Part 7: Revoking the Defence Force Order

Inquiry into New Zealand Defence Force payments to officers seconded to the United Nations.

In this Part, we describe:

Continued non-compliant arrangements for Officer 3

NZDF continued to pay accommodation assistance to Officer 3 until the applicable Defence Force Order was revoked.

As discussed in Part 6, NZDF sent a Military Policeman to New York to investigate the issues raised by the UN and other matters about Officer 4. The Military Policeman, in his report to the Vice Chief of Defence Force in September 2007, identified that Officer 4 had been paid accommodation assistance in accordance with a Defence Force Order. He also stated that three other NZDF officers had also been similarly paid while seconded to the UN.

Officer 3, who had been seconded to the UN before Officer 4, was still on secondment to the UN when the UN became aware that Officer 4 was not declaring his accommodation assistance. Officer 3's secondment continued until 22 July 2008. As discussed earlier, he was also receiving NZDF accommodation assistance, while his wife (also a UN employee) was receiving the UN's rental subsidy.

NZDF continued to pay accommodation assistance to Officer 3 until the Defence Force Order was revoked. As a result of the Military Policeman's report in September 2007, senior NZDF staff must have known that continuing to pay NZDF accommodation assistance to Officer 3 without him or his wife declaring that assistance may have meant that Officer 3 was breaching his UN contract. Despite this, NZDF continued to pay him. We saw no evidence that NZDF considered after September 2007 how it could continue to provide accommodation assistance to Officer 3, for the remainder of his secondment, in a way that complied with the UN's requirements.

Officer 3's employment with NZDF ceased at the same time as his secondment with the UN finished on 22 July 2008. The Defence Force Order was revoked on 16 June 2008. NZDF did not pay him any accommodation assistance after 16 June 2008 because he could only be paid accommodation assistance if there was a Defence Force Order in force that permitted that payment. Because Officer 3 put his claim for NZDF accommodation assistance the month after he paid rent, he did not receive NZDF accommodation assistance for the last two months of his secondment.

Defence Force Order revoked in June 2008

On 16 June 2008, NZDF revoked the Defence Force Order that provided for the payment of accommodation assistance to officers second to the UN.

On 16 June 2008, the Chief of Defence ForceC revoked the Defence Force Order that provided for the payment of NZDF accommodation assistance to UN seconded officers. This was four months after Directorate of Legal Services staff had advised Personnel branch staff in February 2008 that the Defence Force Order needed to be revoked. Directorate of Legal Services staff followed this up with Personnel branch staff on several occasions. Despite this, the Minute from the Personnel branch recommending that the Chief of Defence Force revoke the Defence Force Order was not sent until 4 June 2008.

Assistant Chief PersonnelD advised us that the delay was in part because the Defence Force Order provided for a number of entitlements other than accommodation assistance, and there was concern that cancellation of the order could have removed legitimate entitlements. Changing the Defence Force Order therefore required substantive work at a time when the branch was busy. The branch was primarily occupied with implementing a new remuneration system throughout NZDF.

Since these events, NZDF has not seconded any other officers to the UN.

Repaying the United Nations' rental subsidies

NZDF has repaid to the UN the rental subsidy that was paid to Officer 4.

In July 2008, the Chief of Defence ForceC announced that the UN's rental subsidies paid to all of the seconded officers were to be repaid to the UN and directed the Military AdviserC to arrange this. The UN had requested that Officer 4 repay the amounts it had paid to him in rental subsidies. NZDF repaid that amount to the UN.

The Military AdviserC met with UN officials to arrange repayment of the UN rental subsidies for the three other seconded officers. We were told that the UN officials were reluctant to engage on this matter, because the three officers were no longer UN employees and the UN Secretariat had no method by which it could accept the repayment. The Chief of Defence ForceC visited the UN in September 2008 and was unable to progress the matter.

The New Zealand Defence Force's Court of Inquiry

NZDF's Court of Inquiry was held nine months after NZDF was formally advised that the seconded officers might have made false declarations.

There was some media interest in the court martial of Officer 4, which took place at the end of June 2008, and some commentary about the UN accommodation assistance issue, even though Officer 4 was not charged with any offences for the false declaration to the UN.

The Chief of Defence ForceC convened a Court of Inquiry on 1 July 2008 into the circumstances in which the conditions of service for officers seconded to the UN were developed and implemented. We note that the Military Policeman had sent his report identifying issues about the declarations and accommodation assistance to the Vice Chief of Defence Force in September 2007, and the internal advice within NZDF recognised that there was a general problem with the payment of accommodation assistance in February 2008. However, it was not until July 2008 that NZDF held a Court of Inquiry into the matter to formally investigate what had gone wrong.

