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RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
24/05/2010
AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO
Australian Pesticides and Veterinary Medicines Authority

CHAIR —I welcome officers that are pests and vets! I know I have got senators that are pests and a vet. I welcome the Australian Pesticides and Veterinary Medicines Authority. It is always my will that full members of the committee will lead the questioning, unless it is the will of a senator to pass on to another senator. Senator Back.

Senator BACK —Could I start with a couple of points from the budget papers. In previous estimates we understand APVMA is almost fully cost recovered, with a small appropriation from government, I think, of $300,000 in 2008-09. In 2009-10, can you confirm that the total was $646,000 and estimated to be $650,000 in the 2010-11 financial year?

Dr Bennet-Jenkins —Yes, I can confirm that the appropriation is $650,000, as indicated in the PBS statements.

Senator BACK —Can I then ask why it has doubled over the last two years, when I understood that you were actually looking at staff reductions in the agency?

Dr Bennet-Jenkins —The appropriations have been constant through the years. There is an addition of appropriation that we get from the department for minor use, which is around $130,000, and the $650,000 is in relation to the arrangements whereby, with respect to the money that is collected on our behalf that goes to the Department of Finance and Deregulation, it is the interest earned on that money, and that money is appropriated back to the agency, which was an agreement when the agency moved from being a CAC Act agency to an FMA agency. That has not changed over the years.

Senator BACK —And your revenue is projected overall to increase by $1.2 million up to $25.4 million for the year out?

Dr Bennet-Jenkins —Yes, that is correct.

Senator BACK —You have had an approval of increase of fees as well, I understand.

Dr Bennet-Jenkins —Yes, there has been an approval of the increase in our application and registration fees.

Senator BACK —Staff numbers have reduced from, I think, 157, 160 down to 152. Could you tell us what you have done in terms of management of the agency to achieve that reduction, given, as I recall, that you had a backlog that needed to be cleared last financial year. Could you just explain that situation?

Dr Bennet-Jenkins —The staff reductions have been largely in discontinuing and non-ongoing staff. The core staff that are involved in our core activities have remained the same.

Senator BACK —And has the backlog been cleared?

Dr Bennet-Jenkins —We are continuing to work on the backlog area.

Senator BACK —Where are you with it? Are you in a better position than last year?

Dr Bennet-Jenkins —We are in the same position in terms of the time frames in which we finish applications, but we have certainly finalised in excess of 300 more applications this year—it probably will be larger by the end of June—than we did last year, so there has been a much increased output from the agency in the last year.

Senator BACK —Excellent. Has there been a reduction in FOIs in the agency in the financial year which is coming to a close?

Dr Bennet-Jenkins —I would have to take that on notice. I do not have the FOI numbers. Just from memory, FOI requests are pretty steady; there is no increase or decrease. But I could get the exact number for you.

Senator BACK —Thanks. If you would take that on notice, I would be appreciative. I want to now move, if I may, to the national regulatory framework. I understand that you have got approval for that. When will that go to COAG?

Dr Bennet-Jenkins —I might pass to my colleagues in DAFF on that question.

Mr Grant —The new national regulatory framework, as you say, is a COAG initiative. A framework document has been produced. It was considered by the Primary Industries Ministerial Council at its meeting on 25 April.

Senator BACK —In Darwin, yes.

Mr Grant —They agreed that they would forward it to COAG at its next meeting, which is scheduled to be around June. I do not think the date has yet been finalised.

Senator BACK —Will that result in closure of state offices and what will be the impact staffing wise?

Mr Grant —No. What is being produced is a framework document. It is a set of guidelines and principles. What has to be developed then is a development and implementation plan. That will look at a series of options about how the single national framework can be implemented. We are due to go back to COAG by about the middle of June 2011 for COAG’s acceptance or otherwise of that implementation plan and it will not be until that plan is implemented, sometime in 2012-13, depending upon the legislative requirements, that you will see any changes on the ground.

