Sensitive. Office of the Minister for Primary Industries Office of the Minister of Immigration Office of the Minister of Customs

Transcription

1 Sensitive Office of the Minister for Primary Industries Office of the Minister of Immigration Office of the Minister of Customs Chair Cabinet Economic Growth and Infrastructure Committee FUTURE DIRECTION FOR THE BORDER SECTOR Proposal 1. This paper proposes improvements to government s border services. New initiatives are proposed to improve service delivery at the border through shared processes, common infrastructure and by maximising the benefits achieved from technology investments. Executive Summary 2. As directed by Cabinet in February 2012 [CAB Min (10) 10/21 refers], Border Sector Ministers have investigated how to further improve border services. This work includes exploring the potential to implement a single Ministry for Primary Industries (MPI)/Customs primary line for passenger clearance, and improvements in cargo clearance service delivery. 3. Border sector agencies play a critical role in facilitating the passage of $90 billion in goods and 10 million passengers across our borders while protecting our economy from external risks. Trade and travel is increasing (passenger arrivals are forecast to grow by 4% per annum over the next five years) and becoming increasingly dynamic in line with the global economy and international trade flows. Our border systems have to continually evolve in order to maintain our current levels of border protection. 4. Border sector agencies have been working as a sector since 2007 and have made good progress to create a more integrated and responsive border management system. There is already a significant investment programme underway to enhance risk management and improve service delivery which is being rolled out over the next five years. The key platform for this programme is the implementation of and business change programme for the new information technology tools: the Joint Border Management System (JBMS) and the Immigration Global Management System (IGMS). 5. There is, however, significantly greater benefit to be gained through leveraging the existing work programme, especially IT investments, to deliver further improvements to risk management and service delivery within existing structures. These new initiatives (summarised in appendix one) would enable: Sub Page 1 of 13

2 1. A single primary line for most Australian and New Zealand passport holders, which may be able to be expanded over time to other low risk passenger categories. This will depend on MPI being able to use advance information to effectively profile low risk passengers, including the possibility of baggage x-ray image transfer from country of embarkation. A smaller proportion of passengers would be referred for secondary checks. 2. Cargo clearance delivery would be improved through one-stop-shop services, joint scheduling and planning, undertaking more activities on each other s behalf and partnerships with industry. Traders would face less duplication and would be able to do more themselves to be less likely to be held up at the border. 3. Improved risk management through better coordination and sharing of resources and information across the border sector. 6. Agencies working together to deliver streamlined border services will contribute to the Government's Business Growth Agenda by making travel and trade easier. Some actions outlined in this paper are also included in the Building Export Markets work programme as part of the Business Growth Agenda. 7. This work will also support achieving the target results set by the Government for the public sector through the Better Public Services programme, particularly those related to delivery of a one-stop-shop for public services, a single point of data entry, increased digitisation of services, and the drive to facilitate export led growth. 8. We also considered the high level benefits and risks of moving to a single delivery system. We are not proposing full integration of border services as: 1. Further work would need to be undertaken, following implementation of the proposed work programme, to determine if there are any further efficiencies and improvements to risk management over and above the service and function changes that are proposed in this paper; and 2. It would require organisational structural changes which would create a significant disruption and distraction and put at risk the successful delivery of the current investment programme, and the efficacy of border risk management. 9. We therefore recommend implementing the proposed work programme (see appendix two) in a staged way that leverages off the current investments to deliver better risk management and service improvements. Once the new initiatives are implemented, border sector agencies will advise whether there would be additional benefits to be gained from full integration of border services in the future. Background 10. In March 2010, Cabinet agreed to establish a Border Sector Ministerial Group, comprising the Ministers of Customs, Immigration and Biosecurity (now Minister for Primary Industries), with others invited as required. The Ministerial Group s role is to provide leadership and direction on the strategy for the sector, and proactively drive the sector work programme [CAB Min (10) 10/21 refers]. Sub Page 2 of 13

