Commonwealth of Australia Explanatory Memoranda

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AGRICULTURE, FISHERIES AND FORESTRY LEGISLATION AMENDMENT (EXPORT CONTROL) BILL 2004

2002-2003-2004

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

AGRICULTURE, FISHERIES AND FORESTRY LEGISLATION AMENDMENT (EXPORT CONTROL) BILL 2004

EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Agriculture, Fisheries and Forestry,
the Hon Warren Truss MP)

AGRICULTURE, FISHERIES AND FORESTRY LEGISLATION AMENDMENT (EXPORT CONTROL) BILL 2004

General Outline

The purpose of this Bill is to give effect to the Government’s response to the Keniry Report into Live-stock Exports, announced by the Minister for Agriculture, Fisheries and Forestry on 30 March 2004, by amending the Australian Meat and Live-stock Industry Act 1997 and the Export Control Act 1982. The bill provides the basis for increasing government regulation of the live animal export trade by:

• allowing the Minister to determine a set of principles, known as the Australian Code for the Export of Live-stock that must be taken into account by the Secretary and authorised officers in exercising powers or performing functions under the Australian Meat and Live-stock Industry Act 1997;
• improving the integration between the provisions of the Australian Meat and Live-stock Industry Act 1997 and the Export Control Act 1982 relating to the export of live-stock by requiring compliance under one Act to be taken into account when determining matters under the other. For example, a false declaration under the Export Control Act 1982 regarding compliance with the provisions in the Australian Meat and Live-stock Industry Act 1997 relating to live-stock export licences can be taken into account by the Secretary under the Australian Meat and Live-stock Industry Act 1997 when considering whether to issue a show cause notice to an exporter;
• enabling the secretary to deal with the licences of associates or previous associates of applicants or holders of live-stock export licences under the Australian Meat and Live-stock Industry Act 1997;
• providing a legislative basis for the scheme relating to accredited veterinarians under the Export Control Act 1982; and
• creating seven new offences in relation to the scheme for accredited veterinarians under the Export Control Act 1982 which apply to both accredited veterinarians and other persons, including exporters.

The live animal export industry contributes significantly to the Australian economy by generating about $1 billion a year in rural economies and supporting approximately 9,000 jobs. The proposed amendments will protect this valuable industry by imposing greater regulation on the export process.

Financial Impact Statement

The Bill will require Commonwealth expenditure of $0.5 million a year for delivering additional services to the live animal export industry by the Australian Quarantine and Inspection Service. This amount is calculated on the basis that the Australian Quarantine and Inspection Service will cost-recover the current set rate of 60 per cent of the total estimated cost of $1.2 million from the live animal export industry for the additional services.

The Bill also requires Commonwealth expenditure of:

• $2.0 million in the 2004-05 financial year to fund the development of the new regulatory regime for live animal exports;

• $0.9 million in the 2004-05 financial year and $0.8 million a year for the 2005-06, 2006-07 and 2007-08 financial years to fund a Veterinary Counsellor in the Middle East to support the government-to-government live-stock export relationship;

• $1.0 million a year in the 2004-05, 2005-06, 2006-07 and 2007-08 financial years to fund a technical cooperation program with importing countries; and

• $0.2 million in the 2004-05 financial year and $0.05 million in the 2005-06 and 2006-07 financial years to fund the development of the Australian Code for the Export of Live-stock and associated standards in subordinate legislation.

In addition to the above, the Commonwealth will work with industry to implement a compulsory levy to fund industry initiatives. The Commonwealth will then match the research and development component of the levy.

Regulation Impact Statement

Background

1. The live-stock export trade is a highly valuable trade for Australia and its rural and regional economies. It provides sheep, cattle and goat producers with an alternative market to the meat-processing sector. If the trade ceased, live-stock prices would fall as a result of the reduced competition. Producers obtain higher prices for exporting stock than selling the same stock for domestic slaughter (for example, an extra $10-12 per head can be obtained for sheep).

2. The modern live-stock export trade began in the 1960s, with commencement of the trade to the Middle East. By 1983, 7.3 million sheep valued at $208 million were exported annually. In 2003, live-stock exports of sheep, cattle and goats contributed approximately $0.8 billion to the Australian economy, supporting about 9,000 jobs across Australia in feedmills, the transport industry, saleyards, export feedlots and at ports. Approximately 400 consignments were exported in 2003, from 14 ports around Australia. Export licences are required for the export of sheep, cattle and goats. The total number of licensed live-stock exporters in Australian is approximately 90, with about 40 exporters sending live-stock by sea.

3. The major markets for sheep are found in the Middle East. Using figures provided by the Australian Bureau of Statistics, and in order of market size, the major markets for sheep in 2003 were Kuwait (32 per cent), Saudi Arabia (30 per cent, noting this trade was suspended from 28 August 2003), Jordan (10 per cent), Bahrain (9 per cent), Oman (6 per cent), United Arab Emirates (5 per cent), and Qatar (4 per cent). For cattle, the major markets in 2003 were for slaughter cattle to Indonesia (51 per cent), the Philippines (13 per cent), and Malaysia (11 per cent). Other important markets for both slaughter and breeding cattle are to Israel and China (6 per cent) and Japan, Brunei and Jordan (3 per cent). The numbers of sheep and cattle exported in 2003 were 21 per cent and 22 per cent less respectively than the numbers exported in 2002. Major factors for this downturn were the strong Australian dollar and the reduced supply of stock as producers rebuilt herd numbers post drought.

4. The industry bodies representing Australian agents in the live-stock export trade are the Australian Live-stock Exporters Council (“ALEC”), which is responsible for industry policy, and Livecorp, the industry service company, responsible for quality assurance and accreditation. Livecorp’s activities are funded from voluntary member contributions. These contributions were introduced in 1998 as part of the red meat industry reforms to develop “willing partnerships” between the exporters of meat and live-stock and their respective industry bodies. Prior to 1998, processors and live-stock exporters paid compulsory levies to the Australian Meat and Live-stock Corporation. The current voluntary levies are $1.80 per head for cattle, 21 cents for sheep and lambs and 19 cents for goats. Under existing legislative arrangements, the Australian Government matches money contributed by Livecorp to Meat and Live-stock Australia (“MLA”) for research and development purposes. Since 1 March 2004, live-stock exporters have also been subject to a compulsory levy of $1.50 per head for cattle, 60c for sheep and lambs, and 40c for goats paid to the Commonwealth to recover the costs associated with the MV Cormo Express incident.

Regulatory environment

5. There are two main pieces of legislation that regulate the export of live-stock in Australia. These are the Australian Meat and Live-stock Industry Act 1997 (“the AMLI Act”) and the Export Control Act 1982 (“the ECA”). Both the AMLI Act and the ECA are managed by the Australian Quarantine and Inspection Service (“AQIS”). Exports by sea are also subject to Marine Order 43 under the Navigation Act 1912, which is managed by the Australian Maritime Safety Authority (“AMSA”). A brief description of the legislation is provided below, including the industry’s role in the regulation of the trade.

6. The live-stock export industry operates in a co-regulatory environment, where industry is responsible for setting standards and accrediting exporters against those standards. The Government is responsible for licensing exporters and provides the legislative basis for industry quality assurance schemes through the AMLI Act and its subordinate legislation.

7. The AMLI Act is principally concerned with the licensing of meat and live-stock exporters. Under the Act, exporters must be licensed to export sheep, cattle and goats, and must demonstrate financial standing, integrity and competency to manage the logistical requirements of assembling and exporting large numbers of live-stock.

