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RURAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
20/10/2010
AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO
Biosecurity Services Group

CHAIR —Welcome.

Senator IAN MACDONALD —Can we start without the minister?

CHAIR —Yes.

Senator IAN MACDONALD —Dr O’Connell, I want to briefly mention a matter I have had some correspondence with you on, and that is the Emergency Plant Pest Response Deed. Because some constituents of mine raised it with me, I have related it back to the citrus canker outbreak in Emerald in Queensland in 2004, which was a long, drawn-out process—not just the canker but all of the circumstances surrounding it and compensation and all that. People in that area tell me they are concerned—and I put this in not very technical language, I might say—about the arrangements made and the agreements reached for ongoing work that would, as best you can, guard against a recurrence of that sort of thing at some time in the future. A plan was set out, and the concern of the citrus growers in the area is that it has stalled and not progressed. There are, no doubt, certain reasons for that. Your letter to me in response to my letter about it sets out some issues. The most concerning was this complex—for me anyhow—situation about complex diseases, strictly so-called. They do not somehow come into the system, because there is more than one pest that could get the result, as I understand it. Dr O’Connell, as you signed the letter—perhaps you had some assistance in drawing it up—can you try to explain to me how we can make sure it continues?

Dr O’Connell —Are you are talking about the contingency plan?

Senator IAN MACDONALD —It is the contingency plan. It is an issue of the pest categorisation, the plan simulation exercise and the owner reimbursements costs. Your letter explains that to anyone who can understand it, which is people more clever than me—and that is almost everybody. My concern is not so much about repeating that in detail but getting an indication that the relevant area and the citrus growers will be able to continue working to make sure that you are, as best as possible, in a position to guard against the reincursion of citrus canker at some time in the future.

Dr O’Connell —You are right—I did have assistance in the drafting. I will pass over to Lois Ransom, the chief plant protection officer.

Ms Ransom —The deed has been in place since 2005, and the Citrus Canker Eradication Program just predated that, so we have not had any responses since then involving the citrus industry. The deed allows us to respond quickly to an incursion, and we do that by convening a technical consultative committee. That committee includes industry parties that have signed the deed. So if we were to have another incursion of citrus canker, which I hope would not happen, we have an immediate mechanism to get industry round the table with government to make the decisions about what we need to do to respond quickly.

We have the contingency plan, which you referred to in your correspondence, which gives us a guide to the biology of the organism, how we need to look for it and how we need to treat it to eradicate the pathogen. We also, through Plant Health Australia, have prearranged mechanisms for developing or identifying reimbursement costs to growers who are directly impacted by any emergency response—that is, the owner reimbursement costs.

The deed allows us to cost-share a response where that is agreed by the national management group which Dr O’Connell chairs. So, if a response plan goes forward, it is fully costed. The pest categorisation that is also referred to in the letter determines the cost-sharing apportionment between federal government, state government and industry. What we try to do with categorisation is, ahead of any incursion, work out what the cost-sharing percentages would be. When you are in the middle of a response, it is not a good time to be arguing about who is going to pay and how much, so the deed allows us to do that in advance. That has been done for citrus canker: 80 per cent of the costs are paid by government and 20 per cent by industry, so that is very clear. Hopefully I have answered some of your questions.

Senator IAN MACDONALD —Yes. Fortunately, it does not need me to understand exactly what the issues are. My concern was more reflecting a concern of the industry. They are saying that there was an arrangement, an agreement reached, on things to be done which involved them and the government and the Plant Health people but it has not progressed; it has stalled. I wonder if you can comment on that. I think you said that there had been no contact from the citrus industry. I do not want to verbal you. Did you say that?

Ms Ransom —I do not think so.

Senator IAN MACDONALD —All right. I understand the citrus industry are very engaged.

Ms Ransom —They are.

Senator IAN MACDONALD —They are very keen to get things to a stage where they are as prepared as they possibly can be, but there is apparently something holding that up which I do not fully understand. I do not think I need to, although you might be able to explain it to me. But I do want an assurance from you, or some advice from you, on what needs to be done. Are they dragging the chain? Is there anything else they can do? Do they need to pay more money? Do they need to pay less money? Do they need to sweet-talk someone in Plant Health Australia? What do they need to do?

Ms Ransom —There are a couple of things that I think were highlighted in the response letter. One is that, to finalise the citrus industry owner reimbursement costs, industry needs to provide information to Plant Health Australia.

Senator IAN MACDONALD —So you are waiting for that?

Ms Ransom —We are waiting for that.

Senator IAN MACDONALD —That is the industry’s call?

Ms Ransom —Yes, but that is an active process, and I understand that PHA has been talking with the industry to get hold of that information to allow them to do that.

Dr O’Connell —Just to be clear, when we say we are waiting for that, we mean Plant Health Australia is waiting for that, which is the company that manages this process on behalf of the government and the industry players. It is a not-for-profit company.

Senator IAN MACDONALD —Who comprises that?

Ms Hinder —Plant Health Australia is a Corporations Law company that has been formed with membership on behalf of the Commonwealth. We have, effectively, a one-third share in that company. Each of the states and territories between them own a one-third share of the company and there are currently 20-odd industry or plant industry bodies who have the remaining share of the company. PHA plays a very similar role to Animal Health Australia on the animal side of the fence, which is predominantly to facilitate discussions and outcomes between all players in both plant and animal biosecurity.

Senator IAN MACDONALD —I assume the citrus industry has a stake in the third that is—

Ms Hinder —That is correct.

Senator IAN MACDONALD —Are there perhaps problems with the focus on one industry that other shareholders do not see as important?

Ms Hinder —I certainly believe that in relation to this issue all of the parties are actually keen to progress. There is an assurance from all parties that, once the information can be supplied, Plant Health Australia are willing to act on that information and progress it.

Senator IAN MACDONALD —Are either of you, or some of your officers on Plant Health Australia, the federal government’s representatives?

Ms Hinder —There is no board representation of the government in either Animal Health Australia or Plant Health Australia. However, the minister does nominate a duly appointed representative to act on his behalf for both company matters and matters relating to the EADRA and the EPPRD. At the moment, I am the duly appointed representative nominated by the previous minister. Minister Ludwig is considering those arrangements, but until that is actually revoked in writing I remain the duly appointed representative.

