Accountability to the Minister for Foreign Affairs and Trade

Under the Export Finance and Insurance Corporation Act 1991 (Cth) (the "EFIC Act"), EFIC was established as a statutory corporation of the Commonwealth of Australia charged with increasing Australia's export trade.

The Minister for Foreign Affairs and Trade, The Hon Stephen Smith MP, is responsible for EFIC. EFIC is 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, or direct, entry into 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.

EFIC is required to provide the Minister for Foreign Affairs and Trade with an annual Statement of Intent in response to the Minister's 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.

As a Commonwealth authority under the Commonwealth Authorities and Companies Act 1997 (Cth) (the "CAC Act"), EFIC is required to notify the Minister of certain significant events such as the acquisition or disposal of interests in companies or other ventures. The Board must also keep the Minister informed about EFIC's operations and provide any information required by the Minister or the Finance Minister. Each year, EFIC is required to prepare an Annual Report and provide it to the Minister for Foreign Affairs and Trade for presentation to the Parliament.

Appointment of members of the Board

The Minister appoints the members of the EFIC Board. The Board, after 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 and receives regular and detailed briefings regarding the affairs of EFIC.

Direction from the Minister

The Minister may approve or 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 on its Commercial Account. Details of 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 Foreign Affairs and Trade responds to questions asked by members of Parliament about EFIC.

Audit

The Auditor General, through the Australian National Audit Office (ANAO), is EFIC's external auditor and is responsible for auditing EFIC's accounts. The ANAO has contracted Ernst & Young to carry out the external 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 Deloitte 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 on the Commercial Account in various product categories. Click here for more details.