NZAID was established in 2002 by the
Fifth Labour Government with the launching of a new overseas aid policy, "Towards a Safe and Just World Free of Poverty". The establishment of NZAID as a semi-autonomous body marked a significant shift in the management of New Zealand official development assistance (ODA). Prior to 2002, ODA had been managed by MFAT using largely non-specialist staff, policies and procedures. A Ministerial Review in 2001 found that New Zealand's management of ODA lacked a clear mission: "Management and staff are pursuing poorly defined development assistance, foreign policy and trade objectives. There is a serious confusion of purpose. At the implementing end, desk officers are uncertain and concerned about the core mission of their work." The 2001 Review found that NZ ODA lacked focus; poverty analyses on which to base decisions; systematic analysis of past performance; and systematic use of good practice in aid design and delivery. The rotational staffing system (whereby career MFAT staff were rotated through the aid management division, rather than recruited specifically for skills and experience in ODA issues) had led to the relevant area of MFAT being regarded as "both a training ground for diplomats and a dumping ground for non-performers". Basic issues of staff and document management were found wanting. The establishment of NZAID was a response to these and other problems. The Cabinet Minute (01) 28/8 which mandated the creation of NZAID "set the following major directions for New Zealand's ODA: • Elimination of poverty as the central focus of NZAID, which would need to be incorporated in a new policy framework. • Integration of the International Development Targets (IDTs) – subsequently incorporated into the
Millennium Development Goals (MDGs) – within the new policy framework, and in Pacific regional strategy papers. • A complete overhaul of the NZODA policy framework that would need to be strategic, accountable and focused, based on international best practice in ODA. • Bilateral programmes to be based on country-based poverty analysis and country programme strategies. • A core focus on the Pacific should be maintained. • Development Assistance to the
Cook Islands,
Niue and
Tokelau should remain within the NZODA programme. • A bilateral assessment framework should consider the degree to which the ODA programme was too dispersed, and a strategic approach to funding multilateral allocations should be adopted. • A new education strategy should be developed that would give greater prominence to basic education needs and individual country circumstances. • NZODA should mainstream human rights, gender and environment throughout its operations. • A framework should be developed for determining the level of contributions to regional and multilateral institutions. • Monitoring and evaluation systems to measure the impact of New Zealand ODA should be established. • NZODA should develop 'centres of excellence' in aid delivery." ==Structure==