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Rural and Regional Affairs and Transport Legislation Committee
09/02/2016
Estimates
AGRICULTURE AND WATER RESOURCES PORTFOLIO
Australian Pesticides and Veterinary Medicines Authority

Australian Pesticides and Veterinary Medicines Authority

[15:41]

CHAIR: I call witnesses from the Australian Pesticides and Veterinary Medicine Authority. Senator Sterle.

Senator STERLE: Senator Bullock has some questions.

Senator BULLOCK: So this is a continuation of the theme? For the 2014-15 financial year, how many applications for registration of veterinary chemical products were received?

Ms Arthy : Is this just for generics or total?

Senator BULLOCK: Total.

Ms Arthy : I do not have these on me. I will just check with my colleagues as to whether they have the 2014-15.

Mr Norden : From the annual report: for pesticide applications, in 2014-15 we received 1,388 applications; and for veterinary medicines we received 653 applications. Applications finalised for the financial year for pesticides—

Senator BULLOCK: Does 'finalised' mean approved or finally dealt with either by approval or rejection? What does 'finalised' mean?

Mr Norden : I am sorry; the figures I have at the moment do not include refused applications, just finalised applications. So we would have to take that on notice.

Senator BULLOCK: What does 'finalised' mean?

Mr Norden : It would include both approvals and refusals and withdrawals, as well.

Senator BULLOCK: I would like to know how many were approved.

Mr Norden : We would have to take that on notice.

ACTING CHAIR ( Senator Sterle ): Has anyone got any info today, or is it just all too hard? I am asking you, Mr Quinlivan.

Mr Quinlivan : I think we have been doing it pretty well on notice so far, Senator.

Senator BULLOCK: You have been doing it pretty well on notice, yes. I am pessimistic as to the next question because, if you do not know that one, you are probably not going to know this one. How many of those that were approved required actual assessment as opposed to being label changes, changes of registrant or other simple changes that did not require any scientific assessment? A lot of applications are the same product by the same people in a different size or whatever; they do not require a thorough assessment of their contents.

Ms Arthy : We will have to take that on notice. We do not have the 2014-15 figures with us. But we can certainly get them for you.

Senator BULLOCK: That is all right. I am interested. What did we say? Was it 1 April we said this morning?

ACTING CHAIR: That is April Fools' Day. This department is normally pretty good; so they should come back to us. There you go; I have put the pressure on you now.

Senator BULLOCK: If it gets through the minister's office. I am going to ask these questions. If you need to take them on notice just say, 'I take them on notice' and I will move on to the next one. I am determined that we get to the bottom of this sooner or later. So we will just keep ploughing on. I will give you some background on this. As you will be more than well aware, in your recent court case the distinction between the use of CCI and a disclosure of CCI was drawn out in some detail. So the question is: how many of the applications were refused or withdrawn due to the APVMA's refusal to consider them without having written approval to use CCI or to use the CCI of a reference product when that use would have been available to the APVMA without resulting in any disclosure of the CCI?

Ms Arthy : I do not think I can talk about that one specifically, given the court case is ongoing. I am awaiting the judgment. What I am not sure about is whether we can get to the level of detail that you have asked in the question because the rules as they currently stand, the rules around disclosure—

Senator BULLOCK: The rules as you implemented them limit the ability to approve applications based on CCI. I am not asking you to compromise yourself with regard to any case which is currently on foot, nor am I asking you to identify any products. But you should be able to tell me which of the applications you have refused because you refused to use rather than a use which would have disclosed the CCI. That is not a matter which I can see would bear on any current or pending possible legal dispute.

Ms Arthy : Without getting into the technicalities of the difference between 'use' and 'disclosure' in terms of what we can pull out of our records, we can certainly take on notice to see what we can pull out to provide you that might be useful.

Senator BULLOCK: Do your best.

Ms Arthy : Yes, we will.

Senator BULLOCK: With regard to all of these matters, what has been the total cost to you of implementing the new interpretation of the CCI issue within APVMA, including legal advice, court costs, computer programming for the online portal to enable you to apply this new approach to CCI? Can you look at your books and determine what it has cost you?

Ms Arthy : I can certainly have a look and see what we can provide you. It is probably limited to cost of legal advice, because I am not aware of any—

Senator BULLOCK: I know that a legal bill is likely to go up by the day, Ms Arthy. You can only do your best.

Ms Arthy : We will look at it and we will be excluding of course the cost of the court case but looking at specifically that decision we can certainly provide you with what we have spent in terms of legal. I do not think there would be any other costs associated with it, but we will have a look at it.

Senator BULLOCK: You took legal advice.

Ms Arthy : Yes. That is what I am saying. Apart from legal advice I am not sure that there would be any other significant cost involved.

Senator BULLOCK: You had to defend your position in court. That is a cost.

Ms Arthy : As I said, at this point I will be not be including any cost related to the current court case.

Senator BULLOCK: I am asking you to. Why wouldn't you include costs associated with the court case?

Ms Arthy : It is a matter that is on foot. Whatever we provide you—

Senator BULLOCK: It does not go to whether or not you did the right thing; it is just a question of what it cost. That is all I am asking.

Ms Arthy : I will take that one on notice, talk to my counsel about what we can realistically provide you.

Senator BULLOCK: I will have to call your counsel, the cause of all the problems. Other than the cases that have been brought by Abbey Laboratories have any other companies filed similar cases in the Federal Court or the Administrative Appeals Tribunal?

Ms Arthy : There are no other matters in front of the Federal Court. There are a number of cases in front of the Administrative Appeals Tribunal. I am just pulling up the exact number. There are currently four AAT matters relating to the CCI issue.

Senator BULLOCK: Recalling your answers in earlier proceedings where you noted that no holder of CCI had complained about the previous application and that this was all a result of some legal advice that you received, wouldn't it have been better to have an independent legal review as a more cost-effective and efficient way to resolve the dispute on the CCI issue than waiting for applicants to take your perverse interpretation to court?

Ms Arthy : I disagree that it was a perverse interpretation. It was based on advice from a number of sources.

Senator BULLOCK: Of course you would say that.

Ms Arthy : And I stand by the decision that was made. It is entirely up to the companies as to whether they want to bring action against us. We will certainly go through the process with them.