8. The AMLI Act enables AQIS to impose conditions on an exporter’s licence through issuing directions, or, through orders under the Act, to place conditions on all exporters for certain classes of live-stock or certain markets. For example, minimum standards for the export of pregnant cattle, heavy cattle, exports of sheep, cattle to the Middle East, and cattle to Korea are implemented through orders.

Co-regulation and the AMLI Act – export standards and licensing

9. In 1998, Livecorp developed with government and other industry stakeholders the Australian Standard for Live-stock Exports (“ALES”), and an accreditation program for live-stock exporters (“LEAP”). Livecorp manages ALES and LEAP, subcontracting an auditing company to assess an applicant’s quality management system for meeting the ALES. Audit reports are forwarded to Livecorp for decision on accreditation status.

10. Under section 54(2) of the AMLI Act, a person exporting live-stock must be licensed. Licences are granted by the Secretary under section 10(1) of the AMLI Act. When granting licences, the Secretary must take into account any broad policies formulated by prescribed industry bodies (section 9), and consider whether the grant of a licence to an applicant would be contrary to the interests of the industry (section 12(1)(e)). Persons intending to export meat or live-stock must make licence applications in accordance with the Australian Meat and Live-stock Industry (Export Licensing) Regulations 1998 (“the Regulations”). A copy of the accreditation certificate issued to the applicant by the relevant standards body must accompany the licence application (regulation 6(6)(a) of the Regulations). The relevant “standards body” in relation to live-stock is defined by regulation 3 to mean a body responsible for setting standards for live-stock exports. Livecorp is the prescribed standards body for live-stock exports and a prescribed industry body for the purpose of section 9 of the AMLI Act.

11. Licensed exporters may not export live-stock except in accordance with Livecorp’s quality assurance program (regulation 9(2) of the Regulations). Regulation 9(1) of the Regulations requires the licence holder to allow the accredited standards body to audit the licence holder’s quality assurance system, produce any records or documents to the licence holder and comply with any reasonable request by the auditor or standards body to take corrective action to correct deficiencies. Under the LEAP program, accreditation may be downgraded, (which increases exporter costs, as follow-up audits are a consequence of downgrading an exporter’s accreditation status) or withdrawn by Livecorp if audit reports are unsatisfactory.

12. AQIS has a Memorandum of Understanding with Livecorp that sets out the obligations of Livecorp to audit accredited exporters and to advise AQIS of any additional relevant information (defined as ongoing material and information, including the results of an licensee audit which would assist the Secretary to determine whether the conditions upon which a licence has been granted have been complied with and continue to be complied with).

13. The effect of the AMLI Act and the Regulations is that Livecorp must accredit a live-stock exporter before he or she can be licensed by AQIS. Therefore, if industry accreditation is lost, AQIS can no longer licence the exporter.

Co-regulation and the AMLI Act – market specific quality assurance programs

14. The Saudi Arabia Live-stock Export Program (“the SLEP”) is an example of a market specific quality assurance program. When the trade existed, exporters were required to be accredited by industry to export sheep in accordance with the SLEP. The program was developed between industry and government, and was designed to ensure that exporters met the quality requirements of Saudi Arabia. Accreditation and compliance with the program was prescribed in an order under the AMLI Act. The order included a requirement that Livecorp notify AQIS if exporters failed to meet the requirements of the SLEP.

15. Another example of co-regulation under the AMLI Act is the export of cattle to Korea. Under an order, exporters of cattle to Korea are required to identify cattle with a device approved by Livecorp, and register their intention to export to Korea with Livecorp for inclusion in a schedule. Cattle must be quarantined on arrival in Korea, however the quarantine space is limited. Potential exports are therefore coordinated through the schedule by Livecorp and AQIS to ensure that there is sufficient quarantine space available for each consignment.

Third party veterinarians and industry - accredited stockmen

16. During the preparation of an export consignment, exporters may need to contract the services of a third party veterinarian, registered by the State veterinary surgeons board and accredited by AQIS, to undertake specified tests and/or treatments of live-stock in the consignment as required by the importing country. These veterinarians may also be contracted to examine the consignment prior to export and provide a statement to AQIS regarding the stock’s fitness to travel. Alternatively, exporters can request AQIS to undertake pre-export testing, treatments and inspection.

17. Exporters are required under the industry quality assurance scheme to employ stockmen, accredited by Livecorp, for all cattle export voyages of greater than 10 days. In practice, exporters also routinely contract accredited stockmen to accompany all exports of sheep to the Middle East and all cattle voyages of less than 10 days. Veterinarians approved by AQIS were required for all consignments exported to Saudi Arabia to care for the animals on board and to submit progress reports and a final voyage report to Livecorp. Currently, AQIS requires veterinarians approved by AQIS and contracted by exporters to accompany consignments to all Middle East markets. The veterinarians monitor animal health and provide daily reports and a final voyage report to AQIS.

ECA and Export Control (Animals) Orders

18. Under the ECA Export Control (Animals) Orders as amended (“the Animal Orders”), an export permit is required to export live animals. An export must submit an application (notice of intention to export) at least 7 days prior to export and provide AQIS with information on the nature of the consignment, where it is to be assembled prior to export, the country of destination and the date of departure. Authorised officers issue health certificates and export permits provided they are satisfied that:

• the consignment meets the importing country’s protocol requirements;
• the animals are fit to travel; and
• appropriate arrangements have been made to supply food and water during the voyage.

19. An authorised officer provides official health certification that stock was sourced, tested and treated according to the requirements of the importing country only when the exporter provides the appropriate documentation. In making a decision about whether a consignment is fit to travel, an authorised officer must have regard to the national model codes of practice for the transport and management of the relevant species.

Navigation Act 1912 and Marine Order 43

20. For animals exported by sea, exporters must comply with the standards set out in the Marine Order 43 (“the MO43”) of the Navigation Act 1912. The MO43 prescribes standards for housing, feeding and watering animals at sea, as well as setting maximum stocking densities for each class of live-stock. The MO43 also sets the maximum levels of accepted mortality on well-managed voyages. Masters are obliged to report mortalities to AMSA at the completion of each voyage. If the maximum accepted mortality rate of 2 per cent per voyage is exceeded, AMSA initiates an investigation into the voyage to determine if ship factors caused the high death rates. AMSA refers reports of high mortalities to AQIS for investigation of possible disease outbreaks where the AMSA investigation has ruled out ship factors.

Export performance

21. There has been a history of serious and poor performance by the industry over a number of years. This has been reflected by such events as high mortalities in export consignments in 2001-02, including the specific instance of a loss of 30 per cent of cattle on the MV Becrux to the Middle East in June 2002. This was followed by a series of voyages with high sheep mortalities caused by salmonellas (a stress-induced disease as a result of poor selection, preparation and pre-export management practices). In 2003, there were lower reported mortalities. This may have been the result of the mild winter experienced in southern Australia, improvements in feedlot facilities, or lower loading densities resulting from research and development on heat stress modelling on ships or other factors.

Domestic transport of live-stock

22. Animal welfare, including the transport of animals in Australia is a state government responsibility, and each State and Territory has implemented prevention of cruelty to animals legislation (“POCTA legislation”) to require persons in control of animals to meet basic animal welfare standards; that is, adequate food, water, shelter, and humane management practices. Model codes of practice (“MCP”), developed and approved by the Primary Industries Ministerial Council (“PIMC”), set out minimum animal welfare standards for a range of activities, including the transport and management of live-stock. Most States reference MCP in their POCTA legislation.

