Minutes of a meeting of the Board of the Accident Compensation Corporation held at
ACC Boardroom, Level 7, Justice Centre, 19 Aitken Street, Wellington on Thursday,
27 June 2019 at 9.00 am.

Present
Dame Paula Rebstock
Chair

Ms Anita Mazzoleni
Member

Mr James Mil er
Temporary Deputy Chair

Ms Kristy McDonald QC
Member

Mr David May
Member

Ms Leona Murphy**
Member

Dr Tracey Batten**
Member

Mr John Brabazon
Member

In attendance
Mr Scott Pickering
Chief Executive

Mr Peter Fletcher
Chief Technology & Transformation Officer

Ms Deborah Roche
Chief Governance Officer

Mr Herwig Raubal
Chief Actuarial and Risk Officer

Mr John Healy
Chief Financial Officer

Ms Emma Powell
Chief Customer Officer

Ms Sharon Champness
Chief Talent Officer

9(2)(a)

Russell McVeagh
Board only session
9(2)(a)

L.E.K. Consulting
Item 4.1
9(2)(a)

L.E.K. Consulting
Item 4.1
9(2)(a)

Head of Health, Safety and Wellbeing
Item 7.1
Ms Gabrielle O’Connor
Head of Client Service Delivery
Items 4.1 – 5.1
9(2)(a)

Head of Provider Service Delivery
Items 6.2 and 7.2
9(2)(a)

Head of Privacy
Item 6.1
9(2)(a)
  General Counsel and Company Secretary
Items 7.1 – 7.2
9(2)(a)

Manager Corporate Secretariat

9(2)(a)

Senior Associate Company Secretary

9(2)(a)

Associate Company Secretary
Items 4.1 – 6.1
** Attended via telephone / videoconference
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  Procedural Business
Apologies
There were no apologies received for the meeting.
Register of Members’ Conflicts of Interest Arising
Ms McDonald QC informed the Board that she had been appointed as a director of the Racing
Industry Transition Agency.
Mr Brabazon informed the Board that he was soon likely to become a shareholder of a new Nevis
insurance company aimed at charities. The Board Chair noted that this did not present a conflict for
the current meeting and was unlikely to present a conflict in the future. It would be noted on
Mr Brabazon’s Conflicts of Interest register once the shareholding was confirmed.
CONFIRMED: The Board reviewed the Register of Members’ Conflicts of Interest Arising and
confirmed that it was not aware of any other matters (including matters reported to, and decisions
made by, the Board at this Meeting) which would require disclosure.
  Committee Updates
Investment Committee
Mr Mil er updated the Board on the key matters from the Investment Committee (BIC) meeting of
26 June 2019:
•  Investment performance had improved for the month, although it would be difficult going
forward.
•  The BIC would review a paper at its next meeting detailing a proposal for securities lending.
•  Deutsche Bank had been suspended as a counter-party due to its deteriorating credit rating.
•  Marathon Asset Management had been reviewed, and a paper had been considered detailing
the Investment Team’s general approach to retaining or dismissing external managers.
•  The annual Review of Maximum Shareholding Limits was approved.
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•  The BIC had had a lengthy discussion about the NZ Equities team linking its work more to
ACC’s core health and safety purpose, arising out of Management’s paper on linking health
and safety performance to company executive remuneration. A further paper would come back
to the BIC, with Management having taken on board the Committee’s feedback on the wider
issues.
•  A paper on the Qualitative Review of Risks had been considered. It presented three longer-
term investment issues: the US/China ‘tech war’, the recent outperformance of ‘quality’ stocks,
and the increased capital regulatory requirements for New Zealand banks.
In response to a Board query regarding the overal  year end position, the BIC Chair noted that the
figures were not yet available, and nor had the revaluation of the private markets investments been
completed. The result was likely to be similar to last year’s—close to breakeven but under
benchmark. Given the fund’s conservative positioning, it was not a bad result. The BIC Chair
reported on the difficulties with the headline interest rates coming closer and closer to zero; the
BIC was thinking deeply about what could be done at this point.
  Board Only Session
Chief Executive’s Report
Items raised by Mr Pickering were:
•  Employee engagement results.
•  Client Payments 1 update.
•  Next Generation Case Management (NGCM) Phase 3 consultation update.
•  CEO Branch visitation programme.
•  Select Committee & ICIP Cabinet Paper update.
  Presentation
Rehabilitation Performance Review
The Board Chair welcomed Messrs 9(2)(a)  and 9(2)(a) of L.E.K. Consulting. She acknowledged the
interim nature of their report, and noted that it was important for the Board to have this opportunity
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for input before the report was finalised. She invited the Board and Management to participate
openly in the discussion which was an opportunity to challenge and test issues that ACC may have
overlooked.
9(2)(a)
took the Board through the presentation, slide by slide, explaining L.E.K.’s observations
as to why ACC was experiencing deterioration in the 70-day return to work (RTW) rate. The cause
of the significant volume growth in weekly compensation (WC)—7% compound per annum over
seven years—was unknown. The deterioration in RTW rate appeared to be due to the increased
claims volume growth.
Board discussion and queries focused on the following:
•  Why the deteriorating 70-day return to work rate was not changing. 9(2)(a)
observed that
the drivers of the deterioration appeared to be systemic rather than due to demographics or
injury mix, but that claims volume growth appeared to be causing the deterioration, and
frontline staff were struggling to keep up.
•  Whether the frontline was under-resourced. 9(2)(a)
explained that more work was required
on inefficient processes in branches. It was not clear that NGCM would solve all the issues.
Nor did the issues appear to be driven by provider behaviour. It was a mystery. There was
something ACC was doing at the frontline, or perhaps clients had an entitlement mentality.
•  Whether ACC’s client-centricity had caused the deterioration in performance. 9(2)(a)

