• Chairman’s Report
• The NIWA Executive
• Chief Executive’s Report
• The NIWA Board of Directors
• Financial Highlights
• NIWA’s Social and Environmental Contribution

Chairman’s Report

This is my final report as Chairman. I have served on the board of NIWA since 1994 and have seen the company more than double its revenues, from $36.2 million to this year's level of $77.1 million. In that time, pre-tax profit has increased from $2.2 million to $7.3 million. Scientific and technical staff numbers have grown tremendously, and the result today is an immensely valuable, world-class knowledge organisation working for the benefit of New Zealand. NIWA's success is a testimony to the core management team of Paul Hargreaves, Rod East, and Rick Pridmore, who have been at the helm since 1994, and the immensely able people recruited from within NIWA, who have provided the management resource to achieve this success. NIWA is now a world-class environmental research organisation, with an outstanding level of interdisciplinary expertise, a judgement confirmed by our international partners.

The sustainability of NIWA as an environmental Crown Research Institute depends on the growth of core science revenue, continuation of the policy of increasing staff salaries, which is essential to retain high quality, innovative staff, and consistent achievement of an adequate return on equity to maintain the Institute's financial viability. The limited new investment by the Crown in environmental science is increasing the Institute's reliance on further growth in consultancy revenue to maintain financial viability. Without matching growth in research funds, there is a risk of NIWA evolving towards a consultancy-dominated company which has reduced ability to provide high-grade science for the benefit of New Zealand. To counter this, NIWA is pursuing opportunities to undertake high quality, interdisciplinary environmental research and consultancy with partners in the United States and Australia. At the same time we are working with the Crown to ensure that the recent change requiring dividend payment by CRIs does not jeopardise the need to reinvest in the public good environmental science undertaken by institutes such as NIWA for the benefit of New Zealand.

Aside from the core science funding issue, NIWA believes focus must be given to the development of a sustainable purchase framework for Crown-funded science administered by the Foundation for Research, Science & Technology. The "transition" period from the peer-reviewed, contestable allocation of the former Public Good Science Fund to the Foundation's new portfolio-based investment process has now extended over 3 years. This has created an environment of uncertainty with respect to our strategic investments in science infrastructure and delivery for end-users, and human capital development. NIWA continues its track record of successfully responding to changes in the Foundation's allocation processes, its very successful financial performance, and its first-rate science that benefits a wide range of sectors. Despite this, the current changes in the framework of the Crown’s innovation investment are making it increasingly difficult to plan for the long-term retention and development of our core scientific capabilities. We strongly believe that New Zealand's public good science remains at risk until a more effective and efficient investment system is devised and implemented.

I would like to thank my fellow directors for their input into the development of NIWA. In particular, I would like to acknowledge Professor John Montgomery, who retires with me after 7 years' commitment to the organisation. NIWA is in strong heart, and I wish my successor as Chair, Sue Suckling, the board, our management team, and staff every success in the future.

Don Sollitt

Chairman

The NIWA Executive

Rob Murdoch, Dene Biddlecombe, John McKoy, Clive Howard-Williams, Bryce Cooper (standing); Rod East, Paul Hargreaves, Rick Pridmore (seated)

Chief Executive’s Report

Financial performance

NIWA has achieved a group operating surplus before tax of $7.328 million in the year to 30 June 2001, against $8.001 million in the previous year. Net surplus after tax was $4.717 million ($5.326 million in 2000). Gross revenue from research, consulting, vessel operations, and all other business activities was $77.113 million ($71.556 million). A further $970,000 has been transferred to the research vessel replacement reserve in accordance with the Board's policy, building this reserve to $5.820 million. Shareholders' funds at 30 June 2001 were $56.435 million ($51.675 million), while total assets stood at $75.807 million ($64.413 million). NIWA's after-tax return on average shareholders’ equity was 8.7%. In accordance with NIWA's ongoing staff profit share scheme, a total of $730,000 has been allocated before arriving at the surplus before tax.

This is the second year in which investment by the Foundation for Research, Science & Technology in NIWA's Public Good Science & Technology research has remained static. Representing 48.4% of our total operating revenue (51.7% in 2000), the wide range of environmental science work carried out for the benefit of New Zealand is now declining in real terms, and our success this year has been achieved only by strong increases in commercial consultancy by our scientists and our achievements in securing commitments for our research vessels outside our core public good science and fisheries work. Static investment in our core science poses a real threat to NIWA and will inevitably lead to a rundown in our science capability over the short to medium term. To have achieved the level of return that we have in the 2000–01 year is outstanding when our major revenue component has not grown significantly.