3 11. In February 2012, Cabinet agreed that the Ministry of Agriculture and Forestry (now MPI), Customs, and the Department of Labour (now Ministry of Business, Innovation and Employment) should undertake work on proposals to further improve border services. Cabinet directed the relevant Ministers to report back with more detail, particularly in relation to the approach to implementing a single MPI/Customs primary line for passenger clearance, and cargo clearance service delivery [CAB Min (10) 10/21 refers]. Context 12. The economic environment in which border services are delivered has changed, as have stakeholder and Government expectations of service delivery. The volume of transactions, the diversity of goods, people and craft, the complexity of trade supply chains, and the expectations of faster and smoother processing continue to increase. 13. Currently, about $90 billion in imports and exports, and approximately 10 million passengers cross the border each year. The sector will have to proactively respond to a forecast 4% average annual growth in passenger arrivals in the next five years, and similar levels of growth in imports and exports. The drivers of change are: 1. Stakeholder and Government expectations: Border operations need to be made more efficient, compliance burdens on business need to be reduced, and savings need to be achieved through greater collaboration among agencies. There will also be greater scrutiny of effectiveness of border risk management by primary industry sectors as they become jointly responsible for biosecurity readiness and response under Government Industry Agreements. 2. Economic imperatives: New Zealand must trade its way to greater growth and prosperity. This includes negotiating free trade agreements with more international partners, and providing a more streamlined experience for travellers and traders. 3. Border risk management challenges: There will be mounting pressure on border risk management from increasing volumes of people, goods and craft, and a wider range of risks and threats. 4. Biosecurity: There is also mounting concern amongst primary sector stakeholders that there is a risk of trade and passenger facilitation putting biosecurity at risk. 14. Stakeholder expectations are also reflected in the results of the Kiwis Count survey, which measures New Zealanders satisfaction with public services. Findings from the 2012 survey are very positive and show that the overall quality of service delivery in the public sector has improved since 2009, with Border Services being one of two service groups showing the largest improvements. 15. The sector provides value to New Zealand by successfully managing the tension between protecting New Zealand from risk and facilitating trade and travel. To meet expectations in this dynamic environment requires agencies to Sub Page 3 of 13

4 develop new ways of working together that are smarter and more effective. Intelligence, technology, risk assessment and voluntary compliance will increasingly underpin the sector s ability to manage volumes by minimising interactions with low-risk goods, people and craft. Agencies will need to continually adapt how they operate to remain fit for purpose in this new environment. Appendix three outlines the value to New Zealand of our border protection systems. 16. Government has set its expectations of improved service delivery in its Business Growth Agenda, and in the ten challenging results for the public sector to achieve over the next five years through the Better Public Services programme. These targets require a stretch beyond immediately deliverable results and highlight opportunities for new ways of working together to demonstrate innovation and improvement across a connected, collaborative public sector. Two of the Better Public Services result areas are directly relevant to - and are supported by - the border sector programme of work proposed in this paper, which are result areas 9 and 10: Result 9: New Zealand businesses have a one-stop online shop for all government advice and support they need to run and grow their business. Result 10: New Zealanders can complete their transactions with the Government easily in a digital environment. 17. It is expected that achievement of these results will deliver a reduction in costs to business from dealing with government, and services to customers that are increasingly digital, responsive and personalised. 18. Government expectations of improved service delivery are also reflected in its vision statement for future trans-tasman passenger processing: "The ideal future state for passenger processing would be designed to simplify the travel experience for passengers without compromising security and border control. It would require cooperation between governments and their agencies as well as travel industry stakeholders in both countries." [CAB Min (09) 16/2 refers]. This vision was articulated by the Prime Ministers of New Zealand and Australia as an expectation that both countries will work towards a 'domestic-like experience for trans-tasman travellers. Current Investment Programme 19. The border sector agencies already have underway a substantial investment programme to modernise and improve border services. This includes: SmartGate; Direct Exit; JBMS; IGMS; and Piloting the X-ray image transfer initiative. Sub Page 4 of 13

5 20. The sector has already made a capital investment of $40 million to implement SmartGate and the cost of the current programme is over $160 million. 1 These investments will change the way that all 1000 border staff operate. The most far reaching initiatives are the development of the new technology and information systems, JBMS and IGMS. These initiatives will provide the platform to improve the agencies' approach to risk management and service delivery. They will also influence how risk management supports wider biosecurity, immigration and enforcement outcomes. 21. JBMS development and implementation is in two parts; Government has also agreed to consider a tranche two Business Case in early These programmes will be accompanied by a significant business change management programme which will be rolled out over the next five years. Key changes will include: 1. MPI will get advance information and use it to risk assess passengers before arrival. This should enable MPI to build profiles to identify high and low risk passengers. 2. Continued improvements to the risk assessment process will mean a smaller proportion of passengers will need secondary processing. 3. A Trade Single Window will be implemented, allowing importers to provide information once to government for all border purposes in electronic format. 4. Over time low risk and compliant importers should see a gradual decline in the rate of inspections required. 5. They will also see greater coordination between MPI s and Customs inspections scheduled at the same time in some instances though this might vary from port to port. 23. Legislation is being amended to support the implementation of the JBMS: 1. Amendments have been passed to enable information sharing between Customs and MPI; 2. The Biosecurity Law Reform Bill is currently before the House. It contains amendments to enable improvements to biosecurity risk management; 3. Proposals will be presented to Cabinet shortly for further amendments to the Customs and Excise Act 1996 for the Trade Single Window component of JBMS. New Initiatives: What Will Be Delivered 24. These new initiatives will improve service delivery through the following changes (and are summarised in appendix one): 1. There will be one primary line for most Australian and New Zealand passport holders for immigration, customs and biosecurity purposes, and two for other passport holders. This will depend on MPI being able to use advance information to effectively profile low risk passengers. 1 JBMS has a capital cost of $65.7m (Tranche I) and IGMS $90.5m. Sub Page 5 of 13

