Annual Report for the year ended 30 June 2006
Part 1: Overview
Secretary of Defence's overview
Introduction
The roles of the Ministry of Defence are set out in section 24 of the Defence Act 1990. They are:
- to assist the Government make well-informed decisions about the defence of New Zealand and its interests through the provision of timely, high quality advice;
- to conduct audits and assessments of the New Zealand Defence Force and the acquisition activities of the Ministry; and
- to procure, upgrade, or repair significant items of military equipment.
These roles are reflected in the Ministry's Statement of Intent and contribute to the high-level outcome of supporting New Zealand's security objectives and contributing to the security of other countries.
This high-level outcome is based on a simple, but fundamental principle that a secure New Zealand is critical to our economic and social well-being. Achieving this has both domestic and international dimensions. At home, a strong economy and a prosperous workforce are predicated on securing our borders and our Exclusive Economic Zone, as well as assisting our South Pacific neighbours do the same. Further afield, New Zealand's present and future prosperity is closely linked to a stable and peaceful international security environment, in which all nations are encouraged to play by the rules. Our active participation in international security operations ensures our own security.
How well the Ministry does in meeting the high-level outcome is measured against an intermediate-level outcome of ensuring that our advice and actions are credible and respected, and the Government's defence policy objectives are achieved.
The Government's defence policy objectives are set out in The Government's Defence Policy Framework (June 2000). They are: to defend New Zealand and to protect its people and territorial waters; to meet our alliance commitments to Australia; to assist in the maintenance of security in the South Pacific; to play an appropriate role in the security of the Asia Pacific region; and contribute to global security. A second document, the Government Defence Statement: A Sustainable Defence Force Matched to New Zealand's Needs (May 2001), identifies the military capabilities the Government needs to meet these five objectives.
In the last year, the Ministry has continued to implement the Government's Defence Long-term Development Plan (LTDP) to update and replace a range of obsolete equipment. Committing $3 billion over ten years, the plan links the Government's defence policy objectives, as set out in the Defence Policy Framework, with the capability requirements announced in the May 2001 Statement. Since the plan's release in 2002, Defence has progressed twenty-seven re-equipment projects. A highlight of the work undertaken during this reporting period was the Government's decision to purchase eight NH90 medium utility helicopters to replace the Royal New Zealand Air Force's aging Iroquois fleet. Ensuring that LTDP projects remain on track is a key focus for the Ministry.
Investment in new capabilities is being matched by investment in people and infrastructure. Many of the priorities for this reporting period flowed from the Government's Defence Sustainability Initiative and the defence funding programme of $4.6 billion over ten years attached to it. The aim of the initiative is to achieve long-term sustainability for Defence by building personnel levels, bringing new and upgraded equipment into service, and strengthening defence planning and management systems. Key priorities included addressing the gaps in the Ministry's policy capability, particularly where it lacked specialist technical and financial analysis skills, and working with the New Zealand Defence Force to strengthen organisational and corporate planning, policy, and governance capabilities.
The Government has indicated the importance of prioritising policies that will contribute to a strong sense of national identity. Ministers recognise that as New Zealanders we take great pride in who we are, what we do, and how we are seen, expressed in part through our stance on international issues and our willingness to assist in maintaining peace in various trouble spots around the world and in responding to humanitarian crises. An important focus for the Ministry is to provide the Government with sound policy advice on security risk management, military deployments, and purchasing equipment, the aim of which is to ensure that our Defence Force personnel are appropriately trained and equipped to undertake the wide-ranging tasks New Zealanders expect them to perform, often under very difficult conditions.
The deployment of New Zealand Defence Force personnel to restore order in the Solomon Islands and Timor-Leste are the most recent examples of this willingness to become involved in order to resolve conflict and prevent bloodshed. In both cases, New Zealand, working alongside our alliance partner Australia, responded quickly and appropriately to the requests for assistance from Solomon Islands and the Timor-Leste Governments, providing a meaningful military presence and allowing space for a political solution to evolve in both countries.
In Afghanistan, the work of New Zealand's Provincial Reconstruction Team, now in its fourth year, is a further example of how our Defence Force personnel can put their military skills to practical use, both in securing a troubled country and in helping to build the infrastructure and institutions of a viable Afghan state. This work, in helping to ensure that Afghanistan does not again become a haven for terrorists, underlines the seriousness in which New Zealand takes its international responsibilities, including in countries 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.
