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Rural and Regional Affairs and Transport Legislation Committee
24/05/2018
Estimates
AGRICULTURE AND WATER RESOURCES PORTFOLIO
Australian Livestock Export Corporation Limited

Australian Livestock Export Corporation Limited

[15:32]

CHAIR: Welcome. I'm sure you've been looking forward to this afternoon for the week or so.

Mr Enright : Absolutely.

CHAIR: Would you like to make an opening statement?

Mr Enright : Yes, I would. Thank you for the opportunity to make some opening remarks. I am chair of LiveCorp and I'm joined today by the Chief Executive Officer of LiveCorp, Mr Sam Brown. While this is not my first time before the committee, it is my first time as chair of LiveCorp. Previously, I've been on LiveCorp for nearly eight years as an independent non-executive director. Prior to that I have had a long history with the RDC community, the rural development corporations. I chaired the GRDC, the Grains Research and Development Corporation, for a number of years. Alongside that I've been a livestock and grain producer in Western Australia for all my working life and produced thousands of sheep which have been targeted for live export markets. So I've had a key role in that. But the care and management of those livestock, while I don't have day-to-day operations on a farm today, the lessons I have learnt, the husbandry issues that I have confronted and my working life, is all very relevant to where I'm working today.

In this regard I'd like to put on the record that LiveCorp board, senior management and staff are all shocked, as producers, government and everybody was, at the 60 Minutes footage we saw a few weeks ago. We're shocked because that footage represented the reverse of everything we work towards as an RDC to improve the welfare and support of animals through the whole supply chain. So that footage was shocking in that way. It also shocked us because we were not aware—we're not on the transport vessels—to find that something like that could actually happen on the transport side of the business.

Before we start, it's also important to clarify the role of LiveCorp and the key differences between us as a research corporation and the industry bodies, which is the Australian Livestock Export Council representing the exporters, and of course the government as a regulatory body. LiveCorp is the research organisation. We take levies from sheep, goats and cattle exports. We invest those levies in a whole range of research and development across the supply chain to assist the export industry. Collectively alongside MLA, we also run a live export program where we, jointly with MLA, conduct a number of research projects and in market support to the industry. It's also important to understand what LiveCorp does not do. We do not advocate. We do not lobby. We don't engage in political debate. We do not set policies, we do not regulate and we don't export. We are strictly R&D, supporting those industries with the R&D effort behind them.

In response to the footage, which is very topical, of course, we sought to better understand the circumstances. We stood ready to provide the Australian Livestock Export Council with informed information, research and support to the industry. From LiveCorp's perspective, in undertaking our research and service delivery functions as a company we understand the need for a sustainable live export industry. We see that as important in terms of the competition it provides for producers across Australia. Importers depend on that for the suppliers. Remember, these markets have been developed over many years, and our overseas customers have a preference for Australian product as a result of this trade. I'll leave it at those opening comments, and Sam and I will be happy to answer questions that the committee would like to put before us.

CHAIR: Thank you for that. Just as I lead into Senator McCarthy to take point with questions, has your organisation done any research and development in and around heat stress with animals in various conditions?

Mr Enright : Yes, we have.

CHAIR: I don't want to pre-empt what Senator McCarthy might ask, but at the first opportunity I'd be interested, and I'm sure the committee is, for you to share the body of knowledge you have around that, because I think it's somewhat central to the circumstances here.

Senator McCARTHY: Mr Enright, in 2013 LiveCorp delivered a research development and extension update on the livestock export industry. On page 12 of your report you acknowledge that industry, government and the general public have a keen interest in monitoring the export patterns and mortality rates on board livestock vessels. Do you also acknowledge that the public has a keen interest in the welfare of live animals exported, especially on long-haul voyages?

Mr Enright : The public have an interest in the outcome of the live export industry and have had for many, many years. We've been well aware of that and sought to work with them. That's the situation. It's well understood that the public have an interest in this matter.

Senator McCARTHY: The 2017 LiveCorp update refers to the national livestock export industry transport performance report 2016. It states: 'Cattle shipment mortalities remain stable and low. However, after record lows in 2015 sheep mortalities have increased slightly.' Yet the language in the actual report is: 'The total mortality rate for all sheep exported to all destination regions during 2016 was 0.8 per cent, a substantial increase from the 0.62 per cent observed in 2015.' Why has LiveCorp changed the language from 'substantial increase' to 'increased slightly'?

Mr Enright : I'll have to understand that. I think I might have some figures here to understand it. I'm not aware of why we changed the language or if we did.

Mr Samuel Brown : I think what we're reflecting is that it's a slight increase. To assist my chairman, I think what you're referring to is what we observed in the national mortality report. It's a report we produce every year. There's a slight increase. It's merely stating the facts.

Senator McCARTHY: Could it be an observation that there's an attempt to show that increases in sheep mortality are not substantiated?

Mr Samuel Brown : No, I don't think. If there are alternative words you'd suggest, we'd happily receive them.

Senator McCARTHY: On page 10 of your National livestock industry sheep, cattle and goat transport performance report 2016 it states:

One high-mortality voyage each for 2013 and 2014 will not be included in some analyses as the mortality was incurred under exceptional circumstances, and would distort the study of long term trends. Where this exclusion applies, text, tables and figures are appropriately annotated. Federal Department of Agriculture investigation summaries regarding these voyages are referred to in 6.2 Appendix 2.

There was one high mortality voyage investigation for 2016 which is also referred to in 6.2 Appendix 2. This voyage has been included in all analyses.

My question is: how can LiveCorp justify choosing not to include data from voyages where high mortality rates have occurred on the basis that it will distort the study of long-term trends?

Mr Samuel Brown : Chair, I'm happy to take this question on notice. I think it's an important question. I would have to refer to and speak to the statisticians as to why that report would state that. I don't have the report in front of me; there are a lot of reports we cover. But I'm happy to take that on notice and provide you with an answer, Senator.

Senator McCARTHY: This is information that is yours. If LiveCorp had analysed the data across years and sought to better understand the exceptional circumstances, possibly it would have found the failings currently being debated in the public forum with regard to the northern summer live sheep trade. Is that a fair question?

Mr Samuel Brown : As I said, I haven't reviewed that report for some time. I'm happy to go and review the report and provide you with an answer.

Senator McCARTHY: Do you accept any responsibility in the current circumstances, which the agriculture minister first described as—and I quote—'bullshit'?

Mr Enright : That assessment of the task of exporting animals is continuous in our research. We talked about the heat stress model, which underwrites the rules under which sheep are exported into that market. That's a model that is continuously improved, improving the data that informs it. So it's a continuous process.

Mr Samuel Brown : In addition to what my chair stated—and, as I mentioned, we can certainly take this on notice and we want to get an answer to you—we do these reports every year. The investigation I think you're referring to is a departmental investigation. The chair stated at the start that LiveCorp is not exporting. We're not commercial. We're not transacting live. We aren't actually exporting the livestock; we're simply the service company. And you're referring to one of the many reports we're doing.

Senator McCARTHY: Has LiveCorp sought further information from the Australian Veterinary Association about their recommendation that:

4. Irrespective of stocking density, thermoregulatory physiology indicates that sheep on live export voyages to the Middle East during May to October will remain susceptible to heat stress and die due to the expected extreme climatic conditions during this time. Accordingly, voyages carrying live sheep to the Middle East during May to October cannot be recommended.

Have you sought information on that?

Mr Enright : We haven't received the information of the AVA report that was provided to Dr McCarthy, I understand.

Senator McCARTHY: You haven't received it but have you requested—

Mr Samuel Brown : Senator, hold it. We know that all the submissions to the McCarthy review are available. Of course, we respect the AVA and the AVA views. We have a lot of veterinarians working in our industry. We haven't made contact as yet but we certainly will be—

Senator McCARTHY: Why not?

Mr Samuel Brown : talking to the AVA.

Senator McCARTHY: Why have you not made contact?

Mr Samuel Brown : It's a matter for Mike McCarthy. We will be going and talking to them, understanding their views and trying to incorporate understandings and improving our understandings. We've got a range of tasks we do as an RDC. If people have information that's really of interest to us, we want to socialise that across the work we've done. But we will certainly be looking to talk to the AVA.

Senator McCARTHY: The committee is aware that you aren't the department or exporters, but you inform the public debate about mortality rates and animal welfare for live animals exported.

Mr Enright : We provided all the information that we had available to the McCarthy review, as did the AVA report. The McCarthy review, as you're aware, has only just been released. That took account of the research that we had available, which was made available to it.

Senator McCARTHY: So you did provide information to the northern summer review undertaken by Dr McCarthy?

Mr Samuel Brown : No, we didn't. We provided a submission to the ASEL review. We made sure the submission for that was available to Dr McCarthy, and we responded to any requests from the department to support that review. We also supported requests from our own peak industry council, who made a submission to the McCarthy review.

Senator McCARTHY: Have you reviewed Dr McCarthy's report?

Mr Samuel Brown : Yes, we have reviewed it. We're still in the process of understanding the ramifications and details of that report.

Senator McCARTHY: I'll take you to recommendation 5:

Recommendation 5—Heat Stress Risk Assessment

That the required changes to the industry HSRA model be made immediately and then included in Version 5 of the HSRA model.

You're aware of that?

Mr Samuel Brown : Yes, we are aware of that.

Senator McCARTHY: Do you agree with that recommendation?

Mr Samuel Brown : It's not a matter for us to agree to. The department's agreed and it's recommended this. As an RDC, we'll be talking to the department about immediately implementing that into the HSRA model, as recommended.

Senator McCARTHY: So you do agree with the recommendation?

Mr Enright : It's not a matter of agreeing. The recommendations have been accepted by the minister. Our job is to interpret those recommendations and how we adjust the model to fit them.

Senator McCARTHY: Doesn't LiveCorp have a vested interest in the HSRA model?

Mr Samuel Brown : Certainly. We built that model. We started investing in that in the early 2000s and invested in many upgrades to the model. Once we developed the model, we handed it over to the peak industry council to use in combination with the regulator as a tool to guide their risk assessments. The policy settings of that heat stress risk assessment model is a matter for the peak industry council that sets the policies.

Senator McCARTHY: Is the HSRA model owned by LiveCorp and MLA, or part owned?

Mr Samuel Brown : The IP of all research projects belongs to the LEP. Specifically, for the ownership of that one we would need to—

CHAIR: For the purpose of this committee and people observing, could you qualify acronyms as you go through, please, Mr Brown?

Mr Samuel Brown : Sure.

Mr Enright : LEP is the Live Export Program, a joint program between LiveCorp and MLA, Meat and Livestock Australia.

Mr Samuel Brown : I can take on notice the exact ownership. For any IP that relates to the research reports, there are requirements set out in agreements between LiveCorp and MLA on who owns that, which includes the ownership and management of any materials. Not all research reports, obviously, deliver a product.

Senator McCARTHY: Are you saying you don't know if it's partially owned by you?

Mr Samuel Brown : Of course it will be.

Senator McCARTHY: As LiveCorp has a vested interest in continuing the live sheep export trade regardless of the ongoing animal cruelty, can you provide the government or the public with impartial advice about the trade and conditions which it cannot control but chooses to describe as exceptional circumstances?

Mr Enright : I'd make the point that the first, No. 1 point in our strategic plan is the welfare of animals. And we continue to place over 60 per cent of our investment into that area of research. We have an ongoing interest in making sure welfare outcomes are 100 per cent correct. That's our motivation.

Senator McCARTHY: In terms of the McCarthy report, in which terms are you trying to understand that report?

Mr Samuel Brown : Would you like to talk about the model or the McCarthy review?

Senator McCARTHY: The review.

Mr Samuel Brown : Specifically, which part of the McCarthy review?

Senator McCARTHY: The complete review.

Mr Enright : There were 23 recommendations made by the review.

Senator McCARTHY: Correct, there were.

Mr Enright : The minister has accepted the 23 recommendations.

Senator McCARTHY: And I've asked you about one.

Mr Samuel Brown : As far as LiveCorp is concerned, we're working through those recommendations to better understand the details, what it actually means in application. We received the report last Thursday. We're in the process of understanding its areas. It's complex. It's important that we understand it. We're in the process of digesting and working through what those reports mean to the industry and the implications they'll have on the industry.

Senator McCARTHY: LiveCorp reports that RD&E projects are assessed and prioritised through the livestock export research and development advisory committee, which comprises representatives like yourselves and from MLA, R&D, the Livestock Export Program, Cattle Council of Australia, Sheep Producers Australia, live sheep, and the Australian Livestock Exporters' Council. An independent technical advisor also provides special advice to MRDC on projects and their respective methodologies. My question is this: who is the independent technical advisor who provides specialist advice to RD&E projects?

Mr Samuel Brown : Dr Richard Shephard provides independent counsel.

Senator McCARTHY: Chair, I have further questions around IGAB and into outcome 2. I'm just wondering how you wish to proceed.

CHAIR: I think we've prepared ourselves to sort of collapse the balance of the agenda. Feel free to go on. It will help me manage time better if we're able to do that.

Senator SINGH: I want to follow up on Senator McCarthy's questions she just asked LiveCorp.

CHAIR: It is your time. Senator McCarthy yields to you.

Senator SINGH: I just wanted to follow up on what Senator McCarthy was asking in relation to the McCarthy review and LiveCorp's response to it. Mr Enright, you said, 'It's complex. What component?' The components we really, obviously, want to focus on are the recommendations. We could go through all the recommendations if you want to. But we'd like to know exactly if you can provide a comment on those recommendations, because they're obviously key to this issue of the industry moving forward.

Mr Enright : I'm happy to go through them one by one if you want.

Senator SINGH: We'd like some response from you on those recommendations, particularly as we're about to move into the northern summer.

Senator RHIANNON: Chair, can I ask a process question? I thought we were doing it in 15-minute lots. If we're moving into this style, I'm happy to proceed that way. But I'd like to flag I'd be interested in coming now. Or are we finishing off with Senator McCarthy?

CHAIR: Senator Rhiannon, I very slowly, not once but twice, very thoroughly went through how we are going to manage this afternoon.

Senator RHIANNON: Yes, I thought it was in 15-minute lots.

CHAIR: It is in 15-minute lots. The Labor Party gets two 15-minute lots; the government gets two 15-minute lots; the Greens get a 15-minute lot; and the crossbench gets a 15-minute lot.

Senator RHIANNON: Okay, so we're just into our second Labor 15-minute lot now.

CHAIR: That's right. I actually looked down the barrel of the camera and asked staff to brief their senators who are coming here.

Senator RHIANNON: Sorry, I thought we were just cutting into Senator McCarthy's time. My apologies.

CHAIR: No, they still have 14 minutes to go. Then we'll move to the government for 30 minutes. Then we'll come to you. I might as well touch on it again. Where crossbenchers are concerned, the crossbencher that comes in and registers first—which is you, Senator Hinch—if they are in the room when the crossbench opportunity comes up, gets the call. Another one will then have to wait for the full cycle to go through again. I've done all that straight into the barrel. I'm assuming diligent staff have briefed their senators. Senator Singh.

Senator SINGH: Mr Enright?

Mr Enright : The McCarthy review, as you're aware, was handed down last week, with 23 recommendations. A lot of these recommendations need to be implemented by the livestock export side of the industry if they are to make changes. Where LiveCorp's role is—where there are technical adjustments to the heat assessment model, for instance, or what that means—we will do that technical work and provide that advice to the industry. Some of the other measures recommended in there are not researchable in that sense. Take, for example, the ventilation audit that was recommended on all ships. We are moving already to facilitate that to take place. Of course, that has to be done by people who are competent in that area of science, and the ships have to be assessed over time, but we're working to assist that. But a lot of those recommendations are not actually actionable by LiveCorp.

CHAIR: To assist the senator: there are 23 recommendations. Do you have a sense of how many would enliven your organisation in terms of your participation with stakeholders? Have you reviewed that?

Mr Samuel Brown : I was just making this point, because I take your question seriously. But I have to say, we are not the industry—

CHAIR: Mr Brown, please focus. I asked the question.

Mr Samuel Brown : I'm sorry.

CHAIR: I'm asking you, of the 23 recommendations, have you determined how many of them will enliven your participation? I'm reflecting on your chairman's response to Senator Singh.

Mr Samuel Brown : Yes. Definitely with the recommendations relating to further consultation and the recommendations that relate to the heat stress risk assessment model we see a role for us in there to actually deliver those.

CHAIR: So, you're not in a position to put a numerical response to my question and say that you've looked at them and can say that there are six or seven or nine or 11 that enliven your—

Mr Samuel Brown : No.

CHAIR: It will help—the body of the committee is thinking that you'll be involved perhaps and have all 23, and if the chairman's made it clear that there are many of them that won't affect your organisation, if it's not within your bailiwick, for example, have you considered of the 23 how many—because if you come down to one or two I could anticipate Senator Singh interrogating you on those one or two or three or four, and we'd be done, with this passage of the examination. So, do you know how many of the 23?

Mr Samuel Brown : As I mentioned, the recommendations that relate to the heat stress risk assessment—

CHAIR: That's one, yes.

Mr Samuel Brown : is the main area of our priorities—

Senator SINGH: Well, there are about six recommendations.

CHAIR: Are there?

Mr Samuel Brown : Yes, that's right. There's a suite of recommendations that relate to that and have been identified, some for immediate implementation and others for further consultation. We've sat down with the peak industry council to understand what they see as their priorities and where they need further assistance and advice and what research we might have to support them.

Senator SINGH: Considering that we're about to go into the northern summer, what time frame do you put to your advice and your consultation that you're going to give industry on that? Is it going to be before the northern summer kicks in?

Mr Samuel Brown : Where the recommendations state for them to be in place before the northern summer we'll do everything within our abilities to have it already stated in the report and requested by the regulator.

Senator McCARTHY: If I can just go to my last question to you, when I asked you about the independent technical adviser: can you provide the committee with a list of the skills, the qualifications, of that technical adviser?

Mr Samuel Brown : I don't have his CV in front of me that I could—

Senator McCARTHY: Would you be able to provide it on notice?

Mr Samuel Brown : I'll be able to provide it—definitely a summary of his skills. He's a production veterinarian and has a range of research backgrounds. But of course they are, as they always are, quite technical areas of research and skill that he has. In order to do that correctly and 100 per cent I'll take that one on notice and provide you with a summary.

Senator McCARTHY: Okay. Chair, I was going to go to the department in terms of the collapsing of output 2.

CHAIR: Sure. We've collapsed this with output 2.

Senator McCARTHY: Okay. I'll go to you, Mr Quinlivan. Thank you very much, Mr Enright.

CHAIR: You'll need to remain, gentlemen, because we've collapsed the afternoon's agenda. You'll be here until all the senators have indicated that they've exhausted their interest with you.

Senator McCARTHY: Mr Quinlivan, could you please outline the department's approach to investigating reportable mortality events?

Mr Quinlivan : I'll defer to my colleagues on that.

Dr Clegg : The approach we take for investigating mortality events is set out in the front of all of our reports that we put on the website. What we do is get the results back—the voyage reports—and we look through the application and the heat stress risk assessment, if that was relevant, for the particular consignment. Depending on what the issue is with the mortality event, we might ask for the lab test results, if they were relevant, if there was an outbreak of disease. We do our best to interview the AAV who was on the voyage.

Senator McCARTHY: I'm sorry, can I ask you to speak up a little bit? I do have the chair speaking in my left ear over here. It's a bit hard to hear you above him. He's very loud.

Dr Clegg : What we do is look at the application from the exporter and all the evidence that the exporter provided to us about whether or not the consignment meets the importing country requirements and also the preparations that they had in place for the voyage. We also look at the AAV's reports—the Australian accredited veterinarian's reports—if there was a vet on the voyage, or the stockman's daily report, if there was only a stockman on the particular voyage.

Senator McCARTHY: From what you've just outlined, would you say that they're the basic steps to these investigations?

Dr Clegg : Yes.

Senator McCARTHY: Can I refer you to Mortality investigation report 69: sheep exported by sea to Qatar, Kuwait and United Arab Emirates in August 2017, which involved the death of 2,400 sheep in August 2017 aboard the Awassi Express. Were these steps followed for this investigation?

Dr Clegg : Yes, they were.

Senator McCARTHY: So what happened on that voyage?

Dr Clegg : What happened on that particular voyage was that at about day 15 of that voyage the temperatures on the ship, and in the area in which the ship was, rose considerably and there was a heat mortality event on that particular vessel. They lost, I think, over 900 sheep on the one day, and that was followed by another 600 and 400 on the following days as the voyage headed towards Qatar.

Senator McCARTHY: What were the causes of death?

Dr Clegg : The cause of death was heat stress, predominantly. There were other things. There was a little bit of salmonellosis—enteritis—and inanition in a small number of sheep, but the predominant reason for the deaths was heat stress.

Senator McCARTHY: Did the department find any breaches of Australian standards or regulations following this initial investigation?

Dr Clegg : We did not.

Senator McCARTHY: What did you find?

Dr Clegg : As the report says, we found that the cause of the deaths was heat stress and that, from the information that we had before us and all of the information provided by the exporter and our review of the information from the AAV, the basic requirements for the voyage had been met.

Senator McCARTHY: What was the department's conclusion with respect to compliance with standard 5.7 of the ASEL, which requires:

Any livestock identified as being sick or injured must:

(a) be given prompt treatment;

(b) be transferred to a hospital pen, if required; and

(c) if necessary, be euthanased humanely and without delay …

Dr Clegg : Based on the information that we had before us—and I guess the basis of the information was the reports from the accredited veterinarian—our conclusion was that animals that needed to be treated had been treated and that animals that needed to be euthanased had been euthanased. So we didn't find any breaches of that standard.

CHAIR: So the total number, which you've quoted here, included euthanased animals?

Dr Clegg : Sorry?

CHAIR: The total number included euthanised animals?

Dr Clegg : Yes, in our counting of—

CHAIR: I'm referring to a number you provided earlier with 900-odd fatalities.

Senator McCARTHY: You had 900 on the first day and then 600 and 400 in the following days.

CHAIR: So did those fatalities include animals that had been euthanised?

Dr Clegg : Yes, they would've because the vet at the time on the vessel was euthanising animals that were beyond treatment where they were found and where he was able to do that.

Senator McCARTHY: Do you have a number out of the numbers that you've given us?

Dr Clegg : I don't have a number from the reports that I've received from the vet. I have comments from the vet in his reports about what he did.

Senator McCARTHY: Can you obtain the numbers from the vet in terms of the—

Dr Clegg : I could ask him, but it was August of last year. Yes, sure.

Mr M Thompson : Just in relation to that, it is probably worth noting that mortality report 69, which is the one we're referring to and the Awassi, is, as we've indicated on our website, now reopened effectively because of the further information we've received from Animals Australia. That's the subject of the investigations that I referred to in my opening statement.

Senator McCARTHY: I appreciate that, Mr Thompson, but my questions are about the initial investigation.

Mr M Thompson : Point in time; understood.

CHAIR: Sorry—and I will take this time into account, Senator McCarthy.

Senator McCARTHY: I'm counting!

CHAIR: How are you able to make an assessment as to whether there's been a breach of one of the provisions if you can't isolate the number of animals that died unnaturally in a distressed state as opposed to those that were euthanised? I would have thought that that would be relevant.

Dr Clegg : In a heat-stress event, you've got hundreds of animals dying at one time. Some of them the vet will come to—

Senator SINGH: Thousands, actually.

Dr Clegg : to be able to euthanise. Some will die, because of the heat-stress event. For our purposes, they're deaths and we record the deaths for the purpose of assessing the success of the voyage or otherwise

CHAIR: I don't want to make light of this because obviously, historical events such as this, inform your thinking, particularly now that we're confronted with this exercise. I won't labour the point but, if I were trying to assess how an event were managed, whether animals died untreated, unnaturally or from being euthanised, I would have thought was a significant piece of statistical information upon which you may have built responses to. For example, if the vet said, 'I would've euthanised another 2,000 had I had the time' or 'I only took 50 capsules; I didn't take 2,000,' that may inform, might it not, the architecture around how vets need to be prepared. They might need to put three vets there or 500 capsules or triple shooters—I've got no idea. However, it seems to me that, not knowing the answer to that question, in hindsight, may have been a soft spot on the oversight of what we're having to be informed about where to go. Look, I'm not seeking an opinion. You have the call for another two minutes and 11 seconds, Senator McCarthy.

Senator McCARTHY: So, Dr Clegg, the vet's end-of-voyage report stated that only 132 sheep were euthanised. How is it that you didn't have that information?

Dr Clegg : That'll be in the report. I've got a summary in front of me of what happened. He mentioned in his reports that he had euthanised animals during the voyage. He had animals in hospital pens throughout the voyage and, depending on how they were going, he was euthanising them if they weren't likely to recover. However, on the day of the heat-stress event, I'm not sure how many he got around to euthanising.

Senator McCARTHY: Did you ask him?

Dr Clegg : No, I haven't asked him.

Senator McCARTHY: Why not?

Dr Clegg : I don't think that matters.

Senator McCARTHY: Well, 2,400 animals perished on that voyage—

Dr Clegg : That's right.

Senator McCARTHY: so how did the department conclude that no breach of standard 5.7 occurred?

Dr Clegg : It was a heat stress event.

Senator McCARTHY: But you haven't received all the information to come to that conclusion.

Dr Clegg : I received the written report we expected to receive from the AAV, and it covered the information we expected to see in that report. We would not expect a vet to be able to get around a ship of that size and pre-emptively euthanase sheep just before they die of heat stress. That's not possible.

Senator McCARTHY: Why you didn't ask the vet? You're saying these statistics and records are not there.

Dr Clegg : They are, but they don't have the detail you're seeking.

Senator McCARTHY: But did you ask for that detail?

Dr Clegg : No, we didn't. We have the report under ASEL, which has very basic information requested. This episode, particularly the video footage, shows the inadequacy of the information we're asking vets to provide us.

CHAIR: That's it.

Senator SINGH: I think it shows the inadequacy of the department as an independent regulator.

