Part 2: Organisational context

Inquiry into immigration matters (Volume 1): Visa and permit decision-making and other issues.

The organisational arrangements in place within the Department, external events, changes in the Government’s immigration policy, and changing immigration practices have all influenced how Immigration New Zealand has operated in recent years. These factors, along with the leadership and management culture within the Department, are important contextual matters affecting the environment within which visa and permit decisions are made.

In this Part, we:

Organisational changes within the Department

We have been told that before 2003 the Department was structured and run as a federation of semi-autonomous business groups, each focused on best achieving their specific objectives. There was less attention paid to achieving connections between business groups and efficiencies throughout the Department. For example, apart from the Legal group there were no central corporate functions (such as Human Resources or Finance), and little interaction between the different business groups.

A view frequently expressed to us during our inquiry was that this organisational structure helped create “silos” within the Department. The inference of this silo terminology is that business groups acted too independently, leading to competition between business groups and resulting in the Department being less effective than it should have been.

A new Secretary of Labour (the chief executive), Dr James Buwalda, was appointed to lead the Department in mid-2003. Dr Buwalda reviewed the Department’s strategy and organisational design. He decided to appoint several Deputy Secretaries, who would form a new senior leadership team (known in the Department as the Strategic Leadership Team). The new Deputy Secretaries took up their appointments in mid-2004. Dr Buwalda also started to centralise the core corporate functions that had previously been replicated within individual business groups. He told us that he was surprised by how entrenched and widespread the silo culture was, the limited corporate capability, and the performance issues that were revealed as he started to implement those changes. Changing the organisation was more difficult than he had expected.

In the case of Immigration New Zealand, Mary Anne Thompson was appointed Deputy Secretary (Workforce) and started in the role in July 2004. Ms Thompson had a strong policy background in the public sector. This included senior policy roles in the Treasury, and six years as the Director of the Policy Advisory Group in the Department of the Prime Minister and Cabinet. Ms Thompson and Dr Buwalda came from policy rather than service delivery backgrounds.1

In mid-2004, Immigration New Zealand was faced with several significant problems. They included:

  • difficulty achieving immigration targets and quotas set by the Government;
  • insufficient priority and focus on Pacific immigration matters; and
  • allegations raised in Parliament about inadequate border security.

Ms Thompson reviewed Immigration New Zealand’s organisational structure to help address some of these problems. The subsequent reorganisation included appointing a new senior management team, who then appointed junior managers. Many of the new managers were recruited from outside the Department and had limited or no experience with immigration or managing service delivery organisations.

Themes emerging during our inquiry work

A number of themes emerged during our interviews with people both within and outside the Department. These themes primarily relate to the environment, organisation, leadership, and culture of the Department between 2004 and 2007.

A silo culture within the Department

We were surprised at how often concerns were raised about a counterproductive “silo” culture within the Department, and within Immigration New Zealand. The restructuring of the Department after 2003/04 appears to have been only partly successful in creating a suitable culture.

A failure to successfully complete a strategic baseline review was given as one example of a lack of cohesion and co-operation between different parts of the Department. The Department started the strategic baseline review in early 2005, in partnership with the Treasury and the SSC. Its aim was to confirm the Department’s main business areas, find ways to improve how the Department operated, and identify future growth areas. The review had to be abandoned because different parts of the Department were unable to provide the necessary financial and performance information about their operations.

Operation of the senior leadership team

Several people told us that the senior leadership team was seen as operating ineffectively and not addressing the problems facing the Department. Dr Buwalda told us that the process of changing the organisation put a great deal of pressure on the senior leadership team. Concerns expressed about the operation of the senior leadership team included:

  • informal meeting procedures that allowed decisions to be revisited or bypassed;
  • poor information sharing, both between senior leadership team members and also from members of the team to the wider Department about decisions made in meetings; and
  • insufficient attention given to addressing operational matters, especially relating to Immigration New Zealand, even though it accounts for around two-thirds of the Department’s funding appropriations and employs more than 60% of its staff.

It is difficult to assess how significant these concerns were and how much they affected the overall performance of the Department. But they are unlikely to have helped break down the silo culture in the Department, and may have strengthened it.

Service delivery and immigration experience

The lack of experience in service delivery or immigration among many senior and middle managers is widely believed to have contributed to problems within Immigration New Zealand’s operations. Specific examples given were:

  • The processing of visas and permits was split between three different business units within Immigration New Zealand.2 Separating similar activities may not, in itself, be problematic. However, we were told that the requirements for processing visas and permits were not well understood. This lack of understanding contributed to a failure to share information, quality assurance protocols, and resources among business units, even though those business units were essentially doing the same job. These views were supported by our findings when we reviewed the Pacific Division (see Part 6).
  • SSC officials had concerns about the governance of a major project to introduce a new business model to improve the delivery of immigration services. There was no detailed implementation plan, the project had not been adequately scoped, and no project risks had been identified. It was one part of three in an Immigration Change Programme begun in early 2006 to fundamentally reorganise the immigration system.3

General leadership and management practices in Immigration New Zealand

Many examples of poor leadership and management practices by a few senior managers in Immigration New Zealand were brought to our attention in interviews or during our review of documentation. The examples include matters of performance, competence, or operational practice that fall short of the standards expected of senior managers in the public sector.

