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Rural and Regional Affairs and Transport Legislation Committee - 17/11/2014 - Rural Research and Development Legislation Amendment Bill 2014

KOVAL, Mr Matthew, Acting First Assistant Secretary, Agricultural Policy Division, Department of Agriculture

RYAN, Mr Michael, Director, Productivity Section, Research and Innovation Branch, Agricultural Policy Division, Department of Agriculture

THOMPSON, Mr Ian, First Assistant Secretary, Sustainability and Biosecurity Policy, Department of Agriculture

THOMSON, Ms Vivien, Policy Officer, Innovation Section, Research and Innovation Branch, Agricultural Policy Division, Department of Agriculture

Committee met at 08:44

CHAIR ( Senator Heffernan ): I welcome the witnesses from the Department of Agriculture. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about how and when policies were adopted. Officers are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. Would you like to make an opening statement?

Mr Koval : No, we will go straight to questions.

CHAIR: One of the questions that came out of the hearing the other day was about the decision-making process. Was the department aware that the industry bodies are concerned about the thin end of the wedge comment that they have all made, that somehow they are not the decision maker in what has happened and that that could set a precedent? I suppose that is about spending money that has been allocated to research for membership of an organisation of which they are not the member but the government is the member. They are concerned that that sets a precedent. Do you agree that it sets a precedent?

Mr Koval : We do.

CHAIR: So, in terms of having set the precedent, if we are a member of whatever the organisation is, this is to save in some instances $150,000, and the fishing one is $900,000-odd. With the fishing one, obviously it is pretty important that Pacific Isles do not have a lot of resources for us to be able to assist them in managing their breeding grounds and fisheries, so when you chuck a line in up off the coast there somewhere you get a fish. I think that that is a sovereign issue for the government. In arguing the case for the research bodies, was consideration given to the fact that that is a sovereign responsibility and that maybe the government should pay for it as opposed to the research body?

Mr Thompson : The regional fisheries management organisations of which we are a member are more about managing the stocks in their areas under their jurisdiction and managing the impacts of fishing within those jurisdictions. Each country that becomes a member of those organisations is responsible for their own membership, however they might raise it. Ones in the Pacific will find that China, the EU countries, the United States and others will be members. They are not at the present time a significant part of our aid program; there are other organisations which receive aid assistance.

CHAIR: I am aware that some Asian world powers—without naming them—get their foot in the door by saying to some of these little islands, 'Here's $100. We must deliver it.' That gets their foot in the door. That is obviously not what Australia is on about. The government is the member of the body, as opposed to the research or industry body. We became members of these bodies over recent years under both flavours of government; would that be fair to say?

Mr Thompson : Australia has been a member of the regional fisheries management organisations going back to the 1970s following the Law of the Sea and the UN Fish Stocks Agreement. It has been a matter of government policy to be a member of these organisations.

CHAIR: All right. So under the present new arrangement the research body is going to pay for the membership, which in the case of fisheries is $900-odd thousand, and in the case of some of the others is 150 grand or 90 grand, or whatever it is. That enables the government to participate in whatever the particular global body is. That saves the government's $90,000, for instance, for signing up. Wouldn't it cost a lot more than that $90,000 to be an active member by the time you have paid for a bottle of wine, middle of the plane aircraft travel and hotel accommodation? Couldn't you save the $90,000 by sitting at the back of the plane instead of the front of the plane in the participation in the rounds?

Mr Thompson : Mr Koval will be able to provide advice on how the membership is proposed to be paid. Australia is a member of those organisations because they are part and parcel of being able to fish on the high seas and they pass rules which apply to fishing within Australia's—

CHAIR: I understand all of that.

Mr Thompson : The actual membership fee varies from organisation to organisation. The cost of participation, in some cases, beyond the membership fee can be significant. There is the cost of attending meetings. There is the science that might be undertaken for those meetings. There are research projects undertaken for fish stocks management. That is a separate exercise.

CHAIR: This is my point.

Mr Thompson : And industry pays as well because they travel.

CHAIR: Could the department give us an insight into those costs and some examples? The $90,000 is going to come out of the research body. You can take it on notice if you want to. What is the additional cost? What I am concerned about is that it might be the piddliest bit of the cost—the membership—and the greater cost could be participating in the membership and, as you point out, the various researches, travel and God knows what.

Mr Thompson : I would have to take the detail of that on notice as to the actual costs. But we do know how many people go to these meetings and how much the meetings cost. In most cases the cost of participation beyond the membership fee would not exceed the membership fee. The smaller organisations only meet once a year, and only one or two people go. Bigger organisations might meet a little bit more frequently, but then the membership fee is often higher.

CHAIR: So you could provide those details?

Mr Thompson : I can provide them.

CHAIR: What I am saying is that we have to be cautious that we are not being penny-wise and pound-foolish as a government—if you know that what that means in old language.