Senator IAN MACDONALD —So you are one of the three shareholders in the company?

Ms Hinder —The Commonwealth of Australia is one of the three shareholders.

Senator IAN MACDONALD —Whom you represent?

Ms Hinder —I am representing the minister on behalf of the operations of the company and also the operations during the EPPRD, the emergency response arrangement.

Senator IAN MACDONALD —I think we have established that Plant Health Australia is waiting for some information from the citrus industry?

Ms Ransom —Yes.

Senator IAN MACDONALD —So we will get them to hurry that through.

Ms Ransom —Yes.

Senator IAN MACDONALD —What else is holding up further progress?

Ms Ransom —All of the industries that are members of Plant Health Australia have developed an industry biosecurity plan which identifies the pests and diseases they are most concerned about and that we would probably respond to under the deed if they were detected in Australia. So the citrus industry, with governments, with Horticulture Australia Ltd and with PHA, have been doing a number of things to put themselves in the best position to respond appropriately to incursions.

One of the pests that they are very concerned about is citrus greening, or huanglongbing. The industry, with funding from Horticulture Australia Ltd, has drafted a contingency plan that has been agreed on by governments and industry as the approach that we will take if we find the disease in Australia, and that is going to be used as the basis for an exercise which was also mentioned in your letter. Unfortunately, Victoria was going to do that, but they are a little bit busy at the moment with locusts.

So the plan is that, yes, we will practise those arrangements. There are some fairly stringent response measures in there, because greening is a significant disease for the industry. In the event of finding it here, we would be using the contingency plan as a guide for our actions, but we always need to take into account the situation that we find around any incursion, because they always differ. Every response is different.

Senator IAN MACDONALD —Thanks for that. That has made it a fraction clearer for me. This will be my last question. I am not sure that I can say this with any authority, but my impression is that the citrus industry is not happy about something. Are you aware of that unhappiness or am I misreading it? If there is an unhappiness that you are conscious of, is it a reasonable unhappiness or are they being unreasonable?

Ms Ransom —I think it reflects the fact that there is a lot of work in progress. I am certainly not aware directly of any unhappiness. We are aware of the submission from members of the citrus industry to the inquiry into quarantine and biosecurity, and there are some issues in there. In terms of direct contact with the industry, no, I am not aware, but a number of the issues that you have raised in your letter do relate to the role that Plant Health Australia plays in brokering the response arrangements between industry and government.

Senator IAN MACDONALD —I appreciate you are not Plant Health Australia but have an influence on it. Perhaps the next time we meet at estimates I hope I will be able to report to you that the citrus industry is absolutely ecstatically happy and you will never hear from me again. Of course, the contrary—

Dr O’Connell —We will revisit all the issues that you raise and reconfirm in our own minds that we have got this all under control.

Senator IAN MACDONALD —Thank you for your response. Thank you for your courtesy and information and we will keep it under review.

Senator BACK —Thanks, Chairman. I have two areas. The first relates to a claim for out-of-pocket expenses against AQIS. It is from a constituent in Western Australia and relates to the transport of two consignments of bull semen in which AQIS refused to allow the two separate consignments to be exported in the same flask. Do we have anyone here who knows anything about this? My understanding is that the person then incurred an extra cost of some $3,000 as a result of this decision. My first question is: can you explain why it was that the two consignments were not permitted to be exported in the same container, given that identification on the straws would have been able to separate the origin of the two groups of samples?

Dr O’Connell —It is pretty clear we do not have anybody here who can respond straightaway, so we might have to take that on notice.

Senator BACK —I am sorry, I did not realise that was the case. I can then put the questions on notice and hope for a response.

Dr O’Connell —Yes.

Senator BACK —My only other question relates back to the inquiry we had which led to then Minister Burke making the decision to request that an import risk analysis be done for the importation of beef from countries where BSE has been diagnosed. Could you give us some advice on the progress of that IRA process?

Dr Grant —The IRA process commenced on 8 March and, as you are probably aware, we started doing IRAs on the United States, Canada and Japan on, I think, 4 May. We stopped the clock in respect to Japan because of an FMD outbreak in Japan. The other IRAs have been proceeding in a general sense, with information being gathered in respect of animal diseases but, as you know, the process is going hand in hand with Food Standards Australia New Zealand. In that context, they are dependent on getting an application to do a BSE assessment for human health concerns from each of those three countries. At this point in time, they have received an application from the United States but it is not complete and they have asked the United States to provide more information. As late as a few days ago, the United States indicated that it is not in a position to provide that information at this stage as a result of resource constraints, so there is no BSE assessment going on through FSANZ on any of those three countries. Therefore, we are in a position where we cannot proceed a lot further at this stage because the process is going hand in hand with FSANZ, including the prospective in-country assessments that we propose to do and, until we have something to look at and some information to work on, we are not going to go very much further. So at this point in time we have moved down the path as far as we can and we are at the brink of a point, potentially, of not being able to go very much further for some time.

Senator BACK —So there is no further action to be taken from Australia’s side, as I understand your response. You are waiting for information from the United States, which has indicated that it is not in a position at this point to provide it.

Dr Grant —Yes. There has been a lot of correspondence between us and the United States, FSANZ and the United States, Canada and Japan as well, and the Netherlands as it so happens. Basically, the situation is that we are waiting for responses in terms of provision of information.

Senator HEFFERNAN —So with respect to the stuff that the United States is not in a position to provide, could you provide to this committee all that correspondence on the issues that you are raising and that it cannot provide? We would like to know what the direction is. I have to say that I have not changed my mind and I am very grateful that Japan had an outbreak of foot-and-mouth because they were, on the basis of their BSE status, an applicant in the pipeline to Australia. It just shows, for the Australian producers and the Australian farmers, that erring on the side of bloody caution is pretty important. So could we have all the correspondence that you have raised with the USA, through whatever agency, so that we know where you are going and where they see the roadblocks and exactly where we are up to with this, instead of being ambushed.

Dr Grant —I cannot see any reason, but I will take it on notice, if I may, to provide you with that correspondence, from the point of view of the Department of Agriculture. There is correspondence—

Senator HEFFERNAN —FSANZ as well? You are working in conjunction with FSANZ.

