The Defence Portfolio
Briefing to the Incoming Government 2002
Roles And Organisation of the Ministry of Defence (MOD) and the New Zealand Defence Force (NZDF)
The responsibilities of the Secretary of Defence and CDF form the basis of the organisational functions and structures of the Ministry and the NZDF. Prior to the Defence Act 1990, the NZDF and the Ministry co-existed in a 'diarchy' structure. As a result of the reforms introduced by the Defence Act 1990, the Ministry and the NZDF are separate entities reporting to the Minister of Defence, but operating to some degree in an integrated manner. This arrangement adds a complexity that is not present in other government arrangements, in turn producing a unique set of governance and accountability issues.
The Ministry of Defence
The Ministry supports the Government in protecting New Zealand's sovereignty and meeting its responsibilities for the maintenance of regional and global security. In performing this task it has three main roles:
- To provide advice on defence policy, international defence relations and the military capabilities required to meet the Government's defence policy objectives;
- To manage the procurement of major capital equipment (that is, equipment with a total purchase consideration of greater than seven million dollars) contributing to the future capabilities of the NZDF; and
- To conduct assessments and audits of any function, duty or project of the NZDF and the Ministry's capital procurement activities.
Organisational Structure of the Ministry
To carry out these functions, the Ministry comprises the:
- Policy and Planning Division;
- Acquisition Division;
- Evaluation Division;
- Corporate Division; and
- Finance Section.
Organisation - Ministry of Defence
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The Ministry's Policy and Planning Division forms part of the Defence Policy and Planning Unit (DPPU), an integrated policy organisation that reports to the Secretary of Defence and to the CDF. The DPPU has four functions:
- Formulation of advice on meeting current defence needs and interests;
- Provision of advice on New Zealand's international defence relations, and participation with the NZDF and MFAT in the management of these relationships;
- Formulation of advice on policies and military capabilities to meet future security needs; and
- Co-management with the NZDF of the DPS.
To accomplish these roles the DPPU has two branches: Strategic Policy (SP) and International Defence Relations (IDR). The SP Branch undertakes the following tasks:
- Strategic level assessment and advice, including on current issues, to assist the Secretary's role as principal civilian adviser to the Government on defence and security issues, and on choices for meeting future defence and security needs;
- Provision of expertise, analysis and assessment on military capability issues and capability policy development and reviews; and
- Consultation and advice to ensure that defence policy considerations are taken into account by other Departments and agencies.
The IDR Branch is an integrated NZDF-Ministry policy unit, under DPPU auspices, that reports to the Secretary of Defence and to CDF. The Branch has four functions which are to:
- Play a leading role in shaping and managing New Zealand's international defence relationships, consistent with the Government's policy goals and objectives;
- Undertake strategic-level analysis to provide advice on policies and actions for the effective development and sustainment of New Zealand's international defence relations, particularly CDR with Australia;
- Undertake timely analysis and assessments of current issues to assist the Secretary as principal civilian adviser to the Government on defence and security issues; and
- Consult and provide advice where relevant to ensure New Zealand's international defence relations are taken into account by other departments and agencies.
IDR manages a programme of bilateral and multilateral defence relationships in support of the Government's defence policies and international defence diplomacy initiatives. It has prime responsibility for strategic level defence relationships such as CDR with Australia, New Zealand's South Pacific neighbours, the ASEAN Regional Forum and the FPDA. The Branch also manages the Mutual Assistance Programme, which develops and implements NZDF bilateral defence relations training programmes.
The DPPU is headed by Acting Deputy Secretary of Defence (Policy & Planning), Andrew Wierzbicki.
The Acquisition Division is responsible for the procurement, replacement and repair of equipment of major significance used or intended for use by the NZDF (that is, equipment with a total purchase consideration of over $7 million). In carrying out this task the Division has two core responsibilities which are the:
- Management of procurement processes for defence capability; and
- Provision of information and policy advice on New Zealand industry and its capability to carry out defence work.
