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Export Legislation Amendment (Live-stock) Bill 2018



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ISSN 1328-8091

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BILLS DIGEST NO. 20, 2018-19 4 SEPTEMBER 2018

Export Legislation Amendment (Live-stock) Bill 2018 Claire Petrie Law and Bills Digest Section

Contents

Purpose and structure of the Bill ..................................... 3

Background ..................................................................... 3

Overview of regulatory scheme .................................. 3

Enforcement .............................................................. 4

Awassi Express footage and response ........................ 5

Calls for export ban ................................................... 6

Committee consideration ................................................ 7

Selection of Bills Committee ....................................... 7

Senate Standing Committee for the Scrutiny of Bills .............................................................................. 7

Policy position of non-government parties/independents...................................................... 7

Position of major interest groups..................................... 8

Financial implications ...................................................... 8

Statement of Compatibility with Human Rights................ 8

Parliamentary Joint Committee on Human Rights ..... 8 Key issues and provisions ................................................ 9

Relationship to the Export Control Bill 2017 ............. 9 Proposed changes to penalties ................................... 9

AMLI Act offences ..................................................... 9

Penalties for bodies corporate ................................ 11

EC Act offences ........................................................ 11

Enforcement of civil penalties ................................... 12

Civil penalty orders .................................................. 12

Infringement notices ............................................... 12

Liability of executive officers..................................... 13

Date introduced: 24 May 2018

House: House of Representatives

Portfolio: Agriculture and Water Resources

Commencement: The day after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at September 2018.

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Criminal liability ....................................................... 13

Civil liability ............................................................. 14

Adverse publicity orders ........................................... 14

Concluding comments ................................................... 15

Appendix A—live export Bills currently before Parliament ............................................................... 16

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Purpose and structure of the Bill The purpose of the Export Legislation Amendment (Live-stock) Bill 2018 (the Bill) is to amend the Australian Meat and Live-stock Industry Act 1997 (AMLI Act) and the Export Control Act 1982 (EC Act) to:

• increase the applicable criminal penalties for offences relating to the export of live-stock under each Act

• introduce aggravated offences where the relevant conduct causes economic detriment to Australia, or where the exporter commits the offence with the intention of obtaining commercial advantage

• introduce new civil penalty provisions which trigger enforcement provisions of the Regulatory Powers (Standard Provisions) Act 2014 (Regulatory Powers Act) and

• enable courts to make adverse publicity orders requiring exporters to publish or disclose details of their contravention.

The Bill has one Schedule with three Parts—Part 1 amends the AMLI Act, and Part 2 amends the EC Act. Part 3 contains an application provision.

Background

Overview of regulatory scheme The export of live-stock is underpinned by a complex regulatory scheme. There are two key Acts which create the broad legal framework:

• the AMLI Act regulates the licencing of exporters. It prohibits the export of meat or live-stock without a licence, which may be subject to prescribed conditions, orders and directions1 and

• the EC Act regulates the export of prescribed goods (including live animals).2 It provides authority for ‘authorised officers’ to carry out monitoring and enforcement activities, and sets out penalties for a range of export offences.

Specific requirements for exporters are largely contained in instruments made under these Acts. In particular, the Export Control (Animals) Order 2004 (Animals Order) provides that the export of live-stock is prohibited unless certain conditions are met.3 These include that the exporter has in place an approved Exporter Supply Chain Assurance System (ESCAS), which is intended to allow them to trace all live-stock through the supply chain and ensure that animal handling and slaughter in the importing country conforms to international animal welfare standards.4

Exporters must comply with all requirements under the Animals Order as a condition of their export licence.5 They must also comply with the Australian Standards for the Export of Live-stock in relation to the treatment of livestock prior to their arrival in the importing country.6

Additional requirements for the handling of live-stock on export vessels are contained in Marine Order 43, made under the Navigation Act 2012.7

1. AMLI Act, Division 2 of Part 2. 2. Export Control (Animals) Order 2004 (Cth), section 1.04 provides that live animals and animal reproductive material are prescribed goods for the purposes of the EC Act. 3. Ibid., section 1A.01. 4. Ibid., Division 1A.3 of Part 1A; Department of Agriculture and Water Resources (DAWR), ‘Exporter Supply Chain Assurance

System (ESCAS)’, DAWR website. 5. Australian Meat and Live-stock Industry (Conditions on live-stock export licences) Order 2012 (Cth), clause 3. 6. Australian Meat and Live-stock Industry (Standards) Order 2005 (Cth), clause 3; DAWR, ‘Australian Standards for the Export of

Livestock’, DAWR website.