23. By attending to the basic welfare requirements relating to live-stock, exporters can minimise disease such as salmonellosis (a major cause of death on live-stock export voyages). The ALES incorporates relevant sections of the MCP to ensure exporters address basic welfare requirements when preparing and transporting live-stock not only to meet State and Territory POCTA legislation, but to reduce stress on live-stock to minimise disease outbreaks during export. Under the Animal Orders, authorised officers must have regard to relevant MCP when certifying consignments as fit to travel.

Under-reporting of mortalities on export voyages

24. In July and September 2003, allegations were made that some veterinarians and stockmen were pressured by ships’ captains to under-report mortalities on live-stock voyages to Saudi Arabia in 2001 and on later voyages.

25. AQIS investigated the allegation of inaccurate mortality reporting on the voyage to Saudi Arabia in 2001. The AQIS report concluded that there was no breach of any Commonwealth legislation. However, the investigation highlighted areas of weakness with the current legislative arrangements.

26. First, all responsibility in the subordination legislation of the AMLI Act for reporting on export voyages to AQIS is directed at the exporter, with no requirement on the shipboard veterinarian, the person preparing the reports. Second, under the relevant AMLI order, Livecorp is required to advise AQIS if exporters breach the SLEP program. The high mortality figure reported by the master of the vessel (which was considered to be accurate by Livecorp and the exporter) triggered no investigation into a breach of the SLEP by Livecorp. Livecorp was unaware of the mortalities on this voyage or the allegations until it was brought to their attention in 2003. Livecorp then investigated the particular voyage but found no breach of industry requirements.

MV Cormo Express

27. On 21 August 2003, a consignment of sheep on the MV Cormo Express was rejected by Saudi Arabia. It took the Australian Government until 16 October 2003 to find another country to accept the sheep, once the consignment was purchased from the Saudi importer by the Australian Government, and until 24 October 2003 for unloading of the animals to commence in Eritrea. Over the 80-day voyage, 10 per cent of the sheep died. The rejection of the consignment caused the Australian Government to suspend live-stock exports to Saudi Arabia on 28 August 2003, until the negotiation and implementation of an effective mechanism to ensure the safe entry of live-stock into that country is achieved. The consignment was only the 112th shipment since the resumption of trade with Saudi Arabia in January 2000.

The Live-stock Export Trade Review

28. On 2 October 2003, PIMC discussed the significant community concerns raised by the plight of the animals on the MV Cormo Express, the regulation of the trade, and animal welfare concerns with exported live-stock generally following the allegations. The main concerns expressed at the meeting were:

• allegations of under-reporting of animal mortalities on export voyages;
• a lack of enforcement of regulations on the transport of live-stock by road;
• the corporate governance at Livecorp;
• an inference that the co-regulatory model was not working; and
• overseas transport and handling practices.

29. The meeting agreed that each jurisdiction would examine arrangements for ensuring compliance with the MCP on transport of live-stock, particularly across State boundaries, and consider options to enhance arrangements to ensure compliance. The meeting also agreed to consider the adequacy of arrangements for developing and ensuring compliance with MCP generally, and that an independent review into the live-stock export industry should be initiated.

30. On 10 October 2003, the Minister for Agriculture Fisheries and Forestry, the Hon Warren Truss, MP commissioned an independent review of the live-stock export industry, chaired by Dr John Keniry.

31. The terms of reference of the review encompassed not only an examination of the MV Cormo Express incident, but also the regulatory and administrative arrangements for the trade, in light of the discussions of PIMC. The terms of reference required the review team to examine:

• the adequacy of welfare model codes of practice;
• the adequacy of regulatory arrangements;
• the types of live-stock suitable for export;
• supervision of voyages to ensure accurate reporting; and
• the factors that contributed to excess sheep mortalities on MV Cormo Express.

32. The review received 248 submissions, 76 per cent of which were from individuals, with just over a third of these submissions coming from overseas, mainly the USA, Canada and the United Kingdom. Half of all submissions were simple statements expressing views opposed to the trade, with 38 per cent commenting on all terms of reference. The Minister released the Keniry Report into the Export of Live-stock (“the Report”) on 8 January 2004. Eight recommendations were made to improve the live-stock export trade (see Appendix A). The main thrust of the recommendations were that:

(1) A national live-stock export code focussing on health and animal welfare issues during export should be developed, consistent with the national model codes that are currently in place and underpinned through legislation;

(2) AQIS should have a stronger regulatory role and be solely responsible for the granting of export licences and export permits. The industry should put more effort into research and development and management of its quality assurance schemes. These activities should be funded through a compulsory industry levy;

(3) The criteria for approval of export licences and export permits should be more closely linked in legislation and include an assessment of the history of the exporter (for licence renewals) and of the performance of any related entities. The grant of an export permit should require exporters to attest that the national export code has been met;

(4) Private veterinarians providing export documentation for consignments should be referenced in legislation, directly contracted to AQIS and allocated by AQIS to exporters. Exporters would pay AQIS for these services;

(5) Veterinarians should accompany all voyages over 10 days and 10 per cent of voyages of less than 10 days, and be required to report directly to AQIS;

(6) Some southern ports, such as Portland and Port Adelaide should not be used during winter for the export of live-stock;

(7) Memoranda of understanding should be signed with all Middle East countries and a quarantine facility should be established in the Middle East. This would enable live-stock consignments to be unloaded in the event that an importing country questions the health status of a consignment. If MOUs and a quarantine facility is not established by December 2004, the trade with those countries should be reviewed; and finally

(8) An emergency plan should be developed, modelled on AUSVETPLAN between industry and government to manage crisis situations like the MV Cormo Express.

1. Problem

1. The Keniry Report identified serious problems with the current regulatory arrangements for the live-stock export trade. These included: the lack of a national export code covering all activities along the export chain; industry accreditation processes; industry governance issues; inadequate pre-export preparation and clearance practices; unregulated third party veterinarians; inadequate reporting, audit and sanctions arrangements across the export chain; lack of formal agreements with importing countries to unload live-stock; and the lack of an emergency response plan.

Lack of a national export code

2. The export process crosses State boundaries and involves large numbers of producers (for example 200 for a large sheep consignment), stock and station agents, transport companies, feedlot operators and stevedores. ALES covers the standards that the exporter must meet during the export process. There are no standards for the obligations of other participants in the export process (for example producers, stock and station agents, third party veterinarians, transport companies, feedlot operators and stevedores) apart from relevant requirements in the MCP.

Industry accreditation processes and associated governance issues

3. The number of active live-stock exporters is small, dominated by 5 major companies for sheep and about 20 regular cattle exporters. The current co-regulatory model places the responsibility for accrediting exporters and setting export standards with the industry body. Accreditation is an essential prerequisite for obtaining an export licence. Livecorp is predominantly funded from the voluntary levies of the major exporters. Four of the six current board members are, or have close ties with, the largest export companies. This arrangement leaves the organisation exposed to potential conflicts of interest, real or perceived, as it discharges its responsibilities as the industry standard setting and accreditation body.

Inadequate pre-export preparation and clearance practices

4. Certain practices in the industry were identified as high-risk, including inadequate facilities at pre-export assembly feedlots and poor selection and preparation practices giving rise to unsuitable stock being exported. These practices increase the risk of high mortality events. For example, in 2002, high mortalities on sheep shipments to the Middle East were caused by salmonellosis, outbreaks of which occur when animals are stressed. An investigation into the causes of the high mortalities concluded that the sourcing, transport and pre-export management of these animals in the Portland and Adelaide feedlot premises were important contributing factors in the outbreaks and consequent high mortalities during the export voyage. The lack of shelter in Portland and Adelaide feedlots for stock during winter was also identified as contributing to the outbreaks. The current legislative framework does not specify criteria for pre-export assembly premises but allows the notice of intention (“NOI”) to export to constitute the application and automatic registration of the premises.