Senator BULLOCK: On 11 September 2014 you sent an email to a number of industry representatives including the Veterinary Manufacturers and Distributors Association advising them that the APVMA's interpretation of the CCI had changed. In this email you made the following statement regarding the use of CCI: 'As part of the ongoing review and improvement of registration processes at the APVMA we have identified a number of applications where written consent to use confidential commercial information for a reference product has not been provided. Written consent to access information such as formulation or specification details must be expressly provided by the owner of that information to enable the APVMA to use a reference product to satisfy statutory criteria.' In light of APVMA's position as expressed in the Federal Court last week, do you still contend that written permission is required from the owner of CCI for the APVMA to use such information for the purpose of evaluating applications?

Ms Arthy : I am not going to be discussing anything related to what was said in court last week because I am waiting for the matter in terms of judgment. I think it would be inappropriate for me to second—

Senator BULLOCK: I am not referring to anybody's comments in court other than your own submissions.

Mr Quinlivan : You cannot comment.

Ms Arthy : I cannot.

Senator BULLOCK: I think it is a matter that needs some clarification. This is not going to the merits of the matter.

Senator EDWARDS: It is.

ACTING CHAIR: Just let Senator Bullock continue his questioning.

Senator BULLOCK: For example, if Senator Edwards were in court last week charged with reckless driving I could say, 'Senator Edwards was in court last week charged with reckless driving.'

Senator EDWARDS: But I have not heard whether I am guilty or not.

Senator BULLOCK: It does not go to whether you were guilty or innocent. It does not prejudice your case in any way.

ACTING CHAIR: Senator Bullock, you have the call.

Senator BULLOCK: In this regard I am merely asking you whether you stand by your own submissions.

Ms Arthy : Of course I stand by submissions. But in terms of asking me what I may or may not do as a result of an active court case, that is something completely different that I cannot get into.

Senator BULLOCK: Let me put it to you that your submissions last week, on the face of it, were in absolute conflict with what you advised people in 2014. So I am asking you whether you stand by your submissions or whether you still insist on what you said in 2014, which would be contrary to your submissions?

Ms Arthy : It is very difficult to discuss with you in this sort of forum what is a complicated legal matter. The submissions we put in were in a particular context.

Senator BULLOCK: This is where you are held to account for your actions. You have taken actions that have done damage to a significant number of generic manufacturers and this is their opportunity, through their elected representatives, to hold you to account. If it is hard, so be it.

Ms Arthy : Senator, as we have discussed many times, the decision that was taken was based on significant advice that the APVMA was not applying the law as it stood. Some companies have disagreed with our approach and we are now going through a legal process where it will be worked out.

In terms of the questions you are asking about submissions versus an email I sent in 2014, the substantive issue has not changed. I acted on information and advice—and I am happy to be accountable for a decision that I made which was around the way the legislation was set up. It was that we could not disclose CCI information. Part of that was that in order for us to assess an application, if someone is relying on a reference product and they do not own that CCI, they had to give us permission. That is the issue.

Senator BULLOCK: Ms Arthy, you just said it; you cannot disclose CCI information. In your email you said you could not use it. That is the distinction. There is a distinction which you know well because it was part of your case that it is different to use something than to disclose it. In your email to relevant parties you said you could not use it. It is different from disclosing it.

Ms Arthy : Yes, it is different. But in terms of the substance of the matter and the effect in terms of what was put on our website and all the advice and how it was put out, it is very much focused on the fact that in order for us to assess an application involving generic products we do need to have access to the CCI of a reference product. For that we need permission. That is the fundamental thing. In terms of what may or may not have been put in an email in 2014, that is the substantive issue and that is how we have acted.

Senator BULLOCK: All right, Ms Arthy, I look forward to your answers to questions on notice. My last question on this subject to which I think I have got the answer but I want to be perfectly clear on the record is: within the APVMA the person who was responsible for this change in interpretation in September 2014 was you; is that correct?

Ms Arthy : As statutory officer and CEO of the APVMA, yes, it was my decision.

Senator BULLOCK: I just wanted to have it clearly on the record when this finally blows up that it is you. Thank you. That is all I have to ask on that.

ACTING CHAIR: Thank you, Senator Bullock. I have a few questions. It will not take long. I ask you, Ms Arthy: what is the current state of play with the minister seeking to move APVMA out of Canberra?

Ms Arthy : The last bit of information I have is: the minister wrote to me last month saying that he has asked the department to conduct a cost-benefit analysis in terms of moving the APVMA to Armidale.

ACTING CHAIR: How did that go? Have you done it?

Ms Arthy : No. The department is doing the cost-benefit analysis. Any questions about that should go to the department.

Mr Quinlivan : The letter to Ms Arthy was informing her about the process and asking that she provide information to us to enable us to do the task properly.

ACTING CHAIR: So a cost benefit was the start of this process. I am aware of the survey that was conducted of APVMA. That was done in July 2015. That is a hoary chestnut. We keep chewing this over every Senate estimates, don't we? Anyway, has the minister responded to the staff survey of July 2015? It was a report to the Minister for Agriculture on the willingness of APVMA employees to move to a regional location.

Ms Arthy : That response was included in the letter to me recently.

ACTING CHAIR: I am sorry, I cannot hear you.

Ms Arthy : Sorry. The minister referred to the advice that I provided in July in the letter that he provided me on 22 January this year.

ACTING CHAIR: What was in the letter of 22 January?

Ms Arthy : The minister writes that he appreciates my advice on this matter and the patience demonstrated by the APVMA staff while it is under consideration.

Senator GALLACHER: What was the answer to the survey?

ACTING CHAIR: I will tell you what the answer to the survey was. This says there were 159 staff that filled out the survey; is that right?

Ms Arthy : There were 159 who filled out the survey.

ACTING CHAIR: Out of 170, was it?

Ms Arthy : At that time it would have been around that.

ACTING CHAIR: How many are there now?

Ms Arthy : At the time of the survey 159 staff responded and there were 192 staff members. We are currently sitting at about 200.

ACTING CHAIR: So it was 192 then?

Ms Arthy : Yes.

ACTING CHAIR: I am not making it up, because it is the final survey results on page 5, table 1, where I believe the question was asked of Armidale or Toowoomba or Armidale only and Toowoomba only. I will put all the numbers together. What I have here is 14 staffers, which is representative of that. At that time nine per cent were prepared to relocate.

Ms Arthy : That is correct.

