Reports and Publications

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

Within this section

• Purpose and Conduct of Review
• Review Assumptions
• Parliamentary Inquiry August 1999
• The Government's Defence Policy Framework, June 2000
• Report of the Controller and Auditor-General, August 2001
• Overseas Experience

Hunn Review: 30 September 2002

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Chapter 1

Introduction

Purpose and Conduct of Review

1. This review had its origins in the August 1999 report of Parliament's Foreign Affairs, Defence and Trade Committee -"Inquiry into Defence Beyond 2000" (q.v: recommendation 9, page 109). It was envisaged as a machinery of government review concerned principally with "the accountability arrangements for the Secretary of Defence and the Chief of Defence Force and the present balance of responsibilities and authorities between the two." It also recommended an assessment of "the effectiveness of the structural changes implemented in 1989/90 including the split into two organizations." In its interim report nine months earlier, the Select Committee had already recommended that "options for recombining the NZDF and MoD into one organization be investigated on the basis that an alternative stream of policy advice is available to the Government."
2. The proposal to review accountabilities and structural arrangements between the Ministry of Defence (MoD) and the New Zealand Defence Force (NZDF) was picked up again in the Government's major public document on defence issues -the Defence Policy Framework June 2000. It was repeated and strongly endorsed by the Controller and Auditor- General in his August 2001 report on the Ministry of Defence: Acquisition of Light Armoured Vehicles and Light Operational Vehicles. The Controller and Auditor-General recommended that the review should include an examination of the relationships between the single Services and the NZDF and MoD.
3. The review itself was initiated immediately after the publication of the Controller and Auditor-General's report, the Terms of Reference (TOR) being drawn from all three sources. It was announced by the Minister of Defence on 10 September simultaneously with two other reviews, both of which this review was to take into account (see Annex A). The finalisation of the TOR was held up until I had returned from abroad and were cleared by Cabinet on 17 October. (See Annex B). It will be noted that in their [mal form the TOR go beyond the earlier suggestions and include, among other additions, the most important of the defence relationships -that between the Minister of Defence on the one hand, and the Secretary of Defence (hereafter, the Secretary) and the Chief of Defence Force (CDF) on the other.
4. It is important to note at the outset that this is an organization review commissioned by the Minister on behalf of his Cabinet colleagues, to investigate roles, relationships, responsibilities, accountabilities, -how these are reflected in the law and current structures, systems, processes and practices and what changes may be desirable. It is not concerned with individuals although the collective behaviour of individuals within the system, particularly those at the top, has a profound effect on its vision, values, standards and cultures all of which have a bearing on organization success or failure. Nor is it a review of either defence policy or operations although, again, the quality of the system which produces both and thus the quality of defence policy and operations themselves will be determined by these organizational matters. Finally, it is not a review of all the agencies involved with the defence of New Zealand. However, since the TOR specifically included the relationship between the Executive and Parliament and stipulate one of the outcomes should be to assist the Minister to develop defence policies and operational advice which meet New Zealand's national security requirements, the review has, to that limited extent, ranged beyond the Ministry of Defence and the New Zealand Defence Force.
5. Because of its essentially internal nature, the material for the review has been drawn in large measure from within the two organizations principally concerned. All of the most senior officers, both military and civilian, were interviewed and/or made submissions. A few submissions were received from other members of the two organizations on a personal basis. Four Members of Parliament were interviewed (including the Chairman of the Foreign Affairs, Defence and Trade Committee) as were the Chief Executives of three departments (State Services Commission, Prime Minister and Cabinet, Foreign Affairs and Trade) and the Deputy Secretary of Treasury -these latter four also provided written submissions. To ensure a range of perceptions was brought to bear on the TOR I also commissioned a series of papers from individuals, expert within their fields, as well as from those who were made available by MoD and NZDF to work with the review. In addition to all of these sources the review has drawn on a wealth of material, both historical and topical, made available to it. It has been a major task to bring all of this information and comment together so that the TOR can be fulfIlled and I am especially grateful to Dr Cathy Downes of NZDF, Mr Tim Griffiths of MoD and Dr Lance Beath, formerly of MoD and presently a private consultant. Without their help and that of all the organizations mentioned above, together with the authors of the commissioned papers, it would have been impossible to complete this task. As it is we are all conscious that much work remains to be done.

Review Assumptions

6. The Minister asked that this review should be forward-looking rather than an analysis of past failings, which is why the outcomes have been given such prominence in the TOR. Accordingly, while work was done in the course of the review on the development of New Zealand's defence institutions and processes, the intention in this report is to concentrate on next steps. The TOR indicate that the starting point for this forward- looking stance is a suite of three documents produced over the past four years together with the relevant experience and lessons learned from the structural arrangements and accountabilities of the higher defence organizations of New Zealand's key strategic partners.
7. The documents and their relevance to this review are summarised below:

