Annual Report for the year ended 30 June 2002
Overview
Secretary of Defence's overview
Introduction
The roles of the Ministry of Defence are to provide timely high-quality advice to help the Government make well-informed judgements in the defence of New Zealand and its interests, to arrange for the acquisition of significant items of military equipment needed to meet capability requirements, and to conduct audits and assessments of the New Zealand Defence Force (NZDF) and the major procurement activities of the Ministry.
The key objective over the last year has been the continued implementation of the Government's defence policy, as set out in The Government's Defence Policy Framework (June 2000) and the Government Defence Statement - A Modern, Sustainable Defence Force Matched to New Zealand's Needs (8 May 2001). This activity produced the Defence Long-Term Development Plan (LTDP) (11 June 2002) - a planning tool to enable decisions on defence capability acquisitions to be taken over the next ten years.
Policy has not been developed, implemented or evaluated in a vacuum. The terrorist attacks in the United States on 11 September 2001 reminded us that we have not reached the ‘end of history' and the triumph of liberal democracy and free markets. While direct military threats to New Zealand may not have increased, we continue to face a variety of security challenges that require multifaceted responses. With a sizeable commitment to East Timor, and other commitments elsewhere in the world, NZDF personnel have been deployed to Afghanistan in support of United States and international forces. Policy will continue to evolve in response to these events and deployments.
One outcome has been a greater importance attached to New Zealand's international defence relations, particularly with countries engaged in the Asia-Pacific region. The ongoing development and management of these relations will be crucial for advancing New Zealand's security interests in the future.
Defence will continue to support a broader approach to security and work with civilian agencies such as the Police, Customs, and Fisheries to deal with challenges facing New Zealand. Enhancing the capabilities of the NZDF across all three services, through the implementation of the LTDP, will improve the ability of the NZDF to meet defence policy goals and contribute to wider government goals as well.
Policy and Planning
Development of defence and security policy is a key activity for the Ministry. The Secretary of Defence is the principal civilian advisor on defence matters to the Minister of Defence and other ministers. The Chief of Defence Force (CDF), who commands the NZDF, is the principal military advisor.
The Defence Policy and Planning Unit (DPPU), a combined Ministry and NZDF policy unit, has continued to evolve in its role of providing a single stream of policy advice to the CDF and to the Secretary, and through them to the Government. The DPPU consists of the International Defence Relations (IDR) Branch and the Strategic Policy (SP) Branch.
Implementing the Government's defence policy
The DPPU's work has been focused on the implementation of the Government Defence Statement.
The Statement sets out the Government's priorities for rebuilding the NZDF as being:
- A joint approach, structure and operational orientation;
- A modernised Army;
- A practical Navy fleet matched to New Zealand's wider security needs;
- A refocused and updated Air Force; and
- A funding commitment to provide financial certainty.
The implementation of the Statement has involved a number of reviews, both policy and capability, culminating in the Government's release of the LTDP - a planning tool to enable decisions on defence capability acquisitions to be taken over the next ten years.
Policy Reviews
Pacific Review
In response to a prime ministerial directive about the need to review relations with the Pacific Islands region, the DPPU has completed a review of Defence engagement in the Pacific, New Zealand and the Pacific Islands: Security Through Partnership, setting out New Zealand's defence obligations, responsibilities, and interests in the Pacific. External agencies consulted during the Review included the Ministry of Foreign Affairs and Trade (MFAT), the Ministry of Pacific Island Affairs, the Treasury, the Police, the Department of Prime Minister and Cabinet (DPMC), the Ministry of Fisheries, and the New Zealand Customs Service. The Review recommends greater levels of defence and security engagement, including through the NZDF Mutual Assistance Programme. The Review awaits consideration by the Government.
Defence Implications of 11 September
The DPPU considered the defence implications of the 11 September 2001 terrorist attacks in the United States and consulted with other agencies, including the NZDF, MFAT, DPMC (External Assessments Bureau, and Domestic and External Security Secretariat), and the Police. Themes from this consultation process have been incorporated into thinking on the LTDP.
