Rural and Regional Affairs and Transport Legislation Committee
Estimates hearings, 1 November 2012
- Dr Conall O'Connell, Secretary, Department of Agriculture, Fisheries and Forestry
- Mr Sam Brown, CEO, Australian Livestock Export Corporation Limited (LiveCorp)
- Dr Roly Nieper, AM, Chairman, Australian Livestock Export Corporation Limited (LiveCorp)
Senator RHIANNON: I have been advised that the MLA and LiveCorp were crucial players in the industry-government working group that developed the ESCAS regulatory framework. Considering the recent developments in Bahrain and Pakistan will you be suggesting any changes to improve animal welfare standards?
Dr Nieper: Yes, that is correct. We were heavily involved in the original phases of the ESCAS system. Considerable work was done with the department through the working groups at that particular time. Our responsibility, once that was up and running, then falls into the implementation phase, which is a totally different picture.
To answer your question about whether there are improvements to animal welfare, we are currently undertaking a review of the export standards, and anything that is likely to come up through that process will then reflect on ESCAS if it is needed.
Senator RHIANNON: In working to assist exporters to refine their practices and processes under ESCAS, have you identified any particular frustrations or barriers to exporters meeting their obligations?
Dr Nieper: I will let my CEO answer that one as he is more intimately involved day-to-day with the activities with exporters. We have a program within LiveCorp to aid and assist our exporters in developing their ESCAS systems—to refine them and make them more efficient where possible. We do that on a day-to-day basis with MLA. I will ask Sam Brown, my CEO, to answer in more detail.
Mr Brown: Through the live export program—which LiveCorp invests—is the vast majority of where this work is done. The key areas where we work with exporters are through helping with the interpretation of ESCAS, of course, gap analysis work and technical handling and training materials. But with exporters there are a range of challenges from time to time depending on customers in countries.
Senator RHIANNON: Do you see any tension between LiveCorp's aims of improving the live export industry's economic performance while looking out for animals subject to export, which you say you are committed to?
Dr Nieper: I do not see any conflict at all. I think they go hand in hand. Without the strong economic performance we cannot provide animal health and welfare outcomes and vice versa. I personally believe they both go hand in hand. A strong business can conduct the systems according to what is required by the regulator.
Senator RHIANNON: I want to ask about the information you make available. Looking on your website there is a report that some of the information is still not available. Last estimates LiveCorp representatives promised that your annual operating plan would be publicly available up to the June 2012 board meeting. When I looked at your website recently it required a password to access. Do you plan to change this, because it appears that there is a failure to be transparent?
Dr Nieper: I take your question very much to heart. We know our website is very much out of date. We are a fairly small organisation of three or four and with the current workload we have it has been one of those things that has gone on the back-burner. There is a review currently underway. The board has requested that our website be updated and be made much more friendly. That process is in place now.
The AOP, the annual operating plan, is a plan that the company works to to ensure that we commit our levy revenue that comes in from our exporters in a planned, coordinated way. That plan is signed off by all the exporters and it is consistent with our strategic plan. Our decision in the past, and it remains the same at present, is that the strategic plan is on the open website and will be. But the AOP is a working document for inside the company.
Senator RHIANNON: So you do have a commitment to being open about what you are doing?
Dr Nieper: We do.
Senator RHIANNON: I was interested, because I understand that there is a Four Corners program on Monday about the live export industry, and you have declined to be interviewed, and nobody from LiveCorp will be interviewed for that program.
Dr Nieper: That is correct. Is that correct, Sam?
Mr Brown: Yes, that is correct.
Senator RHIANNON: Why is that the case? Wouldn't that be an opportunity to put your case?
Dr Nieper: LiveCorp is a service company. It is not a company that makes the decisions of the industry. We provide assistance to the industry, and we feel very plainly that it is up to the industry to answer those questions, not LiveCorp the service company.
Senator RHIANNON: But surely your operating plan is critical and should be made public, and this would have been an opportunity to do that. Effectively, you are part of the industry. It is not just that you service the industry, you are part of the industry. So, wasn't this a good opportunity to state the case?
Dr Nieper: The annual operating plan is made available to the department. It is made available to the minister, in confidence. As I said, it is consistent with our strategic plan. It is an internal working document that is reviewed regularly and changed regularly in keeping with that strategic plan. So it is a working document and we do not want to be held tightly to that particular document—we have got to achieve everything that is in there.
Senator RHIANNON: So you do not have plans to release it at any stage?
Dr Nieper: Not at this stage.
Senator RHIANNON: You do not think that should be released?
Dr Nieper: No, not at this stage.
Senator RHIANNON: There is a shift in international markets to more chilled meat. We are seeing China as well as much of Asia increasing their demand for chilled and frozen meat. Is this something that you consider? You obviously have a certain mission statement under which you operate, but there are these shifts in international markets. It is very important for our rural producers. Are you making an assessment of that shift so that our cattle exporters and other rural producers are not at a disadvantage by not giving more support to that international trade?
Dr Nieper: That question is probably better directed at MLA, which is the organisation which supports the producers. We are certainly aware of those shifts. Anecdotally and traditionally, the live export market tends to stimulate interest in Australian product, and we have seen the boxed beef trade come in quite strongly in many of the markets. In the Middle East, a lot of the markets are supplied by boxed beef. It is because of the reputation, I think, of Australian product. That product reputation is brought about by the livestock export trade.
But the main thing with the live export trade and the processing industry in Australia is that we are in competition with each other, and therefore, from a producer perspective, producers get a better price for their product while there is that competition. Without that competition, producers only have one avenue for the sale of their product.