5. The submission of an NOI to export 7 days prior to export was also seen as insufficient time to allow AQIS to manage the export process effectively, particularly for large consignments of sheep. There is insufficient time allowed for the examination of documents to verify sourcing and preparation details and to inspect the stock prior to export. There is no legislative restriction on exporters to obtain AQIS approval prior to loading, and inspections often take place at the wharf as the animals load.

Unregulated third party veterinarians

6. The current legislative arrangements cover the actions of exporters but not other chain participants, such as third party veterinarians. Third party veterinarians play a critical role in the preparation and selection of stock for export and reporting while on board ship, yet their duties and obligations are not referenced in the legislation. This has had the effect of limiting the potential for AQIS to apply sanctions for breaches of standards.

Inadequate reporting, audit and sanctions mechanisms

7. Current reporting arrangements by industry participants to AQIS have been found to be inadequate. Legislative obligations for reporting mortalities during export are currently placed on the exporter with no obligations placed upon the stockman or veterinarian to report directly to the regulator. Early identification of high voyage mortalities enables AQIS to take a range of actions, from increasing monitoring of the exporter’s compliance with the export preparation requirements through to suspending or cancelling export licences. Livecorp’s administration of industry quality assurance is seen as inadequate with insufficient audit and sanctions policies for non-compliance.

Lack of agreed discharge arrangements for all Middle East markets

8. The lack of written protocols and agreements for unloading live-stock on arrival in Middle East countries was considered by the review to be unacceptable from a risk management perspective. Furthermore, the lack of a quarantine facility in the Middle East for discharging live-stock, which are alleged to carry disease or inadequate to meet the importing country requirements, is seen as a problem.

Lack of an industry emergency response plan

9. The lack of an emergency response plan for this high-risk industry is a serious deficiency.

10. Overall, the review found that the government legislative framework of the ECA and the AMLI Act as well as the industry quality assurance systems, governance and co-regulatory administrative arrangements for the live-stock export industry are inadequate to ensure that minimum animal health and welfare standards are reliably met for every export consignment. Unless exporters reliably meet the nationally agreed minimum animal health and welfare standards that apply to the production and management of live-stock in Australia, as well as ensuring that stock selected for export meet the health requirements of importing countries, there will be ongoing pressure from animal welfare groups and the public for the government to stop what is a valuable trade for many regional areas.

2. Objectives

11. The objectives of the regulation are twofold:

(a) to ensure in a cost effective manner that the live-stock export industry operates in such a way that every live-stock export consignment meets minimum animal health and welfare standards, and

(b) to clearly define the roles and responsibilities of exporters, third party veterinarians, the industry body and government in relation to managing the live-stock export trade.

3. Options

1. The following options are available:

Option A Continue with the current government and industry regulatory systems (described in paragraphs 6-22);

Option B Accept all the review’s recommendations (see Appendix A); or

Option C Accept the review’s recommendations with some modifications to take account of operational issues (see Appendix A).

2. Impact Analysis

6.1 Who is affected by the problem?

1. Groups affected by the problem of, and solutions to regulating the live-stock export trade are:

• Australian live-stock producers;
• Live animal exporters;
• AQIS accredited veterinarians;
• Livecorp;
• Australian Live-stock Exporters;
• Meat and Live-stock Australia;
• Sheepmeat Council;
• Cattle Council;
• Animal welfare groups;
• Department of Agriculture, Fisheries and Forestry; and
• Department of Foreign Affairs and Trade.

6.2 The proposed options

1. The options that have been considered as possible response to the Keniry Report are discussed below:

Option A – Continue with the current government & industry regulatory systems

Advantages

• No additional development or implementation costs to government or industry.

Disadvantages

• Insufficient regulatory powers under the current co-regulatory framework to address the management of animals throughout the export process;
• High risk of further high mortality voyages due to inadequate preparation, selection and management prior to export; and
• Dissatisfaction from all producer and animal welfare stakeholders who broadly support the Report’s recommendations.

Option B – Accept the Report’s recommendations

Advantages

• Increased government regulation of the trade provides better opportunities to identify problem exporters, and to take action to reduce the risks of failure to meet required minimum standards;
• Increased government regulatory oversight will assist in reducing risks associated with live-stock voyages;
• Strong support for most recommendations from producer and animal welfare stakeholders; and
• Increased animal welfare.

Disadvantages

• Increased regulatory costs for exporters and government. These costs would arise from increased government inspections of the exporter and each consignment and would be cost recovered from industry. The additional hours of inspection time are estimated to result in an increase in current charges of about 3 cents a head for sheep, and 26 cents a head for cattle. In relation to recommendation 3 of the Report, the increase in licensing fees paid to AQIS are expected to be equivalent to the current fees paid by exporters to Livecorp for accreditation under LEAP. Some exporters would also be required to employ veterinarians on voyages where they are currently not required; additional costs to the exporter would be in the order of $10,000 per voyage to the Middle East. The introduction of a compulsory levy will increase costs for those exporters not contributing to the voluntary Livecorp levy. Closure of southern ports in winter would result in loss of valuable income in rural and regional Australia as approximately 20% of sheep consignments are exported from Portland and Adelaide during May to October.

Option C – Accept the recommendations, modified to account for operational issues

Option C proposes to accept the recommendations of the Report subject to some modification to take account of operational practicalities.

Advantages

• Increased government regulation of the trade will assist in reducing risks associated with live-stock voyages, provide better opportunities to identify problem exporters, and sanctions to reduce risks of failure to meet required minimum standards;
• Increased animal welfare;
• Strong support for most recommendations from producer and animal welfare stakeholders;
• Strong stakeholder support for a risk management approach to the closure of ports and the placement of veterinarians on ships;
• Greater obligations on exporters and other participants in the export chain, thereby increasing accountability of exporters and reducing perception that government is responsible for all phases of the export preparation process; and
• Greater flexibility and less cost for AQIS and exporters than implementing the precise recommendations of the Report while still addressing the problems identified in this Regulation Impact Statement.

Disadvantages

• Increased regulatory costs for government and industry;
• Some increased responsibility for government as a result of the increased intervention in the industry’s activities; and
• Some stakeholder dissatisfaction that the review’s recommendations were not fully implemented.

2. The following paragraphs outline the approach of Option C for each of the Report’s recommendations.

Recommendation 1 – Establishment of an Australian Live-stock Export Code

Option C accepts the Report’s recommendation. This recommendation is supported by most stakeholders, however the specific legislative reference is yet to be determined. Option C proposes to develop an interim code by May 2004 with representatives drawn from state and Commonwealth governments. Consultation with industry and other stakeholders will be undertaken as the interim code is finalised, and in accordance with the requirements in the COAG endorsed publication “Principles and guidelines for national standard setting and regulatory action by ministerial councils and standard setting bodies”. A separate regulation impact statement will be prepared when the precise legislative and regulatory mechanisms are developed.

Recommendation 2 – The Government to become solely responsible for licensing, industry to increase research and development funded by a compulsory levy, and industry responsible for quality assurance issues

Option C accepts the Report’s recommendation. A separate regulation impact statement will be prepared when the precise legislative and regulatory mechanisms are developed. The costs of implementation are the same as for Option B.