Public Good Science and Technology

Public Good Science and Technology funding (PGST) continues to underpin NIWA's success as an environmental research institute and keep our staff at the forefront of scientific developments. Our PGST research helps us attract and retain many of our key scientists, and creates many of the products and skills we provide through scientific services. Through this research we are able to deliver the fundamental science required to support the operational needs of New Zealand’s environmental sector.

NIWA's researchers have continued to excel, and many have gained international recognition for their science over the past year. Some of the science highlights include:

• patenting three new marine natural products with either pharmaceutical or industrial application, and developing their commercialisation with industry
• identifying the location and timing of the arrival of suitable sources of glass eels to support the development of aquaculture of New Zealand eels
• linking weather, catchment, and river flow models to create an operational system on NIWA's supercomputer capable of forecasting flows up to 24 hours ahead; the system has been used for pilot river-flow prediction studies in cooperation with Otago Regional Council
• implementing a high-resolution mesoscale model specific to the New Zealand region to improve forecasting of hazardous weather events and input to a range of weather related environmental prediction systems (e.g., floods)
• supporting New Zealand's involvement on the Intergovernmental Panel on Climate Change (IPCC), as a Bureau member and as contributing authors and review editors of the latest IPCC reports
• providing presentations, reports, and briefings to cabinet ministers and senior policy advisors on climate change issues in support of the 2001 Kyoto Protocol negotiations in Bonn
• building science capacity for a number of taiapure management committees through partnerships with Maori; whereby iwi are now undertaking their own marine resource surveys and recording kaimoana populations in their rohe
• establishing the importance of estuaries as nursery grounds for a wide range of fish, many of them commercial species, in collaboration with iwi and regional authorities, to assist the implementation of appropriate management regimes for estuarine environments
• demonstrating that seafloor biodiversity can be important for the sustainability of valuable commercial and recreational fish species, and developing tools for assessing and monitoring seafloor changes for resource management agencies and the fishing industry
• discovering new freshwater species of plants and animals, adding substantially to our knowledge of the distribution of freshwater biota on the New Zealand mainland
• working in collaboration with the fertiliser industry to develop methods that will help farmers identify paddocks susceptible to fertiliser loss, and determine how to reduce such loss to improve stream water quality, as part of an inter-agency experiment on sustainable agriculture and restoration of agricultural streams
• developing new Bayesian statistical rules for compliance assessments that have been published prominently in the international literature and used in the Ministry of Health's Drinking-Water Standards 2000
• showing that fine suspended sediment in urban streams is highly polluted and the primary cause of much of the contamination of animals in urban streams and estuaries
• establishing from marine sediment cores that at times in the past when global temperatures changed to levels 2–3 °C warmer than at present our ocean ecosystems changed dramatically, and break-up of the Antarctic ice sheet resulted in icebergs reaching New Zealand shores
• using satellite transmitters to track Southern Buller's albatrosses to demonstrate substantial differences in feeding locations between pre-breeding and breeding birds: pre-breeding birds interact with Australian fisheries, and breeding birds are in contact with New Zealand fisheries.

Non-Specific Output Funding

NIWA was allocated $3.810 million (exclusive of GST) of Non-Specific Output Funding (NSOF) in the 2000–01 financial year.

NSOF provides Crown Research Institutes with funding equivalent to 10% of the value of public good science contracts awarded by the Foundation in the previous year, and it plays a major role in fostering NIWA's strategic science, innovation, and staff morale. Without it, we would have little control over how we wanted to develop as an Institute, and would struggle to bring new staff on board and ensure that existing staff stayed at the forefront of their fields of expertise. NSOF also allows us to import new ideas and skills from other research organisations (both here and abroad) through extended visits and secondments.

Without NSOF, many of our most significant scientific advancements would not have occurred or would have been greatly delayed. Services such as the National Climate Centre would not exist. Major technology transfer programmes, such as Sea & Learn and the Institute of Aquatic and Atmospheric Sciences, would cease. Many end-user manuals/handbooks would not have been written without support from NSOF because substantial staff time would have to have been taken from major research initiatives.

Wise use of NSOF has allowed NIWA to become a respected research organisation with a worldwide reputation for quality and multidisciplinary innovation.

The principal ways in which NSOF is used in NIWA are:

• developing new public good research programmes in response to a wide range of end-user demands (e.g., selective harvesting of seafood, mitigation and adaptation strategies for climate change, health management in aquaculture, effects of air pollution on human health, seahorse aquaculture, and medical advances through marine biotechnology)
• supporting new or developing public good research programmes which have received insufficient funds to achieve desired outcomes (e.g., effects of sediment runoff on estuaries, freshwater biodiversity, paua broodstock development, and impacts of contaminants on aquatic ecosystems)
• funding "high risk" strategic research (e.g., improved weather prediction through mesoscale data assimilation)
• developing new technologies (e.g., advanced pond systems for waste treatment, framework for the regional management of water resources)
• responding rapidly to environmental issues important to New Zealand (e.g., tsunami hazards, UV radiation effects on aquatic ecosystems, temporal and spatial variability in climate, the impact and spread of toxic algae, forecasting floods and droughts, quantification of greenhouse gas emissions, and rehabilitation of urban streams).