explained that, although the potential drivers needed to be carefully analysed, it was unusual to
see 7-8% compound growth for ACC that was not being seen international y. In other words, it
was specific to ACC.
•  Whether Sensitive Claims profiles were different from other claims profiles, and whether people
were taking more time to recover in that area. 9(2)(a)
suggested that Sensitive Claims were
a small percentage of all claims, and changing Sensitive Claims handling would not likely
improve the RTW rate.
•  Regarding the Compound Annual Growth Rate (CAGR) of new claims depicted on slide 8,
whether L.E.K. could review data going further back in time, as perhaps prior to 2011 there had
been a high level of entitlements being declined, and this was a catch-up phase. L.E.K. would
review the data for prior years.
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•  The extent to which reactivated claims would explain some of the RTW deterioration.
9(2)(a)
confirmed that reactivations were real, but would not impact the RTW rate.
•  Whether claimants were reactivating their claim with a new injury or were claiming multiple
times for the same injury. 9(2)(a)
explained that the data L.E.K. had was simply for each
claim and not per person. Ms Powell would make deeper information available to L.E.K.
•  Whether L.E.K. had analysed ethnicity, as Māori have lower access to ACC but stayed on the
Scheme for longer. 9(2)(a)
explained that ethnicity was too small a portion in claims to have
been considered.
•  Regarding the capacity of providers, 9(2)(a)
explained that L.E.K. had analysed trend rates
in GP and surgical availability, and there was nothing unusual in the data.
•  Regarding the relativities of ACC staff’s caseloads, whether L.E.K. had a view on the number
of claims per case manager, both as to work rates and control of costs. The Board asked that
L.E.K. look into the range, particularly with ACC moving to the NGCM model.
•  Whether there was a correlation with data from the Ministry of Social Development (MSD) and
ACC’s RTW rate.
•  Whether the wider health system had changed, and whether the health system was
overworked, resulting in leakage from the health system to ACC.
•  Why the self-employed category was the only one to not have a deteriorated RTW rate (shown
in slide 12). 9(2)(a)
explained that it was due to the need for business continuity—while the
self-employed were pleased to receive WC, their businesses had to carry on, so they had a
very strong incentive to get back to work.
•  In response to a Board query, Ms O’Connor provided her insight on the issue of FTEs of
frontline staff; which was the more significant point: not enough staff at the frontline, or the
turnover of frontline staff, leaving less-experienced people who weren’t making the right
judgement calls? The Board suggested the possibility of turnover because of too few staff.
•  Whether L.E.K. had looked at behaviours, with people not wanting, or not being incentivised, to
get back to work. 9(2)(a)
suggested that, given the trends ACC was seeing, either
client/social attitudes, or ACC’s attitude, was relevant.
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•  Ms Champness asked for a longer timeframe to be provided for the data on slide 14 (frontline
capacity). 9(2)(a)
agreed to provide that.
•  The impact of ACC’s KPI culture on the deteriorating 70-day RTW rate. In response to a Board
query regarding whether there had been any change in the KPI regime, 9(2)(a)
reported that
branches were of the view that the focus had always been on the 70-day RTW rate.
•  Regarding case management and workflow management constraints on frontline capacity,
whether there were international comparators available on introducing standardised clinical
pathways. 9(2)(a)
explained the iCare pathways approach which was an automated system
alerting case managers to the next appropriate task for the client. Early triage processes
enabled the identification of psychosocial indicators and streaming those clients into a different
treatment regime. Ms O’Connor explained the similar functionality of NGCM, and its potential
for adding functionality all the time. She explained that there had been consideration of adding
in clinical pathways, but it had been decided to add it in through the Health Services Strategy
(HSS). The Board noted that in the Auditor-General’s report from 2014 there was a
recommendation to have clinical pathways put in place. Mr Raubal explained that it was
envisaged under the HSS, but had not proceeded as had been hoped.
•  Regarding the impact of New Zealand’s high immigration rate, whether ACC was sufficiently
supporting the migrant community, particularly in relation to any correlation between their injury
rates and their ability to understand English. 9(2)(a)
agreed that this was worth reviewing.
•  Regarding the Board’s request at the May 2019 Board meeting that Management review
claims leakage at a case level, whether the leakage work could be fast-tracked and done in
conjunction with this L.E.K. review.
•  The benefit ACC might receive from some early lead indicators, rather than always measuring
after the fact what had been done.