A strong and mutually reinforcing relationship between the Ministry and the New Zealand Defence Force is critical to Defence's strategic-level interaction with the Government and with other central government agencies. This cooperation 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 oversee major capital acquisition projects; and a range of joint engagements, formal and informal, between the Vice Chief of Defence Force and the Deputy Secretary (Policy and Planning), and their staff, that are designed to exchange information and improve collaboration within the Defence establishment.
The Defence Policy and Planning Unit is made up of staff from both the Ministry and the New Zealand Defence Force. It consists of the Strategic Policy Branch, the International Defence Relations Branch, and the new Strategy and Capability Analysis Branch. The principal role of the Unit 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
Defence Sustainability Initiative
In the past year, the Ministry has worked closely with the New Zealand Defence Force in continuing to implement the Defence Sustainability Initiative (DSI). The DSI is a ten-year defence funding package to enable the New Zealand Defence Force and the Ministry 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 over a ten-year period was allocated by the Government in 2005/06, 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 (LTDP);
- 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 information technology; and
- expanding the Ministry'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 to enhance their management and organisational processes. To this end, a considerable work programme of eighteen separate projects was undertaken during this reporting period by the New Zealand Defence Force and the Ministry, with input from Treasury and the State Services Commission. As at 30 June 2006, these projects had either been completed or were well-advanced towards completion.
The projects in this programme addressed a wide range of governance and management issues, largely within the New Zealand Defence Force. The Ministry, however, also received additional funding to strengthen its policy advice capability, with specific emphasis on technical analysis. This has been achieved through the establishment of the Strategy and Capability Analysis Branch.
Defence Capital Asset Management Practice Review
On 15 May 2006, Cabinet approved the Terms of Reference of the Defence Capital Asset Management Practice Review (DCAMP). This important review is part of an over-arching review of public sector capital asset management, which in turn is one of a number of public sector expenditure reviews that address a range of departments and functional activities. The objective of these reviews is to achieve better value for money from public expenditure. A project team of senior personnel drawn from both the Ministry and the New Zealand Defence Force is undertaking the review. Meeting the report back date of September 2006 will be a priority for the Defence establishment over the next reporting period.
Strategic policy advice
Defence policy needs to have a solid empirical basis. As defence-policy makers we seek to comprehend the risks and challenges in our strategic environment and how they affect New Zealand's defence and security interests. A key function of the Ministry is to prepare periodic assessments for the Minister of Defence on the strategic environment, including the implications any changes may have for defence policy. In the last year, the Strategic Policy Branch prepared a geopolitical scan assessing the influences which are likely to shape our security interests over the next five years. Work on the scan informed a series of briefings prepared for the Minister of Defence on a number of defence-related issues, including:
- defence policies of Australia and Japan;
- defence transformation in the United States;
- the implications for New Zealand's defence policy of natural disasters; and
- Defence's role in contributing to the Government's disarmament and arms control policies.
Capability development
Defence Long-term Development Plan (LTDP) update
First released on 11 June 2002, the LTDP is the key capital project-planning document covering the ten-year period out to 2012. Regularly updated, the plan enables decisions on major defence acquisitions (projects over $7 million) to be prioritised and taken in the context of the Government's defence policy objectives and the project's fiscal affordability.
During the reporting period, work commenced on a third LTDP update. Due to be released shortly, the 2006 update will provide a current list of projects, as well as their associated preliminary costings, timings and priorities.
The Strategic Policy Branch has provided policy advice on a number of capability development issues over the past twelve months, including:
- Helicopter replacement: The Government selected the NATO Helicopter Industries' NH90 medium utility helicopter as the replacement for the Air Force's Iroquois fleet. Aside from a considerably greater carrying capacity, the new helicopters will be more appropriately configured to support the Army's enhanced mobility and firepower, as well as provide greater assistance to civil agencies during both national and international emergencies. The NH90 will also be able to operate from the helicopter decks of the Navy's ANZAC class frigates, the new multi-role vessel, and the new offshore patrol vessels.
Advice has also been provided on the next stage of the training/light utility helicopter project. - Improvised explosive device disposal: Approval was given for the establishment of a radiological improvised explosive device disposal (IEDD) capability alongside the newly enhanced chemical, biological and conventional IEDD capability.