ACTING CHAIR: 'Maybe' 35 of them, which represents 22 per cent. And then there were 110, which represents 69 per cent, that said, 'No.' That is correct?

Ms Arthy : That is correct.

ACTING CHAIR: So you sent that off to the minister. The minister has read it and then last month he sent a letter still saying, 'Thanks for your information,' and now he wants the department to do—what was it?—a cost-benefit?

Mr Quinlivan : We will be commissioning some independent party to look at the costs and benefits of the move, yes.

ACTING CHAIR: How much will that cost?

Mr Quinlivan : We have not completed the procurement process yet. We will be able to inform you when we have done that.

ACTING CHAIR: Do you have a rough idea how much it would normally cost when you are asked by ministers to do this sort of thing?

Mr Quinlivan : I think we are looking at somewhere in the region of $150,000 to $200,000—something like that.

ACTING CHAIR: I am just trying to work it out because I cannot remember the percentage. I am that excited I cannot keep my memory that long. What was it, 69 per cent or something that do not want to relocate? From previous rounds of estimates—the 200 staff: what are they made up of? I know they are scientists. If you could just give us a breakdown?

Ms Arthy : Roughly, we have about 85 to 90 regulatory scientists.

ACTING CHAIR: How many?

Ms Arthy : Eighty-five to 90, depending on what we have got on. The other people are lawyers or compliance staff. We have a significant team of people who look at auditing and licensing manufacturing premises.

ACTING CHAIR: How many of them?

Ms Arthy : Off the top of my head, it would be eight. That is a guess. Then we have a significant IT section and corporate, as normal. And of course we have a case management unit that deals with all the administration around the handling of the applications.

ACTING CHAIR: It is not hypothetical. I think it is fair dinkum; it is in your face here. What happens if the minister says, 'I don't care. We are moving off,' whether it be to Toowoomba, Armidale or wherever? I am sure they are lovely places; there is no argument from me. How do you replace these very educated employees? I have to be careful. I always have a crack at lawyers but, yes, they do spend an amount of time at university. How do you replace scientists, lawyers, auditors, IT experts and corporate experts?

Ms Arthy : It would be very difficult because we do have quite a significant training element of what we do to get our people up to speed. I have not really gone into a lot of the detail about what-ifs because I am waiting to see what the decision is.

ACTING CHAIR: Of course.

Ms Arthy : I would probably have to look at different models of providing what we do. Beyond that, for me there is no sense speculating until we have a final decision.

ACTING CHAIR: I know, but if some big bloke says he is going to bop you on the end of your nose if you do not shut your mouth and then you do not shut your mouth; you had better start worrying. I do not mean that you are going to be bopped in the gob, but I am just perplexed. Is staff turnover a problem at APVMA or have they all been there a long time?

Ms Arthy : Most people have been there a long time. We had a fair bit of turnover last year. I think it was just a normal course of events, but we have now—

ACTING CHAIR: Sorry, you had a lot of turnover last year, which is a normal course of events, even though people have been there a long time?

Ms Arthy : No, sorry; I mean we had a fairly low turnover there for a while. It is just as you go in an organisation; people leave for other opportunities. Alternatively, we have also recruited. Since the recruitment freeze finished we have recruited fairly heavily so it has been quite good.

ACTING CHAIR: I will ask how the move will affect the operations of APVMA if these staff do not move?

Ms Arthy : Prior to the move or after the move?

ACTING CHAIR: No, after. If it is pack up and head now—

Ms Arthy : Depending on how many people will finally go—

ACTING CHAIR: Let us have a rough guess: there were nine and 35, I think. It is about 40-something.

Ms Arthy : Nine and 35. Of those, not many were regulatory scientists. I would have to figure out how we actually do keep the operations going. It could be a fairly substantive outsourcing arrangement. Again, that is putting the cart way before the horse. We are just not there yet.

ACTING CHAIR: Are you going?

Ms Arthy : That is a private question, Senator, that I do not believe I should answer.

ACTING CHAIR: What about you, Mr Norden? Are you going? No comment?

Ms Arthy : I believe they are private. It is up to the individual, Senator.

ACTING CHAIR: Dr Bhula, are you going? No-one is jumping out of their skin saying, 'Bloody oath, I'm on the first Greyhound out there.'

Senator EDWARDS: Acting Chair—

ACTING CHAIR: What's up? Have you got questions?

Senator EDWARDS: Well, if you want me to.

ACTING CHAIR: Okay. I just have a few more. Now, I want to talk about the global shortage of Duvaxyn.

Ms Arthy : Mr Norden will answer those questions.

ACTING CHAIR: Tell us what you do with Duvaxyn.

Mr Norden : My understanding is that we were contacted last week by both industry and also the manufacturer of Duvaxyn, which is the equine product. There is a shortage supply in relation to its manufacture. The questions that we have received around it would be: would there be opportunities for importation and use of an alternative product? The APVMA has available to it options of issuing permits such as emergency use permits. We have said to both industry and also the registrant that we would be willing to consider those as options. That is subject, obviously, to assessment processes that we would have to go through.

The other thing to note would be that because it is a biological material there would be other import concept requirements from the Department of Agriculture and Water Resources as well in relation to a biological material. So it would not be just subject to APVMA issues and assessments but also to importation of a biological material.

ACTING CHAIR: You have painted the picture perfectly, because it is an equine herpes virus vaccine. I would assume that it would put fear into the thoroughbred and pacing industry; is that correct?

Mr Norden : That is correct. We have had some contact from the thoroughbred industry.

ACTING CHAIR: So we have a global shortage of this vaccine. When I asked about what you would do, you did offer up: you said you could get another chemical or another vaccine. But then you explained to me all the rigmarole—I will use the word 'rigmarole'; that is the only word I can think of—to try to get a permit to get another vaccine in here. How long would that take?

Mr Norden : Depending upon the information that is provided to us, we assess emergency use applications as quickly as possible. I would be guessing at this particular point in time, but I would expect that it would be less than a month for the APVMA to conduct an assessment of that nature. But you would also have to explore what the process was in relation to the importation of the biological material.

ACTING CHAIR: Who does that?

Mr Norden : The department.

ACTING CHAIR: I will ask Mr Quinlivan, because I am sure you have had some conversations about it. Look at the fright we had when we did not think we were going to have a Melbourne Cup five years ago through Hendra. So how long would your department take to authorise some other vaccine coming in?