Within each of these categories, NSOF supports not only the efforts of our own staff, but also those of visiting scientists, postdoctoral fellows, and postgraduate students.

During the 2000–01 financial year, 14 international experts were given research grants to fill important skill and knowledge needs in New Zealand, covering such areas as:

• mapping ocean currents from satellites
• improving knowledge of our aquatic biodiversity
• developing techniques to detect infections in shellfish
• using artificial intelligence techniques in river biomonitoring
• improving the prediction of tides around New Zealand
• determining the sensitivity of native fish to UV-B radiation
• developing models to better predict how changes in land use affect water quality.

Our 2000–01 postdoctoral fellowship programme assisted 22 young scientists in developing careers in New Zealand. Like our visiting scientists, they bring skills and recently developed insights which are essential to solve many of the complex environmental issues we are asked to address. Most of our past postdoctoral fellows have become permanent staff. Our new recruits are contributing to such important research areas as freshwater and marine biodiversity, weather and climate forecasting, urban air quality modelling, improved satellite technology, enhancing wildstock fishery production, aquaculture, and marine ecotoxicology.

NSOF was also used to support 10 PhD and 2 MSc research projects, to run 23 one-day Sea and Learn classes for New Zealand secondary school students on our research vessel Kaharoa, and to educate thousands of young New Zealanders at our marine biodiscovery room at Kelly Tarlton’s Underwater World in Auckland.

For our permanent staff, NSOF has become their lifeline to strategic science. Most of our public good research programmes have received little or no increase in funds over the last 6 years. In addition, they have been steered towards low-to-moderate risk, highly achievable research targets, with few chances to be truly innovative. Without a large part (about 55%) of our NSOF being used for "high risk" strategic research and associated technique development, the basis for future significant breakthroughs in environmental science would be greatly weakened.

National Climate Centre

In early 1999, NIWA launched the National Climate Centre to increase public dissemination of climate information. Monthly climate summaries and 3-monthly outlooks for New Zealand air temperatures, rainfalls, soil moisture levels, and river flows are released each month through our newsletter Climate Update, the National Climate Centre web pages, and newspaper, television, and radio reports. In addition, experts from the National Climate Centre travel throughout the country giving talks to groups of farmers, local government officials, horticulturalists, and others, so that they may be better informed about how variations in climate could affect activities in their region.

This year was particularly busy for the National Climate Centre, which has well and truly established itself as an important advisory service in New Zealand. More than 60 public talks were presented in 2000–01, as well as numerous briefings to government officials. Routine television segments were prepared for No. 8 Wired on TV3, and detailed reports and maps were produced for a variety of local government authorities and climate-sensitive industries.

This year our climate services also spread into the South Pacific with the monthly publication Island Climate Update. The inaugural issue was launched at a South Pacific Regional Environment Programme Officials and Ministerial meeting attended by 26 Pacific member states. In addition, we prepared a detailed briefing on the implications of climate change for the Cook Islands and held a 2-week training course on climate prediction and information services, sponsored by the World Meteorological Organization, for 28 delegates from Southeast Asia and the Pacific Islands.

In 2001–02, we hope to expand services further with the formation of our National Centre for Water Quantity and Quality, which will offer flood forecasts and provide advice on the impacts of land use and climate change on our nation's freshwater resources.

Institute of Aquatic and Atmospheric Sciences

The Institute of Aquatic and Atmospheric Sciences was established in 1999 as a joint initiative between NIWA and the University of Auckland. The Institute has its own Board of Studies and is linked to the University's Schools of Biological Sciences, Engineering, and Environmental and Marine Sciences, and to the Departments of Geography, Geology, Mathematics, and Physics. The Institute concentrates on producing high quality PhD, ME, and MSc graduates in a variety of multidisciplinary fields, including fisheries, hydrology, marine and freshwater ecology, aquaculture, environmental modelling, atmospheric and aquatic chemistry, oceanography, meteorology, and climatology. Students participating in the Institute have access to the full range of facilities and staff at NIWA and the University of Auckland.

The Institute is already on track to become an internationally recognised postgraduate teaching and research institution. To date, MSc and ME degrees in Atmospheric Science, Fisheries Science, Freshwater Science, and Marine Science have been established, and 14 PhD and 2 MSc students have enrolled in the Institute. They have received study grants from a diverse array of funds (e.g., FRST Tuapapa Putaio Maori Fellowships, Commonwealth Scholarships, FRST Top Achiever Awards, Auckland Uniservices Grants, FRST Enterprise Scholarships, and NIWA Scholarships).