Senator BACK —Is it going to be cost neutral, is it going to save you money, or is it going to cost you more and, if it will cost you more, how will you recover those costs?

Mr Grant —That is not clear until the implementation plans are developed and designed, but I note that the Productivity Commission, when they proposed this development in their assessment a couple of years ago, did indicate that consideration of costs would be a very important part of the implementation plan. That will be something that COAG will have to have a bit of a think about this time next year.

Senator BACK —Legal costs are issues that we have discussed with you in the past—$1.0 million, $1.4 million. Can you tell us what legal costs you anticipate in the coming financial year? Are you aware of any impending challenges that are going to have an impact on your budget from a legal cost point of view?

Dr Bennet-Jenkins —We are not aware of any impending legal challenges. I do not have the exact amount that we have set aside for next year’s budget for legal costs. Again, we could provide that on notice.

Senator BACK —Thank you. The last question, I hasten to advise, does not relate to Tasmania, but it is an issue that has been raised before, and that is the one of the two-headed fish at a hatchery in Queensland, which I know my colleague Senator Colbeck has asked about before. My recollection at that time was that there was an allegation of a chemical drift from agri chemicals. Could you give us an update. Did you ever come to a determination as to the possible cause of the anomaly in that hatchery?

Dr Bennet-Jenkins —Certainly I can give you an update of what has been happening in that case. The Queensland government established a Noosa Fish Health Investigation Taskforce that has been investigating this series of effects in fish. It related to fish, fingerling and larval deaths and larval deformities. All those events have been reported only at that single hatchery. That task force is about to publish its final report in which it will make its findings in terms of what may have been involved in causing these deformities in the fish. They are looking at it in terms of fish health, where pesticide drift could be one cause. To date, the interim reports have indicated that, while it is plausible that chemicals could have been a cause, they have certainly not been able to establish a direct link. We are awaiting the finalisation of that report and its recommendations to see what, if any, regulatory action is needed in terms of the chemicals.

Senator BACK —I have one very quick final question. It may or may not relate to your agency; it possibly does not. The possible feeding of meat meal to fish in a hatchery or in a fish farm would not be something that would come under the oversight of your agency, would it?

Dr Bennet-Jenkins —No, it would not.

CHAIR —I did say, Senator Back, we do have pests and vets. You are the vet. Any other questions? Oh, Senator Xenophon, sorry! I say that tongue in cheek, Senator Xenophon. But I was looking at you. If you wondered what I was thinking, now you know. I do say that tongue in cheek. Senator Xenophon, it does give me great pleasure to give you the call as the last senator for the evening, and please feel free to take your time.

Senator XENOPHON —Since I have been insulted, I might take my cue and ask a few questions! Can I just follow on from what Senator Back asked in relation to the Noosa fish farm contamination. You have said that a Queensland task force has been looking at it, saying that, whilst chemicals could have caused it, it was not definitely the cause in terms of the interim reports. What else could it be, given some of the literature that has talked about the potential impact of endosulfan and carbendazim contamination?

Dr Bennet-Jenkins —There are a number of causes. It can be fish diseases. It can also be the conditions: there is certainly literature to show that varying temperatures and oxygenation of the water can cause deformities in fish. It is not unusual to have fish deformities occur in a fish hatchery. There were a number of issues that needed to be investigated before one could directly say there was definitely a link with chemicals.

Senator XENOPHON —Was your authority previously aware of residents’ concerns relating to contamination in this area and, if so, what action did your authority take?

Dr Bennet-Jenkins —We have an Adverse Experience Reporting Program whereby members of the public or our colleagues in the state departments can give us adverse experience reports. We received some adverse experience reports in terms of these deformities, which we began investigating, and this was followed on. What we do is refer the reports to the Department of Environment, Water, Heritage and the Arts and the Department of Health, if necessary, for expert advice. In this case, this task force was formed whose whole terms of reference were to investigate that, so we have been working with the task force to give them information so that they can investigate it.