Recommendation 3 – Licensing to take account of exporter history and related entities

Option C accepts the Report’s recommendation. A separate regulation impact statement will be prepared when the precise legislative mechanism is developed.

Recommendations 4 – Veterinary responsibilities to be included in legislation, third party veterinarians to be employed directly by AQIS, not the exporter

Option C proposes to modify the Report’s recommendation. Option C accepts that the roles, responsibilities and sanctions and training for private veterinarians providing specified services and documentation (including reporting mortalities during export) be underpinned by legislation as per the Report’s recommendation. Currently, although AQIS accredits veterinarians to perform these activities, there is no legislative basis for the accreditation process, nor is there reference to third party veterinarians in the current legislation. There is no capacity to apply sanctions or to de-accredit private veterinarians for false declarations, unless they lose their registration status with the relevant state veterinary surgeon’s board. Option C modifies the Report’s recommendation relating to AQIS contracting third party veterinarians. This recommendation was not supported by third party veterinarians or the industry body who raised concerns that the costs of administering the employment of and allocation of veterinarians across Australia would be high and of little benefit.

Under Option C exporters would nominate an AQIS-accredited veterinarian to provide specified services that AQIS would approve prior to the exporter commencing collection of stock for the consignment. It is normal practice for veterinarians to provide treatments for stock, including treatments in the preparation of live-stock for export. The objective of the Report’s recommendation to ensure that veterinarians undertake necessary treatments can be readily achieved by training, accrediting and requiring veterinarians to provide declarations, auditing accredited veterinarians, and imposing penalties for false declarations. A separate regulation impact statement will be prepared when the precise regulatory mechanism for this scheme is developed.

In respect to the issue of third party veterinarians undertaking regulatory functions concerning the pre-export “fitness to travel” inspections of stock, Option C proposes that, in view of the pivotal role of the inspection and clearance process at the feedlots prior to transport to port for export, this task should be directly undertaken by AQIS officers, rather than veterinarians under contract to AQIS. This would avoid the need to develop complex contractual arrangements with a pool of private veterinarians. The increased inspection by AQIS would be the same as in Option B, however there would be no additional contracting and administrative costs associated with employing and allocating private veterinarians to AQIS as envisioned in Option B.

Recommendation 5 – Veterinarians to accompany all voyages over 10 days

Option C modifies the Report’s recommendations with respect to recommendation 5. Veterinarians are currently required to accompany live-stock on all voyages to the Middle East and to report to AQIS. Option C proposes that a risk management approach be adopted to the issue of veterinarians on ships, whereby AQIS-accredited veterinarians engaged by exporters but reporting directly to AQIS are required for specifically identified voyages to the Middle East at times when there may be some higher level of risk. AQIS could still nominate a veterinarian to accompany live-stock on these voyages. Implementing this option would reduce current industry costs. The modification would not adversely impact on the health and welfare of animals, as it would only relate to veterinarians aboard ships on low risk voyages; the experienced stockmen and ships’ crew are adequate to maintain high standards of animal welfare aboard these voyages. The veterinary tasks aboard ships are primarily diagnostic and advisory, and stockmen and crew are responsible for stock management.

Stakeholders voiced their concern that if recommendation 5 of the Report was implemented, there would be insufficient experienced veterinarians available to accompany live-stock on all voyages over 10 days. Furthermore, voyages to Japan, Korea and China have extremely low voyage mortality rates and would not require a veterinarian (for example, mortalities on shipments to Japan are less than 0.12 per cent).

Recommendation 6 – Closure of Portland and Adelaide in winter

Option C modifies the Report’s recommendation. Option C proposes that a risk assessment process is undertaken whereby an exporter is required to implement a range of measures that reduce the risks associated with exporting from certain southern ports in winter.

In past years, high mortalities have been associated with the export of stock from Portland and Adelaide during winter, due to poor sourcing, selection and preparation of stock at the feedlot, the incidence of very cold weather at the feedlot combined with the lack of adequate shelter for the stock, as well as rough and cold conditions experienced on the journey across the Great Australian Bight. There is little support for adopting a blanket ban. In 2003, there were no high mortalities from Portland or Adelaide all year, after improvements to the facilities at the feedlots were made in 2002 (covered feed troughs and more shelters for stock), and increased inspection and monitoring by AQIS during the pre-export assembly period removed unsuitable stock from the consignment. However, climatic conditions were mild over the winter of 2003. A detail cost benefit of this proposal is not available at this time, as it is not yet determined how facilities may need to be modified to trade throughout winter.

Recommendation 7 – Develop MOUs with Middle East markets

Option C modifies an aspect of the Report’s recommendation relating to a single quarantine facility in the Middle East. The Australian Government Departments of Agriculture, Fisheries and Forestry and Foreign Affairs and Trade have commenced negotiations with four countries to develop agreed conditions for the settlement of disputes concerning the health status of consignments. The conditions include the requirement for live-stock to be unloaded into a quarantine facility in the Middle East until the matter can be resolved. Preliminary discussions with officials in these countries indicate that each country would establish a separate quarantine facility, rather than a single facility in the region. Option C proposes to adopt this approach.

Recommendation 8: Develop an emergency plan

Option C proposes to accept this recommendation.

3. Consultation

4. The Department met with major stakeholders several times in February 2004 to obtain their reactions to the Keniry recommendations. The meetings did not specifically discuss any precise mechanism that might be adopted to implement the Report’s recommendations. Industry broadly supports the recommendations of the Report, although there were some areas of concern by the exporters, third party veterinarians and producer representative groups – the latter in respect of recommendation 6 to close Portland and Port Adelaide for live-stock exports over winter. Option C takes into account stakeholder comments on the practicality of implementing the Report’s recommendations. A summary of stakeholder consultation is provided at Appendix B.

5. Conclusion and recommended option

6.3 What is the preferred option?

1. Option C is the preferred option.

2. Stakeholders broadly support the Report’s recommendations with some exceptions. While accepting the recommendations entirely would restore confidence in the trade through increased regulation, Option B requires higher levels of government intervention and cost, particularly with respect to contracting and assigning private veterinarians to undertake standard veterinary work for exporters. The main areas of difference between Options B and C arise with respect to recommendations 4, 5 and 6. Compared with Option B, Option C applies risk-management principles to contracting veterinarians, requiring veterinarians on voyages and the operation of southern feedlots in winter. Option C is less costly for industry and government than Option B.

3. Implementation and review

4. A timeline for commencing consultation and developing the legislative and regulatory framework outlined in Option C has been prepared. As noted above, many of the proposed changes require more detailed consideration of the specific legislative and regulatory mechanisms required to implement the proposed approach. Legal advice is that there are a number of ways in which the recommendations can be implemented. Detailed regulation impact statements for each regulatory change will be provided once the options for each legislative and regulatory change have been considered.

Trade Impact Statement

5. The proposed response to the Report’s recommendations involves a risk management approach with enhanced regulation at the stage of licensing exporters and in assessing each consignment, increased obligations on industry to provide evidence that the stock being exported meets strict standards on animal welfare and trade product specifications, longer inspection times to assess exporter documentation that animals are fit to travel and physical checks prior to departure, an audit regime to assess quality assurance and code compliance and the development of memoranda of understanding with importing countries.

6. The proposed approach is expected to reduce the risks of subsequent rejection by importing countries of Australian live-stock, and therefore maintain the trading relationships with these countries. Furthermore, the proposed approach is expected to increase public confidence that the trade is operating within accepted animal welfare standards. This will raise the community’s acceptance of the trade as a valuable market and hence reduce calls from animal welfare groups and the community to close the trade altogether. By providing a more certain and secure regulatory framework for trade in live animals the recommended changes should have a direct positive impact on live animal exports.