Mr Quinlivan : I cannot answer that personally, but after the afternoon tea break we will have as much information as we can for you. Perhaps the right person will be on later in the evening, but we will know then. It is a technical question.

ACTING CHAIR: There are heads behind you that have been there a long time. Would anyone know? It would save them coming back. Does anyone know?

Mr Quinlivan : We have identified the person. We will have it for you after the break.

ACTING CHAIR: All right. We have a timing issue here. What if that equine virus were to break out in a stud—a rather large thoroughbred stud? This is the time of year when it is mating time, isn't it? Are there any horse-mating experts in here? I know they all have their birthday on the same day! No-one can help me? Far out, I could be one of these scientists who could go and work for APVMA! Anyway, what would you do? You get a phone call; someone is panicking. A thoroughbred stud with hundreds and hundreds of thousands of dollars worth of horses and this virus is let loose. What would you do?

Mr Norden : From the APVMA perspective we would not be in a position to comment or advise on that in relation to that. Our procedure is to assess and register products.

ACTING CHAIR: I will put my hat on as being a thoroughbred stud owner. Who do they talk to?

Mr Quinlivan : We would recommend that they talk to chief veterinary officers within their state and also at the federal level.

ACTING CHAIR: You are not the Chief Veterinary Officer. Put it this way: there would be panic, wouldn't there? I am not instilled with a great deal of confidence that we could handle this very quickly because of the processes we would need to get permits to bring something else in.

Mr Norden : The chief vet is not prone to panic and he will be here—we are taking a break at 4.15—at 4.30.

ACTING CHAIR: We can come back to it. He can come and join us.

Mr Quinlivan : Yes.

ACTING CHAIR: That is all right. Let us leave the rest of those questions there.

Senator SIEWERT: Has somebody already asked about the advisory board? I am sorry; I was in another committee meeting. Did you already ask about the advisory board?

Ms Arthy : No, Senator.

Senator SIEWERT: Can I ask about that first? What work did the advisory board undertake and what is going to happen with the decision to abolish it?

Ms Arthy : The advisory board, under legislation, provided advice to me as CEO. Over the three years that they worked with me the types of things that I asked them about predominantly related to our corporate plan. We looked at providing advice about the APVMA's vision and mission and what basic strategies the APVMA should be adopting. We also got them to advise us around business process review. It was particularly using their expertise around organisational performance as well as their knowledge of the registration system.

The other big part of the work they did was to provide us advice on the various strategies we were doing. We had a compliance strategy, a regulatory science strategy and an international engagement strategy that they provided advice on, as well as work around acceptance of international standards. The final area was around how the APVMA can better communicate with the agriculture sector. It was fairly broad ranging. They were the main parts of work that they worked with us on.

Senator SIEWERT: Is there a plan to replace that role following their abolition?

Ms Arthy : I am currently looking at that, the best way of getting that type of advice. At the moment I run a fairly extensive engagement process with the industry stakeholders through one-on-one meetings, as well as different forums through the year. The board played a slightly different role in it. They did not come with their representative hats on. They came to provide advice from a much more strategic level. What I am looking at now is: one, does that role need to be replaced? Can I get it through other means? And two, can I revamp the engagement strategies I have got going with the industry stakeholders to provide more of that role? That is going through at the moment in terms of just my own thinking.

Senator SIEWERT: Do you have a time line for when you—

Ms Arthy : I am hoping to get something settled in the next month or so, just in terms of being clearer about how to go forward.

Senator SIEWERT: Thank you. Were you consulted before that decision was made?

Ms Arthy : The department talked to me, yes, before the decision was made.

Senator SIEWERT: You had not contemplated the issue prior to that?

Ms Arthy : Sorry?

Senator SIEWERT: You had not contemplated whether you needed the board or not?

Ms Arthy : Under the legislation it is the minister who appoints the board. For me it was in legislation, so I worked with the board. They were valuable. Once a decision was made then I would look at alternates.

Senator SIEWERT: This may be a question for the department, but what is the budget impact of the abolition?

Ms Arthy : That one is ours. From memory, the board cost us just over $100,000 a year. I will just confirm that. I will come back to you with the exact number, but it is between $100,000 and $150,000.

Senator SIEWERT: Thank you. Given that you are still thinking about what the alternatives are, are you also looking at the budget impact—

Ms Arthy : Absolutely.

Senator SIEWERT: if you are trying to replace that function?

Ms Arthy : Absolutely. That is fairly important because, frankly, I am trying to channel as many resources as I can into assessing applications. I do look at value adding. That is one of the reasons why I am looking at revamping the current way I engage with the industry stakeholders because it should not have a budget impact if it just means changing slightly what I am currently doing.

Senator SIEWERT: The issue with that, bearing in mind what you said before about how they are not wearing hats when they are on the board, is that, if you are revamping your existing engagement strategy, people are wearing their hats, presumably, under the existing engagement strategy. How do you then get a process where you get that level of independence that you obviously seem to have valued through the board process?

Ms Arthy : The issue for me is whether I need a formal structure to do that and whether I use my networks to get that sort of advice, without necessarily needing to have people in a meeting and looking at how we do things differently within the APVMA to get that sort of advice. It will be a challenge, but I am also weighing up, in terms of the value and the expense in getting that advice, whether there is any value adding for the stage that we are in with the APVMA. A lot of the work that the board did was really about helping me to set up the processes that we have now.

Senator SIEWERT: I have another couple of questions. I want to chase up some issues around nanomaterials in agricultural and vet chemicals. Have you identified any use of nanomaterials in any agricultural or veterinary chemicals in use in Australia?

Ms Arthy : We do not have any currently. However, we have been doing a lot of work in preparation because in the future we expect to see them come in. I will check with my colleagues as to whether they know anything differently. No, we do not have any here.

Senator SIEWERT: What further work has been done? You said you are doing some work to deal with that. What further work has been done? You answered some questions in September of the year before last. I am wanting an update on work that has been undertaken since 2014 to now.

Ms Arthy : Since 2014 we have released a fairly significant report on our website. That was done by our Chief Scientist. We also ran a nano symposium. That informed the final report. The latest information about what our approach is and what the issues are is in that report.

Senator SIEWERT: You have not done further work since then?