Senator XENOPHON —Given that there are allegations or concerns that endosulfan and carbendazim were involved in the contamination, is your role with this task force to provide advice or do you have a role in the gathering of the evidence as well?

Dr Bennet-Jenkins —There are probably two things. Firstly, we were requested by the task force to provide the information that we would either have on file or have the expertise to feed into its investigations. Secondly, our role is to look at the adverse experiences in terms of the responsibility we have in the use of the products.

One of the things that was established quite early was that the chemical endosulfan was unlikely to be involved in the incidences because the farmers concerned had not been using that chemical for at least the last five years. The farmer had been using carbendazim. According to the state authority; he had been properly using it in accordance with label directions. In those particular incidences, there was no direct evidence of cause and effect from the chemical that was detected. So we are in a difficult situation to take regulatory action unless there is a proven link. It was just a hypothesis which has not yet been fully proven to enable us to take regulatory action.

Senator XENOPHON —I know there are other senators who wish to ask questions, so I want to keep moving on. Does the authority have an investigative role, in terms of seeking answers to questions, calling in evidence? Do you see that as your role?

Dr Bennet-Jenkins —We look at all the literature. One of the things that we did immediately was to do a wide literature search to find what we call the toxicological end points for fish, to find out which was the most sensitive fish species, and we also did some modelling for spray drift to see whether the spray could have travelled as far as those ponds.

Senator XENOPHON —But in addition to literature searches and modelling, does the authority have the power to call people in to ask questions, to conduct a fairly thorough investigation?

Dr Bennet-Jenkins —We have the authority to do a full re-evaluation of the chemical, but that only relates to the registrant, so we can require the registrants to provide us information that we then look at.

Senator XENOPHON —But you do not have the authority to actually call people in to see whether they are using the chemicals in accordance with—

Dr Bennet-Jenkins —No.

Senator XENOPHON —You do not?

Dr Bennet-Jenkins —No. That is a state and territory responsibility, the control of the use.

Senator XENOPHON —I think on 26 March you issued a statement about these two chemicals and you stated that:

There is no evidence that either chemical is presenting any human health or environmental problem in Australia when used according to these strict conditions.

But whether the chemicals are being used in accordance with strict conditions is really a matter for state authorities to monitor?

Dr Bennet-Jenkins —That is right.

Senator XENOPHON —Are you satisfied that state authorities are monitoring the use of these chemicals, for instance, in accordance with the strict conditions that you have set out?

Dr Bennet-Jenkins —That is a role of the states and territories and, when we have adverse experience reports, that is the first point that we go to. We ask them, ‘What information and investigations have you done?’

Senator XENOPHON —Yes, but in respect of whether the conditions are being strictly adhered to, does your authority have an auditing role or does it have the authority to determine whether there is an auditing role as to whether state authorities are carrying out their responsibilities appropriately?

Dr Bennet-Jenkins —No, we do not have a role in that at all.

Senator XENOPHON —Do you think it would be desirable that you would, or should there be some auditing role of state authorities?

Mr Grant —Perhaps I can answer that. In a sense it goes back to the questions that Senator Back asked about the COAG initiative to look at whether there should be a single national regulatory framework. That will be one of the issues that will be addressed under that study and it will go back to COAG in the middle of next year or so.

Senator XENOPHON —Thank you. Given that carbendazim is a potential human carcinogen and can cause birth defects and only accounts for about one per cent of fungicides sold in Australia in 2008-09, has the authority considered banning it completely, given its fairly limited use?

Dr Bennet-Jenkins —The only reason that we can cancel a registration or discontinue use is if we actually have evidence that it cannot be used safely. In terms of the warning and the suspension action on the chemical and the warnings in relation to birth defects, they relate to laboratory animals only, and the assessment has been very extensive on this chemical to show that the situations where it caused the birth defects in laboratory animals—which was giving direct large doses in a big bolus to laboratory animals—were not realistic to exposure in real life. Similar experiments done in laboratory animals, where they were exposed in their diet over a lifetime, did not show any of those effects. So the effect is not considered relevant to use. Those label statements are just a general hazard warning, but they are not the risk that the chemical presents in proper use.