Dr Grant —But I cannot speak for FSANZ.

Senator HEFFERNAN —We will ask FSANZ. They might take that on notice, and I presume the secretary will provide that question to FSANZ. Are we going to deal with FSANZ?

Dr Grant —No. It is a different committee.

Senator Ludwig —It is a different committee. You might have to ask that committee.

Senator HEFFERNAN —But I am sure that the secretary—

Senator Ludwig —I am sure you are able to do that, rather than ask my secretary. It is not hard.

Senator HEFFERNAN —In amongst the jumble that is livestock identification source, I am still waiting—as you would know, very patiently—from the February estimates for you to provide to us the paper trail that enabled you to agree to the importation of that pot of meat that I put on the table there that said it was a ‘product of the United States’ rather than ‘grown in the United States.’ I would like to see the paper trail that proves to you that that meat in fact did not come from the United States and there is an effective paper trail and certification, and tell us where the meat came from. This will be an interesting mumbo jumbo answer, I suggest, because ‘I don’t know’ is the answer.

Senator Ludwig —As I understand it—and we dealt with this earlier in the day—it is one of the questions on notice that has been returned to my office this morning.

Senator HEFFERNAN —I understand that—

Senator Ludwig —And so if it is—

CHAIR —Senator Heffernan, the minister is answering. Senator Colbeck, the minister has been asked the question. Let the minister answer and then you can—

Senator HEFFERNAN —Have you identified the source of the meat in the pot that is the—

Senator Ludwig —I have not seen the question on notice.

Senator HEFFERNAN —But surely to God you can tell us whether you found the source of the meat and the paper trail that certified the meat did not come from the United States.

Dr O’Connell —Can I just correct something. You referred to the February Senate estimates and we—

Senator HEFFERNAN —Well, whenever it was, yes.

Dr O’Connell —The response we were giving then was a response about the February estimates questions. It came up in the inquiry, not in the Senate estimates.

Senator HEFFERNAN —Well, wherever. The pot of meat, which is a product of the United States—

Dr O’Connell —So that is not correct, what we just said.

Senator HEFFERNAN —which means it cannot be US meat. US meat is class 4 classification. It is banned because of its BSE status. You guys—someone in the mumbo-jumbo world of the bureaucracy and FSANZ—should have had a paper trail that proved beyond any doubt that that meat was a product of some other country, even though it was processed in the United States.

Dr Grant —The question that you are talking about was raised in the inquiry and I apologise for confusing it with the last Senate estimates.

Senator HEFFERNAN —Anyhow, that is my point.

Dr Grant —There were other questions there. The response has been provided to the committee. It was provided a few weeks ago. I cannot be certain of the date, but some weeks ago.

Senator HEFFERNAN —What is the response? Just remind us.

Dr Grant —Subject to the fact that it is with the committee, essentially we have been able to trace the contents.

Senator HEFFERNAN —Where did it come from?

Dr Grant —The beef? It came from Australia. So the contents of the beef in the can came from Australia.

Senator HEFFERNAN —Even though it is a product of the US?

Dr Grant —Yes.

Senator HEFFERNAN —So what does all that mean?

Dr Grant —The labelling laws of the United States and of Australia need to be understood quite clearly. The situation is this: in the United States, under United States labelling, fresh beef and ground beef are required to be labelled under what is called their mandatory country of origin labelling. In the case of processed product, the processed product is not required to be labelled as to the country of origin because it is processed product of the United States. In terms of Australia—

CHAIR —It is like our ‘made in Australia’.

Senator HEFFERNAN —We have got to change these laws.

Dr Grant —In terms of Australia’s labelling laws—and this is not our area of responsibility—the requirement under Australian labelling laws is that it must identify the country from which it came.

Senator HEFFERNAN —So, in plain language, explain this to me. This is a bit like a sausage case that goes to China, then goes to the United States and comes back as a product of the United States. Is that what you are telling me?

Dr Grant —A sausage casing may be slightly different, I am not certain, but I do know for certain—

Senator HEFFERNAN —Well, I am certain.

Dr Grant —I do know for certain that product of the United States is processed product from the United States.

Senator HEFFERNAN —Yes, that is for sure. But what is the paper trail so you know what is in that? Would it go out as grinder beef and come back as whatever it was, fancy—

Dr Grant —The certificates that we have provided for you in response to the question indicate that the product—the meat, the beef—came from Australia—

Senator HEFFERNAN —You are kidding me!

Dr Grant —went to the United States, went into a processing facility, and the product that was made there ended up back in Australia.

Senator HEFFERNAN —Anyhow, I will deal with that in due course. What, you stamp the container and they tip it into the piping; you know it is the same meat; whoops, the Brazilian meat did not get in with it.

Dr Grant —I can only answer the question as I know it.

Senator HEFFERNAN —And it is a bullshit process, yes. Could I just go to—

Senator COLBECK —Seven.

Senator HEFFERNAN —What? What are you looking at me for?

Senator COLBECK —I have just been counting up the number of times that you have transgressed your contract details.

Senator HEFFERNAN —Righto, yes. What is that, two cartons of beer?

Senator COLBECK —No, actually we are on to a decent bottle of red each now.

Senator HEFFERNAN —We might go to blue whisky.

Senator COLBECK —Now you’re talking!

Senator HEFFERNAN —Senator Ferguson will not be able to drink it for the near future, so we might drink his blue whisky.

Senator COLBECK —That is all right. We will cover him.

Senator HEFFERNAN —So with respect to the National Livestock Identification System that we have here, are we going to insist that if we are going to give national status to the BSE status of the US herd—national status to the US herd—that they are going to have whole-of-country livestock identification. Or are we going to have this phoney area system?

Dr Grant —You are asking about something that is not my area of responsibility. But the situation is that, as I understand, we are going to look at—when we go to the United States with FSANZ—their traceability systems, their management control systems, their certification processes, and we will be on that basis making the judgments within the assessments that have been done by FSANZ and ourselves.

