ERMA's capability endorsed by review
2 July 2003 Media Statement
ERMA's capability endorsed by review
A review of the Environmental Risk Management Authority (ERMA) has found the Authority does have the core competencies and capability to carry out its role, Environment Minister Marian Hobbs said today. ERMA is the independent decision-making body that controls the introduction into New Zealand of new plants and animals, including genetically modified organisms (GMOs), and new and existing hazardous substances.
The review was conducted earlier this year by a three-person team led by a former chief executive of Environment Waikato and Hutt Valley Health Ltd, Graham Nahkies. It focused on ERMA’s decision-making capacity, particularly for new organisms, under the Hazardous Substances and New Organisms Act 1996, following the Royal Commission on Genetic Modification and the government’s response.
The government commissioned the review under its co-operation agreement with the Green party.
While finding that ERMA does have the capability to do the job, the review team makes 49 recommendations to strengthen the authority's performance in various areas, including its functions under the law, its internal policies for development of staff and management, and its relationships with other agencies, stakeholders, Maori and the public.
Marian Hobbs welcomed ERMA's commitment to implement the recommendations.
"ERMA plays a vital role in promoting and protecting the health and safety of New Zealanders," Marian Hobbs said. "Thanks to the Review team's thorough work we now have recommendations we can build on to ensure ERMA continues to meet the demands placed on it by the HSNO Act."
The review team talked to a wide range of ERMA’s external stakeholders, including government agencies, non-governmental organisations, local authorities, Crown Research Institutes and individuals as well as to Authority members and ERMA New Zealand staff. The Review team also considered more than 40 written submissions.
A copy of the report and the cabinet paper outlining the government’s response are available on the Ministry for the Environment’s website at www.mfe.govt.nz (EXECUTIVE SUMMARY ATTACHED BELOW). People without access the internet can contact the Ministry for the Environment, 04 917 7400, for hard-copies.
A Review of the Capability of the Environmental Risk Management Authority (ERMA) relating to the Risk Management of New Organisms
The review focuses on the quality and appropriateness of the operating and management systems and the capacity and capability of the Environmental Risk Management Authority to carry out the purpose and tasks prescribed for it in the Hazardous Substances and New Organisms Act, in particular for new organisms. These tasks include assessment and approvals of new organisms, monitoring, inspection, compliance and enforcement provisions of the Act and promotion of public awareness of issues related to the HSNO Act. Where appropriate, each chapter closes with conclusions and recommendations for improvement, where appropriate.
Throughout this report, ERMA refers to the organisation as a whole. Authority refers to the body of Members appointed under the Hazardous Substances and New Organisms Act 1996, the HSNO Act. NKTT refers to Nga Kaihautu Tikanga Taiao, the advisory committee established by the Authority to advise ERMA on Maori issues and concerns. Agency refers to the operational part of the organisation, headed by the chief executive. Stakeholder is used as a collective label for parties who have or might be: Applicants (seeking permission to conduct new organism work of some description); Submitters (making submissions on aspects of particular applications, either for or against approval); Other Agencies (having policy, regulatory or operational interests in the protection and sustenance of the environment).
Chapter 2 sets out the Terms of Reference and personnel involved in this Review. The approach taken is explained, with details on our interpretation of the terms of reference and the review process. Brief background to the Review follows, noting the Royal Commission on Genetic Modification, including the Government’s response, and the review of the ERMA Methodology. We also note the formation of the Bioethics Council and other relevant initiatives.
Chapter 3 sets out the statutory framework within which ERMA operates, followed by a brief history. Statutory roles are detailed, as is the present purpose and mission.
Chapter 4 outlines the establishment of the Authority, its Membership and their conditions of appointment, powers to delegate and their role. A brief statement on the purpose of the Methodology follows. Comments are made on elements of the ERMA governance structure, including governance committees, the Audit Committee, committees of the Authority for decision-making. Corporate governance, as defined by the Authority, is distinguished from statutory decision-making. Observations are made on Authority meetings and on issues relating to the composition of the Authority including size, continuity, Membership attributes, recruitment, selection and induction.
The present Authority contains a good cross-section of the necessary skills and experience. It is perhaps a little light in some areas but that is hardly surprising in a group of eight people. In considering future appointments, new Members who could bring strengths in the fields of gene technology, ecology and social science would be able make a very relevant contribution. The Authority also needs Members with governance skills and experience. Provided, however, that the Authority takes the opportunity to complement the attributes of its present Members as is needed to deal with particular issues or applications there is no reason to consider that the Authority’s present composition creates a risk.