•  The 60% staff turnover in the Short-Term Claim Centres (STCCs). Ms O’Connor explained the
high turnover rate: the employees in that area tended to be younger, with most of the attrition
being internal to ACC as they moved into higher paid work, such as case management. The
Board expressed concern at not having been advised of this turnover level before.
Ms Champness explained that the regular reports to the Board on staff turnover related to
external turnover, where staff left ACC.
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•  The clinical rationale around the 70-day KPI. The Board queried whether other organisations
used different rates. Ms O’Connor explained that 70 days was based on clinical input, and the
psychosocial factors around getting back into employment beyond that period of time.
Mr Raubal explained that there was also a statutory requirement for such a period. The Board
proposed reviewing whether it was the right KPI. Ms O’Connor echoed that sentiment, as it was
not one ACC wanted for its future.
•  Whether mental health issues were a driver of slower RTW rates. 9(2)(a)
agreed that they
definitely had an impact. However, L.E.K. was confident that the issue for ACC was volume
growth and the difficulties the organisation was having in coping with that. The decline in RTW
rates was not replicated in other organisations.
•  Whether legislative changes were considered in L.E.K.’s report. 9(2)(a)
acknowledged they
were not. 9(2)(a)
suggested consideration be given to legislative interpretation issues. For
example, the legislation included the words “maximum benefit”, but also “reasonable”. It was
possible that ACC was over-emphasising “maximum benefit” and under-emphasising
“reasonable”.
•  Whether provider behaviour impacted volumes growth. 9(2)(a)
advised that providers were
not driving growth.
•  The fact that many New Zealanders hated their jobs, and the extent to which GPs’ patients
asking to go onto ACC was a recent phenomenon that would show up in the past seven years’
claims volume growth.
•  That Management should immediately start testing some of L.E.K.’s observations on issues
ACC could control, such as case load, and also test whether NGCM would alleviate issues,
rather than waiting to validate the data.
•  The frustration of not knowing the drivers of the deterioration in RTW rates. However, the
L.E.K. report had eliminated some of the red herrings, which was very useful.
•  That further information should be obtained from L.E.K. on the case load comparators in the
presentation, the extent to which the frontline was under-resourced, and the extent to which the
1 to 4-week RTW rate contributed to the volume growth.
•  The further questions raised by the report and the discussion: perhaps clients had changed
behaviour in response to ACC having changed its behaviour; perhaps thought needed to be
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given to the meaning of ‘client-centric’; whether to intervene at a critical point in the client
journey, rather than at 70-days; whether the high staff turnover was due to inefficiencies with
case management or to high workload.
The Board warned Management against giving conflicting messages now to staff, regarding the
customer-centric approach.
The Board requested that L.E.K. look further into the drivers of the volume growth. Mr Pickering
would follow up with L.E.K. on next steps. The Board Chair thanked Messrs 9(2)(a)  and 9(2)(a) for
the presentation.
RESOLVED: The ACC Board resolved to:
Note the L.E.K. draft interim report
  Operational Reporting
5.1. (a) ICIP Reporting
Mr Fletcher highlighted the following in relation to Client Payments (CP1):
•  CP1 had now achieved 7,700 payments to 3,200 clients.
•  Three of the planned CP1 early life support releases had been made, but the third release had
resulted in double payments to 176 clients. Processes had been put in place to prevent a
similar issue occurring. Staff were working with affected clients, of whom just over 100 had
responded, mainly positively; the remainder were stil  being liaised with.
•  Despite the disappointing set back, CP1 had had a successful start.
Management provided the following information, in response to Board queries:
•  Mr Fletcher reiterated that processes had been put in place so that the issue would not happen
again. He explained that the cause was likely a result of the release over the weekend.
•  Regarding how Management had been notified of the issue, Ms O’Connor explained that the
team had received two notices simultaneously: clients had called to notify ACC of the issue,
and the monitoring service had also noted the issue.
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•  Ms O’Connor confirmed that there was no risk of having missed paying any clients.
•  Mr Fletcher reported that his team had probably overextended itself by pushing through three
early life support releases in a short period.
•  Regarding the double-paid clients that ACC had not yet reached, Ms O’Connor explained that
attempts had been made to contact all those affected, with voicemail messages having been
left for them to respond to.
Mr Fletcher reported on the following in relation to NGCM:
