Customs' operating environment

New Zealand is an island nation with over 15,000 kilometres of coastline. Everything and everyone that comes to or leaves New Zealand does so by air or sea. Customs is one of a number of agencies that manages the flows of trade and travel across the border. Customs’ presence, significant infrastructure support, and the capability Customs provides at the border means we are a key contributor to border management. Customs is currently based in 13 New Zealand locations, and five overseas. Of approximately 1230 staff, about 70 percent are frontline Customs officers, supported by specialists who provide systems support to enable frontline staff to work efficiently and effectively.

Customs is a central part of the broader government machinery that manages New Zealand’s border interests. Customs and other border agencies seek to improve our collective services, and overall productivity, efficiency, and effectiveness. Customs manages critical border infrastructure – principally the CusMod system – that is increasingly relied on by government and industry to efficiently process border transactions, and manage risks that go with them. The system enables numerous government agencies to meet various objectives. It is now critical to managing risks to biosecurity, immigration, food safety, and customs, and risks to a range of policy objectives on behalf of other agencies.

With Customs’ broad range of functions, we need to identify and prioritise the things that are most important to meeting the Government’s priorities. We monitor changes in our operating environment by keeping an eye on international and domestic trends – identifying opportunities and risks. Our planning focuses us on things that are important to delivering our longer-term goals, offer the most value for money, and mitigate risks. Our planning needs to consider possible single significant events as well as the impacts of a number of core, long-term drivers of change.

In our last Statement of Intent we identified three long-term drivers of change for Customs:

› Changing demand
› Changing requirements
› Changing capabilities.

Over the next three years, the impact of some of these drivers will be different, as a result of the downturn in the global economy. 

CHANGING DEMAND

In recent years, New Zealand’s growing international trade and tourism has challenged Customs’ ability to manage increasing border risks while facilitating growing volumes of trade and travel. Times have changed – at least in the short term. The global economic downturn is impacting on New Zealand, our trading partners, and their citizens. Demand for goods has dropped, both in New Zealand and in our export markets, and fewer people are travelling overseas.

Trade and travel volumes are expected to be flat or falling over the next three years, with volumes rising after that. However, there will be some fluctuation in travel as a result of one-off events, such as the Rugby World Cup, which will generate an influx of overseas arrivals in 2011.

Non-compliance with border and revenue laws is expected to increase as more individuals and companies experience financial pressures. We therefore anticipate more pressure on Customs’ intelligence, inspection, investigation, assurance resources, and revenue collection.

Customs will need to remain agile to manage effectively in an increasingly tight fiscal environment. As for other government agencies, Customs is challenged with improving value-for-money and frontline service delivery, while ensuring we are ready to respond when the inevitable upswing in the economy occurs.

CHANGING REQUIREMENTS 

Internationally, increasing integration of border and supply chain systems and information is expected to continue. The trend is seen in the increase of countries either stipulating trade security requirements, or seeking better trade security assurance and efficiencies through bilateral arrangements. In New Zealand, traders seek better support at the border from government through simpler and more streamlined services with less bureaucracy, which aim to minimise their compliance costs and efforts. Exporters seek better access and speed of goods to overseas markets. 

CHANGING CAPABILITIES
 
Potential technology to improve the speed and effectiveness of border processing and risk management continues to increase rapidly. New technologies for screening, processing, and surveillance and tracking are coming on to the market all the time. We need to ensure we are taking advantage of relevant advanced technology so we are not using high value staff time on labour intensive activities with low value. The challenge for Customs is to identify technologies offering real benefits that are cost-efficient and cost-effective.

New technologies are being used for criminal purposes. Lucrative returns, particularly for trafficking illicit drugs, have led to highly organised and complex criminal activities. The spread of criminal activity into areas of the legitimate economy make it increasingly difficult for law enforcement agencies to detect crime – particularly for illicit drug trafficking and smuggling. Complexities within these high risk areas place increasing pressure on Customs’ investigations resources. Customs needs to have the ability to counter trends in criminals’ use of technology.

Travellers and traders are increasingly expecting their compliance burden to be reduced, and processing speeds to be increased at the border. More sophisticated information and processing systems are needed to enable border agencies to respond without compromising the quality of their risk management. These systems need to deliver more sophisticated risk management capabilities, and increase integration with industry and other agencies’ systems – both domestically and internationally. 

RISK MITIGATION

The table on the following page shows the link between the long-term drivers, organisational risks that would potentially reduce our impact towards the outcomes we seek, and initiatives to mitigate risks.

Risk mitigation