Chapter 6
Conclusion
6.1
On 30 May 2011, the ABC Four Corners program televised A
Bloody Business. The ABC described the program as an "explosive expose
of the cruelty inflicted on Australian cattle exported to the slaughterhouses
of Indonesia".[1]
6.2
No one who appeared before the committee, or wrote to the committee, condoned
the treatment of cattle in the footage broadcast as part of the Four Corners
program. A clear message throughout this inquiry from animal welfare groups,
the livestock industry, governments and the wider community was that the
treatment of cattle as shown in the Four Corner's program was totally
abhorrent and inexcusable.
6.3
During this inquiry, a number of witnesses expressed concerns about the
ABC Four Corners program. Some witnesses expressed concerns about the
accuracy of the program, while others made quite serious allegations about the
editing of the footage. Some of the individuals interviewed for the program
contacted the committee to express concern at the manner in which they were
treated by the Four Corner's team and the way in which they were
presented to the Australian public. The committee has chosen not to comment
further on the specifics of these concerns, having decided that it is not well
placed to determine whether or not they are well founded.
6.4
What is clear to the committee is that the program was intended to have
a significant impact on the viewing public, and through them, the Australian
Government and the live export industry. Many on the committee are satisfied
that the primary motivation for the Four Corner's program was a desire
to end the live export trade.
6.5
To say that this objective has been achieved is an understatement. The
program was so hard hitting that it panicked sections of the community and the
Australian Government into thinking that the only solution was to immediately
suspend the live cattle trade, without consideration of the devastating and far
reaching impact this action would have on the many families and communities who
depend on the trade for their livelihood, or on Australia's relationship with
the Indonesian Government.
6.6
However, the committee does not consider that there is anything to be
gained from dwelling further on the motives of Animal's Australia, RSPCA Australia
or the ABC. The committee prefers instead to focus on how these serious
shortcomings in Australia's live export trade can be properly addressed to
preserve this significant trade and the communities it underpins.
6.7
The committee believes that out of adversity comes opportunity. The
Australian Government and the Australian red meat industry have in their hands
the opportunity to place the industry on solid foundations. To achieve this,
some key lessons must be learnt from the events of the last six months.
There is no room for compromise on animal welfare
6.8
Firstly, Governments, parliaments and industry must all accept that
there can be no compromise around animal welfare. There is genuine and
widespread concern in the Australian community about the welfare of Australian
animals exported for slaughter in other countries. We must continue to strive
to improve the treatment of Australian livestock and foster significantly
improved animal welfare standards.
6.9
The committee endorses the sentiments of Dr Temple Grandin:
I think using animals for food is an ethical thing to do, but
we've got to do it right. We've got to give those animals a decent life and
we've got to give them a painless death. We owe the animal respect.[2]
6.10
While this may seem self evident, the committee considers that in
tackling the difficulty of influencing outcomes in animal welfare in another
sovereign state, compromises have been made, particularly in the Indonesian
live cattle export market.
6.11
The committee notes that prior to the Four Corners program, the
industry had adopted an incremental approach to improving animal welfare within
importing countries, partly in response to the sensitivities involved. In
Indonesia in particular, the widespread prevalence of traditional slaughter
practices, the level of understanding of animal handling practices and the
plethora and diversity of slaughter facilities have posed significant
challenges. The committee recognises that achieving change in this environment
required a careful and considered approach.
6.12
However, the committee is concerned that there appears to have been
insufficient monitoring to determine if this incremental approach was achieving
sustained change. Given the significant investment of both financial and
physical resources by the Australian Government and peak industry bodies over a
considerable period of time, the committee is concerned that the changes appear
to be minimal.
6.13
The committee cannot help but think that at a fundamental level,
Australian cattle producers have been let down by a failure to appreciate the
magnitude of the risk posed to the industry if animal welfare issues were not
effectively addressed within a reasonable timeframe.
6.14
By their own admission, MLA and LiveCorp were aware of significant
shortcomings in animal welfare within the Indonesian market for some time. The
committee is satisfied that other peak bodies must also have been aware of the
true situation. The number of reviews and reports, undertaken on behalf of the
industry, pointing to significant shortcomings in animal handling practices and
in animal welfare casts a cloud over the efforts of peak bodies to facilitate
improved welfare outcomes.
