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Accountability
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The GRDC is accountable to its two key customer groups-the Australian Government and Australian graingrowers-for its performance in addressing their identified priorities. The GRDC also meets its responsibilities under its governing legislation and the broader legal framework for Commonwealth statutory authorities.
Accountability to the Australian Government
Responsible minister
Under the Primary Industries and Energy Research and Development Act 1989 (PIERD Act), the GRDC is made accountable to the Australian Parliament through the Minister for Agriculture, Fisheries and Forestry, the Hon. Peter McGauran MP. The Hon. Sussan Ley MP, Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry, is responsible for research and development corporations, including the GRDC.
Australian Government priorities
The GRDC continues to proactively address the Australian Government's National Research Priorities and ministerial research priorities for rural R&D corporations. These priorities and the GRDC's achievements in meeting them during 2005-06 are discussed in more detail in Part 2.
Ministerial directions
Section 143 of the PIERD Act provides that the minister may direct the GRDC with respect to the performance of its functions and the exercise of its powers.
In July 1998, the then Minister issued a direction in accordance with section 16(1)(b) of the Commonwealth Authorities and Companies Act 1997 (CAC Act) and section 15(2) of the PIERD Act requiring the GRDC to comply with the reporting requirements of the Guidelines on Funding of Consultation Costs by Primary Industry and Energy Portfolio Statutory Authorities.
On 15 December 2004, the GRDC received ministerial directions relating to the Finance Minister's (CAC Act Procurement) Directions 2004. The GRDC is complying with the directions.
General policies of the government
The Hon. Sussan Ley addressing GRDC's Annual Operational Planning Week in March 2006. Photo: Vic Dobos
Under section 28 of the CAC Act, the Minister may notify the GRDC Board of any general Australian Government policies that apply to the GRDC.
As at 25 September 2006, the following notifications had been received:
- Commonwealth Fraud Control Guidelines 2002, 21 August 2002
- Finance Circular No. 2002/01 - Foreign Exchange (FOREX) Risk Management, 28 August 2002
- Finance Circular 2005/05 - Investment of surplus money, 19 May 2005
- Australian Government Property Ownership Framework, 8 November 2005.
The GRDC is complying with the notified policies.
Accountability to the grains industry
Industry representative
Under the PIERD Act, the GRDC is made accountable to Australian graingrowers through the industry's representative organisation, the Grains Council of Australia (GCA).
Grains industry priorities
In setting directions for 2005-06 (the fourth year of Driving Innovation), the GRDC identified industry priorities through consultation with the GCA and through graingrower workshops. The key industry priorities were incorporated into the GRDC Annual Operational Plan 2005-06 and included:
- sustainability and resource management
- new and innovative product development
- development of new alliances and links to market
- bringing biotechnology to bear on sustainability and consumer benefit outcomes, to support profitable farming systems and access to premium markets
- effective and targeted transfer and adoption of technology and knowledge for Australian growers
- integrated pest management to minimise the total cost of pests, diseases and weeds, and to maintain options and control strategies
- genetic improvement and regional adaptation of new grain varieties for improved resistance to biotic and abiotic stress, and quality standards for specific end uses.
Information on how the GRDC is addressing these priorities is provided in Part 2.
Stakeholder report
Each year the GRDC prepares a stakeholder report to assist in determining the research levy rates for Australian grain commodities. The report is launched at Grains Week, the industry-wide conference held annually to discuss the performance of, and the prospects for, the Australian grains industry. The conference is the mechanism through which the GRDC formally reports to industry. It also assists the GCA to formulate its advice to the Minister on setting the research levy rates which provide the basis for the corporation's income each year.
Industry levy rates
In 2005-06, a levy rate of 0.99 percent applied to all leviable crops covered by the GRDC, with the exception of maize, which was levied at 0.693 percent.
The levies were imposed and collected as stipulated by the following legislation:
- Primary Industries (Excise) Levies Act 1999, supported by the Primary Industries (Excise) Levies Regulations 1999, Schedules 4, 12, 20 and 25
- Primary Industries Levies and Charges Collection Act 1991, supported by the Primary Industries Levies and Charges Collection Regulations 1991, Schedules 8, 19, 29 and 34.
Proceeds from levies in 2005-06 are recorded in Note 5C of the Notes to the Financial Statements.
The GRDC paid the Australian Government Department of Agriculture, Fisheries and Forestry $527,734 for the collection and management of levies in 2005-06.
Consultation arrangements
The GRDC paid the GCA $106,950 for its participation in consultations with the corporation during 2005-06. The GCA used these funds to meet its costs of preparing for and attending consultative meetings with the GRDC, to consider grains industry strategic directions and concerns and to assess the corporation's performance against industry expectations.
The payments for consultation were made under the Guidelines on Funding of Consultation Costs by Primary Industries and Energy Portfolio Statutory Authorities, issued by the Minister for Primary Industries and Energy in July 1998. The guidelines also require that when a representative organisation conducts a project or consultancy on behalf of a statutory authority, details are to be included in the authority's annual report.