Officer 3 was still on secondment and still receiving accommodation assistance from NZDF until July 2008.

NZDF advised us that it does not assemble a Court of Inquiry into any matter into which a disciplinary investigation is being conducted until that investigation is complete. This is because the evidence gathered in a Court of Inquiry cannot be used in any disciplinary or criminal proceeding and as a result the effect of a Court of Inquiry may be to make evidence inadmissible. We note that NZDF had determined in February 2008 that it could not charge Officer 4 with any offences relating to the UN allowances he had received. In our view, NZDF could have started the Court of Inquiry process from the point when the two sets of issues were separated.

The process and requirements for Courts of Inquiry are established by the Armed Forces Discipline Act 1971. They have traditionally been used to enable a quick and practical investigation of what has gone wrong in an operational context, to ensure that any mistakes are not repeated. They are usually swift and confidential. As noted, the evidence gathered cannot be used for any other purpose. The Court of Appeal in NZDF v Berryman [2008] NZCA 392 referred to an earlier decision of the Courts Martial Appeals Court in Neave v R (1995) 9 PRNZ 40, where the role and process of Courts of Inquiry were discussed:

The Court of Inquiry has been part of the regular procedures of the armed forces for many centuries. We agree with Mr Stainton's submission that the present day provisions in the Act and the Rules of Procedure when read together disclose an intent to give a superior commander an expeditious fact finding procedure so that a matter can be promptly investigated and if necessary, prompt, remedial action can be taken. Expedition, frankness, and the minimisation of legal niceties are the underlying themes.

The terms of reference for the Court of Inquiry were issued on 1 July 2008, and the Court was instructed to report by 5pm on 2 July 2008. The deadline for reporting was extended until 9 July 2008 and then extended again to 17 July 2008. After carrying out further procedural steps, the Court of Inquiry finally reported on 28 July 2008. Although it interviewed a number of witnesses, and reviewed a range of documents, it did not carry out a comprehensive search of NZDF's files or give witnesses significant time to prepare before giving their initial evidence. This fitted the nature of the Court of Inquiry process. It gathered enough information to be able to form and report its conclusions on what had happened, within a month.

The Court of Inquiry initially interviewed the Military AdviserA. Under the rules of procedure that courts of inquiry operate under, where the conduct of an officer senior in rank to the members of the court of inquiry is or is likely to be called into question in the course of the inquiry, the court of inquiry is required to adjourn and report that matter to the assembling authority (in this case, Chief of Defence ForceC).

The President of the Court of Inquiry advised the Chief of Defence ForceC that in his opinion the conduct of the Military AdviserA may have been brought into question. The Chief of Defence ForceC directed that the Court continue, but that it set aside any evidence about the Military AdviserA for a separate investigation. He then chose to investigate that issue personally and conducted an interview with the Military AdviserA.

The Court of Inquiry was also unable to interview the Assistant Chief PersonnelA/Chief of Defence ForceB as he was no longer serving with NZDF. The Chief of Defence ForceC sought comment and received a statutory declaration from him.

The Chief of Defence ForceC wrote a report to the Minister of Defence. The report considered the findings of the Court of Inquiry and the comments that the Chief of Defence ForceC had received from the Assistant Chief PersonnelA/Chief of Defence ForceB and the Military AdviserA.

The Minister of Defence asked the Auditor-General to review the findings of the Court of Inquiry and in particular to inquire into two matters that the Court of Inquiry had not resolved to his satisfaction. He asked the Auditor-General to independently examine and report on these matters.

There was strong interest from the Minister of Defence, and the public generally, in the findings of the Court of Inquiry, because of the significance of the matters it was investigating and the publicity the issues had already received.

With hindsight, the Court of Inquiry was not a good fit in this situation. It is designed to provide an "expeditious fact-finding procedure", with a minimum of "legal niceties" to enable NZDF to fix any problems quickly. Its processes are not designed to provide public accountability on complex issues. For example, that the Court of Inquiry could not pursue issues about the more senior officers was an unfortunate limiting factor.

As noted, the Minister of Defence then referred the Court's findings to the Auditor-General because the Minister considered that further examination was needed "to ensure full transparency and an independent assessment of the shortcomings exposed by the Court of Inquiry".

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