CHAIR: Hold on.

Dr Clegg : It may well. That's your view.

CHAIR: Please don't respond to that. We have a long afternoon.

Senator BROCKMAN: I thank the patience of those witnesses in front of us. We will jump around a bit. I declare that our family farm has been in sheep production for many years, with sales in the live trade. Mr Enright, can you talk about the research that LiveCorp has done over many years to do with the heat stress assessment, what that research entails, what it shows, and what the models you have been using up until now try to achieve?

Mr Enright : I might ask Mr Brown to address that, because he has worked in a technical sense more closely with the HotStuff model over a number of years.

Mr Samuel Brown : I'll keep it in very general terms, because there's quite a detailed amount of science. This project has been considered somewhat live since 2003. It has undergone many upgrades. Most importantly, all the information and reports on HotStuff, its design and its construction are available on our website, so anyone who wants further information can go there. The science, assumptions and engineering that sit behind the HotStuff model in very general terms look at the voyage route, the passage that the vessel will travel. It uses VOS data from shipping routes to those regions and to the ports. It factors in the time of year and the route. It also takes into consideration the vessel itself, the pen air turnover per deck, then looks at the physiology of the livestock. It looks at their class, their condition, the time of year—all the factors that are important to consider in how the animal might experience heat stress. They're the three areas.

CHAIR: Including their maternity state?

Mr Samuel Brown : With regard to maternity state, that's a separate standard. If animals are exported for the purposes of slaughter, compliance with standards requires them to be scanned empty if over a certain weight.

CHAIR: But we've heard some evidence that it wasn't the case in this recent event, I understand.

Mr Samuel Brown : That's a separate matter. The heat stress risk assessment model doesn't—

CHAIR: No, it's not separate; it goes to the heart of your answer. Your model broke the sheep into different classes based on weight condition and so on. I asked whether modelling was done around heavily pregnant ewes.

Mr Samuel Brown : If that is a condition of the animal, there is a class within the heat stress risk assessment model to identify those pregnant animals.

CHAIR: You hadn't mentioned it when you went through the classes.

Mr Samuel Brown : I thought you might have had a different line of questioning. They're the three parameters. The science that sits behind them takes into consideration all three areas, then it works, as we heard from the department's statement—current settings is a two per cent chance of a five per cent greater mortality.

Senator BROCKMAN: Sorry; could you say that again?

Mr Samuel Brown : A two per cent chance of a five per cent mortality event. And what has changed now as a result of one of the recommendations from the McCarthy review is shifting that tolerance from mortality to experiencing a heat stress threshold. So it is no longer a mortality event; it's actually the experience of the heat stress threshold of the animal. It comes back from them actually experiencing—so five per cent of those animals experiencing a heat stress. That's the policy component of it, and of course there are inputs. I've mentioned the inputs, which are in those three areas. The model runs a range of sophisticated algorithms and calculations that sit behind it. I don't have the technical skill to go into all of that detail, but again the reports and discussions about those models are on the website. That's the model. It was started in 2003. It's had a range of upgrades which we're using to of course upgrade the software from time to time, include different routes, include different ports and include different parts of it, so the model will take into consideration risk of discharge and those sorts of things as well.

Senator BROCKMAN: I just want to get a bit of a sense of how it's actually been used. Let's not talk about the future, just the past. How was it used on boats that previously left Australian ports? Was it a calculation that happened prior to departure? Is it something that is ongoing through the journey? How is it actually used in practice?

Mr Samuel Brown : That's a very good question. It's a risk assessment model. It's just assessing the risk. It's something that is used in the preparation phase of the consignment. It's a tool that's used by the exporter to enter all the details that I've mentioned. That's why it is handed over to industry—we are not privy to all of those details—as well as the regulator; those outputs of the heat stress risk assessment model are provided to the regulator. We are not involved in any of those parts of it. We have simply been involved in the research and design of that model, and hence any questions about changing the parameters of the model have been a matter for policy discussion over the past 15 years with the industry, the industry peak council and the department.

Senator BROCKMAN: Since 2003 how has the heat stress model evolved? What has changed in the heat stress model since 2003?

Mr Samuel Brown : As I mentioned before, there have been lots of upgrades to the system, to improve its sophistication, and a lot of validating exercises that have been undertaken to continually rigorously test the assumptions that sit behind it and the calculations of it. I mentioned that at different times it's included different routes to different ports. It's included port discharge risk in some of its upgrades. It's constantly evolving as we have identified opportunities to improve the model. Certainly through the McCarthy review there is an enormous shift now in changing those parameters from two per cent of a five per cent mortality to a two per cent chance of animals experiencing a heat stress threshold.

Senator BROCKMAN: If I had asked you three or four months ago what the heat stress model had delivered to the industry, what would your answer have been? Has it been a factor in declining mortality rates over time?

Mr Samuel Brown : Most certainly. I think the model itself has definitely shown that it's made considerable improvements. The thresholds at which it's been operating, as McCarthy points out, have obviously fallen out of step with community expectations—those thresholds and tolerance. But the model itself is working on appropriate assumptions, and we've had that tested independently by experts, so we know the model works. We need to be mindful that what we are talking about here is the assumptions that are driving the model.

CHAIR: With this particular event, the one that is writ large before us, were the heat levels, the temperatures, foreseeable or did we have, as you do from time to time, a very unusual heat wave—or cold snap—that's uncharacteristic that may even break records, since they've been kept. If you don't know, please don't even venture to it, but do you know whether we have had some spike that was—I'm not going to say 'not foreseeable'—not within the big range of what you might expect on those days at that place?

Mr Samuel Brown : Do you mean was that outside the parameters of the model? Is that what you're saying?

CHAIR: Well, we'd hope that it was outside the parameters of the model. So we'll take that as a given, because if it was inside the parameters it would mean that your model failed. So, we'll assume that. But I'm asking whether you have compared it to day-on-day for the last 30 years for that zone.

Mr Samuel Brown : It's a difficult question to answer, because, simply, we've made the model but we don't have the input data. We don't have the data of the vessel ventilation and the daily recordings, so it's a regulator question.

CHAIR: No, I accept that, and it's a valid position from you. I accept that you're not designing the ship by ship. And let me take it back to you, Secretary; you may have someone. Do we know whether the temperature event was outside the parameters of what one might expect in that place at that time of the year?

Mr Quinlivan : I think we've got some intuition.

Dr Clegg : You can expect wet-bulb temperatures of that order in August in that part of the world.

CHAIR: So, it's foreseeable?

Dr Clegg : It is foreseeable, but the days on which it occurs may not be foreseeable.

CHAIR: I appreciate that. But within the frame of this voyage, if you were to look at a risk profile, this voyage could have anticipated the circumstances presented to be at that place with temperatures in that order.

Dr Clegg : Yes, and the heat stress risk assessment model is meant to evaluate that particular risk and set a stocking density that's appropriate for that level of risk. So, the model actually uses the average temperature for the month as the point; I think it's about day 15. Every month is calculated on an assessment of weather and temperature data and then they use that as a point so that there's some consistency in the model itself.

CHAIR: So they're operating on the mean rather than an average?

Dr Clegg : Well, I think they're operating on an average temperature, but it's over 30 days.

Senator BROCKMAN: Say, an average rather than an—

Dr Clegg : An absolute.

CHAIR: Okay. I accept that. So, they haven't knocked the top and tail off it. Nonetheless, if you look at the bell curve, the model is driving down the dotted white line rather than wandering—

Dr Clegg : The variations.

CHAIR: the variations. I imagine that's something that will be under review now.

Dr Clegg : It may well be—how you can address that. I think we know from—

CHAIR: I take a coat in the boot of the car every day when I leave my house in Toowoomba. But I will move to Senator Brockman.

Senator BROCKMAN: Following on from the chair, and back to LiveCorp: obviously a mean maximum doesn't take into account the maximum that could be encountered. Is that something that needs to be looked at in the model? Obviously you're going to hit spikes that are always going to be higher than the mean. Or does the model take that into account? Sorry: am I making myself clear?

Mr Samuel Brown : Um—

Senator BROCKMAN: So, if you're travelling into a particular area where the mean highest temperature is 30 degrees, then obviously there are going to be some 25s in there and some 35s in there. So, does the model take into account the 35? Or is that something that has to be built in going forward.

CHAIR: I think Dr Clegg answered it. She said that what's punched into the algorithm is: on the 15th day of that month of travel, they take the average for the 30 days of that month.

Senator BROCKMAN: Yes. What I'm asking is: does that need to be taken into account going forward?

CHAIR: I see. I suspect we had agreement to that. Dr Clegg?

Dr Clegg : I think the review of the heat stress risk assessment model, not only the risk probabilities—certainly previous versions of the HotStuff model have updated the temperatures that have been used. I think the last time that was done was 2012 with version 4. Version 5 is probably doing the same thing, but it will be based on the systematic data that they're collecting. They've got a temperature-collection system that they're using so that the model is repeatable.

The other comment I would make is that, in reading the MLA report on the heat stress model, the assessment is that the risk settings are conservative. We've had this event in 2017. We also had a very significant heat stress event in 2016. Both of those had mortality levels over three per cent. I think that information would be fed back into the model to think about whether the temperatures that we're testing against are sufficient. Is the model working? Compared to the cattle heat stress events, the sheep are just not doing so well. That is my assessment of the way the model is working. I don't know why that is, because it's very successful for cattle. We're not having heat stress events there based on the model with the settings that it has at the moment, but that's not the case for sheep. So, yes, it's an area for further investigation.

CHAIR: But there could be so many features that would feed into that.

Dr Clegg : There's heaps.

CHAIR: These are two different animal groups. There is how they retain liquid and so many other features.

Mr Quinlivan : I think that's the point Dr Clegg is making. For those various reasons, the treatment of sheep in the model is not as effective as it should be.

CHAIR: We've got to look further as to why that is so.

Mr Quinlivan : Yes.

Mr Enright : The other point is that that particular event was influenced by the fact that the first port of call was Qatar rather than Kuwait, which has now been addressed, of course, and the result is that Kuwait will be the first point of loading in the gulf in the future.

CHAIR: I promise you none of us are here thinking that this is event was the result of one feature. I imagine that, with all the features, to mix them up, we'd end up with a thousand scenarios to try and predict.

Mr Enright : The other area that is a subject of work in this regard is pen density, which of course is also a key area. LiveCorp has spent a lot of money over the last five or six years on research in regard to pen density, which has an influence on heat and all the rest of it.

Senator BROCKMAN: That's where I was going next. In terms of the practical implementation of the heat-risk assessment on animal welfare as opposed to merely looking at the death of animals, what does that mean in terms of how you will alter the model, or is it merely that the triggering parameters have changed? Are you going through a process of actually re-examining the model itself?

Mr Samuel Brown : It certainly has to be. You're changing parameter fundamentally from mortality to an animal welfare one of experiencing the effects of heat.

Senator BROCKMAN: I want to try to get an understanding of what that actually means in practice. What are you going to be measuring that you weren't measuring before?

Mr Samuel Brown : That's one area we're trying to pull apart at the moment. It's quite complex. We're looking at that.

Senator BROCKMAN: Have you got any ideas on where you might be going? What are the sorts of things you might be looking at in the future that you have either put to one side in the past or decided not to include in the past?

Mr Samuel Brown : I think it's a massive shift. Moving from mortality to understanding the animal's heat stress threshold and then walking back from at what point would fewer than five per cent of those animals experience that? So we've got a bit of work to do. We've got to go back and look at the way in animals may feel the effects and how that could relate to five per cent of them feeling that effect and build that into the model.

Senator BROCKMAN: Can you talk me through the interrelationship between the heat stress risk assessment tool, stocking densities and air quality. Are all three in the heat model, or is that something that has to be brought together into a single model? How do those three factors come together?

Mr Samuel Brown : Those three factors are part of the one model. They are all variables. They are all components that are built into the one model. They drive the output. In the case of pen air turnovers, the vessels are different. Some vessels can have up to 400 pen air turnovers and some vessels can be down as low as 200 pen air turnovers. As I mentioned, we've got the livestock. We've looked at their physiology and the heat that they are generating. We are also looking at the vessels' capacity to extract that heat as well as deliver fresh air. That is what pen air turnover means. It is about the air that is moving over the full force of that pen. It is not only the velocity but the air movement over the entire area of that pen.

CHAIR: As you look at those features, do you assume an appropriate level of hydration of the beast and nutritional aspects as to when they have had ration?

Mr Samuel Brown : Yes.

Mr Enright : That's all a part of it.

Mr Samuel Brown : Those would all be assumptions built into it.

CHAIR: That is the point I wanted to make: they are assumptions, they are not fed in. You do not feed in a tolerance for that; you just assume their hydration levels are fine and that they have had ration within a period relative to their size.

Mr Enright : The ration affects the heat transpiration of the sheep. That is managed by the vets on board.

CHAIR: But the burden of my question is simple: you assume these things. When you are doing your modelling, you don't say: 'That all looks fine. Now I'll model a beast that hasn't mean hydrated for 48 hours.' You don't do that.

Mr Enright : No.

CHAIR: That would, I imagine, blow the variables way out. I have been a cattleman for 40 years. So you are assuming appropriate hydration and whatever nutrition they are receiving, their ration, are present?

Mr Samuel Brown : Of a healthy animal.

CHAIR: Correct. Putting the veterinary professionals aside, if those managing these livestock got drunk, didn't get out of bed early enough and they haven't done the cycle to hydrate—I'm not even sure whether the cattle and sheep are hydrated in their pen or have to be cycled through another area—that must be a feature that needs to be considered in the review of all this. Correct?

Mr Samuel Brown : Of course. In the same sense, we are not regulators on board.

CHAIR: I'm not trying to paint you into a corner but it is relevant to the science you are applying. Having a shorn sheep, as opposed to a sheep that has not been shorn, would impact seriously on your model. What I am trying to explore is these other features. Animal health is a great example. When you do the model, you assume that you have a healthy animal full stop.

Mr Samuel Brown : Correct. One of the McCarthy review recommendations was that all animals have automated watering within the pen.

CHAIR: Thank you. Senator Brockman.

Senator BROCKMAN: I am not sure we are finished with the question on the interrelationship between stocking density, heat risk assessment and pen air turnover. Those three are all in the heat stress risk assessment model.

Mr Samuel Brown : Yes.

Senator BROCKMAN: In what way will your examination of those three factors change? Is it a question of ensuring a higher volume of pen air turnover? Are you confident that the information that has been given to you on pen air turnover—I assume it is boat by boat—is accurate?

Mr S amuel Brown : Yes. Looking at each component of it, it's about validating the components of those areas that you've been provided. The regulators here, they can comment on the areas that they see as important. For pen air turnover, that's essentially the auditing to make sure that the vessel's input data—the vessel data that's going into the HotStuff model—is actually delivering that. That's been a recommendation and that's an area that we'll be supporting our peak industry council to design and deliver: how you go about doing that audit and how you ensure that a competent and technical expert can go and do that pen air turnover audit. The three components are really important because they show that every vessel is different. It allows it to be stocked to its capability. If it has extremely high pen air turnover, it can be stocked at a different rate by comparison to one that has slightly less pen air turnover. That auditing process is a part of the McCarthy review. The weather data upgrades to that, I'm not sure exactly where that is at within version 5. To give you a correct answer, I'd have to check that for you. I hope that's answering your question. I may have got lost in where you were going with it.

Senator BROCKMAN: At least two of these components are at least somewhat controllable, stocking density and pen air turnover. Presumably, something can be done either in advance or during a vessel's journey that would allow—not stocking so much after they've left, but prior to departure—those things to be varied. You've got two independent variables that you can move. How much flexibility is there within the model around that from your point of view? Does changing those two parameters significantly alter the potential heat stress risk?

Mr S amuel Brown : Of course. If you've got a number of animals in a pen, they're generating heat. If you have fewer animals in a pen, they're generating less heat. That's simple. We talked about pen air turnover, and then you're looking at time of year and the weather data, as to what time of year you're sailing and the different routes—using the Red Sea versus the Persian Gulf.

CHAIR: Before I lose the opportunity, Mr Enright, as one burnt-out, old ringer to another, I wanted to explore some of the culture around animal production. I think there are whole classes of people in this chain of events who can be set aside. I want to put to bed speculation that, by and large, producers of animals are people who will do anything at any cost, even at the expense of the animal's welfare, to produce a profit or an outcome for themselves. Now, I hope my wife's not watching, because I often will lean through the rails of the yards—I think I love my bullocks more than I love my family. As you would have done late at night—in the lights of a ute, trying to get an animal out of a bog and spending hours delivering calves in a paddock and all the things that go with it. Is it fair to say, and I can say it on my part, that, with one or two exceptions of people that have been cruel to animals, the hundreds if not thousands of cattlemen and sheepmen that I've met over the years—these animals are front and centre from an animal welfare point of view. Is that consistent with your long history in the industry?

Mr Enright : Yes, Chair, that sounds like my life.

CHAIR: Yes, mine too.

Mr Enright : I remember spending a Christmas Eve fixing a pump until 4 o'clock in the morning so that the sheep could have a drink the next the morning. Anybody involved in farming in Australia has been through those sorts of occasions—feeding sheep in a drought when things are really tough, carting water and all that stuff.

CHAIR: Those on land transport in my experience have been consummate professionals, at least the people that provided service to me, with the welfare of the animals when taking them over large periods—taking them off the trucks so that they can be hydrated, fed and rested.

Mr Enright : That's very consistent with anybody raising livestock. It's certainly been my experience. Because if you don't get the welfare right—

CHAIR: There is an economic impact.

Mr Enright : Absolutely. It might sound very callous to say it has an economic driver, but it has. But it's more than that. When you work with animals it's a natural instinct to look after them properly.

CHAIR: I'm not even going to be brave enough to venture what happens after they go up on to the ship because I think that's a question that's being well and truly thoroughly looked at at the moment. I want to make some final observations. I know David Littleproud very well. He's very angry, and he's also very determined to find a pathway to preserve this particular trade without potential compromise within a seriously broad envelope of tolerance for this trade to continue. As you've observed, has that been the will that you have seen? Are you satisfied with the will of government and the department in terms of their response to this to date? I know we have a long way to go before I get howls of attention.

Mr Enright : I think the minister's been very straightforward in his response. He's said this footage, as we all agree, was a shocking event and something that just couldn't be tolerated if we're going to continue with this trade. I don't think anybody disagrees with that. He has given us a path forward. In other words, if we're going to continue this trade we have to do it under a regime where welfare is met, and we've got to work through the implications of the decisions around that.

CHAIR: Thank you, Mr Enright.

Senator RHIANNON: Mr Thompson or Ms Clegg, I want to ask about mortality figures. Do you believe that the mortality figures reported to the department from the each shipment are accurate? What I'm trying to understand is on what you base this belief, considering crew are throwing carcasses into hoggers or overboard?

Dr Clegg : I do believe that the figures that we receive from the accredited vets or from the stockmen are accurate. I do realise that the ability to count 60,000, 70,000 or 80,000 sheep onto a ship and off a ship over several ports poses problems. We certainly see in our end-of-voyage reports from the master discrepancies in the number that were said to be loaded on to the vessel and the number that were discharged in ports. In some cases, more are discharged than got on. In other cases, there have been mortality events or we have assumed that there have been mortality events.

Senator RHIANNON: Going back to the issue about the carcasses, we know carcasses are being thrown overboard. Do you have figures about how many carcasses are discarded in this way?

Dr Clegg : We only get the number of deaths on the ship. When the animals have died, they're either going to be put through a hogger or they're going to be disposed of in accordance with MARPOL requirements.

CHAIR: You might share with the committee what you mean by 'put through a hogger'.

Dr Clegg : On some ships they have, I suppose, a grinding machine that's suitable for sheep up to a certain size. The dead sheep will be put through the hogger.

Senator RHIANNON: What happens to the contents of the hogger?

Dr Clegg : That will be released into the ocean, but, again, they are required to meet the MARPOL requirements.

Senator RHIANNON: You started off answering this question by saying you believe the figures. So it's based on the fact that you believe they're giving you correct figures. That's what we rely on.

Dr Clegg : Yes.

Senator RHIANNON: Does the department require the individual ear tag numbers of sheep who have died to be provided?

Dr Clegg : The sheep are not individually identified; they're identified to a property. We don't require the PIC numbers—the property identification code numbers—of sheep that are exported. Sometimes we will get individual information about cattle deaths, but generally we don't require that. We're just after the number that die.

Senator RHIANNON: You don't require it, but I understand they have individual ear tags. Wouldn't that be one way of trying to verify an industry which seems pretty out of control?

Dr Clegg : You could actually do that, yes.

Senator RHIANNON: You could do that, so why don't you do it?

Dr Clegg : It could be an improvement.

Senator RHIANNON: It could be an improvement.

Dr Clegg : We've got the Australian Standards for the Export of Livestock review underway at the moment, and that's something I'm sure they'll consider: the way we can improve knowing what the number of animals getting on and getting off a vessel is. It is fair to say, of the things that are not going well, not being able to accurately count the number of livestock that get on or off the ship used to be a problem in the 1950s and 1960s, but I think technology has moved along a lot. It's certainly an area that we'll be focused on.

Senator RHIANNON: When you find more sheep getting off the ship than got on the ship, there's clearly a problem. What do you do about that? If that's a trend with that particular exporter, do you start to then doubt the veracity of their figures?

CHAIR: Just before you answer, Ms Clegg, and I'm sorry to interrupt, media have joined us in the room. Are any committee members or officials opposed to the media being here? There being none, I remind the media not to take any photographs that would identify an artefact or a document in front of a senator. The secretary will share with you the range of movement that you are entitled to do. Sorry, Senator Rhiannon.

Senator RHIANNON: I want to move on to the issue about independent observers. Can you just briefly, but thoroughly, tell us what the role of the independent observers is, please?

Dr Clegg : We've placed independent observers on vessels because of the footage from the Awassi Express. It raised doubts in our minds: was this just limited to one ship or was it a problem on all ships? So independent observers have been placed on ships to observe the daily care of animals—that they are being fed and watered, that injured animals are being treated, that those animals that need to be put down are put down, that the conditions of the pens are managed, that the plan that the exporter put in place to manage the welfare of the livestock during the voyage is working or isn't working.

Senator RHIANNON: So they've got a big job?

Dr Clegg : They have a reasonable job, but they've got—it's a 26-day voyage—plenty of time.

Senator RHIANNON: They are employees of the department?

Dr Clegg : They are.

Senator RHIANNON: Isn't it more accurate to call them 'department observers'? They are not independent; they are department observers. Isn't that accurate?

Mr M Thompson : I think we've variously called them independent observers, independent departmental observers or vets.

Senator RHIANNON: Considering the loss of trust that there is now with how this is playing out, it would be good to be accurate, because 'independent observer' sounds like it's a communications tool. Anyway, we'll move on. Will the reports and video footage and photographs taken by the departmental observers be made public?

Ms Freeman : At the moment, we've just started—obviously the reports are coming in from our observers—and we are just trying to come up with a framework. We are well aware that the public will be very interested in these reports. We are trying to come up with a sensible way to both look at the information to improve our compliance framework, if you like, but in addition provide information that we know the public will be interested in.

Senator RHIANNON: But, seriously, what's so hard about that, considering again the lack of trust? Wouldn't it be really sensible to just say, 'We will provide the footage that comes back, and they're required to send it back to us every day,' or once a week or whatever your plan is?

Ms Freeman : There are some real mechanics with just the ability to send information from close to the equator at sea, as is the problem with the AAVs that are currently on board some of the vessels. So we are obviously looking at options for technology to provide the information. But it isn't a matter of just hitting 'send' on some video footage.

Senator RHIANNON: When will you make the decision on how you're going to manage that?

Ms Freeman : I'd have to take that under advisement.

Senator RHIANNON: Okay. Is the department observer required to sight and note all mortalities before they're disposed of?

Dr Clegg : No, they're not required to sight and note them, but they are walking around the vessel with the AAV; they are noticing the mortalities; they are checking the shipboard records that come in each day; and they are talking to the AAV and the stockmen and the crew about what's been going on.

Senator RHIANNON: The welfare implications are 24/7. Your department observer will obviously have conditions of work and will need to sleep and eat and will not always be there. Why is there only one department observer to undertake this enormous workload?

Dr Clegg : One of the issues on the ships is the ability to locate the officers, in fact, on the vessel itself. We have room for one. They're not a normal component. We need the AAV to be there, we need the stockmen to be there, and we need all the crew to be there on the livestock vessel. The officers themselves are able to manage their hours and check things as they see fit during their voyage.

Mr Quinlivan : I think it would be worth making the general observation that we're making a transition to—for want of a better word—a more heavy-handed regulation of this trade, and we're trying a whole variety of things, one of which is the observing service that we've just talked about. In the event that we think there would be benefits in two observers or some different kind of observation, we've got the capacity to make that adjustment.

Senator RHIANNON: In regard to the release of information, I understand that there have been some suggested requirements from the exporters that they may not agree to information being released, video footage being uploaded and photographs being sent back because of commercial-in-confidence and privacy reasons. Have those issues been raised with you?

Ms Freeman : Not the specifics of that, but we have actually asked all the exporters, and we've said to them we will be looking to publish information gained by our observers on board vessels and seeking their agreement for us to do that. So we're currently just working through that with each of them now.

Senator RHIANNON: If they start talking about privacy and commercial in confidence, in so many estimates I go to, commercial in confidence is a stonewall. I frankly want an answer. I think it's really important.

Mr M Thompson : That's an issue that we'd have to discuss further with the exporters, but, as Ms Freeman just said, our preference is for that information to be publicly available.

Senator RHIANNON: But you have just said, Mr Thompson, that you will be raising it with the exporters. Does that mean that if they arrive at the meeting and say: 'This is commercial in confidence. The future of our industry depends on it,' you will just say, 'Okay, we can't do it'? How are you going to respond?

Mr M Thompson : It has been raised with the exporters already. That's an issue that we'll have to negotiate with them.

