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Thursday, 21 June 2007
Page: 53

Senator SIEWERT (12:20 PM) —After one of the biggest scandals in recent Australian history the government has presented this parliament with its solution to wheat exporting into the future. The difficulty we have is determining whether the government’s solution is adequate. At the moment our view is that it is not. One of our reasons for doubting the government’s solution with this bill—apart from some of specific concerns with its provisions, which I will go into later—is the way that this particular piece of legislation is being driven through this place without the opportunity for appropriate scrutiny. We believe that the government is showing unnecessary and worrying urgency to have this bill passed. What we are seeing again from this government is a quick fix to get the issue out of the way before the election. Because of the government’s failure to adequately deal with the wheat for weapons scandal, it continues to do damage and it wants to get this issue off the agenda.

They also want a quick fix to shut down debate within the coalition. It is very clear that this is a divisive issue still within their ranks. The only part of the bill that is actually urgent is the extension of the veto, which the Greens support. The rest of the bill, we believe very strongly, should and could wait for proper scrutiny. After the complete disaster of the previous arrangements you would think the government would want to ensure that they got it right this time around. Yet the government are deliberately avoiding adequate scrutiny of this bill.

The bill will have major ramifications for growers and farmers and the way we sell our wheat, and it is vitally important for the future of wheat exports in this country that we get this right. Why is the government, which says it is so concerned about the future of our wheat marketing, afraid to have a Senate committee look at this bill to ensure that it puts in place arrangements that are satisfactory and sufficient to ensure no repeat of the bribery scandal and no repeat of history? It was the lack of proper process that got Australia into this mess in the first place, and rather than learning from this hubris the government seems to be repeating its mistakes. By not allowing this bill to go to a Senate committee and by ramming it through this place, the government is treating the concerns of growers, farmers and the rest of the Australian community with contempt. The issues facing the wheat growers and the broader community in light of the AWB scandal, when you put aside the government’s role in that scandal, include: whether or not to continue with an export monopoly, the appropriate body to hold such a monopoly if we do continue with the monopoly, and the adequacy of the oversight measures.

There is still some disquiet, particularly within my home state of Western Australia, about the issue of the export monopoly. It is important to understand that in Western Australia wheat growers are one of the largest, if not the largest, exporters of wheat in Australia and the vast majority of their wheat is exported, whereas a lot of growers in the eastern states put a lot of their wheat into the domestic market and often exports are seen as a top-up.

Senator Murray —And it is completely deregulated in the domestic market.

Senator SIEWERT —Exactly. The Greens support in principle the continuation of a single desk. The main issues now concern the operation of the export monopoly, how to ensure the best outcomes for our wheat growers and how to avoid another disaster like the AWB bribery scandal. The Greens have some specific concerns about the bill. The Greens support the extending of ministerial veto; we see that as necessary. It is of course essential that arrangements for the sale of wheat are in place for the immediate future and that AWB International is prevented from exercising its existing export monopoly powers. We supported the ministerial veto before as a measure to enable a discussion about the long-term future of our wheat marketing when quite clearly there were very serious issues that needed to be discussed and reviewed before reaching a decision on the long-term future and the way we market our wheat in Australia. Such a process was intended to give all stakeholders the time to give proper consideration to the best way to market Australian wheat into the 21st century so that we got the best deal and protected the interests of all wheat growers in Australia, not just large wheat growers but also smaller ones. We need a system that is transparent and accountable to ensure that the good name of Australia in the wheat market is restored, the good reputation of our agriculture is protected and we never again see corrupt and shoddy deals being done in our name. Unfortunately, we do not think that this bill presents the best way forward. It does not provide a comprehensive response to the issues raised in the aftermath of the AWB scandal.

The provisions in the bill that provide the minister with the power to declare a specified company a designated company raise some issues. That designated company then controls the single desk and has the power of veto over other bodies wishing to export wheat. The minister could then designate a company from 1 March 2008. The government says this is to allow time for growers to establish a grower owned and operated company, or that AWB or AWBI could in the future be demerged. We believe that the amendments in the bill are very light on detail. There is nothing to indicate what happens if there is no appropriate company to become the designated company. Commentary has suggested that it will be difficult for growers to form a company in time, and equally difficult for AWB to put in place its adequate demerging and restructuring process. The minister even acknowledged in his second reading speech that it will be a significant challenge for the industry. In these circumstances we have been told that the power will not revert to AWB automatically; they will not automatically regain the power of veto.