- Boeing 757 modification: Final proposals were approved for the programme to modify the Air Force's two Boeing 757 aircraft to a combined passenger/freight configuration. A decision was also taken not to modify the aircraft for use in supporting operations to Antarctica. This project is now in the equipment procurement phase.
- Joint Command and Control System: The project will provide Defence Force commanders with the means to command and control their forces individually, in groups, within a combined force, and in coalition environments. The Strategic Policy Branch has been involved in determining the options for operating and supporting the system throughout its life.
- Land intelligence, surveillance, and reconnaissance: The project addresses the gaps in the New Zealand Army's intelligence, surveillance, and reconnaissance capabilities. It aims to provide Army commanders with the ability to detect threats at greater distances and with greater certainty. The Strategic Policy Branch has been involved in determining the project's requirements.
Other projects
The Strategic Policy Branch has also been involved in reviewing the Capability Management Framework and has provided advice on navy projects and inter-agency preparedness for the introduction of the Project Protector fleet into service.
International Defence Relations
Closer Defence Relations with Australia
The trans-Tasman defence relationship is a uniquely close one. We share a common interest in a stable region and we work closely together to promote this. Our combined response to the civil unrest in the Solomon Islands in April and Timor-Leste in May 2006 underlined the close cooperation which exists between our two defence forces. Regular high-level discussions between officials ensure a deep, practical understanding of each other's policies and enhance our ability to cooperate effectively.
In the past year, New Zealand and Australia have continued to collaborate and share information over a range of areas, including logistics, communications, personnel and capability development. Both countries are undertaking major capability renewal and acquisition programmes, which offer prospects for project cooperation and greater interoperability. A range of bilateral and multilateral exercises assist in maintaining the complementary skills and capabilities necessary to operate together.
The Minister of Defence met Dr Brendan Nelson, his Australian counterpart in May 2006 for the annual defence Ministerial talks. The Ministers reaffirmed the importance of New Zealand and Australia staying closely engaged on regional security issues. They noted that recent developments emphasised the importance of the two countries working together with their Pacific neighbours to achieve security and stability in the region.
The Ministers also agreed that Australia and New Zealand would continue to look to develop further areas of collaboration and information sharing. This includes the logistics and communications fields, as well as key areas of capability development including the acquisition of medium utility helicopters, ANZAC ship upgrades, and the replacement of Army vehicle transport fleets and artillery and small arms replacement projects.
South Pacific
In the past year, developments in the South Pacific have continued to shape defence policy, outputs, and decisions on defence capabilities. This is indicative of New Zealand's enduring strategic interests in the region and the strong bonds of geography, history, and culture which link us closely to it. We have special obligations to assist our South Pacific neighbours in maintaining peace, promoting good governance and helping achieve economic well-being. The need for this assistance is increasing, including in the defence and security arena.
The region faces cumulative stresses arising from ethnic tensions, governance failures, and fragile economies which make it susceptible to debilitating trans-national security challenges.
A wide range of defence activities in the Pacific support New Zealand's interests. Principal areas of engagement include assistance with maritime surveillance, disaster relief, maritime search and rescue, strengthening peacekeeping capabilities and developing the professionalism of defence and police forces through the Mutual Assistance Programme (MAP). Major developments over the last twelve months in New Zealand's defence engagement in the South Pacific particularly covered Solomon Islands, Fiji, Tonga, Papua New Guinea, Vanuatu, Cook Islands, and Samoa.
Solomon Islands
The Regional Assistance Mission to Solomon Islands (RAMSI) has been in place for three years. It has achieved progress in restoring law and order, governance reforms, and economic development. The mission remains popular with Solomon Islanders.
RAMSI experienced a serious set back in April when rioting broke out in Honiara following the election of a new Prime Minister. Order was quickly restored with the assistance of additional military and police forces from New Zealand, Australia, and South Pacific nations. As the security situation stabilised, some of the additional forces were withdrawn. Despite the restoration of order, RAMSI is likely to require continuous New Zealand military support for some time to come.
Fiji
Fiji is an important South Pacific neighbour and a key partner in RAMSI. Our objectives for Fiji are to rebuild professionalism in, and strengthen the peacekeeping capacity of, the Republic of Fiji Military Forces.
In the last year, bilateral defence activities have included New Zealand military exercises in Fiji, training courses for Fijian military personnel, and visits to Fiji by the Minister of Defence and the New Zealand Chief of Defence Force.