Table 7 lists the project funds and conference support that the GRDC provided to the GCA in 2005-06.
| Project/event | Contribution |
|---|---|
| Grains Week 2006 | $50,000 |
| Pathways to Industry Environmental Management System Project | $20,500 |
| Ministerial Conference of the World Trade Organization, Hong Kong | $17,950 |
| Seed industry consultation and Seed Industry Reference Group | $17,500 |
| Market Access Biosecurity Grains Industry Consultative Committee | $10,700 |
| Ministerial Conference of the World Trade Organization, Geneva | $10,300 |
| Australian Quarantine and Inspection Service Grains Industry Consultative Committee | $8,640 |
| Australian Quarantine and Inspection Service-Pulse Australia Industry Working Group | $3,200 |
| National Agricultural Commodity Marketing Association Commerce Committee | $1,280 |
Obligations under the Commonwealth Authorities and Companies Act
Accountability
A system of accountability and reporting obligations for the GRDC, reflecting its obligations under the PIERD Act, is set out under the CAC Act. Under the CAC Act, the GRDC is obliged to:
- prepare an annual report (in the prescribed form, including a report of operations), and give it to the responsible minister by 15 October each year (section 9)
- ensure that any subsidiary's financial statements are audited by the Auditor-General (section 12(1))
- prepare and provide to the responsible minister interim reports during a financial year, if required by the Finance Minister by notice in the Gazette (section 13)
- prepare and provide budget estimates (section 14)
- provide the responsible minister (in writing) with particulars of any proposal of the GRDC to undertake any one of a number of significant events (section 15)
- keep the responsible minister informed of the operations of the GRDC and its subsidiaries and provide such reports, documents and information as that minister or the Finance Minister requires (section 16)
- ensure that the general policies of the Australian Government as notified to the corporation are carried out (section 28).
Conduct of officers
The CAC Act imposes specific standards of general conduct for directors and other officers. Sections 22-27P ensure that officers of Commonwealth authorities are subject to standards of conduct comparable to those required of officers of companies under the Corporations Act 2001. Subsection 22(1), which is a civil penalty provision, states:
An officer of a Commonwealth authority must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:
- were an officer of a Commonwealth authority in the Commonwealth authority's circumstances; and
- occupied the office held by, and had the same responsibilities within the Commonwealth authority as, the officer.
The Act also obliges an officer to:
- exercise his or her powers and discharge his or her duties in good faith in the best interests of the corporation (section 23)
- not make improper use of his or her position or information to gain an advantage for anyone or cause detriment to the corporation or anyone else (section 24 and section 25)
- disclose to a meeting of the Board the nature of any material personal interest in a matter to be considered by the Board and, unless otherwise determined by the Board or the Minister, ensure that he or she is not present at deliberations or takes part in any decision on the relevant subject matter (section 27F to section 27K).
Sanctions
A civil penalty regime is contained in the CAC Act (Schedule 2), to deal with any breach by directors of:
- annual reporting rules (section 11)
- their general duty to exercise care and diligence (section 22)
- their general duty to act in good faith (section 23)
- their duty to not make improper use of the position of director to gain an advantage or cause detriment (sections 24 and 25).
Independent audits
Dr Iftikhar Mostafa, GRDC Executive Manager for Corporate Strategy and Program Support and National Panel member, inspecting a sorghum crop near Goondiwindi, Queensland. Photo: Vic Dobos
The Auditor-General, under the CAC Act, is required to audit each Commonwealth authority's financial statements. In addition, the Auditor- General Act 1997 confirms the power of the Auditor-General's staff to carry out performance audits of Commonwealth authorities and, in this role, to obtain documents and information. The Auditor-General's Independent Audit Report on the GRDC for 2005-06 is presented on pages 102 and 103.
Judicial decisions and reviews by outside bodies
In 2005-06, the GRDC was the subject of one complaint to the Commonwealth Ombudsman. After receiving the GRDC's response to the complaint, the Ombudsman decided not to investigate the complaint further.
In 2005-06 the Minister for Agriculture, Fisheries and Forestry assessed the GRDC against the governance templates recommended in the Review of Corporate Governance of Statutory Authorities and Office Holders (undertaken by John Uhrig AO in 2003). The templates provide for governance by either a board or executive management.
On 9 June 2006 the Minister wrote to the GRDC advising that the board template would continue to apply to each of the rural research and development corporations including the GRDC. The GRDC will also remain a statutory corporation with the right to employ staff under its own terms and conditions. However, the PIERD Act will be amended to remove the appointment of an Australian Government director to the GRDC's Board, and to expand the required skills set of the Board to include expertise in government policy processes and administration.
The Minister also advised that the Government will provide the GRDC with a public Statement of Expectations, to be developed by the Department of Agriculture, Fisheries and Forestry. GRDC is to respond with a public Statement of Intent.
The GRDC was not affected by judicial decisions.