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Estimates: Rural and Regional Affairs and Transport Legislation Committee: Agriculture and Water Resources Portfolio: Meat & Livestock Australia

Estimates & Committees
Lee Rhiannon 6 Jun 2018

Wednesday, 23 May 2018

Live export

Senator RHIANNON: Mr Norton, did you watch 60 Minutes on 8 April?

Mr Norton : Yes.

Senator RHIANNON: What was your response?

Mr Norton : I thought it was quite shocking.

Senator RHIANNON: Considering your position at MLA, in that context, what was your response?

Mr Norton : Again, I thought that the whole situation was quite shocking to watch.

Senator RHIANNON: It was shocking to watch, and there has been considerable comment about that. Considering that your vision statement talks about Australia being recognised as a leader in market outcomes, what consideration did you give to your work after you had seen it? What were the discussions at your job the next day in the light of what we have seen?

Mr Norton : I think those discussions just centred around MLA's role within industry and the impact within the industry.

Senator RHIANNON: What you mean by that, considering that the live export trade had been shown to inflict incredible cruelty in a way that has been talked about but not seen to that level? There was so much outrage. Your job is, as you say in your vision statement, to look at market outcomes. We know there is an enormous shift going on from the live export trade to the box-chilled meat trade. I ask you again: what were the discussions at work in terms of the impact of this extraordinary vision, where you see life slipping away from animals as they are panting their last breath covered in faeces? It was really extraordinary. You must have, just in terms of doing your job, had some in-depth discussions about it.

Mr Norton : I can tell you what our role is within the live export industry—that is, we are not the regulator. We provide services as a service company at the request of industry.

Senator RHIANNON: I know that you are not the regulator. We have talked about that many times before. But your vision talks about—it actually says the vision is to be recognised as the leader in market outcomes. You are watching on television that night a major market failure. Putting aside the terrible suffering and what these ships' crews had to go through—we know that many of them were sick just because it was so offensive—you have a major market outcome. Surely you would then be considering what the future is here. You were talking about trying to ensure that the meat trade continues. Isn't there a major market failure that you will have to deal with at that point?

Mr Norton : MLA's role within industry is to support the industry outcomes that industry deems to do. So we support the chilled trade, the frozen trade and the live export trade as requested by industry throughout the entire world and in any market where industry requests us to do so.

Senator RHIANNON: Isn't that also in terms of your day-to-day work—and that is why I go back and ask what you did on 9 April, when you were surely sitting around saying, 'We have a problem—what we do with it'. I am trying to understand how you do it. Aren't you trying to work out in terms of the day-to-day work of the MLA the balance between the live export trade and the box-chilled meat trade? Isn't that something you are trying to work out—

Mr Norton : We do not enter into whether the balance of the trade—the market forces determine the balance of the trade. Then, on behalf of industry, we do work to support animal nutrition or anything that the live export industry deems fit and that they want their levy spent on. We do that through the LEP with LiveCorp and then, with the chilled market, obviously, on behalf of the whole value chain, expanding and exploring shelf life and doing research around food safety—again, making sure that the Australian product is promoted well within the market. We do as requested by industry.

Senator RHIANNON: But doesn't the levy system distort MLA's activities because it gives you this enormous emphasis on the live export trade? Isn't that how it plays out? That is probably why you are sitting here not saying, 'Yes, we identified that we had a big problem on Monday, 9 April, and we started working out how we could ensure that farmers have a future and that that future would be with the domestic market'. Don't you have those conversations?

Mr Norton : I completely agree that the industry had a problem from those events—absolutely. MLA's role is to then provide data and information back to industry around the impact of these situations. That was quite obvious.

Senator RHIANNON: What was that data and advice that you were feeding back to industry?

Mr Norton : It was quite obviously the impact that these things have on industry. We have had precedents on it. But I think industry moved to a position of saying that the Australian farmer is not at fault here—the Australian farmer is appalled by what they saw on TV as much as anyone else. MLA's role is to assist industry as they see fit for MLA to assist.

Senator RHIANNON: So you are saying that you do not give any advice to industry—there is a problem here and our farmers could end up losing markets if we stick with live exports, as it is becoming further discredited? You do not give any of that advice?