Arms Control and Disarmament, Antarctica, and Oceans Policy
The DPPU has also been involved in policy development with other agencies. Arms control and disarmament continues to be of interest to Defence and the DPPU worked with MFAT on the issues of small arms and the Certain Conventional Weapons Convention. The DPPU participated in the Officials' Antarctic Committee meetings, hosted by MFAT, and contributed to the development of the new strategic interests statement and fishing policy for the Southern Ocean and Ross Sea. Defence will also contribute, as appropriate, to the inter-agency oceans policy process.
Capability Reviews
The Maritime Forces Review
The Maritime Forces Review was released in January 2002. In addition to the military and foreign policy uses of naval vessels, the Review took into account the recommendations of the Maritime Patrol Review (February 2001), in particular:
- the civilian requirement for coastal and mid-range offshore capabilities;
- the roles to be performed in conjunction with New Zealand's responsibilities and obligations in respect to the Southern Ocean and Ross Dependency;
- the need for an appropriate sealift capability, including the use of such a capability for disaster relief and other tasks in the South Pacific;
- and the need for, and priority to be accorded to, the roles performed by the Royal New Zealand Navy Volunteer Reserve.
The Government's objective is to equip the Navy with a practical fleet that is modern, sustainable and matched to New Zealand's needs. To meet this objective, the Review recommended that the Naval Surface Fleet comprise:
- the Naval Combat Force to meet military tasks;
- the Naval Support Force consisting of the underway replenishment ship and a new multi-role vessel for tactical sealift, patrol, and training;
- a Naval Patrol Force with inshore and offshore capabilities;
- the Clearance Diving Support and Mine Countermeasures Force; and
- a hydrographic survey capability (subject to separate review, see below).
During the course of the Review, the Ministry undertook extensive consultation with external agencies, such as Customs, the Ministry of Fisheries, the Department of Conservation, the Maritime Safety Authority, and the Police, to assess their requirements.
The Government agreed to the Review recommendations. It directed the Ministry, in consultation with the NZDF and other departments and agencies as appropriate, to canvass proposals from industry to meet the requirements for tactical sealift, training, and offshore and inshore patrol capabilities at a cost not exceeding NZ$500 million.
Hydrography Review
A review of the hydrographic survey capability was one of the initiatives announced in the Government Defence Statement. An independent consultant, Mr Ross Tanner, was commissioned to undertake the review and government and non-government agencies were consulted as part of the review process. The purpose of the review was to: provide advice on the need for the Government to retain ownership of such a capability and, if so, whether the Navy was the most appropriate provider; and, examine the present funding-provider arrangement between the NZDF and Land Information New Zealand (LINZ). The review was submitted to the Minister of Defence in July 2002.
Long-Term Development Plan
The LTDP is a planning tool to enable decisions on defence acquisitions to be taken in the context of current defence policy, the priority of projects, and affordability. The Plan links the defence policy objectives with the capability requirements in the Government Defence Statement and contains a comprehensive list of major projects (projects over $7 million), with preliminary costings, timings, and priorities. It is a major policy document and, along with The Government's Defence Policy Framework and the Government Defence Statement, completes a phase of significant policy development.
Capability projects have been prioritised and categorised to reflect their relationship to meeting current defence policy objectives. The categories are: projects approved in principle by government; projects necessary to avoid the failure of policy; projects necessary to provide a well-equipped land force; projects necessary to avoid significant risks to policy; and, projects that have benefit but are less critical to achieving policy objectives.
The LTDP will be updated regularly as projects are completed. The Ministry and the NZDF are now developing planning and decision-making processes which will incorporate management of both operational and financial risks to ensure that investment in defence provides the best value for money.
The LTDP will be managed within approved financial parameters, which are:
- up to $1 billion, in nominal terms, in capital injections over the next 10 years, which, with depreciation, will provide at least $2 billion for new acquisitions;
- current operating baselines set to 2005/06 with adjustments for unfunded depreciation thereafter;
- any inflationary pressure to be managed within these constraints until 2005/06; and
- leasing options may be considered where there is a neutral trade-off between capital and operating expenditure.
