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Chapter 3 - The provisions of the Bill
Current structure of ACIAR
3.1
The Australian Centre for International Agricultural Research Act
1982 (ACIAR Act) established ACIAR as a body corporate to assist and
encourage agricultural researchers in Australia to use their skills for the
benefit of developing countries, while at the same time working to solve
Australia's own agricultural problems.[1]
3.2
In 1992, the ACIAR Act was amended to extend the life of ACIAR past the
sunset clause of 12 years, and allow it to establish and fund training schemes,
conduct and fund development activities and fund international agricultural
research centres.[2]
3.3
The functions of ACIAR are to:
- formulate programs and policies with respect to agricultural
research in relation to agricultural problems of developing countries;
- commission agricultural research and communicate to persons and
institutions the results of such research;
- establish and fund training schemes related to its research
programs;
- conduct and fund development activities related to its research
programs; and
- fund international agricultural research centres.[3]
3.4
ACIAR's organisation currently consists of a Director; a Board of Management;
and a Policy Advisory Council. The Director has the overall responsibility for
the administration of ACIAR and its staff 'in accordance with the general
directions of the Board'.[4]
Board of management
3.5
The membership of the Board of Management consists of the President of
the Policy Advisory Council; the Director of ACIAR; and three board members to
be appointed from among the members of the Council. Members of the Board are
appointed for a period not exceeding three years.[5]
3.6
According to the 1982 Explanatory Memorandum, it was anticipated that
'the three members of the board would reflect the importance of Universities,
CSIRO and State Departments of Agriculture as Australia's prime sources of
expertise in agricultural research'.[6]
3.7
The Board is responsible for conducting the affairs of ACIAR, in
particular with regard to:
- establishing policy and agreeing on strategic issues;
- guiding and monitoring the performance of the Director;
- ensuring good corporate governance; and
- promoting ACIAR and its key relationships, and approving research
projects.[7]
Policy Advisory Council
3.8
The Policy Advisory Council was created to be an expert body with
members from Australian institutions, developing countries and the
international scientific community. Its membership consists of:
- President;
- Director-General of the Australian Public Service, Australian
International Development Assistance Bureau (now AusAID), or a person nominated
by the Director-General; and
- not fewer than 9 and not more than 11 other members.[8]
3.9
Under the ACIAR Act, the minister is required to ensure that 'a
substantial number' of members come from countries other than Australia.[9]
According to ACIAR, the overseas members are to be representative of ACIAR’s
partner countries of high priority—currently China, Indonesia, India, the Philippines,
Papua New Guinea and Vietnam.[10]
ACIAR Amendment Bill 2007
3.10
Both the explanatory memorandum and the second reading speech noted that
the changes introduced in the bill form part of the implementation of the
Australian Government's response to the Review of Corporate Governance of
Statutory Authorities and Office Holders conducted by Mr John Uhrig AO.[11]
3.11
As part of its broad objective to establish effective governance
arrangements for statutory authorities, the government assessed ACIAR's
existing governance structure against the recommendations and principles of the
Uhrig Review.[12] The Minister
for Foreign Affairs, who is responsible for ACIAR, considered that the 'current
board of management structure is inconsistent with the executive management
template recommended by Mr Uhrig for agencies covered by the Financial
Management and Accountability Act 1997 (FMA Act)'.[13]
The assessment found that:
An executive management template would be the most suitable
governance structure for ACIAR with responsibility for the administrative and
financial management of the Centre vested in a Chief Executive Officer'.[14]
3.12
The Uhrig Review considered this model to be the best governance structure
for most non-commercial authorities as it provides a direct line of
communication between the minister and those performing legislated functions,
and the clearest and most direct line of accountability to the minister.[15]
3.13
The bill amends the ACIAR Act to:
- abolish the Board of Management along with the office of
Director;
- establish a seven-member expert Commission for International
Agricultural Research (the Commission);
- avoid duplication in the membership of the proposed Commission
and the current Council; and
- create a new position of CEO (to replace the Director) who will
be directly accountable to the minister for administrative and financial
purposes under the FMA Act.[16]
3.14
According to the government, these changes, as noted previously, are
consistent with the executive management template recommended by the Uhrig
review and will not alter the functions of ACIAR.[17]
The changes are discussed below.