Appendix A
Summary of the Report’s recommendations and Government response

Appendix B

Summary of stakeholder consultation

1. During February 2004, the Australian Government Department of Agriculture Fisheries and Forestry held a series of meetings in Canberra with stakeholders to obtain their response to the Keniry Report’s recommendations.

2. Separate meetings were held in Canberra with Animals Australia, RSPCA, and the Australian Veterinary Association (“AVA”) on 9, 11 and 12 February respectively. The summary notes from each meeting were confirmed with the attendees.

3. Two industry round-table meetings were held on 10 and 18 February 2004: the invitees are listed below. The first meeting asked each industry representative to comment on each of the Report’s recommendations. The summary notes from that meeting were forwarded to attendees for confirmation. Australian Pork Limited and Australian Lot Feeders’ Association (“ALFA”) were unable to attend, however, ALFA submitted their views through a written submission, as did a number of other industry stakeholders who attended the round-table meeting.

4. The second meeting held on 18 February 2004 requested general advice from industry participants on how particular recommendations might be implemented.

5. The Live-stock Export Veterinarians Reference Group also provided written comment on recommendations 4 and 5.

6. Industry round-table attendees were as follows:

• Australian Wool Innovation (AWI)
• Wool Producers
• Meat and Live-stock Australia Limited (MLA)
• Cattle Council of Australia (CCA)
• Sheepmeat Council (SCA)
• Goat Industry Council of Australia (GICA)
• Australian Dairy Farmers Association (ADFA)
• Australian Meat Industry Council (AMIC)
• National Farmers’ Federation (NFF)
• Australian Veterinary Association (AVA)
• Livecorp
• Australian Live-stock Export Council (ALEC)
• Animal Health Australia (AHA)
• Victorian Farmers’ Federation (VFF)
• South Australian Farmers’ Federation (SAFF)
• Australian Government Department of Prime Minister and Cabinet
• Australian Government Department of Foreign Affairs and Trade

NOTES ON CLAUSES

Clause 1 – Short Title

1. Clause 1 is a formal provision specifying that the Act may be cited as the Agriculture Fisheries and Forestry Legislation Amendment (Export Control) Act 2004.

Clause 2 – Commencement

2. Clause 2 provides that sections 1 to 3 will commence on the day on which the Act receives the Royal Assent. However, Schedule 1 will commence on a day or days to be fixed by Proclamation or, if not within six months after the date of Royal Assent, the fist day after the end of that period.

Clause 3 – Schedule

3. Clause 3 provides that the amendment of each Act specified in the Schedule to the Bill and any other item in the Schedule will have effect according to its terms.

SCHEDULE 1 – EXPORT OF LIVE-STOCK, ETC

Part 1 – Australian Code for the Export of Live-stock
Item 1

4. This item inserts a new part, Part 2A, after Part 2 of the Australian Meat and Live-stock Industry Act 1997. The new part comprises one provision, section 57A. The effect of this new provision is to allow the Minister to determine principles relating to the export of live-stock from Australia. The principles may relate to a variety of different aspects of the live-stock export process and will be known as the “Australian Code for the Export of Live-stock”.

5. The purpose of the Australian Code for the Export of Live-stock is to provide uniform, national principles to be taken into account by persons responsible for exercising powers or performing functions under the Act. It is intended that the principles formulated by the Minister will guide the Secretary and authorised officers in making decisions or carrying out functions at any stage of the export process. The Australian Code for the Export of Live-stock will be underpinned by specific standards to be met by exporters. These standards will be determined by Government and will become enforceable by being set out in subordinate legislation.

Part 2 – Integration of export licence and permit systems, etc
Division 1 – Australian Meat and Live-stock Industry Act 1997

Item 2

6. This item inserts a definition for an “associate” in section 3 of the Australian Meat and Live-stock Industry Act 1997. The definition is relevant to the new section 25A.

Item 3

7. This item amends section 9 of the Australian Meat and Live-stock Industry Act 1997 by removing the requirement for the Secretary to have regard to any broad policies developed jointly by prescribed industry bodies when exercising his or her powers in relation to live-stock export licences. The purpose of this amendment is to reflect the government’s intention to have sole responsibility for live-stock export licences.

8. This amendment also removes the requirement for the Secretary to have regard to any broad policies developed jointly by prescribed industry bodies when exercising his or her powers in relation to live-stock export quotas. This aspect of the amendment will have no impact on industry as there is currently no system to establish and administer export quotas for live-stock.

Item 4

9. This item amends section 12 of the Australian Meat and Live-stock Industry Act 1997 by inserting a new subsection (3). Section 12 deals with the requirements for the grant of licences under the Australian Meat and Live-stock Industry Act 1997. The amendment expands the criteria that the Secretary may have regard to when considering an application for a live-stock export licence. The new subsection 12(3) allows the Secretary to have regard to the extent to which the applicant of a live-stock export licence has complied with any requirement of or under the Export Control Act 1982 relating to the export of live-stock, when deciding to grant a live-stock export licence under the Australian Meat and Live-stock Industry Act 1997. A requirement under the Export Control Act 1982 includes a requirement to pay fees.

10. The purpose of this amendment is to improve the integration between the provisions of the Australian Meat and Live-stock Industry Act 1997 and the Export Control Act 1982 relating to live-stock. The item allows the compliance history of a person under the Export Control Act 1982 to be taken into account by the Secretary when determining the grant of a live-stock export licence to that person under the Australian Meat and Live-stock Act 1997.

Item 5

11. This item amends subsection 23(1) of the Australian Meat and Live-stock Industry Act 1997. Subsection 23(1) sets out the matters to which the Secretary may have regard when deciding to issue a show cause notice. Item 5 inserts an additional matter, subsection 23(1)(ea), that the Secretary may consider under subsection 23(1) of the Australian Meat and Live-stock Industry Act 1997. This additional matter concerns the situation where a holder of a live-stock export licence makes a false declaration under the new subsection 7(3B) of the Export Control Act 1982.

12. The purpose of this item is to improve the integration between the provisions of the Australian Meat and Live-stock Industry Act 1997 and the Export Control Act 1982 relating to the export of live-stock.

Item 6

13. This item amends section 23 of the Australian Meat and Live-stock Industry Act 1997. Section 23 deals with notices to licence holders to show cause why the licence should not be treated in a certain way. Item 6 amends section 23 by inserting a new provision, subsection 23(1A), after subsection 23(1). The new provision enables the Secretary to have regard to the extent to which a holder of a live-stock export licence has complied with any requirements of or under the Export Control Act 1982 relating to the export of live-stock, when determining whether one or more of the circumstances in subsection 23(1) of the Australian Meat and Live-stock Industry Act 1997 have occurred. A requirement under the Export Control Act 1982 includes a requirement to pay fees.

14. The purpose of this item is to allow the Secretary to consider the extent to which a holder of an live-stock export licence has complied with the requirements under the Export Control Act 1982 when determining whether to issue a show cause notice under the Australian Meat and Live-stock Industry Act 1997. As with other provisions in this Part, this item will improve the integration between the export licence and export permit systems.

Item 7

15. This item also amends section 23 of the Australian Meat and Live-stock Industry Act 1997 by inserting a new provision, subsection 23(2A), after subsection 23(2). The new provision allows the Secretary to issue a show cause notice to a holder of a live-stock export licence where the new paragraph 25A(2)(b) applies.

