Accountability to the Minister for Trade
Under the Export Finance and Insurance Corporation Act 1991 (the "EFIC Act"), EFIC was established as a statutory corporation of the Australian Government charged with increasing Australia's export trade.
The Minister for Trade, The Hon Simon Crean MP, is responsible for EFIC. The Corporation forms part of the portfolio of the Department of Foreign Affairs and Trade.
The Minister has a number of powers in relation to EFIC, as set out in the EFIC Act. The Minister has power to give written directions to EFIC in respect of the performance of its functions or the exercise of its powers if the Minister is satisfied that it is in the public interest that directions be given. The Minister may also approve transactions on the National Interest Account. In relation to the Commercial Account, the Minister cannot require EFIC to obtain the Minister's approval for a particular transaction, or direct EFIC to enter into a particular transaction.
Any budgetary appropriation in respect of EFIC which relates to the National Interest Account, is effected through the Department of Foreign Affairs and Trade and is scrutinised by Parliament.
EFIC is required to provide the Minister for Trade with an annual Statement of Intent in response to his Statement of Expectations. These statements express and formalise the Minister's expectations of EFIC in the coming year, and the Board's intention to meet these expectations. This requirement comes from the adoption by the Government of the recommendations of the 2003 Uhrig Report on the corporate governance of statutory authorities and office holders.
Appointment of members of the Board
The Minister appoints the members of the EFIC Board. The Board, following consultation with the Minister, appoints the Managing Director. The majority of the members of the board are from the private sector.
The Secretary of the Department of Foreign Affairs and Trade is a member of the EFIC Board, receiving regular and detailed briefing concerning the affairs of EFIC.
Direction from the Minister
The Minister can direct EFIC in relation to transactions considered to be in the national interest, and with respect to EFIC's performance of its functions, or the exercise of its powers. However, the Minister may not direct EFIC to enter into (or not enter into) a particular transaction under its Commercial Account. Details of these Ministerial Directions must be published in EFIC's Annual Report.
Accountability to the Australian Parliament
Powers and functions
EFIC's functions and general powers are set out in the EFIC Act, in sections 7 and 11 respectively.
Annual report
Each year, EFIC prepares an Annual Report that is tabled in Parliament.
Parliamentary review
The Minister for Trade responds to questions asked about EFIC by Members of Parliament.
Audit
The Auditor General, through the Australian National Audit Office (ANAO) is EFIC's external auditor with responsibility for auditing EFIC's accounts. The ANAO has contracted Ernst & Young to carry out the audit work on its behalf.
In addition the ANAO conducts other audits which may cover EFIC. Those audit reports are tabled in Parliament.
EFIC has contracted Deloittes to carry out its internal audit function.
Contingent liability and loan ceilings
Regulations of the Parliament, made under the EFIC Act, set limits on the total value of risk EFIC may assume in various product categories. Click here for more details.