CEO review

Michael Carmody, Chief Executive OfficerIn 2010–11, Customs and Border Protection experienced no significant change in principal functions or services. Since reporting on our performance in 2009–10, we continued to respond to the challenges of our role and meet the Government’s expectations. We have done this through the delivery of our outcome—the protection of the safety, security and commercial interests of Australians through border protection designed to support legitimate trade and travel and ensure collection of border-related revenue and trade statistics.

Our role is complex and diverse and requires a very considered and increasingly targeted approach to conducting our business. If we do not manage our responsibilities effectively, the potential impacts are significant and may negatively affect the Australian community, international travellers and trade relations both here and overseas.

Events and emerging trends through 2010–11 have demonstrated that we are facing an enduring and evolving range of threats to the border. In responding to these threats, we must balance our twin priorities of border protection and passenger and trade facilitation. The dynamic nature of our operating environment and growth in cross-border movements continues to challenge us in achieving and maintaining this balance.

Throughout the year, we have continued to focus on improving the tools and strategies needed to implement our intelligence-led risk-based approach. This means concentrating our resources on high-risk people, goods and environments, while enabling the movement of low risk people and goods with minimal disruption. This approach is allowing us to manage our border protection responsibilities in a context of tight budgets and increasing trade and traveller volumes.

We are also increasingly directing our efforts ahead of the border as a part of the intelligence-led risk-based approach. This calls for us to partner with other law enforcement and intelligence agencies both in Australia and overseas. Examples of our cross-agency work over the past year are highlighted throughout the report, such as Operation BERGONIA, which resulted in Australia’s third largest cocaine seizure.

Not all that we do is focused on mitigating risks to the border. We also work hard to facilitate legitimate trade and travel and collect border-related revenue and trade statistics. The volume of transactions at the border, both goods and people, is projected to increase significantly in the coming years, with international passenger movements projected to increase from around 28 million this year to some 40 million by 2020. Similarly, incoming containerised sea cargo and air cargo consignments are projected to increase from 2.5 million and 14 million to 4.9 million and 21.7 million respectively.

We initiated or continued to build on a range of improvements to meet the challenges posed by these changes. Some of the improvements we have made and continue to make include the enterprise architecture which provides a whole-of-agency (enterprise) view of our knowledge and systems supporting our corporate and operational decision model. This work has immediate and long term benefits such as a target architecture model and gap analysis, a five year investment map and a 2020 target conceptual model. We know where we will need to be and how to get there.

Factors, events or trends influencing agency performance

At times throughout 2010–11, we have been required to respond to a number of factors, events and emerging trends that could potentially affect our capacity and ability to deliver outcomes.

The fiscal environment continues to be tight, which reinforces our adoption and development of intelligence-led risk-based approaches. This is becoming an increasingly normalised part of our operating environment, and we accounted for this trend throughout the year. We were assisted in this respect by our People and Place transformation project, which sought to streamline some of our corporate operations so that we could refocus existing resources where they are needed most—at the frontline.

Cyclone Yasi and the widespread floods impacted Customs and Border Protection in a number of ways. At a personal level, some of our staff residing in the affected areas were displaced or required to assist those around them. Through our role at the border, we did what we could to support relief efforts.

Performance highlights

  • We continued to see positive results throughout the year in delivering on our commitment to the Australian Government and the community.

Some of this year’s highlights included:

  • a substantial reduction in the arrival of suspected irregular entry vessels facilitated by overseas-based people smuggling syndicates in the second half of this year
  • the continued implementation and expansion of SmartGate, our automated border processing capability for travellers
  • the prevention of a significant number of prohibited, restricted or regulated goods including 15 494 detections of illicit drugs and precursors that overall have an increased weight on 2009–10 detections
  • a continued containment of illegal foreign fishing incursions into our waters
  • the detection and seizure of 258 tonnes of tobacco and 82 million cigarettes
  • the collection of $9.6 billion in border-related tax and duties and we supported the collection of $19.9 billion of border-related GST by the Australian Taxation Office.

Full details are available throughout the report, particularly in Parts 2 and 3.

Financial performance

This year we incurred a small operating deficit of $3.6m (0.4 per cent) after excluding depreciation and amortisation expense, which is no longer funded under the Commonwealth’s Net Cash Funding arrangements. This compares to a revised operating surplus of $1.0m in 2009–10. The result for both financial years reflects the scrutiny we apply to our financial management with very slight variations from an otherwise balanced result.

Suspected Irregular Entry Vessel (SIEV) 221

On 15 December 2010, we very sadly saw a tragedy unfold when a people smuggling vessel now known as SIEV 221 foundered on rocks off Christmas Island. This event saw a number of those onboard perish, with an estimated 50 lives lost.

The efforts of a number of very brave individuals meant that this grave event did not result in greater loss of life. I would particularly like to pay tribute to the crews aboard the Customs and Border Protection Vessel Triton and HMAS Pirie. The conditions on that day not only threatened the lives onboard SIEV 221, but all who were involved in the rescue.

A full account of the incident, including the post-incident reviews, is available under 2.1.2 of this report.

The year ahead

Over the coming year, we will be challenged by an increasingly complex and dynamic environment that continues to expand and develop. Specifically we will be faced with a continuing challenge to deliver on outcomes for today while building our capacity for the future.

Enduring problems such as maritime people smuggling and the importation of illicit drugs and precursors will remain.

Like most public sector agencies, our financial situation is increasingly tight and remains so. In response, we will continue to embed our risk-based strategic planning capability. We will continuously reassess the threats to the border and our business, and evaluate the adequacy and effectiveness of our operational responses.

The strategic priorities identified in our 2011–12 Annual Plan will be a key focus throughout the coming year. These priorities will help guide planning and investment decisions and are broken into five categories including border risk, workforce, risk-based planning, intelligence and targeting and information management capability. A particular focus will be on implementing reforms to the anti-dumping and countervailing system.

The commitment, enthusiasm and resilience displayed by all Customs and Border Protection officers gives me great confidence for the year ahead and I am certain that together we will continue to anticipate and respond to the challenges presented to us.

I personally thank all Customs and Border Protection staff who make possible the achievement of our commitment to the community and the Australian Government.


Michael Carmody
Chief Executive Officer

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