Item 8

16. This item is a minor technical amendment to paragraph 23(3)(a) of the Australian Meat and Live-stock Industry Act 1997. Subsection 23(3) specifies the content requirements for a show cause notice. Item 8 amends paragraph 23(3)(a) to accommodate the Secretary’s powers in relation to the new section 25A.

Item 9

17. This item amends subsection 23(3) of the Australian Meat and Live-stock Industry Act 1997. Subsection 23(3) specifies the content requirements for a show cause notice. Item 9 amends subsection 23(3) by inserting a new paragraph 23(3)(aa). The new paragraph requires the Secretary to state the grounds on which the Secretary gives notice, if the new subsection 23(2A) applies.
Item 10

18. This item amends paragraph 24(1)(b) of the Australian Meat and Live-stock Industry Act 1997. Section 24 of that Act lists the Secretary’s powers to deal with licences after issuing show cause notices and considering any written statements given in response to the notices. The effect of this item is to allow the Secretary to cancel, refuse to renew, or suspend a live-stock export licence or reprimand a holder of a live-stock export licence if, after considering any written statement by that person, the Secretary is satisfied that the new subsection 23(2A) applies. The effect of this item and the following item 11 is to address the situation where the Secretary refuses to grant or renew, or suspends, further suspends, or cancels a live-stock export licence, and the holder or applicant of the licence seeks to frustrate this decision by relying on the licence of another person.

Item 11

19. This item inserts a new provision, section 25A, after section 25 of the Australian Meat and Live-stock Industry Act 1997. The new provision empowers the Secretary to take certain action in relation to the licence of a person (“Person A”) who was an associate of an applicant or holder of a live-stock export licence (“Person B”) at the time the Secretary refused to grant or renew, suspended, further suspended or cancelled the lives-stock export licence of Person B. The new subsection 25A(2) specifies that the Secretary may refuse to grant a licence to Person A or issue a show cause notice under the new subsection 23(2A) to Person A if they are or become a holder a live-stock export licence. To avoid doubt, the new subsection 25A(3) states that the Secretary may take action mentioned in the new subsection 25A(2) against Person A, whether or not Person A is still an associate of Person B at the time the Secretary takes action. The combined effect of items 9, 10 and 11 is to enable the Secretary to refuse to grant a licence to Person A or, after issuing a show cause notice, take action against Person A in a manner described in paragraphs 24(1)(c) to (g) of the Australian Meat and Live-stock Industry Act 1997.

Item 12

20. This item sets out the application arrangements for the new section 25A. Item 12(1) confirms that the “particular time” mentioned in the new subsection 25A(1) includes time before, at or after the commencement of Part 2. The effect of this item is to enable the new subsection 25A(1) to apply irrespective of whether the Secretary’s action took place before, at or after the commencement of Part 2.

21. Item 12(2) confirms that the Secretary may only take action in relation to an associate after the commencement of Part 2.

22. Item 12(3) confirms that, in determining whether a person is an associate for the purpose of the new section 25A, the Secretary can take into account anything done before the commencement of Part 2.

Division 2 – Export Control Act 1982

Item 13

23. This item expands the definition of “orders” in section 3 of the Export Control Act 1982 to include orders made by the Secretary. This item is consequential on item 16.

Item 14

24. This item amends section 7 of the Export Control Act 1982. Section 7 deals with the powers to make regulations under the Act. The item inserts two provisions, subsections 7(3B) and 7(3C), after subsection 7(3A) to allow a condition to be imposed in the regulations requiring a person exporting live-stock under the Export Control Act 1982 to make a declaration that he or she has complied with any conditions to which a live-stock export licence under the Australian Meat and Live-stock Industry Act 1997 was subject or any other requirement under that Act that otherwise relates to the export of live-stock.

Item 15

25. This item amends section 7 of the Export Control Act 1982 by inserting a new provision, subsection 7(5), after subsection 7(4). The new provision enables regulations to be made providing that, in relation to the grant, surrender, revocation, or suspension of licences and permissions to export (including export permits) under the Export Control Act 1982, consideration may be given to the extent to which an applicant or holder of a live-stock export licence has complied with conditions relating to the licence or any other requirement under the Australian Meat and Live-stock Industry Act 1997.

26. As with other items in this Part, this item will improve the integration between the export licence and export permit systems.

Item 16

27. This item amends section 25(2) of the Export Control Act 1982 by inserting a new paragraph, paragraph 25(2)(h), after paragraph 25(2)(g). The new paragraph enables the Secretary to make orders with respect to any matter concerning prescribed goods that are animals for or in relation to which provision may be made by the regulations, provided that the orders made by the Secretary are not inconsistent with the regulations or any order of the kind mentioned in paragraph 25(2)(g) made by the Minister.

28. The purpose of this item is to extend the order making power relating to animals (including live-stock) to the Secretary, so that the Secretary’s power under the Export Control Act 1982 is similar to the Secretary’s order making power under the Australian Meat and Live-stock Industry Act 1997 in relation to live-stock.

Part 3 – Accreditation of veterinarians for purposes of approved export programs

Export Control Act 1982

Item 17

29. This item inserts a definition for “accredited veterinarian” in section 3 of the Export Control Act 1982. The new definition is consequential on the amendments in item 22.

Item 18

30. This item inserts a definition for “approved export program” in section 3 of the Export Control Act 1982. The new definition is consequential on the amendments in item 22.

Item 19

31. This item inserts a definition for “eligible animal reproductive material” in section 3 of the Export Control Act 1982. The new definition is consequential on the amendments in item 22.

Item 20

32. This item inserts a definition for “eligible live animals” in section 3 of the Export Control Act 1982. The new definition is consequential on the amendments in item 22.

Item 21

33. This item inserts a definition for “export activities” in section 3 of the Export Control Act 1982. The new definition sets out the scope of activities covered by the amendments in item 22.

Item 22

34. This item inserts a new part, Part IIA, after Part II of the Export Control Act 1982 to deal with the accreditation of veterinarians for the purposes of approved export programs in relation to eligible live animals and eligible animal reproductive material.

35. The new subsection 9A(1) is a regulation making provision, which allows for regulations to be made for the preparation, implementation, variation, suspension and cancellation of approved export programs.

36. The new subsection 9A(2) defines an approved export program as a program of activities for accredited veterinarians or authorised officers to undertake for the purpose of ensuring the health and welfare of eligible live animals and eligible animal reproductive material in the course of export activities.

37. The new subsection 9A(3) lists the types of activities that may be included in an approved export program. The programs may include importing country requirements regarding the treatment of live animals and animal reproductive material and other requirements relating to record keeping and reporting.

38. The new subsection 9A(4) confirms that regulations may provide that approved export programs may differ depending on the country to which the eligible live animals or eligible animal reproductive material are to be exported, the type of eligible live animals or eligible animal reproductive material involved, and any other matter. This will enable specific programs to be made in relation to a particular importing country and a particular type of live animal or animal reproductive material, for example a program concerning the export of cattle to China.

39. The new subsection 9A(4) also allows regulations to be made for giving directions to exporters in relation to the implementation of an approved export program, and regulations to be made for publishing by the Secretary of records and reports made by accredited veterinarians or authorised officers in relation to the programs.

40. The new section 9B enables regulations to be made to establish a system for accrediting veterinarians for the purpose of undertaking approved export programs. The new provision states that these regulations can provide for the variation, suspension, or revocation of accreditation, and the payment of fees by veterinarians in making an application for accreditation.

