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Friday, 25 November 2011
Page: 9739


(Question No. 1280)

Senator Milne asked the Minister representing the Minister for Trade, upon notice, on 14 October 2011:

(1) Is the Minister aware of the case history between Austrade Nagoya and Mr Mark Eather formerly of Jolly Roger Exports Pty Ltd, a successful and world renowned sustainable seafood export business that was destroyed following dealings with a phantom company (Yamaichi Tsusho Ltd) introduced to Mr Eather by Austrade Nagoya management, Mr Ian Brazier and Mr Takehiro Yoshimoto.

(2) Is the Minister aware that Mr Eather has been left with substantial debts, the loss of his business and professional reputation, as well as considerable personal difficulties, as a direct result of Austrade Nagoya insisting he do business with a phantom company and person using a false name.

(3) Can an explanation be provided as to why the department is unable to provide any documentation of correspondence between Austrade and Mr Kasamatsu of Yamaichi Tsusho Ltd prior to their endorsement of Mr Kasamatsu.

(4) On what grounds did Austrade Nagoya recommend business dealings with Mr Kasamatsu of Yamaichi Tsusho Ltd, in which it asserted the company is 'one of our good customers' and Mr Kasamatsu 'is [a] trustworthy business man and [Austrade] enjoy good relationship with him [sic]'.

(5) Can an explanation be provided as to why Austrade Nagoya sought basic company information from Mr Kasamatsu (regarding the name and address of his company, his position, year of company establishment, and the company's capital stock, turnover and the nature of its business) 2 months after recommending his customer status to Mr Eather.

(6) (a) What was Messrs Brazier and Yoshimoto's tenure at Austrade Nagoya; and (b) when did they commence and end their management role at Austrade Nagoya.

(7) When and why was the Austrade Nagoya office closed.

(8) Were performance audits of Austrade Nagoya ever conducted; if so, can copies of all the audit results and performance assessments be provided.

(9) Was any investigation conducted of Austrade's endorsement of Mr Kasamatsu and Yamaichi Tsusho Ltd; if so, can a copy of the investigation report be provided; if not, why not and who made the decision not to investigate.

(10) (a) When was Yamaichi Tsusho Ltd (Suite 405, 0-31, Yamada-cho, Kaga-shi, Ishikawa-ken, Japan 922-0413) registered and consequently deregistered as an Austrade trading partner; and (b) why was it deregistered as an Austrade trading partner.

(11) Who were the directors on Yamaichi Tsusho Ltd's board.

(12) Is it common practice for Austrade to require Australian business owners and operators to enter into business dealings with companies or persons unknown to Austrade, and can a copy be provided of any guidelines or requirements that govern the activities of Austrade employees regarding their obligation to do due diligence on any company registered as an Austrade business partner.

(13) Given there is no evidence of communication between Mr Kasamatsu and Austrade prior to his endorsement, can the Minister confirm that the Attorney-General's Legal Services Directions have been followed regarding the 50 per cent Deed of Settlement afforded to Mr Eather, especially since Commonwealth agencies are obliged at all times to act honestly and fairly in handling claims according to section 55ZF of the Judiciary Act 1903.

Senator Conroy: The Minister for Trade has provided the following answer to the honourable senator's question:

(1) I (Dr Emerson) am aware of the claims made by Mr Eather.

(2) See (1) above.

(3) I am advised that communication between Austrade and Mr Kasamatsu was initially undertaken by telephone.

(4) Austrade provides Australian exporters with introductions to prospective overseas customers. Conducting due diligence, negotiating terms of trade, insurance and securing payment is the responsibility of the exporter.

I am advised that in February 2000, Austrade Nagoya introduced Mr Kasamatsu, of Yamaichi Tsusho, to Mr Eather. Mr Eather dealt directly with Mr Kasamatsu from February 2000 to July 2000. Austrade did not participate in any meetings between the parties.

Austrade Nagoya relied on information provided by Mr Kasamatsu when introducing Mr Kasamatsu to Mr Eather.

(5) I am advised that, at this time, Austrade sought written confirmation of the company information previously provided by Yamaichi Tsusho Ltd in initial telephone conversations. See (3) above.

(6) Mr Brazier was employed at Austrade Nagoya from 4 May 1997 to 14 July 2001. Mr Yoshimoto was employed at Austrade Nagoya from November 1998 to 31 August 2009.

(7) Austrade Nagoya was closed on 31 August 2009 for operational reasons.

(8) Yes. Documents covering this question were provided to your (Senator Milne) office on 26 May 2011 following a Freedom of Information request.

(9) Austrade engaged law firm Mallesons Stephens Jaques to undertake an examination of all the relevant circumstances and available information. This legal advice is privileged.

(10) A search of Austrade’s current and previous database does not reveal any entry, or subsequent deletion, for Yamaichi Tsusho Ltd.

(11) I am advised that Austrade does not have any information about the directors of Yamaichi Tsusho Ltd.

(12) Austrade provides introductions between Australian exporters and prospective overseas customers. It does not, and cannot, ‘require’ any company to trade with another.

Austrade does not undertake due diligence for Australian exporters. Conducting due diligence, negotiating terms of trade, insurance and securing payment is the responsibility of the exporter.

Austrade’s internal client service document Meeting Our Clients’ Needs - A Practical Handbook, dated July 1999, contains the following entry:

Assisting in the selection of a long term strategic export partner: …Clients (i.e. Australian exporters) will need to engage professional financial and legal counsel to complete due diligence tests or other technical assessments of business capacity or capability. Austrade may be able to arrange for a credit/status report on a potential partner, should the client require one.

(13) On 8 July 2010,The Office of Legal Service Co-Ordination (OLSC), which administers the Legal Services Directions 2005 (the Directions), concluded that Austrade had acted in a manner consistent with the Directions after considering the concerns raised by Mr Eather about Austrade’s handling of his claim and events leading to the signing of the Deed of Settlement and Release. Mr Eather was legally represented at the time and the terms of the Deed are confidential.