Fisheries science

The Ministry of Fisheries continues to be the major purchaser of fisheries research in New Zealand. The funding available was significantly increased for the 2000–01 year, and NIWA maintained its position as the major provider of fisheries science by successfully tendering for over 75% of the available projects. Revenue from this source in 2000–01 was $13.701 million, up from $11.343 million in 1999–2000 and $11.777 million in 1998–99. Significantly, however, we were the sole bidder for 62% of the projects tendered in 1999–2000 and 45% in 2000–01.

Processes for determining fisheries research requirements and priorities within the Ministry are still limited by an inadequate fisheries management framework. One result of this has been serious practical difficulties in the planning and administration of research contracts, particularly in the organisation of larger, resource intensive programmes. The trend for research questions to be focused on the short term continues, and little progress has been made in improving our understanding of the biological and ecological processes that form the basis of extractive industries such as fisheries.

The trend towards research questions aimed at the environmental effects of fishing has developed further with MFish responsibility for the administration of research arising from the Biodiversity Strategy. This includes the commitment of significant resources to marine biosecurity and biodiversity studies. NIWA is in a position to contribute very significantly in these areas, and several projects have begun over the past year.

The development of fisheries research projects with interested groups in industry and the community is an integral part of our strategy. Such developments are driven by the need to carefully ensure the independence and objectivity of NIWA in an environment where important decisions are often made on the basis of our research. In appropriate circumstances we continue to seek joint projects involving other research providers and fishing industry groups. We have maintained very successful collaborations with the Rock Lobster Industry Council, the Orange Roughy and Hoki Fishery Management companies, and several other industry and community groups.

Fisheries science highlights over the year have included:

• developing the first fully age- and length-structured fishery model (for snapper in northern New Zealand)
• discovering and quantifying changes in benthic biodiversity associated with scallop and trawl fisheries in the Spirits Bay environment
• completing the development of digital photographic survey techniques for measuring deepwater scampi abundance
• determining the age of Antarctic and Patagonian toothfish
• developing reliable, verifiable techniques for identifying species of bluefin tuna in New Zealand waters
• developing new techniques for identifying fish in deepwater acoustic surveys by using swept frequency sound pulses
• successfully modelling rock lobster larval distributions in the oceanic waters east of New Zealand
• developing "safe" internal Passive Integrated Transponder (PIT) tags for estimating the abundance of snapper.

NIWA staff provide scientific and stock assessment input to several international fisheries organisations and initiatives. We have continued our contribution to the Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR), and provided support to New Zealand delegations to the Convention on the Conservation of Southern Bluefin Tuna, the Multi-lateral High Level Conference on Tuna and Billfish in the Pacific, and the South Pacific Standing Committee on Tuna and Billfish. NIWA expertise has also been recognised and in demand to assist with discussions on the assessment and management of orange roughy fisheries in Namibia, the southwest Indian Ocean, and the South Tasman Rise (between New Zealand and Australia). Direct scientific collaborations have also been developed with fisheries research institutions in Chile, Argentina, Australia, and the Falkland Islands, reflecting an increasing recognition of the skills and knowledge within NIWA relevant to deepwater and middle depth fisheries.

Strategic investment

NIWA has maintained its commitment for the seventh successive year to invest significantly in strategic assets to advance our atmospheric and aquatic sciences. This year's investments included state-of-the-art oceanographic sampling and survey equipment, a flow cytometer, and the development of a new aquaculture facility at Bream Bay in Northland.

Our new oceanographic equipment includes a Simrad EM300 multibeam swath sounder now installed in RV Tangaroa, which allows us to produce detailed images of the morphology and structure of the seafloor. The swath sounder is being used to conduct hydrographic surveys in New Zealand and Antarctica, to identify seafloor features important to fisheries, to provide information to support New Zealand's claim under the United Nations Convention on the Law of the Sea, and to increase our understanding of the active geological processes that control the shape, texture, and composition of New Zealand's seabed. Other equipment recently purchased to improve our knowledge of the sea includes an open-ocean temperature microstructure profiler to measure surface-layer turbulent mixing and vertical diffusion rates, and an undulating towed vehicle which will allow us to make detailed maps of the vertical structures of biological and physical variables over large distances.

Our new flow cytometer meets a variety of demands, both in the field and in the laboratory, and across many scientific disciplines. The cytometer rapidly quantifies the number of particles in solution, which in many cases had previously been counted laboriously by eye through a microscope. The instrument has already been used to count small phytoplankton and bacteria in food web studies at sea, to trace fine sediment movement in coastal and estuarine studies, to resolve cellular DNA content in life history studies, and to assess the toxicity of organic pollutants to aquatic life in laboratory bioassays.