Senator STERLE: For the benefit of the colleagues who were busy with other work last week, what came out very clearly is that there are a number of research and development corporations that have had their funding cut in terms of membership—well, not had their funding cut. The government pays through DAFF for membership to international bodies. The government has now made a decision as part of the savings costs that that funding will not be provided by the department. What we found out the other day is that some R and Ds find that it is no big deal and they are not interested because they could not get information out of the department on the benefits that it may deliver. But there were a couple of R and Ds, particularly the FRDC and, of course, Wine Australia, which were absolutely fuming. What they are saying is that if the government does not fund, through DAFF, membership to these international forums, they would either miss out completely and not be able to go or they would have to find funding within their own structures without increasing the levy. What a couple of them said to us clearly was that some projects may miss out. If we can go to the FRDC, Mr Koval. I remember that $965,000 was the membership fee that DAFF pays now for that valuable work out of a budget—and I cannot remember the budget—of $30 million; is that right?

Mr Koval : It was about $27 million.

Mr Thompson : Yes, $27 million.

Senator STERLE: If my memory serves me right, they had one of the lower budgets but one of the higher costs for international stuff, as the chair has touched on, for a number of reasons. Is that correct?

Mr Koval : Is it probably not the lowest budget, but it is probably the largest proportioned, if you like.

Senator STERLE: Definitely the largest portion—nearly $1 million; $960,000, or whatever it is. Of the $960,000 that DAFF paid for the membership to these international bodies, can you tell us how many forums would be attended, where around the world and by whom, so we can actually get a picture of what that $960,000 membership involved in Australia being a participant on international forums?

Mr Thompson : We can provide you with a list of all the multilateral meetings we have attended as a department, and with industry, to all of those fisheries organisations. I am not sure whether you want me to read it all out now.

Senator STERLE: How many have you got there, Mr Thompson? We have three-quarters of an hour before we run away, and I do not want to take up the time of other senators, but I think we really need to get a snapshot of what it actually means. Colleagues, the FRDC did not put in a submission. They were being represented by the overarching body of the R&Ds. I just cannot remember the title at this stage. On record, we asked the FRDC to put in a submission so that we could actually get down to the bottom of what it means to them. How long do you reckon it will take? Why don't you just give us the last year or two, Mr Thompson, so we get a bit of an idea? Is that possible?

Mr Koval : What we can do, if you like, is 2013-14, the last financial year. Is that helpful?

Senator STERLE: Yes, that is helpful. Please.

Mr Koval : For all the bodies or just the fisheries?

Senator STERLE: Just fisheries.

Mr Koval : For the Commission for the Conservation of Southern Bluefin Tuna, in 2013-14 there were three meetings. Government officials attended all three. Industry attended two of the three meetings.

Senator STERLE: And industry pay their own way?

Mr Koval : Yes, as far as I am aware.

Senator STERLE: Just so we get a snapshot of what it actually means.

Mr Koval : Regarding the Indian Ocean Tuna Commission, there were two meetings last financial year. Government attended both meetings and there were no industry attendees.

CHAIR: Have you got the figures on how much it cost to attend?

Mr Koval : No, I have not—

CHAIR: Are they extractable?

Mr Koval : They are extractable.

CHAIR: It would be interesting to know.

Mr Koval : We can pull those out of our system on notice, if you like.

CHAIR: Where were these meetings? Just an island-hop away, were they, or on the other side of the world?

Mr Thompson : No, they are not on the other side of the world, but they can be difficult to get to. For example, the Commission for the Conservation of Southern Bluefin Tuna had meetings in Canberra, Adelaide and Yeosu in Korea. The Indian Ocean Tuna Commission had meetings in Busan and Colombo, and the Pacific ones tend to hold meetings at various places around the Pacific.

Senator STERLE: Sorry to interrupt. I think there are five or six parts of the FRDC. If we can get them listed first, that would be helpful, Mr Koval.

Mr Koval : Okay. The Western and Central Pacific Fisheries Commission had two meetings last financial year. Government attended both and there were no industry attendees. The Western and Central Pacific Fisheries Commission actually had five meetings.

Senator STERLE: Five, not two—okay.

Mr Koval : I apologise.

Senator STERLE: And government attended all five?

Mr Koval : Yes, and industry attended one of those meetings. The South Pacific Regional Fisheries Management—

Senator STERLE: Sorry—what happened to the Pacific fisheries council. There was the WCP—

Mr Thompson : There is no Pacific fisheries commission; it is the Western and Central Pacific—

Senator STERLE: It is the same thing?

Mr Thompson : Same thing.

Mr Koval : I do apologise.

Senator STERLE: No worries.

Mr Koval : The South Pacific Regional Fisheries Management Organisation had two meetings and industry did not attend either one of those.