Mr Norton : I think that is quite obvious to everyone within industry. I do not think anyone needs MLA to reinforce that advice. We give advice quarterly and monthly, and we have done for decades, around the risks of industry.

Senator RHIANNON: I then come back to this: therefore, are you looking at whether your response needs to shift away from the emphasis with the livestock export program, because of the way those levies work, over to the transition to ensure that the farmers do have a future?

Mr Norton : That is an industry decision. Industry would tell MLA. The bulk of our levies around markets certainly, with the size of our export markets in the chilled and frozen sector, go into developing those sectors. The live export sector does not quite have the availability of those funds. I can get you the breakup of those funds on notice. If the live export sector wants MLA, with the use of their levies, to concentrate on a particular issue then we will do it. If the chilled and frozen sector want to expand their market share within a market, how they want to do it—whether it be through food safety or promotion of Australia's credentials in the market—is MLA's role.

Senator RHIANNON: I will go back to some comments that you made I think to Senator Brown. You talked about the MLA's commitment and that we have the safest product in the world. You use that language, which is something that is impressive, but in the context of that vision that starts to fall apart. When you say that—and then you also talked about the commitment to understanding consumers. That was your language. Understanding consumers is pretty easy at the moment—they are very angry about what has gone on. Aren't those factors that you would be assessing? But, when you come here, you fall back on the idea that it is all up to industry, so the MLA is really not a player here in directing where it is going.

Mr Norton : MLA provides the information, evidence and data on what consumers think, and we provide strategies. Those strategies may or may not be accepted by industry. If they are not accepted by industry, we will go back and rework those strategies so that they are accepted. So, obviously, in this situation industry had a major issue of reaffirming back to the Australian consumers: please do not punish Australian farmers in this situation. Punishing Australian farmers will have a negative impact on the Australian farming community.

Senator RHIANNON: Talking about punishing Australian farmers, if a future government of a country that presently accepts live exports from Australia withdrew their in-country subsidies, would live export farmers lose their trade?

Mr Norton : That is on the assumption that—

CHAIR: You need to be a bit careful there. You are seeking an opinion.

Senator RHIANNON: No, it is not seeking an opinion.

CHAIR: You are asking him for an opinion: 'In your opinion, do you believe'.

Senator RHIANNON: No, I am asking him to answer the question in the context of the extensive research and understanding of the industry that Mr Norton has. It is legitimate question.

Mr Norton : The answer to the question is that economic forces will change. They change all the time. We are subject to variances in currency that make our live export market competitive or uncompetitive, as it does at the moment, with the discussion we have just had, with South Korea and Japan. In Japan we have a tariff advantage. In South Korea we have a tariff disadvantage. So in South Korea we are not doing enough to sell Australian beef and in Japan it is all wonderful. But this is what it is about. It is the economic forces. MLA's role within industry is to provide the data and evidence and support industry in the strategies they want executed.

Senator RHIANNON: I just want to explore this further, because there is a transition going on from live exports to the box-chilled meat trade around the world. That could be really increasing shortly with what the International Maritime Organization is bringing forward with regard to the regulations for shipping. Are you aware of those changes that will impact on live export ships?

Mr Norton : Not in detail. I am aware of the recent changes that were announced.

Senator RHIANNON: We probably have about the same amount of knowledge, so I think it is worth asking the questions. The changes are to do with regulations with regard to the level of sulphur content and also later with regard to greenhouse gas emissions. There is an estimation that the number of ships that currently ply our oceans will change. You would be aware that most of the live export ships are very old ships. That is the case, isn't it?

Mr Norton : I do not think that is absolutely correct. I think there is a fleet of relatively new ships by one particular company in Western Australia, which invested heavily in quite a modern fleet.

Senator RHIANNON: I will just explain where I am going with this. What I am hearing is that, because of the changes that will result from the IMO's regulations, there could be fewer live export ships that are able to trade out of Australia and therefore that suddenly could put farmers in a very difficult situation.

CHAIR: Senator Rhiannon, I am loath to interrupt, but that is so far outside the scope of the MLA to be able to respond to.

Senator RHIANNON: But the MLA, as Mr Norton has told us—

CHAIR: I am not going to argue with you, Senator Rhiannon. I am just pointing it out. You had this opportunity yesterday. The people who could have answered all of this—the ones who survey these ships and who have knowledge of the movements and the rules and regulations—were here yesterday and you chose not to come. This is way outside of Mr Norton's level of expertise.