The LTDP does not give Defence authority to proceed with any of the projects set out in the Plan. Every project will be brought forward for approval and will be judged in the context of the Government's defence policy, the priority of that project in terms of the LTDP, and the affordability of that project within the overall context of the LTDP. The $2 billion cap does not include those projects already funded and underway: light armoured vehicles, Seasprite helicopters, and Army radios.
Implementation of the LTDP will comprise a significant proportion of the DPPU's work in the coming year. This will include work on projects such as the Ohakea runway upgrade, the P-3 Orion mission systems upgrade, and the C-130 and B727 replacement projects.
International Defence Relations
Developments in the Asia-Pacific region influence New Zealand's security and well-being. We are strongly committed to playing a meaningful role in the maintenance of regional peace and security. New Zealand considers defence and foreign policy to be a partnership working in a comprehensive way to secure our territorial, economic, social and cultural interests and to meet our collective and global responsibilities. The demands on New Zealand are likely to intensify as we play a meaningful part in the campaign against international terrorism and deal with its root causes.
In the South Pacific, heightened ethnic and nationalist tensions continue to have a destabilising influence, particularly in Melanesia. In Solomon Islands, a failing peace process, the law and order crisis, and the damage it has inflicted on the country's weak institutional foundations, threaten to produce the region's first failed state. Elsewhere in our neighbourhood, peace and security are being undermined by the spread of trans-national crime, problems of governance, and intractable land grievances. The peace process in Bougainville, in which New Zealand continues to take a prominent role, represents one of the few optimistic spots in an otherwise problematic region.
New Zealand is an active participant in measures designed to reinforce stability in Southeast Asia. The ASEAN Regional Forum, with its broad membership, provides opportunities for New Zealand to work with other Forum members in promoting regional security. We are committed to the Five Power Defence Arrangements. This is our major point of defence contact with Singapore and Malaysia, and is tangible evidence of New Zealand's contribution to confidence building and preventive diplomacy in the region. The UN Mission of Support in East Timor and its predecessor missions, to which New Zealand has made a meaningful and long-standing troop contribution, is one of the most successful operations of its type.
The 11 September 2001 terrorist attacks on the United States have heightened our understanding of the threat to regional security posed by trans-national actors. We need to be alert to the linkages between terrorism and other trans-national threats such as piracy, illegal seaborne immigration, drug trafficking, and money laundering. Countering these threats will require constant vigilance, cooperation and dialogue.
The NZDF is not only responsible for the defence of New Zealand; it also represents a force for good in the world. The deployment of New Zealand servicemen and women in support of multilateral peacekeeping missions reinforces our wider commitment to collective security and our credentials as a good international citizen. Peacekeeping complements and strengthens New Zealand's profile in areas of considerable international tension, and strengthens our voice in calling for widespread participation in missions of importance to us in the Asia-Pacific region. Our contribution in Afghanistan is just the latest example of our preparedness to uphold the principles of international law and collective responsibility.
Closer Defence Relations with Australia
Australia is New Zealand's most important and valued defence partner. A strong strategic relationship with Australia in support of common interests for a secure and peaceful region is a key outcome in The Government's Defence Policy Framework. We share a common commitment to the security and stability of the Asia Pacific region as reflected in our combined efforts in Bougainville, East Timor, and Solomon Islands. The East Timor mission, in particular, underlines our ability to work together effectively in an operational environment.
Regular meetings take place at several levels, the most important being the annual meeting of Defence Ministers and the concurrent meeting of Secretaries of Defence and Chiefs of Defence Force. At last year's meeting in Melbourne, Ministers directed their officials to give further emphasis to achieving the highest possible levels of interoperability between the two defence forces within national defence priorities, so that the full potential of Closer Defence Relations can be realised. In our assessment, practical levels of interoperability are very good. Recent positive developments include the establishment of Headquarters Joint Forces New Zealand, which has greatly enhanced ADF-NZDF relations at the operational level, and the release of the LTDP. These will address many of the capability-based interoperability gaps that currently exist between Australia and New Zealand.
