Making the Labour department work
Colin James on the Labour department for the Business Herald 29 June 2004
At first sight James Buwalda looks and sounds a harmless chap: soft-spoken, slight of build, an easy target, you would think, for Murray McCully hunting a bureaucratic scalp.
Then you notice a set to Buwalda's jaw that bespeaks determination and an inner toughness. That has been felt full force in the Labour Department, which he took over as chief executive a year ago and is radically restructuring.
A whole top echelon has been replaced. The aim is a deep change of culture in a department, in parts of which one senior official says there was a "conspiracy to behave badly" -- a reference to the "lie in unison" affair just before Christmas 2002 when the Immigration Service, part of Buwalda's inherited fiefdom, misled the media over Ahmed Zaoui.
Though new to the job at the time of that incident, the service's chief, Andrew Lockhart, has paid the price at the end of Buwalda's new broom. The man responsible for the infamous email, Ian Smith, went some months ago.
That was not before McCully had demanded Buwalda's head for allegedly whitewashing the wrongdoings and demanded an independent inquiry.
Buwalda the discreet public servant bit his tongue. Actually, he was doing pretty much what McCully -- a man whose own ministerial career was badly damaged in 1999 by his mishandling of the Tourism Board -- had been demanding.
Buwalda was constrained in two ways: by the niceties of the personal grievance procedures McCully's party introduced with the Employment Contracts Act in 1991, procedures which have complicated sackings ever since; and by the need to work out a strategic, not a kneejerk, response to the department's wayward culture and fragmented structure.
Buwalda (the name is Dutch) seemed at first glance an unlikely choice for a hatchet job. For nearly eight years before he went to Labour he was parked in a bureaucratic side street, the Ministry for Research, Science and Technology (MoRST).
As one former top official describes MoRST when Buwalda took over, it concerned itself with how much money research, science and technology should get and where it should go. Buwalda went behind that, asked what New Zealanders wanted of science and concluded it was to contribute to economic advancement.
So he dreamt up the Foresight exercise championed by Maurice Williamson in late 1990s. That attempted to project alternative high-level strategic economic options. It had a mixed reception -- some called Foresight Buwaldadash -- and it sank from view but he did succeed in time in parlaying the small ministry into a key role in the growth and innovation framework, which is at the heart of the government's high-level economic thinking.
His job is now to translate that sort of thinking to the Labour Department: a sprawling mishmash of near-autonomous units reporting to different ministers and with disparate objectives, ranging from social (occupational safety and health, workplace relations law, community employment groups) to border protection (immigration).
The department had an edgy relationship with former Minister of Labour Margaret Wilson -- in part because Wilson is an exceptionally demanding minister but also, one close observer of ministers and departments says, because it was slow to adjust from the 1990s market-liberal policy paradigm to the more interventionist, worker-friendly, "sustainable economy" approach Labour demanded.
There were other problems.
The Occupational Safety and Health Service (OSH), reporting to Wilson, built up a record for vexatious treatment of employers instead of working with them to promote safety.
The Immigration Service, reporting to then Immigration Minister Lianne Dalziel, took time to get the message the government began to send it in 2001 that it was to focus less on keeping people out than actively finding the people who will fill the skills gaps left by those who emigrate.
The Community Employment Group (CEG), reporting to Social Development and Employment Minister Steve Maharey, and under instructions to hunt out and fund social entrepreneurs, made some embarrassing mistakes.
Enter Buwalda. He has restated the department's objective, replaced most of its top personnel and radically restructured it. And, while it obviously still has a large social policy and service function, Buwalda is gearing it more clearly to the economic strategy, principally in skills and productivity.
The "unifying purpose" he has defined sounds suitably woolly for a social democratic government: "People with high quality working lives in thriving and inclusive communities".
The economic edge comes through three of the four "intermediate outcomes": "high-quality, more productive workplaces", "a highly skilled workforce", "high-quality work opportunities". The fourth is to "influence and lead international thinking and practice about labour market, security and refugee issues".
Buwalda concluded he could not do that through the structure he inherited. The five units, each with their own organisations, did not "support or enable a common purpose".
So there has been no place among the eight deputy secretaries he has appointed for Lockhart, CEG general manager Charlie Moore, OSH general manager Bob Hill and labour market policy group general manager Geoff Bascand (the formerly 70-strong group, now slimmed down, is being divvied up among the new divisions).
Chainsaw Buwalda he would be called if he did that in the private sector. The one survivor among the five former service general managers is Andrew Annakin, head of the old employment relations service who will be deputy secretary at the top of a new workplace. This division will incorporate OSH, cover employment relations, including the new preoccupations of work-life balance and pay equity, and advise on ACC matters.
Immigration is absorbed into a new workforce division which also includes employment (working with the Ministry of Social Development) and skills (working with the Tertiary Education Commission). It is headed by Mary Anne Thompson, who has been deputy chief executive of the Department of Prime Minister and Cabinet.
The other operations division is called work opportunities, covering community employment and working with iwi, trusts and Jim Anderton's regional development agencies. It is headed by Andrew Crisp, formerly acting Treasury deputy secretary for regulatory and tax policy and there is talk of it coming under Ruth Dyson instead of Maharey. Buwalda wants it far more focused on the labour market. It has linkages to the Ministry of Social Development and the Internal Affairs Department.
A strategy division, headed by Marie France from Buwalda's own office, will develop a long-term overall labour market perspective and anticipate emerging trends and developments to reprioritise the department's work.
The three other divisions cover corporate services, headed by Brian Sage, who was a private sector consultant on Crown entity legislative changes, legal and a transitional Maori perspectives post.
The seven new divisions come into existence on Thursday [1 July].
Will the shakeup work? Will the present Labour Minister, Paul Swain, get a department the government feels more comfortable with, aligned more closely with its objectives and better coordinated internally?
Restructurings disrupt. They destroy institutional memory. They can damage morale. They divert energy from productive activity. Ask the repeatedly restructured Ministry of Health.
Buwalda has attempted to counteract those negatives by talking the department through them, telling staff of decisions soon after he makes them, inviting comment on them and responding. He is also staging the changes below the top to smooth the transition.
The rub will come in two or three years when it can be measured against Buwalda's stated outcomes. Is immigration delivering quality skilled people in the right quantities? Is OSH respectful of business needs instead of a costly nuisance generating angry anecdotes? Is policy geared to "sustainable development", whatever that is?
Buwalda has the advantage that the Wilson agenda is nearly complete. Swain is piloting through the last major measure, the Workplace Law Reform Amendment Bill, and will try to quarantine the clauses which, strung together, can amount to compulsory multi-employer "awards".
That out of the way, Buwalda -- and Swain -- will be able to focus on economic development. At least, that's the line.