Senator HEFFERNAN —Fair enough. In that process, will you take industry representatives to foresee the human error side of it, rather than the science side of it? As you know, there are a lot of likeable rogues in the beef industry. In fact, there are a lot of stolen cattle going out on ships, live shipments, that belonged to the investors of an MIS scheme. They are just slipping through our system like that, because they do not have to be tagged if they are from property of origin if they go live on a ship out of Darwin—and I can assure you that this a police matter. In much the same way, are you going to insist, by way of principle, that if it is good enough for us to have national livestock identification, birth to death traceability, given the open border system with Canada, given the open border system with Mexico—and, fair enough, people that know nothing about the bush and our beef industry complying with a free trade agreement with the US—that if they do not shut the Canadian and US border traffic of beef they will have lifetime traceability in any beef from cattle that are proposed to be imported into Australia? As a principle, would you agree with that?

Dr Grant —I will refer to the answer I gave at the inquiry. I think we are a bit ahead of ourselves because we have not been over to the United States or to Canada to investigate the situation.

Senator HEFFERNAN —To go back to my original question, will you be providing the opportunity for industry representatives to be part of that delegation?

Dr Grant —I will take that on notice.

Senator HEFFERNAN —And I will be one of them.

Senator COLBECK —Thanks, Chair. Can I ask, firstly, some questions about an industry advice notice, G2010/06, which is protocols for fumigation using methyl bromide.

Dr Grant —Can you give us a bit more in terms of on what?

Senator COLBECK —I have just been asked to find some information—in fact, I do not know how far it goes back. I understand that there are a number of protocols for using methyl bromide for both fumigation and unloading or opening of containers, but it has been passed on to me by another member to ask some questions about that particular notice. I am sorry, I cannot give you a date on it. G2010/06, so I presume it is from this year.

Dr O’Connell —I think we would have to take that on notice.

Senator COLBECK —It may have been prompted by the circumstance that occurred out of Burnie this year, where there were some real problems with an export shipment of some logs, and the department may have put out—

Dr O’Connell —This was the timber?

Senator COLBECK —Yes. That was the timber: 5 May 2010.

Dr O’Connell —Yes. We may have to take that on notice, if that is okay?

Senator COLBECK —I can provide you with the document.

CHAIR —Do you want to table it?

Senator COLBECK —Yes, I will table the document so that you can have a look at it. While you are having a look at it, I will go on to something else.

CHAIR —We are just tabling a document.

Senator COLBECK —We will come back to that. My full expectation is that it is derived out of the dramas that occurred in Tassie. I know that there have been some issues, including calls for the removal of methyl bromide as a fumigant, so we will come back to that. I would just like to get an update on the progress of the export certification reforms—and I am sure Mr Read is prepared, as he was last time, to let us know where we are at.

CHAIR —Was that the time he—

Senator COLBECK —The presentation he gave us last time was really good.

CHAIR —You set me up, Mr Read. Look out!

Senator COLBECK —No, not at all—

Mr Read —I actually think we could refer back to that—

Senator COLBECK —That is right.

Mr Read —because that probably covers the majority of what I would need to say.

Senator COLBECK —I hope we have progressed a little bit since then.

Mr Read —Just to give you a fairly high level overview at this point in time, I think at our last estimates we certainly overviewed, from each of the committee perspectives, progress to that point; the fact that we had plans in place, that those plans covered a number of agenda items, particularly in the reform realm. Since that particular meeting, as you would have expected, we have had a large number of what we are calling ‘ministerial task force meetings’ with each of those industry sectors. The progress, as of this time, has been substantial and very positive across each of those sectors. As of today, we currently have a revised meat delivery program agreed with the ministerial task force. It is a program that we have discussed reasonably extensively across the industry and it is taking shape to be the final model for the meat program that will provide substantial benefits both in terms of efficiencies within the industry and the regulatory overlay.

In relation to the plant programs—Horton grain—we have conducted a detailed Ernst and Young supply chain mapping exercise of the horticultural industry, and also the fish industry. In both those sectors we have identified, through that supply chain mapping exercise, where there are duplications and inefficiencies in both the industry supply chain management and the regulatory services provided not only by the Commonwealth but also by the state jurisdictions and we have agreed, again, a regulatory delivery model for the plant programs that effectively deal with those duplications. That has been carried across from both the grain export program and the horticultural export program to ensure as many synergies as possible within that delivery framework. As we speak, both those delivery frameworks are being discussed in terms of a final model in each of those ministerial task forces.

The fish and dairy task forces are again at that same point. We have looked very closely at the delivery structures in terms of AQIS’s regulatory overlay in those programs, and again those delivery frameworks have been analysed in detail and the revised models drafted to deal with some of the inefficiencies and some of the duplication but, equally, to reflect what is now an internationally accepted model that those food programs can respond to in terms of the need for regulatory presence.

At this stage we have all of those ministerial task forces at that point, and this is in terms of the final regulatory models for each of those task forces. As you would appreciate, in moving to these revised delivery models we also need quite a sophisticated national system to support that. We are currently in a build process that will provide us with a proof of concept around the new systems to support this change delivery model. That will be completed towards the end of November, early December. That will provide us with the basis for a detailed evaluation of the merits of that system in responding to the demands of these changes that we are foreshadowing to these industry sectors.

Senator COLBECK —The proof of concept will be completed in that time frame?

Mr Read —It will be. Parallel to that, we now have, with those delivery models, an extensive consultation period over the next two to four weeks. I need those delivery models finalised by each of those industry sectors in that time. That will then provide the detailed framework for us to very clearly understand precisely what, post the proof of concept, is the production design of that system to deal with the intricacies of each of those commodity sector delivery models. Equally, understanding those delivery structures will enable us to estimate our resource demands on those programs moving towards 30 June, thereby enabling each of those industry sectors, in around February next year, to come together and identify what the new fees and charges are to fully fund those new regulatory models from 1 July 2011.

Senator COLBECK —What about the work that was done to determine legitimate cost to government? I do not think I got the terminology right.

Mr Read —I understand the proposition. Ernst and Young have done a couple of detailed financial assessments, particularly in the meat program and the horticultural program. Both of those reports have provided some good background understanding for the industry sectors around how these costs, in terms of both the direct cost of the program and the internal overheads, are allocated to the program. The conclusion of those reports essentially is that that is a workable model and, effectively, their review has not identified costing flaws in that model. The task forces are utilising some of the information in those reports and will reconsider them in the context of those revised fees and charges and that process that needs to be recommenced, as I mentioned earlier, from February 2011 forward.