Senator STERLE: Okay.

Mr Koval : The Southern Indian Ocean Fisheries Agreement had one meeting and there was no industry representation there.

Senator STERLE: Okay, just government. So that $965,000—have I got the right figure; the membership?

Mr Thompson : I think you have.

Senator STERLE: So that is just to be the members of these international bodies; it is not travel and all that on top?

Mr Koval : No, that is right.

Mr Thompson : That is the membership fee which covers the staff for the organisation, their research activities and their data management, and those sorts of things.

CHAIR: You are going to let us know how much all that travel costs?

Mr Thompson : We can give you a figure for the travel, yes.

CHAIR: Precisely.

Mr Thompson : For some of the meetings. It would be a large amount of work to extract it for all of them, but we should be able to do it for the last 12 months, for example.

CHAIR: Surely there is a full accountability. Do people use a credit card?

Mr Thompson : They use a credit card and charge it to departmental accounts. That is why, going back in time it is a significant amount of work. We could do it for the last 12 months.

CHAIR: How do you actually verify it? Given this committee has discovered all sort of fraud in credit cards—it is not a bad little effort to spend $31,000, or whatever it was, at the Ottoman restaurant. Do you actually have a system to verify what happens on a credit card, especially on these sort of wild excursions?

Mr Thompson : Yes. The traveller's accommodation is booked through departmental systems. For other expenditure, because it is overseas travel, full receipts are required. If official hospitality is engaged, there will be an official hospitality form signed and filled out and then acquitted.

CHAIR: So if you go down to the local massage parlour, it turns up as 'Oops!

Senator STERLE: I want to come back, Mr Koval, to the consultation process. I have no doubt you would have heard or seen the Hansard, that there were a couple of the RDCs that were very critical of the department. All of them were critical in the terms of the consultation process. For my colleagues' benefit, I believe, Mr Koval, if I remember rightly, you said you contacted the RDCs on a Tuesday afternoon in September, whether it be by email or phone. If I am wrong, please pull me up. They received a copy of the proposal or the bill on the Wednesday morning, or Wednesday, and the close of conversations was on the following Thursday—so 30 hours or whatever it may be. The Sugar Research Australia, on the phone to us for all to hear, said that they got it and they were not allowed to talk to their members. Can you table the email that was sent to the RDCs for the benefit of this committee?

Mr Koval : Shall I answer the first question about the consultation first?

Senator STERLE: Please, yes.

Mr Koval : It was a budget decision. I had spoken to the statutory RDCs in April about the actual decision and told them that the decision had been made, and that we would be talking to them about the implementation of that decision. We had a number of conversations about that, that it will be a legislative implementation. In September, as you quite rightly pointed out, we had the draft bill and we sent it out to those bodies and said, 'Can you have a look at the legislation and get back to us by close of business on the Thursday.' It was a very short period, and I mentioned that last week; it was a short turnaround time. It was to comment on the draft bill that is actually in parliament at the moment, to make sure that the implementation of the decision had no unintended consequences that we had not foreseen. As quite normal, we asked that they keep the draft bill legal in confidence and not to share it. We did ask them to do that and hold it in house and in confidence. We did ask them to do that. In terms of providing the text of the email, we can provide that text if you want.

Senator STERLE: SRA had said they were not allowed to speak to their members. That is what I just want to get to the bottom of.

Mr Koval : We asked them to keep it internal to the organisation—that is correct.

Senator STERLE: Okay. All I am trying to point out is how can we have a consultation process if we are only giving 30 hours, or whatever, and they are not allowed to talk to their members. I go to the thin end of the wedge argument as well that the chair and I heard here the other day from every single research and development corporation. If that is the way the government can do it, it gets frightening now in terms of all funding.

CHAIR: This comes down to if a research body, an organisation, and I think it is an interesting definition that you send the advice and 30 hours to respond to an organisation, but they are not allowed to talk to the people that actually elect the organisation or make up the organisation or pay for the organisation—that is, the members. You are just talking to the bureaucratic side of the organisation. If, in its wisdom, an organisation who pays for the membership for the government to be a member, says it is a waste of time, can they tell the government they are no longer a member and are not paying?

Mr Koval : There is a process for the Australian government to withdraw from these organisations.

CHAIR: Usually you are as independent as the person who pays you, but not in this case. Does the research body have the capacity—yes or no—to say we are no longer a member of that organisation because we are paying?

Mr Koval : Not by themselves. Some of them are treaties and you have to go through a process to withdraw from a treaty which is quite complicated and it cannot just be on the basis of a single organisation saying no. So there is a treaty withdrawal process which can be complicated and time consuming.

Senator WILLIAMS: Just on the sign on of $50,000 FRDC membership a year, that sounds a lot to me. How much has that membership gone up over the last five years for example?