Bream Bay Aquaculture

Aquaculture now supplies more than one-quarter of the total global seafood production and is expected to supply 50% by 2025. New Zealand's export revenue from aquaculture is currently dominated by the greenshell mussel industry, but the global demand for seafood provides the opportunity to increase export earnings by diversifying into new, high-value species. During the year we examined the directions of our aquaculture research and how it might best be leveraged to deliver the economic opportunities for New Zealand that this increased demand implied. A key constraint identified was the lack of a warm-water R&D facility to complement our cold-water facility at Mahanga Bay in Wellington Harbour. After an extensive search and evaluation of options, a lease of land near Whangarei was secured. The site is owned by Mighty River Power and is next to the mothballed Marsden Point power station. Importantly, we have secured access to the existing pipelines, so we can draw large quantities of high quality seawater from Bream Bay. Construction of a hatchery and nursery will begin shortly and we expect completion by March 2002.

The main aim of the facility is to bridge the gap between small-scale research techniques and commercial-scale production of high quality products. Unique opportunities will be provided for high-quality research, the education of future aquaculture personnel, and joint business initiatives with a diversity of partners, including seafood companies, Maori, entrepreneurs, venture capitalists, regional business promotion agencies, trusts, and government agencies.

Commercial revenues

Commercial science revenues (i.e., revenue other than that earned from the Foundation for Research, Science & Technology and the Ministry of Fisheries) continued to grow in 2000–01, reaching $25.309 million and now making up 33% of NIWA's operating revenue. This strong performance is a reflection of the relevance of NIWA's core science skills in providing answers to real-world questions, and it helps us fulfil our role in delivering the Government's desired science outcomes of healthy environments and wealth creation.

Our commercial science revenue is derived from consultancies for a wide range of public and privately owned entities, reflecting the diversity of science skills in NIWA. Our major clients remain the hydroelectric energy industry, regional councils, and government agencies (e.g., the Ministry for the Environment). Revenue has also grown through the expanding aquaculture industry as NIWA's advice is sought on sustainable production and environmental impact issues.

We continue the strong focus on providing timely advice of high scientific quality. NIWA's capabilities are promoted through regular presentations to clients, a variety of client-focused publications, and attendance at key conferences and workshops.

Research vessel operations

NIWA has been the major owner and operator of New Zealand's research vessel capacity since 1995 when the research vessels Tangaroa (deep water) and Kaharoa (inshore and coastal) were acquired. Initially, revenues were derived solely from NIWA's ocean science programmes, funded through contracts with the Foundation for Research, Science & Technology and Ministry of Fisheries contracts for fisheries stock assessment. During the year we have successfully built on earlier initiatives in undertaking a variety of science-based voyages related to seabed mapping, hydrographic surveys, and other activities. A 44-day hydrographic survey off the coast of Antarctica in the western Ross Sea, covering Cape Adare, Cape Hallett, the Possession Islands, and the Balleny Islands, was undertaken for Land Information New Zealand (LINZ) in February-March 2001. This project required the deployment of the Simrad EM300 multibeam swath sounder, which had been installed in Tangaroa in November 2000. The voyage was very successful, and the data produced by the multibeam sounder were outstanding. Tangaroa has now undertaken voyages into Antarctic waters in three successive years and is the only New Zealand research vessel capable of operating at these latitudes.

Kaharoa also worked outside our core public good science and fisheries projects; totalling 141 days for other science users, including Discovery Channel, the University of Southampton, and the Institute of Geological and Nuclear Sciences. At the end of last year NIWA was awarded a major contract for the hydrographic survey of the shipping channel through Foveaux Strait. Kaharoa was commissioned to undertake this project with the support of the survey launch Pelorus, acquired earlier for work in Antarctica. Overseas subcontractors were required for much of the specialist survey work, and the project is ongoing. We are moving to a point where, if a stable longer-term relationship could be established with LINZ, we could commit to taking on further staff and resources to allow us to fully undertake these important projects ourselves.

Overall, Tangaroa operated for 322 days during the year, excluding dry dock time, while Kaharoa operated for 277 days. Tangaroa is operating at maximum capacity, with two crews and very tight turnarounds between voyages, often involving installation and deinstallation of scientific equipment and heavy lifting gear. The fact that the vessel has been able to maintain this demanding schedule is a tribute to NIWA's vessel staff, the engineering management, and the quality of the maintenance, much of which is carried out at sea.

NIWA in the USA

During 2000–01, two wholly owned subsidiaries of NIWA were successfully established in the United States to allow NIWA to grow both financially and in scientific expertise. NIWA (USA), Incorporated concentrates on providing commercial consultancy services, whereas NIWA Environmental Research Institute (ERI) is a not-for-profit organisation specialising in multidisciplinary, public good research. Both companies focus on core skills held by NIWA in New Zealand.