•  NGCM was reporting green for the first time in nine months. He explained that the project was
well on track for the August 2019 rollout. However, the testing for the remediation of
warehouses was running behind schedule. Management was taking a risk-based approach so
that the most important issues were tested before go-live.
•  Staff consultation had completed during the month and senior leader appointments had
completed during the week. Mr Pickering reported that the process in which the senior
leadership had been selected was extremely robust and that he was very proud of the
achievements.
Regarding Board engagement in the go-live process for NGCM in August, the Board agreed to a
similar process as had occurred for the pre-live go-live for CP1. Mr Fletcher would liaise with the
Board Chair regarding which Board Members to include in the pre-go-live meetings.
The Board congratulated Ms O’Connor for the progress on NGCM.
The Board acknowledged the positive feedback that had been received from the Cabinet
Committee regarding the ICIP update.
In response to a Board query Mr Fletcher confirmed that Management was confident the HSS
would meet the August 2019 reporting timeframe, with assistance from PwC. Mr Pickering
suggested connecting L.E.K. with PwC in the HSS work, and looking at what could be achieved in
the business over the next 18 to 24 months, with the near-term focusing on where ACC could drive
the outcomes and the longer-term focusing on engaging with providers. This would be part of the
conversation with the Board in August.
RESOLVED: The ACC Board resolved to:
(a)  Note the ICIP Report.
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(b)  Note the Investments Technology Issues Report.
(b) & (c) Claims Cost Report and Performance Report
Mr Healy highlighted the following:
•  The Annual Report timetable, under which Annual Report would be published a month earlier
than last year. The Board indicated the importance of the full Board strongly engaging with the
draft until it was at an appropriate stage of completion for delegation to two Members (as
proposed in the timetable).
•  The presentation of the income statement, in response to an earlier Board request to isolate
some of the volatile elements in the profit and loss statement. Presentation in a fashion similar
to the government’s OBEGAL disclosures would help to explain ACC’s large deficit. The Board
discussed the proposal and suggested that changing to this type of presentation would be
more appropriate in surplus years. However, if the presentation was to change now, Mr Healy
should benchmark across all insurance companies in Australasia, and identify to which ACC
was comparable. That would determine the type of presentation ACC could justify using. Then,
reporting in this way would need to continue consistently into the future. The Board asked
Mr Healy to present the options to the Board, showing the actual figures, to enable the Board
to make a decision. In response to a Board query, Mr Healy confirmed that Treasury did not
have a preference on the type of presentation used by ACC.
Mr Healy reported that the Minister had approved the Service Agreement which would be
published shortly, but had not yet approved the Third Quarter Report for publication.
The Board discussed the likely Year End deficit and the extent to which it would show in the
Government OBEGAL. Mr Healy informed the Board that, as at 20 June, the deficit was $9 billion.
The Board discussed claims costs. Mr Healy reported that the actuaries had remodelled the
projections for the actuarial strain (of $900 mil ion) to isolate the impact of Sensitive Claims
(c.$420 mil ion). In response to a Board query, Mr Raubal confirmed that the figures were above
budget, but this had not resulted from the remodelling (which simply isolated the Sensitive Claims
part of the strain). The strain was caused largely by volume. Mr Raubal would bring to the July
Board meeting an indication of the Accounts in which the strain was occurring. In response to a
Board query as to whether the OCL Management Group was addressing the Sensitive Claims
aspect of the strain, Mr Raubal explained that the disaggregated information had only just become
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available, so had not yet been to the Group. Regarding whether anything could be done about the
Sensitive Claims part of the strain, Mr Raubal pointed out that ACC had been trying to increase
access to the service, therefore the question was about getting outcomes for clients consistent with
the spend. The Board discussed the assumptions that had been made about volume growth.
Mr Raubal explained that the assumptions had been based on a levelling off last year, but then the
growth had increased again.
The Board requested that the OCL multiplier always be included in the Claims Cost Report, as it
was very useful. Mr Healy agreed to do this.
Mr Healy reported that forecast operating costs would be $14 million higher than budget, and he
explained the breakdown of the spend. The Board noted that this would require Board approval, to
ensure there was no Management overspend at Year End. Mr Pickering would prepare a paper for