Mr Thompson : In the case of fisheries the Commission for the Conservation of Southern Bluefin Tuna is the most expensive by quite a margin. The relative amount has not gone up much over the last few years. I think it has probably been pretty much the same. The reason for that one being quite large is the cost of running a regional fisheries management organisation is pretty much the same irrespective of the size of the organisation; there are a few flag fall costs. Some of the really small ones have one person, the others have three or four, plus they have science and research costs. Bluefin Tuna has a small number of members and it undertakes some quite intensive research on fish stocks which is not undertaken by other organisations, so it ends up with a relatively high cost shared between a small number of members. Bluefin Tuna is really Australia, the EU, New Zealand, Indonesia, Japan, Korea and Taiwan. Japan and Australia pay the largest share because it is proportionate to the share of the stock caught and basically Australia is the largest fisher of southern bluefin tuna at the present time—Japan is the other major party—so we pay a large share. In the other organisations the Indian Ocean or the Western Central Pacific, we are very minor players, so we pay a very minor share. The big take comes from countries like Japan or Korea or the EU. What you pay is dependent on the amount of fish you take, so bluefin tuna ends up being expensive because we fish a lot in it and the industry is a very valuable fishery from that point of view.

Senator WILLIAMS: So the tuna fishermen of Australia obviously catch a lot of tunas. They are a very successful business. Do they contribute through a levy to this cost?

Mr Thompson : No.

Senator WILLIAMS: They do not?

Mr Thompson : No. At the present time, it is 100 per cent paid by government.

Senator WILLIAMS: That is interesting. These five meetings last financial year in the Pacific over these issues, you had five meetings?

Mr Thompson : For southern bluefin tuna, I think Mr Koval said five meetings. Yes.

Senator WILLIAMS: Roughly, how many people would attend those meetings?

Mr Thompson : It varies depending on the nature of the meeting. They can be quite small if it is a technical meeting and they can be larger.

Senator WILLIAMS: Have there been meetings with larger delegations?

Mr Thompson : We have had industry and state participants of up to 20 on occasions, and then the government delegation is usually around four or five.

Senator WILLIAMS: In my job here, and I fully understand, we have a lot of meetings as well and sometimes we do it by teleconference to save on costs and travel and time. With these smaller meetings, can't you carry them out in a teleconference meeting? It might be a few hours conference with a phone bill of a couple of thousand dollars, but couldn't you do that?

Mr Thompson : Often because they are international meetings, they are difficult to do by teleconference because there is often simultaneous interpretation required. There will be simultaneous meetings going on with the main plenary, plus working groups on the side. The meetings can be a series of compliance meetings, working group meetings and plenary meetings. The southern bluefin tuna ones, for example, usually take four or five days, with side meetings. I think most people have decided—

Senator WILLIAMS: You just said some of the meetings are not so big and so on. Could some of the smaller meetings be done via teleconference?

CHAIR: Just pausing there: I raised this the other day, Senator Williams. We could actually do it with skype. This committee could be skyped in from New Zealand. You do not have to actually be there.

Senator WILLIAMS: That is telecommunications today.

Mr Thompson : I think that would be very difficult for a full meeting of these commissions where people are doing quite complex negotiations. For things—

Senator WILLIAMS: For minor meetings, which is what I referred to, Mr Thompson.

Mr Thompson : Yes, for minor meetings where people are discussing science or models. Some of those meetings actually take place by email exchanges, for example. Teleconferences are also possible. It is the ones where you have all the members with simultaneous interpretation. For example, a meeting of the Indian Ocean Tuna Commission, which usually involves 500 people, could become a bit unwieldy on a telephone.

Senator WILLIAMS: Thank you, Chair. I have finished.

Senator STERLE: This is more of a comment. We understand the government is trying to save a few dollars. There are a few RDCs that do not see any value in international meetings, but the ones that do are pretty pee'd off because everyone has been tarred with the same brush and so funding has now stopped for them. This was the problem going to the consultation period. There was only a brief 30 hours. Some of the RDCs said, 'Who cares?' And some of the others who have a vested interest in making sure they are playing on the international stage did not even get the opportunity to have any conversation with the government.

CHAIR: Obviously this is a new frontier in terms of cost shifting. I note the annual reports. Why won't we have consistency in the annual reporting? Some of these organisations are obliged to report annually and some are not. Why don't they just all report?

Mr Koval : Senator, this is reporting as in tabling in parliament?


Mr Koval : They all have to produce an annual report.

CHAIR: There is the cost-saving measure not to table the damned thing.

Mr Koval : That is right.

CHAIR: Why wouldn't you just be consistent and say, 'What is good for the goose is good for the gander'?

Mr Koval : There are fewer of them who actually have to table an annual report than those who do not. There are only four of the industry-owned—

CHAIR: What is the criterion for the non-reporting side as opposed to the tabling side of an annual report? Is it the size of the budget, the size of the credit card expenditure or the cost of the wine? What is it?

