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Social Welfare - Senate Standing Committee - Reports - Annual Report of Commonwealth Serum Laboratories Commission

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Parliamentary Paper No. 356/1976

The Parliament of the Commonwealth of Australia


Report on Annual Report 1974-75 Commonwealth Serum Laboratories Commission

December 1976

Brought up and ordered to be printed 8 December 1976

The Acting Commonwealth Government Printer Canberra 1977

Printed by Authority by the Acting Commonwealth Government Printer


Senator P, E. BAUME, N.S.W. ( Chairman) — Sub-committee member

Senator W. W. C. BROWN, Victoria— Sub-committee member

Senator D. J. GRIMES, Tasmania

Senator J. I. MELZER, Victoria— Sub-committee member

Senator T. J. TEHAN, Victoria

Senator M. S. WALTERS, Tasmania

Secretary Mr R. P. JOSKE The Senate


1. The Senate resolved on 28 April 1976 that:

® All annual reports of government departments and authorities, including statutory corporations, laid on the Table of the Senate shall stand referred without any Question being put, for consideration and, if necessary, for report thereon, to the Legislative and General Purpose Standing Committees.

* The President shall transmit a copy of each report so tabled to the Com­ mittee which he deems appropriate.

• The Legislative and General Purpose Standing Committees may, at their discretion, pursue or not pursue inquiries into reports so received; but any action necessary, arising from a Report of a Committee, shall be taken in the Senate on Motion after Notice.

2. In accordance with the terms of the above resolution, the President of the Senate transmitted to this Committee, on 18 May 1976, the Annual Report 1974— 75 of the Commonwealth Serum Laboratories Commission (CSL).

3. After examining the Annual Report, the Committee noted a number of matters that it considered needed clarification. Accordingly, CSL was invited to comment, in writing, on these points which read as follows: (a) It is clear that only by a virtual crash program throughout the next 10

years will the organisation be able to modernise and expand in time to meet adequately the community’s growing needs and regulatory standards. (page 6 of the report) (b) . . . progress was made in gaining increased production from equip­ ment that is obsolete and in some instances worn out . . . (page 6) (c) . . . the Personnel Section has laboured under very difficult conditions for many years and has lacked the structure to provide the range of services necessary for CSL. (page 10)

(d) Greater attention must also be given to industrial relations and reviews of working conditions. (page 10)

CSL written comments

4. CSL welcomed the opportunity to reply and offered explanations which are briefly summarised in the following paragraphs; the full text is at Appendix A.

5. CSL wrote that the references to a crash program to modernise and expand CSL capacity should be viewed against the knowledge that CSL is in its 60th year of operation and works in a field of rapidly changing technology. The more modern facilities built 20-40 years ago are now obsolete, in part unsafe, and in many regards altogether inadequate.

6. CSL stated they have a forward plan, covering the upgrading of many facilities. However, the unpredictability of funds for capital expenditure, and with programs being revised each year and projects being postponed to subsequent years, the crash program attitude is necessary to constantly revise and redefine

what may be attained in the next 10 years. The point was made a number of times that plant has been kept in operation by careful and costly maintenance and modification over recent years, thus avoiding capital investment.


7. In regard to extracts (c) and (d) in paragraph 3, relating to personnel

and industrial relations activities, CSL wrote that it has not been possible to give proper attention to the quality of the work environment, training and organisation development. However, since submission of this 1974-75 Annual Report a beginning has been made to strengthen the Personnel Group by recruiting an additional senior officer and by advertising for a Safety/Training Officer.

Committee visit to CSL

8. The Committee resolved to form a sub-committee and to arrange an inspection of the buildings and the more significant items of equipment said to be obsolete or worn out. Members considered that direct discussion with officers of the Commission during such a visit could provide valuable detailed information.

9. Subsequently, representatives of CSL met with the sub-committee in private hearings and inspected the Laboratories at Parkville, Victoria. CSL’s assistance and co-operation in this short inquiry is gratefully acknowledged.