Ms Arthy : No, not since we released that report.

Senator SIEWERT: Thank you.

CHAIR: We should go to afternoon tea. Are you nearly done?

Senator SIEWERT: I have about five more questions.

CHAIR: Have we finished this section now?

Senator STERLE: I need them back.

CHAIR: We will come back in 15 minutes.

Proceedings suspended from 16 : 19 to 16 : 33

Senator SIEWERT: I want to pick up on a question that I asked on notice a little while ago. In your response you said that, in relation to products that contain nano materials, applicants are advised to contact the APVMA to discuss their specific requirements before making an application. Does this mean that the APVMA no longer has the view that existing substances reformulated at the nano scale would be considered as new substances? I understand that was your position. Maybe I should give you a bit of background. When I was pursuing this issue with FSANZ during last estimates, they were of the position, which is something I didn't quite understand before, that if it is a substance that is being used—in food in this instance—and it has come in at the nano scale, they do not see that as a novel, as a new, substance. Is that now your position, or are you still of the opinion that they are different substances?

Ms Arthy : Before I hand over to Mr Norden or Dr Bhula, we are suggesting to applicants to come and talk to us because nano is so new that we would prefer to work with the applicant from the beginning so that we can work through what the issues are. So for me it is not as simple as saying 'yes' or 'no' to your question. Because nano materials are fairly unknown, we would much prefer to talk to the applicant about what they have got, what they want to do with the product and then work with them as the application comes in. I will check whether my colleagues have anything different to add.

Dr Bhula : I am sorry, Senator; I missed the beginning of your question.

Senator SIEWERT: Substances that are reformulated on the nano scale are not now considered new substances.

Dr Bhula : New substances—okay.

Senator SIEWERT: We were just having a discussion, and agreed it was not as simple as a 'yes' or 'no'. Is it the case that substances on the nano scale could still be treated as a new substance?

Dr Bhula : In answer to your question, if we had two formulated products, one formulated product which we had already assessed, and then another version of that came in and it had nano material within it, that formulated product would be treated as a new product. Assessments would be conducted again. So we would look at environmental safety, worker health and safety, and residues in food.

Senator SIEWERT: Thank you; that answered my question. Have you had contact from any companies that want to look at agricultural products and/or veterinary products that contain nano material?

Mr Norden : Yes, we have. I would have to take that on notice in terms of how many, but we have had discussions, yes.

Senator SIEWERT: If you could take on notice how many companies have contacted you about that, or that you have had discussions with, and whether you able to provide us with information on what advice you provided to the companies. Are you aware of whether those companies are proceeding to lodge an application? Have any been told that they do not need to lodge an application? Does all that make sense?

Mr Norden : Yes, it does. Again, I would have to take that on notice as well.

Senator SIEWERT: That is what I understood you were doing. You have already said you have not identified any agricultural or veterinary chemicals in use—I have already asked that question. Are any of those products now starting to go through the process?

Mr Norden : No, I don't think we have any before us at this point in time.

Senator SIEWERT: Okay. Thank you very much.

CHAIR: I asked earlier where I would want to deal with the superbug.

Mr Quinlivan : Yes, you did indeed: Biosecurity Animal Division, outcome 2, item 17.

CHAIR: Does APVMA have any interest in colistin? Is that of interest to you?

Mr Quinlivan : They may do, depending on what the proposed remedies and responses are.

CHAIR: I asked a question about the superbug MCR-1, which causes bacteria to become resistant to colistin. Are you familiar with that?

Mr Norden : No, I am not.

CHAIR: It was detected in China in 2015 and thought to be confined to China. It has reportedly been detected since then in 19 other countries, all over the place—Canada, Denmark, England, Wales, the Netherlands, Portugal, France, Thailand—in bacteria from farm animals, chickens, pigs, cattle, retail meat, chicken feed, pork and humans. In June 2015 the government released a National Antimicrobial Resistance Strategy. Is colistin registered for use in Australia? Who will answer that—the other crowd?

Mr Norden : Yes.

CHAIR: Maybe you should take an interest in this, because it is a serious matter. It started off in chickens, and now it is everywhere.

Mr Norden : We would have to look to see if we have the product registered.

CHAIR: Can you answer it, Chief Vet?

Dr Schipp : Colistin is one of the polymyxin antibiotics. It is not registered for use in veterinary medicine in Australia.

CHAIR: Correct. In Australia it is a last resort for use in humans, is it?

Dr Schipp : It is quite a damaging antibiotic in human medicine. It causes quite severe kidney damage. It is an antibiotic of last resort because there is little resistance to it but also because of the side effects that it has.

CHAIR: Dr Schipp, obviously it can enter through the human chain now that it has got out into other places. In China, for instance, it has been used in the animal world. So what should we be doing? Do we have some way of monitoring if the superbug gets into Australia?

Dr Schipp : In terms of the measures we are taking, because Australia does not import live ruminants or pigs, that avenue is closed down. We don't import chicken meat unless it has been retorted. Pig meat is required to be cooked. The only poultry that are coming in are coming in as hatching eggs. So through those biosecurity measures we are restricting entry into Australia. In terms of monitoring in Australia, we have commenced a pilot trial in the pig industry to look at antimicrobial resistance generally and we are hoping that that will also be able to look into the issue of whether there are any MCR-1 genes in Australian pork

CHAIR: Do we look at imported fish?

Dr Schipp : No.

CHAIR: Is it being used in the fish world?

Dr Schipp : We have not seen any reports of polymyxin or colistin use in fish. We have seen it in pigs and poultry.

CHAIR: How does the department remain connected in with alerts on this issue and keep abreast of what is happening internationally? I asked in October what you knew about it. I think we said we would go away and have a look. Have we come back with a report? How might this affect Australia? This question is in response to Ms O'Connell's—'connected in' was the term used by the department deputy secretary.

Dr Schipp : You mention the national strategy, which was launched in June of last year. That is overseen by a steering committee chaired by the Secretary of agriculture and the Secretary of health, together with the Chief Medical Officer and me. The Chief Medical Officer and I co-chair an advisory group of technical and strategic advisers. APVMA is one of the representatives on that, together with Food Standards Australia New Zealand and a range of other experts. So they have connections to what is happening internationally and are able to provide advice on the best practice for us to adopt in Australia.