the Board on the issues. Mr Healy confirmed, in response to a Board query, that all overspend had
been accounted for in the $14 mil ion. The Board agreed to delegate authority to the Board Chair
and the Chair of the Risk Assurance and Audit Committee to approve the additional expenditure.
In response to a Board query regarding the provision in the financial statements for the refunds to
self-employed levy payers, Mr Healy explained that most of the refunds had already been made.
The Board discussed the reference on page 5 of the Claims Cost Report about the Financial
Condition Report recommendation to implement a formal framework for monitoring and measuring
client, operational and financial outcomes. Mr Raubal explained that the work had been largely
completed. In response to a Board request, Mr Raubal agreed to review the past five years, to
provide a retrospective on the recommendation.
ACTION: Management to undertake a five-year retrospective review of the Financial Condition
Report recommendation regarding a formal framework for monitoring and measuring client,
operational and financial outcomes.
RESOLVED: The ACC Board resolved to:
(a)  Note the Claims Cost Report.
(b)  Note the Operational and Financial Performance Report.
(c)  Note the Annual Report 2019 publications timeline and proposed changes to the Income
Statement format.
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(d)  Delegate authority to the Chair of the Board and the Chair of the Board Risk Assurance and
Audit Committee to approve the operating budget overspend of up to $14 mil ion that had
been reported to the Board verbally and would be explained fully in a forthcoming paper to
the Board.
  Board Papers
(a) Q3 Privacy Compliance Report & Key Risk Indicators
9(2)(a)
introduced the paper, highlighting the fol owing:
•  The number of reported near misses had been added to the report, which was a useful
indicator of ACC’s improved privacy culture.
•  There had been two recent Level 3 privacy breaches, both of which had been previously
reported to the Board. This was stil  within the target of five or less for the year.
In response to a Board query as to whether the privacy breaches could be prevented through
encryption technology, 9(2)(a)
explained that most of the breaches related to staff emailing
information to the wrong health provider, which encryption would not resolve. However,
Management was reviewing how to make it easier for providers to send information using portals.
The Board queried the reported ICIP outstanding recommendation from the Privacy Impact
Assessment relating to Client Payments. The Board emphasised that privacy was a very high
priority for the business and that the point of Transformation was to build in privacy by design. Mr
Jones was given the Board’s full support to help to achieve this. 9(2)(a)
reported that
Mr Fletcher had been made aware of the problem. The Board expressed its confidence that
Mr Fletcher would do what needed to be done.
The Board queried the percentage of staff completing privacy training within ten days of
commencing work at ACC. 9(2)(a)
explained that the target was set at 90%. The percentage of
people meeting the target had risen from 71% to 75%. The main barrier related to contract staff
where the onboarding routine was not as strict. The Board suggested that ACC should be able to
exert pressure on contractors, and gave 9(2)(a)
its permission to be forthright.
RESOLVED: The ACC Board resolved to:
(a)  Note that quarter three had similar levels of reported breaches to this time last year (84 Level
1 & 2 breaches).
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(b)  Note that the quarter three Key Risk Indicator (KRI) report includes the number of reported
near misses, and that these have increased, which is a positive reflection on ACC’s privacy
culture.
(c)  Note that two of the KRIs (privacy training of staff within ten days of starting work at ACC,
and the number of privacy breaches resulting from staff not following process), have not met
their compliance target, and that the Privacy Team is targeting communications on these two
KRIs.
6.1 (b) Privacy Maturity Self-Assessment and Privacy Maturity Action Plan
9(2)(a)
reported on the annual privacy maturity self-assessment which he had undertaken. One
year ago, KPMG had presented a Privacy Maturity review to the Board, outlining a range of
recommendations. Overall, good progress had been made on these in the last 12 months.
9(2)(a)
reported on the focus for the coming year. The Board requested that the team push for
legislation changes that would support privacy by design through, for example, removing the
requirement to send hard copy letters to clients. The best outcome would be everyone using a
portal, and, in this regard, MyAcc would be a big step forward.
9(2)(a)
confirmed that there was stil  a small percentage of clients without internet, and so hard
copy communications would stil  be required for them.
RESOLVED: The ACC Board resolved to:
(a)  Note that the Head of Privacy has completed the annual Government Chief Privacy Officer
(GCPO) Privacy Maturity Assessment (GCPO Privacy Self-Assessment).
(b)  Note that ACC’s full GCPO Privacy Self-Assessment is available on request to
9(2)(a)