It is disappointing how often staff told us they felt the leadership failed to adequately and effectively deal with poor practices by senior managers, even though some staff and senior managers within the Department knew about these practices.

Two specific matters we investigated are discussed in detail later in this volume. In Part 6, we discuss the contracting arrangements for a senior manager in the Pacific Division. In Part 7, we discuss incidents relating to the visa and permit applications from relatives of Ms Thompson.

What the State Services Commission and Ministers knew about problems in the Department of Labour

The SSC has a role in reviewing the performance of departments and their chief executives.4 The SSC was aware of the main leadership and management problems facing the Department. The Department was considered by the SSC to be one of its high-profile agencies, given the size of the Department and its crucial role.

The SSC considered that the progress and planning of the new business model project and the new immigration legislation were the most critical matters facing the Department.

The focus of the SSC during 2006 and 2007 was the Department’s management of the new business model project and other change management matters. The SSC was also concerned about whether the senior management team had the right mix of skills and experience to meet the demands of the project and change management as well as the operational requirements of Immigration New Zealand.

The main mechanism the SSC uses to manage concerns about a department is its performance review of the chief executive. It is through this relationship that a wide range of information is gathered, and support and influence can be exerted. The SSC aims to influence performance and integrity through the ongoing relationships between SSC staff and the department’s senior management.

The SSC staff responsible for the Department were mindful that Dr Buwalda did not come from a service delivery background (managing much smaller policy-focused public entities). The SSC sought to ensure that the Department, through the chief executive, was aware of and appropriately managing the problems faced by the Department.

We discussed our inquiry with Members of Parliament who were Minister or Associate Minister of Immigration between 2002 and 2008. Ministers had an appreciation of some of the more general operational concerns we discuss here. Some noticed apparently sloppy processes and mistakes, and weak managerial lines with instances of messages not always getting through. Some had held concerns about a number of allegations being raised about the Pacific Division.

The influence of organisational context

The organisational context matters permeated many of our more detailed findings about systems and processes used to make visa and permit decisions, and include:

  • substantial variation and inconsistency between Immigration New Zealand branches in organising and operating the processes used to make visa and permit decisions (branches used different approaches for similar operational issues without any formal evaluation of their effectiveness);
  • poor sharing of information and good practice between Immigration New Zealand business groups and branches;
  • the relative isolation of some parts of Immigration New Zealand, including poor access to resources that are available to other parts to help them with making visa and permit decisions;
  • incidences of a lack of transparency in dealing with problems, and ineffective handling of integrity or performance concerns; and
  • a workplace culture within Immigration New Zealand that failed to support staff in raising concerns.

Events after 2007

Dr Buwalda resigned as chief executive in May 2007. Graham Fortune was acting chief executive until Christopher Blake was appointed as the chief executive in October 2007.

We understand that, under Mr Blake, the Department is acting to improve the organisational culture and leadership and management practices within the Department and in Immigration New Zealand.

The Department intends that its actions will help to address many of the issues covered in this volume. The actions include:

  • improving the resources and information available to support Deputy Secretaries;
  • implementing performance agreements for Deputy Secretaries;
  • establishing an Executive branch to support the chief executive and improve risk and assurance capability within the Department;
  • changing the composition of the Department’s audit committee to increase the number of external committee members;
  • an increased focus on operational issues by the Department’s strategic leadership team;
  • completing stage two of a major business case for new Immigration New Zealand systems; and
  • plans to review business processes within Immigration New Zealand.

A review of the Pacific Division has also been carried out, and staff have been given urgently needed decision-making training. We discuss the Pacific Division in more detail in Part 6.

1: Dr Buwalda was previously the Chief Executive of the Ministry of Research, Science and Technology. The Ministry of Research, Science and Technology develops research and innovation policies.

2: This separation occurred after the establishment in 2005 of two specialist operations – the Pacific Division and the Immigration Profiling Group – removed certain categories of visa and permit processing from the core Service Delivery group. The Pacific Division was set up in the Service International group, while the Immigration Profiling Group was set up in the Border Security group.

3: The other parts of the programme are comprehensive reviews of immigration legislation (the Immigration Act 1987) and immigration policy.

4: We discuss the SSC’s role further in Part 7.

page top