So what is going to happen? That is not clear from the legislation. Alternatively, the government could keep extending the ministerial veto until an appropriate company has been established. However, we have been told that this is not going to happen either; there is only a limited time for that. So what is going to happen? We believe we need to have this sorted now, rather than sometime in the future. Perhaps we will learn it in the committee stage this afternoon. To my mind it would have been a lot better to have those details in the legislation or to at least have a Senate committee process—the Rural and Regional Affairs and Transport Committee for that matter—where we could learn and discuss these details through the revision process. We believe this is an unsatisfactory situation. We believe there needs to be certainty into the future.

Furthermore, there are no criteria for a company to become a designated company. It is merely at the discretion of the minister. There is nothing in the legislation indicating what would constitute an appropriate company to be the designated company. This is surprising, given that the company is being given monopoly powers. Surely not just any company should get these sorts of powers, and the minister should be completely satisfied that the company structure is appropriate to hold monopoly powers before declaring a company a designated company. There has been comment that the complex share structure of AWB as a private company led to a lack of clarity in accountability within the board that particularly contributed to its failings. We question whether there should be some legislative requirements for the designated company to meet. For example, there could be a consideration of its share structure to ensure good governance structures are in place. We are not convinced that corporate regulation alone is necessarily sufficient and believe there should be some legislative standards a company should meet before being able to exercise such a significant power. We also note that there is no requirement for the designated company to be grower owned and operated. Companies that hold monopoly powers must have robust and independent oversight regulation. Without such oversight, abuse and corruption will potentially follow.

This leads me to the issue of the amendments proposed for the Wheat Export Authority, or WEA. The WEA is to be renamed the Export Wheat Commission and provided with some additional powers. There are also provisions for transitional arrangements for the move from the Wheat Export Authority to the Export Wheat Commission. The failure of oversight is one of the biggest lessons to be learnt from the wheat for weapons bribery scandal, and we should have had the opportunity to scrutinise these measures much more closely to ensure that this bill does in fact provide adequate safeguards and accountability. Otherwise, we run the risk of future failures.

When the Australian Wheat Board was privatised in 1999, a system was supposedly put in place to oversee that privatisation. The agency with that responsibility was the Wheat Export Authority, which had responsibilities under the Wheat Marketing Act 1989 to, amongst other things, monitor, examine and report on the performance of AWB. The Wheat Export Authority has a role in monitoring compliance with the conditions of export consents that have been issued, including price performance, the supply chain and the operating environment. It is clear that the WEA did not carry out its functions adequately. It is also clear that it had a very narrow interpretation of its functions. This narrow interpretation of its functions resulted in its failure to pick up the failings of AWB. Quite clearly, changes are needed in the long term.

In cross-examining the WEA chair at the time, Tim Besley, in Senate estimates, it seemed to me that WEA verged on being wilfully narrow in its interpretation of its role and also that it was dominated by a boys club culture where you looked someone in the eye, shook their hand and took their word when you were told that nothing dodgy went on. I remind this place of a quote from estimates. I asked:

Weren’t you concerned ... that you had heard rumours separately, as I understand it, about that Jordanian trucking company and that you had heard rumours of kickbacks? Wouldn’t that have prompted you?

I was obviously talking about the scandal. Mr Besley said:

There is nothing sinister in this. We did our job. We went down there, we looked them in the eye, they came back, looked us in the eye and said: ‘Look, we’ve done no wrong. Here is our code of conduct. Here is our agency facilitation thing.’ We looked at that. What more do you do? We trusted them, and you have to ask the question: were we unwise to do so? I do not know the answer to that. I would reserve my judgment on that until I see what Cole comes out with.

That is not what I consider to be an appropriate attitude to take on such a serious responsibility. The Cole report showed quite clearly that WEA was not carrying out its functions. Paragraph 29.60 of volume 4 of the report states:

In relation to exports to Iraq, the Wheat Export Authority did not display the necessary strength or vigour.

Mr Cole in his report goes on to recommend that:

... there be a review of the powers, functions and responsibilities of the body charged with controlling and monitoring any Australian monopoly wheat exporter. A strong and vigorous monitor is required to ensure that proper standards of commercial conduct are adhered to.