(c)  Note that ACC’s privacy maturity has improved since KPMG completed an assessment in
July 2018, with ‘embedded’ having been achieved in six of the nine elements of the Privacy
Maturity Assessment Framework.
(d)  Note that that the Privacy Team has identified key deliverables for improving maturity in the
three remaining areas, all of which are in train, and that ACC remains in a strong position for
achieving embedded in all nine elements in 2020.
(a) Public Health Acute Services Annual Service Agreement
9(2)(a)
explained the price increases in the new service agreement. Ms Roche outlined the policy
implications of the agreement. In response to Board queries, 9(2)(a)
explained that—
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•  The pricing was marginally below that which had been budgeted for, but aligned with
movements from the Ministry of Health (MOH) to DHBs for core services and tertiary
adjustments.
•  There was limited scope for negotiation, and ultimately it was an agreement between the
Ministers.
The Board Chair noted her conflict in the matter and asked the Temporary Deputy Chair to put the
resolutions to the Board without her input, which he then did.
RESOLVED: The ACC Board resolved to:
(a)
Note that the Deputy Director-General, DHB Performance, Support and Infrastructure
(Ministry of Health) has signed the Agreement.
(b)
Note the cost associated with the 2019/20 Public Health Acute Services Agreement is
$558,584,890; representing a funding increase of 5.34% on last year’s total amount. This
contribution has been included in the budget set for the 2019/20 financial year.
(c)
Approve the Public Health Acute Services Agreement 2019/20
(d)
Delegate authority to the Chief Executive to execute the Public Health Acute Services
Agreement 2019/20
(b) Residential Support Service – Contract Extension
9(2)(a)
reported that there had been an intention in 2017 to work on the Residential Support
Service (RSS) pricing model with MOH. However, building a consistent model with MOH had been
unsuccessful. ACC was now progressing the development of its own model to standardise the
assessment of pricing across providers. The new timeline for completion of this work was
September 2021. Board discussion focused on the following:
•  Whether ACC was actively trying to bring new competitors into the market to push prices down.
Mr Dyer responded that this was not currently possible.
•  Who it was that decided the level of care for the individual client. 9(2)(a)
responded that a
needs assessment was undertaken for the client, and the ACC’s case manager negotiated the
care and cost with the provider.
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•  Whether Management had external support to develop the model. 9(2)(a)
responded that it
was being completed in-house, using the capability of his team and the analytics team.
•  Whether, given that 800 of the 1300 clients in the RSS were aged 65 and older, the cost to
ACC of the RSS was accurate, since assessments of injuries for the elderly so often rested on
whether they were age related or accident related. 9(2)(a)
confirmed that the 800 clients were
covered by ACC.
RESOLVED: The ACC Board resolved to:
(a)
Note that the current Residential Support Services (RSS) contract was extended on 1
October 2017 and expires on 30 September 2019.
(b)
Note that the current contract appears to be performing well, with opportunities to improve
the pricing model to align with a greater range of client complexity levels.
(c)
Note that there is a programme of work in place to complete a pricing review and undertake
a contract refresh, but this needs further time to be completed and implemented.
(d)
Approve an extension to the RSS contract for a period of two years (1 October 2019 to 30
September 2021).
(e)
Note the forecast spend over the two year extension is estimated at $132.96 mil ion.
(f)
Note the proposed contract extension has no material impact on the Outstanding Claims
Liability (OCL) and Levies.
(g)
Note that the proposed extension is compliant with the Government Rules of Sourcing and
ACC Procurement Policy as the contract wil  continue to remain open for new supplier
applications during the life of the contract.
(h)
Note that Board approval is required in accordance with Section B3.1 of the Corporate
Delegations Schedules, as the Whole of Life Cost from 1 February 2003 to 30 September
2021 for this service is estimated at $706.53 mil ion.
  Performance Reports
Health, Safety and Wellbeing Report
Ms Champness presented the Report. In response to the Board’s request for more detail on the
whistle-blower issue in the report, Ms Champness explained that she had received no further
information as to why it had been reported to WorkSafe rather than through ACC’s whistle-blower
mechanisms. In response to a Board query, the General Counsel explained ACC’s Protected
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Disclosures Policy. The Board requested a regular whistle-blowing report, to enable the Board to
identify whether there were any systemic issues. Ms Champness reported that the whistle-blower
referred to in her report had raised concerns with WorkSafe about workload and stress in the
Sensitive Claims Unit. Ms Champness explained the range of initiatives that Management had put
in place for the Unit and reported that WorkSafe had been invited to provide feedback to
Management, but the invitation had not been taken up.
In response to a Board query regarding when the lead indicators on the top ten risks, referred to in
the report, would be available, 9(2)(a)
explained that this was in next year’s workplan. The
Board would see the draft indicators in the first quarter, with the data provided later in the year.
The Board congratulated Management on ACC’s low injury rate.
RESOLVED: The ACC Board resolved to:
(a)
Note actions underway to mature our safety system, demonstrate safety leadership and
strengthen our safety culture.
(b)
Note there was one notifiable events in May 2019.
(c)
Note the health and safety performance indicators.
Legal Report and Policy Update
(a)
Legal Report – LEGALLY PRIVILEGED
The General Counsel summarised the report, focusing on the following:
•  Ng had been given a possible fixture for the second week of November 2019. However, the
date might be affected due to ACC’s application to introduce further evidence.
•  The Stafford judicial review hearing was set down for 10 September 2019. The hearing may be
vacated. If it was not, a full report to the Board would be presented in July, with an out of cycle
paper to BIC at the same time. If the date was vacated, the report would be scheduled for
August 2019.
•  A new matter not mentioned in the report was a recent decision from the District Court, which
may receive media attention, upholding ACC’s refusal to fund a cannabinoid for chronic pain
management because Pharmac had not approved it for the use for which the patient wanted it.
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RESOLVED: The ACC Board resolved to:
(b)
Note 9(2)(h)

