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Wednesday, 13 November 2002
Page: 6231

Senator MINCHIN (Minister for Finance and Administration) (3:03 PM) —Senator Murphy asked me a question yesterday about the National Stem Cell Centre, which I took on notice. I seek leave to incorporate a response in Hansard.

Leave granted.

The response read as follows—

Accountability of the Centre to the Commonwealth

Funding for the National Stem Cell Centre is from two sources—Biotechnology Australia, within the Department of Industry, Tourism and Resources, and the Australian Research Council. Because of this, the Centre will be required to be accountable to both agencies. An Executive Committee comprising officers from the two agencies will monitor the activities of the Centre through provisions to be contained within the funding Deed, including regular reporting of the Centre to the agencies on its research activities, and also the Commonwealth's ability to review these activities.

Ensuring the Centre and its Intellectual Property is managed for the Maximum National Benefit.

There are a number of measures being taken to ensure that the activities of the Centre and its intellectual property are managed for the maximum national benefit, however these arrangements will not be finalised until negotiations on the Centre's Business Plan and the Deed of Agreement are complete. The following points detail likely arrangements resulting from the negotiation process.


To ensure the Centre and its intellectual property is managed for the maximum national benefit, under the Deed of Agreement the Centre will be required to provide regular reports to the Commonwealth with respect to:

· achievement of Centre outputs and outcomes;

· progress and achievements in Centre operations;

· descriptions of research undertaken;

· achievements in the area of research commercialisation; and

· compliance with biological standards.

Business Issues

In addition, provisions within the Deed of Agreement will require that:

· the Commonwealth approve the Centre's final business plan, and material amendments to the business plan;

· the Commonwealth approve intellectual property commercialisation plans of the Centre, including any offshore commercialisation of intellectual property;

· the Centre's activities comply with the objectives of the Centre of Excellence program;

· the Centre's key performance indicators under the Centre's business plan require the Centre to deliver national economic benefits;

· the Commonwealth approve the Centre business plan; and

· payments to the Centre be made after the Centre has provided a report on the expenditure of the funds provided in the previous instalment. The Commonwealth will be able to withhold payments if it is not satisfied that the Centre is performing in accordance with the objectives and the terms and conditions of the Deed.

Conflict of Interest

· The Centre must warrant that at the signing of the Deed, no conflict or risk of conflict of interest or is likely to arise in the performance of its obligations.

· The Centre must disclose in writing prior to the signing of the deed if any conflict of interest exists.

· Thereafter, the Centre must notify the Commonwealth if any conflict of interest arises during the term of the contract.

· The Commonwealth is entitled to ask the Centre to resolve any such conflict of interest.

· If the Centre does not notify the Commonwealth on any conflict of interest or it fails to resolve the conflict of interest, as required by the Commonwealth, the Commonwealth may terminate the Deed.

Adherence to Ethics Codes

The Deed being developed between the Commonwealth and the successful Centre operator will require that the Centre's operator will comply with all relevant legislation, regulations, and ethical codes and guidelines.

This will include compliance with outcomes of the decision taken at COAG on 5 April this year with respect to regulation of embryo research.

The funding Deed will be drafted to include provisions such that:

· all research conducted by the Centre must comply with all applicable laws, ethics, codes and guidelines of the Commonwealth, States and Territories or local authorities;

· these include NHMRC guidelines (including the National Statement on Ethical Conduct in Research Involving Humans, and Ethical Guidelines on Assisted Reproductive Technology) and requirements under the Gene Technology Act 2000;

· the Centre must also comply with the laws, regulations and guidelines in other places in which research is being conducted;

· all Centre research must have the approval of the relevant institutional biosafety, animal ethics or human research ethics committee. It is a condition of the NHMRC guidelines (human or animal) that approval from the relevant committee is obtained before any research work is undertaken; and

· the Centre must submit evidence of such approvals to the Commonwealth.

· the Commonwealth may, at any time, carry out reviews of the activities of the Centre to determine whether or not the Centre is complying with the conditions of the deed, including compliance with relevant ethics codes and guidelines.

· Under the NH&MRC guidelines on ethical matters for research involving humans, the National Statement on Ethical Conduct in Research Involving Humans (1999), those staff who conscientiously object to research projects or therapeutic programs conducted by institutions that employ them should not be obliged to participate in those projects or programs to which they object, nor should they be put at a disadvantage because of their objection. The Centre must comply with this provision. In addition, an express clause to this effect will be included in the Deed of Agreement between the Commonwealth and the Centre.

The Commonwealth will reserve the right to terminate the Deed in case of any breach by the Centre of any compliance requirements.

The members/owners of the company—National Stem Cell Centre Ltd

Details of this aspect of the Centre will not be finalised until negotiations on the Centre's Business Plan and the Deed of Agreement are finalised.

These negotiations are currently in abeyance.

However, it is intended that the National Stem Cell Centre Ltd will be incorporated as a non-profit company limited by guarantee. It will operate as a not-for-profit company to allow it to be independent of the institutions which are partners in the Centre.

The Directors of the National Stem Cell Centre

Complete details of the governance aspects of the Centre will not be finalised until negotiations on the Centre's Business Plan and the Deed of Agreement are finalised. • However, the Centre's Board is composed of:

Bob Moses (Chair)

Bob retired from CSL Limited in 2001, where he was Vice President of CSL Limited. Prior to joining CSL, Mr Moses was Managing Director of commercial law firm Freehills, Chairman & CEO of a NASDAQ listed medical service company and Corporate Manager of New Business Development at ICI.

Barry Jones

Barry Jones, former Commonwealth Minister for Science 1983-90.

Ross McCann

Ross is currently Managing Director of Qenos, a joint venture between ExxonMobil and Orica with operations producing polyethylene in both Sydney and Melbourne

Hugh Niall

Hugh was most recently Chief Executive Officer of Biota, a listed Australian biotech company focussed on the discovery and development of treatments for human respiratory diseases. Previously he has held senior academic and commercial positions, including four years as VP of Research Discovery at Genentech.

Mark Richardson

Mark has been a Special Counsel of the firm Blake Dawson Waldron since 2001, acting on behalf of medical defence organisations in Australia and a major international medical mutual society

Brian Watson

Brian Watson is the Managing Director of JPMorgan Partners Australia.

Prof Alan Trounson

Chief Executive Officer Designate

It is also anticipated that the Management Team will include:

Chief Executive Officer Alan Trounson

Chief Operations and

Commercial Officer Dianna DeVore

Chief Financial Officer Anthony Moore

It is expected that the Chief Executive Officer and Management Team will report to the Board on the management and operations of the Centre and will submit a Business Plan and Revisions for approval by the Board. The Board will operate in the manner of a private company and adopt the sound business principles of a fully commercial business.