10. Initially, the members of the sub-committee engaged in discussions with senior members of the Commission, and with the assistance of an aerial photo­ graph and site plan examined the locations of old, new and proposed buildings referred to in the Commission’s Annual Report and its supplementary statement to the Committee. Specific matters reviewed included:

(a) the obsolete nature of the East Block Building and its replacement by the Veterinary Vaccine Building, and a Human Vaccine Building, planning for which is well advanced in conjunction with the Department of Construction; (b) the obsolete Insulin Buildings and the progress made with a replacement

building commenced just before the sub-committee’s visit; (c) the siting of a new building for the breeding of Specific Pathogen Free Animals required because of developments in technology; (d) the location and limitations of the existing Serum Fractionation Plant

which, as a long-term proposal, will be replaced with a new building; and (e) the limitations of the existing Research and Development Laboratories, particularly those located in the South Block which, as a long-term proposal, are planned for replacement with a new Research and Development


11. In addition, the sub-committee was informed that: (a) the Maximum Security Building, which the Annual Report indicated should be operational by December 1975, has now been commissioned and is in operation; (b) the Virus Production Building Phase 2, which it had been anticipated

would be completed by the end of 1975, is now complete, and the instal­ lation of plant is proceeding; (c) the Veterinary Vaccine Building which was due for completion in July 1976 is now complete, and the installation of plant is proceeding; and (d) the Experimental Animals Building which was due for completion in

November 1975 is now operational.

12. The sub-committee then inspected the buildings and sites referred to above, and returned to the Board Room for further discussions.


13. In relation to the Insulin Building, the Members explored in detail the question of whether the possibility of future expansion had been adequately studied, and sought reassurance that the building now being designed and con­ structed would meet future CSL needs. The CSL representatives indicated to the sub-committee that:

(a) the national requirements had been forecast 15 years ahead, and production capacity in the new building was adequate for that period with some reserve capacity for export; the capacity of the building is rated at five times existing capacity;

(b) professional advice indicated that the work flow lent itself only to a two-storey construction;

(c) the building and plant design had been arrived at after consultation with major overseas manufacturers— especially taking into account the require­ ment of keeping animal and human source materials and products separate (as per WHO recommendations); and

(d) the possibility of a solvent explosive hazard was a major factor against including other activities in the building.

The Members recognised these factors and understood that the above building could be described as a ‘single purpose’ building.

Australia’s future needs

14. In relation to CSL’s capacity to meet Australia’s future needs, the sub­ committee discussed the present closure of the CSL penicillin fermentation plant, and the importation by CSL of measles, rubella and polio vaccines. They noted the economic considerations which led the Commonwealth to import these vaccines rather than produce locally, at high cost, the relatively small quantities required.

15. The Members then explored the capability of CSL to meet the need for the above products in the event of overseas supplies being unavailable, and were concerned to note that a substantial time lapse would occur before local products would be available. Questions were also raised: Could CSL cope if an emergency

arose calling for several new vaccines at the one time? Does CSL have stand-by facilities to ensure the protection of Australia’s population should circumstances cause the failure of overseas supplies?

16. CSL explained that the prospect of supplies of the three vaccines from all available sources of overseas supply being unavailable at the one time was remote.

17. In the event that it became necessary for CSL to commence production of polio, measles and rubella vaccines at about the same time, the Committee was informed that it would take CSL at least one year to commence issue of rubella vaccine and a somewhat longer period for polio and measles. Existing

stocks would bridge a portion of the period between cessation of overseas supplies and the availability of local manufacture. Coverage against any unexpected cessation of supply could be made by a policy of deliberate holding of reserve stocks with the consequent acceptance of loss through time expiry. The Minister has the authority under section 19b of the CSL Act to authorise CSL to provide reserve capacity for stocks. However, CSL must meet the cost involved unless a

loss situation occurs as a result of that or other activity.


18. CSL emphasised that they have the expertise in many of the techniques required for producing measles, rubella and polio vaccines, but reinforcement by overseas contact would be desirable before production commenced. However, no suitable facilities are available at present for the manufacture of any of these vaccines while existing activities are maintained. If more than one of these vaccines were to be made at the one time, some additional buildings would be necessary, possibly with some rearrangement of other activities.