Tonga
The deployment of Tongan Defence Services (TDS) personnel to Solomon Islands as part of RAMSI is a recent and significant development. The TDS is likely to contribute more actively to regional peace support operations such as RAMSI, where they performed very credibly. The New Zealand Defence Force's engagement with the TDS will therefore be broadened beyond the traditional focus on trade training, band and officer training to assist them to continue to participate meaningfully in regional operations.
Papua New Guinea
We continue to enjoy good defence relations with the Papua New Guinea Defence Force (PNGDF) which, like the military forces of Fiji and Tonga, has made a valued contribution to RAMSI. A key feature of New Zealand's defence engagement with Papua New Guinea is the ongoing support provided to the Commercial Support Programme (CSP), which has made significant progress over the last two years. The way the New Zealand Defence Force has provided support to the CSP is regarded as a model for New Zealand assistance to other Mutual Assistance Programme partners. After initially providing a New Zealand officer to the PNGDF to implement and oversee the CSP project, responsibility for managing the project has been shifted to the PNGDF. The New Zealand Defence Force role is now confined to providing ongoing advice and support from New Zealand.
Vanuatu
Our focus is to help the Vanuatu Police develop skill sets relevant to their policing work, and to strengthen the Vanuatu Mobile Force's national engineering capacity, while emphasising the latter's role as an integral component of the Police Force.
In cooperation with the Vanuatu Mobile Force, and with NZAID funding, a team of New Zealand Army engineers assisted in the conversion of the Police Barracks in Luganville into a temporary prison over April and May 2006. The project was part of a wider NZAID supported Corrections programme in Vanuatu.
Cook Islands and Samoa
Appropriate training support is provided to both the Cook Islands and Samoan Police forces, with an emphasis on developing the skills required for the effective operation of their Police patrol boats, and strengthening the information technology capacity of the Samoan Police.
Southeast Asia
Southeast Asia remains a key area for New Zealand's security interests. Terrorism continues to be the major security concern in the region. New Zealand engages in high-level relationships with defence partners in the region and defence officials contribute to the regional security dialogue. This includes the annual Shangri-La Dialogue in Singapore, which now occupies an important place in the regional security architecture. The Minister of Defence was one of seventeen Defence Ministers from, or with close security interests in, the Asia-Pacific region who attended this year's meeting.
Five Power Defence Arrangements
The Five Power Defence Arrangements (FPDA) continues to make an important contribution to regional security. The Arrangements bring the defence forces of Australia, Malaysia, New Zealand, Singapore, and the United Kingdom together to exercise, and provide a valuable forum for Defence Ministers and officials to exchange views on defence issues of relevance to all members. The FPDA continues to evolve to meet today's security challenges.
New Zealand participates in the full range of FPDA activities. These have recently been expanded to include scenarios based around combating non-conventional threats, such as maritime terrorism, piracy and people smuggling. In June 2006, the Minister of Defence met with his FPDA counterparts in Singapore and Malaysia to discuss these developments. A commitment was also made to explore options for enhanced cooperation in humanitarian assistance and disaster relief.
ASEAN Regional Forum
The ASEAN Regional Forum (ARF), which brings together twenty-four countries and the European Union, is the only Asia-Pacific pan-regional forum devoted to discussing security issues. New Zealand values the ARF and actively supports greater defence participation under its auspices.
New Zealand defence officials attended the Ministerial Meeting in Laos in July 2005; the Intersessional Group Meetings in Honolulu in October 2005 and the Philippines in March 2006; and the Senior Officials' Meeting and Security Policy Conference in Malaysia in May 2006. New Zealand also participated 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. The defence relationship is sustained through exercises, training and exchanges, and an annual schedule of meetings, including at senior levels. The Minister of Defence held talks with his Singaporean counterpart, Rear Admiral Teo Chee Hean, at the Shangri-La Dialogue in Singapore in June 2006. The introduction of formal army-to-army talks in September 2005 and the deepening of defence industry links underline the value in continuing to grow the relationship with Singapore.
Malaysia
New Zealand has a long history of defence association with Malaysia 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' Tan Sri Mohammed Najib, during the FPDA Ministers' Meeting in June 2006.