Senator RHIANNON: But I'm actually asking: what is your response to it? Otherwise, it sounds like we could well be back at estimates, and you'll be saying: 'There's no information. They said it's commercial in confidence. We can't ruin this industry.'

Mr M Thompson : As the regulator, we'll have to consider our options. I'm not going to add to that, but we'll have to consider our options.

Senator RHIANNON: So you haven't considered it yet? You haven't got a framework of how you're going to deal—

CHAIR: Senator, Ms Freeman made it quite clear at the start of your questioning that she will take your question under advisement. That says to me that there are considerations that can't happen here at the moment. I imagine there'll be legal considerations and a whole suite of things, so I don't know that the witnesses can add much more to that, other than to indicate to you that their objective is—

Senator RHIANNON: Chair, it was quite a fair question. I was just asking: have you got a framework about how you will judge commercial in confidence? That's a fair question.

Mr Quinlivan : I think it would be fair to say our framework is to achieve as much as transparency as we reasonably can. What that means in practice is something we're testing with the operators at present. But, since the conditions under which each journey is going ahead are not a commercial-in-confidence matter, the experience on the vessel and compliance with those conditions generally should not be either. That's the position we'll be taking into those conversations, but we've got to have them.

Senator RHIANNON: With regard to the department observer on board, what power do they have to compel? What right do they have to enter areas and have access to where they believe they should be able to go? How are you working that out with the exporters? Is there some protocol that can be publicly released?

Dr Clegg : On the work of the independent observers?

Ms Freeman : Their legal powers?

Senator RHIANNON: Yes. When they're on the ship, can they say, 'I need to go onto this deck down in that corner'? Can they go wherever they want to? What's the protocol to allow that?

Mr M Thompson : We'll just ask one of our colleagues to come to the table.

Mr Sanson-Fisher : The independent observer is an authorised officer under the Export Control Act and they're entitled to the run of the vessel effectively, except as otherwise directed by the master.

Senator RHIANNON: Unless directed by the master?

Mr Sanson-Fisher : Yes, the master remains in control of the vessel.

Senator RHIANNON: Therefore, they would have the power to say no?

Mr Sanson-Fisher : Potentially.

Senator RHIANNON: Thank you. It's recently come to light that onboard veterinarians' daily reports and end of voyage reports say that there are breaches of ASEL. So we know that's going on. When only a small percentage of the animals have died and they've been listed as euthanased—I understand, is some of the things that we're hearing about. Considering we are hearing about clear breaches of ASEL, isn't this showing where we could have a continuing problem with how the regulations or the protocols are followed on board these ships post the tragedy that we saw on 60 Minutes?

Ms Freeman : I'll pass to Dr Clegg if she'd like to add any further. But, as Mr Thompson indicated in his opening statement, the reporting requirements in place indicated that the information that we received regarding those voyages was clearly inadequate. So they did technically meet ASEL as it stood in terms of providing those reports, but I think it's very clear that the information provided did not indicate the animal welfare conditions on the voyage were conveying correctly the extent of the problems on the Awassi Express, and I think that's quite clear and those reports were inadequate.

Dr Clegg : They did, though, report that ewes had lambed. They did report things like that. They didn't include things like, 'The horns of the sheep were too long'. Is that the sort of thing you're referring to with the ASEL breaches?

Senator RHIANNON: Can I ask about the ones on this ship, because isn't it the case that the ewes are not supposed to be pregnant when they're on the ship?

Dr Clegg : Pregnant ewes are not supposed to be sent but ewes can be sent. The ewes need to be preg-tested beforehand. The testing arrangements can have a two per cent error rate. So you've got—

Senator RHIANNON: So that's my question. Over a two per cent error rate in terms of the number of lambs that are being born is an example of the conditions breaking, not working; they're breaking the rules.

Dr Clegg : I wouldn't say that the exporters are deliberately putting on sheep that that are going to lamb.

Senator RHIANNON: No, I'm not saying it's deliberate, but they're not following the checks they're supposed to, so the system is not working.

Dr Clegg : No, they've followed the tests. They’ve done the tests. No test is 100 per cent accurate. No blood test you ever have is ever 100 per cent accurate. Nothing that you do like that—ultrasounds that they do, they have an error rate. You'll get a result back for that ewe and it will say it's not pregnant.

Senator RHIANNON: Has the department ever taken regulatory action in regards to any breaches? I think we are all agreeing there have been a number of breaches. Have you taken any action over the breaches?

Dr Clegg : On this particular voyage or on any voyage?

Senator RHIANNON: Generally.

Dr Clegg : Generally speaking, with pregnancies, unless there's been a huge number of animals that have been found to be pregnant, no, we haven't done that because of the error rate that exists.

Senator RHIANNON: But generally. With all these breaches, can you give us any examples of where you have actually followed through?

CHAIR interjecting—

Senator RHIANNON: I'm just finishing off that question.

CHAIR: No, I indicated—and everyone does this to me and I've got low tolerance. Is this your last question?

Senator RHIANNON: It's my last question. I'm just trying to get this question answered, but with all due respect, Chair, you've also had a good run, so let's be fair.

CHAIR: I'll tell you what, why don't you take on the chair's role and you can have a good run too. This is your last question.

Senator RHIANNON: Let's be fair. It is and I'm just trying to get it answered in a general way, not just about ewes.

CHAIR: Well, just ask the question for Jiminy Cricket's sake.

Dr Clegg : Senator, yes. When we see animals being prepared that don't meet the requirements, they're rejected from the consignment and they're usually rejected because they don't meet the ASEL standards—their horns are too long, the wool length is too long that, that sort of issue. They're not as described. We've had cattle that were to be exported to China a few years ago that were described as 'thin with a summer coat' that were actually quite fat with a winter coat. So, yes.

Senator RHIANNON: The question was 'Has the department ever taken regulatory action?'

Dr Clegg : Yes.

Senator RHIANNON: Yes?

CHAIR: Officials, do not answer the question. That's it. I'm not going to tolerate this. Senator Hinch, you have the call.

Senator HINCH: I have one question for Senator Ruston. We know that the McCarthy review recommended reducing stocking density et cetera, but I'm wondering why the government has looked at the Australian Veterinary Association's Dr Parker, who said:

Irrespective of space allocation, thermoregulatory physiology indicates that sheep on live export voyages to the Middle East during May to October will remain susceptible to heat stress and die due to the expected extreme climatic conditions.

And they say—

CHAIR: Senator, I indicated at the outset that we had set a framework for this and we'd sent the message through. It was clear that questions asked and answered won't be followed up again. That question's been asked and thoroughly answered.

Senator HINCH: I'm entitled to ask it. I'm sorry I missed that. If you're one senator, you can't be in every room, every day, at every time.

CHAIR: I appreciate that, but put yourself in our experience. In five minutes another one will come and take up 15 minutes on the question, and another and another.

Senator RHIANNON: Chair, he's got a right to ask his question.

CHAIR: The answer is on the Hansard. Senator Hinch, if you've got some follow-up questions—

Senator RHIANNON: He can ask what he likes.

CHAIR: We've laid this down. Senator Hinch, just ask your follow-up questions for as long as you need to.

Senator HINCH: Minister, do you want me to ask it or just leave it? You've done it?

Senator Ruston: Basically, the response that the minister's had so far to the McCarthy report and a whole heap of additional information, including the bit that you were referring to, has been: we need to take action so that we can mitigate the circumstances that are being predicted. Reduced stocking rates, looking at the heat stress indicators, dealing with airflow—there are a whole series of things he has requested further information on so as to make sure that we are meeting the expectations of the Australian public about the animal welfare conditions of the sheep that are exported.

Senator HINCH: All right. Mr Brown, we've talked a lot about models over the years, and I think you said some of the models go back to 2003. You also said that every vessel is different. How does that affect your modelling, when some of these ships are 30 and 40 years old?

Mr Samuel Brown : I mentioned that every vessel is different, so it can deliver a different airflow. That's what we've been talking about. And that airflow of the vessel needs to be entered into the model individually. It doesn't simply take a group average of all the vessels; it actually has to enter its own ventilation—pen air turnover— details. That's assessed off the engineers who converted the ship or built the ship.

Senator HINCH: You also made the point to the chair that the sheep you use in your model are healthy, well hydrated et cetera. But if you saw the 60 Minutes footage, you'd know many of those sheep, thousands of those sheep, couldn't get to water, could they?

Mr Samuel Brown : I'm not privy to the investigation of how that circumstance has led to that event.

Senator HINCH: Yes, but that would make your model void—if you think that tens of thousands of these sheep maybe couldn't get as much water as they needed to fit your model.

Mr Enright : That's not a failing of the model. If they couldn't get hydrated, that's quite outside the parameters of what we're trying to do.

Senator HINCH: Dr Clegg, there's been all the discussion about the 900 sheep that died one day and the 600 that died another, and some discussion about whether they'd died from heat stress or whether some had been euthanized. From the footage we saw on 60 Minutes, it seems a lot of those sheep that died—the 900—surely died from suffocation in a metre-high pile of faeces. Wouldn't that be the case?

Dr Clegg : One of the issues with the footage that was shown on 60 Minutes is verifying what voyage the footage was actually showing. There were five different voyages that were filmed. Some of the voyages, I think, would have been shown on 60 Minutes. Some of the people in my team are now going through the over 390-odd files that we received and looking at the pens, the dates and the reports of the footage to work out what part of the ship was involved for those really bad examples where the manure pile was up to your knee. Certainly those animals may well have died of heat stress—but partly contributed to by the terrible conditions in which they were existing.

Senator HINCH: So that may explain perhaps the Awassi Express—that those piles and piles of droppings may not have happened on that ship. Is that what you're saying?

Dr Clegg : No. What I'm saying is that, regarding the deaths on the third voyage, I don't know whether the footage that 60 Minutes showed came from the third voyage or whether they had snippets of footage from the first voyage.

Senator HINCH: From the whistleblower from earlier voyages?

Dr Clegg : That's right. Of all of the footage on all of the voyages, to us, maybe the last couple were a bit better, but that was the worst thing about the footage. It was dreadful, regardless of whether there was a heat-stress event.

Senator HINCH: What I can't understand is how this very ship had made something like 29 visits to Australia and had been inspected 39 times; if there's sheep muck that high on this voyage, you'd have to assume that it was on other voyages as well.

Dr Clegg : The ship itself had been mostly doing cattle voyages. For 2016, if you look at the reports to parliament, you'll see what species that ship has been carrying. It did a couple of sheep and cattle shipments to Russia, but mostly it was doing cattle to South-East Asia. It came back, and 2017 was when it did the greatest number of sheep voyages. I think it did one in 2016.

Senator HINCH: Okay.

Dr Clegg : There'd been no reports from any of the vets on any of those other voyages about conditions as were seen in that footage.

Senator HINCH: Obviously, there would be a different number of sheep than cattle—they are a different size altogether.

Dr Clegg : Yes, and different ventilations as well.

Senator HINCH: Mr Quinlivan, I put on notice yesterday a question. I asked: how many abattoirs in WA have closed in the last three years?

Mr Quinlivan : You did.

Senator HINCH: And your answer was that 'WA currently has eight meat-processing facilities licensed to export sheepmeat with an underutilised capacity of more than two million sheep per year'. There was no mention of how many closed in the last three years. So could you take that on notice again?

Mr Quinlivan : Yes, we did. I just thought it would be helpful to give you that information because I knew you were planning to use it today. So we gave you what we could get yesterday, and we will endeavour—

Senator HINCH: How many have closed in the last three years?

Mr Quinlivan : I don't know. We couldn't get that quickly, but we will give it to you in due course.

Senator HINCH: I know you made the point, too, that we didn't have any information on delayed processing. I asked you about delayed processing and how many seasons had been set back or pushed back. You don't answer that, but there's a clue there because you've also referred to 'underutilised capacity of more than two million sheep'. So obviously there are a lot of abattoirs out there that could process far more sheep here if they could get them.

Mr Quinlivan : That's in WA. Yes.

Senator HINCH: That to me seems to be the main problem.

Mr Quinlivan : Correct. Obviously, there would need to be a ramp-up process before those processors could hit full capacity, but, yes. That was the advice—

Senator HINCH: That's why we're looking at five years to get it set up, so we can maybe do that sort of thing.

Mr Quinlivan : That may be, yes.

Senator HINCH: Can I go back, briefly, to the independent or department observers that Senator Rhiannon was talking about. I can understand why you say ships like this have small capacity—like any merchant ship—for cabins, for crew or for throwing an extra person on there, but I'm pleased that you're actually looking at the idea that, really, one person can't do it all because, if he or she is working 10 hours a day, and we've got evidence that they've been throwing carcasses overboard, that does put a hole in the process, doesn't it?

Dr Clegg : The role of the observer is not to be the worker on the ship. The role of the observer is to give us a report about how well the exporter's plans are working, whether the sheep are being well managed and whether they are being fed and watered. There was so much footage of empty troughs—that was dreadful.

Ms Freeman : I think the point for us is that their job is to check, not to do—really importantly. Part of it is for them to come on board and have a look that they are doing what the exporters said would be done on board that vessel. That's really their role. As part of it, we have also asked them to take film footage. I know Senator Rhiannon was asking for video footage et cetera. They are taking images as well and reporting back to us about how the pens are looking in terms of stocking density. Prior to the McCarthy report coming up but after the Animals Australia footage, we already had reduced the stocking densities on board voyages. We're looking at what that looks like now, and they are taking photos and providing them back to us.

Senator HINCH: So they are doing officially what the brave whistleblower was doing unofficially—is that right?

Ms Freeman : We can't speak for the whistleblower, obviously, and we're not aware and, as Ms Clegg indicated, we're going back trying to verify the footage to determine what vessel and what voyage and trying to track it—where were they on the vessel?—whereas now, if we actually have someone in broad daylight, for want of a better way of doing it, as part of the team on board the boat, they are the independent person checking that the voyage plan is being executed as was notified to us. That's their job.

Proceedings suspended from 17:10 to 17:22

CHAIR: We will now resume. Senator Hinch has yielded five minutes to Senator Rhiannon.

Senator RHIANNON: Mr Thompson, how many export permits for live sheep exports have been granted since the 60 Minutes story and the receipt of video files from Animals Australia went to your office?

Mr M Thompson : I might ask my colleague Ms Freeman to answer that.

Ms Freeman : Are you after since 8 April? Would that be correct?

Senator RHIANNON: Yes; good.

Ms Freeman : We've had seven, by my calculations.

Senator RHIANNON: For those seven, can you explain what additional conditions, if any, were placed on these exports?

Ms Freeman : A range of conditions have been applied. They've included an independent observer, reduced stocking densities that have been applied—

Senator RHIANNON: Is that the 17.5 per cent increase in space? Is that the one you're referring to?

Ms Freeman : For the most part yes, that's been correct. I think we've had one or two voyages where that amount has been 15 per cent that have actually been travelling to areas that have slightly cooler weather—through the Red Sea.

Senator RHIANNON: Has there been anything apart from the department observers and the extra space?

Ms Freeman : Kuwait has been the first port in some cases. We've also had cases where—and Dr Clegg can correct me—when we've calculated the stocking density we have also added that it will be the weight of the animal at the time of arriving in the port as opposed to when they embark on the voyage. Basically animals will gain weight for the most part over the life of the voyage. So, when you're actually weighing the animals and weighing what the stocking density would be, an allowance is made for a bigger animal needing more space, which will effectively reduce the stocking density.

Senator RHIANNON: I was actually interested in how the 17.5 per cent figure was arrived at. Can you explain that, please?

Dr Clegg : The 17½ per cent figure was arrived at after the footage appeared on the network. The average increase we have normally applied to sheep export voyages after a mortality event has been in the order of 10 per cent. In some instances we've applied 15 per cent. Because of the severity of the symptoms that were shown on that ship we asked for more than 15 and arrived at 17½ per cent.

Senator RHIANNON: So, it wasn't so much on any scientific basis—

Dr Clegg : No.

Senator RHIANNON: but that it was so terrible. Okay. Thanks very much. Can you advise on how the new information in the form of the 395 video files was taken into account in assessing whether the travel arrangements were adequate for the animals' welfare? Is that what you're referring to—you saw all the terrible footage and then you went for 17.5?

Dr Clegg : Yes, we saw the footage and did a number of things. One was to apply a reduced stocking density on voyages for that exporter on other vessels that contain sheep. The other thing that we did was to put the observer on the vessel and ask for photos and videos to be taken.

Senator RHIANNON: I want to ask about the McCarthy review and one of its recommendations, particularly in light of the Australian Veterinary Association submission. They made a submission to the review. Their submission talks about the thermoregulatory physiology of sheep and how that indicates that sheep on live export voyages to the Middle East from May to October remain susceptible to heat stress and death. I'm sure you're aware of that. The AVA recommend that sheep should not be on voyages in those months from May to October. My question is: Dr McCarthy did not recommend any suspension during this period, and the department supports his recommendation. Can you help me reconcile the reason for the different conclusions here? Did Dr McCarthy make any new discoveries about the physiology of sheep that the AVA has missed? There is clearly a disjunct here.

Dr Clegg : I'd say that it's a difference between different scientists and opinions. The heat stress risk assessment model takes into account the weather in the countries of destination. By making sure that the ventilation on the vessels is compliant with the model, that it is delivering the ventilation that the shipowner claims it is, and by ensuring that the stocking densities are well managed, the heat stress risk assessment model should work. I do understand the AVA's point that there is always going to be a temperature at which sheep can't thermoregulate. But to suspend the entire trade from May to October on the probability of some sheep dying on some voyages is quite a step. Therefore part of the actions of the department are to review the conclusion that Dr McCarthy has come to with his risk assessment level. Implementing his proposal of a 75 per cent—I don't want to say it's a threshold, before death—but he has asked that the heat stress risk assessment be based on the probability of animals experiencing heat stress. That is a very, very significant reduction in the number of sheep that could be exported, which would lead to the closure of the trade in the summer months, and that isn't what he ended up recommending. He didn't recommend that.

Senator McCARTHY: Ms Clegg, I'm going to continue with the questions that I had when I previously spoke with you, but may I just add, certainly on behalf of the committee, that we're very conscious of the enormous amount of preparation and work that goes into these estimate hearings and certainly would be aware, too, that your colleagues at the table would no doubt share a lot of the information, so please feel free to refer across if you need to.

Dr Clegg : Thank you.

Senator McCARTHY: I will pick up on something that Senator Rhiannon spoke to you about earlier. You indicated that you do reject sheep from boarding at times, and you used the longhorns example. How is that process undertaken?

Dr Clegg : In the registered premises where the sheep are gathered before they're going to be loaded on trucks to go to the port, at that point our officers inspect the consignment. They inspect a sample of the sheep there and determine whether or not the exporter has met their declaration to us that all the sheep in the consignment are suitable for export.

Senator McCARTHY: Does the exporter self-reject, or is it a departmental officer?

Dr Clegg : There's a departmental officer who is there as well to assess the efficacy of the exporter's assessment.

Senator McCARTHY: How did the longhorn sheep get onto the Awassi Express?

Dr Clegg : That's a very good question. I think that the number of sheep that were on that particular voyage was something like 63,000. I don't know the answer to that question. That's part of our administrative investigation into that particular voyage. That video footage gave us lots of new information that we are now chasing down to evaluate how there came to be such woolly sheep on that shipment.

Senator McCARTHY: Are the videos that are available to the department videos that the committee would be able to receive—through the chair?

Mr Quinlivan : We received 390 video files, as we mentioned earlier, from Animals Australia. Some of those video files were also obviously made available to the producers of the TV program. I'm not sure about the ownership of that footage, but I'm sure that, if you were to ask Animals Australia for access to the full video file—well, I can't say that I'm sure, but I'd be reasonably confident—they would make that available to you. And I think that would be—

CHAIR: In the exchange earlier, it was indicated by, I think, Ms Freeman that this question would be taken under advisement. My instinct is that—

Mr Quinlivan : Sorry, Chair, we're talking about two different things here.

CHAIR: I'm sorry. Is the video before—

Mr Quinlivan : Yes, what we're talking about now is the video footage that we were shown before the TV program and was used in the TV program. What Ms Freeman was talking about in that conversation was footage that our observers are taking on voyages since then and into the future.

CHAIR: I would have thought that, in the absence of a public interest immunity claim, you would need to provide that.

Mr Quinlivan : Yes, we're happy to do that. I'm just saying that it's owned by Animals Australia. I'm pretty sure they'd be happy for you to have it, and it might be better for you to ask them. We'd need to ask them as a matter of courtesy before we provided it.

CHAIR: How about we leave that up to you to ask them first?

Mr Quinlivan : Yes, we're happy to do that.

CHAIR: If you don't have success, we'll buy in.

Senator McCARTHY: Thanks, Chair. Thanks, Mr Quinlivan. Ms Clegg, what does the ASEL say about pregnant sheep? I'm conscious that Senator Rhiannon touched on this space, but not with the questions that I've got following on.

Dr Clegg : Pregnant sheep shouldn't be shipped during the northern summer—May to October. The evidence that we've got, from the vet reports but also from the footage, is that lambs were born during the five voyages of the Awassi from May through to November. The issue there is that, when you are shipping ewes, they all require pregnancy testing to say that they're not pregnant, but there's a two per cent failure rate in the test itself. So you end up with some ewes loaded that will in fact lamb during the shipment.

Senator McCARTHY: The vet's end-of-voyage report stated that 11 lambs were born during the voyage. How did the department conclude that no breaches of these standards occurred? I'm just going to the heart of your investigation.

Dr Clegg : Because we know there's a failure rate. If the exporter is provided the pregnancy test details to show that the ewes have been tested, and we confirm that, and there's an error rate in the testing, then we don't say that the exporter hasn't done the right thing because the test didn't give the right result. That's why we say that.

Senator McCARTHY: What does it suggest to you when we have an incident involving the deaths of 2,400 animals, when 132 were actually euthanised and when 11 lambs were born on board, and the department concludes that everything was conducted according to the regulations and standards?

Dr Clegg : Because the—

Mr Quinlivan : Perhaps I can have a shot at this. It indicated to us two things. Firstly, obviously, something's gone very wrong on this vessel. We know that there are a number of potential reasons for that. We were investigating compliance with existing regulatory requirements. That's one issue. The second, broader issue is the efficacy of those regulations. Clearly, we and the government have already made judgements that those requirements were inadequate, because we've made quite a number of changes already. As we've been discussing over the last hour or so, we see those evolving and adapting as we make them more effective. That's what it told us: there is a potential problem of compliance with the existing regulations and it's likely that, even if those requirements had been met, the requirements themselves were not sufficient. We're in the process of addressing that.

Senator McCARTHY: Mr Quinlivan, who has responsibility for granting permits for live animal exports under the Export Control (Animals) Order?

Mr Quinlivan : The department does.

Senator McCARTHY: Is it correct that the secretary may only grant an export permit if the travel arrangements for the livestock are adequate for their health and welfare?

Mr Quinlivan : That's a legal question.

Mr Sanson-Fisher : That's correct. The secretary may grant an export permit if satisfied, among other things, that the travel arrangements for the livestock are adequate for their health and welfare.

Senator McCARTHY: Mr Quinlivan, what does animal welfare mean to you?

Mr Quinlivan : What does animal welfare mean to me? To me, personally, it means the wellbeing of the animal. What it means to me legally I'd have to take some advice on.

Senator SINGH: What does it mean to the regulator?

Mr Quinlivan : This gets to one of the issues that we've been discussing, which is that our measure of the performance of the trade to date has been based on mortality outcomes. And we have been—'comforted' is the wrong word—seeing the performance of the trade over time as improving because the trend in mortalities and the trend in breaches of the ESCAS requirements have both been reducing, or, in other words, improving over time. But what we now think, of course, is that mortality outcomes are not a sufficient measure of the performance of the trade and certainly not of the welfare of the animals involved. That's why we're in the process of moving to a new regulatory model.

Senator McCARTHY: It's just important to understand what it actually means given that the Export Control (Animals) Order specifically states your role as secretary in granting export permits.

Mr Quinlivan : That was one of the main questions that Dr McCarthy was asked to answer in his report. He's given us a new model for regulating the trade, which is based on animal welfare outcomes. That's what we'll be testing over the coming months, and at the end of that testing and consultation process we will be adopting a new model based on animal welfare outcomes. In the meantime, we've taken interim steps of reduced stocking densities and the other things we've been talking about.

Senator McCARTHY: How is animal welfare assessed now?

Mr Quinlivan : As I said, we've been managing the trade and the 'animal welfare outcomes' against mortality outcomes. And as I said, we now think that's inadequate.

Mr M Thompson : Part of the response to that is really through the mechanism of the independent observers who don't just have a brief to observe mortality rates, as Ms Freeman and Ms Clegg said earlier; they're looking at the full suite of care and management of animals on the vessels. So they're already looking at the wider notion of animal welfare and stewardship there.

Ms Freeman : We should also mention that there's currently a review of the ASEL being undertaken by a technical advisory committee of experts. One of the issues that they're looking at in particular is measures of animal welfare. There are a number of people on that advisory committee with those particular skills. One of the things they're looking at is, for example, measures and indicators that you can use with apps potentially on phones that will actually look at being able to have more accurate, consistent and reliable sources of information. That review is currently under way. Part of that is that the committee has asked the department to seek more information and advice in a literature review. We have gone out to a tender to get more work and advice to inform ASEL in the development and the review of the existing ASEL standards. Obviously at the forefront of that is animal welfare, which is chapter 5.

Senator McCARTHY: I appreciate that, Ms Freeman, but we are trying to understand what is happening now. I appreciate that you've got a review under way, but we need to actually understand what went wrong now. Has the department used mortality rates as a measure of animal welfare?

Mr Quinlivan : My understanding is that they've been used since the current regulatory model was put in place in 2011.

Senator SINGH: Do you acknowledge now, since the 60 Minutes footage, that that indicator of mortality is flawed?

Mr Quinlivan : I have just said that several times.

Senator SINGH: So it's on the record that it's flawed.

Mr Quinlivan : We agree completely, yes.