The tasks involved in the procurement process are the:
- Initial identification of an equipment requirement;
- Subsequent acquisition process, including project investigation, risk assessment, quality assurance, equipment selection, and the negotiation and execution of contract arrangements up to a point when the equipment is delivered to the NZDF;
- Management of warranty provisions (if any);
- Investigation of associated financing arrangements; and
- On-sale of the equipment to the NZDF.
The second core responsibility of the Acquisition Division relates to New Zealand industry. The Division provides information to the Secretary on the status of New Zealand industry and its capacity to carry out defence work. It liaises with industry organisations and implements, where appropriate, the New Zealand industrial involvement policy. The Division has four main objectives which are to:
- Reduce the cost of ownership of defence equipment;
- Provide competitive local (New Zealand, Australian and Singaporean) industry with the opportunity to support Defence;
- Encourage offshore suppliers of defence equipment or components to seek associations with local companies, to the commercial advantage of both, and to the long-term advantage of Defence; and
- Create and enhance local capability which can competitively provide support for defence equipment.
The Acquisition Division is headed by Deputy Secretary of Defence (Acquisition), Bruce Green.
The Evaluation Division carries out assessments and audits, under s24(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 capability. These assessments and audits are undertaken when required by the Minister of Defence, or to a programme approved under authority delegated by the Minister to the Secretary of Defence and the CDF. Reports of completed audits are submitted to the responsible chief executive and the Minister is provided with a copy.
The Secretary and the CDF, together with an external member, meet six monthly 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 provides an internal audit service for the Secretary of Defence. In addition to undertaking audits to meet the Secretary of Defence's responsibilities under the Defence Act, the Evaluation Division undertakes audits under s3(6) of the Hazardous Substances and New Organisms Act 1996.
The Division is headed by Deputy Secretary of Defence (Evaluation) Merus Cochrane, on secondment from the Office of the Auditor-General.
The Ministry's Corporate Division and Finance Section provide support services and policy advice to the Ministry in the areas of legal, human resources, finance, communications, administration, and information technology and management. This service assists the Ministry in meeting its key outputs of policy advice, procurement management, and evaluation.
Corporate Division also acts as the main conduit for communication with the Minister's office. It manages all ministerial correspondence, official information requests, parliamentary questions and responses to select committees. The Division also has responsibility for defence public relations which is co-located with the NZDF.
The Finance Section is directly responsible to the Secretary. The Section has the following responsibilities:
- Preparation of forecast financial statements (the DFR and Estimates) and annual financial statements (audited and unaudited components) in accordance with Part IV of the Public Finance Act 1989;
- Financial support to all Crown account activities including acquisition activities;
- Hedging foreign exchange exposure to the contractual commitments of an acquisition project; and
- Carrying out the day-to-day cash management of the Ministry.
The Finance Section must report to the Minister of Defence and The Treasury on the following matters:
- Monthly and year-to-date on departmental output classes;
- Departmental and Crown statements of financial performance and financial position;
- Purchase or development of capital assets by the Crown; and
- Crown revenue.
The Corporate Division is headed by Deputy Secretary of Defence (Corporate), Mandy McDonald and the Finance Section by Assistant Secretary (Finance) Stuart Patterson.
Ministry of Defence Personnel
| Division | No. of personnel |
|---|---|
| Policy and Planning | 14 |
| Evaluation | 6 |
| Acquisition | 10 |
| Corporate | 15 |
| Finance | 4 |
| Office of the Secretary | 2 |
| Secondees | 4 |
| Total | 55 |
Key Ministry Personnel
| Secretary of Defence | Graham Fortune |
| Acting Deputy Secretary (Policy & Planning) | Andrew Wierzbicki |
| Deputy Secretary (Acquisition) | Bruce Green |
| Deputy Secretary (Evaluation) | Merus Cochrane |
| Deputy Secretary (Corporate) | Mandy McDonald |
| Assistant Secretary (Finance) | Stuart Patterson |
