Appendix 1: Governance, Crown Entities and Legal Responsibilities
Overview
The core governance arrangements for the Ministry conform to the pattern for all departments as set out in legislation. Annually, these arrangements centre on the Estimates approved by Parliament, the Ministry's Statement of Intent and the output plan between the Chief Executive and the relevant Ministers (for the outputs to be supplied and the standards to be met for each Vote the Ministry administers).
The governance arrangements also provide for monthly reporting on financial performance to the Treasury, six-monthly and annual reporting on financial performance to Ministers, and a Select Committee examination that follows the presentation of the Ministry's Statement of Intent and Annual Report to Parliament. Audit New Zealand audits the Annual Report and related material on behalf of the Controller and Auditor-General.
Ministers and Votes
The Minister for Economic Development is the Responsible Minister for the Ministry. The Responsible Minister oversees the Government's ownership interest in the Ministry, which encompasses its strategy, capability, integrity and financial performance.
As at 30 June 2007, the Chief Executive reported to the portfolio Ministers listed below on the discharge of his responsibilities for six Votes.
| Minister |
Vote |
Minister for Economic Development
Minister for Industry and Regional Development
Minister for Small Business |
Economic, Industry and Regional Development |
| Minister of Commerce |
Commerce |
Minister for Information Technology
Minister of Communications |
Communications |
| Minister of Consumer Affairs |
Consumer Affairs |
| Minister of Energy |
Energy |
| Minister of Tourism |
Tourism |
Crown Entities
The following Crown entities were administered through Votes administered by the Ministry of Economic Development during the year:
- Accounting Standards Review Board
- Commerce Commission
- Electricity Commission
- New Zealand Tourism Board
- New Zealand Trade and Enterprise
- Securities Commission
- Takeovers Panel
While the Ministry administers the non-departmental appropriations to the Crown entities, they are directly accountable to Ministers for their performance in supplying agreed output expenses.
The Ministry is the Government's purchase advisor in relation to these Crown entities. This is a significant responsibility, covering advice on appointments, role and functions, and the overall contribution of each Crown entity to the Government's policy objectives. Management of the relationships with New Zealand Trade and Enterprise (a role undertaken jointly with the Ministry of Foreign Affairs and Trade) and the Commerce Commission has been particularly important, given the major contribution each makes to advancing economic development.
During the year, the Ministry also advised Ministers on ownership interests relating to the following Crown entities:
- Standards Council
- Testing Laboratory Registration Council (TELARC)
A key aspect of Crown entity monitoring is building and maintaining cohesive relationships between the entity and the Crown. The Ministry aims for transparent and open communication at all levels. This runs from the day-to-day communication between the Ministry and staff of the Crown entity, through to regular meetings between the Minister and the Chair of the Crown entity.
In undertaking its monitoring, the Ministry advises Ministers on the use of formal accountability tools such as the Letters of Expectations, Statements of Intent and Output Agreements, and the quarterly reporting against these agreements.
The Ministry has been involved in the implementation of the Crown Entities Act 2004, both in assisting Crown entities to understand the requirements of the legislation and initiate required changes and in supporting the development of guidance on the legislation by the central agencies.
As part of the Ministry's on-going strategic priority work programme, a Crown entity relationship and governance project was completed during 2006/07. The project's objective was to develop a best practice approach to Crown entity relationship management and monitoring that will be adopted and applied across the Ministry. As part of this, the Ministry reviewed its relationship management and monitoring approaches, assessing how it could make better use of the instruments available to it and ensuring that institutional memory is maintained.
The guidelines complement the guide for Ministers with Crown entity responsibilities, recently produced by the State Services Commission.
Other Entities
The Ministry also advises Ministers on ownership interests related to the Copyright Tribunal and the Joint Accreditation System of Australia-New Zealand (JASANZ).
The Crown Company Monitoring Advisory Unit (CCMAU) has lead responsibility for monitoring New Zealand Venture Investment Fund Ltd (NZVIF), and the Ministry is responsible for providing policy advice on NZVIF's future direction. As a Crown entity company, NZVIF is subject to accountability arrangements set by the Companies Act 1993 as well as the Crown Entities Act 2004. These accountability arrangements are overseen by CCMAU.
Legal Responsibilities
The Ministry is responsible for the administration of approximately 100 Acts and all of the associated regulations.
In addition, the Ministry has numerous responsibilities under other legislation.
Over the past 12 months, the Ministry has reconsidered its approach to legislative compliance and has purchased an easy to use legislative compliance programme, which will become fully operational by the end of this year. The reporting required will ensure that issues of non-compliance are identified and properly considered and, where appropriate, action taken. The programme will be automatically updated when additional responsibilities are created by new legislation, thus the legislative compliance reporting will always be relevant.
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