Regulating live exports

Claire Petrie, Law and Bills Digest and Rob Dossor, Economics

Key Issue
In the 44th Parliament the Government worked to streamline the regulatory regime for live animal exports and to establish and re-open export markets. However, evidence of supply chain breaches has sustained debate about the efficacy of the system and enforcement role of the Department of Agriculture and Water Resources.

Why export live animals?

According to the UN Department of Economic and Social Affairs, Australia is the largest seaborne exporter of live cattle and second largest exporter of live sheep. The question arises as to why Australia exports live animals, rather than as chilled or frozen meat.

Generally speaking, countries with large Islamic populations often require meat imports to comply with halal certification. While many Australian abattoirs have this certification, importers often choose to import live animals and rely on domestic abattoirs for processing. A number of countries also use live imports as a form of industry development, as it enables the importing country to keep the added value in their country. Cultural preferences, such as the demand for freshly slaughtered meat (purchased in ‘wet’ markets, which are generally open and non-refrigerated) dictate that the animal is slaughtered locally and recently. Similarly, availability of refrigeration in some countries which import livestock is limited, requiring animals to be imported live and slaughtered locally.

Regulatory regime

The export of live animals is regulated by the Australian Meat and Live-stock Industry Act 1997, the Export Control Act 1982 and the regulations and instruments issued under these Acts. The Export Control (Animals) Order 2004 sets out the conditions for export and requires the exporter to hold a livestock export licence and permit and provide a Notice of Intention for export. Exported livestock must meet importing country requirements. This may include mandatory pre-export quarantine and the issuing of a health certificate confirming the animal meets health protocol requirements as negotiated between Australia and the importing country.

Exporters must also comply with the Australian Standards for the Export of Livestock and have in place an approved Export Supply Chain Assurance System (ESCAS). The ESCAS was initially implemented for Indonesia following the 2011 live export ban and subsequently rolled out to all countries. The system requires the exporter to establish a system of control for transporting livestock to a particular country, including tracing all livestock through an independently-audited supply chain up to the point of slaughter.

Compliance with the system is primarily monitored through independent audits, which are submitted to the Department of Agriculture and Water Resources (DAWR) during the year at a frequency dependent on the facility’s risk rating.

Enforcement

A 2015 Departmental review found the system to be an ‘administratively burdensome regulatory arrangement’, but nonetheless effective in improving animal welfare outcomes. It noted the inherent difficulty of requiring exporters to oversee off-shore entities not subject to Australia’s regulatory requirements. The review recommended greater industry responsibility for managing risks within supply chains, and clearer non-compliance guidelines.

In response to non-compliance findings, DAWR can: suspend or revoke an export licence or use of a facility/supply chain; impose conditions on an ESCAS approval or licence and/or refer the matter to the Commonwealth DPP. Animal welfare advocates and some exporters have expressed frustration with the absence of strong enforcement action by DAWR, which has primarily responded to non-compliance by imposing conditions on export licences and ESCAS approvals.

In July 2016 DAWR cancelled the licence of exporter Frontier International Agri, after a consignment of dairy heifers sent to Japan tested positive for Bovine Johnes Disease, causing Japan to suspend its cattle trade with Australia.

Recent developments

Since the 2013 election, the Coalition Government has sought to streamline the regulatory scheme by:

introducing a risk-based audit framework in which audit frequency is determined by the facility type, its inherent risks and the compliance history of exporters
removing the requirement for a Memorandum of Understanding to be in place for each new export market which sets out the conditions under which the live trade can proceed and
implementing ‘Approved Arrangements’ between DAWR and an exporter which remove the need for exporters to obtain approval for each consignment. These will be mandatory for exporters from 1 January 2017.

The Government has also focused on establishing new export markets in China, Cambodia and Thailand, and has reopened trade to Bahrain, Iran, Lebanon and Egypt.

Continuing concerns

Reports of incidents on livestock carriers and documented cruelty in importing countries have sustained debate about the effectiveness of the regulatory regime and the future of the livestock export trade.

In June 2016 the ABC broadcast footage of Australian cattle being beaten with sledgehammers in Vietnamese abattoirs. The industry-run Australian Livestock Export Council suspended exports to three abattoirs and announced an independent inquiry into the systems in place to support ESCAS requirements in Vietnam. DAWR subsequently suspended 21 facilities in Vietnam and directed two Australian exporters to cease supply to the Vietnam market.

The incident prompted debate about the Department’s role in responding to non-compliance, with the ALP and the Greens calling for the establishment of an independent office of animal welfare (see ‘The Commonwealth’s role in animal welfare’ elsewhere in this briefing book). The Coalition has resisted such calls, arguing the existing regulatory framework is sufficiently robust.