6.15
The clear positive to come out of the past six months' chaos is that it
has fast–tracked a lot of processes that were taking altogether too long to
reach an appropriate conclusion, and stimulated a greater degree of shared
commitment and cooperation. Within a very short period of time, a range of
sensitive diplomatic issues appear to have been addressed and the level of
cooperation government to government and industry to industry displays a
renewed commitment and vigour.
6.16
The committee considers that there is also a lesson here for the live
export industry. The industry must review its lines of authority and
responsibility and the manner in which peak industry bodies communicate both
within the industry and with other key stakeholders, governments and the
community. The industry would benefit from a review of which peak bodies
currently hold what responsibility for the live export industry, the nature of
those responsibilities and the extent to which they are shared with other industry
peak bodies. In undertaking such a review, the industry should seek to clarify
the extent to which those bodies with responsibility to act and speak for the
industry are accountable to the industry for those actions and statements. The
committee considers that clarification of the lines of responsibility and
authority within the industry would assist the industry to respond more
effectively to any future call for urgent action.
Recommendation 6
6.17 The committee recommends that the Australian live export industry
undertake a review of the responsibilities of peak bodies that act and speak on
behalf of the industry with a view to clarifying the lines of authority and
communication within the industry.
Live export trade offers an avenue for effective change
6.18
While many submitters to this inquiry have argued strongly that the
solution to these animal welfare issues is to end all live exports, the
committee does not agree. The committee considers that Australia's active
involvement in the live animal export trade puts it in a much better position
to act as an agent of change.
6.19
In this context, the committee welcomes the Government's stated
commitment to the live export industry and notes its expectation that the
current reform process will provide stability for the industry and the
individuals, small businesses and communities that are dependent upon it. The committee
hopes that through its commitment to continue to work closely with the
livestock industry, state and territory governments and Australia's trading
partners, the Government may be able to foster a return of confidence to this
very important industry.
Reform across the supply chain
6.20
The committee considers that the Australian Government's recognition
that it must play a more active role in the oversight of all stages of the live
export chain is long overdue. The committee also welcomes the clear delineation
of responsibility and the emphasis on accountability and transparency in the
recently adopted supply chain assurance approach. The long-term future of the
industry depends on effective accountability and full transparency.
6.21
The committee would also like to see closer accountability and scrutiny
of Commonwealth funding for industry and government programs designed to
improve the animal welfare framework across the live export industry.
6.22
The committee has also noted its support for the imposition of an
expectation of full traceability of animals throughout the supply chain. The
committee would, however, prefer to see this strengthened to ensure the
mandatory application of a uniform, electronic traceability system across the
board.
6.23
The committee notes that as a result of the Independent Review of
Australia's Livestock Export Trade (the Farmer Review) and the work of the
Industry Government Working Groups, the Government has committed to the
implementation of further reforms throughout the supply chain, both
domestically and internationally, for all live export markets.
6.24
The committee welcomes the Government's acceptance of all
recommendations made by the Farmer Review. More importantly, the committee
notes that the Review's findings have been welcomed by industry representatives.
Mr Steve Meerwald, Managing Director of Wellard Rural Exports has said that
"Our goals are aligned. The Federal Government, the Australian public,
exporters and farmers all want to ensure that animals are treated professionally
and humanely, that voyage success rates are optimised and that animal welfare
is a priority throughout the live export process from procurement to
processing".[3]
National Farmers Federation President Jock Laurie has noted the extent to which
the Review's recommendations align with the recommendations made by the
Industry Government Working Groups on live exports. Mr Laurie said "[this]
shows that both the live sheep and cattle export industries are determined to
actively drive the reforms. We have stressed before, and we will continue to
stress that animal welfare is of utmost priority to Australia's livestock
industry."[4]
6.25
The committee notes that implementation of the recommendations will
require action and cooperation on the part of Commonwealth, state and territory
governments and the industry and notes the Government's intention that the
proposed reforms be implemented across supply chains for 75 per cent of the
live export trade by February 2012 and for the entire trade by the end of 2012.[5]
The committee notes that this work has commenced and will follow its progress
closely.