(c)
Note the Ng ‘ordinary consequences’ Test Case continues to progress. Counsel is
approaching specialists to seek evidence to address the practical application of the Ng test.
(d)
Note in relation to the Stafford litigation
i.  The Court of Appeal’s decision has not yet been issued in the case concerning the legal
basis for a caveat to be lodged against land registered in ACC’s name.
ii.  The judicial review proceeding concerning the scope of Ministers’ powers to direct
Crown entities under the Crown Entities Act 2004 not to dispose of land in scope of Mr
Stafford’s breach of fiduciary duty claims in the Wakatu litigation wil  likely progress to a
hearing before the end of 2019.
(b)
Policy Update
Ms Powell reported on the proactive release of the mental health Cabinet paper. The release
would be packaged with MSD’s. Ms Powell confirmed to the Board that ACC’s view had been
referenced, and that the paper had come from the Ministers for MSD and ACC.
Ms Roche informed the Board that ACC, Police, Treasury and MBIE had received a range of
official information requests in relation to the gun buyback scheme. The timing of the response
would be matched with the other agencies’. The Board Chair asked to be kept informed of the
documents to be released.
9(2)(a)
updated the Board on the air ambulance contract. In January 2018, the Board had
approved Phase 1 of a two-phase strategy on the air ambulance contracts and the exit of single
engine helicopters from the service. The contract was joint between ACC and MOH through
NASO, and included the DHBs. The Northern and Central contracts had been signed, 9(2)(j)