Senator RHIANNON: As a member of the Industry Government Implementation Group, did you discuss the sheep incident in Bahrain?
Dr Nieper: I will refer that question to Sam, who is on a day-to-day basis.
Mr Brown: Yes, through the IGIG, the group, the issues and updates were provided on the status of the vessel in question.
Senator RHIANNON: You say 'updates were provided'. Beyond receiving information about it, was an assessment made about the implications this has for the live export trade and how you should respond to it?
Mr Brown: The IGIG was for updates. Obviously there were other groups within the department and the exporter that were tasked with making the decisions and the assessments that were forming the decisions between the commercial parties, those being the exporter and the department.
Senator RHIANNON: Did you have any role at all in the shipment ending up in Pakistan and Pakistan becoming part of ESCAS?
Mr Brown: Through the live export program we provide assistance, as we do to all markets, in providing advice as new markets come on line or in existing markets. We provide technical support through LEP staff or consultants for point of discharge, transportation, feedlot, management, handling and those sorts of guides. Those services were provided.
Senator RHIANNON: About Pakistan?
Mr Brown: To Pakistan, yes.
Senator RHIANNON: How did it happen so quickly, considering that for other countries it has been quite a lengthy process to bring them into the ESCA System? With Pakistan, it has happened in a matter of days. How could that occur?
Mr Brown: As you have heard from the department, the exporter has, as many other exporters have, longstanding relationships with various markets. We compete in a global market where some markets may go cold and be receiving livestock from other origins. If the market fundamentals turn, Australia becomes of interest again. A lot of exporters have longstanding relationships with markets that could be considered dormant. I am not aware and I do not have any specific knowledge of the relationships that were in existence prior to that with the Pakistani importer, but it should be no surprise that some of these exporters are well aware of the infrastructure that exists in countries and its status.
Senator RHIANNON: It was actually an enormous failure though, because the ESCA System has been set up for Pakistan, but then how the animals were treated showed that the system did not work.
Dr O'Connell: I think LiveCorp is not in a position to comment on the regulatory framework.
Senator RHIANNON: I appreciate that.
Dr O'Connell: We discussed this with the department. LiveCorp is not involved in the regulatory framework or its compliance.
Senator RHIANNON: Dr O'Connell, the minister promised the investigation on 28 September, yet I understand from you that it took the department until 29 October to write to the exporter asking for information on which it will base the investigation.
Dr O'Connell: The departmental people have just completed the query—
Senator RHIANNON: Yes, I was just wondering if you could explain—
Dr O'Connell: I am happy to take the question on notice.
CHAIR: My intention in the program was to finish at 5.20, but we will go with you to 5.20 and then Senator Back will have the last five minutes, so we will be five minutes behind all the way through.
Senator RHIANNON: Dr O'Connell, would you be able to answer that, because we still have some time.
Dr O'Connell: No, I do not have the facts at my fingertips. I would have to take that on notice, but LiveCorp is not involved in that. That is what I am trying to say.
Senator RHIANNON: I will return to the issue that I was just exploring with you about the shift that is occurring with a decrease in the live export trade and the increase in chilled meat. I am just trying to understand, considering that LiveCorp has a specific objective. On your board, do you make an assessment? Is this something that you are discussing—that, while you have a responsibility in terms of live exports, there is something very significant occurring? Could you share with the committee how you are responding to that shift?
Dr Nieper: Yes, I can reply to you, but on the board we do not discuss the state of play of the red-meat industry of Australia. The LiveCorp board is there to represent the interests of the exporters and to look after their needs, and that is where our financial levies are put in. There is another organisation that you would probably be aware of: RMAC. Our industry organisation, ALEC, sits on that committee, and we appear before that committee occasionally and talk through bigger red-meat industry issues. As LiveCorp, we will take our guidance from the industry organisation, ALEC, which sets the policies of our industry. From the LiveCorp perspective, we implement those policies wherever we can.
Senator RHIANNON: I am running out of time. You set out very clearly there your role in the industry and who you represent. Again, why didn't you do the interview for Four Corners? I just did not feel that that was explored enough, considering that you said you are committed to scrutiny and to being transparent.
Member of the committee interjecting—
CHAIR: Senator Rhiannon is allowed to ask any question she likes.
Dr Nieper: It is a decision that has been made that the industry spokespeople in this particular event will be the livestock exporters association, ALEC. LiveCorp, being a service company, not involved in the regulatory side of this whole episode, not involved in the decision making in Bahrain or in Pakistan, can add very little to that process.
Senator RHIANNON: But was that decision made by the board, by you or by the CEO?
Dr Nieper: It is made by a number of people in cohorts. The industry in general has appointed a spokesperson for this particular issue.
Senator RHIANNON: But, even though you cannot speak about Pakistan and Bahrain, as you said, you are there to represent the live export industry, which is in considerable crisis at the moment, considering not just what has happened in Pakistan but the standing of the Australian dollar and the pressure within Australia for animal welfare to be more respected and implemented. The industry is under so much pressure. On what basis did you make the decision not to speak? What were you judging, considering that you are so much part of the industry?
Dr Nieper: As I said, within the industry the communication decisions that we have made at this stage are that the spokesperson will be from the Australian Livestock Exporters' Council, ALEC, and LiveCorp would not be making any statement. That is all I can add.
Dr O'Connell: It is maybe worth explaining that LiveCorp does not represent the industry. It is not a representative body. It is essentially a service body, so it does not represent the industry as such. You would go to ALEC for that function.
Senator RHIANNON: I appreciate that, but it is very much part of the industry. Thank you.