Mr Koval : It is to do with when the legislation to enable these bodies was passed and whether there was a requirement in the legislation at the time to table a report.

CHAIR: That is not a very good explanation. What was it based on? That sounds like political convenience or—

Mr Koval : I do not know if there was a science or a principle around which ones would or would not.

CHAIR: Can just say this: it sounds dodgy that some have to table and some do not, and the definition between who does and who doesn't is a vagary.

Mr Koval : I think when you look back at the history, what the government was trying to do at the time was to give greater responsibility of these organisations to industry, and one of the ways to do that was to say: 'You don't need to table the annual report to parliament. It is available. You don't have to table in parliament through the tabling office.' Looking back, that would have been the principle applied at the time for some of these organisations.

CHAIR: For someone who has to table at the moment, can they apply to not have to table?

Mr Koval : No. It is a legislative requirement that they have to table.

CHAIR: How does the legislation define the tabling mob from the non-tabling mob? What does it say?

Mr Koval : It is separate. It is just a line in the legislation.

CHAIR: It is just a political decision.

Mr Ryan : Each of the industry-owned corporations has its own act which governs it. There has been no consistent approach with regard to this. In some there is a requirement to table and in some there is not.

CHAIR: It sounds very untidy. I will not ask you for an opinion.

Mr Ryan : The object of this is to make it consistent across the industry-owned corporations.

CHAIR: Senator Back?

Senator BACK: I am clear in the understanding, thank you.

CHAIR: Senator Siewert has some issues, and she will be back soon.

Senator STERLE: I want to follow up on something, if I can, unless Senator Bullock wants to ask something.

Senator BULLOCK: I apologise, Chair, for not being here last week. I was over at the environment committee, so I have missed out on all the fun. Just arising from this morning, when you were telling us about who went to the various meetings, the government was always present in number but the attendance of industry was patchy. Presumably, these meetings make decisions that have effects on industry—our industry. How do people who are not in the industry make effective decisions affecting the industry without the industry involvement—without them present? How can you do that?

Mr Thompson : I think you are talking about, in the main, the fisheries meetings. There are a range of meetings that take place on fisheries—some will be science, some will be compliance and some will be the whole meeting. Industry tends to turn up at the major meetings where the decisions are made. But prior to any meeting, it takes some 12 to 18 months to develop a proposal to go to one of these meetings—what is to be decided upon has to be developed and you have to develop partners to take it through with. It then goes to science committees to be assessed, and then it goes to the meeting itself. Throughout that process—

Senator BULLOCK: Does it mean they are just a rubber stamp?

Mr Thompson : They are not just rubber stamps. Throughout that process, industry will be briefed on what the proposals are. They talk to their counterpart industries in other countries, or like-minded countries, and develop positions. Before each meeting we have a full briefing of all stakeholders, where they pass us their views about what their objectives for those international meetings are and we share with them as best we can the whole-of-government position, and we come to a common view on the resolutions. If there are changes going on, we will speak to them. In some of the meetings, we will contact industry during the meeting if things are shifting to say, 'What can work?'

In addition, as part of the government delegation, there is almost always someone from the Australian Fisheries Management Authority. Many of the resolutions that are being passed in these fisheries organisations are about improving the methods of fishing, improving the nature of fishing, or measures to mitigate bycatch. AFMA are able to advise us whether these measures exceed the rules that already apply in Australia. If they do not exceed the rules that already apply in Australia—we are reasonably confident that we can agree to them. Were any of them to go near the line of what we already agree in Australia, that is when we go back to the industry and seek their direct view. In some cases, industry have been at meetings where the government delegation was quite small, there would be more industry than government, and they have rung up and said, 'We would now like your participation in this meeting from this point on.' Where it is convenient, we have actually attended part of the meeting at the industry's request to boost the delegation because of the nature of the discussions going on. As I said earlier, there are often parallel discussions, and you can run out of people.

Senator STERLE: That sounds great—tremendous. But evidence taken last week from Grain Growers Limited was very scathing of the department. They said that they got sick of asking—my words, not theirs—what the benefits are of international membership of these forums. So can I come back to the grains industry. Can you tell us the figures—similar to the FRDC figures—and let's just do 2013-14. How many meetings were there and who went—how many from government and how many from industry?

Mr Koval : For the International Grains Council in 2013-14 there were four meetings. We had a government attendee at each of those meetings. There were no industry attendees.

CHAIR: Can you tell us where the meetings were?

Mr Koval : The meetings were in London.

Senator STERLE: All of them?

