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Accountability
The GRDC is accountable to its two key customer groups-Australian grain growers and the Australian Government-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 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 R&D 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 2006-07 are discussed in more detail in Part 2.
Statement of Expectations and Statement of Intent
As a result of the Review of the Corporate Governance of Statutory Authorities and Office Holders (known as the Uhrig Review), Ministers are required to outline their expectations of agencies in a public Statement of Expectations. Each agency must then respond with a Statement of Intent which details how they will achieve the Minister's expectations.
The Parliamentary Secretary, provided the GRDC with an initial Statement of Expectations on 1 March 2007. The GRDC responded with its Statement of Intent on 30 March 2007. The GRDC is acting in accordance with these statements.
The Statement of Expectations and Statement of Intent are likely to be renewed in late 2007 and annually thereafter. The current statements are available on the GRDC website.
Ministerial directions
The PIERD Act and Commonwealth Authorities and Companies Act 1997 (CAC Act) provide that the responsible Minister (the Minister for Agriculture, Fisheries and Forestry) or the Finance Minister may direct the GRDC with respect to the performance of its functions and the exercise of its powers, or require it to provide information.
In July 1998, the responsible Minister, the Minister for Primary industries and Energy issued a direction 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 1 December 2004, the Finance Minister issued the Finance Minister's (CAC Act Procurement) Directions 2004, requiring the GRDC to comply with the Commonwealth Procurement Guidelines.
On 18 December 2006, the Finance Minister required the GRDC to provide an annual report on compliance and financial sustainability, under section 16(1)(c) of the CAC Act. The requirements are detailed in Finance Circular 2006/11 Compliance Reporting-CAC Act bodies.
The GRDC is complying with the directions.
General policies of the government
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.
The GRDC had been notified of the following policies as at 30 June 2007:
- Commonwealth Fraud Control Guidelines 2002
- Finance Circular No 2006/06 Foreign Exchange (FOREX) Risk Management (replacing Finance Circular 2002/01)
- Finance Circular 2005/09 Cost recovery policy (replacing Finance Circular 2002/02)
- National Code of Practice for the Construction Industry and the associated Implementation Guidelines
- Protective Security Manual 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 grain growers through the industry's representative organisation, the Grains Council of Australia (GCA).
Grains industry priorities
In setting directions for 2006-07 (the last year of Driving Innovation), the GRDC identified industry priorities through consultation with the GCA and through grain grower workshops. The key industry priorities were incorporated into the GRDC Annual Operational Plan 2006-07 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.
The GRDC also consulted extensively with the GCA and its affiliate organisations to identify industry priorities when preparing the GRDC's Strategic R&D Plan 2007-12, Prosperity through Innovation.
Stakeholder report
Each year the GRDC prepares a stakeholder report to assist the GCA to formulate advice to the Minister on setting the research levy rates which provide the basis for the corporation's income each year.
In 2006-07, for the first time, the GRDC also prepared a Growers' Report. This 20-page report was a shortened form of the 2005-06 Annual Report, providing a reader-friendly summary of how the GRDC operates, the corporation's financial situation and highlights of research investments. It was circulated to growers and other Ground Cover subscribers in November 2006.
Industry levy rates
In 2006-07, 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 2006-07 are recorded in Note 4C of the Notes to the Financial Statements.
The GRDC paid the Australian Government Department of Agriculture, Fisheries and Forestry $554, 028 for the collection and management of levies in 2006-07.
Consultation arrangements
The GRDC paid the GCA $66, 873 for its participation in consultations with the corporation during 2006-07. 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 8 lists the project funds and conference support that the GRDC provided to the GCA in 2006-07.
| Contribution | |
|---|---|
| Australian Quarantine and Inspection Service Grains Industry Consultative Committee | $10,500 |
| Market Access Biosecurity Grains Industry Consultative Committee | $12,210 |
| Travel for Cairns Group Meeting | $7,865 |
| National Agricultural Commodity Marketing Association Market Standards and Trade Committee | $4,026 |
| Grain Industry Leaders Summit | $28,297 |
| Seed Industry Consultation and Seed Industry Reference Group | $8,800 |
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 to 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:
(a) were an officer of a Commonwealth authority in the Commonwealth authority's circumstances; and
(b) 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).
A director must 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 and does not take 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
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 2006-07 is presented on pages 98 and 99.
Judicial decisions and reviews by outside bodies
In 2006-07 the GRDC was not affected by judicial decisions, nor was its conduct the subject of any reviews by outside bodies.