6 2. Over time, and depending on the efficacy of profiling for biosecurity risks, more passengers may experience a single primary line. 3. A smaller proportion of passengers will need to be referred for secondary processing such as baggage search. 4. Agencies will jointly schedule and plan for interactions with cargo and craft, and undertake joint inspections where appropriate. 5. Traders will face less duplication of effort, such as not needing to have their cargo examined by multiple agencies at different times. 6. Traders will be able to do more to get themselves into the low risk category, meaning they would be less likely to be held up at the border. 25. To enable agencies to deliver these changes, the IT systems must be delivered, information and intelligence must be shared across agencies and MPI needs to develop the capability and profiling history to identify patterns and risk. This platform will allow agencies to identify risk more effectively and to identify the best way to work together at the front line. 26. Agencies also will need to develop common approaches for training, performance monitoring and measurement, and compliance. Benefits 27. These new initiatives will build upon the benefits from the existing work programme: 1. Security: more effective management of risk, ideally offshore, through better targeting of risk and the sector sharing information and intelligence. For example, advanced management of border risk through JBMS will result in avoidance of harm through reduced biosecurity incursions and increased drug detections, with an estimated benefit of $47.3 million per annum A more joined-up approach to risk management across the sector will help agencies to better promote voluntary compliance by passengers, importers and craft operators, and would deter non-compliance. 3. Efficiency: sharing tools and resources, and carrying out tasks on each other s behalf will enable the sector to manage increasing volumes of trade and travellers, and the range of risks to be managed. For example, IGMS will provide faster, more accurate processing of visa applications at lower cost. The financial benefits of IGMS for Immigration alone are estimated at $252 million over 15 years. 4. Client Service: simpler processes and reduced intervention for low-risk passengers, traders and craft operators as agencies will be able to better identify them through partnerships, more sophisticated profiling and targeting and wider use of automated passenger processing (SmartGate). 5. It will be easier for industry to comply, principally through enabling traders to use one set of electronic import documentation to get clearance from all 2 JBMS tranche one business case, pg 70 Sub Page 6 of 13

7 border agencies. Benefits from increased supply chain efficiencies as a result of JBMS are estimated at $40 million per annum It will provide 'one-stop-shop' border services to traders and travellers for most services. There will be benefits for clients through reduced compliance costs and other regulatory-related costs, as agencies will perform tasks on each other s behalf and coordinate inspections and searches. Costs, Risks and Impacts 28. Realising these further opportunities will have implementation costs. Staged implementation will assist agencies to prioritise work and allocate resources to deliver the new components within the next five years. 29. A staged approach will also ensure that the process of implementation does not affect risk management at the border. Impacts on existing programmes and overall system effectiveness during implementation can be monitored and measured along the way, enabling potentially significant risks to programme implementation and to biosecurity risk management effectiveness to be mitigated. 30. Most components can be delivered within baselines through reprioritisation, noting the commitment by Government to consider a business case for JBMS tranche two in early 2013, elements of which may be required to support delivery of some of the new initiatives. 31. Cost savings may not necessarily result, as more resources and expertise may be needed for different functions, for example in pre-arrival risk assessment to enable agencies to do fewer inspections. 32. A programme of consultation and engagement will be needed to better understand and manage the potential impacts on key stakeholders. Exploring a Single Delivery System 33. We have also considered the high level benefits, costs and risks of further integrating border services into a single delivery system. As part of this analysis we reviewed how other countries structure their border management functions and the drivers behind those structures (see appendix four for a summary of the findings of that review). 34. A single delivery system represents a significant change to border sector operations, and would be complex to implement. It would require reviews of legislation and business processes. Further investment in technology may also be needed to support integrated border services, for example extending automation in passenger clearance. It is not clear whether the benefits of a single system would outweigh the level of investment it would require and the risks it would create. 3 JBMS tranche one business case, pg 70 Sub Page 7 of 13