NIWA's success since 1994, both nationally and internationally, has been underpinned by a strategic decision taken at that time to stick closely to selected core research areas in atmospheric and aquatic science. The high costs and capital equipment requirements of atmospheric and aquatic research make it difficult to adequately service an expansion into science areas outside our core without putting considerable strain on our capital expenditure programme and lowering the quality of what we do and the efficiency with which we do it.

Expanding what we do well to vibrant markets in the United States allows us to grow, but more importantly gives us the chance to strengthen our core skill bases and improve the quality of our science, making us significantly better at what we do. Hence, as NIWA ERI and NIWA (USA), Inc. develop we will be able to provide a better service in both New Zealand and the United States, offer substantial new work opportunities to our staff, and ensure that the operations of the parent and subsidiary companies are closely meshed and integrated.

Both NIWA ERI and NIWA (USA), Inc. have "runs on the board" and are quickly finding their niches in United States commercial and science markets. They are an important thrust in NIWA's future development and essential to our long-term sustainability as a premier research organisation.

NIWA in Australia

In April 2001 we officially opened a subsidiary company in Australia, based in Brisbane, with two founding staff members appointed from the Australian science fraternity. Our reasons for entry into Australia were identical to those behind our earlier entry into the United States market; namely, the need to expand revenues to offer new opportunities to our science teams in the face of static government funding for environmental science in New Zealand.

Although we have always had some interaction with our Australian counterparts, the establishment of an Australian base will allow us to greatly strengthen these links. Our Brisbane-based staff will seek opportunities to apply the expertise of our New Zealand-based scientists to Australian projects. This will enable our staff to broaden their scientific experiences, bring those experiences to bear on issues facing New Zealand, and help ensure that NIWA remains part of the global science community.

Working with Maori

NIWA's development of relationships with Maori continued to gather momentum during the year. Our commitment to this relationship-building arises from the obvious alignment between our core business of the sustainable management and development of freshwater, coastal, and marine resources and the importance of such resources to Maori.

During the year Dean Grace, NIWA's first Maori Development Manager resigned. Dean had laid the platform for NIWA-iwi links, which his successor, Apanui Skipper (Te Whanau Apanui, Ngati Tamatera, Ngati Raukawa, Ngati Toa, Ngati Tukorehe), has been able to build on. Our Maori Research and Development Unit has been named "Te Kuwaha", signifying its role as a gateway between NIWA's scientific knowledge and matauranga Maori. Te Kuwaha includes NIWA Maori staff with skills in a variety of science areas, such as mussel aquaculture, contaminant effects on shellfish, marine ecology, and eel migration. These staff have the mandate to network with iwi throughout New Zealand and to develop active relationships where NIWA's science expertise can assist Maori in the exercise of kaitiakitanga or in the development of new economic opportunities (e.g., aquaculture). NIWA's partnership activities with Maori are now many and varied, and several examples are included elsewhere in this report.

In December 2000 a Memorandum of Understanding was signed with Ngai Tahu. The NIWA Board and staff were guests at Te Waipounamu House in Christchurch, where the signing ceremony took place. This occasion cemented in place the growing relationship between Ngai Tahu and NIWA, exemplified by the successful joint project to develop a stream health monitoring kit for Maori and hold training hui in its use.

New Zealand Business Council for Sustainable Development

The Business Council, formed less than 2 years ago, is playing an increasingly influential role in developing and promoting sustainable development initiatives and projects among New Zealand businesses. These projects now include waste reduction, climate change impacts, successful schools, and triple bottom line reporting. NIWA is a member of the Council, chaired by Mr Stephen Tindall, and I am a member of its Executive Committee.

We have committed ourselves to championing the climate change project on behalf of the Council, with the objective of bringing a better understanding to business of the issues, impacts, and opportunities. A major conference involving international partners is planned for early 2002.

Staff and management

During the 9 years of our establishment we have created over 85 new positions and now have 582 permanent staff. The key to our success has been a very stable staff of dedicated scientists, many of whom have international reputations. Our difficulty in the future lies in the fact that the static investment in environmental research means that the amount of science we can undertake is reducing in real terms. NIWA's top scientists make a substantial contribution to New Zealand through the application of their knowledge to solving a wide variety of environmental problems for a wide variety of clients throughout the country. The core of our ability to do this work lies in the public good science we undertake, funded through the Foundation for Research, Science & Technology. Our ability to retain our top scientists in New Zealand depends on this. We remain very conscious of the need to pay competitive salaries, and our financial success has enabled us to maintain staff remuneration above the average levels for the science sector.