CHAIR: This paper has been prepared by Lucinda in my office, and I am grateful for it. According to this paper, which has been thoroughly researched, the emergence of MCR-1 heralds the breach of the last group of antibiotics, polymyxins, by plasmid-mediated resistance. Is that true?

Dr Schipp : That is true, yes.

CHAIR: The findings emphasise the urgent need for a coordinated global action in the fight against pan-drug-resistant gram-negative bacteria. I am sure that you know what that means; I do not. The potential for MCR-1 to become a global concern will depend on several factors: the continued use of colistin in the veterinary sector providing selective pressure both inside and outside China, the stability of the MCR-1 positive plasmids and their ability to transfer to human pathogenic E. coli strains and the population dynamics across China's borders. China is one of the highest users of colistin in agriculture. Why are they doing it when they know that this is the outcome? Is it a last resort for them to be able to keep the chickens alive or something?

Dr Schipp : It is a cheap way of getting high levels of productivity out of poultry and to remain competitive at a great cost to the global community.

CHAIR: At the cost of the human race. Of the top 10 largest producers of colistin for veterinary use, one is Indian, one is Danish and eight are Chinese. Asia, including China, makes up 73.1 per cent of the use, with 28.7 per cent for export, including to Europe. In 2015 the EEU and North America imported 480 tonnes, and 700 colistin sulphates together with other antibiotics have been used in farming fish diets—interesting—where it has been shown to improve health and promote growth. Should there be some sort of global conference on this?

Dr Schipp : There was an independent review sponsored by the UK government, and they published a report in December which looked at global use and a global approach, as you have suggested. In that report, they make a number of recommendations, which include restricting use of these medically important antibiotics and putting a cap on use on each country so that there would be a quota of antibiotics to be used within agriculture within each country.

CHAIR: Bloomberg on 23 January 2016—and it includes a map—makes the point that a superbug fostered by one country's loose practices, which sounds like what is going on in China, can arrive in another country in a shipping container of beef or in the gut of a traveller getting off a plane. Would that be right?

Dr Schipp : Absolutely. We have seen a number of reports in Australia of resistant infections in humans either through tourism or travelling overseas for medical procedures and then returning to Australia.

CHAIR: It goes on: superbug MCR-1 is immune to antibiotics—interesting—is able to convert other bacteria, is hard to keep out of Australia, experts say. Should we be introducing mandatory testing of food imports for this particular bug?

Dr Schipp : That is a question for Food Standards Australia New Zealand. At the moment in the food code there are no standards for antimicrobial resistance and as a consequence there is no testing done routinely within Australia or at the border for imported food.

CHAIR: So the current Australian testing program only tests for drug residues that are left-over fragments of antibiotics and does not test for superbugs; is that correct?

Dr Schipp : That is correct.

CHAIR: At Senate hearings two years ago, it was the government that mentioned that under current international trade rules we cannot set up a testing program for imports unless we have a testing program for our own local produce, but we really need to get on with this and establish such a program. The superbug could easily be spread to Australia and it may already be too late to prevent it arriving. What you have got to realise is that, if you think of all the tourists who are going to China and other places and consuming food, when they return to Australia their own gut flora may now contain superbugs and they will not know. So it would be fair to say that this is quite a serious issue?

Dr Schipp : Indeed, and that is the reason for the national strategy.

CHAIR: Thank you very much for that. I guess it is the last thing we need. I do recall, I think in Mexico, it was one of the last-resort antibiotics they were using to spray their apple trees with.

Dr Schipp : Yes. I was attending a conference in Thailand two weeks ago and they had photos of trees being injected and then sprayed with antibiotics to control bacterial infections.

CHAIR: Perhaps we have done our little duty as a committee in this regard. I will follow it up. Thank you very much for your information today, Mr Secretary.

Senator STERLE: I will come back to that. Dr Schipp, you would have heard—were you in the room?

Dr Schipp : Yes.

Senator STERLE: I want to go back over this vaccine, this Duvaxyn; it treats the equine herpes virus. For the purposes of those who have an interest here, there is a crisis in terms of global supply; correct?

Dr Schipp : Yes.

Senator STERLE: There is or was a company called Zoetis?

Dr Schipp : Zoetis.

Senator STERLE: They manufacture the vaccine between sites in America; is that correct? I am led to believe that there were issues in ensuring the consistency of the product at the new factory resulting in Zoetis removing the vaccine from sale. It is the only product available to treat the equine virus; correct?

Dr Schipp : Yes.

Senator STERLE: You will assume where I was trying to go. I am worried particularly about the thoroughbred and pacing industries. You will have heard my questions to Ms Arthy and co about what happens if a stud or whatever rings up and says, 'Oh, we have a problem.' What I have got so far in terms of APVMA's work is that there would be at least about a month's worth of work before we could start making application or making the way to try and find something else. Firstly, are there other vaccines available around the world?

Mr Chapman : Hopefully I can answer your questions; I sought some advice from the office. First of all, as far as Duvaxyn is concerned, that has been imported into Australia before. The last permit expired in 2014. If there were an application for another permit, it would be given priority because of national need and it would take two to three weeks for us to issue a permit. If there is an application for an alternative to Duvaxyn—and there is the Zoetis example—that would also trigger us treating it as a high priority because of the national importance. It is a bit speculative as to exactly how long it would take us to issue the permit because we would have to look at all aspects of the vaccine manufacture to make sure that it did not bring biosecurity risks with it. That would include things like the strain and the activation of the virus used to produce the vaccine, the animal material that is used in the production and the testing of the virus, the animal materials and the final product for freedom from contaminating agents. If we were provided with all that information satisfactorily we believe that it would take us two to three months to go through all that information and issue the permit. But as far as I understand—I will correct this later if I am wrong—we have not had a permit application for that product.

ACTING CHAIR ( Senator Sterle ): Let us hope that we do not have to but we have to put contingency plans in just in case we do. We did not envisage the Hendra outbreak that sent shivers through the whole community but also the thoroughbred and pacing industries. So that I am very clear in my head, Duvaxyn is not onshore but, if it was reapplied for—if there was a request for a permit to bring it back—it would take you about two to three weeks to get it back into the country?

Mr Chapman : That is right. It does have a history of importation, so we know what the issues are with it.

ACTING CHAIR: Is that on top of APVMA's month?

Mr Chapman : That is our assessment. That is a biosecurity risk assessment for the issuing of the permit.