Senator McCARTHY: What is the department's approach to assessing the risks possessed by heat stress?

Dr Clegg : The approach that we're taking is really to follow the recommendations of Dr McCarthy's review, which is to take into account first and foremost the stocking density; secondly, to evaluate the ventilation on all the ships; and thirdly, to conduct the heat stress risk assessment review. He recommended that change in the risk profile. So it is about evaluating that and giving that broader consultation.

Senator McCARTHY: What is the HotStuff risk formula?

Dr Clegg : That's a patented model.

Mr Quinlivan : Perhaps we can refer that to LiveCorp.

Mr Samuel Brown : As I described before, we can provide this on notice if you take the time to detail your question out when you ask them. I'm not quite sure I understand about the formula.

Senator McCARTHY: What do you think formula means? What is it—probability of mortality? Have a go.

Mr Samuel Brown : As I explained in my earlier answer, there were three areas of input data to aid the heat stress risk assessment model. There's also the probability and tolerance. Probability is a two per cent chance and the tolerance being a five per cent mortality. That's the current policy, and that, as I said before, Dr McCarthy has moved.

Senator McCARTHY: Has this HotStuff software been independently peer reviewed and validated?

Mr Samuel Brown : Yes.

Senator McCARTHY: Is this risk model based on risk of mortality?

Mr Samuel Brown : The current model is based on risk or tolerance of a five per cent mortality.

Senator McCARTHY: What is the formula based on—risk to animal welfare?

Mr Samuel Brown : That is the new formula. That's what's being proposed under the McCarthy review, which we're working through at the moment.

Senator McCARTHY: Can I go back to you, Mr Quinlivan. How do you as secretary satisfy your regulatory responsibilities to ensure the travel arrangements are adequate for the animals' welfare if you're simply relying on models and indicators based on mortality?

Mr Quinlivan : If you're asking how we are exercising our regulatory responsibility now, with the knowledge we've been discussing, I would say that we have a number of different objectives that we are trying to satisfy. The first is the one you've just mentioned. The second is that as public servants we are required to take into account government policy, which is to support continuation of the live export trade. The third one is that under administrative law we have an obligation to act in a reasonable manner. What we are proposing to do or will do in response to the McCarthy inquiry is to embark on a process over the next couple of months to further develop the animal welfare model that Dr McCarthy has proposed and to give affected parties an opportunity to comment and contribute to the refinement of that model. Then, when we have made a tentative decision on what model we're going to introduce to deliver the animal welfare outcomes we have been discussing, we will be conducting a regulatory impact statement. At the end of that process we will be adopting that outcome. In the interim we're applying new stocking densities and the new conditions that we've been discussing to manage the risk of heat stress over that interim period.

Senator McCARTHY: Recommendations 4 and 5 of the McCarthy review are around heat stress risk assessment. The department hasn't accepted those two recommendations in full, has it?

Mr Quinlivan : Correct.

Senator McCARTHY: Why is that?

Mr Quinlivan : The reasons I have just given. That was essentially the question I was just answering.

Senator McCARTHY: So is there enough space for sheep stocked at these densities to lie down at the same time?

Mr Quinlivan : That is one of the definitions of the allometric model.

Dr Clegg : That's right. We're introducing these allometric stocking densities forthwith. That's recommendation 2. That provides significantly more space than the 17.5 per cent that we have been providing. I think in Dr McCarthy's report, on page 22, there's a little graph that shows the different amounts of space. We're going with the allometric version of 0.033 and using that on the basis that it will allow animals to all be able to lie down in a pen at the same time and move around and have reasonable access to feed and water, because I think that's one of the memories of the footage.

Senator McCARTHY: Are these stocking densities compatible with the OIE standards?

Dr Clegg : The OIE standards make general statements. They don't necessarily use that type of formula. They use outcomes. We believe they will be, yes.

Senator SINGH: I want to ask a bit about the granting of export permits, particularly following the 60 Minutes video evidence. How many permits for live sheep exports have been granted since that 60 Minutes story and the receipt of the video footage from Animals Australia?

Dr Clegg : My count is five. There were also some consignments where we have issued permits for cattle that have gone to Russia which were approved in the absence of sheep. But we asked for further reporting on that vessel.

Senator SINGH: So five for sheep.

Dr Clegg : Five for sheep, yes.

Senator SINGH: And with those five permits, what additional conditions were placed, if any?

Dr Clegg : We have applied conditions to the licences of the exporters. We have issued directions on the licences of the exporters to ensure that the—not to ensure, I've got to be careful here—to ask for reports back and make—enable their animals to be fed, to be watered and to be treated and handled appropriately and if there are issues with the bedding, for the bedding to be dealt with immediately with the use of sawdust or by cleaning out the sloppy pens. And there is the observer.

Mr M Thompson : In that context, on the bedding, I think there was a requirement, at least in one case, to carry further bedding material to deal with any deterioration in the bedding.

Senator SINGH: What about the condition of space allowance?

Dr Clegg : The space allowances for the voyages that were travelling through to the Persian Gulf had 17.5 per cent applied, and then the last voyage—

Senator SINGH: What was the rationale behind 17.5 per cent?

Mr M Thompson : We did touch on that earlier. I think Ms Clegg indicated that there's the ASEL standard and then in response to the sorts of mortality levels that we have seen in the past there has been a condition set around a 10 per cent or 15 per cent reduction on the stocking densities compared with ASEL. And then in response to—

Senator SINGH: By who? What scientific evidence is that condition?

Dr Clegg : That's what we have done in the past. So we had ASEL and we added more space requirements for animals if there had been a reportable incident on the basis of allowing them more room and better amenity than—

Senator SINGH: So that was your own condition.

Mr M Thompson : The conditions set by us as the regulator.

Senator SINGH: What is your condition based on? Is it based on any scientific evidence

Mr M Thompson : It's based on risk management and on previous experience in terms of reducing mortality rates—what has worked in the past. Then, as Ms Clegg said, the 17.5 was really flowing from the evidence that we saw on the Awassi Express and wanting to go beyond 15 per cent. So 17.5 per cent was something that we arrived at.

Senator SINGH: I'm just trying to understand how the 2.5 per cent extra was worked out—

Mr Quinlivan : It's an iterative process

Senator SINGH: and what scientific evidence it was based on other than your past experience. It seems to be past experience.

Mr M Thompson : Past experience and risk management. We're just reaching out.

Senator SINGH: Can you advise how the new information in the form of the 395 video files was taken into account in assessing whether the travel arrangements were adequate for the welfare of the animals?

Ms Freeman : I think it's an important one for us, and the department is still working through this. We have images for five voyages. What we don't have is that amount of information from all the other voyages.

When we're looking at the five Awassi Express voyages the footage speaks for itself, and the department is trying to manage that. What we don't know is what happens on the other voyages, which is why we now have observers on board giving us photo and video images to try and get some information. What we also don't know, and are currently investigating, is, in relation to the footage we have of the Awassi Express, how widespread it is across the vessel and trying to actually verify the rest of the voyage. Obviously it's horrific and no-one is stepping back from that at all. But we don't know what it means for the rest of the vessels.

Dr Clegg : How widespread it is.

Senator SINGH: I understand that. I'm just trying to understand the role here of Mr Quinlivan, as you are the regulator. Isn't there an inherent conflict of interest between your independence as the regulator and as, as you said just previously, your requirements as public servants to implement government policy and therefore be responsible to the minister of the day?

Mr Quinlivan : I think if you wanted decisions to be made independently of government policy then you would need a different law, and the parliament could make such a law, but it hasn't. If your point—which I know is made regularly—is that there is a conflict between our dual roles as a facilitator of trade and a regulator of animal welfare outcomes, which might be seen to be reducing or inhibiting trade—I know that claim's been made—

Senator SINGH: That's not the claim exactly that I made.

Mr Quinlivan : I know that, but I'm just saying that that's a potential conflict that has been made. We do have those functions in different parts of the department. I delegate my authorities in this area to the leader of the live export program—at present, Dr Clegg—and she makes those decisions to deliver on the regulatory requirements, without reference to what it means for facilitating trade. Certainly there is a different model, where the regulatory responsibility is taken outside the department, and indeed outside the Public Service. That would be—to follow your point—a possible model. We expect that Philip Moss, in doing his review of our performance as a regulator and the regulatory culture in the department—I'm sure that's an option that he'll be looking at.

Senator SINGH: Okay, because there does appear to me to be an inherent conflict of interest. After the department undertakes its work to develop a different animal welfare model, it might find that it will adversely affect the live export trade and possibly result in the necessity for the trade to be shut down. In that case, how would you put that to government, when you are implementing government policy? Can you see that conflict of interest?

Mr Quinlivan : We would provide that advice to the government and we would at that point essentially be telling them that we thought this was the responsible thing for us to do as a regulator. If the government wished for a different outcome in those circumstances, we would be telling them that they would need to use the various legal avenues they've got for directing us to act in a different way. There are such avenues. Mr Sanson-Fisher can tell you about those if you'd like to know the detail, but that's the kind of succession of logic and decision-making that I would see occurring in the scenario you're talking about.

Senator SINGH: When does the department expect to develop a RIS into adopting a new model?

Mr Quinlivan : As it happens, I haven't had an opportunity to discuss this with the minister. He's either been overseas or I've been at this table since the responses to the McCarthy report were made public. But I'll be discussing that with him, I expect, probably early next week. I'd expect an announcement next week.

Senator SINGH: He's in Qatar—is that right?

Mr Quinlivan : He was. He's back in Australia today.

Senator SINGH: Did the department provide him with any kind of briefing before he left for Qatar—some detail as to what he's doing over there?

Mr Quinlivan : Absolutely, yes.

Senator SINGH: What was it?

Mr Quinlivan : If you're after some guidance on the schedule and what advice we gave him, I'll just get the relevant people to the table.

CHAIR: Senator Singh, we're at a transition point. Do you want to hold this until you come back around?

Senator SINGH: What do you mean?

CHAIR: Time's up.

Senator SINGH: We'll just wait for the answer and then move to the next person.

CHAIR: I'm trying to help you manage your time. If you thought this was going to go for some distance, you could bring it round to the next cycle.

Senator SINGH: No, that's fine.

Mr Quinlivan : So, the question was: what assistance and briefing did we provide to the minister for his Middle Eastern trip?

Ms van Meurs : The minister travelled to the UAE, Kuwait and Qatar from the 19th until the 22nd. So, last night he returned. We provided various briefing, which includes information on the particular countries—what sort of trade we have, not just the sheep trade but what sort of trade we have with, for example, the UAE, Qatar and Kuwait on agricultural trade.

Senator SINGH: Live sheep exports?

Ms van Meurs : Yes, as well.

Senator COLBECK: I am interested to know what sort of feedback we received from the various nations that we visited, or that the minister visited. Is there a possibility that we can get some sense of what issues were raised with the minister by our trading partners and what their concerns might be?

Ms van Meurs : The main issues that I suppose in general terms were discussed were concerns around making sure that those countries have continuous supply. They were also obviously concerned about animal welfare. Their view is that they are very concerned about animal welfare and they have put a lot of effort into making sure that they can comply with, for example, the ESCAS scheme for Australia's live trade. They also continue to look at both live trade and boxed meat trade. So, that's something they want to continue to develop, depending on which country you're talking about, with Australia.

Senator COLBECK: How did the supply issues manifest? What sorts of things are they talking about in that space, in how they raised that as an issue? What are their concerns in the supply sense?

Ms McAlister : They're very interested in continuous supply. Now is a high peak-demand period for them. So I guess then around that the issues are how it will be affected through the report and the recommendations and then how it impacts price.

Senator COLBECK: So, there's the concern that a break in supply would have a price impact in their local markets. Was it in all countries that that issue came up?

Ms McAlister : It was predominantly in Kuwait and Qatar, but all countries are interested in that. We send the most product to those two countries.

Senator COLBECK: Are there any particular elements of the market that a change in supply would impact?

Ms McAlister : There's a preference I think for live meat, which is why we see those volumes so high. But the markets are all taking boxed meat as well.

Ms van Meurs : Also, the volume of boxed meat continues to increase. For example, the UAE is very interested in supply of more boxed meat.

Senator COLBECK: So, there is market opportunity for some additional boxed meat, particularly in the UAE?

Ms van Meurs : That's correct.

Ms McAlister : The UAE is best served as well, capacity wise, through air freight.

Senator COLBECK: So, a slightly different market. What about the particular market effects of a change in supply at this time in the cycle, besides price?

Ms McAlister : There is the potential that they'll need to look elsewhere for product and that would have a long-term impact on the market.

Senator COLBECK: On our market?

Ms McAlister : Yes.

Senator COLBECK: Is there any evidence they are looking at alternatives as an insurance measure, if you like?

Ms McAlister : We certainly received messages from the private sector that they felt they would be forced to do that.

Senator COLBECK: Okay. I did see some media reports back here about their concerns to do with animal welfare, which appeared to be relatively strong. Can you detail what they talked to you about in that context, please.

Ms McAlister : There were two main messages coming through. One was that they want the quantity of sheep getting off the vessels, so it's in their best interests as well to have live and healthy sheep. The second one is from a religious standpoint. It is fundamental to their beliefs as well that sheep, and all animals, are handled well.

Senator COLBECK: Did you have any conversations about potential regulatory changes that were being proposed and how they might impact on their issues at that end?

Ms McAlister : I'm not sure I fully understand. We certainly discussed the McCarthy report and the conditions that have been put forward in that.

Senator COLBECK: My point was that that goes to them getting the animals off at the other end and meeting their animal welfare and religious requirements. Obviously, that also plays into supply. In the context of potential other trade impacts, were there any conversations around that? We've put a range of commodities into those various markets. Are they concerned, or is there concern from our perspective, about further trade impacts if—

Ms McAlister : There weren't any statements in that regard at all.

Senator COLBECK: That's pleasing. You were talking to both the private sector and government?

Ms McAlister : Yes, that's correct.

Senator COLBECK: Was there effectively the same reaction from both?

Ms McAlister : Yes. I think it's fair to say the private sector were possibly more pointed in their area of interest, which is all around cost.

Senator COLBECK: So there are some potential concerns around the new regulatory framework around cost of product?

Ms McAlister : Yes.

Senator COLBECK: I think we heard yesterday from some other witnesses that that will have a potential impact on the market.

Ms McAlister : Yes.

Senator COLBECK: Will that potentially impact on our supply place in the market—the fact that the changes will have a cost variation and potentially move the market in that sense?

Ms McAlister : I think it's hard to tell at this stage.

Senator COLBECK: Do we have any advice on cost implications at this stage? Or is that something that the shipping companies will have to work their way through as the new regulations come into play?

Mr M Thompson : I think it's a commercial matter for—

Senator COLBECK: I understand that. But would they be working their way through that?

Mr M Thompson : I think so.

Senator COLBECK: I am just trying to get a sense of the reaction that came back from the market. I think it's reasonable that we have a decent understanding of what our market is telling us from a range of perspectives.

Mr M Thompson : I think that's right.

Senator COLBECK: There is the potential for what's happening or what we're doing in supply of the market to make them think about the trading relationship.

Mr M Thompson : Yes. I think that's why the minister was very keen to have meetings with both private sector interests and government in this field.

Mr Quinlivan : The UN published some information recently on sheep flock in Australia from the Horn of Africa over the period 2000 to 2016 which shows that the Australian flock fell from about 120 million in 2000 to about 70 million in 2016 and our share of the world sheep flock fell from about 11 per cent to something less than six per cent over that period. Of course, sheep are probably as valuable now in Australia as they have been for a very long time, possibly since the Korean War. Over that same time, the sheep flock in the Horn of Africa region has grown from about 75 million to 80 million up to 125 million and is growing quickly. So there's clearly a shift in Australia's share of the world flock and our competitiveness as a producer of sheep and sheep meat.

Senator COLBECK: In that sense, I suppose that consideration also plays into overall market economics.

CHAIR: Just before we move on: Senator Rhiannon, I've spoken to the deputy and we've consulted our colleagues, and no-one else has anything for LiveCorp. So what we're prepared to do is bring them on now and you'll have the unlimited time you need to exhaust yourself with LiveCorp in an effort to treat them in the same way that we treated Animals Australia and let them go. Can I have them back to the table, please?

Senator RHIANNON: As I said, I have a number of questions about the issue, but I don't know if they're to LiveCorp. They will be handled by the department, so I can't make that call.

CHAIR: Senator, that would be true of a whole string of witnesses we've had over the last two days. It's not right to keep them here. There hasn't been a question to them for over an hour—or I think there was one. So we're going to handle it this way. You've got an unlimited period of time. You can explore whatever you want, for hours if you want to.

Senator RHIANNON: I want to be fair to everybody. I'm quite happy to come back after dinner—when I thought I would be coming back—and go with the department. If I can't go with the department and they say that I've got to go to the witnesses who have gone—

CHAIR: No. I've just made a ruling. Can LiveCorp can come back to table? You can stay with them for hours until you exhaust your interest in whatever it is that the witnesses have to provide. We can't have contingency—

Senator RHIANNON: I'll say that I have no questions for them, because most of my questions, I am sure, are for the department, and I can put questions on notice to them any time.

CHAIR: Thank you very much. LiveCorp, we thank you for your attendance and preparation and we wish you a safe journey back to your destination.

Mr Enright : Thank you very much, Chairman.

Senator BROCKMAN: Following up on Senator Colbeck's questions, particularly with regard to our trading partners—and I'm happy for you to go outside the recent ministerial visit—can you talk to any intelligence the department has on our trading partners' view of ESCAS and its implementation, obviously, in foreign countries to Australia and how it has been received? I suspect at the beginning at least, there would have been some resistance to the implementation of ESCAS. You mentioned earlier that they had a very positive view of ESCAS. So I'm just wondering whether the department has any further intelligence on our how trading partners have interacted with ESCAS and how they are adapted, adopted, embraced it?

Ms van Meurs : I think Ms Clegg might give a better view of the past history of ESCAS.

Mr Quinlivan : Just while we're passing over to her, a general observation, I think, is that a number of these countries have made quite large investments based on compliance with ESCAS. We have had consistent reports that our ESCAS requirements have established, if you like, a new standard in those countries. The new abattoirs, which are being built to meet our ESCAS requirements and modern food safety requirements, are now a source of preference for consumers in those countries, and that's part of the reason why, even though Australian sheep have been relatively expensive, we've continued to be a supplier of choice to those countries, because they're very invested in the product. So that's the general picture.

Senator BROCKMAN: Just continue on that for a moment before we go to Ms Clegg. I think this is something that the farming community particularly, and all aspects of the livestock industry, have had a strong level of belief in—that Australia's participation in this aspect of global trade has actually improved animal welfare standards. The statistic that's been quoted at me—and you can tell me it's wrong if it is—is that, for every one Australian animal slaughtered in a facility overseas that's up to Australian standard, there are four animals from elsewhere that are slaughtered to those standards. Would that be accurate? Is it more than that? Is it less than that? Is that a statistic that has no basis?

Mr Quinlivan : I don't know. One key observation I would make, though, is that that kind of logic is not relevant to us as a regulator.

Senator BROCKMAN: Okay.

Mr Quinlivan : That's obviously an interesting policy issue and a trade issue—

Senator BROCKMAN: No, it's a flow-on effect.

Mr Quinlivan : and a political position, I guess, but it's not the kind of logic that would influence our behaviour as a regulator. But I've got no reason to believe that it's not correct, because I've heard it said regularly and, if it weren't true, I think it probably would have been more successfully challenged. But, as I say, it doesn't affect our behaviour as a regulator.

Senator BROCKMAN: No. Absolutely. Ms Clegg?

Dr Clegg : On our results, I suppose, of the improvement in ESCAS performance over time, we started in 2012 and there were kind of five reports of non-compliance in facilities. At our peak, during the opening of the Vietnam market for cattle, we had up to 43 reports of noncompliance received that year, and now we're back down towards eight. When we're talking to exporters, one of the things that's, I suppose, helping drive the improvement is the presence of the exporters in market working with the supply chain partners, because when breaches are reported, we ask them to go and find out what happened and in some instances keep people there as supply chain officers, and the industry has increasingly done that. It helps transfer the skills, I think, between the technology and know-how, I guess, that Australia has in managing animals being slaughtered, to countries that aren't as well off as we are, particularly in areas where countries don't have the same level of investment. In countries like the Middle East, where traditionally it's been a more local form of slaughtering in markets—the sale of animals in markets, the use of the local slaughterhouse—as their wealth has increased and the cities have developed, they have invested in better facilities and had experts, not just from Australia, but from around the world to build them facilities that meet international standards for food safety purposes. So I don't like to say it's cause and effect, but the fact that you have a relationship with the industry in the country does help transfer information across and improve animal welfare standards.

Senator BROCKMAN: You don't have to answer this if it's asking too much of an opinion, but is there a sense that our trading partners were at first resistant but have come to more accept and embrace the ESCAS model?

Dr Clegg : I think it's a very difficult thing for one country to be told by another that we need to impose higher standards than you might apply locally. I think we'd find that difficult ourselves. Why does Australia operate our slaughterhouses in the way we do? It's because it makes economic sense and we have better meat as a result. I think that, with the time, the less wear and tear on workers, the better quality product that you'll end up with, it's more efficient. It's for all of those reasons. Animal welfare pays dividends, and they're seeing that. But it's not to say that their sense of animal welfare was necessarily poor before, but we've been able to show them some different ways because of the amount of livestock that we regularly raise and slaughter.

Senator BROCKMAN: I'm just going to go back—sorry, I'm jumping around a bit again—to the investigation that is underway. Chair, if I cover ground that was traversed while I was unavoidably absent, please let me know.

CHAIR: I'll let you know.

Senator BROCKMAN: The investigation is ongoing into Animals Australia's footage—

Mr Quinlivan : We have a series of investigations underway.

Senator BROCKMAN: So, a series—

Mr Quinlivan : We have an investigation underway. Dr Clegg talked earlier about, with the benefit of new information, reopening the investigation into what happened on that journey. So, if you like, that's a technical investigation against the ASEL standards and the other requirements on the principles in that voyage. But we also have some other what we would describe as compliance investigations underway, and Mr Thompson talked about those a bit in the opening statement. Some of those are framed around the kinds of things we've been talking about, which is trying to understand what actually happened on that voyage, how it is that the evidence that we've seen in this footage came to be, because, on the face of it, it does seem at variance with the rules under which the voyage was operating.

Senator BROCKMAN: How much footage is there?

Mr Quinlivan : There are 390 video files. Some of them are less than a minute and some of them are quite a few minutes. I don't know how many—

Dr Clegg : About seven minutes is around about the longest video that we have, and others are quite short, about 30 seconds—plus there are photos as well.

Senator BROCKMAN: I do not mean to ask this question in any way to cast doubt on the veracity of the footage—I absolutely accept that it is what it is—but is it time and date stamped so you can piece together which bit came first?

Ms Freeman : I'll turn to my compliance colleagues to correct me if I need to, but I understand that there's verification of the metadata behind the footage. It's part of our investigation.

Mr Quinlivan : There are some limits on what we would like to say about this, because it's underway. We may be able to give you—

Senator BROCKMAN: I certainly do not want to—

Mr Quinlivan : I think we can probably give you a little bit more flavour without—

Senator BROCKMAN: I certainly don't want to jeopardise the investigation.

CHAIR: Earlier, Dr Clegg also indicated that they're working through the images and trying to cross correlate. It's called photogrammetry, where they pick up features that tell them that that was on that ship on that date—markings on the ship, I imagine, and things on blackboards. There are a range of those sorts of things.

Mr Patterson : The investigation, amongst the things that it is doing, has obtained the forensic images of the video files and also the photographs. That has been obtained by forensically imaging a computer and then examining the metadata that is sitting behind those files themselves to identify at what points in time they were taken. Work, as I understand it, is also being done to see whether they can be placed at a geographic point in the world.

Senator BROCKMAN: Are they geostamped?

Mr Patterson : That's what the work is exploring—and also the metadata in terms of when the files were taken or recorded.

Senator BROCKMAN: But you're confident that all 390 of these files came from the same—

Mr Patterson : To correct my colleague, we actually have about 800 files and 150-plus photographs. I would be loath to go beyond that as to where we got them from, if that's possible.

Senator BROCKMAN: Yes, of course. No, I do not want you to go anywhere you shouldn't go. This has probably been asked, but have we got a time frame at the moment, or is this going to take as long as it takes to get it right?

Mr Quinlivan : It'll take as long as it takes to get it right. But I'm not sure how much more I should say. I should leave this in your hands, Andrew.

Mr Patterson : In our investigation planning, we aim have to it completed by July. I know of no reason that we won't be able to make that commitment.

Senator BROCKMAN: I want to move on to penalties and sanctions, briefly. Who's the best for this?

Mr Quinlivan : This is in the new legislation?

Senator Ruston: Senator Brockman, can I seek clarification. Are you talking about the recent amendments that have been put to the parliament?

Senator BROCKMAN: I beg your pardon?

Senator Ruston: Are you speaking about the recent amendments in terms of sanctions and penalties that were put to the parliament last week?

Senator BROCKMAN: I'm going to get to that—probably after the break now, realistically—but I also want to look at penalties and sanctions at the point in time.

Senator Ruston: Okay.

Mr Sanson-Fisher : Currently, there is a criminal offence for the export of meat or livestock without an export licence under the Australian Meat and Livestock Industry Act 1997. There is, similarly, a criminal offence for a holder of an export licence contravening the conditions of that export licence either knowingly or recklessly.

Senator BROCKMAN: What is the penalty for the second one of those?

Mr Sanson-Fisher : Imprisonment for five years.

Senator BROCKMAN: And is there a financial penalty, or not?

Mr Sanson-Fisher : It can be converted into a financial penalty through the action of the Crimes Act.

Senator BROCKMAN: All right. Under the new regime, what is the change?