NIWA has an outstanding management team supported by many committed people throughout the country. I am proud to have served such a team and am confident our strength of purpose and morale will carry NIWA successfully into the future.

Paul Hargreaves
Chief Executive

The NIWA Board of Directors

John Hercus, Brian Rhoades, Carolyn Burns, Sue Suckling, John Montgomery (standing);
Paul Hargreaves, Don Sollitt, Paul Morgan (seated)

Financial Highlights

Full financial details from the NIWA 2001 Annual Report available from
General Manager – Finance, NIWA, Private Bag 99 940, Newmarket, Auckland

NIWA’s Social and Environmental Contribution

NIWA's research and related services are focused strongly on meeting New Zealand's needs. In 2000–01 the services provided by NIWA included $33.5 million to the Foundation for Research, Science & Technology, $13.7 million to the Ministry of Fisheries, $23.1 million to other New Zealand purchasers, and $2.2 million (2.9% of total) to purchasers outside New Zealand.

New Zealand’s international obligations

NIWA's expertise is made available to various Government departments to provide policy advice and meet New Zealand's obligations to international conventions to which this country is a signatory. Examples include provision by NIWA of:

• Convening Lead Authors and Lead Authors and Reviewers of chapters of the Third Assessment Report of the Intergovernmental Panel on Climate Change (IPCC)
• The IPCC Bureau Working Group II Vice-Chair for the World Meteorological Organization Region V, whose role is to help coordinate and disseminate climate change information relevant to the southwest Pacific and to provide the scientific backdrop against which domestic and, in particular, international climate change policy is developed
• Chair of the Regional Steering Committee for UNESCO's International Hydrological Programme for Southeast Asia and the Pacific
• New Zealand's representative at the United Nations Environment Programme Panel Meeting on the Effects of Ozone Depletion on the Environment
• New Zealand representative at the First Session of the Joint Commission on Oceanography and Marine Meteorology
• Convenor of the Royal Society of New Zealand Climate Committee, whose responsibility is to advise Government and the general public on climate issues
• Two members of the National Science Strategy Committee on Climate Change, whose responsibility is to advise Government on national research needs and progress
• Member of the New Zealand delegation at the Ninth Session of the Commission on Sustainable Development
• New Zealand's representative to the IGBP Ecosystem Dynamics (Globec) Programme
• Member of the New Zealand delegation at the Sixth Conference of Parties to the United Nations Framework Convention on Climate Change
• Personnel to supply advice on climate issues to the New Zealand Permanent Representative to the World Meteorological Organization
• Vice-President of the World Meteorological Organization's Commission for Agricultural Meteorology
• Co-Chair of the IGBP Global Atmospheric Methane Synthesis project
• New Zealand's representative to the Joint Global Ocean Flux Study (JGOFS)
• Chairman and Secretary of New Zealand's National Commission for the UNESCO International Hydrological Programme
• Vice-President of the International Ozone Commission of the International Union of Geodesy and Geophysics
• New Zealand's Hydrological Advisor to the Permanent Representative of the World Meteorological Organization
• Member of the New Zealand Science Sub-Commission for UNESCO

In some of the above examples, travel and some other costs for NIWA staff have been met from sources such as the International Science and Technology Linkages Fund and the International Technical Input Programme, but NIWA has borne the cost of staff time involved in attending the meetings, report writing, and the provision of policy advice. The total cost to NIWA of such activities in 2000–01 was more than $450,000. This is a cost which NIWA willingly bears to ensure that the best advice is available to the Crown on these key scientific and technical issues.

NIWA staff routinely contribute to various intergovernmental treaties, processes, and agreements; for example:

• Montreal Protocol on substances which deplete the ozone layer
• United Nations Framework Convention on Climate Change
• Kyoto Protocol
• Vienna Convention for the Protection of the Ozone Layer
• United Nations Convention on Biological Diversity
• Commission for the Conservation of Antarctic Marine Living Resources
• Antarctic Treaty
• Madrid Protocol to the Antarctic Treaty
• United Nations Convention on Law of the Sea

Research output

NIWA's research output for 2000 included 290 papers in international, externally refereed, scientific journals, series, or books; 165 papers in local, internally, or editor-refereed journals, series, or books; 595 conference papers and abstracts; 86 research monographs or books; 2 popular books; and 463 scientific and technical reports. Full details of these publications are published separately from this Annual Report.