Senator COLBECK —How are we going within the respective budgets?

Mr Read —In summary, as you would be aware, around $127 million was provided to 30 June to fund the transition in terms of the 40 per cent to those commodities to 30 June plus funding the reforms themselves. At this stage there is around $60 million of that still unspent. Between now and 30 June, about $30 million of that funding will be applied to transitional funding, which is that offset margin of the 40 per cent. Of the other $30 million, around $22 million equates to workforce reform in the meat industry. That is leaving around $8 million for supply chain reform. There is going to be a large investment in getting up the supporting audit management system up that I described earlier.

As well, there are some particular initiatives that we need to fund for those ministerial task force areas. For example, in the live export industry there is specific system support that they are looking for in automation. There is a lot of legislative drafting to bring this all together to give effect to these new models—so that $8 million. As well as that, there is going to be a lot of training and support required in terms of our staff and the competencies that they require and, equally, the competencies and training that industry requires. That $8 million will be used with that endeavour. But we are currently working towards 30 June, fully utilising that money to the best value possible.

Senator COLBECK —You will obviously spend it. The question is: will you actually get what you need to do done within it?

Mr Read —The models that have been agreed by these ministerial task forces will provide substantial improvement in the regulatory delivery of certification services to those sectors.

Senator COLBECK —It sounds as though you are doing a lot of work to very much design a new system of delivery as part of this process. You have indicated that there is going to be some legislative requirement around that. You have obviously done a lot of work overseas to tick off the relationship issues that you might have there. Have you got any estimate of the sort of cost reductions you have been able to take out of the system? I know it is still part-way through the process, but are you getting any ideas of what sorts of cost reductions you are taking out? After all, the whole purpose of this process was to make the system more efficient so that the removal of the 40 per cent rebate would have a lesser impact.

Mr Read —That does not necessarily equate to a 40 per cent reduction in—

Senator COLBECK —No, and I do not want to imply that it does.

Mr Read —No. Again, it is early days and I am only foreshadowing, but we would estimate in these early days that even in regard to the meat program we would be internally looking to reduce the cost by somewhere around $25 million to $30 million, let alone the security that this new system will provide in relation to supporting market access, both now and into the future, with the sophistication we are bringing to our capability of monitoring companies and also companies understanding how they are positioned in the context of the Australian certification system.

Senator COLBECK —You have put a total dollar sum on it, but—

Mr Read —That was in relation only to meat. If you look at our total certification programs, they are about $100 million. That is about the 25 to 30—

Senator COLBECK —Yes, that is a reasonable percentage.

Mr Read —In regard to the others, again it is going to be a big number. I am thinking $3 million to $5 million in addition to what I have talked about.

Senator COLBECK —Of the $20-odd million—and let’s put it in those terms so that no-one gets the perception that it is a specific number—taken out of the meat industry, what proportion has been transferred across? Acknowledging that they will get some efficiencies out of that transfer, what is the rough calculation of the proportion that might be transferred across?

Mr Read —It is maybe a third—perhaps a bit more than that—but again there are substantial benefits in how the companies pick up some of these responsibilities and how they are integrated into their own QA systems and the businesses they are running. The staff involved with that will have career paths through those organisations. As I mentioned earlier, the work we are doing on market access will provide substantial benefits. Equally, there are a lot of examples in the work that we are doing that will remove duplication and regulatory costs, not just our costs, out of the supply chain. When I say a third, in the context of everything else it is probably going to be a little bit less than that.

Senator COLBECK —What about the small operators, particularly small abattoirs, which was again a feature of the discussions that we had right at the outset?

Mr Read —From the discussions that we are presently having with the industry, clearly the big winners in this are the bigger works, the bigger abattoirs. At this stage the way the model is setting itself is that there will probably need to be a regulatory presence on the one-inspector sheds. When you look at the one-inspector sheds, can we use an alternative arrangement in those sheds? We have looked at that in detail with industry and it is difficult to put an alternative in place without duplicating people in those establishments.

Logically, for the seven to 10 single-man operations in this country we would probably still have to provide a meat inspector. The question then becomes, for example, if this program starting from 1 July 2011 costs $50 million to run, what is the basis for the fees and charges being set? We are having that discussion with industry now. You can imagine both sides of the coin at the moment.

Senator COLBECK —Absolutely.

Mr Read —One argument is about those small plants paying for one operative, but equally we can argue that every plant in Australia will have one meat inspector, a food safety assessor and a vet. If that is our national system, there are other ways to charge those costs other than the direct costs and it may well be a throughput charge. That is clearly on the table with industry now. That is something they are going away to work through, and they are starting that process in the next couple of weeks, because clearly the smaller operators are very sensitive to that issue.

Senator COLBECK —Is there any reason that the meat industry task force plan is not available on the website at the moment?

Mr Read —There are two major sensitivities with the meat program. The first is the international markets and the message that is communicated. The second is that, as you can imagine, we have a large number of staff involved in that reform and we need to ensure that we are very closely in step with them through this process. I do not want industry telling our staff what this direction is; I want it to be me and I want it to be a proactive engagement with them.

Senator COLBECK —Or them reading it on the website and interpreting it in a different way to what really is occurring, or something of that nature.

Mr Read —Yes.

Senator COLBECK —Thanks, Mr Read, we will leave that there.

Mr Read —Thank you.

Senator COLBECK —I want to go quickly back to my methyl bromide, if I can. Are we in a position to do that? In fact, I should not claim the methyl bromide; it’s not mine! Is there any suggestion of phasing that out as a fumigant? As I indicated, there has been a lot of publicity in my home state about log shipment fumigation and a lot of claims about where it is and is not used and how it is and is not used, particularly in Europe.

Mr Chapman —If you like, I can give a bit of a high-level answer to the position we have as far as the phasing out of methyl bromide is concerned.

Senator COLBECK —Yes.

Mr Chapman —Under the Montreal protocol it is meant to be phased out in developed countries I think by 2015. The issue there is finding suitable replacements, because there is nothing that actually can do the job that methyl bromide does across the wide range of commodities that methyl bromide is currently used to treat. There are other fumigants, such as sulfuryl fluoride, ethyl formate, hydrogen cyanide, ethane dinitrile and modified atmospheres using nitrogen, carbon dioxide, phosphine, carbonyl sulfide, methyl isocyanate, methyl iodide, ozone and combinations of those. I am sorry, I was reading from the list there.