19. CSL told the sub-committee that the Laboratories were originally founded to meet urgent needs in the absence of overseas supplies during the First World War. Subsequently, the manufacture of insulin in 1923, penicillin during the Second World War and Salk polio vaccine in the 1950s were each introduced in the national interest. In each case production was commenced because of a world-wide shortage. There are no examples of a sudden unavailability of any product which CSL presently obtains from overseas. In addition, the Laboratories have at times been called on to supply, without notice, unusually high quantities of products to meet disasters overseas.

20. Continuing on the subject of the growing needs of the Australian com­ munity, CSL said that these were reflected in three distinguishable ways:

(a) the population growth which maintains and slowly increases the demand for prophylactic products such as diphtheria toxoid and endocrine products such as insulin;

(b) the stimulation of community programs which might, and should, occur and to which reference was made in the Commission’s Annual Report 1972-73,1 and the changing patterns in medical practice—for example, the current increase in the demand for heparin and the increased usage of anti-haemophilic factors for home use; and

(c) the probability of the demand for new products of a kind which CSL believes it should have the capacity to manufacture—for example, a hepatitis vaccine or further pituitary hormones for human use, or a wider range of companion animal vaccines.

21. Notwithstanding the above explanations the sub-committee considered that, although CSL provides a satisfactory service under foreseeable circumstances, its role should also be to cope with emergency situations and, therefore, should have adequate stand-by facilities.

‘Crash program’ queried

22. The sub-committee noted the forward planning undertaken by CSL to meet anticipated needs over the next 10 years, and the integration of this plan with the triennial forecasts forwarded to the Minister. However, the Members questioned the validity of the words ‘crash program’ used in the Annual Report,

in view of the reference to the plant level of construction and re-equipping.

1The Commission is concerned that a sudden increase in awareness of the value of immunisation, which has been consistently propounded, could lead to a situation in which even the reserve supplies would be inadequate. It is therefore planning to expand and renew the existing facilities for the manufacture of vaccines for human use during the next triennium. Such an expansion is, of course, a very expensive project but it must be undertaken if complete community protection by vaccination is to be available from CSL’s resources.


23. CSL representatives explained that the term was not intended to imply that a start needed to be made, but rather that the program already progressing needed to be sustained if CSL is to maintain its position in the forefront of biological product manufacture. They related this to the wording on page 7 of

the report, which referred to:

The major upgrading and replacement program which commenced several years ago . . .

Industrial relations

24. The question of the emphasis to be placed on safety, training, industrial relations and other programs was raised. Members were informed that some strengthening of the personnel staff had occurred, and the need for further expansion as a progressive exercise was understood. Measures already taken

internally included the initiation of staff-management meetings and the upgrading of the house magazine.

25. The sub-committee reported its views to the full Committee which, after deliberation, endorsed them.


26. The Committee concludes that the CSL building program appears to be carefully and satisfactorily planned and considers that if CSL is to continue to provide Australia with adequate biological products, the need for replacement and upgrading of old facilities and obsolete equipment appears to be well justified and should proceed without interruption.

27. Government should accept that part of CSL’s operational capacity is to provide adequate facilities to cope with vaccine requirements in emergency situations. The Committee understands that measures such as these cannot be easily costed but do represent an essential public service.

28. CSL personnel and industrial relations activities have been strengthened by recruiting an additional senior officer and by advertising for a Safety/Training officer. Further attention will need to be paid to these areas to ensure the required expansion is achieved.