South Pacific
New Zealand shares security concerns with much of the Pacific through geographic proximity, common points of history, people to people links, commercial opportunities, social and humanitarian concerns, and diplomatic goals. Our mutual interests interact through complementary objectives, shared responsibilities and similar, emerging security challenges. As regional security issues become increasingly complex, conventional means of promoting security need to be adapted to meet them. Isolation no longer provides an adequate or partial solution for the region.
We are seeking better-targeted and more effective delivery of defence assistance to the South Pacific. This includes developing with the New Zealand Police a coordinated programme of assistance for law enforcement.
Papua New Guinea (PNG)
Our defence assistance to the PNG Defence Force has slowed as it grapples with the need to downsize and restructure to remain within budget. The apparent willingness of elements within the PNG Defence Force to become involved in the political process is of major concern.
Bougainville
The Bougainville Peace Agreement sets the scene for peace on the island. It provides for the establishment of an Autonomous Bougainville Government; an opportunity for the province to hold a referendum in the longer term to determine its political future; and a weapons disposal process. The Peace Monitoring Group, of which New Zealand is a member, continues to have an important role in building confidence in the political settlement and in supporting the weapons disposal process. A premature exit might simply create a situation where we are forced to re-deploy at some later date.
Solomon Islands
Solomon Islands is entering a critical period. Problems with governance, a faltering peace process, growing lawlessness and an economy in crisis are placing serious pressure on the Solomons as a unitary state. An improvement in the law and order situation is a prerequisite for economic recovery and the restoration of donor confidence.
The International Peace Monitoring Team (IPMT) completed its phased withdrawal from Solomon Islands in June. The IPMT had fulfilled its mandate to the extent that it was able. Open ethnic conflict has not reignited since the IPMT's deployment in November 2001. Addressing the deteriorating law and order situation through the Solomon Islands Police Project represents a better use of New Zealand's resources.
One member of the DPPU was part of the Election Monitoring Team while another was deputy leader of the IPMT and then Deputy High Commissioner.
Fiji
Reform of the Republic of Fiji Military Forces (RFMF) is fundamental to the organisation's present and future stability. Although the sanctions imposed by New Zealand against Fiji following the events of May 2000 have been lifted, there has been no resumption in bilateral defence cooperation. The one exception is the provision of refresher training for RFMF personnel in dealing with unexploded ordnance prior to deployment to East Timor. Consideration is being given to a renewed Mutual Assistance Programme with Fiji, although it would not necessarily resemble past programmes.
Southeast Asia
Southeast Asian countries condemned the 11 September 2001 attacks, but there have been differences of emphasis in responding to the United States-led campaign against terrorism. The region's two significant Muslim nations, Indonesia and Malaysia, for example, have called for caution while the Philippines has invited direct United States military support. Southeast Asian economies are slowly recovering from the economic crisis of 1997, but the region must still deal with heightened ethnic tensions, and a growth in the incidence of trans-national crime, especially piracy and illegal migration.
New Zealand maintains important bilateral and multilateral defence and security relationships in Southeast Asia. Five Power Defence Arrangements (FPDA) The FPDA continues to make an important contribution to regional security by enhancing cooperation among its members: Australia, New Zealand, Malaysia, Singapore and the United Kingdom. The Minister of Defence's attendance at the Informal Ministers' Meeting and 30th Anniversary Celebrations in Malaysia last year reinforced the importance we place on the FPDA. New Zealand participates actively in FPDA exercises through the commitment of P-3 Orions as well as our Navy and Army assets. We have also supported the organisational changes adopted by FPDA such as the establishment of the joint headquarters, mechanisms for policy development, and arrangements for more effective integration of activities.
Thirty years on, the FPDA still provides participant countries with a useful mechanism for consultation and cooperation on defence matters. It is also a significant regional confidence building measure. The utility of the FPDA resides as much in the political commitment it represents as in the practical operational benefits it offers.