41. The new section 9C enables regulations to be made relating to the payment by exporters of the reasonable cost of activities undertaken by authorised officers.

42. The new section 9D allows the Secretary to direct an authorised officer to undertake some of all of an approved export program. The new provision also requires the Secretary to notify exporters in writing of a direction given under this section to whose export activities the direction relates.

43. The new subsection 9E(1) allows the Secretary to direct an authorised officer to monitor, review or audit the undertaking of accredited veterinarians or exporters in relation to approved export programs. The new subsection 9E(2) provides that if a direction is given to an authorised officer under subsection (1) and the authorised officer identifies a deficiency in the undertaking by an accredited veterinarian of the activities in an approved export program, the authorised may, in writing, direct the accredited veterinarian to remedy the deficiency within such reasonable time as is specified in the direction. The new subsection 9E(3) specifies the requirements for a direction given under subsection 9E(2), including the requirement that the direction state that it is an offence under new section 9H for failing to remedy the deficiency. The new section 9E will assist in maintaining the integrity of the scheme relating to accredited veterinarians and approved export programs.

44. The new section 9F creates an offence with a penalty of 50 penalty units, applying to veterinarians for agreeing to undertake approved export programs without accreditation. The purpose of this new offence is to ensure that only accredited veterinarians undertake activities in approved export programs. Strict liability applies to the conduct of the veterinarian in undertaking an activity included in an approved program and the circumstance that he or she is not accredited. However, recklessness applies to second element of the offence, that being, whether the activity is included in an approved export program. The penalty for this offence is 50 penalty units. This level of penalty is within the limits considered appropriate by Commonwealth policy in relation to strict liability offences. Strict liability is necessary to ensure the integrity of the regulatory system relating to accredited veterinarians.

45. The new section 9G creates an offence of strict liability applying to accredited veterinarians, if under the regulations, accredited veterinarians are required to keep records or provide reports in connection with an approved export program and the requirements are contravened. For example, the regulations may provide that accredited veterinarians keep records and provide reports for the purpose of monitoring the mortality rates of eligible live animals.

46. The penalty in the new section 9G is 50 penalty units. This penalty is higher than the standard penalty of 30 penalty units for record-keeping offences. A higher than usual penalty is required because the Government’s ability to make decisions at crucial points in the export chain often depends on the information supplied by accredited veterinarians. The Government therefore needs to be confident that it can obtain reports from accredited veterinarians when required and that it can verify the information provided in the reports by checking the records held by accredited veterinarians.

47. The consequences of failing to comply with record keeping and reporting requirements are significant and warrant a higher than normal penalty. For example, if reports are required from an accredited veterinarian who accompanies live-stock on an overseas journey and he or she fails to provide the reports, the Government may not be aware of animal health or welfare problems that may have arisen on the journey in time to take effective action. In addition, if the Government is required to certify to an importing country that certain tests required by the importing country have been undertaken and this certification is based on the information provided by an accredited veterinarian in a report, then the Government needs to be able to verify the information by checking the records held by that veterinarian. The integrity of the certification system is undermined, if the Government cannot verify the information provided by accredited veterinarians.

48. The new section 9H creates an offence of strict liability applying to accredited veterinarians for failing to remedy a deficiency in his or her undertaking of an approved export program within the time specified by an authorised officer in a written direction. The purpose of this offence is to ensure that deficiencies in the undertakings of approved export programs by accredited veterinarians are remedied within such reasonable time as an authorised officer specifies in a written direction under the new subsection 9E(2). The offence has a penalty of 50 penalty units. The level of penalty is within the limits considered appropriate by Commonwealth policy in relation to strict liability offences. Strict liability is necessary to ensure the integrity of the regulatory system relating to accredited veterinarians.

49. The new section 9I creates a fault-based offence applying to exporters of eligible live animals and eligible animal reproductive material. The purpose of this offence is to ensure that exporters engage accredited veterinarians to undertake approved export programs. The offence carries a penalty of 12 months imprisonment. This penalty is comparable with the penalties for existing offences in the Export Control Act 1982, such as section 24, and provides a middle ground between the other proposed offences in this Bill and the more serious offences in the Export Control Act 1982, which carry penalties of 5 years imprisonment.

50. The penalty in the new section 9I is higher than the penalty for the other new offences because it is fault-based and applies to the exporter who has ultimate responsibility for exporting live-stock. The scheme for accredited veterinarians established in item 22 will only improve animal health and welfare outcomes in the live-stock export trade if exporters take compliance with the scheme seriously. This offence and the penalty of 12 months imprisonment demonstrates the Government’s intentions in this regard.

51. The new section 9J creates a strict liability offence applying to exporters, if under the regulations, exporters are required to allow accredited veterinarians to accompany eligible live animals during their transport from Australia to their overseas destination in connection with an approved export program and the requirement is contravened. The purpose of this offence is to ensure that exporters cooperate with the requirement for accredited veterinarians in approved export programs to accompany eligible live animals overseas. The offence has a penalty of 50 penalty units. The level of penalty is within the limits considered appropriate by Commonwealth policy in relation to strict liability offences. Strict liability is necessary to ensure the integrity of the regulatory system relating to accredited veterinarians.

52. The new section 9K creates a strict liability offence applying to persons obstructing or hindering an accredited veterinarian or authorised officer in the undertaking of an approved export program. The purpose of this offence is to ensure that persons, including exporters, do not interfere improperly with the activities of an accredited veterinarian under an approved export program. The offence carries a penalty of 50 penalty units. As above, the level of penalty is within the limits considered appropriate by Commonwealth policy in relation to strict liability offences. Strict liability is necessary to ensure the integrity of the regulatory system relating to accredited veterinarians.

53. The new section 9L creates a strict liability offence applying to exporters for failing to provide accredited veterinarians or authorised officers who are engaged by the exporter or directed by the Secretary to undertake an approved export program with all reasonable facilities, and assistance, necessary to undertake the activities in the program. The purpose of this offence is to ensure that exporters provide all necessary equipment, access and support to accredited veterinarians or authorised officers to enable them to undertake the activities in an approved export program. The penalty for this offence is 50 penalty units. The level of penalty is within the limits considered appropriate by Commonwealth policy in relation to strict liability offences. Strict liability is necessary to ensure the integrity of the regulatory system relating to accredited veterinarians.

54. The new section 9M provides that 15.2 of the Criminal Code (extended geographical jurisdiction – category B) applies to an offence against any of the new sections 9F to 9L. This means that, in addition to the offences applying in Australia, the offences apply to conduct occurring wholly outside Australia when the defendant is an Australian citizen, body corporate or resident. However, it is a defence for an Australian resident if there is no equivalent local offence.

Item 23

55. This item amends subsection 10A(1) of the Export Control Act 1982, which deals with monitoring powers in relation to registered premises and other premises entered by consent. The amendment allows an authorised officer to enter a registered premises or any other premises with the consent of the occupier and exercise the powers set out in section 10 for the purpose of monitoring, reviewing or auditing the undertakings of accredited veterinarians or exporters in connection with an approved export program. The purpose of this amendment is to clarify that authorised officers have the power to enter premises and exercise general search powers such as inspection, examination, and sampling when complying with a direction under the new section 9E(a).

Item 24

56. This item amends subsection 10B(2) of the Export Control Act 1982, which deals with the issue of monitoring warrants by magistrates. The amendment confirms that a magistrate can issue a warrant in relation to particular premises if satisfied that an authorised officer should have access to the premises for the purpose of monitoring, reviewing or auditing the undertakings of accredited veterinarians or exporters in connection with an approved export program.

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