Parliamentary Inquiry August 1999

8. The report of the Foreign Affairs, Defence and Trade Committee of the House of Representatives -"Inquiry into Defence Beyond 2000" -is regarded by the Government as the genesis of much of current defence policy as well as the basis for considering the most appropriate arrangements for managing the New Zealand defence system. This present review is not concerned with the policy directions of the Parliamentary report but rather the organizational implications that flow from them. The emphasis was on "a dramatic run-down" in the country's defence capability and the need to look at new approaches which took into account peace- keeping and other coalition activities; the role New Zealand should playas a credible partner which could respond quickly to international crises; a defence force structured "round a niche market capability"; "achieving affordable excellence", bearing in mind opportunity cost considerations; and greater cost effectiveness.
9. In organizational terms the Select Committee found that systems established over the previous decade had negated the intention of the Defence Act 1990 to introduce contestability of advice from the Secretary and the CDF and that in any case that Act had not given effect to the original proposal which had sparked the changes -the implication being that the MoD introduced by the 1990 Act was flawed from the outset. The result of setting up two separate organizations and depriving the Secretary of certain key functions had weakened the defence policy advice role: this had been compounded by the marginalizing in 1991 of the Secretary's statutory audit responsibility.
10. In order to overcome the evident weakness in the system the Select Committee recommended in its interim report that:
    • options for recombining the NZDF and the MoD into one organization be investigated;
    • that contestability of policy advice should be sought elsewhere by setting up an independent Advisory Committee on National Security and;
    • that the assessment and audit of the NZDF in relation to any function, duty or project should be carried out externally by the Controller and Auditor General.
11. In its final report, the Select Committee again voiced its concern over the relative roles and strengths of the Ministry of Defence and the NZDF. In order to redress the balance to what it thought was a more appropriate distribution of functions, it suggested "all Defence staff working on defence and strategic policy, personnel policy planning, force structure development, resource management and Defence corporate affairs might be made responsible to the Secretary; but this proposition needs to be further developed in the course of a machinery of government study. The CDF should have a Deputy Chief of Defence Staff (DCDS) in his Wellington HQ responsible for staff interfacing with the MoD and other relevant government agencies."
12. In the same vein it is interesting that the Select Committee, having taken account of comment on its interim report, amended its earlier recommendation to read: "We recommend that the Government direct that responsibility for arranging the assessment and audit of the NZDF in relation to any function, duty or project, including the measurement of the operational preparedness and performance of the NZDF, be reallocated to the Secretary in terms of the Defence Act 1990." There was no explanation as to how this recommendation was to fit with the Committee's inclination in its interim report to recombine the NZDF and MoD, but it was consistent with the Committee's view that the relationship between the Secretary and the CDF could not work unless they were on an equal footing in terms of their responsibilities and accountabilities.

The Government's Defence Policy Framework, June 2000

13. In releasing this framework ten months after the Parliamentary Report, the Government said it had been substantially guided by, and had built on, that report. The greater part of the framework set out the Government's intended policy approach to defence matters but it picked up Parliament's suggestion concerning the need for organizational revision and indicated the Government's intention to review "accountabilities and structural arrangements" between the Ministry of Defence and NZDF. It was also clear that the Government's statement of its core requirement (as being for "well-equipped, combat trained land forces which are also able to act as effective peace-keepers, supported by the Navy and Air Force") and its emphasis on joint operations, would lead to new organizational systems and processes.
14. In view of its importance in pointing the way to the future it is worth quoting a passage from the framework:

Report of the Controller and Auditor-General, August 2001

15. The public eye was caught principally by the Controller and Auditor-General's reference to the "dysfunctional" relationship between the parties involved in the two procurement projects examined by the OAG. But there were other indicators of shortcomings in terms of governance structures, lack of clarity in respect of accountability and an ineffective planning system. In his introduction to the report the Controller and Auditor-General said, "In theory, the bilateral approach between the MoD and the NZDF could have worked. Instead, we observed an acquisition process based around a tripartite relationship between the MoD, the NZDF and Army. This gave rise to an environment of poor communication, confusion over roles, and dysfunctional relationships. The acquisition projects have slowed, costs have increased, and relationships have been damaged..."
16. The Controller and Auditor General went on to say:

Overseas Experience

17. To comply with this direction in the TOR I have had notes prepared on experience in Australia, Canada, the United Kingdom and the United States. These have been summarized, with a commentary, at Annex D. I also had the opportunity of visiting Canberra where I had meetings with both the Secretary and the CDF -they were most helpful in explaining the manner in which the Australian system has evolved over recent years and continues to do so. (It is of some interest that the Australian Defence Act dates from 1903. Because of its general nature and the flexibility that affords, it remains relevant one hundred years on.)
18. The main impression one has from this overseas material is the massive difference in size between our defence system and those of our partners, so that it is difficult to draw lessons directly from the experience of others. Yet, there are many points of commonality. Best practice can be identified. The significance of differences, and the prospects for adapting and integrating them to suit New Zealand's circumstances, can be assessed. International trends of relevance to the current situation in New Zealand are clear. Even in those systems where there has been a degree of integration in the past or where the system has been managed by a diarchy, the emphasis is on taking integration to the point where there is a blurring of the difference between civilian and military -both are essential and both need to work closely together. The difference in skill sets, backgrounds and attitudes are recognized but a great deal of effort, especially in Australia and the UK, is going into governance systems and cooperative processes which will produce the best combined result in terms of both policy and operations. The conclusion is that successful joint operations demand the closest possible integration of the defence system at all points.

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