Organisational Health and Capability
In order to maintain our reputation and deliver our mandate effectively, we must maintain public trust and confidence in Customs, especially as we expect – and rely on – the significant majority of customers to comply voluntarily with border requirements. We recognise that integrity is fundamental to maintaining that trust and confidence. Customs’ solid reputation lies in the integrity of our actions and the way we use our powers as we protect and promote New Zealand through world class border management.
During 2016/17, we progressed our ongoing programme of initiatives to continue to safeguard integrity and prevent corruption. We facilitated workshops to promote integrity and to raise integrity and security awareness; reviewed and revised our integrity framework, fraud and corruption risk profile, and workplace bullying, harassment and discrimination prevention policy; focused on personnel security, information security and security policy development; presented at international integrity forums; and continued to strengthen our networking with other key agencies and administrations on integrity and security matters. Our Integrity Assessment Committee continued to independently assess allegations of breaches of integrity.
Code of Conduct
Our Code of Conduct applies to all Customs employees and all those we engage as contractors and consultants. The behaviour required falls under four standards – fair, impartial, responsible, and trustworthy. This is in keeping with the State Service Commissioner’s Standards of Integrity and Conduct. Customs’ employees are responsible for upholding these standards and complying with the Code of Conduct.
We take alleged breaches of integrity very seriously and manage them professionally. We do not allow or tolerate any acts of corruption.
Customs has Disciplinary Policy and Procedures for addressing unacceptable behaviour. The following table shows the outcomes of the investigations into allegations of unacceptable behaviour by Customs staff and contractors/consultants engaged by Customs that were concluded in 2016/17:
|Upheld||Not upheld||Withdrawn||Relevant person|
|Did not meet|
Where misconduct was found, the particular types of unacceptable behaviour alleged are shown in the following table:
|Unacceptable behaviour alleged||Upheld||Not|
|Inappropriate use of, or access to customs systems||2||0|
|Inappropriate behaviour at work||2||0|
|Inappropriate behaviour outside work||2||0|
|Inappropriate access to controlled area||1||1|
|Failure to follow the usual processing procedures||1||0|
|Customs' material on social media||2||0|
|Building security breach||0||1|
When misconduct occurs and it is determined that disciplinary measures are necessary, these are meant to be corrective in nature rather than punitive. In some cases termination is justified and appropriate. The following table provides statistics38 on disciplinary action or sanctions in 2016/17:
|Formal warning*39||Termination (with|
or without notice)*
Leadership and governance
Customs has arrangements in place to help the overall monitoring and direction of our organisation, in order to ensure effective business performance and governance. We have a layered approach to our governance and management committees.
The Customs Executive Board (CEB) is our main governance body, consisting of members of Customs’ senior management. As well as providing leadership and maintaining Customs’ management environment, the CEB is future-focused: it looks at Customs’ role in the wider government and industry sector, and at the stewardship of the organisation, with the goal of making Customs a more sustainable organisation.
Supporting the CEB in 2016/17 were four governance sub-committees; a sub-committee for each of the Intelligence-led, Border Modernisation, Customer Focus, and People and Culture streams. The role of the sub-committees was to take a ‘whole-of-organisation’ perspective to approving and prioritising work with a clear connection to Customs’ strategic direction, and to monitor the progress and results of projects within the relevant stream.
Also supporting the CEB is a number of other committees – both standing and project-related – to ensure effective performance and risk management by Customs, and to provide upstream advice to the CEB.
As the Joint Border Management System was a major project (for Customs and MPI), it had its own specific governance arrangements, including a Programme Delivery Board to manage technology delivery, and a Joint Executive Board to focus on delivering the programme and realising its benefits. In addition, there was an Assurance Plan overseen by the Government Chief Information Officer, which included the management of risks and issues. After the JBMS programme was completed in April 2017 (see Border modernisation), these arrangements were replaced by joint Customs and MPI governance groups focused on the ongoing enhancement of the shared systems.
We regularly review our risk management policy, framework, and procedures to ensure that they remain effective and continue to be aligned with appropriate standards and best practice. The most recent review produced Customs’ Risk Management Framework introduced in June 2016, which sets out the principles on which risk will be embedded in all of Customs’ practices and business processes. We are committed to managing and, where possible, reducing risks at all levels to ensure we achieve our objectives and the Government’s priorities. The Framework helps staff to identify and manage risk in a structured way, recognising our shared and individual responsibility in this area. It ensures that risks are identified, assessed, and mitigated at a strategic, organisational, and operational level.
Customs’ Audit and Risk Committee is a key governance body. It provides advice to ensure that Customs has an effective and comprehensive framework for corporate governance, and to ensure that significant risks are being identified and mitigated. It consists of external members only, including an independent Chair, although members of Customs’ senior management may also attend meetings depending on the specific agenda items.
Customs Audit and Risk Committee Report for the year ended 30 June 2017
The Customs Audit and Risk Committee exists to provide independent advice to the Comptroller.
The Committee comprises four independent members. During the year two members resigned and two new members were appointed. The Committee brings considerable relevant experience from members who have worked in and alongside Customs and other government agencies involved in border, information management, enforcement and revenue collection.
