Chief Executive's review
Kia ora koutou katoa.
Greetings to everyone
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| Andy Pearce. Image - Ian Whitehouse |
As I write this review for my last Annual Report, significant and positive change for the science system in New Zealand seems likely. In my review I reflect on system and other changes over the 13 years since CRIs were formed in 1992; on some positives and negatives of the recent Outcome Based Investment (OBI) contest for FRST funds; and make some comments on new directions and horizons for the science system and for Manaaki Whenua. I also disclose and comment on the recent controversy over Manaaki Whenua’s provision of expert witnesses to the Cypress Mine hearings in the Environment Court.
I extend a warm welcome, my congratulations and best wishes for success to Manaaki Whenua’s new Chief Executive, Dr Warren Parker, who commenced his appointment in July 2005.
Changes since 1992
Contestable funding
From 1992 until 1996, FRST funds were contested annually—only a few programmes had “long-term funding” for three years. From 1996 to 2000, bidding rounds were biennial for two-, four- or six-year funding, with most programmes being funded for four years. Now, about a third of the company’s FRST revenue is in eight- or twelve-year Outcome Based Investment (OBI) contracts, about 6% is in new four-year Project contracts, and the remainder is part-way through four- to six-year contracts from previous bidding rounds.
Relocations
In 1992 we had staff at 18 locations in 15 cities or towns, and only 25% of staff on or adjacent to university campuses. Now, Manaaki Whenua operates from four small regional sites and four major campuses, with more than 90% of staff located on or adjacent to the campuses of Auckland (Tamaki), Waikato, Massey, Lincoln and Otago universities. This enables a high degree of research collaboration and joint ventures with universities.
Science capacity
In the beginning, our work was in natural environments and rural land use, with strong capacity in biology, pest management, land, soil and water sciences, remote sensing and GIS research. Manaaki Whenua is still strong in all those fields, and has added substantial social science, policy and economics skills. Research has also extended into urban environmental management and into helping business and government to be more sustainable. I believe no other sustainable development research organisation in the world can equal Manaaki Whenua in the range of expertise and work undertaken.
Stakeholder engagement
Manaaki Whenua has always focused on achieving real-world outcomes from our science and technology, and on working closely with end users and stakeholders. Our stakeholder advisory groups have progressed through many forms since 1992, culminating in the recently established OBI governing bodies.
Our commitment to engaging with Māori, and building an understanding of tikanga Māori among staff, had never been attempted by previous science organisations. I believe we have achieved much—this is reflected in the strong research partnerships we have with many iwi. An appreciation of Māori traditions, protocols and te reo is expressed in much that we do.
Outcome Based Investments (OBIs)
Successes
This year Manaaki Whenua took a major part in FRST’s OBI funding contest for Natural Ecosystems research. Ultimately four OBI proposals (subsequently condensed to three OBIs) and a range of Project proposals were successful, which slightly increased our level of revenue. Additional new revenue was also awarded to Manaaki Whenua’s nationally significant databases and collections.
I believe that the OBI process was successful in developing both much greater focus on real-world outcomes and real engagement by end users and stakeholders. There were major implementation diffculties in the OBI process because of poor design, inadequate risk management, decision-making of questionable legality, and poor communication by FRST. Extensive feedback, including many suggestions for improved design and implementation, was provided to FRST in a review of the OBI process.
Despite these diffculties, Manaaki Whenua remains a strong supporter of the outcome focus, end-user engagement and devolved decision-making of the OBI approach. Most of the high-level goals of the OBI trial have largely been achieved. I congratulate FRST on achieving these objectives.
High transaction costs
In the mid-1990s, the transaction costs for Manaaki Whenua were about 6% of the sum being contested—benchmarking research undertaken by FRST showed this was at the low end of the range. By 2003 our transaction costs had risen to more than 12% of the sum being contested. In the OBIs and Projects, the transaction cost for Manaaki Whenua was significantly higher than in 2003, perhaps as high as 15%. This is of real concern given that the OBIs were four times overbid, Projects were eight times overbid— making the bidding round about six times overbid in total. Thus the combined transaction costs incurred by parties other than FRST, are at least 50% and possibly even approaching 100% of the sum being contested! FRST’s direct costs of running the contest are trivial in comparison. I applaud the Minister of RS&T, the Hon Steve Maharey, and his officials in MoRST for exploring ways to make our system both more effcient and more eff ective.
Cypress Mine controversy
In May 2005, Forest and Bird sought an investigation by the Minister for CRIs and subsequently made significant allegations to the news media about unethical behaviour and the company’s impartiality regarding a part-time staff member who was to appear for them as an expert witness at the Environment Court hearings in regard to the Cypress Mine proposal of Solid Energy. A CCMAU review of this matter for the Minister concluded that I and the company had not acted unethically.
New horizons
Manaaki Whenua’s 50-year vision for sustainable development in New Zealand is “Invest in quality of life and environmental care, then wealth will follow”. I believe this will become the mantra and basis for sustainable development. New Zealand’s enduring basis for wealth will be the differentiation of our products and services. Brand values will tell the story of New Zealand’s environment—the places that these products and services came from, the people who made or provided them, and their history, heritage and culture.
Final reflections
Over the last 13 years, Manaaki Whenua and its staff have achieved much. As Chief Executive, I was very fortunate to have had the support of three excellent Chairmen in John Kneebone, Ian Donald and Rob Fenwick. Through their leadership the company’s Board has always been united, irrespective of changing membership, and we established superb working relationships. I had the long-serving support of an excellent team of senior managers, several of whom have been with the company since establishment, and all but one have been with the company for at least 10 years.
The staff of Manaaki Whenua have proved themselves to be outstanding. Their scientific productivity is double the national average, and the quality of their work (measured by citations) is higher on average than that produced by the Marsden Fund. They have delivered huge, real benefits to New Zealand in biodiversity; pest management; greenhouse gas mitigation; land, soil and catchment management; urban environments; and improving the sustainability of businesses. They are superbly focused on engaging with end users and other stakeholders. Manaaki Whenua is a superb team. It has been my enormous privilege to lead that team from the beginning of the establishment process in November 1991.
I thank successive shareholding Ministers, Chairmen and Board members, my excellent senior management colleagues, and most of all, the wonderful staff of Manaaki Whenua for all their individual and collective contributions to the success of the company. I offer you all two challenges for the future. The fi rst is to believe in yourselves—you can achieve anything if you really want to. The second is to be relentlessly dissatisfied with how well you are doing—that is essential to continuous improvement.
I conclude with the whakatauki that has become one of the favourite waiata in Manaaki Whenua.
Hutia te rito o te harakeke Kei whea te kōmako e kō Ki mai ki ahau He aha te mea nui i te ao Māku e kī atu He tangata, he tangata, he tangata.
Andy Pearce
Chief Executive
Hutia te rito o te harakeke
Kei whea te kōmako e kō
Ki mai ki ahau
He aha te mea nui i te ao
Māku e kī atu
He tangata, he tangata, he tangata.
(If you) pluck the tender shoot of the flax, where will the bellbird perch? But you ask, what is the most important thing in the world? I say, it is people.