Application and promotion of science

In the 2000–01 financial year, NIWA supplied information to New Zealand users (excluding the Foundation for Research, Science & Technology and the Ministry of Fisheries) through consultancies and contracts to the value of $23.1 million. In addition, we achieved 100% of the technology transfer objectives in our PGSF contracts during this period, and we have commenced four Technology for Business Growth contracts to the value of $750,000 and Techlink contracts to the value of $60,000. The availability to end-users and degree of use of NIWA's three Nationally Significant Databases continued at similar or higher levels than in previous years. We serviced over 4000 requests for information from the National Climate Database (which also has more than 120 registered online users), 326 requests for information from the Water Resources Archive, and 363 requests for information from the New Zealand Freshwater Fisheries Database. During 2000, 94 magazine and newspaper feature articles written by NIWA staff were published. NIWA staff appeared in 16 science-related television feature programmes, and were involved in 24 radio interviews during the year.

Education

NIWA is strongly committed to the advancement of science education and knowledge. Our commitment is aimed at schools and universities, and in some cases the wider public. The school sponsorship programme in 2000–01 again targeted three areas: the Sea and Learn programme, regional school science fairs, and Kelly Tarlton's Discovery Room.

• The 2000–01 Sea and Learn programme was run by NIWA in September 2000. Using its own resources, NIWA provided pupils from 20 schools each with a 1-day hands-on science voyage on our coastal research vessel Kaharoa from the ports of Picton, Nelson, Lyttelton, Timaru, Napier, Tauranga, and Auckland. In addition to the direct schools programme, we ran 6 days of courses for Maori students with, and under contract to, Te Ohu Kai Moana. The teaching resource for the programme was developed jointly by NIWA scientists and school science teachers and is linked to the New Zealand science curriculum. The teacher on board the vessel was supported by a Royal Society Science, Mathematics and Technology Fellowship.
• NIWA is the major sponsor for the Auckland City, Waikato, Bay of Plenty, and Wellington Regional Science Fairs, and provides additional sponsorship of the Central Northland, North Harbour, Taranaki, Nelson, Marlborough, Central South Island, South Canterbury, and Otago Regional Science Fairs. These sponsorships promote science in secondary and intermediate schools and to the community at large. NIWA science staff contribute to judging at these fairs and are consistently impressed by the high standard and innovation of the entries.
• In 2000–01, NIWA continued its sponsorship of the marine educational facility at Kelly Tarlton's Underwater World in Auckland. This is known as the "NIWA Discovery Room" and is aimed largely at primary and intermediate age children. It provides interactive marine science in varied formats, such as a touch pool, hands-on experiments, and life under the microscope.
• NIWA has continued to strengthen and expand links with New Zealand universities. The postgraduate Centres of Excellence with three universities and the joint NIWA-University of Auckland Institute of Aquatic and Atmospheric Sciences continued to operate successfully. Overall, NIWA staff acted in a supervisory role for over 80 postgraduate students across six universities during the year, and we provided eight NIWA PhD scholarships in skill areas that we have identified as priorities for the future. These cover a wide range of topics, such as coastal ecology, greenhouse gas production, and the ecology of eels linked to Maori cultural values. Many of our supervised students have received funding from the Foundation for Research, Science & Technology's Enterprise Fellowships, or Bright Futures Fellowships.
• NIWA's publications are directed at education of the wider public. Our flagship publication, Water & Atmosphere, is distributed to schools, local bodies, and a wide range of other institutions across the country. We also produce a range of specialist publications, such as Aniwaniwa, Aquaculture Update, Biodiversity Update, and Climate Update, which are more industry-focused. Climate Update is associated with NIWA's National Climate Centre.

Staff resources

Staff numbers, turnover, and age composition

Age breakdown (%) by 10-year age groups

Good employer

NIWA has maintained a performance management system and remuneration policy that pays for the range, depth, and type of skills of our staff, recognises an individual's worth to NIWA and the value of each staff member's contribution, and allows for career development. We also provide superannuation and life insurance schemes for staff.

NIWA has maintained a comprehensive Health and Safety Plan, and received recognition from ACC in the Partnership Programme that our Safety Management Practices moved from a primary to a secondary level from 2000 to 2001. The number of work-related accidents in 2000–01 was 105, of which only 5 required staff to take time off work. The number of days lost due to work-related accidents in 2000–01 was about the same as in the previous year and represented a very low level of total working days.

Our Human Resources Policy and Procedures Manual, which was developed and is added to as required by a Staff Working Group, addresses a wide variety of issues from Staff Training and Equal Employment Opportunity to Recruitment and Remuneration. This Manual is available online to all staff.

Retention of key staff through facilitation of effective science is a major objective of NIWA's management. This includes such aspects as a strong capital investment programme to purchase state-of-the-art science equipment, a project management system which gives staff the opportunity to lead and direct research projects with a high level of responsibility for scientific and financial performance, and a substantial overseas travel programme for staff. In addition, we operate Technical Training and Sabbatical Awards for staff and a Visiting Scientist Programme.

Copies of full NIWA Annual Reports are available at the main public libraries and from:

NIWA
Private Bag 99940
Newmarket
Auckland