ASEAN Regional Forum (ARF)
New Zealand is committed to the ARF process as the only pan-regional forum devoted to discussing security issues. Against the expectations of many, the ARF has developed into a valuable forum and with the adoption of the first management tools for addressing regional security situations, attention is now focusing on proposals to enhance its role. The ARF is engaged in the regional response to terrorism and we are contributing to regional co-operation on terrorism issues. New Zealand Defence officials have participated in the two Inter-Sessional Group (ISG) meetings in New Delhi and Hanoi, and the Senior Officials' Meeting in Brunei. New Zealand has led the development of a register for ARF Confidence Building Measures to aid in the rationalisation of this process and supported efforts to enhance Defence participation in the ARF process, which are now gathering momentum. Most importantly, the ARF has accepted New Zealand's offer to co-host the next two ISG meetings. The first of these will be held in Wellington in November 2002.
Singapore
Singapore is our second most active defence partner after Australia. In the last year, the Minister of Defence has met with his Singaporean counterpart, Dr. Tan, at the FPDA Defence Ministers' Meeting and at the IISS Asia Security Conference in Singapore. The Singaporean Secretary of Defence visited New Zealand in July 2001. Senior meetings reinforce the considerable scope for defence cooperation both bilaterally, through regular exercises, training, and exchanges, and multilaterally, through groupings such as the FPDA and ARF. The defence relationship is an important strand of the wider bilateral contact between our two countries and has a part to play in underpinning new endeavours and foreign policy collaboration. Our cooperation in East Timor and the Closer Economic Partnership are cases in point.
Malaysia
New Zealand values its close bilateral defence relationship with Malaysia. As with Singapore, we welcome opportunities to co-operate bilaterally through meetings, exercises, and exchanges, and in multilateral co-operation through the FPDA and ARF. The Minister of Defence met with Malaysia's Minister of Defence, Datò Seri Najib, at the FPDA Defence Ministers' Meeting and again at the IISS Conference. The two Secretaries of Defence met in Kuala Lumpur for the Senior Executives' Meeting in May this year.
Thailand
We have close relations with Thailand in respect of our mutual participation in East Timor. We will be working closely with Thailand as they move to take over our area of operations once we withdraw our battalion. In addition to peacekeeping, we have an active programme of training through the Mutual Assistance Programme, as well as bilateral exercises and visits.
East Timor
New Zealand continues to make a major contribution to the newly independent nation of East Timor. By the time we withdraw our battalion group and RNZAF Iroquois helicopters in November 2002, we will have sustained this level of commitment, our largest to an operational mission for several decades, for over three years. This is a major achievement for a defence force with only two regular force battalions.
The withdrawal of our battalion and helicopters will be an important part of the phased downsizing of the UN presence in East Timor (the UN is planning on a full departure by mid- 2004). This will signal the end of a NZDF ground presence in East Timor. Options for a muchreduced military contribution, likely to be a mix of staff officers, military observers and trainers for the East Timor Defence Force, are currently under consideration.
Other Southeast Asian Nations
New Zealand maintains small, but important, defence relationships based on Mutual Assistance Programme cooperation with Brunei and the Philippines. New Zealand remains committed to the demining process in Cambodia and Laos, where NZDF Technical Advisors are deployed. Our newest relationship in the region is with Vietnam. Our defence attaché in Thailand was cross-accredited to Hanoi last year and has established good contacts.
North Asia
One of the principal determinants of the shape of the political, economic and strategic landscape in the Asia-Pacific region is the triangular relationship between the United States, China, and Japan. In the wake of 11 September 2001, the United States is now viewing international security through an anti-terrorism prism that has resulted in increased levels of dialogue and cooperation across the Asia-Pacific region. China's cooperation with the United States in forming a global coalition in response to the terrorist attacks provided a timely circuit breaker in Sino-United States relations following their deterioration earlier last year (by next October, Presidents Bush and Jiang will have held three summits inside 12 months). Cross-straits relations between China and Taiwan appear to have entered a new positive phase but tensions on the Korean peninsula continue to cast a shadow over the region. Doubts about Pyongyang's commitment to inter-Korean rapprochement have again been heightened in the wake of the recent naval clash in the Yellow Sea.