Senator XENOPHON —Has the authority made a submission to the persistent organic pollutants committee review of carbendazim?

Dr Bennet-Jenkins —The Stockholm convention relating to persistent organic pollutants is something that the department actually participates in. It is not something the authority does. We are obliged to give submissions if we have information about chemicals that meet the criteria for persistent organic pollution that are under the Stockholm convention. Carbendazim, as far as I am aware, has so far not been identified as meeting those criteria.

Senator XENOPHON —Finally, the final report into the review of the management of carbendazim, when is that likely to come out?

Dr Bennet-Jenkins —The draft report—what we put out is a draft report—on the human health, the public health and occupational health side of things is likely to come out sometime this year. We are awaiting the draft report from the Department of Health and Ageing, who are writing this report for us. It will then go out for a period of public comment before we make the final decision. But because we had feedback of some certain concerns about the exposure assessments, in terms of residues as well as public health worker exposure, we took some suspension action quickly to remove those uses while we went through the public comment period and finalised the report.

Senator XENOPHON —So by September, do you think? Is that a reasonable time line?

Dr Bennet-Jenkins —I would really have to take that on notice. I am not quite sure how far along it is in the work order that we have in the department, but I believe it is very close to finalisation.

Senator XENOPHON —Thank you. Thank you, Chair.

Senator COLBECK —Minister Burke, at the ABARE Outlook conference, talked about a review of the APVMA. Can you tell us where that process is at?

Mr Grant —Perhaps I can help. Minister Burke foreshadowed a better regulation ministerial partnership in his Outlook speech. That review has progressed significantly. There was an external consultant that was sent in to work through the APVMA’s operations, provide some advice about their administration and look at the legislative constraints and strengths and weaknesses. A report has been provided back to Ministers Tanner and Burke with a series of recommendations about improvements that could be made to the APVMA’s operations. The ministers are considering the contents of that report at the moment.

Senator COLBECK —Did the consultant just go and have a look at the APVMA, or did the consultant go and talk to the constituency of the APVMA?

Mr Grant —The consultant went outside the APVMA and talked to the constituents as well.

Senator COLBECK —How broadly was that?

Mr Williamson —From memory, the consultant looked at about six organisations, the main ones being CropLife, ACCORD, PACIA. They invited also Choice and the Veterinary Manufacturers and Distributors Association. The consultant also invited comment from the relevant state jurisdictions and that was provided. It was a relatively broad consultation, given the time allowed for the consultancy to be undertaken, which was about four weeks.

Senator COLBECK —Four weeks?

Mr Williamson —Yes.

Senator COLBECK —So the APVMA and six industry players and the states and territories, effectively, was the—

Mr Williamson —That is correct, yes.

Senator COLBECK —What about some of the smaller end users of product that might have issues with, say, minor use, registration, things of that nature? You have talked to the major players in a manufacturing sense, but what about people at the other end of the chain?

Mr Grant —A lot of those consultations and users will be picked up as part of a significant consultation that is going to happen around the COAG single national framework process. So there has already been one process of consultation in the development of the framework paper and, as we go forward over the next 12 months to develop an implementation plan, there are two significant consultations with users, and all of those control of use and smaller organisations will certainly be picked up in that process. What we were looking at in the Better Regulation Partnership were issues that were complementary to the single national framework developments and were associated with either legislative reform or administrative reform—so quite direct—and changes that could be implemented quite quickly and which would have some impacts in the near future.

Senator COLBECK —Where does that sit in respect of the current process on cost recovery that is going on?

Mr Grant —As was indicated to Senator Back, Minister Burke made a decision to increase cost recovery fees by 10 per cent. That is an interim decision pending the significant reform processes that are happening—we have mentioned two of them here—with a view that there will be another review of costs once the functions, format and structure of the APVMA are better clarified, around this time next year.

Senator COLBECK —What was the process by which it was increased? Was it increased by regulation?