ACTING CHAIR: So two or three for you guys and possibly four weeks for APVMA on top of that, so six to seven weeks?

Mr Norden : I think we are talking slightly different things as well in terms of—

ACTING CHAIR: That is why I want to clarify it. If anyone from the thoroughbred industry is listening, the poor buggers are probably sweating up as it is now.

Mr Norden : I am sorry; just to clarify, if we talk about the existing registered product, if there was a change to the site, as you suggested, in relation to North America—the US—then we would approve that particular site. I think where Dr Chapman is talking is if they were to source it from an alternative site such as New Zealand, which has been discussed, that would be a separate application as well.

ACTING CHAIR: Let us not make it too murky. Let us go to the hypotheticals and, guess what, I am the Acting Chair, so we are going to; we have to do this. So that we are very, very clear, let us just talk about Duvaxyn. We can source that from New Zealand, did you say?

Mr Chapman : I did not say that. I am not sure.

ACTING CHAIR: You have done a good job of confusing me now. So come back to this: if we want Duvaxyn, we have to go through Zoetis and it has to come from America; correct?

Mr Chapman : My understanding—and somebody might correct me if I am wrong—is that the Zoetis product is an alternative to Duvaxyn.

ACTING CHAIR: I thought Duvaxyn was—

Mr Chapman : I am sorry; if it is an alternative Zoetis product that I was talking about, it is taking that two to three months. They have another product—

ACTING CHAIR: I am sorry; we will get this established. Zoetis are the distributors of Duvaxyn; correct?

Mr Norden : That is correct.

Mr Chapman : Correct.

ACTING CHAIR: They are the only ones that distribute it. Am I right to assume that that is the only vaccine that has been used to treat this equine virus?

Dr Schipp : Yes.

ACTING CHAIR: Thank you, Dr Schipp. We will go back to where you came in, Mr Chapman. Following on from my questions to APVMA, what happens if we have an outbreak or someone needs this straightaway? There is about a month's work through APVMA to do what you need to do. Mr Chapman, from biosecurity's point of view, you said that, if there was urgency or something, there could be a little bit of a rush—my words, not yours. You mentioned the time of two to three weeks. So is your two to three weeks going to happen at the same time as APVMA's month? So we could say that it could take up to a month before we could get this drug back in? Let us just work on Duvaxyn.

Mr Chapman : The time frame that I was referring to is the time from when we get the permit application—

ACTING CHAIR: So that would come from APVMA?

Mr Chapman : No, it would come from the importer.

ACTING CHAIR: Let us put it in really simple terms because you guys are really good. You sit there and you read all the stuff. My attention span goes after race 2 and then I just pick numbers. So tell me: if there is a thoroughbred breeder or a stud master or someone on the end of the phone—or pacer—going, 'I've got a problem; the vet has come in and found that we have this equine herpes virus,' what happens before the vet can get that in the gun and stick it in the horse or horses and then how many other horses could be affected; how does it spread? But let us just do one step at a time—really simplistic, please.

Mr Chapman : From our perspective, an importer would come to us and make an application for an import permit for the vaccine; we would accord it a high priority. The information I have been provided with is that a two- to three-week time frame would be realistic for the Duvaxyn product.

ACTING CHAIR: So that would land on the shores and go straight to the vet, would it?

Mr Chapman : Once they have got the import permit, the goods can come into the country legally and there is no further impediment from us.

ACTING CHAIR: So, from your point of view, it is two to three weeks that you need to do your work? I come back to APVMA. Can you tell me: who would the vet or the importer ring? He would ring you blokes?

Mr Chapman : That is right. We have a lodgement process. With import permits, there is a process we go through.

ACTING CHAIR: And, Mr Chapman, would you go, 'Oh, hang on a sec, mate, I've just got to get on the phone to APVMA,' and word them up too? Is that what you do so that you are all working in conjunction so that we can get this vaccine?

Mr Chapman : I am afraid that I cannot talk in real detail, but generally, when there are multiple agencies which have a role in allowing a product to come into the country, there is communication between the agencies. It does not always work as well as we want it to, but we would be saying, 'Here's what we're doing,' and I would assume that because of the national need the agencies would collaborate and, if there was one issue that one agency had that the other one did not, we would communicate that between ourselves.

ACTING CHAIR: So are we talking about just these two agencies, or is there someone else in the wings here?

Mr Chapman : I am not aware of other agencies, but I will correct that later if I am—

ACTING CHAIR: No worries, Mr Chapman. Coming back to APVMA, you tick off; you agree that, if the phone call came today, in two to three weeks time, once biosecurity had done their bit and you guys had done your bit, the vet would have it in his needle in three weeks?

Mr Norden : Yes. It would depend on who made the application to us. If it was an individual vet or—

ACTING CHAIR: What does that mean; I am sorry?

Mr Norden : In terms of who makes the application. Generally applications are lodged with the APVMA by the supplier or the manufacturer of the particular product.

ACTING CHAIR: I thought the application went to Mr Chapman's mob.

Mr Chapman : They are separate applications. We are approving the importation of the product, and what we look at is whether the product is safe in biosecurity terms for use on animals in Australia. So, in short, we want to make sure that it does not introduce a disease agent in Australia.

ACTING CHAIR: I understand. Well, I understand bugger all, but I got that bit. But for the purposes of getting Duvaxyn in here through Zoetis, can I safely say on the Hansard out there—it is printed—if there was an outbreak and an importer rang you straightaway, now, within two to three weeks there should be no excuses why that vet would not have it available to treat the horses; is that right? There is a deafening silence. Think very carefully about what you are saying because I am going to keep going until I get a definite—

Mr Norden : If the product was to be imported and a request was made to the APVMA, it would come from Zoetis. It would be the importer and the distributor of the product.

ACTING CHAIR: Okay. You know all the intricacies of who is going to do that. If there is an outbreak, Dr  Schipp, who finds the outbreak? Who diagnoses the horse and says, 'Oh, we've got this equine virus here'?

Dr Schipp : In practice, it does not require an outbreak to trigger an import because the permit already exists; we just need some—

ACTING CHAIR: Okay; one horse has got it.

Dr Schipp : We just need somebody to request an import permit from the department or to request a registration permit from the APVMA to kick this process off.

Senator BULLOCK: Does it need something like an emergency to trigger your emergency time table; otherwise you are going to go on the long handle?