Reflecting the rapid growth and importance of New Zealand's wider relationships in Northeast Asia, appropriate reciprocal contact in the defence and security arena has continued. Northeast Asia is a region where strategic realities, uncertainties and market opportunities combine to compel a strategy of greater engagement. Moreover, there is an expectation on the part of countries in the region that a well-rounded relationship will have a defence component.
China
Defence contacts constitute one element of a wide-ranging and increasingly important relationship with China. 2002 is the 30th year of diplomatic relations and good progress continues to be made in developing closer defence links. Highlights included the visit to New Zealand in March by General Qian Shugen, Deputy Chief of the General Staff. His visit was preceded by a series of senior Peoples Liberation Army (PLA) delegations. The Minister of Defence, the Secretary of Defence and the former Chief of Air Staff made reciprocal visits to China. A third PLA officer is attending the RNZAF Command and Staff College senior officers' course and, in August 2002, this course will itself visit China. For the past three years NZDF officers have gained benefit from international security seminars hosted by the National Defence University in Beijing. Later this year the frigate HMNZS Te Kaha will visit Shanghai as part of a wider programme of regional port calls.
Republic of Korea
There has been increasing contact between New Zealand and the Republic of Korea (ROK) on security and defence issues. The Ministry hosted a third round of military-military talks in July 2001, followed by a delegation from the Korea National Defence University in October. The former Chief of General Staff visited Korea in September 2001. There is the potential for further cooperation especially in counter-terrorist training and maritime patrol exercises. HMNZS Te Kaha is scheduled to visit Korea later this year. In another positive development the ROK military hopes to accept a place on the RNZAF Command and Staff College senior officers' course in 2003.
Japan
Defence links with Japan have developed quickly, as reflected by the exchange of visits by Defence Ministers and senior military officers. The first bilateral defence meeting at full ministerial level took place in Tokyo last November. The Chairman of the Joint Staff Council, General Takegouchi, followed this with a visit to New Zealand in January 2002, the first visit by such a senior Japanese officer in nearly 20 years. Senior Vice Minister for Defence Mr Kyogon Hagiyama's earlier visit to New Zealand in September 2001 was another significant milestone in the relationship.
The Chief of Naval Staff will attend the 8th Western Pacific Naval Symposium in Tokyo just prior to the Japan Maritime Self Defence Force's 50th Anniversary International Fleet Review in October 2002 in which HMNZS Te Kaha will also participate. There is a growing defence association through the ARF process and defence cooperation in East Timor. In addition to the annual NZDF involvement in security seminars hosted by the Japan Defence Agency, a second round of security consultations will probably be held in Tokyo later this year.
The United Kingdom and North America
United Kingdom
The defence relationship with the United Kingdom is close and long-standing. Cooperation with the British Armed Forces extends across a wide range of activities, including joint and multinational exercises, individual and unit exchanges, specialist training, and defence agreements. Our contributions with the British to peace support operations in Bosnia, Sierra Leone and Afghanistan have further advanced the defence relationship.
United States
Having established common cause with the United States on counter-terrorism, a key component of the bilateral defence dialogue is on dealing with terrorism. New Zealand is one of a handful of countries committed to the military campaign in Afghanistan, a fact that is recognised and appreciated by the United States. The intensified cooperation on terrorism does not depend on the resolution of differences over our nuclear-free policy.
Canada
New Zealand has a close defence relationship with Canada. It centres on cooperation in peacekeeping, participation in exercises, and an annual three-month reciprocal exchange of around 20 personnel from each country. New Zealand is purchasing 105 Light Armoured Vehicles (LAV III) from General Motors Defence Canada to replace the Army's existing M113 Armoured Personnel Carriers. The LAV III has a high degree of commonality with the Canadian Army vehicle, and their purchase will lead to contacts and interoperability between our two armed forces.
Peacekeeping
New Zealand has a long-standing and active record of participating in international peace support operations. Including a battalion level commitment in East Timor, the NZDF is committed to twelve United Nations or United Nations-sanctioned peace support and humanitarian demining missions around the world, including the Middle East, the Balkans, Africa, Afghanistan, and Indochina. At present, 804 NZDF personnel are serving on peace support missions. Overall, New Zealand has participated in more operational commitments in the last five years than in the previous twenty.