Chapter 5 reports on the methodologies in use by the Authority and its Agency to undertake tasks, including how it implements key concepts in the HSNO Act, how it approaches risk management issues and how it weighs up information of different types and from different sources. These “methodologies” are taken to include both the formal Methodology confirmed by Order in Council and the various operational and planning methods adopted by the Authority and the Agency in completing their work. Concerns exist on ERMA’s implementation of key concepts in the HSNO Act, its approach to risk management and its use of different kinds of information. Aspects of current practices are investigated, including claims of favourable treatment of applications and bias in favour of applicants. The approaches to risk and uncertainty are examined in practice. The challenges and responses in realising the precautionary approach are outlined. Comments are made on public awareness concerns: sources of applicant and submitter discontent, the need for role clarification within ERMA and perceptions of cost effectiveness are critical. Issues in future workload management are described, with reference to workload forecasts and processing rate. The different situation in Institutional Biological Safety Committees (IBSCs) is described. Observations are made on consultation with Maori and reducing professional isolation.
In many areas, ERMA is doing well, while it others it has become tied to a process that is inflexible and unresponsive to changing appetites for risk. Its people have worked hard to come to grips with legislation that is not simple, public opinion that is strong and sometimes fierce, and diverse opinions within and beyond science. The decision-making process is still evolving and the Methodology has been made to work by ERMA, applicants and submitters. Compliance and enforcement arrangements are advancing, with work needed to ensure effective inter-agency collaboration. The Authority has taken time to ensure the views of many parties are heard, allowing some deviation from the particulars of applications to inform the process as a whole. Costs are a considerable concern to applicants but dissatisfaction seems focused on the process rather than a lack of confidence that decisions will be generally sensible. Stakeholder perceptions are diverse on the effectiveness of the legislation and the particular implementation set up by ERMA. There are significant opportunities to improve on the present situation.
Chapter 6 reports on the appropriateness of the organisational and management structure of ERMA, examining the present structures at the Agency in the light of likely workload and priorities. It outlines the prevailing staffing strategy and organisational structure. Issues in the senior management team are noted. Comments follow on the project management structure and internal staff relationships.
The Agency is a small organisation with staff of high calibre and good people can make poor structure work surprisingly well. A number of deficits are described and suggestions made—some are skills and some are ways of working. The structure itself does not appear unfit for purpose, although the division of staff groups into those working with new organisms and those working with hazardous substances has merit now that critical mass can be achieved in each group. The benefit is of increased focus on stakeholders and the critical parts of the assessment and compliance processes involved.
Chapter 7 reports on the suitability of the qualifications and experience of the staff of the Agency to undertake existing and likely future work in providing guidance and advice to the Authority in connection with new organisms. Issues in leadership, vision and organisational culture are identified. Issues of competence form the final sections, divided into technical specialism shortfalls and a detailed management capability evaluation.
Staff are recruited for technical competence and development efforts have been moderately effective. More could be done to develop the professional capacity of professional staff. Retention has been an isolated issue but is not generally seen as significant cause for concern. Organisational culture is a source of concern: superficial signs of satisfaction may be obscuring deep-seated frustrations. A number of technical and managerial shortfalls are detailed: in a maturing organisation, addressing these is crucial to building public responsiveness, cost effectiveness and technical integration needed to support wise and practical risk management.
Chapter 8 comments on a number of interface issues, covering policy, enforcement, regulatory and other stakeholders. Significant issues are also reported in relationships are with other stakeholders: the applicant ‘community’; non-governmental organisations (NGOs) and other submitters; the general public.
At an institutional level, important relationships appear to be well documented in terms of commitments to consult, share information, collaborate etc. Within key agencies, at a senior executive level there are a variety of liaison arrangements. Agencies and individuals are generally positive about the relationship they have with ERMA contacts, particularly at the operational level. Ensuring that all agencies and stakeholders are properly involved, that they contribute to sound decision-making and effective post-decision implementation of risk management strategies, will demand of ERMA relationship and process management skills of the highest order. With ‘mission critical’ agencies such as the Ministry for the Environment (MfE) and the Ministry of Agriculture and Forestry (MAF) it would appear that the parties work together willingly and proactively. We must note, however, our concern that there is not yet the degree of ‘seamlessness’ and integration at the decision/monitoring/enforcement interface that we believe is desirable. Two vital agencies, ERMA and MAF, not only administer and are committed to different statutes but they have different organisational personalities and ways of doing things. At present the people involved in both agencies—at least at a senior level—are aware of the risks and are fully committed to make the necessary partnership a successful one. It is at this point that we believe, however, that the ‘system’ of risk management for new organisms is most vulnerable.