Mr Koval : All of them were in London. We use our officer based in Europe to attend those meetings. No-one from Australia attends. Many of those meetings are administrative meetings around management organisation. They have one big council meeting in June, which normally has the largest attendance. In previous years—

CHAIR: Is this a junior CPA? I went to a CPA—Commonwealth Parliamentary Association—and I actually told the conference I thought they were totally corrupt, especially when a pearl turned up at my door at seven o'clock in the morning to assist my capacity to vote for the right new president. That is not our culture. One person from Europe attends this meeting. How much is the membership?

Mr Koval : I think the National Grains Council is about £88,000.

CHAIR: So, $150,000. What is the benefit of spending 150 thousand for one person who is already in London to go to a meeting? What do we get out of it? Is this about kamal bunt? Does something meaningful come out of it?

Mr Koval : The National Grains Council, from memory, was established in 1949. It is about market flows, production flows, trade flows, market access, market conditions and those types of things. It is also about understanding some of the rules and regulations that other countries are putting into play.

CHAIR: Does the United States attend that meeting in London?

Mr Koval : Yes, they do.

CHAIR: Archer Daniels Midland and Cargills in on it? These guys are global manipulators of the market.

Mr Koval : The majority of the meetings are held amongst a smaller group of members.

CHAIR: Are they all just government to government or do they have industry?

Mr Koval : The one that industry attends is normally the June meeting and occasionally you do have industry attend from other countries. The US does attend, the Canadians attend, the Ukrainians, the Russians and Brazil.

CHAIR: Can you brief the committee on notice what is evidently a benefit that has come out of the last couple of meetings? What did we learn, other than that one guy turned up and—

Senator STERLE: Can I just assist there, because we are on the same page. We have the submission from grain growers in front of me, so if I could just supplement that. Did you listen to the grain growers and the GRDC's evidence?

Mr Koval : I read the evidence.

Senator STERLE: Okay. This is straight from the grain growers and it says: 'In order to support this bill, grain growers will need to see greater involvement of the grains industry representative bodies. At the minimum, the department of agriculture IGC representative should report back to the industry representative bodies on the following aspects.' If I can, there are three parts. If I put to you Mr Koval, this is what the committee would like to see a written response to. The first is the rationale for the Australian government commitment to the International Grains Council. The second part is an update on activities and progress of the International Grains Council on trade and market access issues, specifically an update on activities and progress of the grains trade convention forum, and any decision to develop and sponsor grain related projects in member counties should be reported to industry at the conclusion at each of the two-yearly meetings. The third part is reporting on any benefit derived from the participation in the International Grains Council, with particular detail around benefit to the production sector, provided at the conclusion of each of the two-yearly meetings. If you could take that away and come back with an answer for us. It goes on as to the frustration of the Grain Growers Limited, who said to us that they could not get any sense or any answers out of the department. That is now on the record, if you could fix that for us.

Mr Koval : Certainly.

CHAIR: I will declare an interest again, I am a bloody grain grower. Where does the bloke who attended that meeting in London come from? Has he come out of the consul? Is he a contractor?

Mr Koval : No. We have agricultural people overseas. He is from our department.

CHAIR: He is an agricultural attache?

Mr Koval : He is our agricultural attache.

CHAIR: Could you just give us his name, rank, serial number and CV? I just wonder if he would know what Wedgetail was.

Mr Koval : I can give you his name.

CHAIR: What is Wedgetail good for?

Mr Koval : I do not know. He is from the department.

Senator STERLE: What is Wedgetail?

CHAIR: Wedgetail is a wheat. It is early sown and a grazing wheat.

Mr Koval : They do not normally get to wheat varietal types like that.

CHAIR: But it would be nice to think the grains industry was represented by someone who knew what date to put a chemical on and whether MCPA mixes with Roundup or not; someone who actually knew the industry, rather than just, 'Here's the brief; you're off to the Savoy Hotel in London to meet these people'—which is probably what happened.

Mr Koval : No, they are normally at the offices of the organisation. But, certainly, we can provide you the name.

CHAIR: Anyhow, you will provide his details and his CV so we can see if he has ever been out on a farm and all those sorts of things.

Mr Koval : We certainly can.

CHAIR: It is a bugger dealing with someone who has been on a farm! We got an inch of rain over the weekend, which is two weeks too late to benefit the crop. The crops have all closed off on the bottom joint, so every second head is going to be shrivelled.

Senator SIEWERT: You started touching on this, chair, before I left. That is, the issues that were raised during the previous hearing around decision making. Have we covered that, in terms of the fact that—

CHAIR: You ask the question and we will see if they have already answered it.

Senator SIEWERT: The witnesses during the previous hearing raised the issue that they are not the decision makers and they are now going to be paying the membership fees, although they are not the decision makers or involved in the voting process. I ask for your response to that and whether you plan to incorporate the organisations that are now paying the membership fees in the decision making process.

Mr Koval : Is that the decision making process to be a member or what happens at the meetings?