Ms McDonald : Under section 54 of the new livestock bill, there will be criminal and civil penalties for aggravated offences—that's where there's an economic advantage or commercial benefit being sought. They will be for individuals, for executives of companies and for body corporates. An individual could face up to 10 years imprisonment and $420,000 in fines for a criminal offence under exporting livestock without a licence, which is up from what it is now.

Senator BROCKMAN: How about if a party is in breach of a standard, a licence condition or whatever the technical description of that may be?

Ms McDonald : For contravention of conditions of a licence, there is a criminal offence under the current legislation. Going forward, in the changes under the bill that was introduced today, the criminal offence goes up to eight years, from five years—I think my colleague just talked about the five years—and the financial penalty will be about $100,000. It's $100,800. In penalty units, it's 480. For a body corporate, the penalty will be 2,400 penalty units, or $504,000. So that's quite a jump from what it is now. There's also a civil penalty that's been introduced for that category of offence. There's no civil penalty under the current legislation, but there will be under the bill that was introduced by the minister this morning. That civil penalty will be: for an individual, $201,600, which is 960 penalty units; and for a body corporate, a bit over a million dollars.

Senator BROCKMAN: Chair, do you want me to stop there?

CHAIR: I think we will, yes. We'll now suspend our proceedings and resume back here in an hour.

Proceedings suspended from 18:30 to 19:29

CHAIR: We will resume the 2018-19 budget estimates of the Senate Rural and Regional Affairs and Transport Legislation Committee.

Senator RHIANNON: I want to ask some questions about the biosecurity import levy. The budget outlines that $360 million will be collected by the new biosecurity import levy. I just want a breakdown and an understanding of how it works. Could you specify how much of the biosecurity import levy will be spent on environmental national biosecurity?

Ms O'Connell : The biosecurity levy was a suggestion made in the quite comprehensive review of the biosecurity system which was published in the middle of last year. It was announced by the government as part of the budget. The levy won't come into place until the middle of next year, 2019. In terms of what it will raise, there's an estimate of $325 million.

Senator RHIANNON: Did you say $325 million? I thought it was $360 million.

Ms O'Connell : It depends on whether it's the cash treatment or different treatments of it. We've been sticking with the number of $325 million that appears in the paper. We can explain the difference between $325 million and $360 million.

Senator RHIANNON: Considering the time, I'll accept what you're saying. I am interested in how it will be spent.

Ms O'Connell : The government's already made some decisions in this budget on how the funding will be spent. There were announcements in this budget of $121.6 million on biosecurity-related measures. As I said, the levy doesn't come in until 2019 so there's potential for further decisions of government to be made. We can take you through the breakdown of the $121.6 million in the budget for biosecurity, if that assists.

Senator RHIANNON: Yes.

Ms O'Connell : I'll ask Mr Koval to go through that.

Senator RHIANNON: I am particularly interested in how much is going to be spent on national monitoring and surveillance.

Ms O'Connell : There are measures that go exactly with that.

Senator RHIANNON: So you've got line items for that?

Ms O'Connell : Yes.

Mr Koval : As Ms O'Connell said, the biosecurity import levy was a response to the review into the priorities of the biosecurity system. The government made some announcements in the budget of additional biosecurity measures. There was $51.5 million announced for priority pests and diseases; this is looking at national action plans for priority pests and diseases, and maintaining and improving diagnostic capacity for pests and diseases which has an impact irrespective of whether it's environmental or production based. It's for all pests and diseases that we are concerned about. There's $27.8 million for assurance and verification; this is making sure our systems are working. The measures are treating the pests and diseases of concern, and we can be satisfied that biosecurity is effective and efficient.

There's $7.5 million for seamless border clearance, which is about looking for new technology to make the border work smarter—for example, new X-ray technology—so we can get a better understanding of what's coming through in a faster environment. In addition, there are a couple of other measures that were announced in the budget. There is $14.8 million for international ports, for dealing with increased people traffic through airports and sea ports, and there is some money for fruit fly in Tasmania.

As Ms O'Connell said, there are a number of environmental recommendations in the IGAD report. Some of those have already started. For example, we have already started work on a priority list for environmental pests and diseases. We've had the first workshop, and the second workshop will be in June, about how we build that priority list of environmental pests.

Senator RHIANNON: My next questions were going to be about the priority pest-and-disease planning and response, which has $51.5 million allocated over four years. Is that different from what you referred to?

Ms O'Connell : That's one of the measures that Mr Koval outlined. That is a key feature, in terms of the budget measures. This links back to the review report. The review report recommended that for priority pests and diseases we have a comprehensive action plan ready to go. Part of this funding is to build the comprehensive action plan for the priority pests and diseases.

Senator RHIANNON: How will the priorities for this spending be determined?

Ms O'Connell : Within the priority pest-and-disease planning? There will be several things that are done as part of it. There's developing and implementing the national action plans for priority pests and diseases. That will be focused on the high priority pests and diseases. There's offshore intelligence gathering that we'll be doing as part of that, and surveillance and capacity building in neighbouring countries as part of prevention measures, and building on previous investments in that area that we've made that have paid considerable dividends. We'll also be increasing our response capacity under our current Biosecurity Act and maintaining and improving our diagnostic capability. We've seen quite an increased demand for diagnostic capability across the biosecurity network so that we can diagnose pests and diseases much more rapidly.

They're some of the things. One of the smaller measures, as part of it, is to meet our obligations under the Australian foot-and-mouth disease vaccine bank for the next few years. So there are a range of things within that $51.5 million for priority pest-and-disease planning.

Senator RHIANNON: Maybe you don't have it divided up this way, but I was interested in what the allocation was for the agricultural sector.

Ms O'Connell : We divide things into pests and diseases. Our concern is pests and diseases.

Senator RHIANNON: So you make an assessment of the level of threat from a certain pest and then you're looking at it across the board. Is that a fair assessment?

Ms O'Connell : I think that's a reasonable assessment of it. It's focused on the pests and diseases.

Senator RHIANNON: Not the sectors.

Ms O'Connell : Not necessarily the sectors. The sectors have a part to play in it because, if you're going to do a cost benefit, you'll look across the various sectors—environmental, whether it goes to our way of life, production et cetera. All of those make a contribution when you're doing a cost benefit. Taking something on the plant side, our No. 1 plant pest disease is Xylella and that has a major impact, including environmental. We do it by pests and diseases because there's no point in planning for a disease only for production or only for environment. It's the disease—a bit like myrtle rust.

Senator RHIANNON: Totally. I can understand that. I want to ask about the recommendation of a senior expert position of chief community and environmental biosecurity officer, that this be established in the environment department. When will the office be established? It appears there are some delays in establishing. Could you explain that, please?

Ms O'Connell : Not so much delays in establishing. This report that has that recommendation was considered by ministers mid-last year as a draft. They put the report out, agreeing to make it public, mid-last year with the view of offering opportunities for people to comment. We've had, certainly, some extensive consultation—Mr Koval might talk to that—on the recommendations not just within governments but also with states and territories who are a key contributor to the biosecurity system, and, much more broadly than that, including NGOs and environmental et cetera.

So there's been a lot of consultation and feedback on how these recommendations should be implemented. Mr Koval outlined that some of the things immediately within our gift we've gotten on and done. Some of those are in progress. If you want, I can mention a few of those that relate to environmental biosecurity—

Senator RHIANNON: Is it going to be established in the Department of Environment and Energy?

Ms O'Connell : The decision as to where it will be established is yet to be taken.

Senator RHIANNON: When will it be made?

Ms O'Connell : I can't tell you when it will be made but it will be made soon.

Senator RHIANNON: Who makes the decision?

Ms O'Connell : It's essentially a decision for government to make about how it wants to do it.

Senator RHIANNON: At cabinet level, is it?

Ms O'Connell : I'm not going to talk about how government makes the decisions to do it.

Senator RHIANNON: I'm just trying to work out the process. It seems a fair enough question.

Ms O'Connell : Potentially, yes.

Senator RHIANNON: I love that word 'potentially'. So is it at cabinet level?

Ms O'Connell : It's a decision for government to make.

Mr Quinlivan : We've got a number of things that need to be settled by an expenditure review committee as part of the normal budgeting process, and it's most likely going to be one of those decisions.

Senator RHIANNON: The budget allocation has been made, hasn't it?

Mr Quinlivan : That will be part of the decision-making.

Senator RHIANNON: I wanted to ask about invasive ant specialists. I understand that they met in Queensland back in 2016 and they've got a plan. When's the plan going to be finalised?

Ms O'Connell : I think there are two things here, and just want to be clear. We've got a eradication plan for the red imported fire ant in Queensland, and that's a significant response and eradication plan. There's also a broader plan around ants in general and an approach to be taken with exotic ants. So I just want to be—

Senator RHIANNON: I am interested in the yellow crazy ant—an incredible name. So the wider—

Ms O'Connell : The wider plan for what we call tramp ants?

Senator RHIANNON: Yes. I was actually interested in when the plan will be finalised.

Ms O'Connell : If it's specifically yellow crazy ants—

Senator RHIANNON: Yes.

Ms O'Connell : There's funding given to the Department of the Environment and Energy to deal with yellow crazy ants in the Wet Tropics. If that's specifically what you want to talk about, it's the department of the environment who is funded to deal with the yellow crazy ant.

Senator RHIANNON: So that's not you?

Ms O'Connell : No. We have the eradication of the red imported fire ants. We're also looking at tramp ants more generally and what can be done in relation to exotic ants, which we're happy to talk about. But, if you specifically want to talk about the funding that the government has provided for the eradication of yellow crazy ants, that's the—

Senator RHIANNON: What about the red fire ant?

Ms O'Connell : That's us. We're very heavily involved in the red imported fire ants eradication plan. It is one of Australia's largest eradication efforts ever that has ever commenced on eradicating the red imported fire ants.

Senator RHIANNON: When will the plan be finalised to get rid of the red fire ant?

Ms O'Connell : There is a plan underway. There is a group that is doing it. All governments have contributed to the eradication effort and it's underway.

Senator RHIANNON: How much has the federal government contributed?

Ms O'Connell : It's a contribution over 10 years.

Mr Koval : The Australian government contributed 50 per cent of the total of the red imported fire ant eradication program in South-East Queensland. In real terms, if you take inflation and everything else, it's just over $202 million.

Ms O'Connell : So in the order of $200 million over 10 years. This is to deal with the incursion of red imported fire ants in South-East Queensland. That incursion has been around for a long time—15 or 20 years. I was going to say a couple of decades. One of the enduring lessons about biosecurity is that when there's an incursion it's always a lot cheaper to go in very quickly and attempt immediate eradication rather than allow it to become established. It has become established in that area in South-East Queensland—hence the huge cost to eradicate it. We have had more recent incursions of red imported fire ants recently, within the last 12 months or so, in Port Botany—a single instance. But, jumping on it quickly, it cost $1 million to get rid of and deal with. That's why surveillance, detection and all those things are really important, because if you can get to it earlier it's going to cost you a heck of a lot less than if it becomes established.

Senator RHIANNON: Just out of my own interest, did it come in in a container?

Ms O'Connell : The recent one in Port Botany, yes, on a container. And that's relatively common for red imported fire ants and a number of other exotics—we call them hitchhikers, because they hitchhike on the containers. There are a number of things that come in on containers that are of concern, but the sooner we can detect it through surveillance, eradicate and get onto it, the better, because it's a lot cheaper than if they're allowed to establish, which is what did happen here.

Senator GRIFF: I'd like to seek some clarification on aspects of the department's involvement with the pet food industry—and I appreciate that states are responsible for a large part of that. I understand the department was involved in the development of the Australian Standard for the Manufacturing and Marketing of Pet Food—is that correct?

Ms O'Connell : I'll ask Dr Robyn Martin to tell you about what's happening with pet food.

Dr Martin : I know we certainly provided input into the standard. It's been reviewed, and that—

Senator GRIFF: It's currently being reviewed now?

Dr Martin : It was reviewed, and that was finalised in 2017. Originally there was a code of practice for the pet food industry, and that was converted into a standard. I think that was around 2012, so it's since been reviewed. The department has provided input into that review.

Senator GRIFF: Who ensures that the standard is adhered to?

Dr Martin : The pet food industry is a self-regulated industry, so it's the pet food industry.

Senator GRIFF: Does the department receive updates from the Pet Food Industry Association on compliance, or is this hands off now—you were involved in it early on in the piece and you don't have any involvement with compliance with the code at this stage?

Dr Martin : I'm not aware of any involvement. As I said, it's a self-regulatory approach. There is also a reporting mechanism called PetFAST, which was a joint initiative between the Pet Food Industry Association and the Australian Veterinary Association. That's so that vets can report where they think that there are health issues with dogs and cats associated with pet food.

Ms O'Connell : But I think, in short, the answer is that we don't regulate the pet food industry.

Senator GRIFF: Just on PetFAST, that's a voluntary program involving the Veterinary Association. Are you saying that you have some exposure to it? If there's an issue, if there needs to be a recall or something along those lines, are you involved in any way?

Dr Martin : No, as we said, the department's not involved in regulating pet food, and not at the state and territory level either. It's self-regulatory, so it's the pet food industry that regulates.

Senator GRIFF: As I understand it, there was quite a significant 2011 report that you were also involved in at the time, from the Standing Council on Primary Industries' Pet Food Controls Working Group. That recommended a review of the pet food industry within five years, and it's now been seven years since that report and no review is on the cards. Are you, or perhaps the minister, aware of whether this review is going to take place?

Dr Martin : The minister has recently written to his counterparts, to state and territory agriculture ministers, seeking support for a review. So we're looking to do that with the pet food industry and AVA, and other parties.

Senator GRIFF: How recent was this?

Dr Martin : Just this month.

Senator GRIFF: So that might be related to the recent spate of deaths in relation to pet food? Do you think that's probably spurred this along?

Dr Martin : Certainly there was public news about the cases of megaesophagus in dogs which have been linked to pet food. At this stage they haven't found a cause.

Senator GRIFF: It's interesting to look at the different approaches that each state has. It seems to me to be quite crazy that each state has different legislation relating to pet meat but nobody has anything in relation to pet food. You have a situation where Queensland is the only state that requires pet food to be labelled with its ingredients; no other state does. It seems to be a very all-over-the-place kind of approach.

CHAIR: There's a reason for that.

Senator GRIFF: Because it's Queensland—I should have got that one straightaway! To me, someone has to take control of it. Someone has to take leadership on this. I know it's difficult because of the arrangement with the states. Minister, do you have a view on how this can move forward?

Senator Ruston: Certainly one of the strongest operating mechanisms with our federated system is through the ministerial councils that operate. We seek in most instances to get a consensus view amongst the ministers that we will move forward with a harmonisation or a set of regulations. Obviously that's what Minister Littleproud is seeking to do by his correspondence with the states. It makes a whole heap of sense that everybody does it in a voluntary manner, because federal government taking over responsibilities that otherwise would be the states' is fraught with danger.

Senator GRIFF: Does the department itself actually keep an independent record of the number of pet food recalls at all? Or is there an entity that does it on a national basis, that you're aware of?

Dr Martin : Not that I'm aware of, no.

Senator GRIFF: I look forward to the results of that letter progressing things. Thank you.

CHAIR: During the break we've been provided with some answers to questions taken on notice by Senator Ketter. Colleagues, if you've had a look and there's no objection, we'll table that. Senator McCarthy, you have the call.

Senator McCARTHY: I'd like to go back to the questions on the sheep issue.

Mr Quinlivan : Just give us a moment to change over. We were asked similar questions on export permits issued since the footage was broadcast, and we gave slightly different answers. We'd like to clarify the most accurate answer to that question.

Ms Freeman : To correct the record about how many export permits had been issued and to be clear, since the footage was aired, 15 export permits relating to five voyages that carried sheep have been issued.

Mr Quinlivan : We answered the question in relation to voyages, not the actual question, which was about export permits.

Mr M Thompson : We included some cattle voyages in there as well.

Ms Freeman : Some voyages carry sheep and cattle.

Senator McCARTHY: Thank you very much. Can you advise what the role of the independent observers is?

CHAIR: There are only a couple of us here and we've got all night, but they did quite thoroughly cover that. Unless you're coming from a different angle?

Senator McCARTHY: Let me just try. I think I might be going in a different direction, Chair. I am conscious that a few questions were asked, but let's see how we go.

CHAIR: All right.

Dr Clegg : The key role of the observers is to confirm that the exporters' plans for managing that consignment on board the vessel are carried out. It means that the sheep and—if there are cattle there—cattle are fed, are watered, have appropriate bedding arrangements, are treated if they're ill and are euthanised if they're not able to be treated.

Senator McCARTHY: Are the individuals employees of the department?

Dr Clegg : Yes.

Senator McCARTHY: Are the recommendations in the McCarthy review consistent with the available scientific evidence regarding sheep heat-stress physiology?

Dr Clegg : Yes, we think so.

Senator McCARTHY: Did the department receive a copy of the Australian Veterinary Association's submission to the McCarthy review?

Dr Clegg : We have, through the McCarthy review.

Ms Freeman : So it was provided and passed on to Dr McCarthy.

Dr Clegg : We were the secretariat for that review.

Senator McCARTHY: Okay.

Senator MOORE: What are the professional qualifications required to be one of the observers?

Dr Clegg : At the minute, what we're requiring—the observers we're sending are veterinarians, generally, department veterinarians. They're the officers, largely, to date, but we have used other officers, that are involved in service delivery activities—some for live export, some in other export programs.

Senator MOORE: Is that a requirement? Do they need to have that professional qualification?

Dr Clegg : We're finding it useful because we're investigating what went wrong and trying to understand what risks are associated with these voyages—how we missed what was going on, on the Awassi, essentially.

Mr M Thompson : It's a new role.

Senator MOORE: That's why I'm asking.

Mr M Thompson : We are, pretty much, designing it as we go and it provides that level of assurance, as Ms Clegg said. One of Dr McCarthy's recommendations is to have some further work done to clarify the roles and responsibilities of the independent observer and the accredited vet, and that's something we support.

Senator MOORE: So we've not had them before?

Dr Clegg : No. In the past, we've occasionally put one of the live-export vets on a ship that has been travelling to the Middle East, sometimes, after a report of a mortality incident. That has been something that's happened in the past.

Senator MOORE: It's not a requirement?

Dr Clegg : No, and we haven't done it all that recently either.

Senator MOORE: Just evolving from that, you're looking at those things at the moment. Will that be part of the formal response to the McCarthy report or is it just something you're doing in your internal planning?

Mr M Thompson : I think it's something we would be doing anyway. What we have committed to do, as part of our response as a regulator and in responding to what Minister Littleproud has asked us to do, is to put these observers on all vessels.

Ms Freeman : I think the model that we've got now is obviously using departmental staff, and we'll be looking to establish a permanent ongoing observer function, if you like. At the moment, we're literally scoping out the best way for that to be delivered.

Senator MOORE: Whether that's a pool of people you can draw from. So that's not been finalised either.

Ms Freeman : Yes, because at the moment we're drawing on existing resources.

Senator McCARTHY: Do you envisage that it will be difficult to find independent observers?

Ms Freeman : I think there are a couple of things. One is working out a business delivery model. International fishing vessels have an observer model as well. We are drawing on the pool of staff that we have. To the question regarding the right skill set, veterinary and animal management is important but some auditing skill sets are as well. We're trying to scope out, to work out, the task. We're using our vets at the moment but looking, over the long term, at what a permanent observer role would look like. An important part of that is the visual element to provide evidence—what footage you might use that would also inform your assessment of the risks.

Senator MOORE: And to standardise that as much as possible, because that would be an issue if there's varied—

Ms Freeman : Yes.

Senator McCARTHY: How many will be needed, do you think?

Ms Freeman : I'd have to take that on notice. Last year, for example, there were, I think, 272 live-export voyages, of all species, of different lengths. Some of them were only for a few days and some of them were long-haul voyages. We're trying to look at what that might look like. That will then determine how many people we might need.

Senator McCARTHY: Have live sheep exports been in decline since 2013-14?

Ms Freeman : The number of sheep exports? I might call on my ABARES colleagues but I think so, yes.

Mr M Thompson : We might just ask our colleague from the Bureau of Agricultural and Resource Economics and Sciences.

Mr Gooday : Exports of live sheep, in terms of value, have fallen from $245 million in 2014-15 to about $233 million in 2016-17. In terms of quantity—millions of sheep—exports have gone down from about 2.2 million head in 2014-15 to about 1.8 million head in 2016-17.

Senator McCARTHY: Has the department undertaken modelling work or requested ABARES to do so as to what the tipping point is for the live sheep export trade to be unviable for exporters?

Mr M Thompson : I think in answer to a question last night during the ABARES session, the Executive Director of ABARES responded to that in terms of work that has been undertaken. But we indicated at that time that that work was part of material that was provided to cabinet as advice, so we're not in a position to go into detail about what was in that analysis and what it covered.

Senator McCARTHY: Sheep abattoirs, particularly in WA, have over two million per head of sheep capacity underutilised, would that be correct?

Mr M Thompson : That's our estimate.

Mr Gooday : That's our understanding.

Senator McCARTHY: Could I take you with trade and market access to the wine issue? When did the department counsellors become aware of certificate of origin issues with Australian wine exports to China?

Ms van Meurs : The actual date of our first knowledge of the particular issue around the country of origin certificates for wine to China—the counsellors were aware on 20 April 2018. The Treasury Wine Estates China representative gave us that advice, and it wasn't clear what the problem was. Then by 25 April, the counsellors worked with Treasury Wine Estates and advised us that it was actually a certificate of origin issue.

Senator McCARTHY: So what forms of communication were there, and from which companies?

Ms van Meurs : I'm talking about the Treasury Wine Estates, so that's basically the main company. The issue is, when you have a free trade agreement, to get the concession on your particular product, you need to have the certificate of origin. That's issued by a number of different parties, and those parties aren't the Department of Agriculture and Water Resources. If there's a concern in a particular country—in this case, China had some issues around some of the certificates of origin—it goes back to the issuing company. They work with our customs organisation to verify the authenticity or the issues that they might have with that particular certificate of origin. So that's the process. Our counsellors in Beijing have been working with their customs counterpart to work through that issue with the particular authority that did issue a number of those certificates.

Senator McCARTHY: Which other departments did the Department of Agriculture and Water Resources counsellors tell or involve in creating a solution for Australian wine exporters?

Ms van Meurs : Just to be clear, the certificate of origin mechanisms sit with our customs organisation not the Department of Agriculture and Water Resources. But because it's a commodity our agriculture counsellors deal with, we work closely with Department of Foreign Affairs and Trade and the counsellor for customs in Beijing. But, of course, that also comes back in here about what can we do to try to deal with the issue.

Senator McCARTHY: What briefings or correspondence were provided to the minister on this issue?

Ms van Meurs : I'd have to take that on notice.

Senator McCARTHY: Minister?

Senator Ruston: Yes, I have had briefings from the agency and also been in discussions with TWE, Treasury Wine Estates, which, as Ms van Meurs has been referring to, is the major company that has been incurring the difficulty with the export documentation being finalised. So I've been well kept abreast of the issues from both the Department of Foreign Affairs and Trade and from the Department of Agriculture and Water Resources and with direct communications with the company themselves.

Senator McCARTHY: And when did that start in terms of you being alerted?

Senator Ruston: I'm going to have to take that on notice to give you an exact date, but we have been in discussions for the last couple of weeks when it became apparent that we probably had to delve a little more deeply into this. This is a new system of import by TWE. In the past they have been exporting directly from Australia to their buyers in China; they've got a new system through which they're using bonded warehouses in Shanghai. So it appears to have been a difficulty in terms of the new processes and the new systems that are in place around clearing from a bonded warehouse on mainland China as opposed to the actually point of export being from Australia. I'm not sure of the absolute technical terms, but it is worth remembering that this is a new system and it could well just be teething problems that we are experiencing—albeit ones that we obviously would prefer not to have happen.

Ms van Meurs : I'd only add that quite often port clearance issues do happen from time to time, and we work through those. So this is something that happens not infrequently. So it's an issue about what the issue is and whether it's actually an issue that the Department of Agriculture and Water Resources deals with or its Customs or another agency, such as Industry.

Senator McCARTHY: There's a great quote there: 'It's an issue about what the issues are.'

Senator Ruston: I'm sure someone will tweet it!

Senator McCARTHY: Thank you.

Senator CHISHOLM: I'm going to move to a different area, or what I presume will be a different area, around the Intergovernmental Agreement on Biosecurity. There was a review conducted by Dr Craik in 2017, and my understanding is that part of it related to a levy being imposed to raise money, which would raise, I think, $360 million over four years?

Mr Quinlivan : We had some questions on this after dinner. We're happy to do it again, but we gave, I think, Senator Rhiannon quite a detailed description of the levy and how it's to work.

Senator CHISHOLM: And how it was going to be distributed?

Mr Quinlivan : Yes, that's right—the decisions made thus far.

Senator CHISHOLM: I'll move on to a separate but related issue. There was proposed to be $51.5 million to be spent on priority pest and disease planning and response as part of an Australian Agriculture and Export Growth Plan. Can you give me a bit of detail about the Australian Agriculture and Export Growth Plan?

Ms O'Connell : We did cover some of this, but I'm happy to go through it again.

Senator CHISHOLM: And I would like to know how the $51.5 million would be spent as part of that.

Ms O'Connell : The $51.5 million is a component of a total package of $121.6 million in the budget for biosecurity. I'm happy to hone in on the 51.5 which is for priority pest and disease planning and response. I'll ask Mr Koval to go through the elements of that package.

Mr Koval : The $51.5 million covers a range of measures that were announced in the budget. I can provide you with a full list on notice, if you like, given the time. For example, there's additional funding for the running of the Australian Animal Health Laboratory; there's money to maintain Australia's foot-and-mouth disease vaccine bank; there are funds to help us improve our diagnostic capability for new exotic pests and diseases that we want to be able to test rapidly; and priority planning, should pests and diseases come into the country, for how you might want to manage them. For example, we have a list of the top 40 plant pests, and we're in the process of making a priority list for environmental pests, and money will be spent to actually work out how we might want to plan for those pests, should they come into the country. Also, there are funds to make sure that we can boost our intelligence gathering in what's happening offshore, so we actually know where pests and diseases are in the world, where they're moving to and the likelihood of them arriving in Australia. There's additional funding for us to actually manage responses on Commonwealth land, if you like, such as external territories as well as national parks and those types of things that are under the control of the Commonwealth.

