By Kent Atkinson of NZPA

Wellington, April 8 NZPA - Environmental Science and Research chief executive John Hay has a simple job description for his crown science institute's work: "We identify bad bugs and bad buggers".

Dr Hay today produced that lay version of the state science company's mission -- protecting people and their environment through science -- at Parliament's select committee on science, the first since the new Government was elected.

And in financial review session designed to introduce novice MPs to ESR and its work, Dr Hay made a strong argument for it to retain its operational scientific activities and key income streams from the police ($21 million), Ministry of Health ($11 million) and Food Safety Authority ($2.5 million).

"It would be a backward step to move operational scientific activities into a more commercial entity, or back in to policy ministries, or compromise the forensic independence from police," he told MPs.

"If (ESR) ceased to be a CRI (Crown Research Institute), it would lose access to the crucial underpinning research funding and most of its scientists," he predicted.

Questioned by committee members about those concerns, he said the first question asked by new Minister for Research, Science and Technology Wayne Mapp was "Why aren't you guys an SOE (state-owned enterprise)?

"In our view, ESR's optimal strategic fit for NZ is as a CRI," said Dr Hay, who noted the company's performance was dependent on both the quality of its scientific staff and the quality of its underpinning research, because it was the main end-user of its own research.

Its environmental health work ranged from food safety, and water quality management, through disease surveillance, population health and land-based sewage issues, to biosecurity and emerging diseases.

In its higher-profile forensic work, it maintained the national DNA databank, investigated physical evidence such as matching fibres, toolmarks and bullets, carried out toxicology screening on both live suspects and corpses, and earned $2 million a year from testing pharmaceuticals and drug use in the workplace.

ESR is also responsible for illicit drug analysis, and work on clandestine drug laboratories -- New Zealand has the highest per-capita rate of police raids on these "clan labs".

ESR has a forecast revenue of $55.4m in 2009 ($51.4m in 2008) with expenses of $51.6m ($47.1m) and earnings before interest and tax of $3.8m ($4.3m), Dr Hay said.

Its average net assets are $32.3m ($28.7m last year) and its cost of equity in 2009 is forecast to be 8.6 percent, compared with 10.1 percent last year.

Dr Hay said ESR wanted to expand its core business and was talking to other Government agencies, including those dealing with agriculture, biosecurity, customs, defence, environment foreign affairs and local government.

It had invested heavily, from retained earnings, in a collaborative National Centre for Biosecurity and Infectious Disease at Wallaceville to share a level-3 containment laboratory with Ministry of Agriculture scientists working on animal disease outbreaks.

The centre will be the diagnostics and command centre should pandemic influenza, or a similar disease outbreak, or a bioterrorism event hit New Zealand.

Research at the centre underpinned ESR's advice to Government on biosecurity, bioterrorism and emerging diseases.

Dr Hay emphasised the need for the Government to retain strategic capacity and critical mass in health, biosecurity and forensics.

He noted UK efforts to outsource forensic work had slowed after a police commander asked where he should send an RFP (request for proposals, preliminary to seeking tenders) the next time terrorists bombed the London underground.

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