The question we have to ask is whether the bill establishes a sufficiently strong and vigorous oversight body.

The change of name from the Wheat Export Authority to the Export Wheat Commission really is neither here nor there if the powers are not appropriately given to it. What is important is its structure, its powers and the exercise of those responsibilities. In regard to the new structure of the commission, we welcome the changes as a step in the right direction. A measure of independence is provided by turning the authority into a statutory body, with commissioners to be appointed on the basis of relevant skills. The structure of WEA contained inherent conflict of interest, with some members appointed by the Grains Council of Australia and one being a departmental nominee answerable to the minister. A change of structure was necessary. We also welcome the provisions broadening the scope of the information-gathering powers of the commission. However, these seem to be the only changes made with respect to the powers of the commission.

While the amendments broadening the scope of information powers are very important and implement a recommendation by Commissioner Cole, these amendments do not go far enough in providing the necessary oversight. Commissioner Cole recommended a review of the powers, functions and responsibilities of WEA, the Wheat Export Authority, and all the government has come up with is limited additional powers to obtain information. This is why we need an inquiry into this bill: to identify its shortcomings in these areas of vital importance.

The other key element of the failure of oversight, as I mentioned earlier, was the boys club culture of the oversight body. Even with the powers it had, the WEA did not use them effectively to monitor AWB. It is no use giving extra powers if they are not actually going to be used. Could we hope that the changes made to the structure of the WEA will result in a more accountable culture? I do not know. I think that we needed further time to review that to ensure that we have an effective oversight body.

The other key element in ensuring adequate oversight is the role of the minister. In the AWB scandal, the Greens believe there was a failure of ministerial oversight. Of course, this is not something that can be legislated, but strong ministerial oversight is a key part of a ministerial Westminster system of government, and its failure can be a disaster. It is important to remember, given the decision of the government to retain the single desk and vast monopoly power of what will be a commercial private company, that we are giving a private company significant power over an important export commodity and also enormous responsibility. We have our doubts about the appropriateness of a private commercial company holding such powers. But if this is going to happen then there must be the highest standards of oversight, and this is where we believe the bill is currently insufficient.

The Australian Greens will support and have indicated before that we support the splitting of this bill to deal with the power of veto and to deal with the issues and concepts around the single desk and the broadening of the powers of the new commission, so that we can adequately review those and make sure that they are the best governance structures. At the moment, we simply do not know whether this legislation will deliver better markets and prices for growers. While we acknowledge—and I take on board what Senator Adams says—that this is a step in the right direction, we are beyond steps in the right direction. We need to get it right. It is essential that we get it right. I do not think our markets can bear another scandal of the like that we saw before.

We do not believe that this legislation is right yet. We need the time to look at it. We do not have that time. We are negotiating and talking about this legislation at the very end of the last sitting before the winter break. Not only have we not had a Senate committee review of this legislation but we are sitting here on the last day talking about this amendment bill, and the pressure is on. We still have a long list of legislation that we need to deal with before we rise for the winter break, so the pressure is on to hurry this legislation through. Is it a coincidence that this legislation was brought on at this time, in this week, just before the end of the sitting, so that we had no time to adequately debate, no time to review it, and no time to review the next lot of amendments to this legislation that the government has brought out?

Senator O’Brien —He tried to con his own, let alone us.

Senator SIEWERT —Yes. This is not the appropriate way to debate and to determine the future of wheat marketing in Australia. The Greens support, in principle, the concept of a single desk and grower owned control but we need to make sure that those structures are properly in place, that the oversight structures are properly in place, and that we get the transparency and accountability right. The Greens are not convinced that we have that, so we cannot support this bill in its entirety. We will support it being split, we will support the veto and we will support it being sent to committee for review, and for it to then come back in August to look at whether further amendments need to be put in place. But this is not the way to do business and it is not the way to treat wheat marketing in this country. We are very disappointed that the government is rushing this through. This is the government’s response to the Cole inquiry and the government’s response to how we market our wheat into the 21st century. You would think the government would give this place, and the community, a little more time to deal with this adequately and make sure we have got it right this time because I do not think there will be an opportunity to get it right at another time before we expend our credibility completely in the international sphere.