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Chief Executive's Report

The Commission met 14 times in 2006/2007.  The Commission meets monthly and will convene special meetings on particular cases as required.  Two special meetings were held in respect of marine and rail investigations.

In addition, the Commission ventured out of Wellington, visiting tourist operations in Milford Sounds and operations on the inter-island ferries, and operations on the Auckland rail network.  These visits are part of a commitment on the part of the Commission to gain a greater appreciation of modal operations in specific regional environments such as the West Coast or the Cook Strait.

From a service delivery perspective the 2006/2007 year got off to a slow start in terms of notifications received and investigations launched.  This was a continuation of last year’s slow decrease in notifications in the 4th quarter.  The trend continued well into the second quarter of 2006/2007 with notifications down 24 percent (91) on last year at the end of the second quarter.

However going into the second half of the financial year notifications surged, increasing 94 percent (144) on the first half year’s result and 74 percent (123) on last year’s result.  At year end the Commission had received 847 notifications – an all time high.  The increase in notifications is driven by the aviation and marine modes with the increases peaking in the third quarter, as they did last year.  This is suggestive of seasonal impacts from mid to late summer activities.  Rail notifications dropped 26 percent from last year.

Investigations launched were 50 percent down on last year in the first quarter but then sustained a higher launch rate over the remaining quarters, settling at a 21 percent (7) increase on investigations launched compared with the figures for last year.  The overall launch rate for investigations is 5 percent – the same as last year.

The Commission published fewer reports this year thanin the previous 2 years – 15 reports published compared with 53 last year.  The slowed notification rate and subsequent lower investigations launched rate between April 2006 and December 2006 reduced the volume of active cases in the inquiry system, particularly in the aviation and marine modes, with fewer final reports published.  However, as discussed above, with the surge in notifications and the increase in investigations launched, the Commission’s active caseload increased markedly – moving from 26 in June 2006 to 52 in June 2007.  Rail cases increased 56 percent.

Rail cases consistently account for 50 percent of the Commission’s caseload.  While rail notification rates are lower than aviation and marine rates, the investigation launch rate is higher – averaging 17 percent over the last three years compared with aviation and marine with 4 and 5 percent respectively.  The higher launch rate for rail does not indicate an overly unsafe system.  Rather, the rate reflects the characteristics of the type of notifications received, given the operating environment of rail which, of course, involves constant movement of heavy machines.  The rate is suggestive of properly exercised discretion in reporting incidents in so far as the Commission is being notified of incidents that might warrant further investigation.

Events of note for the year included the start of the Commission’s training partnership with Cranfield University School of Engineering in the United Kingdom, and participation in the International Maritime Organisation’s Flag State Implementation at the invitation of the Director of Maritime Safety.

The Commission is developing a core competency training programme for its investigation staff.  Part of that programme is completion of a multi-modal accident investigation course with Cranfield University.  Our investigators have the opportunity to work and study alongside their international colleagues.  At the
completion of the course investigators then spend 1-3 weeks with our United Kingdom peers, gaining further practical experience, and sharing expertise.

By participating in the Flag State Implementation, the Commission had a rare opportunity to lend its
investigative knowledge at a State level in the development of
International Standards and Recommended Practices for a Safety Investigation into a Marine Casualty or Marine Incident.

Financial Performance

The Commission ended the financial year with a deficit of $74k against a planned surplus of $25k.  The deficit was driven by on going costs associated with the inquiry into the FV Kotuku capsizing in Foveaux Strait, and retirements of 2 key senior staff.  These events occurred early in the financial year.  The Commission quickly recognised it could not make budget and signalled the impending fiscal risk with a forecast of $(87k).  The deficit is funded out of the Commission’s cash reserves, reflecting the reduction in taxpayers’ equity on the balance sheet.

The impact of the cost of the FV Kotuku inquiry highlighted the Commission’s exposure to high cost inquiries in which baselines are set to manage small to medium level events on average.  The Kotuku event
has been described as a 1 in 23 year event.

Across the modes, the Commission averages one severe event every 3 to 5 years.  The cost of these events for the Commission is variable, ranging from $50k to $250k.  The Commission does not have recourse to supportive funding outside of the normal appropriation process to support high cost events.  However, the Commission is exploring funding arrangements to support future high cost inquiries when warranted.

The on going deficit position the Commission is in is a concern and has been highlighted through the Commission signalling the fiscal risk.  Consequently, a capability review of the Commission is planned for early 2007/08.  Meanwhile the Commission has an additional $110k increase to its baseline for 2007/08 to cover contractual obligations.

Lois Hutchinson

Chief Executive