Senator COLBECK —That is a delightful selection of products.

Mr Chapman —There are a wide range of products, but we need to in some cases determine where they are effective, what impacts they have on the various commodities that they might be used for, and there is the certification of them for use in Australia in some cases. While we are not the determinants of what gets used, we are working closely with others to work out what alternatives are available that we might use in the future. At the moment methyl bromide is accepted for use for quarantine purposes but, as you say, there are a number of issues which attach to it.

Senator COLBECK —I have been through quite a deal of that information and read some of the reporting on the website that relates to that. Is there a standard set of protocols for the use of the product in each state or is it based on the protocols specified by AQIS? I see Dr Bennet-Jenkins at the back, and I think it was a paper of hers that I was reading during this dispute that gave me some information on this. It is all flooding back to me. I think some of the regulations that have been spoken of have been in place in my home state for a period of time—since about 2006, I think. We were going to send you home too, Dr Bennet-Jenkins. You are very unlucky!

Dr Bennet-Jenkins —Could you perhaps repeat the particular question that you were asking? I did not quite catch it at the back.

Senator COLBECK —I am looking to get some revised protocols that have been listed by AQIS in particular and, I think, perhaps brought on by the events earlier this year in Tasmania, where there was an issue with the fumigation of a log ship out of Burnie. I understand that there have been requirements for a period of time, based on some work that the APVMA have done, for ventilation of containers and recapture of methyl bromide in the fumigation process and a process for opening containers that have been fumigated overseas with methyl bromide. I just want to get some clarification on that.

Dr Bennet-Jenkins —The APVMA’s involvement in recent times has been that we reviewed methyl bromide for the environmental effects, particularly the ozone depletion effects, to make sure that the use pattern and the label instructions complied with the Montreal protocol requirements. So it was largely an environmental review that we conducted. As part of that, we did consider the use of recapture technology.

Senator COLBECK —There were some health effects from the product too, though, from my recollection.

Dr Bennet-Jenkins —That review, though, was principally the Montreal protocol review. At that time those health effects were not specifically raised with us as requiring a review. We did look at recapture technology, but again that was mostly in terms of environmental effects, and at that stage we did not mandate that people use recapture technology because not all businesses were able to do that.

My recollection is that the issues we responded to a few months ago were in relation to providing advice in terms of the label instructions that carry instructions on how people should be using methyl bromide and what precautions they should observe. In addition to that, the fumigation industry, as well as the Maritime Safety Authority, have protocols that they follow and it is really a matter for the state authorities as to how they enforce those particular protocols and how they enforce their label instructions.

Senator COLBECK —My recollection was that there were different protocols in each state and I think that at that stage Tasmania had had a mandatory recapture process, particularly for containerised fumigation, since about 2006.

Dr Bennet-Jenkins —There is going to be a meeting on 5 November between the states and territories. The APVMA is hosting that meeting and it is going to be looking at some of those issues. I do not have the details of that meeting with me, but we could provide you with some information on the agenda for that meeting and what is going to be discussed, and I think that at that stage we will look at some of those issues.

Senator COLBECK —If you could take it on notice, that would be fantastic, and perhaps it is possible to provide us with some information on the outcomes of that meeting. I recognise that that may be beyond a certain date that we have discussed a couple of times here today, but I certainly would appreciate getting some feedback on that.

Dr Bennet-Jenkins —Certainly.

Senator COLBECK —Perhaps I could pass that on to my colleague. Thanks.

Senator NASH —Who do I talk to about guava rust and myrtle rust? Where are we at with this in terms of the outbreak on the Central Coast?

Ms Ransom —As of Monday, 46 properties have been investigated for myrtle rust. Of those, all but a couple have been confirmed as having the disease.

Senator NASH —Really?

Ms Ransom —Yes. The action that is taken when the disease is confirmed is that the infected material is destroyed, so as far as we know at the moment, where we know the disease has been, there is no infected material there. That work is undertaken by Industry and Investment New South Wales and they have repeat surveillance back to those properties to make sure that there is no further infection occurring.

Senator COLBECK —Were any of those outbreaks recent? Sorry to interject.

Senator NASH —No, that is fine.

Senator COLBECK —You gave me a very comprehensive briefing about 12 weeks ago and I think there were some seasonal issues around the likelihood of an outbreak at that period of time. Are any of those outbreaks more recent?

Ms Ransom —We have been recording infected properties since we were notified of the disease in late April. We thought that the cooler conditions in winter would slow the infection down and we believe that has happened. We did think that under the cooler conditions it would be more difficult to find the disease—that the rust would not show up as it would under warmer conditions—but we have been picking up infection through winter. There is nothing to indicate at this stage that the amount of infection is increasing exponentially or at a great rate. Most of the infection has been found through tracing activities, particularly with a focus on nurseries. Where plants have been moving between nurseries and we have found an infected site, there has been tracing back to the origin or forward beyond that to see if we can find infected material.

Senator NASH —Perhaps you might take on notice giving the committee a time line of each of the determinations of the outbreaks and where they were.

Ms Ransom —Yes.

Senator NASH —In terms of the testing, my understanding is there is some difficulty in determining whether it is in fact myrtle rust or guava rust. What has been done in terms of the definitive testing and are you absolutely sure that it is not guava rust? If you are, how can you be absolutely sure?

Ms Ransom —We do not know that it is guava rust.

Senator NASH —What are you assuming it is at the moment?

Ms Ransom —We are calling it myrtle rust. It is determined to be myrtle rust based on the morphology of the spores—what they look like. There have been several activities underway to try and determine whether it is guava rust or, if it is not, what the differences are between the two fungi.

Senator NASH —How do you do that? This is really important. How do you determine whether or not it is guava rust? Given that this has been going on since April, what is being done and why do we not know definitively now which one it is?

Ms Ransom —The two bodies of work have been in looking at, initially, several parts of the DNA of guava rust and comparing that with myrtle rust and the first testing that was done showed that there was no difference. Subsequent work has been looking at a component of the DNA called microsatellites which determine differences in population. So what you must do first is identify the areas, the microsatellites, that you are going to look at, and work in Tasmania with an isolate of myrtle rust has identified 10 areas or loci for comparison. Recent results show that those 10 loci are not found in the isolates compared with those from Brazil.

