AgResearch hid risks of proposal: Cull

Dave Cull
Dave Cull
AgResearch has been accused of hiding the ''enormous risks'' of slashing Invermay jobs after the belated release of its full business case.

This organisation's full case for restructuring, which it previously refused to provide to the Otago Daily Times after an Official Information Act request, goes into more detail about the risks involved with its plan, examines a ''worst-case scenario'' outcome and business as usual options.

Local politicians say the full case shows the plan is high on risk, with little potential for reward.

AgResearch responded by saying it had been transparent at ''all times'' and said its business case was ''robust''.

Meanwhile, a former top scientist at AgResearch says he has been approached by several ''mission critical'' staff seeking letters of support to use when applying for work elsewhere.

Dunedin Mayor Dave Cull said the full case showed AgResearch had been guilty of only releasing the ''good bits'' and keeping the risks hidden.

''In a nutshell, the 62 pages that have now been acknowledged as being part of the complete business case [cover] the risks and the worst-case scenarios.''

''The 40 pages that was originally released as the business case was only the good bits.''

Dunedin North Labour MP Dr David Clark said it was no surprise AgResearch had hidden the full report from farmers ''because it shows their plans have no economic merit whatever and could hurt farm returns''.

''AgResearch has been treating industry stakeholders like mushrooms: keeping them in the dark and feeding them manure,'' Dr Clark said.

It was ''outrageous'' AgResearch's ''worst-case scenario'' assumed staff numbers would be ''sufficient to deliver increases of revenue'' and did not take into account the risk of greater-than-expected staff attrition.

He said the economic benefit AgResearch calculated would come from its plan was ''within the margin of error''.

In the full report AgResearch lists the potential loss in revenue from ''key science'' staff not moving among the risks which could have a ''high'' impact on its plan.

Other risks identified included the loss of organisational knowledge, delays in assets sales, the attractiveness of Christchurch for staff asked to shift and the potential the relocation could interrupt ''science delivery''.

The report says the risk of staff attrition would be mitigated by ''working closely with affected staff during the transition'' and building a ''very strong'' change management approach.

However, former leader of the AgResearch Wallaceville reproduction group, Prof Ken McNatty said he was yet to see any sign AgResearch had learnt from previous restructuring, when only seven out of 25 scientists shifted when asked to move from Wallaceville to Invermay.

''I am very concerned about the way the AgResearch board has behaved here. I don't know whether they have lost the institutional memory that they had for the Wallaceville change.''

Now a professor at Victoria University of Wellington, he kept in touch with AgResearch scientists.

Those he had spoken to were telling him they were not going to shift and he had written several ''letters of support'' for key staff looking for jobs elsewhere.

The latest proposal would be more damaging than relocating Wallaceville staff in 2008, because the level of change proposed was much larger, involving up to 250 staff relocations from both its Invermay and Ruakura campuses ''I think it's a terrible scenario for New Zealand and it's an even worse scenario of the sheep and beef industries.''

Otago Regional Council chairman Stephen Woodhead said given what was in the full report it was ''hard to fathom'' why the AgResearch board and Government had approved it.

The option AgResearch should instead have chosen was the ''business as usual'' option assessed in the case, which involved keeping staff where they were, but upgrading and replacing old buildings, Mr Woodhead said.

AgResearch shared services director Andrew McSweeney said in a statement it stood by its business case and denied trying to hide the risks associated with its plan.

''We stand by our business case, which is sound and robust, and at all times we have been transparent with stakeholders, while protecting staff information and without compromising commercially sensitive material.''

''The business case clearly defined the current issues AgResearch faces, the options available and, importantly, the risks and mitigations in proceeding with the Future Footprint programme, including the overall benefit of delivering higher returns, and better science for farmers and the pastoral sector.''

Asked why staff retention was not considered as part of its ''worst-case scenario'' he said: ''The scenarios were in the financial modelling section, as part of the better business case process, and outlined our ability to afford the facility upgrades, e.g. reductions in asset disposals and increases in asset expenditure.''

The situation was ''very different'' from the Wallaceville relocation ''as it is a major investment and is being done in partnership with other organisations''.

''We're committed to trying to help every staff member make a decision that will suit their circumstances, and we'll work to ensure the transition is as easy as possible,'' he said.



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