Dr Schipp : It does not need to go to an emergency committee or anything of that nature; it just needs to be recognised as a pressing need. We have previously dealt with these issues in an expedited manner when there has been a request to do so.

ACTING CHAIR: So has it run out before?

Dr Schipp : Not on this vaccine, but on other biological products where we have treated it in the same way.

Senator BULLOCK: Senator Sterle, can I make this a little more complicated for you?

ACTING CHAIR: Please. I was just starting to enjoy myself and we cannot have that.

Senator BULLOCK: We have been talking about bringing Duvaxyn into the country, except the manufacturer of Duvaxyn has withdrawn it from sale. So really that is a hypothetical consideration. What is more practical was what started to be opened up down there at the table of bringing in an alternative where they had to go through a much more detailed process. I think, for the purpose of that horse breeder that you say is listening—I do not believe it myself, but just imagine there is one—then that is what the real world holds for him: bringing in an alternative which triggers a longer process. Perhaps in the interests of having a little bit of a light on the real world, we might go through that process to see how long that would take. I must say that I am still not clear as to whether, therefore, a week starts when the clock starts with you or whether a week starts when you are finished. I still have not got that, in spite of Senator Sterle asking it about 10 times.

Mr Chapman : My understanding—and I am sure that my colleagues from APVMA will correct me if I am wrong—is that they are not necessarily dependent on each other as far as start is concerned.

Senator BULLOCK: So they could happen at the same time.

Mr Chapman : Yes. So the issue for us is getting the import permit application. We would start our clock ticking—

Senator BULLOCK: Would you let them know?

Mr Chapman : We certainly would now.

Senator BULLOCK: Just bear with me. In dealing with this alternate product, did you say earlier two to three months?

Mr Chapman : There is a product that is made by Zoetis called, I understand, Pneumabort-K+1b—

ACTING CHAIR: Which is the same company.

Mr Chapman : the same company—which I understand is an alternative to Duvaxyn. It is a product like that and, because we have not done previous work on it, we do not know its previous import history and, even if we gave it a high priority—which we would because of the national need—we need to do those assessments of the manufacture of the strain of virus that is in there of potential contamination of testing and so forth, and that is the two to three months time frame that I was referring to from our side.

Senator BULLOCK: Are you fairly comfortable about that? It would not be five; it would be two to three.

ACTING CHAIR: Months.

Mr Chapman : That two to three months is dependent on our being provided with the information that we need. So if we were provided with unsatisfactory information or insufficient information—

Senator BULLOCK: You would follow that up as a matter of urgency.

Mr Chapman : We follow it up and we go back to the person seeking the import permit or to the manufacturer saying, 'We need this information.' Obviously it would not be appropriate—

Senator BULLOCK: So let us go for two to three months for the time being. When the two to three months is up, are you already finished or are you just starting?

Mr Norden : We could consider it at exactly the same time, as I discussed before the break. That would be a month process, provided, again, that we had the relevant information that was submitted.

Senator BULLOCK: In the real world, Senator Sterle, two to three months.

ACTING CHAIR: Yes, two to three months.

Mr Quinlivan : I think that two to three months, if I am hearing this conversation right, is dependent on a number of assumptions about the process going extremely well—

ACTING CHAIR: That is right, yes.

Mr Quinlivan : adequate information being provided on time and so on. I do not know how realistic those assumptions are, but you probably would not want to rely on them.

ACTING CHAIR: Spot on, Mr Quinlivan. We get that.

Senator BULLOCK: Senator Sterle raised this issue hypothetically in the first instance and he said that he had a horse that was stricken with this virus. My response as an aside was 'dig a big hole' and I think that is probably where you—

ACTING CHAIR: So that has clarified it: two to three months, but anything could happen because you have other work to do.

Mr Chapman : Two to three months is the best case.

ACTING CHAIR: The best case; yes, that is okay. Dr Schipp, back to you; you are the expert here. What does it mean to the owner or breeder of the horses should their horses suffer this virus?

Dr Schipp : I am sorry; I am not sure what the vaccine covers.

ACTING CHAIR: I will tell you. It covers equine herpes virus—

Dr Schipp : I know that it covers equine herpes virus, but I am not sure exactly what range of disease it is responsible for; I am sorry.

ACTING CHAIR: That is fine. Can someone from APVMA tell me?

Mr Norden : No, I am not across that; sorry.

ACTING CHAIR: What we have here now, without the theatrics, is a gaping hole of information not coming forward. I am not having a crack at you, but this is a true thing that could happen and, if I was in the thoroughbred or pacing industry or whatever, I would want to know what the dramas are if we cannot get our hands on this vaccine for the animals. I do not know who to ask now.

Dr Schipp : We will have a response for you when we come back to our session later this evening.

ACTING CHAIR: What session is that?

Dr Schipp : Item 17, is it?

Mr Quinlivan : Yes. It looks like quite a few roads today are leading to item 17.

ACTING CHAIR: Item 17.

Mr Quinlivan : Animal Biosecurity.

ACTING CHAIR: All right. Chair, I am nearly finished now. I am not finished, but I am nearly finished with APVMA. I just want to ask a couple of questions. Has the department or the minister's office requested a briefing on the global shortage of this vaccine?

Ms Arthy : Not to my knowledge, no.

Mr Quinlivan : I think there is an awareness of the issue. There have been meetings and discussions, but I am not sure whether they would meet your definition of a briefing. But there is certainly an awareness and it has been discussed.

Dr Schipp : And the minister's office called us for advice on this vaccine.

ACTING CHAIR: Okay. You have had your conversation. Can you tell us when that was?

Dr Schipp : It was earlier this week.

ACTING CHAIR: Earlier this week. That was the first one?

Dr Schipp : That was the first one that I am aware of, but that is not something that I normally would be involved with.

ACTING CHAIR: This is a loaded question, but was the minister's office as confused as we were there?

Dr Schipp : I believe that would be a fair assumption.

ACTING CHAIR: That is fair enough; okay. I will leave further questions to section 17. Do you have any, Senator Edwards?

Senator EDWARDS: I will put mine on notice. I am looking at the time.

ACTING CHAIR: Thank you. In that case, if there are no further questions, we will see you later in the day, Dr Schipp. Thank you very much everyone. Can we now hear from HIA?