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Thursday, 10 May 2007
Page: 36


Ms KING (11:21 AM) —In November 2002, the Prime Minister commissioned a review by Mr John Uhrig of the corporate governance of statutory authorities and office holders. On 12 August 2004, Mr Uhrig’s report Review of the corporate governance of statutory authorities and office holders was publicly released. The Uhrig report made a number of recommendations to improve the governance of statutory authorities and office holders and their accountability frameworks. The Governance Review Implementation (Science Research Agencies) Bill 2007 is part of the response to recommendations in that report. The bill seeks to implement recommendations in relation to three statutory authorities: the Australian Institute of Marine Science, the Australian Nuclear Science and Technology Organisation and the Commonwealth Scientific and Industrial Research Organisation. Labor is supportive of measures which will improve the governance of statutory authorities. The implementation of the Uhrig report is currently used as the way to increase the efficiency and transparency of the operations of statutory authorities. Labor intends to support this bill as part of its commitment to consistency in the governance of statutory authorities.

The bill implements the recommendations in the Uhrig report for frameworks most suited to a particular agency. In the review’s assessment of AIMS, ANSTO and CSIRO, it was concluded that a board framework would best suit those agencies. For each of the three agencies, changes have essentially been made in respect of: the appointment of the CEO of each agency by the relevant board rather than by the Governor-General; provisions relating to the termination of and other arrangements for a CEO and acting CEO; and the removal of a legislative requirement for ministerial approval of contracts for expenditure above a prescribed value, as consistent with section 15 of the Commonwealth Authorities and Companies Act 1997. The CEO of the Australian Institute of Marine Science will now have a maximum appointment of five years instead of seven years. The approval for entering contracts for AIMS will now be consistent with section 15 of the Commonwealth Authorities and Companies Act by repeal of section 42 of the Australian Institute of Marine Science Act for ministerial approval of contracts for expenditure above a prescribed value, currently $1 million. This requirement will be replaced by a requirement set out in the minister’s statement of expectations, the minister being notified in advance of AIMS entering into significant contracts.

The current structure of the Australian Nuclear Science and Technology Organisation, which consists of the executive director and ‘not fewer than two nor more than six other members’ under section 9 of the Australian Nuclear Science and Technology Organisation Act 1987, is changed to require that the board consists of a CEO and at least five but not more than eight other members. This implements the recommendation that six to nine members, including an executive director, is best practice for governance by a board. The approval for entering contracts for ANSTO will now be consistent with section 15 of the Commonwealth Authorities and Companies Act by repealing section 31 of the ANSTO Act for ministerial approval of contracts for expenditure above a prescribed value, currently $5 million. This requirement will be replaced by a requirement set out in the minister’s statement of expectations that the minister is notified in advance of ANSTO entering into significant contracts. The title of the chief executive of ANSTO will change from executive director to chief executive officer, for consistency with commercial practice. As with the other two science research agencies, changes are also made in respect of the appointment of CEOs and their relationship to the board.

The approval for CSIRO contracts will be consistent with section 15 of the Commonwealth Authorities and Companies Act. Section 50 of the Science and Industry Research Act—for ministerial approval of contracts for expenditure above a prescribed value, currently $5 million—will be repealed. This requirement will be replaced by a requirement set out in the minister’s statement of expectations, with the minister being notified in advance of CSIRO entering into significant contracts. The minimum number of CSIRO board members will be increased to five members other than the CEO. A position of deputy chairperson of CSIRO will also be created in recognition of the increased workload of the chairperson. Labor notes the changes in relation to the CSIRO board and amendments to allow the appointment by the board of its CEO. These changes, however, do not address issues of concern raised last year in the media as to the apparent gagging of CSIRO scientists, in relation to reports on climate change, by the Howard government and management of that organisation. Although structural changes to the management of CSIRO which implement the Uhrig recommendations will make improvements to its management, they certainly do not make the organisation immune to politicisation. Governance changes alone do not in fact ensure independence in the face of a government that fails to respect the independence of its scientists.

This bill will also establish CSIRO as a body corporate with perpetual succession which must have a seal; which may acquire, hold and dispose of real and personal property; and which may sue and be sued. Section 9A of the Science and Industry Research Act will be amended to remove the need for ministerial approval for CSIRO to accept gifts, as consistent with existing arrangements for ANSTO and AIMS. Labor is committed to ongoing improvements in the corporate governance of statutory authorities. The implementation of the Uhrig report recommendations in respect of the application of the Financial Management and Accountability Act and the Commonwealth Authorities and Companies Act frameworks will increase consistency in the corporate governance of statutory authorities and is therefore welcomed by Labor.

(Quorum formed)