Loss of body corporate status
3.15
Item 9 of the bill revokes ACIAR's status as a body corporate and its
right to acquire, hold and dispose of real and personal property:[18]
As described in the explanatory memorandum:
[Retaining] the Centre as a legal personality separate from the
Commonwealth has been assessed as unnecessary given the Centre is budget
funded, is a prescribed agency under the FMA Act and does not have any need to
own assets in its own right.[19]
Commission
3.16
The bill abolishes the Board of Management and replaces it with a Commission,
which was seen to be the best way to implement the executive management
template.[20]
The responsibility for administrative and financial management of ACIAR is
vested exclusively in the CEO.[21]
Chief Executive Officer
3.17
The joint submission from the Department of Foreign Affairs and Trade,
AusAID and ACIAR explained that the executive management template would be the
most suitable governance structure for ACIAR, with the CEO having the exclusive
responsibility for the administrative and financial management of the centre,
and being directly accountable to the minister.[22]
Terms of appointment
3.18
The bill abolishes the office of the Director and establishes the office
of a CEO who is appointed by the Governor-General for a period specified in the
instrument of appointment but not exceeding seven years. The appointment is on
a full-time basis.[23]
3.19
The Governor-General may terminate the CEO's appointment on the basis of
misbehaviour or physical or mental incapacity and shall terminate the
appointment on the grounds of bankruptcy and related matters, or if the CEO is
absent for
14 consecutive days or 28 days in any 12 months.[24]
The CEO may resign by giving the Governor-General a written resignation.[25]
3.20
Like that of the members of the Council and the Commission, the CEO's
remuneration is determined by the Remuneration Tribunal. In the absence of a
determination, the CEO will be paid the remuneration and allowances as
prescribed by the regulations.[26]
3.21
The bill prevents the CEO from engaging in paid employment outside his
or her ACIAR duties without the minister's approval.[27]
The CEO must declare to the minister any interest that the CEO has 'that
conflicts or could conflict with the proper performance of the CEO's
functions'.[28]
3.22
Other terms and conditions not covered in the bill are determined by the
Governor-General.[29]
Functions
3.23
The bill confers the functions of ACIAR on the CEO, which recognises the
CEO's 'exclusive' responsibility for the administrative and financial
management of ACIAR.[30]
The CEO, on behalf of ACIAR, may:
-
formulate programs and policies with respect to agricultural
research for either or both of the following purposes:
- identifying agricultural problems of developing countries;
- finding solutions to agricultural problems of developing
countries;
- commission agricultural research by persons or institutions
(whether the research is to be conducted in Australia or overseas) in
accordance with such programs and policies;
- communicate to persons and institutions the results of such
agricultural research;
- establish and fund training schemes related to ACIAR's research
programs;
- conduct and fund development activities related to ACIAR's research
programs; and
- fund international agricultural research centres.
3.24
ACIAR is not authorised or permitted to carry out research on its own
behalf.[31]
Relationship with minister and Commission
3.25
The CEO is accountable to the minister under the FMA Act,[32]
and must comply with any directions by the minister.[33]
These directions must be in relation to the performance of the CEO's functions
and the strategic direction he or she should take in performing those
functions. Such a direction is not a legislative instrument.[34]
3.26
The CEO is not subject to direction by the Commission in relation to the
performance of functions or exercise of powers under the FMA Act or the Public
Service Act 1999.[35]
3.27
The CEO must prepare an annual report to the minister on the operations
of the centre.[36]
The report must contain financial statements and an audit report pertaining to
those statements[37]
as well as all directions given by the minister to the CEO and the Commission[38].
The minister must table a copy of the annual report in both Houses of the
Parliament.[39]
3.28
The bill also provides for the CEO to be appointed to the Commission.[40]
According to the explanatory memorandum and the second reading speech, it is
the intention of the bill for the CEO to be a member of the Commission 'to
ensure consistency in advice to the Minister'.[41]
Further, it is stated that '[t]his provision also permits an arrangement
whereby the Chair of the Commission could be appointed as the CEO'.[42]
3.29
The committee understands that the CEO's participation in the Commission
is intended, but it appears that the current wording of the bill allows for a
situation where the CEO may or may not be a commissioner. Since the explanatory
memorandum clearly states the intention to appoint the CEO to the Commission,
the wording of the legislation should reflect that intention rather than
leaving it subject to interpretation.
Recommendation 1
3.30
The committee recommends that the wording pertaining to the appointment
of the CEO to the Commission [proposed new subsection 24(3)] be revised to
reflect the intention stated in the Explanatory Memorandum that the CEO be
appointed as a Commissioner.
Commission
3.31
The bill establishes a Commission to replace the Board. The joint
submission from DFAT, AusAID and ACIAR explained that this restructure was necessary:
...to ensure that ACIAR retains a collective expert-decision
making role, rather than vesting this entirely under the control of a single
chief executive.