Acquisition
The Ministry, through the Acquisition Division, is responsible for procuring all major items of capital equipment for the NZDF. The procurement process is often lengthy. It commences with the Government giving approval in principle to begin a tender process on the basis of a user specification developed by the NZDF. The Acquisition Division then undertakes risk assessments, identifies preferred bidders, and invites tenders. Once government approval is given, the Division negotiates and manages the contract arrangements through to the delivery of the equipment to the NZDF.
Major projects for the Acquisition Division currently include the LAV III, the Light Operational Vehicles, new naval vessels, maritime helicopters, and tactical communications equipment.
Upgrading the Army
Vehicles
Light Armoured Vehicles – Production of the pre-production unit has been completed and the vehicle is currently undergoing contractor testing. The first batch of vehicles is due for acceptance in September 2003 with the last batch due in November 2004.
Light Operational Vehicles – Tenders have been requested for the supply of both Military Vehicles (MV) and Limited Capacity Military Vehicles (LCMV). In the case of the MV, tenders were released to the five manufacturers whose vehicles had passed the NATO Reference Mobility Model tests and in the case of the LCMV, tenders have been advertised on a worldwide basis.
Tactical Communications
This project covers tactical communications for the Army and supporting RNZAF units. The Government approved the purchase of the equipment on 20 September 2000. The supplies are obtained through the United States Government Foreign Military Sales (FMS) organisation. Deliveries have already commenced and the project will be completed within budget and on time.
Weapons
The direct fire support weapon (area) and the medium range anti-armour projects have been on hold pending the development and approval of the LTDP. Government approval to proceed with the projects will be sought when the timing is determined by the NZDF.
New Naval Vessels
Following the Government's endorsement of the Maritime Forces Review, Project PROTECTOR has been initiated to purchase new vessels for the Navy. The Ministry, in consultation with the NZDF and other appropriate agencies, is developing functional descriptions of the capabilities required for the multi-role vessel and patrol vessels for distribution to industry. This work includes the preparation of Registration-Of-Interest and Requests-For-Proposal documentation. Information flowing from the Registration-Of-Interest process may allow the Ministry to provide fleet composition options to the Government later in 2002.
Air Transport Capabilities
Fixed Wing Transport
Marshall Aerospace of the United Kingdom has been contracted to undertake a Life of Type Study on the C-130H Hercules aircraft fleet. The study will determine the configuration and condition of the aircraft and identify the feasibility and costs of extending their life. The final documentation for this study is scheduled for delivery in September 2002.
A Force Development Proposal is currently being prepared by the NZDF to detail the requirements for replacing the B727 aircraft. The NZDF requirements will be considered as part of a broader policy review by the Ministry of total fixed wing transport needs, with the results from the C-130 Life of Type Study being apposite. Subject to government approval to purchase new aircraft, proposals will be sought from industry worldwide to fulfil this requirement. Proposals are anticipated to include, as options, outright ownership, operating lease and shared ownership.
Maritime Surveillance Aircraft
P-3 Orion
Replacement of fatigue and corrosion critical structure on the six P-3 Orion aircraft to extend their life for another twenty years has been completed. A replacement autopilot system has been installed in all the aircraft.
Maritime Helicopters
The first four aircraft received final acceptance on 6 May 2002.
All aircrew and maintainer training by the manufacturer, required under the contract, has now been completed. Further training, associated with depot level maintenance on the Automatic Stabilisation System, will take place at the manufacturer's facility in September 2002.
The fifth aircraft is being accelerated through the production process and is due for delivery in December 2002.
A Joint Approach
Joint Command and Control System
Following an Invitation-to-Register for a Project Definition Study, three tenderers were invited to respond to a Request-for-Proposal and their proposals have been received. The selection of a preferred tenderer is expected to be made in August 2002, and it is expected that the Project Definition Study will be completed by July 2003.