Timor-Leste
New Zealand responded swiftly to the recent crisis in Timor-Leste through the deployment of 200 Defence Force personnel as part of the Australian-led regional task force to restore civil order. Prior to the unrest, New Zealand had been providing modest assistance to the Timor-Leste defence force in an advisory capacity with logistic and human resource support, and small arms training. Over the reporting period, New Zealand also provided one military liaison officer to the United Nations Special Political Mission to Timor-Leste (UNOTIL).
Other Southeast Asian Nations
New Zealand's defence relationships with Brunei, the Philippines and Thailand centre primarily on the Mutual Assistance Programme. Joint military exercises were held with the Royal Bruneian Armed Forces in Brunei in July/August 2005 and in Central Otago in January/February 2006. The Minister of Defence held bilateral meetings with both the Deputy Minister of Defence of Brunei and the Secretary of National Defence of the Philippines at the Shangri-La Dialogue in Singapore. Defence links with Vietnam are developing and there has been considerable interaction with other Southeast Asian countries through the ARF defence dialogue process.
North Asia
North Asia is strategically important for New Zealand. Our strong economic links with the region make its ongoing stability critical to this country's prosperity. Relations between the countries of North Asia have a significant impact on the security of the wider Asia-Pacific region. New Zealand's defence engagement with China, the Republic of Korea and Japan has developed in line with growth in the overall bilateral relationships.
China
New Zealand's defence relationship with China continues to centre on visits and exchanges. Prominent events in the past year included the visit to New Zealand by Vice Admiral Wu Shengli, People's Liberation Army Deputy Chief of General Staff, in September 2005. A People's Liberation Army officer continues to attend the New Zealand Defence Force Command and Staff Course. New Zealand reciprocates by sending an officer to Beijing for six-weeks to attend the International Symposium on Regional Security Issues at China's National Defence University.
Republic of Korea
New Zealand's defence links with the Republic of Korea (ROK) extend back to New Zealand's participation in the Korean War. Bilateral defence engagement over the past year has included high-level visits, annual talks and academic exchanges.
In November 2005, the Minister of Defence visited the ROK and met with his counterpart, Mr Yoon Kwang Woong. New Zealand defence officials held defence talks with their ROK counterparts in Seoul in October 2005. In May 2006, a Defence Force officer began a twelve-week attachment at the Korea National Defence University as a visiting professor. The ROK Joint Staff College visited New Zealand in June 2006 and a Korean student is attending the New Zealand Defence Force Command and Staff Course.
New Zealand's contribution to the multinational United Nations Command underpins New Zealand's commitment to security on the Korean Peninsula and inter-Korean reconciliation. The Minister of Defence met with the then Commander United Nations Command, General Leon J. LaPorte, during his visit to the ROK in November 2005. Three Defence Force officers serve with the United Nations Command Military Armistice Commission.
Japan
New Zealand's defence relationship with Japan took a significant step forward with the formalisation in 2005 of annual bilateral defence talks. Previously this dialogue had taken place as security consultations on an ad-hoc basis. New Zealand defence officials visited Tokyo in December 2005 for the first talks in the new format. We reciprocated in May 2006 by hosting a visit by Japanese officials in Wellington. There will be opportunities for further bilateral engagement in the future as Japan continues its efforts to increase its participation in international peace support operations.
United Kingdom
Our defence relationship with the United Kingdom is long-standing, close and very important. Cooperation across all three Services continues to play a key role in maintaining our professional standards and interoperability with key defence partners. New Zealand continues to contribute to British peace support operations in Bosnia through our commitment to the European Union-led stabilisation force.
The Minister of Defence met with then United Kingdom Secretary of State for Defence, John Reid in February this year; and met with the current Secretary of State for Defence, Des Browne, in London, in early June 2006. He also met with the Secretary of State for the Armed Forces, Adam Ingram, in June in Singapore and Malaysia.
North America
United States
The relationship with the United States remains an important one for New Zealand. We continue to work alongside United States Forces in a number of international operations in pursuit of shared interests. A key component of New Zealand's bilateral defence relationship with the United States is the international campaign against terrorism. New Zealand is one of a growing number of countries contributing military forces to the stabilisation effort in Afghanistan; and we also actively contribute to, and participate in, the United States-led Proliferation Security Initiative. Such commitments are recognised and appreciated by Washington, including at very senior levels.