This would also ensure that 'the principles of executive
management are adhered to'.[43]
3.32
The Commission consists of seven members (commissioners), including the
Chair.[44]
Although its membership is larger than that of the abolished Board (5), the
joint submission explained that the increase in the number of members 'is
considered to be consistent with the size and complexity of ACIAR's operations'
and will provide for 'a diversity of expertise'.[45]
3.33
In order to avoid duplication of membership between the Commission and
the Council, a member of the Council cannot be appointed as a Commissioner.
However, this or any other provision of the bill does not 'prevent
commissioners or Council members from attending the meetings of the other body
as non members to maintain linkages between the Commission and PAC'.[46]
Terms of appointment
3.34
The commissioners are to be appointed by the Governor-General for a term
specified in the instrument of appointment but not exceeding three years. The
appointment is on a part-time basis.[47]
3.35
The remuneration for commissioners is to be determined by the
Remuneration Tribunal (subject to the Remuneration Tribunal Act 1973).
If no determination is in operation, the level of remuneration follows the regulations.[48]
Termination of appointment
3.36
The Governor-General may terminate the appointment of a commissioner for
misbehaviour or physical or mental incapacity. The Governor-General must
terminate the appointment if a commissioner:
- becomes bankrupt and in related matters;
- is absent from three consecutive meetings of the Commission
without leave of absence; or
- does not comply with disclosure of interests guidelines.[49]
3.37
A commissioner may resign by providing the Governor-General with a
written resignation.[50]
Conflict of interest
3.38
The commissioner must disclose any conflict of interest to a Commission
meeting as soon as the relevant facts have come to the commissioner's
knowledge, and it must be recorded in the minutes of the meeting. In
consequence, the commissioner must not be present during any deliberation on
the matter nor take part in any decision with respect to the matter.[51]
Functions
3.39
Under the ACIAR Act, the board is responsible for the conduct and
control of the administration of ACIAR.[52]
Consistent with the principles set down in the Uhrig Review, the bill repeals
the administrative role for the new commission. Instead:
[the commission] will provide a forum for collective
decision-making to ensure that expert advice is provided to the Minister on program
formulation, priority setting and funding. This separation of roles between the
Commission and the CEO reflects the new governance and accountability
arrangements.[53]
3.40
The joint submission from DFAT, AusAID and ACIAR explained further:
...given the specialist nature of ACIAR's functions, it remains
appropriate for the agency to retain a forum for collective decision-making to
enable a group of suitably qualified scientific, development assistance and
industry experts to rigorously assess ACIAR's research programs and policies
and provide advice to the Minister.[54]
3.41
The proposed functions of the Commission are to provide advice to the minister
in relation to:
- the formulation of programs designed to identify and find
solutions for agricultural problems of developing countries (paragraph 5(1)(a)
of the ACIAR Act);
- the funding for training schemes and development activities that
are intended to identify and find solutions for agricultural problems of
developing countries and for international agricultural research centres (paragraphs
5(1)(d), (e) and (f);
- program and funding priorities; and
- on the minister’s request, on any other matter relating to the
ACIAR Act.[55]
Relationship with minister
3.42
The bill provides for the minister to give written directions to the
Commission in relation to the performance of the Commission's functions. The
minister must take into account any relevant advice received from the Council,
and must provide a copy of the direction to the CEO.[56]
3.43
The bill makes it a requirement for any direction given by the minister
to the CEO or the Commission to be included in the annual report.[57]
This is to ensure the transparency of ministerial directions.[58]
3.44
The Bills Digest points out that the current legislation contains 'a
couple of checks which seem to be absent' in the bill (in relation to the CEO).[59]
These checks refer to directions regarding the exercise of power, including
with respect to the commissioning of particular research.[60]
Policy Advisory Council
Establishment
3.45
The Council consists of the President, AusAID Director-General or
his/her appointee, and 9-11 members.[61]
It remains largely unaffected by the bill.
3.46
The intention is for the Council to continue 'to provide advice on the
agricultural problems of developing countries and suitable agricultural research
options to address these problems'.[62]
The main change is to the membership which, under the bill, is to exclude the
CEO and commissioners from membership.[63]
This provision is in keeping with the intention of not duplicating membership
between the Commission and the Council.[64]
The joint submission from DFAT, AusAID and ACIAR explained:
The provision which ensures no duplication of membership between
the Commission and the Policy Advisory Council (PAC) is aimed at clarifying and
segregating the advisory roles of the two bodies to ensure best practice in
corporate governance and is in line with the clarity of purpose principles
enunciated in the Uhrig Review...[t]he avoidance of duplication of PAC membership
with the Commission allows for more specialised input with high level partner
country participation in PAC. This will complement but not overlap the
Commission's role.[65]
3.47
The Uhrig Review supports the existence of a formal consultation
mechanism where it can assist government in developing and planning policies,
particularly where there is constant need for advice in the formulation of
policy and its implementation.[66]
3.48
The committee notes the reasons for not allowing dual membership but is
concerned about the lack of clarity surrounding the functions of the Commission
and the Council. The functions of the Council as stated in the ACIAR Act under
section 18 are to provide advice to the minister regarding:
- agricultural problems of developing countries; and
- programs and policies with respect to agricultural research for
either or both of the following purposes:
- identifying agricultural problems of developing countries;
- finding solutions to agricultural problems of developing countries.