Mr Quinlivan : We may be able to help. If you can provide us with questions that AMSA should answer and they are able to provide answers over the next 24 hours, we can endeavour to have them for you tomorrow. But, so far, the questions you have asked are questions to AMSA. If you can provide those to us, we will do our best to get you answers.

Senator RHIANNON: Thank you.

Senator BARTLETT: Can I just follow up briefly on those questions. Hopefully this will not be outside of your area of expertise, which I am sure is very broad and deep. When you said you were shocked about seeing that footage, you were shocked because it was bad to look at or you were shocked because you had no idea that that was what it was like?

Mr Norton : Any animal welfare issues within industry that show that sort of vision, I do not know how could not be shocked by that at any level. I see the stats. If I may, I will walk through what MLA's role is. The statistics that we see are that about 0.7 per cent of all of the animals travelling to an overseas destination on live ships—the death rate is 0.7. No MLA staff member has ever conveyed to me in my time at MLA any animal act like I saw on that footage.

Senator BARTLETT: I guess that, speaking on behalf of animal rights activists for 30 years, I'd say it was shocking, but it was not surprising at all. You are genuinely saying that you had no idea what it was like?

Mr Norton : To that extent, no. Again, I come back to footage that I have seen that has been real-time footage of ships and to the data and evidence that industry provides. I come back to the staff of MLA having never portrayed to me that level of footage that was on the 60 Minutes program.

Senator RHIANNON: When you say—do you mean in terms of numbers or in terms of the horrendous levels of the faeces that they are lying in and how they are panting their last breaths away while the little lambs are dying underfoot? Is that what you are referring to or was it just the sheer numbers of it? It was extraordinary. It was really extraordinary. I think you just need to explain it.

Mr Norton : I do not understand the question, I am sorry.

Senator RHIANNON: You said that you had no idea, prior to viewing that film, of the extent of it. I am trying to understand what you mean by 'extent'. Is it extent in terms of numbers, but you knew how horrible was that there were faeces everywhere and little lambs were dying under the adult sheep? Was it numbers or was it just all of the horrible things that we saw? It was horrendous.

Mr Norton : I will give the answer I gave, and that is that I rely on the data and evidence that industry provides in terms of how many animals have arrived alive on voyages over the last five years. I also rely on live camera footage that I have seen around the industry on ships and Just In Time. I also rely on what whatever MLA staff tell me. I do not know if you are implying that I have seen this before and walked away from it. I am suggesting that that is absolutely false to make those suggestions.

Senator RHIANNON: No, I was not making that suggestion.

Senator HINCH: I think what Senator Rhiannon was getting at was that, when you sat there and watched 60 Minutes, you must have thought to yourself, 'Gee, what is this doing to my brand?'

Mr Norton : Absolutely—unquestionably. As a service provider to industry, our role is to advise industry on frozen product into markets, chilled products and live export strategies into markets. We are the service provider, and that is what industry tells us to do. Industry tells us to ensure that the brand of Australian red meat globally is at its fullest and most trusted that it can be.

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Senator RHIANNON: When the scandal broke about the mass deaths on the Awassi Express, did you or somebody from the MLA talk to the minister for agriculture or somebody from his office or Mr Quinlivan or somebody from the department about how to respond to the criticisms of the live exports issue that escalated post the 60 Minutes program being screened?

Mr Norton : I'll have to get the exact date and timing, but I met with the minister for agriculture in Melbourne and we discussed research and development activities, structures and future outcomes around that that related to MLA.

Senator RHIANNON: Did you meet with Mr Quinlivan or somebody from the department also about this issue?

Mr Norton : I believe my—

CHAIR: Hold on. You can't extract from Mr Norton's answer that he met on this issue. He just said he had a meeting. Is it your intention to suggest that part of that agenda related to this—the minister?

Mr Norton : When I met with the minister over this issue, we were asked to go and see the minister as MLA, which we did do, and the topics of the discussion were around the structure of the research and development within the LEP, how it operates and who determines how research and development is structured within the live export industry.

CHAIR: Thank you. Senator Rhiannon.

Senator RHIANNON: Did you provide advice on how to handle calls to stop the live export trade?