Senator SIEWERT: What happens at the meetings. There are two things. Yes, you are right. I was going to come to that later, but you may as well handle it all at once.

Mr Koval : On the decision around being a member, that is a decision made by government. It does depend on the nature of the membership. If it is a treaty, for example, it is quite complicated to withdraw from that process, so the decision to continue will be made by government in the national interest. We would normally consult with industry, if we were going to withdraw. Or, if we are going to sign up to a new one, we will consult with industry.

Senator SIEWERT: Consult with, but not involve them in the decision making when they are paying.

Mr Koval : The decision will be made, if it is a treaty, by the government.

Senator SIEWERT: I actually understand why the government would make the decision on the treaty. However, it does not get past the fact that you are now asking these organisations and their members to pay, and they are not included in the decision-making process. Being consulted is very different to making the decision. What happens if they carry out a vote of their members and then they say no?

Mr Thompson : Perhaps there is a slight difference between some of the agricultural organisations and the fisheries ones. The fisheries ones are all treaties. We entered those on the basis that industry wanted us to be members of them so that they could access international waters and fish legally or so that Australia could participate in decision making about rules and regulations relating to migratory species. So we went into them on the basis of industry requests. To get into them, we had to undertake a consultation process with industry and the states and go past the parliamentary committee on treaties. To get out of them, we would follow the same process. If industry really said they do not want to participate, we could reverse that process. To date, no industry has said they want to get out of any of these fisheries organisations.

The second part, which I think Mr Koval was getting to, is in terms of the decision making at these bodies. In the case of the fisheries, the decisions can have impacts on how Australian fishing operations can take place in Australian waters. The Australian government consults with industry as soon as the papers—the proposals from other countries—are received, consults with industry and involves them in any proposals we would take to them. They are part of the delegation or they are kept informed of progress during the proceedings of meetings. Some of these meetings take quite a while; some of them, with proceeding and compliance meetings and science meetings, can take a couple of weeks, so there is opportunity to engage with industry during the meeting. Then after the meeting there is feedback to industry on what decisions were made and what steps need to be taken, if any, to change Australian modes of operation to meet the international requirements.

If industry did not want us to take a measure to one of these committees—I think I would be surprised if we have ever gone to one with something that industry disagreed with, and on a number of occasions we have taken things to these committees which industry have asked us to do. During the course of the meeting, there are negotiations and things chop and change, but industry certainly make their views known on what is going on and where the outcome should be.

Senator SIEWERT: I understand what you are saying but, with all due respect, as I said, being consulted is very different to being involved in the decision making. I know very well what the difference is between being consulted and actually having a vote or being the decision maker.

CHAIR: Just pausing there for a moment: the NFF in their submission have made some recommendations on more transparency and more consultations. If it was at adequate at the present time, they would not be doing that. This sounds a dodgy, shambolic thing. All governments are guilty of it. I think this government may have implemented the fisheries one; the previous side of politics implemented a lot of the others. I think it was on-the-run stuff. There does not seem to be any methodology. The NFF is highly critical with three recommendations in their report to this committee which substantiate what you are talking about.

Senator SIEWERT: It seems to me that nearly all of them have concerns about this. So the consultation period obviously was not long enough—the 30 hours.

Mr Thompson : I think there are two issues. One is a consultation period on this, and then there is the consultation around the actual operation of the organisations.

Senator SIEWERT: I understand that very well. But you will have read the submissions as well as everybody else and obviously you were listening to the evidence.

CHAIR: Hopefully.

Senator SIEWERT: Hopefully—or certainly have read the transcript. I understand the difference. There are issues around the fact that they do not like the whole process of having to pay to cover these membership fees. Then other issues have been raised around consultation—not the consultation over this particular process, but the consultation over the process of involvement in decision making as part of the membership of these organisations. Their point of view, as I understand it, is that if they are paying the fees, which they are not happy with, then they should at least be involved in the actual decision making, not just consultation.

CHAIR: I realise you are not allowed to have an opinion, so I am not asking you for an opinion. But just sitting here, and if I were standing down there at the back of the room down there, it seems bloody odd to me that the research body—and the money is going to come out of research; it has to come out of somewhere—is paying for something they are not a member of and have no say in. It seems a bit bizarre to me.

The trouble that I have deep down is: how much does it cost? If it is a 10-day meeting somewhere, how much do we get booked out? I would love to see the accounts for attending these things. I was completely disgusted with the CPA thing I went to in Malaysia or somewhere. It was the greatest rort exercise of people dressed in gold and talking about the starving world, but not even talking about how they were going to fix it; rather, talking about what was on the menu for that night and what sort of wine they were going to have. These things can become serious junkets, and yet that has to come out of the government's accounts. You say it probably is not the case that the junket side of it—the tripping around and the meetings and consultation and whatever, like this thing in Brisbane; God knows what that cost—is compared to the membership. The membership might be the infinitesimal little bit of it compared to consequences of being a member, and then it does not seem to me that the industry knows what benefit they have got out of it, anyhow.