The Minister of Defence met his United States counterpart, Donald Rumsfeld, in Washington D.C. in April this year. The commanders of the United States' Pacific (Admiral William Fallon) and Central (General John Abizaid) Commands also visited New Zealand in January and February 2006, respectively.
Canada
New Zealand and Canada enjoy a close and cordial defence relationship. An important development in the relationship this year was the inaugural New Zealand-Canada political-military talks in Ottawa in May 2006. The talks reflect a strengthening of the bilateral relationship in recent years through shared experience in peace support operations, expanded training activities, and defence procurement.
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 current commitments are global in reach, with personnel carrying out peacekeeping activities in the Pacific, Middle East, Asia, Europe and Africa. As at 30 June 2006, approximately 411 New Zealand Defence Force personnel were deployed on overseas missions, the bulk of them in Timor-Leste, Solomon Islands, Afghanistan and the Middle East.
Afghanistan
New Zealand supports international efforts to stabilise Afghanistan and build indigenous capabilities. The focal point of this activity is the provision of a Provincial Reconstruction Team of over 120 personnel, a commitment that has been extended to September 2007. Working in Bamyan Province, this team aims to assist the Afghan authorities extend their influence beyond Kabul. Its emphasis is on improving the security environment, as well as facilitating the provision of humanitarian support and development assistance to the Afghan people. New Zealand Defence Force personnel are also training the Afghan National Army and a Military Liaison Officer is working with the United Nations Assistance Mission in Afghanistan.
Proliferation Security Initiative
The Proliferation Security Initiative (PSI) is a multilateral United States-initiated effort to counter the growing challenge to international security posed by the global proliferation of weapons of mass destruction (WMD), their delivery systems, and related materials - in a manner that is consistent with relevant domestic legal requirements and international law. The PSI objectives, which were launched in 2003, are encompassed in its Statement of Interdiction Principles. New Zealand expressed its support for the PSI Interdiction Principles in April 2004, and has been a member of the governing Operational Expert Group since November of that year. Since joining the PSI, New Zealand defence officials have attended several plenary and Operational Expert Group meetings; and the New Zealand Defence Force have contributed to the ongoing series of workshops and training exercises.
The contribution of a Royal New Zealand Air Force Boeing 757 aircraft, aircrew, and support personnel to the Australian-led PSI exercise, Exercise Pacific Protector, in April 2006 was significant. This enhanced our credentials as an active PSI contributor, particularly in our region.
Acquisition of Defence Equipment
The Ministry, through the Acquisitions Division, 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 approval in principle to the acquisition process on the basis of concepts of operations and functional performance specifications. These are determined by the New Zealand Defence Force and, at times, in consultation with 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 Defence Force.
Major projects over the last year have covered all three services, with the majority in the delivery phase. The light armoured vehicles and tactical communications projects are generally complete, following the delivery and introduction into service of the equipment, but some accessories remain to be delivered. Both projects are expected to be delivered within the Government approved budget.
Upgrading the Army
Light armoured vehicles
105 light armoured vehicles were purchased from General Dynamics Land Systems, Canada. All but one of these vehicles is now in service with the New Zealand Army. One vehicle will remain with the manufacturer to provide a systems validation and a test platform for Army operational purposes. Spare parts, special tools, and test equipment have been delivered and the project is in the final stages of completion.
Light operational vehicles
This project involves the acquisition of 321 light operational vehicles, in six variants, to meet the Army's motorisation requirements. Deliveries commenced in October 2004, and 131 non-armoured vehicles were in service with the Army by 30 June 2005. During the past 12 months all but one of the remaining non-armoured vehicles have been delivered to New Zealand, leaving five armoured variants outstanding at 30 June 2006.
At the request of the New Zealand Defence Force, five light operational vehicles were purchased for the Royal New Zealand Air Force. While the additional vehicles were funded separately from the Defence Force's capital programme minors, the Ministry assisted in their acquisition through the existing contract with the manufacturer.
Tactical Communications
This project covers tactical communications for the Army and supporting Royal New Zealand Air Force units. Final deliveries were received in the fourth quarter of 2005, and the project is now in the closure phase.
Very Low Level Air Defence
This project will provide alerting, cueing and identification of friend or foe systems for the Mistral very low-level air defence system, which is already in service. The systems will be delivered in the fourth quarter of 2006.