Ms O'Connell : One of the direct correlations with the intergovernmental agreement review report that you mentioned is that it specifically said that for each of our priority pests and diseases—and Mr Koval mentioned that we have a list of 40 top plant pests and diseases—we ought to have a national action plan well in advance. These are exotic diseases that are not here. That plan needs to cover what sort of surveillance we would put in place, what sort of diagnostic capability we have, what our prevention strategies are, what our response strategies will be should that pest or disease arrive et cetera. For each of those top priority pests and diseases, we ought to have a really well-formed national action plan. And, significantly, that's what a lot of this funding goes towards.

Senator CHISHOLM: And that comes under the Australian Agriculture and Export Growth Plan?

Ms O'Connell : Yes.

Senator CHISHOLM: I don't know whether this question is for the department or the minister, but the review proposed other funding mechanisms, including a levy on containers and a charge on overseas passenger movements.

Ms O'Connell : That's recommendation 34 in the review report. It gave three different suggestions for better funding the biosecurity system. One of those was a levy per container. The report suggests a levy on incoming shipping containers of $10 per container. It also suggests a $5 levy on incoming air containers et cetera. That is one measure that's in the review report, and that's what's happened in terms of the budget implementation of a biosecurity levy on incoming containers. So that one was implemented in this budget. The two other measures that are mentioned in the review report—

Senator CHISHOLM: Just to clarify, was it only the shipping containers or was it the air containers?

Ms O'Connell : Just the shipping containers. The government made a decision to implement a levy on shipping containers, and, in addition, there's a levy for freight bulk. It's an equivalent levy of $1 a tonne. The shipping container levy is $10.02 per container. The government didn't implement the air container levy. The volume coming in by air container is a lot lower, and it's also a heck of a lot lower risk. The shipping containers et cetera are really the higher risk area from a biosecurity perspective. That's one of the three aspects of the levies in the report. The second suggestion was increasing the passenger movement charge by $5 effective from 1 July 2022. The government hasn't made a call on that at this point, and it's not suggested until 2022 in the review report. And the third is one for states and territories to consider. That's a suggestion around a more widespread implementation of state and territory land based levies. That's up to individual state and territory jurisdictions to make a decision on.

Senator CHISHOLM: Minister, on the air container levy and the increased passenger charge for 2022, what's the status of those from a government point of view?

Senator Ruston: I'll have to take that on notice. I'm certainly aware that we've moved to the container levy on the shipping containers, but I'm unaware of any further discussions in relation to the passenger movement levy or air containers.

Senator CHISHOLM: You wouldn't rule those out?

Senator Ruston: It's not my decision to make, but I'm certainly happy to ask the question and get back to you.

Senator CHISHOLM: Why has the review taken so long to implement? I thought the original plan was for it to be implemented around this time this year.

Ms O'Connell : Not implemented, Senator. The review report was released by ministers in the middle of last year, and, as part of that, there was a sort of a consultation process to put the report out and seek views, and there's been some extensive consultation that we've run. There's been consultation in the states and territories as well. Then, at the last meeting of agriculture ministers, they considered the feedback and also the recommendations in the report, and I'm anticipating that there'll be a finalised response fairly soon. As part of this, this review recommends putting in place a new intergovernmental agreement, so that's been a key component. In the intervening time between releasing the report for comment and consultation and the meeting of ministers, which I think was last month, there's been work on putting together an intergovernmental agreement so that it could be in front of ministers for them to consider and make decisions on. In this report, there are significant recommendations for all governments to consider, so the Australian government and the governments of each of the states and territories need time to consider things like whether or not they will implement levies.

Senator CHISHOLM: There were elements of the review that could be implemented straightaway from a federal government point of view—for instance, the setting up of the industry and community biosecurity committee, which was recommendation 25; creating a position of chief community and environmental biosecurity officer, which was recommendation 9; and establishing a $25 million national biosecurity innovation program, which was recommendation 14. Was any consideration given to implementing those rather than waiting for the states, given that they are solely the responsibility of the federal government?

Ms O'Connell : Yes, and almost immediately on the release of the report in the middle of last year, the National Biosecurity Committee—all the heads of biosecurity from the states and territories and myself—went through the report recommendation by recommendation in order to see which ones can be implemented immediately, and as you suggest some of them can. We have taken action on a number of them but not necessarily the ones that you've suggested. Something like having a $25 million innovation fund requires a decision usually of governments rather than being something departments can agree to and go ahead and implement. But certainly the ones that could be implemented we have either implemented or commenced work on or done a fair bit on. I'm happy to talk through what some of those are. We also worked on preparing an agreed set of conditions or clauses that would form the new intergovernmental agreement between the Commonwealth and all jurisdictions. We've worked on that. We've worked on a biosecurity statement. We've done other things. For example, the suggestions about setting up a committee that would deal with looking at environmental pests—we have done that. We now have an environment and invasives committee as part of the structures within the national biosecurity structures. There are things that we have done and implemented that could be done and implemented. Others required decisions of governments and/or funding decisions.

Senator McCARTHY: Mr Quinlivan, ABARES did admit yesterday that they undertook some economic modelling which was provided to the department, and you yourself said it formed part of a cabinet submission.

Mr Quinlivan : That's right.

Senator McCARTHY: What date did the department receive the ABARES information and when was it provided to the minister's office?

Mr Quinlivan : To provide those precise dates, I think I'd have to take those on notice. The provision of that information to the office would have been as an attachment to a draft cabinet submission, I think. We'll get you those dates.

Senator McCARTHY: What advice exactly was sought from ABARES?

Mr Quinlivan : I'm not sure what the precise commissioning was.

Mr M Thompson : Steve Hatfield-Dodds from ABARES gave a more specific answer last night, I think, but it was really around, in general terms, the cost structures for the live sheep export industry and then some of the economic conditions facing that industry. In broad terms, that's what the material covered.

Senator McCARTHY: On Monday, 21 May this year, the former minister for agriculture Barnaby Joyce claimed that, in response to an incident in July 2016 where 3,000 sheep died at sea from heat stress, he personally called all exporters in the industry. Journalist Brett Worthington has been unable to find any exporters that can remember a call from the minister. Was the independent regulator aware that the former minister personally called exporters back in 2016?

Mr Quinlivan : We answered that very question yesterday. I think, from memory, I said we had no specific knowledge that he had done that but we thought it was very likely that he had done.

Senator McCARTHY: Does the independent regulator support this type of action?

Mr Quinlivan : That would be a matter for a minister to decide how they wished to handle it. I couldn't see anything wrong with giving companies involved some direct feedback. It seemed like a pretty good idea to me.

Senator McCARTHY: Does the department work closely with your WA counterparts with regard to sharing information to improve the regulation of the live export trade?

Mr Quinlivan : I think it would be fair to say we've had an interesting relationship with the WA department over the last month or so. We have cooperated and sought to share information where we could. We have been—I will choose my words carefully here—disappointed by some of the material that the WA department has produced. Their observations about the loading of the Maysora, particularly, were not consistent with the observations of our departmental vet on the vessel, and they were written in a very florid way which we thought did not accurately represent the situation at the time. As you're probably aware, the WA minister has written a few letters indicating that WA is looking at legal options to assert its rights over vessels that have valid Commonwealth export approvals. So we have been sharing information and there has been good informal contact, but there's obviously been some political tension between the WA and Commonwealth governments or ministers which has slightly affected the working relationship. I can describe it that way.

Mr M Thompson : One of the regulatory changes to the animals order that Minister Littleproud made was to amend that to better enable sharing of information between the Commonwealth and the states and territories on animal welfare issues. That's been a positive thing. All of the matters that were raised by WA officers in relation to the Maysora were passed on to our observer vet on that vessel and checked out. So we worked through a checklist to make sure things had been addressed or to check that conditions were as they appeared.

Senator McCARTHY: Thanks, Mr Thompson.

Senator STOKER: I wanted to ask some questions about the Moss review. How was Phillip Moss identified as a potential reviewer?

Mr Quinlivan : After the minister had decided that he would commission this review, he asked me to check with some of my colleagues to see whether we could put together a list of potential reviewers. From memory, I think we came up with four people that we thought had the right kind of experience and credentials to take on a task of this nature. After discussing it with them and checking that they were willing and available to do something like this, we provided their names and CVs to the minister and he made the decision. I think he made the decision after speaking with Philip Moss.

Senator STOKER: When is he due to report?

Mr M Thompson : On 4 August.

Senator STOKER: Can you outline the scope of his review. What exactly is he looking into?

Mr M Thompson : His review at the headline level is into the department's regulatory capability and culture, specifically focused on live animal exports and the regulatory activity associated with live animal exports. The purpose of the review is to assure government and the Australian public that exporters meet our high animal welfare standards and to identify any regulatory and investigative improvements that can be made by the department. Going to his terms of reference, he will assess and make recommendations on: the powers that we have available to us as a regulator and how effective they are; ensuring compliance and how effectively we use those powers; how we assess and determine regulatory conditions appropriate to achieve ASEL and animal welfare standards; the processes by which we investigate reportable mortality events and complaints; the effectiveness of reporting obligations under the relevant legislation; the way in which the department's structured to do its work; the regulatory culture that we have and how we maintain that; the skills, capabilities and systems that we have in place to do our job properly; the effectiveness of our interaction with state and territory authorities to ensure state and territory cooperation; community expectations in relation to animal welfare matters; and any other related matter.

Senator STOKER: Which nations are Australia's main competitors in the Middle Eastern live sheep export market?

Mr M Thompson : I think Mr Quinlivan referred before to the growth in sheep herds in the Horn of Africa. Certainly countries in that part of the world but also South Africa would be competitors.

Mr Quinlivan : And in Eastern Europe.

Senator STOKER: What share of the market is supplied by Australian exporters?

Mr M Thompson : In Qatar and Kuwait, roughly 60 per cent, is my understanding, of live sheep, I think.

Senator BROCKMAN: Can I just interrupt there quickly. I've heard South America mentioned a couple of times. Is that real or is that—

Mr Quinlivan : South America is one of our main competitors in parts of the beef—

Senator BROCKMAN: I understand.

Mr Quinlivan : Not so much lamb and mutton.

Senator STOKER: For the animals that are being exported from, for instance, the South African market into the Middle East, particularly in the markets you've identified, what are the animal welfare standards that are imposed for those animals?

Mr M Thompson : I don't think that's known to us in detail, but our working understanding is that Australia applies, in particular through the Exporter Supply Chain Assurance System, which reaches into countries to ensure animal welfare outcomes when the livestock are delivered there, standards that are the highest of anywhere in the world.

Senator STOKER: And they exceed those that are imposed by, for instance, our African competitors?

Mr M Thompson : That's our understanding, but I can't confirm that in detail and it would depend on which country you were talking about.

CHAIR: Is there much of a spectrum on that—for example, from the worst standards or a complete absence of standards to the opposite point—around the world?

Mr M Thompson : I suspect there is a spectrum. You would expect probably different standards in the Horn countries compared with South Africa and Eastern Europe.

CHAIR: I've seen footage once—I won't name the country—where they were pulling pigs out of the back of a truck with hooks, directly into them, for slaughter. I think a point that needs to be well made is just how far ahead the rest of the world we are around animal welfare and following them along the supply chain all the way to slaughter.

Senator STOKER: And I guess that's my point. I wanted to know how the standards that were in place for Australia as at May to November 2017 would compare to those that were in place for sheep that have been exported from those competitor countries? To the extent that you're able, I'd be interested in your answer.

Mr M Thompson : My general comment before was more around ESCAS and that end-of-voyage situation. Again, Australia does consider itself to have high animal welfare standards at every point of the export supply chain, but, as we've said on a number of occasions today, our assurance around those things, particularly for the voyage portion of the chain, is something that's been tested by the footage that we've seen. So we're looking to provide ourselves, and the Australian community, frankly, with greater assurance around those standards being met from now on.

Senator STOKER: How do the standards, then, that have been recommended by Dr McCarthy compare to those that are in place from those other countries? I guess it's an extension of the answer you've just given.

Mr M Thompson : It's an extension of your question as well, Senator! Again, we're not able to talk with great confidence or a lot of specificity about the standards that other countries set. We certainly have characterised—and I said this in the opening statement—the shift that's recommended in Dr McCarthy's review from a focus in the heat-stress risk assessment and in the regulatory model that we take for avoiding mortality to avoiding heat stress as a very fundamental shift and something which is much more assertively reaching into animal welfare.

Senator STOKER: I'll put a statement to you and you tell me if it's right or wrong. If the live sheep export industry were to cease in Australia, could you expect that the market in the Middle East would then be supplied by nations that have lower animal welfare standards than Australia does?

Mr M Thompson : We certainly expect that Gulf countries that we're currently exporting to, if our exports were to cease, would seek their live sheep from other markets. We know broadly where those markets are, and we've touched on those already. Our sense is that the welfare standards in those countries are lower than in Australia—in many of those countries; not all of them, possibly. But we don't have clear evidence of that.

Senator Ruston: Senator Stoker, the other thing that's probably worth mentioning is it's a little bit hard to tell what the shift would be from live exports to actually boxed and chilled, into that market. We're not quite sure, were we taking 60 per cent out of the live exports out of market, whether it would totally recorrect with live exports from elsewhere or whether there would be a change in the behaviour, and the buying behaviour. So it's a little bit hard to tell.

Mr M Thompson : That's a good point.

CHAIR: Just elaborating on that, let's go back 15 years in the live beef cattle exports: had we not entered that marketplace—particularly in some markets in what I might refer to as quasi-developing nations in the Asia region—there seems to me to be no question that the welfare of animals from other destinations into that market, including methods of slaughter and handling after arrival, would be demonstrably worse than what happens with us, with our prevailing ESCAS systems and all the systems that are in place. Is that a fair and reasonable statement?

Senator Ruston: Certainly one of the things that this government prides itself on and previous governments have prided themselves on is the amount of investment that we've made into capability-building into a lot of these countries. You've only got to look at the kind of investment we've made in Vietnam as an example, not just through our capacity building through the federal government but through MLA—

CHAIR: And are continuing to make.

Senator Ruston: Absolutely. And so we're now seeing the animal welfare standards increase significantly in these countries that previously hadn't had them—by us investing not just in telling them how to do it but also actually teaching them and showing them, not just about the animal welfare benefits but the broader benefits in terms of the economics of the animal they're getting. There's been a lot of capacity-building by Australia into countries where we export to, particularly in Asia over the last few years, that does support very much the argument that you make that Australia is leading.

CHAIR: Wouldn't you agree that the Australian people need to think seriously about this? There's a hypocrisy in groups who resist—the current anomaly aside—the humane movement, a surveilled, complete supply chain all the way through to slaughter and, mind you, a better product from the beginning, in terms of how we deal with food security. I know the little piggy doesn't want to go to market, but if you've got to go to market you're better off being a little Australian piggy going to market than you are coming from some other, darker destinations around the world. Is that not fair?

Senator Ruston: Indeed. But I think there is an expectation by the Australian public that any animal that has been in the control of Australia is going to be treated and handled and managed in a particular way. The footage that we have seen in recent times has damaged that situation and, certainly, the thing that this government is absolutely determined to do is to rectify that, to put in place the necessary steps and procedures, regulations, penalties and punishments et cetera that are commensurate with what the expectation of the Australian public is about how animals are being handled.

CHAIR: But I think there's a bigger message here to Australian people who have witnessed this and, like everybody here, found it abhorrent—to then default immediately to: 'we'll stop exporting animals from Australia to these destinations'. If they think for one second, the welfare of animals who will make that journey into those marketplaces is going to be far worse. Is that not a fair statement? Not across everything; you've mentioned that there are countries who probably have standards as high as ours, but they're not in the bulk trade.

Senator Ruston: Absolutely. But it is incumbent on us as government and on the department as the regulator to restore the confidence in the Australian public about what's going on.

CHAIR: There's no question.

Senator Ruston: I think the events that we've witnessed over the last few weeks have really knocked everybody around. I can't think of anybody who has been more shocked, more damaged and more angered by what we've seen than our Australian farmers.

CHAIR: Agreed.

Senator Ruston: I think there was a level of expectation, even in their minds, that when their animals got onto those ships they'd be looked after a whole heap better than they obviously have been. So we've got a big job ahead of us, but part of that job is making sure that we give confidence back to the Australian public that we're handling this in a methodical, systematic, responsible and scientifically based way—that we're not going to have some knee-jerk reaction to what was disgusting, disgusting footage. But, equally, we saw what happened in the live export situation with cattle. Whilst we had that immediate knee-jerk reaction, nobody actually thought to consider the hundreds of thousands of cattle that died of starvation because there just wasn't the food—

CHAIR: Died in the paddock.

Senator Ruston: to feed them. That's why we are being absolutely thorough and methodical about how we're approaching this, and we will make sure that we do it in a way that everybody's interests are considered, including the interests of the animals.

Senator STOKER: Is there time for me to turn to another topic, Chair?

CHAIR: Of course there is. I'd describe it as ample time.

Senator STOKER: Thank you.

Senator Ruston: And she's so polite the way she asks, too.

CHAIR: She's an old Crown prosecutor; don't—

Senator Ruston: Don't mess with her?

CHAIR: Don't cross her. She can change in a heartbeat!

Senator STOKER: And, with all that warning, I'd like to talk about cut flowers!

Senator Ruston: I have to declare an interest!

CHAIR: I've partially misled you. We're four minutes away from the break.

Senator STOKER: I don't think these are going to take long.

Ms O'Connell : To deal with cut flowers we've made recent changes to conditions, yes.

Senator STOKER: Yes. I wondered if you could provide the committee with an outline of the enhanced import conditions for cut flowers.

Ms O'Connell : Yes, certainly. I'll ask Dr Marion Healy to address that.

Dr Healy : Yes, we have recently made some changes to the import conditions for cut flowers. These largely arose from the changes that have occurred over the last several decades around the quantity of cut flowers coming into Australia, as well as the diversity of countries from which they're coming.

Cut flowers arriving under the previous conditions, if they were contaminated with insects, were required to be fumigated on shore. The result of that arrangement, particularly with the increase in the number of flowers and in the variety of countries, meant that we had a higher so-called approach rate—a higher number of insects coming to our shores. Our general philosophy is to keep insect contamination offshore, and therefore the changes in the conditions that we've implemented are designed to keep the insects offshore and for treatments to happen within the country of origin. There are a range of options for the importation of cut flowers, whether it be a systems approach or a treatment in the country of origin and a certification by the country of origin that the Australian conditions have been met.

Senator STOKER: Are there checks in place to ensure that those checks, given that they are being performed offshore, are being completed in the way that's prescribed?

Dr Healy : The answer is yes, because the flowers are inspected on arrival. So we have quite a good picture of the extent to which the revised requirements are being implemented. It's quite fair to say that we're still in a transition period, and a number of countries are still refining, if you like, the procedures that they're going to use to ensure that over time the flowers will arrive pest free—hopefully, pest free, or at least with a low pest prevalence. In some countries we've seen quite significant changes. In other countries the changes are happening more slowly, and we have an active program of interaction with those countries to help them transition.

Senator STOKER: How was the increased risk identified?

Dr Healy : Cut flowers are often contaminated with thrips and mites and aphids, and a number of species within those general groupings are quarantined pests for Australia and are hazardous. For example, we have recently done a comprehensive analysis of thrips and have identified particular thrips and the viruses that those thrips carry as being a risk to the Australian horticulture industry. It's that kind of scientific analysis.

Ms O'Connell : Just to touch on the volumes that Dr Healy mentioned to begin with: over the last decade, what started off as a small trade in the import of cut flowers has tripled—the volume of consignments has tripled over the last decade. During that time the pest load on imported cut flowers has increased more than 10-fold. It's that increase in volume plus the increasing pest prevalence that has led us to say that we need to do this differently; we have to make some changes. They're the sorts of changes that Marion outlined.

Senator STOKER: Finally, when do you expect the remaining exporting countries to get to the point where they are compliant with the new rules?

Dr Healy : We have offered a transition period until the end of this year, but we are wanting to see steady and incremental improvement in the compliance rate and reduction in the number of insects that are arriving. So we are monitoring very closely. For a couple of countries, if we don't see that steady improvement then we will look to take other action.

Ms O'Connell : And we are seeing a varied rate of improvement, which is probably expected, and giving plenty of feedback to those countries in terms of what we're seeing at our end. That feedback is very clear and transparent so that they can continue to make improvements and hopefully be in a position to meet the new conditions. But if they can't, we'll have to consider other action.

Senator STOKER: How many countries are in that category?

Dr Healy : There are just a few—three or four countries—that we're monitoring particularly closely.

Senator COLBECK: Is there a list of countries, and are the relationships bilateral relationships? Or do we just have an import protocol that applies to everyone, and everyone has to meet it?

Dr Healy : We have a general import protocol that everyone has to meet, and it's in the goods determination now.

Senator COLBECK: Can you give us a list, on notice, of the countries that are sending?

Dr Healy : My colleague may be able to give you that off the top off her head. Some are complying, and some aren't.

Ms Ransom : I can't off the top of my head, but we have identified species of flowers that we will let in. There are some that we don't. And we have general conditions in the goods determination and lists that are published on our website of the flower species, the country of origin and the conditions under which they can be imported.

Senator COLBECK: So there's still a protocol around effectively neutralising the growth capacity of—

Ms Ransom : Yes.

Ms O'Connell : Devitalisation.

Senator COLBECK: Devitalisation. I knew someone would know the word. That's ruined it all for me!

CHAIR: You nearly impressed me!

Senator Ruston: It's why the leaves fall off all the flowers you buy your wife. If you buy them from overseas, the leaves fall off.

Ms O'Connell : Because they've been devitalised. It's very important to do.

Senator COLBECK: No, I get the importance of it.

CHAIR: What an exciting committee: exploding bees, angry ants, new ways to look at beef consumption!

Ms Ransom : Not all flower species need to be devitalised—only those that have the potential to be propagated.

CHAIR: How about you two take this conversation offline; I'm not sure that there's a national interest here!

Senator COLBECK: Oh, there is!

Proceedings suspended from 20 : 49 to 21 : 04

CHAIR: We'll now resume this budget estimates for 2018-19 for the Senate Rural and Regional Affairs and Transport Legislation Committee.

Senator COLBECK: I just want to go back to the expanded budget measures and the cost-recovery element of the announcement in the budget.

Mr Quinlivan : I think our finance people have just left, Senator.

Senator COLBECK: Really?

Mr Quinlivan : Yes. We thought we'd exhausted the cost-recovery discussions in corporate. They've been here all day, but I think they just took off.

Senator COLBECK: Can anyone tell me who comprises the export industry consultative committee?

CHAIR: Just before we start: I know that we and Labor have got general matters, but there's some flexibility. Senator Rhiannon, if you look at outcome 2, are there any agencies that you won't want? We'll deal with our own position on it, but are there any agencies that you don't want?

Senator RHIANNON: I can tell you—

CHAIR: If it's quick—

Senator RHIANNON: I want to continue questions about some of the current issues around live exports and the McCarthy report. I then have questions about greyhound exports; donkey exports; export registered abattoirs; and quarantine, enhancing inspection and quarantine cooperation shown.

CHAIR: Knowing your experience, point out to me the ones that you wouldn't want to see leave.

Senator RHIANNON: That's why I read out the titles. I constantly get caught out with regard to asking. I don't want to keep staff here unnecessarily.

CHAIR: We'll leave it—

Mr Quinlivan : I might be able to help here: I think all but the last one are in what we call exports division, but I didn't quite catch the last one—you said quarantine inspection and—

Senator RHIANNON: It's to do with donkey issues. Again, if the people aren't here to answer a question, I'll put them on—

Mr Quinlivan : No, it was the one after that I didn't catch.

Senator RHIANNON: That was the China one: inspection and quarantine cooperation actually relates to donkeys going to China.

CHAIR: That's everybody?

Mr Quinlivan : No, that's just exports.

CHAIR: So can you take us down the line now with regard to Senator Rhiannon's needs.

Mr Quinlivan : Answering those questions, I don't think we need biosecurity operations, biosecurity plant compliance or biosecurity policy, and a question mark about biosecurity animal.

CHAIR: If it's in question, we'll need to leave it.

Mr Quinlivan : So just those two.

CHAIR: And biosecurity animal relates to the donkeys?

Mr Quinlivan : It may do—that's why I had a question mark.

CHAIR: Do we have a donkey expert that we might be able to keep back?

Mr Quinlivan : I think we'll be fine with those questions.

CHAIR: So, then, does it follow that we can quite safely excuse—subject to my colleagues to the right—biosecurity operations, biosecurity animal, biosecurity plant, and biosecurity policy and implementation? That was directed to you, sorry, Mr Secretary.

Mr Quinlivan : Yes, that's right.

CHAIR: They're the four. Does anyone have anything before they go?

Senator KETTER: Chair, I was just going to ask a couple of follow-up questions on the response from FIAC—the Forestry Industry Advisory Council—if I could?

CHAIR: Is forestry in any of those?

Senator KETTER: I'm happy to just address them to the secretary?

CHAIR: Yes, alright. So you're fine. Let's deal with the four groups that are now released.

Mr Quinlivan : I'm not sure what Senator Ketter has, but I don't think either I or they have that document.

Senator KETTER: I thought it came from the group.

CHAIR: Could you show the secretary those answers and he might be able to guide us there and we could keep them? It's about the forestry stakeholders.

Mr Quinlivan : I think between the minister and I we can probably manage that.

CHAIR: So at that point, without further ado, can we express our that thanks to biosecurity operations?

Senator COLBECK: I was going to ask some questions about the cost recovery processes for the export fees and charges. Those people have gone. So that was in trade and market access?