Mr Grant —Yes, but it has not been increased yet. We are moving to finalise the regulations at the moment.

Senator COLBECK —Something for us to keep an eye on. So effectively what the minister did was put a blanket 10 per cent increase on fees and charges?

Mr Grant —On fees and charges, yes.

Senator COLBECK —And that is an interim measure. What is the additional revenue from that 10 per cent?

Dr Bennet-Jenkins —That additional revenue is about $600,000 a year. Most of our revenue comes from levies. About 70 per cent of our income comes from levies and only about 28 per cent of our revenue comes from application fees.

Senator COLBECK —So it is not a review of fees and charges across the board?

Dr Bennet-Jenkins —All our fees rather than the levy system.

Senator COLBECK —Yes, and the levies are paid on what basis?

Dr Bennet-Jenkins —They are paid on the basis of sales of product.

Senator COLBECK —Okay. That is an agreed process, so what is the process to modify the levy rates? A regulatory process by government again—regulation?

Dr Bennet-Jenkins —Again, yes, it would be through a cost recovery process and changes in regulation.

Senator COLBECK —Okay. I will have to go back and have a look at that. I am just reading to make sure that the answers correspond to my question, because they have been pretty good.

Senator NASH —What—the answers or the questions?

Senator Sherry —Can you table them?

Senator COLBECK —It is a great change from early in the day, I can tell you.

Senator Sherry —Let’s quit while we’re ahead!

Senator COLBECK —Yes. Perhaps we are just wearing them down. I do not know, Senator Sherry. But let’s take it when we can get it.

Senator Sherry —Let’s keep going, then, until two or three in the morning!

Senator COLBECK —What has industry feedback been from the 10 per cent increase? They do not know yet?

Dr Bennet-Jenkins —Yes, we made an immediate announcement and we have written to them all. I think we have had one inquiry.

Senator COLBECK —I think Senator Back has done some stuff on time for registration. I suppose the purpose of the review of process is in the context of red tape as much as it is anything else, so time taken for registration is something that would be borne out in that overall process. Is there a time frame that has been placed on this overall process? Obviously the initial consultation was only four weeks, so that was pretty sharp. Is there a projected time frame that you have for the next stages of this process?

Mr Grant —The intent of the veterinary regulation partnership was, as I said before, to identify some changes that could be implemented quite quickly, notwithstanding the complex nature of the national system about agricultural and veterinary chemicals. As I said, ministers are considering it at the moment and I would expect there to be some responses quite soon. Legislative changes will take time to go through the system, so, if there is a significant amount of legislative change that may not filter through the parliament until later this year.

Senator COLBECK —Going back to the minister’s statement, there is discussion about capacity to access and it even reflects a bit on Senator Xenophon’s questions about what the APVMA’s capacity is to act on certain things. Are there conversations with the states about the overall management of ag and vet chemicals and the current separation of powers? Recognising that the APVMA itself was created in the late nineties by a drawing together of state entities in the registration and labelling of chemicals, is there discussion about going a step further with respect to the management of use at a state level and picking up some of the things Senator Xenophon talked about?

Mr Grant —That will be a focus for the consultations and the development of that implementation plan around the single national framework. So in relation to what role there should be for a single national regulator—whether it is the APVMA or a complementary body that might sit alongside the APVMA—and whether you should vest the responsibility still with the states and have consistent national legislation, there are a range of options that you could look at.

Senator COLBECK —That process has been dealt with through the Primary Industries Ministerial Council?

Mr Grant —That is correct.

Senator COLBECK —That itself can entail some time.

CHAIR —Thank you, Senator Colbeck, and I thank the officers from APVM and you, Dr O’Connell and all your crew. We will see you again tomorrow. To my fellow committee members, thank you. Cheerio to the secretariat, Hansard and Broadcasting. Minister, thank you very much.

Senator Sherry —Thank you all.

CHAIR —That concludes today’s hearing and the committee now stands adjourned.

Committee adjourned at 10.56 pm