8 35. It would also require organisational change, either through amalgamating border services into MPI or through creating a single border agency. Change management processes take time and create considerable disruption and distraction to business delivery (including the major IT projects) and may impact adversely on border risk management. 36. On the basis of analysis to date and the work programme ahead of agencies over the next five years, we do not support pursuing a single delivery system. We recommend the border sector agencies work together to improve functions and services as outlined in this paper. Analysis of the risks and benefits from further integration of border services could be done once the proposed work programme has been delivered. Implementation 37. Subject to Cabinet approval of the staged approach outlined above, we propose that Border Sector Ministers oversee the work programme to implement these changes. 38. Appendix two provides a high level work plan for implementing the new initiatives. Subject to Cabinet approval, agencies will develop a more detailed work plan for implementation. Conclusion 39. The current work programme will give agencies a platform to achieve further improvements to service delivery, and will require significant focus, effort and resources to deliver. However, it will take the sector only so far in preparation for future increases in trade and travel. Sub Page 8 of 13

9 40. Progressing further initiatives will leverage off existing commitments to make services more efficient and effective, and deliver services from a whole of border perspective. They will further improve the customer experience and ensure risks will be managed appropriately. Agencies working together to deliver streamlined border services will contribute to the Government's Business Growth Agenda by making travel and trade easier. Some actions outlined in this paper are also included in the Building Export Markets work programme as part of the Business Growth Agenda. 41. The proposed programme of work will also support the Better Public Services results set by the Government related to delivery of a one-stop-shop for public services, a single point of data entry, increased digitisation of services, and the drive to facilitate export led growth. These will particularly support result areas 9 and 10: Result 9: New Zealand businesses have a one-stop online shop for all government advice and support they need to run and grow their business Result 10: New Zealanders can complete their transactions with the Government easily in a digital environment 42. Delivery against these result areas will mean a reduction in costs to business from dealing with government, and provision of services to customers that are increasingly digital, responsive and personalised. 43. We consider that implementing the recommended approach in a staged and measured way will provide similar service delivery benefits to a single delivery model. The new work programme can be implemented without significant structural changes, within current funding commitments and without compromising risk management efficacy. 44. New initiatives can be implemented in stages, to enable agencies to prioritise and resource the programme within baselines while managing risk. This approach will also allow agencies to work with stakeholders to ensure they understand and support changes to border processes. 45. Implementing the recommended approach will allow the border sector to determine whether there would be additional benefits to be gained from further integration of border services in the future. Consultation 46. The Treasury, the State Services Commission, the Ministry of Transport, Maritime New Zealand, the Ministry for Foreign Affairs and Trade, and the Department of Internal Affairs have been consulted on this paper. The Department of the Prime Minister and Cabinet has been informed. 47. The State Services Commission has indicated that it supports a strong focus on delivering the IT projects that are already in progress, and also other possible projects such as tranche two of JBMS that will be considered soon. The programme of work indicates that substantial progress can be made. Successfully implementing the program (which exceeds $160 million in value), Sub Page 9 of 13

10 and the associated business process changes to realise the service benefits, is a significant task, with all the usual risks attached to large projects. At this stage there are not readily identified benefits to significant organisational change, and such change would certainly increase the risk of non-delivery substantially. In the future there may be a good rationale for organisational change, however the timing of this would need to be considered carefully. 48. Delivery partners for the sector include airports, airlines, freight, port and shipping companies, Tourism NZ and industry groups (e.g., Business NZ). The proposed programme has been discussed with major delivery partners and they have expressed general support for the scope and proposed approach. 49. The proposed programme was also discussed at a high level with other stakeholders that have a particular interest in MPI's role at the border. These stakeholders include Federated Farmers, Food and Grocery Council, Meat Industry Association, Dairy New Zealand, and the Biosecurity Ministerial Advisory Committee. These stakeholders emphasised the importance of managing biosecurity risks at the border and supported a staged approach to any changes at the border to ensure risks are managed. Implications 50. This proposal has no implications in the following areas: Human Rights Implications Not Applicable Gender Implications Not Applicable Disability Implications Not Applicable Financial Implications 51. There are potential financial implications from the programme of new initiatives to improve service delivery at the border, although it is expected to be able to be largely delivered from within baselines. If Cabinet agrees to this approach, further work will be carried out to understand these costs and their scale. This work will be used to inform the JBMS tranche two business case, which is due to be reported to Border Sector Ministers in early Regulatory Impact and Business Compliance Implications 52. Legislation to enable the implementation of JBMS and IGMS has been accompanied by analysis of the impacts on business compliance costs [CAB Min (10) 13/4 (13) refers]. 53. Implementing the new initiatives may require changes to regulatory arrangements and may change the obligations of some businesses, for example, information needed for border processing. Further work is required to determine the nature of these impacts, including consulting those potentially affected. If Cabinet agrees to adopt the programme of new initiatives to improve service delivery at the border then the regulatory and business compliance impacts will be analysed as part of the process of developing any future proposals for changes to legislation. Sub Page 10 of 13