Mr Thompson : We said we would provide on notice the cost of participation in excess of membership at these meetings; that is, the travel and accommodation costs. I think I said earlier insofar as the fisheries ones that I am responsible for consultation and effective engagement in the Australian government's position. These are government-to-government arrangements that are being entered into—

CHAIR: It is a sovereign issue, yes.

Mr Thompson : We entered into it on the request of industry. Industry is involved in the preparation of the whole-of-government brief, which is signed off by relevant ministers. Then industry does get feedback on what happened after the meeting and they do participate in the meetings.

Senator STERLE: I am sorry to interrupt—that may be the case for fisheries but what we heard is that it is not the same for others.

CHAIR: And you are not responsible for others. It would be interesting for this committee to see, 'Oh my God! Weren't we lucky we had membership of the grains one!' to see what some of the benefits to come out of this over the years were. For instance, something where we could say, 'Phew! We were lucky we were a member there!' Is there a 'phew!' moment in some of this?

Senator STERLE: That will be interesting to see in the transcript!

Mr Koval : In grains or just, say, in wines, for example? Industry goes along to every meeting with government officials for wine. Decisions are made about regulations and wine-making practices. Those are made in consultation with—

Senator STERLE: And they are very critical of the bill.

Mr Koval : So the wine industry sits there with us. Cotton goes along to the main meeting every year. The attendance for sugar is patchy by industry but they have gone for the last few years. I know that one of the bits of evidence that came up last week was a comment by Sugar Research Australia, where the sugar industry said to the government back in the early 2000s that we should withdraw from the ISO—the International Sugar Organization. We have gone back and had a look at the records: a lot of the claims were around inefficiency and the reform of the ISO. We pushed some reforms through and we have on file that the sugar industry then participated in the meeting in the following year and appeared to be comfortable with membership then in that organisation.

The International Grains Council is one where we actually have the lowest amount of industry engagement, and that is the heart of the question that Senator Sterle asked. We will get back to him on notice with some comment on that.

CHAIR: The difficulty for the Australian industry, a lot of these, like the world soccer organisation, which is speaking in code a bit like institutions of abuse tend to look the other way and talk about something else. I mean, it is obviously corrupt, the global soccer thing. Some of these organisations, like the corruption in the market by manipulation of the market by the likes of in the sugar industry, which the industry is going to learn the hard way at Wilmar or in the grains industry of ADM who have this given that you can bribe your way around the world. I mean, they have huge litigation and anti-trust laws, corruption, God knows what. I mean, I do not know what role they have to play in these decisions of the grains mob, for instance, and I have to say that the average cocky out there waiting for it to dry out this morning on a header would not have any idea what the benefit is. If we are going to be members we are entitled to know what the benefit was. I mean, oh my God, lucky we went to that meeting otherwise this would have happened. But there is none of that.

Mr Koval : We can certainly provide some comments on that on notice for you, Senator.

CHAIR: Right.

Senator STERLE: I have no further question.

Senator SIEWERT: I did not really hear an answer to the question that I asked, in terms of…

Mr Koval : Consultation?

Senator SIEWERT: There is consultation, but then there is actual involvement in decision making. Is it expected that now that these bodies are paying membership fees that they will actually be involved in the decision making. Not just consulted, but get a vote.

Mr Koval : Normally, for these organisations the vote is by the member. We do not have multiple votes per attendee. The vote will be a vote by Australia as the member.

Senator SIEWERT: So the bodies cough up the dough, and that is it?

Mr Koval : Normally, we would involve them in the preparations for the meeting, some of the technical background, and it does depend on the body.

CHAIR: How reliable is that for a comfortable decision? I could not believe a couple of the things I have been to where they all go out and get on the grog and come with a headache to the decision making meeting in the morning. How do we know that is a reliable way if it is up to one person representing the government and the industry has no way of introspection?

Senator SIEWERT: It is just cost shifting, Bill, that is all.

CHAIR: Well, it is cost shifting. I realise that. Can I just, before we close, just say that because time is of the essence we would like the answers on notice close of business tomorrow.

Mr Koval : We are close to finalising the answers to the questions we took the other day. Some of those, the questions this morning, for example, the cost of travel, because it involved other parties and not just ourselves, we will try and do ours by then but we have to contact other government agencies and we will do our best to make sure we have their costs. We will endeavour to do ours by then.

CHAIR: I think that concludes this morning's hearing. We are most grateful for your time and your patience, and thankyou to the people up behind the glass there and thankyou to the Secretary. That concludes the meeting.

Committee adjourned at 09 : 43