The Committee has met four times over the year and has been well supported by the Comptroller of Customs and other senior managers who have been available and prepared for discussion on key risks, issues and opportunities facing Customs.
The Committee has met with Audit New Zealand (Customs’ Auditor) and discussed their view of the control environment and Customs’ performance.
I attended the Auditor-General’s forum for audit committee chairs which discussed the focus, structure and development of public sector audit and risk committees and provided the latest guidance from the Office of the Auditor-General.
During the year, the Committee has focused on the status and management of:
- Health and safety governance
- Customs’ Strategic Risk Profile
- Customs’ Security, including a Security Enterprise Architecture review
- Customs’ organisational change programme
- The Joint Border Management System implementation
- Integrity, including a performance and maturity assessment
- Customs’ governance structure
- Customs and Excise Act implementation
- The Border Clearance Levy
- Four Year Plan, Long Term Investment Plan and the Investor Confidence Report.
In 2017/18 the Committee will build on the progress made in the past year with the aim of continuing to fulfil its charter obligations and enabling Customs to continue to understand and effectively manage risk while at the same time maintaining its enviable reputation and high levels of trust with key stakeholders and the New Zealand public.
New Zealand Customs Service Audit and Risk Committee
People are critical to what we do, as reflected in People and culture being one of the areas through which we are delivering on our strategic direction. Our organisational health and capability in this area is discussed in People and culture.
Collaboration with other agencies
Customs continues to develop our collaborative working relationships with other agencies.
We regularly engage and collaborate with the Border Sector to identify ways to deliver more integrated operational processes, and to work more collaboratively at the border to improve efficiency, reduce duplication for traders and travellers, and provide a more seamless service for customers. The Border Sector is committed to the Business Growth Agenda (BGA) Export Markets goal of New Zealand operating the world’s most efficient and cost-effective border management system to support trade and people flows. In 2016/17 Customs contributed to the work of the Border Sector on developing a new strategy and vision out to 2025; this includes adopting a customer-centric approach, involving the sector working with key stakeholders and industry to create more opportunities to achieve border objectives, – while continuing to support the BGA goal. This work will be completed in 2017/18.
Customs cooperates with other agencies, both locally and internationally, to build our intelligence picture, share information on drug trafficking trends and enforcement techniques, and disrupt supply chains for illicit goods (as discussed in Intelligence-led).
Border management systems
Customs’ work relies heavily on our border management IT systems, particularly for facilitating trade and travel, collecting revenue, and managing the associated risks. Given that these systems need to be available 24/7, their reliability and capability is vital. We do, however, have business continuity plans and processes for when they are unavailable.
The key systems for 2016/17 were the Joint Border Management System/Trade Single Window (TSW), CusMod, Nexus, SmartGate, and the Financial Management Information System (FMIS):
- TSW (used primarily for trade) was available for 98.90% of 2016/17. The majority of the time that TSW was unavailable was due to planned outages for new releases as part of the phased implementation of JBMS (as discussed in Border modernisation). These outages are scheduled for when they will provide the least disruption to industry. Excluding planned outages, TSW was available for 99.86% of 2016/17
- The CusMod border management system (used primarily for passenger processing and legacy trade transactions) was available for 99.79% of 2016/1740
- Nexus41 is Customs’ data warehouse for the information recorded in CusMod and TSW. This enables managed reporting, analysis, and ad hoc queries. Nexus was available for 99.75% of 2016/17
- SmartGate assists in the processing of air passengers by offering a self-service option (as discussed in Travel). This technology was available for 99.75% of 2016/17
- FMIS (through which Customs collects revenue, and undertakes our departmental financial transaction processing and reporting requirements) was available for 99.86% of 2016/1742.
The November 2016 Kaikoura earthquake necessitated repairs to our Wellington Customhouse, resulting in relevant staff being relocated to alternate premises until completion of the building works. Those works had not been completed as at the end of the 2016/17 year. As a result of the earthquake, we accelerated our mobility programme so that Wellington staff could continue to work from alternative locations using mobile devices.
Customs began reviewing and updating our business continuity plans in 2016/17 (with the work continuing into 2017/18). This incorporated lessons from managing the impacts of the earthquake. We have also been contributing to the whole-of-government work on disaster recovery planning.
38While one incident is one incident too many, these numbers need to be understood in the context of a workforce of over 1,200 employees.
39A formal warning could also include one or a combination of the following: referral to Employee Assistance Programme or other professional assistance; removal of delegated powers; removal of privileges; transfer; demotion; non-eligibility for merit remuneration increase or one-off payment; change of reporting time or hours of work; or such other penalty decided by the Chief Executive.
40This does not include planned outages for restarts. CusMod is restarted every 24 hours, but this is done overnight and has no impact on business operations. Upgrades and application modifications are also scheduled for times that have the minimum possible impact on business operations.
41Developed by Cognos® and distributed in New Zealand by CDP Ltd.
42This does not include planned outages for restarts. SmartGate is restarted every 24 hours, but this is done overnight and has no impact on business operations.