Managing in a Changeable Operating Environment
The operating environment
Pressure on natural resources
There is increasing recognition that New Zealand risks hitting environmental limits in some areas (for example, water allocation in dry provinces) or effects that are irreversible or costly to remedy (for example, water quality in some regions). There are also many ‘legacy’ issues such as land contamination to be addressed.
The critical issues for environmental policy in New Zealand are complex and interconnected, with economic, social and cultural dimensions as well as environmental. Potential solutions, too, are often complex, costly and/or contentious, due to the public and private interests that will be affected.
The environmental challenges facing New Zealand are greater than one agency can solve alone. They require an understanding of economic, social and cultural perspectives and awareness of the adaptation required if New Zealand is to meet higher environmental standards.
The Ministry for the Environment is now collaborating more closely on key issues with other government departments through the Natural Resources Sector Network. This central government network will complement the Chief Executives Environment Forum, through which central government engages with regional councils.
Treaty of Waitangi settlements
Treaty of Waitangi settlements and foreshore and seabed agreements often contain provisions which allow for Māori involvement in natural resources management.
Recent settlements and agreements have included tools such as requirements for the Minister to engage with iwi when using his Resource Management Act powers, provision for co-management or transfer of powers from local authorities to iwi authorities, and provision for the settled group to give feedback to the Ministry about local authorities and their implementation of the Resource Management Act.
The Ministry for the Environment is increasingly involved in Treaty of Waitangi negotiations, so that we can advise on redress options involving natural resources, and in implementing settlement arrangements.
Fiscal situation
In recent years there has been a growing awareness in the wider community of issues such as climate change and an increasing willingness by households and businesses to reduce their environmental impacts. The current world economic situation, however, could make the Ministry’s task more difficult.
Environmental regulation may be seen by some as a costly blockage on their activities, which could increase the pressure to minimise requirements. Local government may have less funding available for environmental action and awareness-raising in their communities. Business and households may be less motivated to reduce their environmental impacts if they are under pressure financially. Environmental non-government organisations may struggle to attract funding for their activities.
The Ministry will, therefore, need to focus on cost-effective regulation and to encourage environmental action that also improves efficiency and reduces costs.
Proposed changes in the environment sector
The Government has indicated its intention to make some significant changes to roles and functions in the environment sector, in particular:
- establishing an Environmental Protection Authority
- introducing a new Environmental Reporting Act to amend the roles and functions of the Parliamentary Commissioner for the Environment and the Ministry for the Environment.
These proposals mean that further changes for the Ministry can be expected, and must be planned for, during the period covered by this Statement of Intent.
Environmental scanning
Because the Ministry’s work is so interconnected with economic, social, and cultural issues, it is important for us to have a good understanding of the wider environment in which we operate. For example, changing or emerging international trends – not just those directly related to the environment – can affect our priorities and activities.
Being aware of the bigger picture can help the Ministry take account of varying influences on, and by, environmental issues. This in turn can contribute to developing effective advice and policy.
The Ministry has recently established, and is further developing, a process for sharing ‘environmental intelligence’. This is intended to provide high quality information for strategic planning and contribute to the evidence base for policy making. It will also support the activities of the Natural Resources Sector Network.
In essence, the environmental intelligence process gathers, analyses and interprets useful and timely information. It involves synthesising information from the national environmental reporting programme and other external monitoring, identifying emerging issues and changes in the wider environment, and integrating environmental, social, cultural and economic perspectives. The process then draws out potential implications of the intelligence for the Ministry.
Risk management framework
The Ministry for the Environment is developing more strategic, integrated and systematic approaches to risk assessment and risk management.
An Audit and Risk Committee has been appointed to provide independent assurance and advice to the Chief Executive. The committee consists of three independent external members: Sue Suckling (Chair), Paul Carpinter and George Reedy. The committee considers that the Ministry has key risks in terms of leadership, reputation and effective management of key projects.
Risks will be considered at an organisational level, a programme level and a project level. This will link to our investment in building strong project management and programme management skills and capabilities. The key organisational risks and mitigation strategies are set out in the table below.
|
Key risks |
Mitigation strategies |
|---|---|
| Organisational strategy and leadership | |
| We may not meet the higher expectations being placed on the Ministry or have sufficient influence to achieve our outcomes | The Ministry is investing in strategic processes centred on identifying the key outcomes that should drive our work and the future capabilities that will be essential to our effectiveness. |
| Growing delivery expectations exceed the resources available | Links between planning and budgeting have been enhanced. Emphasis is being placed on priority setting so that the Ministry focuses effort where it will make the biggest difference. We will work with the Natural Resource Sector Network organisations to ensure that use of the available resources is optimised. |
| Key project and programme delivery | |
| Key projects and programmes run by the Ministry may not deliver expected outcomes within constraints of time and cost | A focus is being placed on effective project management disciplines and the use of second or third party Independent Quality Assurance to provide confidence in project delivery. The Ministry is using lessons learnt to expand our body of knowledge of project management and establish consistent expectations around project governance, planning and implementation. |
| Recruitment, retention and development of staff | |
| Insufficient understanding of roles and responsibilities of public servants may result in situations that impact on the Ministry’s reputation | Staff development will increase understanding of the role of a public servant and the Standards of Integrity and Conduct for the State Services. |
| Systems and processes | |
| Internal policies, procedures and practices may not adequately support business needs and provide good external accountability | The Ministry is continuing its systematic review of the control environment. An organisational policy team has formed and is tasked with improving the structure of our control environment. The Audit and Risk Committee has been established. An internal audit schedule is agreed annually and is being executed. |
Crown risk
Alongside the departmental risks mentioned above, there exists a significant financial risk with the Kyoto Protocol liability. This relates to our contribution under the Kyoto Protocol, through which New Zealand committed to reduce emissions in the period 2009–2012 down to the levels in 1990 or take responsibility for the excess emissions. The provision for this liability is affected by key factors that include the exchange rate and the international price of carbon. Other factors influencing the position of this liability include changes in oil prices, the weather, economic growth and changes in forestry activities, all of which are outside of the Ministry’s control.
The Ministry monitors this risk through the annual inventory of greenhouse gas emissions and the net position report (see page 13). The Emissions Trading Scheme is the main mechanism to manage and mitigate the risk, subject to Government decisions on implementation and possible amendment by Parliament.