Mr Norton : No.

Senator RHIANNON: Did you provide advice on how to handle calls to stop the trade in the hot months?

Mr Norton : No.

Senator RHIANNON: Did you have discussions with Mr Quinlivan or somebody from the department also about these issues?

Mr Norton : Not me personally, no.

Senator RHIANNON: Does that suggest that somebody else from the MLA did?

Mr Norton : At that point in time, MLA staff were having numerous discussions across the whole industry with all stakeholders. So I can't, without providing it on notice, say who spoke to who and when at that point in time.

Senator RHIANNON: Mr Quinlivan, did you have discussions with the minister, the minister's office or the MLA about how to handle this issue?

Mr Quinlivan : Can I just clarify what time frame we're talking about?

Senator RHIANNON: Post the 60 Minutes program.

Mr Quinlivan : Yes, most certainly—absolutely, yes.

Senator RHIANNON: Was that about providing advice on how to handle calls to stop the trade?

Mr Quinlivan : Well, it was on the full suite of issues that arose as a result of not so much the television program but the footage that Animals Australia had provided to us some days before that.

Senator RHIANNON: I take it from your answer that that was one of this things that was discussed, because you haven't said you didn't discuss it. Is that a fair assumption? I'm not trying to verbal you; I'm just trying to clarify.

Mr Quinlivan : Well, not particularly. I think at that stage we were trying to understand exactly what this evidence meant and what were the appropriate responses from both the government and the department as a regulator.

Senator RHIANNON: When you say 'what the evidence meant', wasn't it fairly obvious? You would have seen the sheep dying from overcrowding, the heat exhaustion, the lack of food, the lack of water and the lambs being crushed under their mothers or other sheep. I mean, wasn't it clear what you were dealing with? Weren't you in damage control where one of the thing you were dealing with was how to ward off the calls that were immediately mounting that the live export sheep trade must stop?

Mr Quinlivan : The material that Animals Australia provided to us gave rise to a whole series of questions—which I know are going to be possibly the main topic for conversation tomorrow—all the way from our individual personal emotional reactions to it, which were probably not too dissimilar to you own, through to questions such as: what does this evidence mean in a compliance sense? what does it mean for the material that we had previously been provided in relation to this voyage and the assessment we've made of that? what are the implications for the effectiveness of our various regulatory arrangements? Then each of those questions spawned a raft of further, more detailed questions. By the time the footage was aired on Sunday and the public reaction commenced, we had done quite a large amount of work on all that, but it has continued since then and is still continuing. We've still got a lot of various lines of investigation, further development of policy instruments, testing of various ideas and so on. So it's been a continuous process since then.

Senator RHIANNON: So when you say you're assessing what it means in a compliance sense, wasn't that absolutely obvious—

Mr Quinlivan : No.

Senator RHIANNON: that it's just not working? They're swimming in faeces. It was extraordinary.

Mr Quinlivan : It was obvious what had happened on that journey was completely unacceptable, so that, I think, is probably the main point you're making, and we'd agree entirely with that. But in a compliance sense, we then had to test whether that was clearly at variance with the material we'd been provided by the exporter and others about what happened on that journey and, if so, how it was different, whether we were provided with accurate information, and so on and so forth. Our view was that we had never seen anything like that before. We had a discussion with Animals Australia when they showed us the footage where they also shared that view—that, apart from it was completely unacceptable and very emotionally disturbing, it was also something quite new. So we did have to spend time, and we're continuing to spend time, working out exactly what it means in a compliance sense.

Senator RHIANNON: Can I just ask you to clarify that? You have just said that Animals Australia showed it to you and that it's agreed that it was something quite new. I thought what was agreed was quite new was that we were seeing the vision, but, in fact, this is what's been happening for a long time, because thousands of sheep regularly die on these ships. In fact, it's the business model that these companies rely on because that's the only way they can make a profit. They can't air-condition these ships. They've got to pack the sheep in so they make enough money. They guess that out of 30,000 or whatever's on the ship, a couple of thousand will die. When you say that it was something quite new, are you referring to the fact that you had the vision, or are you honestly saying that you had no idea that this had ever happened before?