Ms Roche reported on the ICIP Cabinet paper having gone through Cabinet. ACC was now in the
30-day proactive release period. The Privacy and Legal teams had assessed the paper and had
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identified no issues for withholding information. The Board requested a final review of the paper to
ensure it did not contain any commercially sensitive information that should be withheld.
Ms Roche informed the Board that the Cabinet reshuffle had resulted in a new Associate Minister
for ACC being appointed—the Hon Wil ie Jackson. The briefing for the new Associate Minister
would be circulated to the Board when completed.
RESOLVED: The ACC Board resolved to:
(c)
Note that the Minister is exploring possible opportunities to progress legislative
modernisation proposals through different amendment packages, and management is
awaiting formal advice on whether this work wil  progress.
(d)
Note that a progress update on the Integrated Change Investment Portfolio was considered
by the Cabinet Government Administration and Expenditure Review Committee on 20 June
2019.
(e)
Note that the Ministry of Health is currently exploring issues related to the cost of delivering
services under the Public Health Acute Services Agreement between the Minister of Health
and the Minister for ACC, and that management wil  update the Board on the progress of
that work at the Board meeting.
(f)
Note that management wil  bring a paper to the July Board meeting about the air
ambulance contracts, including what has been achieved, variations to what was planned,
the direction forward, and a request for increased funding (if required).
  Board Administration
Minutes of Meeting held on 30 May 2019
APPROVED: the ACC Board approved the minutes of the meeting held on 30 May 2019.
Schedule of Matters Arising
The Board noted the Schedule of Matters Arising.
The Board requested that the forthcoming Torchlight paper include a summary of who within
Management had authority trigger litigation.
Confirmation of Decisions Made Out of Cycle
RESOLVED: the ACC Board resolved to:
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Note that there were no decisions made out of cycle for the period of 24 May 2019 to 19 June
2019.
Annual Work Programme
NOTED: The ACC Board noted the annual work programme.
  General Business
There was no General Business.
  Confirmation of Next Meeting
To be held at the ACC Boardroom, Level 11, PwC Tower, 188 Quay Street, Auckland on Thursday,
25 July 2019 at 9.00 am.
Closure
The meeting closed at 3.40 pm.
Approved

Chair ………………………………………………………….
Date ………………………………

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Document Outline