6.26
As noted during the inquiry, the series of reforms implemented across
the supply chain will impose significant additional cost on the industry.
Members of the industry have indicated that the extent of these costs will not
be fully understood until the reforms have been fully implemented. The
Australian Live Export Council has estimated that the cost to the industry of
implementing supply chain assurance programs in all of Australia's 29 live
export markets could be in the order of at least $25 million. ALEC has said
that the industry will seek Government assistance to meet these increased
costs.[6]
The need for effective and
cooperative relationships
6.27
A key message from this inquiry is the fundamental importance of
establishing and maintaining positive industry to industry relationships
throughout the supply chain, and supporting this relationship through the
provision of appropriate assistance and training. The committee is pleased to note
that both industry and government representatives have managed to maintain
positive working relationships with their counterparts within Indonesia during
the recent crisis.
6.28
The committee is particularly pleased to note that the supply chain
assurance framework offers the ability to respond to failings in the supply
chain on a case-by-case basis without resorting to closing entire markets. The
committee considers that there may have been too little emphasis placed on the
diagnosis and correction of poor performance in the past. The supply chain
approach offers an incentive to those involved to work cooperatively to ensure
the sustainability of individual supply chains, by developing and maintaining good
animal welfare practices.
6.29
In addition to this, the committee believes it is important for Australia
to continue to work cooperatively with importing countries to improve animal
welfare and animal handling procedures. The committee believes there is an
ongoing need for both government and industry to invest in appropriate
infrastructure and training to ensure animal welfare standards are adhered to.
6.30
The committee considers that, in the first instance, an active dialogue
must be maintained at the highest and most formal level between Australian
Ministers and their counterparts within those countries with whom Australia
engages in live export trade. The committee also considers that the messages
from these high level discussions must in turn be clearly communicated to
government officials and to industry to ensure that all parties are working
harmoniously toward a common set of goals.
Recommendation 7
6.31 The committee recommends that the Australian government establishes an
ongoing dialogue with the governments of each of our live export trading
partners and ensures that agreements reached as a result of this dialogue are
clearly communicated to Australian Government officials and Australian industry
representatives.
6.32
The committee will maintain a watching brief over the implementation of
the supply chain assurance system. It will monitor government and industry
initiatives to assure itself that there is an ongoing commitment to the
provision of appropriate training in animal handling practices, and that the
effectiveness of such training in securing improved animal welfare outcomes is
monitored.
Diversification of the industry
6.33
The live export industry plays an important role in the Australian
economy. Much more significantly, however, it underpins regional economies in
Western Australia, the Northern Territory and Queensland. The committee notes
that it is a significant source of employment and investment in many rural and
remote communities, both directly and through ancillary industries. It is also
a significant source of training, employment and business opportunities for
Indigenous communities. This investment in training, employment and
infrastructure is not easily transferrable.
6.34
The committee does not support the argument that phasing out of the live
export industry would reinvigorate the domestic processing sector. The
committee is also not persuaded that the benefit to the processing sector would
justify the economic and social dislocation involved. The committee considers
that rather than seeking to phase out one industry in favour of the other, more
emphasis needs to be given to strengthening the complementary relationship
between the two.
6.35
At the same time, the committee is concerned that the northern
Australian cattle industry is too heavily reliant on the live export trade,
particularly the trade with Indonesia. The temporary suspension of the live
cattle trade with Indonesia has highlighted the vulnerability of the industry. The
limited ability of producers to access alternate markets left the industry and
surrounding communities in a very difficult position from which they will take
some time to recover.
6.36
The committee considers that the reforms to the live export supply chain
should go some significant distance toward placing the live export trade on a
more secure footing and restoring confidence to the industry. However, the
committee believes that the industry must also work to ensure that it is better
able to withstand any future disruptions to the trade.
6.37
The committee welcomes current initiatives to establish meat processing
facilities in northern Australia, and considers that these developments have
the potential to contribute to long term diversification within the industry. The
committee notes that these proposed facilities are intended to complement the
live trade by providing a market for stock which does not meet the requirement
of the trade.