This Review recommends a number of clarifications, improvements and reinforcements in the Environmental Risk Management Authority (ERMA) on fitness for purpose. Many of these are for ERMA to lead, while some involve other agencies.
Principal recommendations related to new organism work are detailed in each chapter. Recommendations are made on enhancements to:
decision-making and governing body, referred to as the
Methodologies in use in managing risk and benefits
Present management and organisation structures
Staff qualifications and experience
Recommendations on The Authority
1. That it be clarified that Nga Kaihautu Tikanga Taiao (NKTT) is an advisory committee of the Authority; a subordinate component of the governance structure of ERMA
2. That the Authority take responsibility for appointing the chairperson of NKTT
3. That the chairperson of NKTT be invited to be present at Authority ‘governance’ meetings but not be considered a ‘Member’ of the Authority for such purposes
4. That the membership of the Audit Committee be reviewed to support the specialised role that it has to play
5. That the Authority review (and possibly extend) its definition of the governance component of its responsibilities
6. That the Authority adopt a more active and systematic approach to the performance management of the Chief Executive
7. That the Authority reassess whether it should retain the structures and processes that give rise to and support the identity of ERMA New Zealand separate from the Authority
8. That the Authority review and take ownership of the policies that relate to the design of its own job and discharge of its responsibilities. All such policies should be agreed by the Authority and signed off by the Chairperson
9. That the Authority adopts the practice of developing an “annual agenda” (or work programme) to assist it in determining its own priorities. This should follow through into a reformatting of its monthly meetings
10. That the Authority conduct a formal self-assessment of its governance performance including a review of its effectiveness in the application of its policies and procedures at least annually
11. That the Authority be maintained at full strength of eight members at all times
12. That the Authority itself take an active part in its own succession planning, in conjunction with the Minister
13. That future appointments address the areas of comparative inexperience and under-resourcing that are identified in the report
14. That the Authority’s statutory decision making committees be well supported with legal advice
15. That the recruitment and selection process for Authority Members should be approached no less thoroughly than would be the case for the selection of a chief executive. Appointments should be “merit-based.”
Recommendations on Methodologies In
16. Dialogue should continue between ERMA and MAF on the selection of particular controls and the frequency of monitoring.
17. A short study of the scope of work required to complete core registers should be conducted, perhaps with MAF or DOC collaboration. ERMA and the Ministry of Fisheries should discuss the requirements for a marine equivalent.
18. The Authority should consider the content and style of Evaluation and Review Reports, to improve internal consistency and readability; each Report should open with a summary of key issues in the view of applicant, submitters and staff.
19. The Authority should clarify the instruction to Agency staff on how conflicting information should be dealt with and the minority views reported, including deciding what types of information are included or excluded. The Authority should be informed where there are significant differences in view among staff. The Agency should be developing skills in interdisciplinary collaboration with emphasis on dialogue as well as debate.
20. Effort should continue on the broadening of risk management understanding, to meet the requirements of the Act: stakeholders should more fully appreciate that balancing of environmental risk and benefits is different to the insurance risk paradigm of detecting potential for loss and providing for compensation.
21. ERMA, research funding agencies and applicants should look together at the implications of case-by-case processing for research programmes dependent on a series of approvals to produce useful outcomes.
22. In its evaluation and review reporting, public awareness and consultation activities, ERMA should make use of the recent work available on the expectations of the New Zealand public and their range of perceptions, views and values.
23. A body of knowledge, about decision-making precedents and their implications should be distilled from the casework completed, as has been promised in the Annotated Methodology.
24. More flexibility in the risk assessment process will eventually be required and should be investigated soon. Perceptions change over time, to the extent that previously valid judgements are no longer fitting. The dynamic meaning of caution should be anchored in public risk appetite and scientific evidence.
25. ERMA should look for means of promoting awareness that provide for dialogue rather than debate, especially between communities of interest with a history of misunderstanding.
26. Observations deserving further consideration include those on the need for dialogue outside hearings:
27. Observations of merit on the need for dialogue outside the hearing process and on improvements to the hearing process should be considered in the light of whether they will assist wise and consistent decision-making that is more cost-effective. A more committed effort should be made to reduce cost for the Agency and applicants: alternatives to the present structures and process, allowable under the Act and Methodology, should be costed and their qualitative merits examined.
28. The Authority should take steps to understand and respond to perceptions that submitters, in particular, may not trust the process or the Agency.