3.49
This provision remains unchanged. Under the proposed restructure, the
Commission will have exactly the same advisory function but will also provide
advice on the funding for training schemes and development activities that are
intended to identify and find solutions for agricultural problems of developing
countries and for international agricultural research centres; on program and
funding priorities; and on the minister’s request, on any other matter relating
to the ACIAR Act.[67]
Recommendation 2
3.50
The committee recommends that the Explanatory Memorandum include a
clearer explanation on the functions of the Commission and the Council to avoid
unnecessary duplication and to ensure that the work of the Council does
complement that of the Commission.
Statement of Expectation and Statement of Intention
3.51
The Uhrig Review recommends that the responsible minister and the
statutory authority clearly state the expectations and outcomes for which they
would be held accountable:
A Statement of Expectations would enable a Minister to provide
greater clarity about government policies and objectives relevant to a
statutory authority, including the policies and priorities it is expected to
observe in conducting its operations. A statement would not, however, seek to
impinge on the level of independence or objectivity provided to an authority
under legislation, and accordingly would need to be consistent with the power provided
to a Minister under the legislative framework of the relevant authority.[68]
3.52
The response by the statutory authority, a statement of intent, would
outline the authority's commitment to the minister’s expectations and how it intends
to undertake its operations. The minister could request it be modified if it
did not address expectations.[69]
The Uhrig Review also recommends both statements be made public to provide transparency.[70]
3.53
The committee notes that the bill makes no reference to this governance
mechanism. Considering that the Government has endorsed this recommendation,[71]
the committee recommends that the governance arrangements for ACIAR, albeit
absent from the bill, be exchanged between the responsible minister and ACIAR.
Recommendation 3
3.54
The committee recommends that the ACIAR governance arrangements include
the statement of expectation and the statement of intention.
Ministerial delegation of functions or powers
3.55
Section 41 of the ACIAR Act describes the minister's rights in relation
to the delegation of his powers as follows:
- 'The Minister may, either generally or as otherwise provided by
the instrument of delegation, by writing signed by him, delegate to the Board
or a person any of his powers under this Act, other than this power of
delegation.
- A power so delegated, when exercised by the delegate, shall, for
the purposes of this Act, be deemed to have been exercised by the Minister.
- A delegation under this section does not prevent the exercise of
a power by the Minister.'[72]
3.56
The bill proposes to repeal the old section and replace it with the
following:
'the Minister may, by writing, delegate to any person all or any
of the Minister's functions or powers under this Act'.[73]
3.57
The explanatory memorandum states only that the delegation to 'any
person' is required because in some circumstances it may not be 'appropriate'
to delegate ministerial functions or powers to the CEO.[74]
3.58
The committee notes this reasoning but does not deem it necessary to
repeal the existing provision with its more precise guidelines in favour of a
rather vague statement ('any person'). The committee considers that the same
result could have been achieved by simply omitting the words 'the Board' without
losing the checks that were in place.
Recommendation 4
3.59
The committee recommends that section 41 of the current legislation not
be repealed but instead omit the words 'the Board or' in order to keep the current
checks in place.
Conclusion
3.60
The committee has considered the bill and is of the view that its
provisions are consistent with the recommendations of the Uhrig Review. As a
statutory agency, it is appropriate that ACIAR aligns more closely with the
executive management template as intended by the bill.
3.61
Yet, the committee has several suggestions to improve the clarity and
intention of this legislation. The committee suggests that the wording in the
legislations be more precise in order to clearly state the intention and to
avoid misinterpretations. The committee recommends that the expectations and
intentions between the minister and ACIAR be documented in the Statement of
Expectation and Statement of Intention as recommended by the Uhrig Review.
3.62
The committee agrees with both Coalition and Opposition members who have
stated their support for the bill to the effect that it does not change ACIAR's
performance greatly nor does it impede its capacity, but could provide a more
efficient model.[75]
Recommendation 5
3.63 The committee recommends that the Senate pass the bill.
SENATOR MARISE
PAYNE
CHAIR
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