New Zealand Industrial Involvement
Defence Technologies New Zealand Joint Action Group
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 group of local companies, Defence Technologies New Zealand Joint Action Group (JAG), which have a focus on defence work. The Ministry provided regular briefings at JAG meetings and assisted that organisation to make contact with appropriate defence people in New Zealand, Australia and overseas. Assistance is also provided to JAG as sponsors of the annual Defence Industry Seminar. The 2001 event was held in Palmerston North and was well attended by defence and industry representatives.
Defence Industry Committee of New Zealand
The Ministry provided support for the Defence Industry Committee of New Zealand (DICNZ). This minister appointed committee provides industry feedback into Defence and briefs the Minister of Defence on issues relating to industry. The DICNZ established the Defence Industry Committee Awards of Excellence, which are awarded annually to companies that have provided Defence with excellence in service or products. The Minister presents the Awards at the Defence Industry Seminar dinner. The winner in 2001 was Australian Aerospace Pty Ltd (formally Celsius Hawker Pacific) which was the Ministry's contractor responsible for replacing the fatigue and corrosion critical structure on the six P-3 Orion maritime patrol aircraft – Project KESTREL. Australian Aerospace demonstrated exceptional innovation, co-operation and flexibility in undertaking the aircraft refurbishment work.
Evaluation
The Evaluation Division carries out assessments and audits, under section 24(2)(e) of the Defence Act 1990, of any function, duty or project of the NZDF. The Division also conducts audits of the Ministry's activities relating to the procurement of major military capabilities.
These assessments and audits are undertaken when required by the Minister of Defence, or to a programme approved under the authority delegated by the Minister to the Secretary of Defence and the CDF. Reports and completed audits are submitted to the responsible chief executive and the Minister is provided with a copy.
The Secretary of Defence and the CDF, 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.
During the year the Division completed reports on:
- Overseas travel by NZDF Chiefs of Staff and Senior Officers;
- Physical security arrangements for NZDF establishments in the Wellington area;
- NZDF civil staff management delegations;
- Naval individual training;
- The Naval Health Service clinical services business unit;
- NZDF health and safety in employment policies and systems;
- Project KESTREL (the re-winging of the P-3 Orion aircraft);
- Disposal of used Army clothing; and
- NZDF leave policies.
The Evaluation Division also undertook internal audits of the Ministry for the Secretary.
In addition to undertaking audits to meet the Secretary's responsibilities under the Defence Act, the Division can undertake audits under section 3(6) of the Hazardous Substances and New Organisms Act 1996. During the year the Division monitored the NZDF's progress in introducing codes of practice and management systems for hazardous substances.
Corporate
The Corporate Division provides support services and policy advice in the areas of human resources, information management and technology, communications, and legal. It is responsible for all aspects of Ministerial services and support.
Over the last year, improvements and enhancements to the Ministry's management systems have continued. The revision of policies and procedures has been completed with the implementation of a comprehensive human resources manual.
Improvements and enhancements have been made to the electronic document management system and other electronic systems, and to the management of the Ministry's hard copy records.
The Division has started work on revising the Ministry's Strategic Business Plan in preparation for the first Statement of Intent to be published next year.
The Hunn Review
The Hunn review into the accountabilities and structural arrangements between the Ministry and the NZDF is nearing completion. The review is expected to make recommendations about the strategic level structure of Defence in order to optimise the delivery of high quality policy advice and to improve the effectiveness of the two organisations.
Conclusion
The release of the LTDP will have a major impact on the future work of the Ministry. The Plan sets out the path ahead for capability development and will determine the work of Policy and Planning, Acquisition, and Evaluation as projects are developed and new internal processes put into place.
Now that defence policy has been articulated in three over-arching government documents, released seriatim since 2000, a challenge for the Ministry is to communicate New Zealand's defence direction to our allies and friends, and to explain how the upgrade of existing equipment and the introduction of new equipment will be utilised to underscore our commitment to regional and international security.
As an organisation, the Ministry is performing a wider role as well as improving its own internal processes. There may be further organisational change ahead, but the Ministry will remain committed to providing high-quality outputs in its policy, acquisition, and evaluation roles.
Graham Fortune
Secretary of Defence
23 September 2002
