evidenced in the 1999 Select Committee's Beyond 2000 Inquiry.
99. Over the past two decades the shift from the primacy of managing defence alliances (which is essentially an Executive function) to the emphasis on overseas deployments as partners in peacekeeping and peace support missions, has led to increasing Parliamentary interest in defence and its management. Recent Governments have chosen to involve Parliament in decisions to deploy the NZDF overseas on operations that may involve combatant situations. The decision to commit forces rests with the Government. However, because of the consequences for personnel deployed overseas and for the need to maintain public support, Governments have recognised that Parliament can playa valuable role in building a national consensus for such deployments.
100. Another emerging trend is legislative provision for oversight of particular Government decisions and plans. For example, provisions were inserted in the recent Civil Defence Emergency Management Bill requiring Government to submit its Five-Year Civil Defence Strategic Plan for consideration by the relevant Select Committee. These provisions for Parliamentary scrutiny involve Government plans at the macro level and are consistent with an oversight role, rather than a decision-making one. Nonetheless, the possible precedent would require careful consideration if it were applied to Defence.
101. In the case of Defence, the New Zealand Constitution assigns the decision-making role very clearly to the Executive. Under both Crown Prerogative and the Defence Act, the Executive -rather than Parliament -is authorised to raise, arm and commit armed forces (See Annex G; Heron J and Court of Appeal Legal Judgements). What is not in question is Parliamentary supremacy in passing legislation and appropriating finance for defence purposes, and in holding to account those responsible for defence policy and operations.
102. It is clear that to perform its oversight roles effectively in these areas, the Select Committee needs high quality advice and information. Compared with parliamentary machinery concerned with defence and security in the countries examined during this review, there is a substantial difference in the resources available (even taking into account our much smaller size). Select Committees in Canada, Australia and the United Kingdom are all equipped with professional researchers and advisers, to assist Members to cope with the complexities of international security problems, rapid defence-related technology change and cost drivers for defence materiel. I note also that considerable use is made of briefings by officials as a means of widening the basis for parliamentary debate and improving the range of advice available on defence matters.
103. Members of Parliament themselves will be more aware than I of the differences between New Zealand and the three other Commonwealth countries. My impression in discussing the matter with them is that our Parliamentary environment has undergone significant change in recent decades. Twenty years ago, defence and foreign policy issues were generally regarded as bipartisan: that is no longer the case. No doubt there are a number of reasons for this but MMP in particular has brought with it, as was intended, a much wider expression of opinions on defence as on other matters. In these circumstances consensus is infrequent. Some Parliamentarians have also made it clear that they would not be bound by any confidentiality restrictions: that would rule out the possibility of sharing sensitive information (as is done elsewhere), particularly where this originated with a treaty partner.
104. The conclusion one draws from this is that it is difficult for an organisational review of this kind to comment on Parliamentary procedure or even the relationship between the Executive and Parliament. Both are political matters, requiring political debate and decision. I understand the Select Committee would like to be better informed on defence questions, to be briefed more frequently on overseas deployments and capital purchases and to have additional resources to enable it to examine issues in greater depth. For his part, the Minister has spoken positively about the role of the Select Committee in discussions on such issues as the future of the Territorial Force. In my view, if any change is desired, the political channel is the best means of taking this matter further.

Enabling Policy Advice on Defence Matters from a Variety of Sources

105. I was asked to consider options for the Government to draw policy advice on Defence matters from a variety of sources. The view of the Select Committee in its 1999 report was that there were few options in New Zealand outside the officials' community, the political parties and the Select Committee itself for generating independent assessments of defence policy and military capability options. The question remains, given the low priority of defence, in comparison with our strategic partners, what other sources are necessary? Moreover, what level of Government expenditure could be justified in supporting such sources, if the internal defence management systems were strengthened in the manner suggested by this report and bearing in mind that unlike our strategic partners, alternative sources of advice are unlikely to be funded privately.
106. Elsewhere, independent institutes, "think tanks" and universities play an important role in enabling Governments to reach balanced decisions. Study centres not only provide inputs into the national defence and security debate from a non-officials' perspective, they also counter-balance and challenge the information provided by lobby groups who seek to press their views on Ministers, political advisers and Parliamentarians (a major consideration in jurisdictions where defence expenditure is much greater than ours).
107. In Washington DC for example, over 100 not-for-profit research think-tanks operate. At the same time, the US Federal Government funds a number of research institutions to provide sources of advice, external to the Department of Defense. These Federally-funded institutions play an important role in conducting wider and more in-depth studies than can be undertaken by defence officials. This research sector is also useful in the professional development of officials in providing a range of opportunities for them to "take time out" to test their thinking and expand their knowledge in a challenging academic environment. Similar practices apply in Australia, Canada, and the United Kingdom.
108. The base for such activities in New Zealand is at present very thin. The university sector, for example, does not seem to have been able to develop and retain groups of researchers of international repute in defence and national security matters. Individual scholars are dispersed and educational programmes for developing researchers have shortcomings when compared with the practice in other countries.
109. While I have not undertaken a review of the Centre for Strategic Studies, I understand that it has not been as successful as was originally hoped in terms of value for the funding provided by the Defence and Foreign Affairs agencies. I have been told one of the reasons for this may have been that the funding was insufficient to bring an adequate number and diversity of scholars together to generate the studies expected from similar institutions overseas. It may also have been optimistic to have one small academic institution undertaking the function carried out by a wide range of institutions in other larger countries. In these countries, contestability between institutions insures that it is irrelevant if one institution is seen to be "institutionally" or "ideologically" captured -for inevitably others from opposing perspectives will balance it.
110. I suspect that part of the problem could have been the onset of the "think tank" syndrome which in the past has affected other similar Government-funded bodies in New Zealand. The recent decision by Victoria University of Wellington to establish a School of Government and incorporate the Centre for Strategic Studies within it, should give the Centre a new lease of life. Certainly it will provide Government with a fresh opportunity to renegotiate a Memorandum of Understanding that makes explicit the expectations of both parties. If this proved to be satisfactory, similar MOUs could be considered for other universities which provide courses or undertake research related to defence issues.

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