Mr Quinlivan : Certainly, the vision was new, and that was the first indication. I mean, we have had some incidence of high mortality in the past, including the one that was the subject of the court case yesterday. But that was the first time we'd seen the footage, and that was the first time we had any indication of conditions on a vessel of that kind.

Senator RHIANNON: So is it fair to say—

Mr Quinlivan : Sorry, just to complete that, I'm not sure what they would say now, but that was the impression that we had from Animals Australia in that conversation as well—that this was something quite new.

Senator RHIANNON: Okay. Just to summarise it, is it fair to say that what you're saying is that in the period post the 60 Minutes program, you're looking at the reputational damage that's been done to live exports and really—

Mr Quinlivan : No, that's not what I said at all.

Senator RHIANNON: And that's why I'm just trying to summarise.

Mr Quinlivan : I thought I was drawing a fairly clear distinction from the kind of concerns you were raising with Mr Norton about what this meant for marketing Australian meat products overseas, and I share those. But the conversation we were having was about the kinds of things we in the department were thinking about. Yes, that was one of them, but that was very low on our list and, frankly, not on a list of things we were spending time on. We had higher priorities.

Senator RHIANNON: Thank you. Mr Norton, when you spoke before lunch, if I understood you correctly, you said that this Awassi Express incident was the only incident that you're aware of. Is that correct? Did I hear you correctly?

Mr Norton : That I was, yes. As MLA, we rely on the regulator of the industry to investigate instances that are reportable. I rely, again, on the data that is publicly available from the department.

Senator RHIANNON: I was surprised to hear that, because the industry is known for these mass deaths. In fact, the ships are called death ships. In 2003 on the Cormo Express, 6,000 died. Then there's the Bader III, which is the export ship with the highest number of deaths; in one incident 4,050 died. Have you really not heard? There are many more; I just didn't want take up all our time. Have you really not heard of those other examples?

Mr Norton : Again, I can show you that in the data that I've received—it is over the last five years—the mortality rates are running at 0.7 per cent—under one per cent. I don't have a role at MLA around the regulation of the industry. I don't have a role around telling industry whether they should or shouldn't export live sheep or cattle. That's not MLA's role. Our role is as a service provider to the industry.

Senator RHIANNON: That wasn't the question. The question was: is it really the case that you're not aware of any other incidents apart from this one on the Awassi Express?

Mr Norton : On the incident on the Awassi Express, the 60 Minutes reporting was the first time I'd seen it. Of course I'm aware of those other—

Senator RHIANNON: Not seen it—knew about it.

Mr Norton : That's the first I knew about that.

Senator RHIANNON: You also spoke earlier about the True Aussie brand and how it's out there as part of your marketing. Do you agree that the True Aussie brand, whatever form it comes in—live exports, boxed chilled meat or dressed carcasses—has all been damaged now?

CHAIR: Senator, you can go ahead and Mr Norton can answer, but can I just point out that, honestly, that must be the 12th or 14th time that this witness has been asked that question, and he has made it very patently clear—

Senator RHIANNON: I have not asked about the True Aussie brand.

CHAIR: No, it has been asked in some other form. He has made it patently clear on the potential. So I'm going to allow the question to go forward on this occasion, but let me let all senators know: that's it.

Mr Norton : In answer to the question on damage to True Aussie, it really doesn't matter what my opinion is. We will research consumer insights in all our markets to understand what the impact of this or any other matter is.

Senator RHIANNON: This may be my final question, depending on the response. Post the 60 Minutes report, did you get inquiries, comments or feedback from any of your members or any of the groups that you work with?

Mr Norton : Again, through the open email address to the managing director, we had two inquiries from levy payers.

Senator RHIANNON: You've used the term 'industry' many times. Did industry contact you—for instance, the people who are in the business of boxed chilled meat and the dressed carcasses? Did they say: 'This is looking really bad for us. Don't we need a bit of a strategic discussion about whether the MLA's putting its efforts into it?' Is anybody ringing you up about that?

Mr Norton : Not directly to MLA, no. I did not get any phone calls of that nature.

Senator RHIANNON: Nobody outside takes that up?

Mr Norton : Not to me. I've certainly heard that plenty of people were expressing those concerns, but they weren't expressing those to MLA.

Senator RHIANNON: Not to MLA. Okay, thank you.

CHAIR: Thank you.

 

 

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