Mr Quinlivan : Corporate, actually. That was yesterday. They have just been here today in case they got a question.

Senator COLBECK: So there's no-one here to help me with that? What about trade and market access with the technical officers that are part of the budget measure. They're still here?

Mr M Thompson : Yes

Senator COLBECK: I can see someone waving at us from the back of the room.

Mr Quinlivan : We can manage those.

CHAIR: Without the four?

Mr Quinlivan : Yes, that's right.

Senator COLBECK: The other questions I'll put to you, secretary, and they can take them on notice.

Mr Quinlivan : No, we've got other people here.

Senator COLBECK: I have some others. I'll just direct them to you and you can take them on notice.

CHAIR: Our thanks to biosecurity operations, biosecurity animal, biosecurity plant, biosecurity policy and implementation. We had kept back trade and market access. Are we done there?

Senator COLBECK: Can they hang around?

CHAIR: You want them to hang around? I apologise to the officers at the table. Let's bring trade and market access up and see if Senator Colbeck can exhaust himself with them.

Senator COLBECK: If you don't have the answer I'm happy for it to go on notice. Who currently comprises the industry consultative committee that have been written to by the minister on the proposed export fees and charges reform?

Mr Quinlivan : Well, there are quite a number of those export committees. There is one for the red meat—

Senator COLBECK: So there are five or six of them?

Mr Quinlivan : Yes.

Senator COLBECK: So that structure hasn't changed significantly?

Mr Quinlivan : No.

Senator COLBECK: And I can find them on a website somewhere?

Mr Quinlivan : We can take it on notice. We can provide that.

Senator COLBECK: I just wanted to know who they were and what their structure was. The additional 34 technical and food safety and market analysis experts coming in through the process—will they be housed within the department?

Mr Quinlivan : That's right.

Senator COLBECK: And they'll provide additional capacity to work on bilateral market access arrangements?

Mr Quinlivan : They'll do all manner of things to support maintenance of existing trade and enhancement of that trade, supporting our offshore people. As you know, in a transactional trade world, sometimes if you want to get better market access for your exports you need to provide something on the import side. So some of them will be doing import risk analyses and those kinds of things.

Senator COLBECK: So import risk assessments as well. That brings me to my next question. A commodity market like China, which is very much reciprocal—

Mr Quinlivan : Exactly. Very transactional.

Senator COLBECK: We're still on four plus four, is it?

Mr Quinlivan : Two by two at present.

Senator COLBECK: And the process for determining our priorities are still industry-relationship based?

Mr Quinlivan : That's largely right, particularly on the horticulture side. For us it's apples and blueberries. I forget precisely what we're doing for China, but Louise may know.

Ms Van Meurs : I think stone fruit, but I'd have to take it on notice.

Senator COLBECK: But to get one we give one?

Mr Quinlivan : More or less, after due process.

Senator COLBECK: I understand. Are we provided with a proportion of the passenger movement charge at this point for our processes?

Mr Quinlivan : No, not really. The passenger movement charge is a general tax and there is a very loose relationship between that and appropriations to the home affairs department; in fact, so loose that it's not really a relationship any more.

Senator COLBECK: I have a sensitivity to that from another life. So the process of consultation will determine what the triggers are for charging the three dot points on the second page of the department's letter on 9 May from Jason Lucas? What's going to be charged for, when and how, hasn't been finally determined yet, but will be in consultation with industry?

Mr Quinlivan : The general principles and the general activities that the government considers are potentially cost recoverable have been settled. We've got a few months to consult with all of those exports and then we'll prepare some advice for the government and they'll make a final judgement.

Senator COLBECK: So those principles are the three listed in this document?

Mr Quinlivan : Yes.

Senator COLBECK: Do we know what the triggers for those are? If someone's got a consignment that's going in, they have got an obvious problem with it, I think that would probably be okay, but if there's some other issue going on within the market that—

Mr Quinlivan : That's exactly the question we'll have to sort out with the industry groups, but the general principle is that our people offshore spend a lot of time working on those kind of problems. The firms that do all they can to make sure that those problems don't arise are effectively being penalised by those that don't make that effort.

Senator COLBECK: Because it limits the available resources?

Mr Quinlivan : That's right.

Senator COLBECK: My next question is, who's likely to pay? It goes back to that last point. Is there an expectation by industry of who's likely to cop the most fees?

Mr Quinlivan : No, I think it's too early to say. We've had a couple of fairly abstract discussions with the various industry groups that you mentioned, but we'll soon be getting down to quite a lot of detail.

Senator COLBECK: So part of that process is a consideration of what is actually a legitimate cost to government versus what is a legitimate cost to business?

Mr Quinlivan : Yes. The general principles have been agreed, but they're subject to coming back to government with a proposition that accepts—

CHAIR: I understand Senator Moore has an inquiry of trade and market access?

Senator MOORE: I want to get an idea about the role that the department's playing in the SDG agenda, the responsibilities you have for a large number of the goals under the current government response and also, within that frame, the fact that it's domestic as well international.

Mr M Thompson : That's right. I might start to answer this and my colleagues might add to it. As you point out, we lead on two of the goals: SDG 2 on food security and SDG 6 on water.

Senator MOORE: And you're involved in 12, 14 and 15 as well?

Mr M Thompson : We're involved with 12, 13, 14, 15 and 17, remarkably. On most of those we partner with the Department of the Environment and Energy, as you know, and we work closely with that department in their construction of material for Australia's voluntary national report, which I think is due in July of this year. That includes participation with them in some of the stakeholder forums. They held a larger stakeholder session, I think, a round-table, a little while back now, about six months or so. We participated in that and also invited some of the stakeholders we have in relation to our goals to participate in that discussion as well.

Senator MOORE: What was the model your department used to get information? My understanding was that DFAT is coordinating the whole approach but it's partnering with PM&C.

Mr M Thompson : That's right.

Senator MOORE: So for domestic issues PM&C were in charge, but international issues is DFAT.

Mr M Thompson : Yes.

Senator MOORE: Each department who had responsibility was responsible for gathering information for the VNR themselves.

Mr M Thompson : Yes.

Senator MOORE: You said you partnered with Environment, because they were well down the track in this field—they were working in the space long before. What did your department do, particularly on the 2 and 6, for which you have primarily responsibility?

Mr M Thompson : As you know, one of the critical steps in providing material for the voluntary national report is around data collection and selection of the performance indicators that support the achievement of the goal. Most of the focus has been on the domestic side and, where relevant, our contribution to international efforts to meet those goals. For example, in water we would point to the MOUs we have with other countries, including India and China, formal arrangements we have with those countries to support their efforts in better water management. Likewise with goal 2 around food security, we have pointed to our engagement with the Food and Agriculture Organization of the UN. We have worked across the organisation. For the water goal, the preparation of that material has been primarily carried by our water division, not surprisingly.

Senator MOORE: Food security?

Mr M Thompson : The food security one has been a cross-cutting one, which I think has been let out of our trade and market access division and is also engaged with our relevant portfolio bodies.

Senator MOORE: Can you tell me why it's in trade and market access? I don't know your department well, but in other departments it's a whole of corporate area that takes the leadership. They are the people I ask questions to. Why in your department is it trade and market access?

Mr M Thompson : Trade and market access is like a central coordinating division for all of our trade matters, but also engagement with multilateral organisations and our bilateral relationships. So our relationship with the UN is run out of there, and because of that it falls to them to coordinate.

Senator MOORE: That makes sense. This can go on notice: I'm wanting to know what information you're using within your department to raise awareness of the SDG agenda. It is my concern there is still a lack of knowledge and awareness about this whole thing, even though we signed in 2016. You can take this on notice in terms of internal ways of getting awareness across such a very large department, and secondly in terms of getting your stakeholders involved. There are a whole range of stakeholders who could have input in this process. I would like to know what you're doing to raise awareness. I went to your website and it's not there on the website. It certainly wasn't in your annual report last year. Speaking to Environment, they've now got a process of putting their corporate plan and also their publications within the SDG framework. Is that something that you've considered?

Mr M Thompson : It's not something we've considered as an executive at this stage. I think for Environment, to contrast and to be fair to them, they have so many goals that are leaning on it. It weaves their portfolio story together much more comprehensively than ours. I think we're probably lagging a little bit in terms of raising awareness within the department and the portfolio bodies et cetera around SDGs. I'm pretty confident, though, that finalising the voluntary national report and publishing that will draw attention to it, and I'm hoping it will be a bit of a headland for people to gather around.

Senator MOORE: There's a website which has a range of areas underneath the heading 'environment and energy'—but when you read through it, it's got your department listed as well—which are the case studies that people have brought forward, and they're extraordinarily valuable. There are over 60 that organisations have brought forward, about how they're using the SDG framework for their own process, many in water. Who owns that website?

Mr M Thompson : As I understand it, it's the Department of Environment and Energy. I could confirm that, but I'm pretty sure it's them.

Senator MOORE: You've obviously contributed a lot to it.

Mr M Thompson : Yes, I think we have.

Senator MOORE: Particularly in water—some in food—but there are at least 10 or 11 that are water projects that are on that list. I'll check how it's going to operate and who's going to look after it with Environment.

Mr M Thompson : There is a lot of interest and contribution to water out of DFAT as well, through the Australian Water Partnership.

Senator MOORE: And the WASH areas as well.

Mr M Thompson : That's right.

Senator MOORE: I'm also interested to see what resourcing this is taking from your department. Do you have any idea of how much work is allocated around the SDG development of the voluntary response? And what's going to happen after that's actually made public? Because people have been focusing on doing the first voluntary return, but it's really after that that I think the real work will happen.

Ms van Meurs : Because it's such a broad range of issues across the department—there is a team within the department, Trade and Market Access—what we do is we're asking, across the various divisions of the department, various questions and for input into the report. So we draw on staff across agriculture policy, sustainable agriculture, fisheries, forestry, farm support, water division and ABARES—they're the key ones—and we coordinate the inputs once we get the questions and answers back from those divisions.

Senator MOORE: So there's no particular dedicated ASL?

Ms van Meurs : I'd have to take that on notice.

Senator MOORE: Take that on notice—it would be difficult.

Ms van Meurs : It would be a small proportion of an FTE within the Trade and Market Access division. The only other thing I would add, too, is that we've only just completed a communications plan to look at raising awareness, within the department and outside with the external stakeholders as well.

Senator MOORE: Is that into the 2017-2018 year?

Ms van Meurs : Yes.

Senator MOORE: Is that going to extend to your annual report?

Ms van Meurs : I'd have to take that on notice.

Senator MOORE: Take that on notice, yes. Can I get some idea about whether you've prepared any information for the minister in terms of a briefing about what the department's done? Because I'm unaware of any public statements that your ministers have made referencing the SDGs. If you can take that on notice—particularly because you have such a primary responsibility for two of the poorer elements, domestically and internationally—just to see whether there has been any engagement at the ministerial level on the process. That would be very useful.

Senator Ruston: Senator Moore, you can be assured that I've been on the public record on a number of occasions in relation to our obligations with SDGs.

Senator MOORE: Can we find out?

Senator Ruston: Certainly, I'm more than happy to—

Senator MOORE: Not now; but I haven't heard it in the parliament, Minister.

Senator Ruston: Certainly I have been.

Senator MOORE: With regard to the other processes, particularly with your international links—I don't know if anyone at the table is one of the people who have the international discussions—what we're finding is that other countries are already very much entrenched in the SDG framework, and they're using this framework in their discussions. I'm wanting to check, is that something you're finding in your experience? It certainly was said by Environment that it's happening internationally quite clearly there, and Health. That's it.

Ms van Meurs : Chair, I just wondered if I could complete a question that Senator Colbeck asked.

CHAIR: As long as you promise it won't promote a question from him in return! If you can give me that guarantee, you go ahead.

Ms van Meurs : He asked what the priorities were for China for import risk assessments—and I'll do this very quickly—it's jujube and cherries.

CHAIR: Thank you. Run, Forrest, run! Thank you for your attendance and preparation; we know the effort that goes in. We wish you safe travel back home.

Senator RHIANNON: The minister stated that it would implement all of the recommendations from the McCarthy review. I want to explore one of those to understand how this is going to play out. Dr McCarthy recommended changes to the HotStuff heat stress risk assessment. I understand that was to ensure it was based on animal welfare rather than mortality. We've had some discussion about that. This is where I get into the figures. He recommended a change from a two per cent probability of five per cent mortality to a two per cent probability of five per cent heat stress score 3. Does the department plan on making those changes?

Mr M Thompson : Could you take us to which recommendation you're referring to there?

Senator RHIANNON: Recommendations four and five deal with the heat issue. There's the query about what you're doing.

Mr M Thompson : The department's response to that—and I think the minister has made comments to this effect as well—is that we support those recommendations, subject to testing and consultation. That goes to the comments that we've made a number of times about doing some further work and seeking some further views from a range of stakeholders on those recommendations and how we could implement them, their veracity and whether there are other ways to achieve that outcome.

Senator RHIANNON: When you say it is subject to testing and consultation, these days those words ring alarm bells. We need to explore it more at this late hour because of everything that's gone down. I did note that the McCarthy review stated that these changes to the heat stress risk assessment could occur—and these are the words in the review—'reasonably quickly and should be operational for this northern hemisphere summer or at a minimum by 1 July 2018.' Reasonably quickly—that's clear language. Your view that it is subject to testing and consultation could be described as kicking it into the long grass, but I hope I'm wrong. The department has responded to this recommendation. I understand you've also said that it will undertake further consultation and testing on the proposed model over the next three months. Is that accurate—over the next three months?

Mr Quinlivan : That's our plan. I think I said earlier today that we were expecting to discuss that process with the minister next week. We were not able to do that this week because our paths didn't cross, but it would be a priority for next week.

Senator RHIANNON: Is it accurate to say that what you mean by that is you're suggesting a process over three months, but you'll take that to the minister and see if he approves?

Mr Quinlivan : I'll discuss with him next week what process we'll follow. We might ask for comment on these particular recommendations, and the analysis supporting them, in the McCarthy report with some questions of our own and have a public consultation process on that. I mentioned earlier that the intention was that, after that process, we would need to form a view on our preferred heat stress model and do a regulation impact statement on that and then it would be adopted.

Senator RHIANNON: So do I take from that answer that it could be three months, longer than three months or shorter than three months depending on your meeting with the minister? Is that fair?

Mr Quinlivan : There's the discussion with the minister and also our own scope thinking on how long we think it needs to take. Any process that involves a public consultation is six weeks or two months before you do any work. So it certainly won't be done in less than three months. That would not be possible.

Senator RHIANNON: So it could be three months, or it could be more than three months?

Mr Quinlivan : Yes, but hopefully not too much longer than that.

Senator RHIANNON: Why does the department believe that this further delay is necessary, when Dr McCarthy believed quite clearly that this could be implemented reasonably quickly and before 1 July this year?

Mr Quinlivan : Because we felt that the implications of immediate acceptance of these particular recommendations were so significant it would be unreasonable for us as a regulator to adopt them without giving all of the affected parties, interest groups and so on an opportunity to have a say about them before we made a decision.

Senator RHIANNON: Therefore, when it's been reported that the minister wants these recommendations fully implemented, that may not be correct?

Mr Quinlivan : I think he was saying that he wants a strong heat stress risk assessment model implemented. He also—I think in his press release, although I don't have it in front of me—talked about further work to be done on that. I think he was clearly referencing the need to work out how that was going to be done in practice. What we're now talking about is the process that will resolve that question of what we're actually going to do in practice. Dr McCarthy's work generally was quite scientifically robust and has been supported by the community of people who have expertise in this area. But his panting score model and so on is new and has not been discussed with many of the interested parties, so we felt it was necessary to have a broader discussion with that.

Senator RHIANNON: I missed that bit. Which did you say hadn't been discussed much?

Mr Quinlivan : His panting score model. I'll get one of the people with more expertise than me to take you through it. But it's a crucial part of his heat stress model. It hasn't really been very widely discussed. I'm not saying there's anything wrong with it.

Senator RHIANNON: Is this about the formula?

Mr Quinlivan : No, it's the actual decision-making model.

Ms Freeman : It's basically the significance of shifting to a model that assesses risk on heat stress rather than mortality. That's actually a very big deal. How you might do that is very important. In the short time Dr McCarthy had, he didn't have time to consult and test his analysis. What Mr Quinlivan has been talking about is us developing an arrangement to do just that. I'll pass to Dr Clegg, and she can talk about what that actually means in reality about what he was trying to measure.

Dr Clegg : On page 19 of his report, he has provided an amalgamation of heat stress indicators so that there's a more systematic way of assessing the heat stress that sheep might be suffering from and relating it to a panting score. The current ASEL has just three standards. Dr McCarthy was pointing out that it needed to be standardised across all exporters, rather than exporters—or vets in particular—each having their own individual way of providing that assessment. They also did that for heat stress. Some AAVs use their own method for describing the level of heat stress. In the interests of having more consistent data and assessing the problem more reliably, I guess, he has developed this amalgamation table. Our intention is to implement that now, but it will also be something that the ASEL committee will discuss in its review. Again, that will give it greater airing amongst relevant experts.

The department is implementing recommendations 1 and 2 straightaway. I think recommendations 3, 4 and 5 are all about the heat stress risk assessment modification, which we're putting out for greater consultation. Recommendation 6 is the panting score table, which we are going to implement. Recommendations 7 and 8 are about a future model of the risk assessment. That's for 2019, so that's okay. The pen air turnover recommendations—Nos 9, 10 and 11—are all going to be implemented now. We're organising with both the Australian Maritime Safety Authority and LiveCorp, which was the research industry R&D body, to work out how to audit the ships and provide the verified information on these PAT scores through to the model developer.

Recommendation 12 was on the curfew adjustments for stocking density. We're developing an order to implement that. Recommendation 13 was about compliant loading of animals and we're also working on that now. Dr McCarthy recommended that the weight of animals be standardised a little bit better than we are doing. Some animals may be curfewed; some may not. If animals are curfewed—that is, they haven't had food and water for, say, 12 hours—they'll obviously be lighter than if they had been fed and watered. So he wants an account made of that so that into the heat stress model goes the actual weight of the animal to try to avoid any underallocation of space.

We're implementing recommendation 14. That's the observation that he makes that sawdust, while not essential for all voyages, should be a component in all sheep export consignments so that if the sheep pad on which the animals are lying becomes too wet there are ways of addressing it through the application of sawdust should it be required. Recommendation 15 is about future research. Recommendation 16 is also something that we will refer to the Australian Standards for the Export of Livestock review, the ASEL review. Recommendation 17 is about animal carcasses. We've been in contact with AMSA about those particular recommendations. Recommendation 18 is on dropping the reportable level from two per cent to one per cent. We're doing that straightaway. Recommendation 19, which is about daily reporting, we're implementing. That links into recommendation 6 and that table. Those two go together.

Recommendation 20 is on automated watering systems. The Awassi Express was a sheep carrier that actually didn't have automatic watering on four or six of its decks that were only for sheep. It had automatic watering for cattle but not for sheep. That's actually been addressed now and we're making it a requirement in our new legislation that exporters can only use export vessels that have automatic watering if they're going to travel to the Middle East. Recommendation 21 we're implementing straight away—to improve the information in exporters' heat stress management plans. Recommendation 22 we've been carrying out ever since the footage went to air, which is to make Kuwait the first destination point if ships are travelling to the Gulf and Kuwait is a destination port on that voyage.

Recommendation 23 is something a little bit for the future and it involves the Australian Maritime Safety Authority. Dr McCarthy notes himself that, by 2019, there should be automated continuous environmental monitoring equipment installed. We don't have any objection to that. So we're doing what we can, as soon as we can—apart from the ones that require consultation or are set for the future.

Senator RHIANNON: It's recommendations 4, 5 and 6—the ones about the heat stress—that are the controversial ones.

Dr Clegg : It's 3, 4 and 5, I think. No. 6 we can do because that's that table.

Senator RHIANNON: Thank you. Sorry about that. With regard to that, in some of the reports it has been suggested—I think the minister might have said this, too—that the model could result in stocking density reductions of up to 79 per cent. That's a reduction of 79 per cent for high-risk voyages. Isn't that where the controversy lies, because a reduction to that level would make it uneconomical? That's why there's growing concern and that is in fact why you're hesitant on these recommendations.

Ms Freeman : I suspect that it would be a reduction of a far lower number than 79 per cent that would have an impact—but that is not a matter for us. The point is, I think, to reiterate what Mr Quinlivan said, that it's actually an untested approach. The reality is that it actually would reduce the numbers by a very significant amount and that needs to be tested.

Senator RHIANNON: So are you—

CHAIR: Thank you, Senator. That's your time. Senator McCarthy.

Senator McCARTHY: I want to go over the McCarthy review. I just have a couple of questions. The review was delayed by a day—

Ms Freeman : Is that the release?

Mr M Thompson : Is that the announcement?

Senator McCARTHY: The announcement of the McCarthy review was delayed by a day. Why was that?

Ms Freeman : It was a decision of government.

Senator McCARTHY: And stakeholders had been asked to come to Canberra for the announcement on Wednesday morning?

Ms Freeman : Yes. They were notified as soon as we were made aware of the time change.

Senator McCARTHY: For a lock-up briefing—but it was cancelled late Tuesday afternoon. Is that correct?

Ms Freeman : Yes, correct.

Mr M Thompson : That's correct.

Senator McCARTHY: So, was the department required to provide additional information to cabinet? Is that why there was a delay?

Mr M Thompson : We didn't say anything about cabinet in that context, so I'm not going to answer that.

Senator McCARTHY: Did the department cover the costs for stakeholders who had travelled to Canberra for the lock-up only to find out late on Tuesday that it was cancelled?

Ms Freeman : No, we didn't.

Mr M Thompson : No.

Senator McCARTHY: Were any stakeholders asked to come to Canberra?

Ms Freeman : Yes, they did. When the lock-up was rescheduled we actually offered briefings jointly in four cities as well. So we had Perth, Brisbane, Melbourne, Sydney, and then those in Canberra as well. At our regional offices in Sydney, Brisbane and Melbourne, we offered them facilities, and the Commonwealth Parliament Offices in Perth also hosted a lock-up there to stop people having to travel and be inconvenienced.

Senator McCARTHY: If the McCarthy review was not delayed due to cabinet issues, what was it delayed for?

Mr M Thompson : It was a decision of government.

Senator McCARTHY: And you aren't provided that reason?

Mr M Thompson : We're not in a position to go into details on that.

Senator McCARTHY: When is the next AGMIN meeting going to be? What date will that be?

Mr Quinlivan : They typically happen about 12 months apart. I think the last one was in the last week of April. So, on the normal schedule, it would be April next year. It could be that there will be a meeting later this year, depending on electoral time frames for the states and so on, because there will be some further decisions to be made on the outcome of the Intergovernmental Agreement on Biosecurity Review. There could be some decisions to be taken there which would warrant a further meeting, but no decision has been made on that yet.

Senator McCARTHY: When do you expect a decision to be made?

Mr Quinlivan : I don't know, to be honest. June, July is probably when a decision will be made. But as you know the last quarter of the year and the first quarter of next year are quite problematic for intergovernmental matters because of state elections—fixed state terms.

Senator McCARTHY: When did the government tell the department the announcement of the report would be delayed? What time on Tuesday was it? Do you remember?

Mr M Thompson : I'd have to take it on notice. I can't recall what time it was on Tuesday.

Senator McCARTHY: Okay.

Ms Freeman : Suffice to say, as soon as we knew, though, we did notify all stakeholders immediately.

Senator McCARTHY: All right. Thank you very much. Thank you, Chair.

CHAIR: Thank you. Senator Colbeck?

Senator COLBECK: I've exhausted my questions.

CHAIR: Senator Brockman?

Senator BROCKMAN: I'm fine.

CHAIR: Senator Stoker?

Senator STOKER: I'm done.

CHAIR: Chair? No. Senator Rhiannon?

Senator RHIANNON: Just to finish off on where we were at, are you aware that the RSPCA, in commenting on recommendations 3 to 5 and the delay that's now occurring, stated: 'This is a deliberate delaying tactic that is legally questionable and will result in further animals suffering heat stress that would otherwise be avoided with the timely implementation of the revised HSRA.' Are you aware of that statement, and what's your interpretation when they say it's 'legally questionable'?

Mr Quinlivan : I wasn't aware of that specific statement but I think, with our plan to consult further on the development of a new management model with some quite innovative ideas in it, with far-reaching implications, our approach is at least partly informed by our legal obligations, as a regulator, to be reasonable—to give people a chance to have a say before we make decisions that have major implications for them. I haven't seen, obviously, the legal advice that the RSPCA has but I can say that our own planned handling of this, at least in part, is based on us thinking about our legal obligations as a regulator.

Senator RHIANNON: I asked you before about the process—because you had said three months but then you explained it could be more than three months. When will we know what that process is? I think you said you're about to meet with the minister?

Mr Quinlivan : We're hoping to settle it with him next week. We want to make a quick start on it, so I would hope—

Senator RHIANNON: So you'll possibly be making an announcement at the end of next week?

Mr Quinlivan : As soon as we can. I won't put a particular time frame on it, but we want to start as quickly as possible. We'll need to announce it, obviously, to commence the process with something specific for people to respond to. So it will be as soon as possible.

Senator RHIANNON: Thank you. I want to go back to something that was said before dinner. One of you gave evidence that the formula and the software had been independently peer reviewed.

Mr Quinlivan : I think that was a statement by LiveCorp, talking about the HotStuff model.

Senator RHIANNON: Yes. The information that I've gained over dinner is that in fact it has not been independently peer reviewed. If you're saying that it has been, can you provide the evidence please.

Mr Quinlivan : I think we're saying that it was LiveCorp.

Senator RHIANNON: You're saying that has to go to LiveCorp?

Mr Quinlivan : Yes. We'll take that on notice. I would be very surprised if what they said wasn't factually correct, because that model has been used. It's quite important for the decision-making. It has been controversial. So I would be very surprised if they had made a mistake along those lines, but we will make sure they answer that on notice.