Medium Range Anti-Armour Weapon
This project will provide a medium-range anti-armour weapon, the Javelin missile, manufactured by Raytheon/Lockheed Martin Joint Venture. Proceeding under the United States' foreign military sales programme, the training equipment was delivered in June 2006. The missiles will be delivered in the fourth quarter of 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. In July 2004, a contract was signed with Tenix Defence Systems for one Multi-Role Vessel, two Offshore Patrol Vessels and four Inshore Patrol Vessels. The Multi-Role Vessel was launched in Rotterdam in February 2006, undertaking contractor sea trials in late June 2006. The Offshore and Inshore Patrol Vessels are being built in Melbourne and Whāngarei respectively. All seven ships will be delivered during 2007.
Upgrading the Air Force
C-130 Life Extension
A contract was signed with L-3 Spar Aerospace in December 2004 to upgrade and extend the life of the Royal New Zealand Air Force's C-130 Hercules fleet. In October 2005, the first aircraft was inducted into the life-extension programme at L-3 Spar Aerospace in Edmonton, Canada.
P-3 Orion Communications and Navigation Systems Upgrade
A contract was signed with L-3 Communications Integrated Systems in October 2004 to upgrade the communications and navigation systems of the Air Force's P-3 Orion fleet. The early Electro Optics installation was completed in New Zealand. Work commenced on the fit out of the new systems in the first aircraft following its arrival at the L-3 communications facility in Greenville, Texas, in September 2005.
Boeing 757 Purchase and Modifications
A contract to re-configure the Air Force's two Boeing 757 aircraft for cargo, as well as passengers, was signed with Mobile Aerospace Engineering in October 2005. Modification of the first aircraft will begin in the second quarter of 2007.
Helicopter Replacement
Work is proceeding on replacing the Air Force's Iroquois helicopters. The Government approved NATO Helicopters Industries (NHI), supplier of the NH90 medium utility helicopter, as preferred tender in March 2005. The Ministry has been engaged with NHI to obtain full costings for the NH90. Government approval was granted on 10 July 2006 to commence contract negotiations for the acquisition of eight NH90 helicopters.
Work is also proceeding on identifying a suitable Training/Light Utility Helicopter to replace the Air Force's Sioux helicopters. The evaluation of the Registration of Interest has been completed and Requests for Tenders will be sought in the fourth quarter of 2006.
A joint approach
Joint command and control system
The acquisition of a joint command and control system (JCCS) will provide Defence Force commanders, at strategic, operational, and tactical levels, with the means to execute, command and control their forces individually, jointly, within a combined force, and within a coalition environment. It will also provide a sustainable framework that is interoperable with our partners, including relevant non-defence partners.
In June 2006 the Ministry accepted responsibility for the acquisition of the JCCS.
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 the New Zealand Defence Industry Association. During the year, the Ministry provided regular briefings at New Zealand Defence Industry Association meetings. Assistance was also provided to the Association for the annual two-day Defence Industry Seminar held at Te Papa Museum in Wellington in late October 2005.
Defence Industry Committee of New Zealand
The Ministry provided support for the Defence Industry Committee of New Zealand. This Ministerial appointed committee provides industry feedback to Defence and briefs the Minister on industry issues.
The Defence Industry Committee of New Zealand sponsors the Defence Industry Committee Awards of Excellence. These are awarded annually to companies that have provided Defence with excellence in products or services. The awards were part of the Defence Industry Seminar 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's activities relating to the procurement of major military equipment.
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.
Corporate
The Corporate Division provides support services and policy advice in the areas of human resources, information management and technology, and legal. The Corporate 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. This is scheduled for completion in February 2007.
Conclusion
The last year proved to be another challenging and rewarding one for the Ministry. As well as the continued focus on re-equipping the New Zealand Defence Force and operational deployments, substantial efforts were devoted to implementing the changes initiated under the DSI. While significant advances have been made, the next phase in the development of the Ministry and the New Zealand Defence Force will bring new challenges. Ensuring that sound policy continues to drive advice on defence capabilities and operations will remain the core function of the Ministry.
The Ministry is very conscious of the high international standing in which our Defence Force personnel are held and that New Zealanders take pride in the good work they do. The greater certainty provided by the DSI for defence planning and the investment in new capabilities mentioned above will ensure that these high standards are maintained well into the future.
Chris Seed
Acting Secretary of Defence
22 September 2006