Senator NASH —You are going to have to give this to me in English now.

Ms Ransom —All right. That indicates that what we have in Australia is different to what they have looked at in Brazil, which is the guava rust. There are 10 parts of the DNA that we have identified for comparison with other isolates of Puccinia, which is the guava rust. In comparison with Brazil, none of them are common. In comparison with isolates of guava rust from Hawaii, three out of the 10 are common, three are missing and the other four have not been characterised yet in the Hawaiian. What we have is different from the comparisons that we have made with a small number of isolates of guava rust from elsewhere.

Senator NASH —Is it possible it could be guava rust?

Ms Ransom —We do not have enough information to say that it is, but the information that we are getting in suggests that it is different.

Senator NASH —But does that mean you do not have enough to say that it is not? I ask because this is really serious.

Ms Ransom —We do not have enough to say that it is different. We do not have enough to say that it is the same. But, if you add together what we have seen on the DNA at the moment with the fact that the spores look different and that we are not getting any infection in the field in eucalypts, it is behaving differently at this stage.

Senator NASH —If you were absolutely sure it was guava rust, what would you be doing now?

Ms Ransom —We would be doing the same as what we are doing now.

Senator NASH —You would be treating it exactly the same. Will what you are doing now eradicate it?

Ms Ransom —We are still collecting information. We have real difficulties in finding the disease in the situation that we work in. There is a lot of bush. There are potentially a lot of hosts within that large area around the Gosford area where it has been found. There have been traces to a number of nurseries along the New South Wales coast. We do not know yet if we will be able to eradicate it. We know that the disease is not spreading as quickly as we would have expected. It seems at this stage mostly to be moving short distances or through direct contact, so it is not working in the way that we would expect with a rust, which would produce a lot of spores and then spread great distances on wind and through movement of plant material. With more surveillance and the tracing work, we may find that it is confined to the area where it is now. We anticipated that with the increased temperatures, with spring, we may get more disease showing up. We have not seen that as yet.

Dr O’Connell —It is probably worth clarifying that the 43 sites that have been identified where this has been found so far are largely by a trace back and forward. Forty-one of these are nurseries, garden centres or cut flower facilities, one was a single tree in a backyard and one was a TAFE college tree. So far we have the thing almost wholly contained, as far as we are aware, within the flower industry and garden nursery industry, with very close trace backs. So far the surveillance on the surrounding bush has not shown anything in any of those areas. There have been around 500 properties inspected as being potentially likely to have it and that 43 is all that we have seen, and that is really by trace back and forward.

Senator NASH —I asked you for a time line of where the observations all occurred. Can you give me a whole time line of everything that has been done from the beginning to now in terms of the decisions that have been made, why they have been made and what has happened? Are there alarm bells going off all over the place about this?

Dr O’Connell —If you are asking are we taking this seriously, yes, we are taking this seriously. This is clearly a serious rust. It is difficult to trace. It is difficult to find. We have not seen yet the expression of it we might have expected. All rusts are difficult things to eradicate. These are not easy. They can be translocated very easily.

Senator NASH —On that, there is the issue of the beekeepers that have been there and then travelled to Queensland, as I understand it. What has been happening with the monitoring of that?

Ms Ransom —They were fully traced and inspected. The beehives were inspected, including inside, and the area of bush around where the beehives were taken has been inspected. There has been no infection identified with those.

Senator NASH —How far can the infection travel? That whole area up there is a significant eucalypt area. I would not know what the actual size of the area was but I would suggest there are hundreds of hectares of eucalypt area around there.

Ms Ransom —That is right.

Senator NASH —How far does it travel and how do you make sure you are having a good look?

Ms Ransom —If we were talking about guava rust—the classical guava rust from overseas—we would have expected it to have moved great distances by now. The fact that it has not suggests either that it is something different or that there are other reasons why that is not happening. It is entirely possible that it is at the southernmost edge of its ability to grow and spread, but we really do not know.

Dr O’Connell —So far it has not spread to eucalyptus.

Ms Ransom —It is not in eucalyptus.

Senator NASH —I am not suggesting that your practices are not right, but how can you be absolutely sure that it has not travelled and you just have not found it yet?

Ms Ransom —We cannot.

Dr O’Connell —That is a possibility but there is, as we are saying, boundary work to undertake surveillance around each of these areas, so if it had been in that location we would have seen it, and we have not seen it. All your notes of caution are absolutely right and that is why this is being taken seriously.

Senator HEFFERNAN —Immaculate conception, I think.

Dr O’Connell —Rust can move very easily. These things can move—

Senator HEFFERNAN —Do you think it came in a nursery plant imported into Australia?

Dr O’Connell —It is not clear how it came in. It could have come in on somebody’s clothes. These are very easy things to bring in.

Senator NASH —This is a really good question. You are saying this particular rust is not moving far, so you expect it to be myrtle. Then obviously it has not come in from a great distance away if it is not moving out a great distance, so Senator Heffernan is asking how did it get here.

Ms Ransom —We really do not have the information to conclude that.

Senator NASH —What have you done to try and figure out how it got here?

Ms Ransom —All of the sites where we have looked and found myrtle rust were investigated to see if there is a logical entry point. Where has it come from? Where has it gone? The site where the infection was first picked up had no international linkages at all. As we have got more information it has become clear that that is likely to have been a secondary spread, so it has come from somewhere else. There is nothing in any information that we have at the moment that would indicate any source, any origin, for this fungus.

Senator NASH —Is it a concern that you do not know how it got there? Is that a worry? If you do not know how this one got to where it did, can that situation occur again?

Dr O’Connell —It obviously would be nice to know how something like this got in, but it is also a reality that something like a rust is almost impossible to see. It is microscopic. It can travel on anybody’s clothes. It is not the kind of thing that you can easily manage any border activity with.

Senator HEFFERNAN —Can you spray for it?

Ms Ransom —We can, yes.

Senator HEFFERNAN —So are we destroying the stock in these nurseries and spraying them?

Dr O’Connell —Yes.

Ms Ransom —And the nurseries are all being sprayed with fungicides that are proving to be effective.