29. The role of NKTT should be communicated more clearly to stakeholders. Advisory interaction between NKTT and the Authority should be reinforced at a strategic level as well as the present case-by-case level.
30. Fluctuations in applications numbers and effort required in pre-application, application and monitoring phases should be studied to explore the foreseeable options facing new organism work over the next three years. Such a study should include discussions with representative applicants and parties involved in monitoring and enforcement. The whole of government aim should be reinforced: protection and prevention outcomes are to be achieved, though different organisations may use different approaches or legislation.
31. The Agency should review the way of working and expectations about what standard of proof decision-makers need. Changes to staffing levels should not be considered until potential for process changes has been examined and governance implications considered.
32. Coaching efforts with IBSCs should continue, complementing audit of their processes and decisions.
33. A review of organisation development strategy, culture and structure should be completed in time to be fully implemented before the end of the moratorium, perhaps splitting the functions presently grouped in Science and Operations differently to focus attention on the very different requirements of new organisms and of hazardous substances.
34. Management level representation of policy development in environmental or public arenas should be considered, to complement the operational and technical focus of the organisation.
35. Budget holding for all senior management positions should rest with the position holder, so that the quality of service to Agency and Authority can be controlled with a single point of management and professional accountability.
36. Application Review Meetings should be used for clarification of issues around applications and familiarisation with skill areas in need of development, as well as ensuring compliance with the application-processing regime.
37. There should be more opportunity for dialogue within ERMA on high level issues of relevance to work now or in the foreseeable future, including the factors that need to be weighed, the ways these can be investigated and the workplace culture that will facilitate wise, balanced decisions.
Recommendations on Staff Qualifications and
38. The Agency’s Operations group should lead an operational review of the way application-processing is expected to be done, looking for skill deficits and potential for savings of time or cost in the preparation and processing of applications. Action plans for building or co-opting expertise in areas of shortfall should be implemented.
39. Professional development of staff should be guided by an organisation-wide strategy to develop capacity to meet the challenges facing ERMA.
40. The Authority should reconsider the high-level processes used within and beyond ERMA to complete tasks related to new organisms, including the sustaining of stakeholder relationships that assist future compliance and understanding. The potential for alternatives, still meeting the requirements of the Act and Methodology, should be examined.
41. A shared vision for ERMA, and the path to its achievement, should be built, lead by the Authority. There need to be free and frank discussions on what might happen as the new organism work progresses, including cultural, ethical and scientific dilemmas, perhaps involving applicant, submitter and other agency perspectives. Support for the expected workplace culture should be a part of the path to the vision. A means of addressing recurring contradictory culture themes should be proposed by management for the Authority to consider.
42. Developmental guidance should be provided for managers, to ensure treatment of staff is consistent with obligations and provides the support necessary to work to the standards expected.
43. There should be periodic review at Authority level of the satisfactory presence of specialisms and management competencies critical to the Agency’s achievement of a reputation as an even-handed adviser to a wise Authority making informed judgements. Governance activities should regard these strategic human assets as crucial to the present and future performance of the organisation, to be added to and replenished in advance of need. Detailed recommendations are made in sections on shortfalls.
44. Rigorous quantitative and qualitative methods should be used to establish baseline perspectives and begin predictions of changing attitudes. Collaboration with research institutions should be investigated, including the possibility of obtaining FRST funding for a public-interest research programme.
45. Authority Members should become familiar with the different qualities of advice required so they can express their requirement clearly. This expression will assist the Agency, external experts, applicants and submitters in completing work to necessary and sufficient standards.
46. The Authority should review management competency ratings to ensure alignment with the 2010 visioning, then ensure their use in planning and conducting developmental activities for present and potential managers.
47. The Authority should consider the balance between expenditure on technical and managerial development of staff in the light of the needs facing the Agency.
Recommendations on External Relationships
48. Policy agency relationships should be sustained where established and reinforced where liaison is limited. This may require re-prioritisation of senior management attention in ERMA.
49. Liaison for compliance and enforcement purposes should be examined by the Authority to explore the division of responsibilities between ERMA and other agencies. The existing MoU arrangements have not been wholly satisfactory ‘on the ground’. Reliance on agency relationships to deliver core services creates risk that the other agencies’ priorities might precede those of ERMA. The Authority must be confident of satisfactory implementation of compliance controls and, when required, enforcement and emergency response actions. Diligent monitoring of actions by ERMA and other parties is needed, as is better integration of ‘on-the-ground’ operations.’