11 Legislative Implications 54. Changes to legislation are being made to support the implementation of JBMS and IGMS. In April 2012, amendments to the Customs and Excise Act 1996 and the Biosecurity Act 1993 were passed to enable information sharing between Customs and MPI. The Biosecurity Law Reform Bill is before the House and includes amendments to help facilitate changes to border risk management. Proposals will be presented to Cabinet shortly for further amendments to the Customs and Excise Act 1996 for the Trade Single Window component of JBMS. 55. Changes to legislation may be needed to support aspects of the programme of new initiatives to improve service delivery at the border. Further work is required to determine the nature of any amendments. If required, proposals will be developed and presented to Cabinet for policy approval. Publicity 56. Border Sector Ministers intend to make a joint announcement about the work programme, following Cabinet s approval. 57. Stakeholders have different expectations of border management. Each agency has a large number of diverse stakeholders with a vested interest in how the border is managed. While many industry stakeholders will welcome the changes to enhance border risk management and productivity, some biosecurity stakeholders in particular may be concerned about whether the proposals might potentially weaken New Zealand s biosecurity system. 58. A communications strategy has been developed to manage and respond to stakeholders interests and ensure they understand the changes and their potential implications. It is recommended that this Cabinet paper be proactively released as part of that strategy. Sub Page 11 of 13

12 Recommendations 59. Border Sector Ministers recommend that the Cabinet Economic Growth and Infrastructure Committee: 1. note that in February 2012, Cabinet agreed for the Ministry for Primary Industries, New Zealand Customs Service and Ministry of Business, Innovation and Employment (Immigration) to progress work on proposals to further improve border services, and directed Border Sector Ministers to report back to Cabinet with more detail, particularly in relation to the approach to implementing a single MPI/Customs primary line for passenger clearance, and cargo clearance service delivery [CAB Min (10) 10/21]; Current investment programme 2. note that the current border sector improvement programme includes considerable resources devoted to implementing the Joint Border Management System and Immigration Global Management System along with a change management process to integrate these new information technology tools; New initiatives 3. agree that border agencies progress a new programme of work over the next five years to deliver greater use of shared processes, common infrastructure and maximising technology investments to further improve the passenger clearance experience, and increase efficiencies in cargo clearance service delivery; 4. note that these new initiatives should improve service delivery through: 4.1 Establishment of one primary line for most Australian and New Zealand passport holders for immigration, customs and biosecurity purposes, and two for other passport holders. This will depend on MPI being able to use advance information to effectively profile low passengers; 4.2 Over time, and depending on the efficacy of profiling for biosecurity risks, more passengers experiencing a single primary line; 4.3 A smaller proportion of passengers being referred for secondary processing such as baggage search; 4.4 Agencies jointly scheduling and planning interactions with cargo and craft, and undertaking joint inspections where appropriate; 4.5 Traders experiencing less duplication of effort, such as not needing to have their cargo examined by multiple agencies at different times; 4.6 Traders being able to do more to get themselves into the low risk category, meaning they would be less likely to be held up at the border. Sub Page 12 of 13

13 5 note improvements to service delivery will be delivered by leveraging off the current border sector work programme and within current agency structures; 6 agree that Border Sector Ministers will oversee the work programme to deliver the initiatives outlined in this paper; 7 note that if any legislation changes are necessary then proposals will be developed and presented to Border Sector Ministers for approval as required; Exploring a single delivery system 8 agree that once new initiatives have been implemented, agencies will report back to Border Sector Ministers on the risks and benefits of further integration of border services; Next steps 9 note that Border Sector Ministers intend to make announcements about the work programme; and 10 agree to publicly release this paper. Hon David Carter Minister for Primary Industries Hon Maurice Williamson Minister of Customs Hon Nathan Guy Minister of Immigration / / 2012 / / 2012 / / 2012 Sub Page 13 of 13