Senator RHIANNON: In taking that on notice, can you ask them to provide who peer reviewed it and what their professional standing is.

Mr Quinlivan : We will do that.

Senator RHIANNON: Is it the case that HotStuff is commercial-in-confidence, so we can't actually see it? Is that the case, or can it be released so that we actually know what this algorithm is?

Dr Clegg : It's intellectual property that's owned by LiveCorp but it contains data within it that is about individual ships and shipping companies. I think that's the commercial-in-confidence information.

Senator RHIANNON: That is pretty extraordinary, because it means our regulatory framework depends on an algorithm that cannot be released. So we can't have any scrutiny with—

Mr Quinlivan : I think the point being made there is that it's not so much the algorithm but the data that is sensitive.

Dr Clegg : One of the pieces of information that's within the model is the details of ventilation per deck. Each deck has a different pen area turnover rate. The pen area turnover of the decks will depend on how many animals can be carried on that ship at particular times of the year and whether they're cattle or sheep. That's information that the shipowners provide to the people who hire them. They don't make it available generally.

Mr Quinlivan : Having said that, I do think you're on to a legitimate point here.

Dr Clegg : Yes.

Mr Quinlivan : We have been asking ourselves whether the arrangements for access to the model and the public transparency of the use of the model and its products is sufficient. I think you've identified a genuine issue there. That's definitely on our to-do list.

Senator RHIANNON: It would certainly help us at least get to the foundation of building some trust around this issue. Sometimes I do understand why departments come up with commercial in confidence, but in this case I really can't understand it. We're talking about boats, sheep on a deck et cetera. So you're saying that it's the data and not the actual algorithm that's the issue of why—

Mr Quinlivan : Yes. It's like having an architect's drawing of your boat, effectively.

Senator RHIANNON: Right. I see.

Mr Quinlivan : We take your general point. We are definitely going to look at this because we have our own concerns about it.

Mr M Thompson : In that context, Dr McCarthy recommends that we get independent verification of the pen air turnover and in response to the McCarthy review that's something that we will be following up.

Senator RHIANNON: When you say you are 'following up' on both those issues, is this something you'll follow up and then there will be public engagement like how you're consulting on the other issues that we just discussed? Is this part of what you're talking about?

Mr M Thompson : On the one I just mentioned, we hope to do that in condition-setting for vessels from now on. It's something that we will look to do.

Ms Freeman : I would also add that we've already started talking to both AMSA and LiveCorp and, for want of a better way of describing it, the person who drives the model and getting all the parties together to look at the data, what information we need, what needs to be verified and by whom. That goes to how the model is actually constructed—

Dr Clegg : And confidence in the model.

Ms Freeman : Yes.

Dr Clegg : So the data at least that's entered into it has been audited and is correct. It's checking that the fan rate, for instance, is actually producing the output that the fan manufacturer says it is. It's not just, 'I put this in 20 years ago or 10 years ago and that's the fan rating and therefore that's my PAT.' It's not as simple as that, but knowing what the ratings and structures are the within the ship are critical to working out how much air flow sheep actually get in their pens.

Ms Freeman : We've already commenced that.

Senator RHIANNON: When you say you're consulting with parties, is that just industry representatives or does it include the animal groups as well?

Mr M Thompson : If you're talking about the consultation we plan to run on the heat stress risk assessment and management elements of the McCarthy review, it won't just be with industry; it will be with a wider set of stakeholders.

Dr Clegg : On the PAT itself, that will be with the parties that have the information.

Mr M Thompson : That's a specific technical issue.

Dr Clegg : So with the model owner, the ships are—

Senator RHIANNON: So it's secret? It's not public?

Mr M Thompson : It's not that it's secret—that's the bit that's kind of touching on what could be commercial-in-confidence information. What we're seeking to do, consistent with Dr McCarthy's recommendations, is to have an independent verification of the data that they're providing into the model. That's one bit. Then, in terms of the wider set of issues in recommendations 3 to 5, 7 and 8 that we're consulting further on, that will be an open process.

Senator RHIANNON: Thanks very much. I'll move on to greyhounds now.

CHAIR: Senator, your time has nearly expired. You want to start a new topic?

Senator RHIANNON: So everybody doesn't have to get up and down, maybe I'll wait until I come round again.

CHAIR: If everyone takes their time, you won't come around again. So, if you have something that's really occupying you, I'll allow you a bit more time.

Senator RHIANNON: Thank you very much. On greyhounds, how many export permits have been granted outside of the Greyhounds Australasia passport scheme?

Dr Clegg : We don't take into account Greyhounds Australasia's passport scheme. We issue permits based on the Export Control (Animals) Order. The Greyhound passport scheme is not part of our issue of permits.

Senator RHIANNON: I was asking how many export permits had been granted outside, separate from the Greyhounds Australasia's passport scheme.

Dr Clegg : They're all outside.

Senator RHIANNON: They're all outside?

Dr Clegg : Yes.

Senator RHIANNON: So you don't have anything to do with Greyhounds Australasia?

Dr Clegg : No.

Senator RHIANNON: Is the government aware of how many dogs have been exported illegally so far this year?

Dr Clegg : I don't have any information about the number of dogs that have been illegally exported.

Senator RHIANNON: So you are not able to track that, or you don't get reports after the fact or anything?

Dr Clegg : No. We have details of what we have issued permits for but not what we haven't.

Senator RHIANNON: How many have you issued?

Ms Freeman : I can answer that. From 1 January 2017 to 31 March 2018, there were 333 greyhounds, of which 88 per cent of those went to New Zealand.

Dr Clegg : That's 293 dogs.

Senator RHIANNON: Do you have any activities, tracking these periodic reports of greyhounds being illegally sent over to Macau or wherever?

Ms Freeman : I think once dogs get exported it comes under the jurisdiction of the importing country.

Senator RHIANNON: But for a while they are in Australia—so no information?

Dr Clegg : No.

Senator RHIANNON: How many greyhounds have been exported to New Zealand? I think you've answered that—88 per cent of 333.

Dr Clegg : Yes, 293 dogs out of 333.

Senator RHIANNON: How many greyhounds have been imported from New Zealand?

Dr Clegg : I don't know, because I don't do imports. I'll have to take that on notice.

Senator RHIANNON: Separately, how many have been imported to Australia via New Zealand from a third country?

Dr Clegg : How many imported into Australia?

Senator RHIANNON: Yes, imported from New Zealand but they're coming from a third country, via New Zealand.

Mr Quinlivan : We'll take that on notice.

Senator RHIANNON: Do you have any concerns about that—that there are possible channels where dogs are being brought into Australia representative that they're coming from New Zealand when in fact they're not? Is that something that's been flagged with you?

Dr Clegg : I have confidence about New Zealand. New Zealand is one of our close trading partners, and I would have confidence in New Zealand's quarantine system.

Senator RHIANNON: Okay. I'll now turn to donkeys. Can you confirm that the federal government will not support the live export of donkeys from Australia to supply the—and I can't pronounce the word—ejiao trade?

Dr Clegg : I don't know how to pronounce it, but I think it is the donkey skin product trade.

Senator RHIANNON: Yes. There is a gelatine that comes off the skin that is now becoming a booming trade.

CHAIR: Senator Rhiannon, I am sorry, but we'll have to leave it at that.

Senator RHIANNON: I will leave that one and come back to it.

CHAIR: I don't know that you are going to get back but you're welcome to hang. I was going to put a heap of stuff on notice but, since we're still here, we might as well get it all done now. There was talk earlier about a potential modelling about the impacts relating to the suspension of the live trade of sheep. I don't want to explore that; it's all in the pipeline. Was there any such work done after the suspension of the live cattle trade? Do you know about the economic impacts?

Mr Quinlivan : We don't know of any. It seems unlikely to me that, if there had been any, we wouldn't know about it. So I'd deduce from that that there probably wasn't any serious modelling done. But certainly estimates have been made and, as you are probably aware, there's a class action underway at present.

CHAIR: Yes, I am aware of that.

Mr Quinlivan : There are some very large numbers involved in that, but I don't know that we have seen that they're based on any significant modelling.

CHAIR: The Commonwealth is a defendant in that class action, isn't it?

Mr Quinlivan : Yes. We can talk you through that.

CHAIR: Is it currently live before the court?

Mr Quinlivan : Yes.

CHAIR: Have we got an issue around sub judice with this?

Mr Quinlivan : No, I think Ms Linacre can talk about it.

Ms Linacre : The class action is currently before the Federal Court and the Commonwealth is a defendant in those proceedings.

CHAIR: Are you suggesting that sub judice might apply here?

Ms Linacre : It's not appropriate for me to go into details of the action, but I can certainly speak to—

CHAIR: I'll try and stay around the periphery of it and I won't talk about the merits or otherwise of the action, clearly. There was quite a lead time where there was talk of this happening. Was there any work done in trying to model potential economic impacts of the suspension of the trade, both on a global and national income level and on potential exemplar cases of individuals?

Ms Linacre : I'm not aware of any in the context of that action, but I could take it on notice.

CHAIR: Again talking in principle, wouldn't you think at some stage that sort of work would need to be done in responding to discovery—

Ms Linacre : The matter's still before the Federal Court and both parties are going through a range of obligations with mutual discovery. There are submissions still being exchanged and conversations around those issues may still be ongoing.

CHAIR: On a separate note—and you can remain if you choose—Mr Quinlivan, what about the impacts on the market, particularly the domestic market, post that? Did the department spend any time or effort around it to learn any lessons in case we were confronted with this again, such as now?

Mr Quinlivan : I think, when Mr Norton from MLA was here yesterday, he made the observation that the closure of the trade to Indonesia had an impact on domestic cattle prices for, as I think he said, three to four years, which was quite material over that period of time, and that our trade to Indonesia in some ways never recovered. So it had significant implications both internationally and domestically.

CHAIR: Did we track any of the social impacts? I'm not a scholar on the drought across Australia, but in Queensland I've got a real sense of it. Firstly, do you accept there were impacts on the domestic market with the saturation of cattle that would have otherwise been destined for Indonesia?

Mr Quinlivan : Yes.

CHAIR: Do you accept that it was clear that that had a downward pressure on price and affected the domestic market further down—perhaps not all the way down but certainly in the southern parts of Queensland?

Mr Quinlivan : No, I think Mr Norton's observation, which I'm sure is credible, was that it had a national impact.

CHAIR: Given that, with the impacts of the drought, do you think that we found, or is there any evidence that's come before you that suggests, that producers—pastoralists in particular—have found themselves in an economic bind sooner than they may well have had the live cattle job not been suspended, such as they didn't have any fat in the account?

Mr Quinlivan : I'll start to respond to that while Mr Gooday from ABARES comes up to the table, but the general impression I've had is that there was a very unfortunate conjunction of events because we had a very long drought, the millennium drought. At the end of that period, cattle prices in Australia were probably low by international standards, so you would naturally have expected an increase in cattle prices. Then we had the 2011 event and the effects on the domestic market for the following few years. But, once those two effects had washed out of the market, there was a very strong increase in cattle prices, to historically high levels now.

CHAIR: Due, would you accept, to supply constraints?

Mr Quinlivan : I guess I'm saying that those two events masked what was happening with the underlying market, which was that the demand for Australian cattle was rising. And the prices should have risen, but the drought and the closure to Indonesia obscured that for quite some time. The net impact of those on producers' incomes and asset values and so on would have been very significant.

CHAIR: Yes, we've had almost 2½, possibly three, years with better prices, if you like, even though they've come off some in the last four, five months. But do you accept that there were supply constraints there? I know about 60 per cent of the herd resides in Queensland, and, if you look at the drought map, 80 per cent of the drought was in Queensland. Do you believe supply constraints fed into that?

Mr Quinlivan : Well, there was a sell-off that went on for a number of years, and Mr Norton was talking about how the herd still hasn't rebuilt from the experience through that time. So, yes, it's had very long lasting effects.

CHAIR: The national herd, as it has been related to me, is about 29 million.

Mr Quinlivan : He said yesterday that it was currently, I think, 26.9 million; and he thought 29 million was probably the stable national herd level.

CHAIR: At the lower end, we heard it was down—there were various figures—as low as 23 million in some figures.

Mr Quinlivan : Correct.

CHAIR: So, over not a long period of time, we had a sell-off, if you like, of six million-odd cattle into the marketplace.

Mr Quinlivan : That's correct.

CHAIR: The point I'm making is that that on its own would create supply constraints. I'm trying to get to a point, because additionally—and you've heard me refer to it here before—we had producers who sold cattle at 58c a kilogram, for example, on heifers, and by the time they recovered from flood conditions they had to go back into a marketplace where, at periods, they were nudging $3 and $2.90, or 280c. What I'm trying to build as a picture, or come to understand, is that the live cattle trade fed into another event, which has now fed into an inability for—do you accept there is an inability for some producers to restock because of the cost involved?

Mr Quinlivan : If you were on the receiving end of those events and the underlying structural changes in the market, and have experienced a period of drought, as many Queensland producers have done over this high price period—so you missed out on the peak prices—it could have done enormous damage to your business.

CHAIR: I suppose what I'm really trying to come to understand is whether, with the suspension of the live cattle trade, had we had advance notice of it, there are things we could have done with and for our production sector to have been able to give them a softer landing. Are there lessons from that in the context of the current calls by some, for example, to do the same with the sheep trade?

Mr Quinlivan : Yes, I think that lesson has been largely learned, because even those who've called for a closure of the sheep trade are talking about an extended transition period. I think the lessons of 2011 have certainly been learned by the major proponents in this discussion.

CHAIR: I want to move to another subject, the prickly acacia. You very kindly sent an officer up to Longreach with me. We had a couple of days and inspected what was happening there. Is it a subject on the minds of the department at the moment—looking at the struggle with prickly acacia in my home state?

Mr Quinlivan : You're really stretching my memory now, but I do recall reading the briefing that was provided for that trip. From memory, between the department and the R&D corporations, there were, I think, about 20 different projects that were underway to try and find better ways of managing and reducing the range of prickly acacia over time. I know there has always been a worry that, when the next run of good seasons happens in the Channel Country, the range of prickly acacia will spread very quickly. That's certainly a big problem for that area, and there are significant investments going on, but there's obviously no silver bullet.

CHAIR: You may have to take this on notice, but what do you regard as significant investment in it? I have a lot to do with Desert Channels, who are at the forefront of battling prickly acacia. The CEO there is a woman named Leanne Kohler, a very impressive personality, very passionate about overcoming this. She indicated to me at one stage that she thought an investment in the order of about $25 million would allow Desert Channels the capacity to tool up and at least, she thought, restrain the prickly acacia from getting into the upper reaches of the Murray-Darling, so down in the lower part of Queensland, below the desert country. That didn't happen. I don't expect you'd know, but would there be someone in your department who'd be thinking about prickly acacia every day? It's a massive problem and potentially catastrophic.

Senator RHIANNON: It's a good filibuster—prickly acacia!

CHAIR: How rude of you, Senator.

Senator RHIANNON: You know I'm not being rude.

CHAIR: How rude of you.

Senator RHIANNON: Not at all.

Mr Quinlivan : Because there are these large number of research projects underway, there are certainly people in the R&D and plant and weed community who are thinking about these things, so we'd be happy to look at the proposition from Desert Channels.

CHAIR: I'd really appreciate that, because, for example, they've just had a struggle with APVMA—I didn't raise it while they were here because it has been resolved recently—about the use of herbicides that they were wanting to be relicensed for their use. Other than prickly acacia, do you know of any invasive woody weeds that are on that scale in our country? We've abandoned lantana and the like.

Mr Quinlivan : There are a very large number of weeds that are under management in Australia. There are some that have a greater economic cost because the costs of managing them are higher, but I don't know that there are any that cover such a large area and outcompete other plants to the extent that prickly acacia does.

CHAIR: I want to move on to compliance. With the lessons that have been learned with the live sheep trade, I imagine that we have one eye cocked on other live animal exports out of the country. I know the challenges are different, but is that the case, Mr Quinlivan?

Mr Quinlivan : We have begun to look at the relevance of the lessons from this live sheep incident and the reflections we've since made on our regulatory arrangements for the live cattle trade. It's likely some of the additional measures that we're applying in the sheep trade will also be applied in the cattle trade in due course, although generally speaking the risks are lower and the mortality performance of the live cattle export trade is significantly better. That's not surprising, because the value of the cattle, obviously, is very high at present and the travel patterns—even those that are travelling all the way to north Asia—are more benign than those through the Middle East. Nevertheless, we are looking at it. I guess one point that we have been reflecting on a lot is that our regulatory effort, after the 2011 experience, has been based on the experience of those animals once they disembark. We've been concentrating on our ESCAS system. The gap here was the journey before the ESCAS system became relevant. We're clearly addressing that for sheep, but we'll also be reflecting on what that means for the cattle trade.

Mr M Thompson : Can I just make two comments. One is that I think Philip Moss's review will identify at a finer grain some of the things that we might translate across into other regulatory activity around live animals and cattle in particular, as Mr Quinlivan said. In terms of ESCAS, we are starting to pilot in-country audits of the activities there so that we get a high level of assurance. And that's really driven by our experience on live sheep.

CHAIR: Would it be fair to say that, after we reinstated the live cattle trade, the activities around compliance were more dynamic than they may have been before the suspension of the trade? Are we always putting pressure on ourselves to try and improve the environment, which manifests itself in changes with regulations?

Mr M Thompson : Certainly for the end-of-voyage part of the export chain, the ESCAS end of the chain, the exporter—as the exporter is with all elements of the chain—is very much at the centre of obligations around how well the system operates. That's the first point. There's a lot of obligation, expectation and reliance on the exporter meeting their obligations. The second point is that we rely quite a lot on other elements for transparency, whether it's mortality reporting or incident reports on ESCAS breaches that come to us from whistleblowers in country—and, in fact, from exporters themselves. What we're finding, pleasingly, is that a number of exporters will reveal their own identified breaches to us. They'll report them to us. Then we'll work through how they're dealing with those. So I think that's a positive thing.

CHAIR: That's pleasing to know. Senator Rhiannon has indicated she only has a short period of time to go, so I'll go to Senator Rhiannon. Then I think Senator Ketter has a couple of questions.

Senator RHIANNON: Can you confirm that the federal government will not support the live export of donkeys from Australia to support the ejiao trade?

Dr Clegg : We haven't had any requests to export donkeys for slaughter purposes, which is what they'd have to be for the ejiao trade. I think we've had something like 14 donkeys exported in the last year, from memory. I can give you the exact numbers of that. But they are very small numbers. There's been no confirmed interest in it. There were some requests a couple of years ago, but there was also an enormous amount of public outcry over the idea of exporting donkeys for slaughter. Since then, we've had nothing. Nor do we have any conditions.

Senator RHIANNON: If there were a request, would it be turned down? Are we at the point that it's not going to be a yes?

Mr M Thompson : That's really a policy question, I think.

Ms Freeman : There's currently no government policy about extending ESCAS to equines as part of that. But Dr Clegg is absolutely right: we haven't had a request to do so.

Senator RHIANNON: How many donkeys are being sourced from the wild for slaughter in federally approved abattoirs? Can you answer that or take it on notice?

Mr Cunningham : In relation to the question of how many donkeys have been processed in export-registered establishments, there have been approximately 1,250 in the last 12 months.

Senator RHIANNON: So they've been processed at abattoirs in the Northern Territory, in the main?

Ms Cooper : There are three abattoirs in Australia that are approved to slaughter donkeys for human consumption.

Senator RHIANNON: Where are they?

Ms Cooper : There is one in South Australia, one in Queensland and one in the Northern Territory.

Senator RHIANNON: Are the donkey parts for export?

Ms Cooper : The donkey is processed for export, correct, but I understand some of it does go to the domestic market.

Senator RHIANNON: And, for the export, is that part of the ejiao trade?

Ms Cooper : That is something that seems to be unique to the Chinese market and, at this stage, we don't have access for donkey to China.

Senator RHIANNON: They're not going to China; therefore, they may not be part of the ejiao trade. But we're not absolutely sure.

Ms Cooper : Correct.

Senator KETTER: I want to follow up on some questions from the deputy chair, in relation to the release of the McCarthy report. I want to get the time line right with that. I understand Dr McCarthy's report was provided to government on 11 May. Then there was a decision made, presumably by the minister, to arrange the lock-up and release of the report. That was scheduled for 16 May. Is that correct?

Ms Freeman : It was actually released on the 17th.

Senator KETTER: In between, there was a cabinet meeting on the 15th. Is that correct?

Mr M Thompson : We've not mentioned a date.

Senator KETTER: I'm referring to an article from The Australian, dated 16 May, which makes reference to the cabinet meeting on the 15th.

Mr M Thompson : We, typically, don't talk about cabinet meetings or cabinet agendas.

Senator KETTER: So you can't confirm whether that cabinet meeting took place. Did you provide advice to cabinet on 15 May?

Mr M Thompson : We certainly made no secret of the fact that we provided advice to cabinet, but—

Mr Quinlivan : And the government made a decision, and then the report was released.

Senator KETTER: The article reports Senator Canavan as saying that it wasn't a delay in the lock-up, that the government was still considering the report from Dr McCarthy. I'm just mystified as to why there was a decision taken to do a public release of the report whilst the government was still considering it.

Mr Quinlivan : I'm sorry, we can't help you on this.

Senator KETTER: The decision to have the lock-up and the release on 16 May was a decision of Minister Littleproud, was it?

Senator Ruston: These are all matters that were decisions of government and the various machinations of government, which the agency would not be aware of. As the assistant minister I'm not aware of them either. So we can certainly take as much of it on notice as is possible and report back whatever is available, but none of us would be aware of the details that you're asking.

Senator KETTER: I'm happy, Senator Ruston, if you would take that question on notice on whose decision it was to call for the release on the 16th.

I will just go back to the Forest Industry Advisory Council. Thank you very much for this additional information. So I can understand where we're up to at the moment with this particular council, the terms of reference have expired—is that correct? The terms of reference have expired in relation to the Forest Industry Advisory Council?

Senator Ruston: The original one, yes.

Senator KETTER: So they're not operating on any terms of reference at this stage? We're awaiting new terms of reference, presumably.

Senator Ruston: Yes, but I can advise that the new terms of reference are substantially the same as the old terms of reference that are currently with the new appointment of the new board.

Senator KETTER: You also advised us that all the members' appointment terms expired in either September of last year or January of this year.

Senator Ruston: Yes.

Senator KETTER: Have there been any new appointments made?

Senator Ruston: No. The process is underway. In fact, it's very close to being finalised. I would imagine it's a matter of days away.

Senator KETTER: So we haven't had a meeting since—

Senator Ruston: 23 June.

Senator KETTER: June last year. We have terms of reference which are in the process of being addressed. We have no members of the council currently in place, and that's being addressed. My concern is that, if you look at provisions of the RFA Act, it says:

The Minister must take all reasonable steps to ensure that, at all times, there is in existence a committee that is:

(a) known as the Forest and Wood Products Council; and

(b) established under the executive power of the Commonwealth.

Is this council in effect at the moment? Does it exist? It sounds like it either doesn't exist or is on life support.

Senator Ruston: No, it's certainly not on life support. It is going through a transition phase at the moment. We've changed ministers. We are renewing the council. I'll have to take it on the chin: it's an administrative delay. In substance it hasn't had any impact on the way that this has been operating and the communications and consultation that have been occurring with industry, but I take your point: it certainly has taken slightly longer than I would have liked. It is certainly on foot. It will be resolved within days, and there has been no substantive impact in terms of the input of industry into any of the processes around any of the issues in forestry—not just RFAs, but any of the issues in relation to forestry—as a result of the administrative delay.

Senator KETTER: If there's been no impact, it sounds as if it's almost a redundant council, if it doesn't need to exist.

Senator Ruston: Not at all. In fact, I would say that, out of all of the councils or advisory authorities that I have anything to do with, it's probably the most active. It's an extremely active group.

Senator KETTER: You said that the last meeting was a teleconference on 23 June 2017. Are you able to advise me whether there were any other meetings of the council in 2017?

Senator Ruston: In terms of a formal meeting of the whole council, I think I have to say that it's my understanding that there weren't. Were there a substantial number of subcommittee meetings or meetings of groups that sit within FIAC? The answer would be yes.

Senator KETTER: I understand the terms of reference were probably applied at that stage, and so you would have been under the obligation of a meeting every six months at that point.

Senator Ruston: We're going to start splitting hairs here as to when we're holding meetings, but, as I said, I take your point: the administrative delay has been unfortunate. But I can assure you and the committee that in substance there has been no impact because the committee hasn't been in place.

Senator KETTER: Okay. Thank you, Chair.

CHAIR: Thank you, Senator Ketter. I thought you would have known better than to engage the minister on forestry at this time of night!

Mr M Thompson : If I could just correct something I might have said before: I was referring to the practice that we're piloting now to audit some areas of ESCAS, and I may have left the impression that we're going into countries to audit. We're not doing that. We're basically auditing exporter traceability systems in Australia—looking at our exporters and what systems they have. I didn't want to leave the impression that we're reaching into country.

CHAIR: Before we close: Mr Quinlivan, I just want to say—and I think all my colleagues would share this with me—that I want to pay tribute to the staff you've had at the front line with respect to this matter. I know from discussions with you that they've put in an enormous effort, in very difficult circumstances, in particular Ms Freeman and Dr Clegg. It's clear and evident that you've been providing leadership in the space. You've got it covered. And for my part at least, we've got great confidence that you're going to take us to where we need to be with this. And you can take great pride if the trade is saved. You'll have made an enormous contribution to it. That said, to you and your staff, thank you from us in relation to your preparation for estimates. Safe travels home. Thank you to the secretariat, and of course to—they never talk to me, these people; they just put fingers up in the air!

Mr Quinlivan : And Chair, could I also thank the committee for the way you've handled the matter today. I thought it was very good.

CHAIR: Very well chaired!

Senator Ruston: And deputy chaired!

CHAIR: Yes, and deputy chaired!

Committee adjourned at 22 : 36