Dr O’Connell —Infected stock is destroyed and then there is fungicide spraying of the nurseries and places, so there is a very comprehensive response, yes.

Senator NASH —I have masses of other questions and I am going to put some of them on notice. One of them is going to be around the locusts issue. I will put it on notice, but I would implore you, could we have a response to that really quickly so we can see what is happening at the moment. I have got one and a half minutes left, which is why.

Dr O’Connell —It is going to go on notice.

Senator HEFFERNAN —I have got a couple.

Senator NASH —Senator Heffernan has got some too. Are camels in this part or somewhere else?

Dr O’Connell —No.

Senator XENOPHON —Where are camels?

Senator Ludwig —In WA.

Dr O’Connell —But we could do locusts instead, if you like.

Senator NASH —No, that is all right.

Senator HEFFERNAN —I want to go back to biosecurity.

Senator NASH —Yes, you can. Which section is camels?

CHAIR —Camels, locusts—what is the difference?

Senator NASH —Where do I do camels?

Dr O’Connell —Camels in what sense?

Senator NASH —In terms of the eradication program.

Dr O’Connell —You missed that. We discussed that earlier on.

Senator NASH —All right. Very quickly, then, can I have potted locusts—where we are at—and I want a really detailed brief given to this committee as soon as possible of where we are federally and your interaction with New South Wales and the other states as well.

Senator Ludwig —Do we want to organise a briefing for you rather than trying to respond in writing?

Senator NASH —That would be very much appreciated.

Senator Ludwig —Mr Ottesen is very busy, but I am sure he would find time to provide a private briefing.

Senator NASH —If we could do that perhaps next week, that would be very much appreciated. We will just do that, if you prefer. Then I can give Senator Heffernan some time. I think he wanted some. Thank you.

Senator HEFFERNAN —With the traceability and the need for the goose to be the same as the gander in terms of countries that want to important beef into Australia, what are we doing about the fact that there is an exemption in the Northern Territory for cattle from property of origin, live export, no tags?

Senator HEFFERNAN —With the traceability and the need for the goose to be the same as the gander, in terms of countries that want to important beef into Australia, what are we doing about the fact that there is an exemption in the Northern Territory for cattle from property of origin—live export, no tags? Besides the fact that it has allowed great opportunity for cattle thieves to steal cattle and accumulate them, especially out of the Great Southern cattle scheme, with cleanskins, no tags, live export, isn’t that a flaw in the system? That is what you call a stake in the heart.

Senator Ludwig —We are just trying to find the right person to be able to assist you. I do not think the BSG plant division is the right one. We might need to take it on notice.

Senator HEFFERNAN —The government vet is there. Has he got a view?

CHAIR —I will let you into a secret, Dr Carroll. Your answer does not have to be long and drawn out, because we are way over time.

Dr Carroll —It is a Northern Territory legislative issue, so the running of NLIS within the state boundaries is—

Senator HEFFERNAN —Yes, but we have an Australian policy—

CHAIR —Senator Heffernan, do you have another question?

Senator HEFFERNAN —No—you are not going to get away with that.

CHAIR —It is the truth. Another question, Senator Heffernan, or we are going to pull it up.

Senator HEFFERNAN —Sorry, but my question is: is it a flaw in the system that we have got that sort of lunatic view that in one state you can do what you like? How the hell can we profoundly say we know where the cattle come from if we do not have to tag?

CHAIR —He is actually right.

Dr Carroll —The live animal export system has trace-backs through to the property of origin sufficient for the export—

Senator HEFFERNAN —I can tell you what is going on, and the cops are on to it. As long as you can say, ‘This was the property of origin,’ you can accumulate them from anywhere to the property of origin, put them on a boat as cleanskins and they are gone. I have to tell you, I have been talking to the musterers up there. They are thieving them—

CHAIR —Senator Heffernan, just one more question.

Senator HEFFERNAN —Robert Steele wrote a letter to you, Mr Grant, and you responded with a letter, in part, to the Land newspaper—

Dr Grant —No. Robert Steele wrote to me a few days ago and I have not responded as yet. There was an article raised in the Land and I responded to that in the Land.

Senator HEFFERNAN —Yes. In your proposition in the Land you say:

For a variety of reasons, which have all been explained by Australian and US authorities, US export figures will include shipments that may be proposed for export to Australia but do not actually enter Australia, or where products have been miscoded by the US exporter.

One of the free trade issues, in the discussions with our officials and theirs with the free trade agreement with the US, was that we would, as part of the agreement, assist them in their exports of beef to Japan and Korea. What sort of a world do we live in where we knowingly allow this? As explained in your letter:

Canned products from the US are labelled as a product of the US because it is the legitimate requirement—

but some of these are mislabelled. You go on to say:

On August 6 a US Embassy official publicly confirmed the export statistics in question were not accurate and no US live cattle, fresh, chilled or frozen beef had been exported to Australia.

Yet, officially, in their statistics there are.

Dr O’Connell —Those are the US statistics.

CHAIR —Senator Heffernan, I have been very patient. One very quick question and then we are winding up.

Senator HEFFERNAN —Yes, thank you very much. One of the propositions in the free trade agreement, in this assisting the US, is the cover that allegedly, when they get a BSE reactor, they lose market share in Korea and Japan; we gain it. But for the purposes of the assistance, we are saying that meat comes into Australia, even though we say tonight—

Dr O’Connell —No, that is not correct.

Senator HEFFERNAN —This meat is mislabelled. Do you agree with that?

Dr O’Connell —It is not correct that US beef is allowed to come here.

Senator HEFFERNAN —That comes here? No, I am not saying that, but the labelling says it is.

Dr O’Connell —But that is what you said.

Senator HEFFERNAN —And, according to you, in this letter you are saying it is mislabelled. Why do we tolerate that?

Dr Grant —No. What I am saying in that article is very simple: no US beef has entered into Australia since 2003.

Senator HEFFERNAN —Yes, I accept that.

CHAIR —Senator Heffernan, it is well over time. You have had plenty of time on this at every estimates hearing. I am not degrading your questions.

Senator HEFFERNAN —You do not think it is important.

CHAIR —It is very important, but they are the same questions all the time. In that case, then, I thank the officers from Biosecurity Services Group.

 [9.14 pm]