The Issue

John Stuart Mill argued it was better to be an unhappy philosopher than a happy pig; that all transactions and assets are not of equal value. However, the New Zealand Government system largely treats heritage assets similarly to other assets. Today’s governance needs to move past the happy-pig approach to one which recognises that some assets are more valued than others – more valuable than what is recorded in the ‘books’ – and need to be managed differently.

What is needed is a new institutional form which recognises the special characteristics of the entities responsible for the stewardship of such heritage assets. The new kind of institution would be called an Autonomous Kaitiaki Entity or AKE.

Summary Conclusion

At the heart of this submission is the proposition that there are assets which the Crown is said to own (or claims to own) but which are really held in trust by the Crown on behalf of all New Zealanders.

The proposal is that the National Library and Nga Taonga: the New Zealand Archive of Film, Television and Sound should each be categorised and treated as Autonomous Kaitiaki Entities (AKEs), which are government entities whose prime purpose is stewardship of its assets to be kept in perpetuity.

The AKE would be a new category in the categories of Crown entities, having some of the characteristics of Autonomous Crown Entities (ACEs) and some of the characteristics of Independent Crown Entities (ICEs).

The acronym is deliberate; ake is the Maori word for ‘forever’. The primary distinction from the other two categories is that the activities of an AKE are dominated by assets which it is entrusted to hold forever.

The rest of this submission elaborates the notion of an AKE, illustrated by the National Library. The same logic applies to Nga Taonga. The submission also considers other institutions. – the Museum of New Zealand and Heritage New Zealand – which should be AKEs.

Characterising AKEs

Purpose

The purpose of AKEs is to recognise that an entity whose primary purpose is the management of heritage assets is quite different from those concerned with the other activities of government and that they should be managed differently.

Definition

An AKE is a Crown entity whose activities are dominated by the management of assets which are to be maintained in perpetuity.

For example, both the legal deposit collection of the National Library and most of the collection of the Alexander Turnbull Library are heritage assets.

The relevant assets may have been obtained by Crown purchase, by some other statutory means of acquisition (such as the National Library’s legal deposit collection) or by gifts from individuals and elsewhere from the private sector. In the latter case it is often ambiguous whether those gifts were to the Crown or to some wider entity such as the people of New Zealand.

Governance

An AKE is governed by a board, with a chief executive reporting to it.

The Board is appointed by the Governor-General on the recommendation of the responsible Minister.

The Minister does not have power to direct an AKE on government policy unless specifically provided for in another act of parliament.

The power to set direction and annual expectations is held by the Minister.

(The above is drawn from the SSC’s governance characteristics of ACEs and ICEs.)

Legislation

Typically, each AKE should have its own specific legislation.

In addition there would be an overall AKE Act of Parliament which would set a framework and be available for use by other holders of heritage assets in local government and the private sector.

The AKE Act would set out the procedures for disposal of a heritage asset in the rare occasions when that was appropriate (e.g. the transfer between two AKEs or repatriation to a rightful owner). It would require approval by the Governor-General following advice from an officer of parliament such as the Chief Archivist. It is vital that a minister or chief executive cannot alienate heritage assets without public scrutiny although that has happened in the past.

The AKE Act should be designed to give confidence to a donor that once a donation is accepted as a heritage asset, it will not be arbitrarily privatised and it will be properly maintained, Clear rules about trusteeship by the Crown will engender trust by donors. (On occasions putative donations have been gifted elsewhere because the donors have not had confidence in the Crown entity.)

The statute could refer to the substantial body of law on private trusts where relevant (to guide court decisions in the rare cases where they are required).

Minister

Every Act of Parliament normally requires a responsible Minister. Very often the Minister for each AKE would be the Minister for Arts, Culture and Heritage, who would be advised by the Ministry of Culture and Heritage. This would have the effect of reinforcing the MCH’s expertise in advising on AKEs rather than having competence scattered throughout the government.

Visible Independence

Public trust requires that each AKE have a visible independent public presence.. Obscuring them in a huge government department, destroying their identity – as the DIA did with Archives New Zealand and the National Library – reduces their reputation and integrity in the public mind thereby undermining their ability to preserve assets in perpetuity.

Crown Accounts

Currently there are assets included in the Crown accounts which were privately gifted on the basis they would be maintained in perpetuity (although there is no guarantee of that). Their ‘ownership’ is ambiguous.

Additionally, the Crown accounts places a commercial or market value upon them and upon other heritage assets, as if they could be sold on the private markets.

(For instance, the document on which Te Tiriti o Waitangi was written was valued at $33m in 2005, although any sensitive valuation would conclude it was priceless.)

Market valuation is useful for identifying each asset but it ignores the ambiguities of ownership and their significance, so heritage assets should be recorded in the Crown Accounts separately from commercial assets to emphasize they are distinct. .In particular there should be a separate line entry in the Statement of Financial Position.

Which Crown Entities should be AKEs?

At the very least, AKEs should cover the following Crown entities:

Heritage New Zealand: Pouhere Taonga;

Museum of New Zealand: Te Papa Tongarewa;

National Library; Te Puna Matauranga

Nga Taonga: the New Zealand Archive of Film, Television and Sound.

Other ACEs and ICEs do not have a primary purpose of preserving assets forever and it is therefore not appropriate for them to be AKEs.

Should Archives New Zealand be an AKE? It is true that it holds public records in perpetuity, but the Chief Archivist has a central constitutional role in the holding of the executive to account and therefore should be an Officer of Parliament. The Chief Archivist should be invited to consider the relevance of AKE status to Archives New Zealand.

Should the Department of Conservation be an AKE? It holds land and other environmental assets with the expectation they should be maintained in perpetuity (some were private gifts). However it is currently a department of state rather than a Crown Entity. A separate enquiry should consider the relevance of AKEs to the conservation estate.