29. The Committee reports to the Senate and commends these conclusions to the Minister for Health.


The Senate Canberra December 1976


A p p e n d i x A

Commonwealth Serum Laboratories Commission 45 Poplar Road, Parkville 3052 Melbourne, Australia

14 October 1976

Senator Peter Baum e Chairman Standing Committee on Social Welfare Parliament House Canberra, A.C.T. 2600

Dear Sir,

Thank you for the opportunity of elaborating on the comments concerning the CSL 1974-75 A nnual Report which have been noted by your Committee, and to which you refer in your letter dated 24 August 1976. In relation to the first two extracts, as these are related, we shall comment on

them jointly. Similarly, we will offer a single comment in relation to the second two extracts. The references to a crash program to modernise and expand our capacity and our success in maintaining equipment that is obsolete must be viewed against the background that, in common with many other areas of industry and service, we operate in a field of rapidly changing technology. We are now in our 60th year of operation, and some of our buildings here at Parkville predate our birth. Even more m odern facilities built 20-40 years ago are now obsolete, in part unsafe, and in m any regards altogether inadequate. We have a forward plan covering the upgrading of many of our facilities, and the next 10 years is seen

as a period of intense activity. However, uncertainty and unpredictability sur­ rounds the availability of funds for capital expenditure, and with programs being revised each year and inevitably projects being postponed to subsequent years, the crash program attitude is necessary to constantly revise and redefine that

which may be attained in the next 10 years. This forward-looking approach will continue to be necessary, and the 10-year planning phase will, for the foreseeable future, be starting again with every successive year. Perhaps the situation is best explained by three projects which stand at

different points in the 10-year plan. A new production plant for veterinary vaccines is currently under con­ struction and is scheduled to come into operation during the current financial year. The need fo r the plant was twofold. Firstly, it was housed in one of the buildings to which I referred earlier as being on the Parkville site when CSL came here 60 years ago. This building is now totally unsuited to large-scale production work due, amongst other things, to deterioration in the floor which limits its load-carrying capacity. As a consequence, large tanks cannot be used. Secondly, a considerable proportion of the plant and equipment which is still in use, but will shortly be superseded, is of the order of 15-20 years old, and is obsolete in terms of modem processing facilities. This plant has been kept in

operation by careful maintenance and modification over recent years. Capital investment has thus been avoided. However, the cost has caused us to spend more money than is desirable on repairs and maintenance.


A new building to house insulin manufacture was commenced during the current financial year following extensive investigations including the study of overseas facilities. The existing plant is housed in two very old buildings, one of which was formerly used as stables. As an example of the difficulties mentioned with plant, the centrifuge used for separation of the meat solids from the insulin

extracting fluid was some 25 years old. It was difficult to maintain because of poor availability of spare parts and the overall deterioration of the unit. It has recently been replaced with a new centrifuge which will be reinstalled in the new building when constructed. The evaporators which are used for the concentration

of insulin extract are some 15 years old, and are reaching the end of their useful life. As with other plant, it has only been possible to have them continue in operation by constant maintenance work.

A further project included in our 10-year plan is the construction of a new building for serum fractionation work. It is at present housed in a relatively recent building, built in the 1940s for general laboratory use. It is not wholly satisfactory for the work involved, and space limitations have been a persistent problem. Some of the centrifuges and other equipment used in the section are

of the order of 15-20 years old and are obsolete. This equipment is now planned for replacement with equipment that will ultimately be moved into the proposed serum fractionation building.

In relation to the second two extracts relating to our personnel and industrial relations activities, we have in the past had a Personnel Group staffed on a narrow base, sufficient only to provide routine services such as employment, pay, furlough, compensation, and other conditions of service. It has not been possible

to give proper attention to the quality of the work environment, training and organisation development.

Whilst we have an enviable record in the field of industrial relations, a great deal more needs to be done in this area. For example, we are currently confronted with a claim for a 36|-hour week for 40-hour-week staff, and we have not been properly staffed to enable the expeditious and efficient handling of such claims.

Since submission of the 1974-75 Annual Report, we have recruited an additional senior officer to strengthen the staffing of the Personnel Group, and we have recently obtained Ministerial approval to the provision of a position of Safety/Training Officer. Action is currently being taken to advertise this position.

A beginning has thus been made in the strengthening of the Personnel Group, but we see this as a gradual process which will need to be fostered during the next several years. The limitations imposed by staff ceilings could affect our ability to implement the desired changes.

We trust that the above notes will be of assistance to your Committee. Should further elaboration or information be desired, we would be happy to assist.

Yours sincerely, A. H. BROGAN Secretary