6.38
The committee notes that the establishment or re-establishment of
processing facilities in northern Australia is not without significant
challenges. For such an enterprise to be viable, it must have a reliable source
of labour, a secure supply of livestock and be able to adapt to the seasonal
nature of production in northern Australia.
6.39
The committee notes evidence that such facilities are unlikely to be
established without some form of government assistance. The committee considers
that given the significant investment in the northern Australian cattle
industry, government support of such enterprises, in all its guises, is fully
justified. The committee encourages the industry and all levels of government
to continue to investigate options for the development of commercial processing
streams within northern Australia in addition to existing live export markets.
Government assistance
6.40
The committee also notes concerns raised regarding the provision of
financial assistance by the Australian Government following the temporary
suspension of the live cattle trade to Indonesia. Evidence received during this
inquiry has shown that the losses directly incurred by cattle producers and by
those engaged in a range of ancillary businesses, such as live stock
transporters, helicopter musterers and stock feed suppliers, have run into
millions of dollars.
6.41
The committee acknowledges that the Government assistance to date has
been appreciated by some, but for many it has proved poorly directed and
inadequate to the task of surviving the massive jolt that the industry has
sustained. The committee also notes that take up of the assistance was slow and
that many cattle producers in particular were reluctant to apply for what they
perceived as welfare payments.
6.42
The committee notes that the effects of this jolt to the industry are
likely to be felt for some significant time to come. The committee is therefore
concerned that cattle producers and businesses affected by this crisis should
have had to resort to additional debt in order to access the cash flow required
to survive the impact of the temporary suspension of the trade. During the
inquiry, members of the committee expressed some concern that many northern
businesses would not have the security against which to take advantage of the
offer of subsidised interest rates on an additional $300,000 debt. At the same
time, the committee noted that such loans were a drop in the bucket in the
context of some northern cattle enterprises.
6.43
The Australian Government must recognise that while the trade has now
resumed and a degree of confidence has been restored to the industry, it will
be a long time before these businesses and communities recover. The committee notes
that the temporary suspension of the trade was imposed on the industry without
consultation or warning. In this context, the committee would not be surprised
if some in the industry were to seek legal recourse with regard to the costs
incurred by their businesses.
6.44
The committee the urges the Australian Government to continue to work
closely with the industry and communities to support producers and businesses
through what is expected to be a long period of recovery. The committee is
concerned that many producers and businesses have not taken advantage of the
assistance measures. The committee believes that businesses should be able to
identify the losses they have incurred as a consequence of the temporary suspension
of the trade to Indonesia and seek further government assistance to address
these costs.
Recommendation 8
6.45 The committee recommends that the Australian Government, in consultation
with the live export industry and other ancillary businesses develops a package
of further assistance or reallocates existing packages of assistance to address
those identifiable and otherwise irrecoverable financial costs incurred as a
result of the temporary suspension of live cattle exports to Indonesia.
6.46
The committee is also concerned that a number of producers and
businesses have come under pressure from financial institutions as a result of
the temporary suspension. The committee notes the assurances provided during
the inquiry by the Department of Agriculture Fisheries and Forestry regarding the
likelihood of financial institutions moving to imposing penalty interests rates
or take similar actions. However, the committee also notes the findings made by
Hydro Consulting regarding actions taken by some financial institutions since
the imposition of the temporary suspension. The committee notes the suggestions
made by Hydro Consulting with a view to assisting borrowers in their dealings
with financial institutions and commends these to the Australian Government for
further consideration. The committee also considers that the Australian
Government should initiate discussions with financial institutions to encourage
the adoption of a supportive approach to the repayment of debt.
Recommendation 9
6.47 The committee recommends that the Australian Government establishes a
dialogue with financial institutions with regard to the financial difficulties
faced by producers and businesses involved in the live export industry as a
result of the temporary suspension of live cattle exports to Indonesia. The
committee recommends that the Australian Government seeks to encourage
financial institutions to adopt a supportive approach to the repayment of loans
and the imposition of interest penalties in the event of default on such
payments.
Senator the Hon. Bill Heffernan
Chair
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