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Enforcement As the independent regulator, the Department of Agriculture and Water Resources (DAWR) is responsible for enforcement of the regulatory scheme.8 Monitoring of the live export process is primarily conducted through ESCAS auditing requirements. Exporters submit an independent initial audit report as part of their ESCAS application, and must subsequently provide independent performance audit reports covering the performance of the ESCAS after live-stock have entered the supply chain.9 The frequency of these audits depends on the type of facility and its inherent risks, as well as the compliance history of the exporter.10

In addition to audits, DAWR has the power to monitor, review or audit the activities of exporters, including in response to self-reported breaches and third party complaints.11 There is a range of sanctions available, including criminal penalties, the refusal or revoking of an export permit or licence, or imposition of conditions on the export licence.12

From February 2012 to the time of writing, there have been 157 regulatory compliance investigations (either finalised or ongoing).13 Additionally, there have been 70 investigations of voyages with reportable mortality events.14 However, DAWR has been criticised for a perceived reluctance to penalise exporters.15 The Department has suspended or cancelled an export licence in only a small number of cases, and there are no publicly reported cases of criminal sanctions being imposed.16 In regards to mortality investigations, in April 2018 The Guardian Australia reported:

An analysis by Guardian Australia of 70 mortality investigation reports produced by the department shows a number of cases where conditions contrary to ASEL are noted in the report. Despite this, Guardian Australia found no instances of punitive measures such as fines or loss of export licence being imposed. The department was asked to provide details of any companies that had been punished for breaches of the standards, but it did not respond.

7. Marine Order 43 (Cargo and cargo handling—livestock) 2018 (Cth); Navigation Act 2012 (Cth). 8. This is with the exception of Navigation Act requirements, which fall within the scope of the Australian Maritime Safety Authority (AMSA). 9. DAWR, ‘2015-06—Revised risk-based auditing requirements for ESCAS’, DAWR website, 23 March 2015. 10. Ibid. The current risk-based audit requirements were introduced in 2015, with the aim of reducing the regulatory burden on

exporters. Prior to this, all facilities of the same type were subject to the same number of audits per year regardless of their performance: B Joyce (Minister for Agriculture), Live export reform targets areas of greatest risk, media release, 24 March 2015; S Locke, ‘Cutting audit costs of animal welfare in livestock export markets welcomed by the industry’, ABC News website, 25 March 2015. 11. DAWR, ‘Compliance and investigations’, DAWR website. 12. Ibid. 13. DAWR, ‘Regulatory compliance investigations’, DAWR website. 14. That is, where the mortality level is higher than: 2% for sheep and goats, camelids and deer; 0.5% for cattle and buffalo on a

voyage less than ten days; 1% for cattle and buffalo on a voyage more than ten days (or three animals, whichever is greater): see the definition of reportable level in the Australian Standards for the Export of Livestock, standard 5.5, p. 107; for summaries of DAWR’s mortality investigations see: DAWR, ‘Investigations into mortalities’, DAWR website. In July 2018, the Australian Meat and Live-stock Industry (Standards) Amendment (Reportable Sheep Mortality Level) Order 2018 (Cth) reduced the reportable mortality level in relation to sheep exported by sea from 2% to 1%. 15. See, for example: S O’Sullivan, ‘Why are Australian livestock still turning up in places where they are treated cruelly?’, The

Conversation, 21 October 2015; ‘Editorial: cruelty exposes flaws in live export safeguards’, The Sydney Morning Herald, 21 May 2015, p. 18; L Sales, ‘Live exporter joins animal rights activists in push for Middle East slaughtering procedure enforcement’, The 7.30 Report, Australian Broadcasting Corporation (ABC), 13 October 2015. 16 For reports of each case in which an export licence has been suspended or cancelled for breach of the ESCAS, see: DAWR, Live export licence cancelled, media release, 21 August 2018; P Karp, ‘Live animal exporter hit with second licence suspension’, The Guardian (Australia), 12 July 2018; M Grattan, ‘Government suspends licence of biggest live sheep exporter’, The Conversation, 22 June 2018; C Jasper, ‘One RuralCo live export company hit with licence cancellation’, ABC News website, 18 July 2016.

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Many fatality reports result in additional conditions being added to the exporter’s next consignment, such as loading fewer animals or the addition of a vet. In several cases, temporary halts on exporting were imposed but later lifted. 17

As part of its report on the Regulation of Australian Agriculture, released in March 2017, the Productivity Commission considered the regulatory scheme for live animal exports.18 Its report highlights the tension between concerns from exporters as to the cost and complexity of the ESCAS, and criticisms from animal welfare groups regarding weaknesses in responding to non-compliance. The Commission concluded:

It is critical that the community has confidence in the system used to regulate live exports. Incidents of mistreatment of animals in facilities that are within the purview of the ESCAS and that are overseen by the Australian livestock industry reduce community confidence in the trade and the regulator’s effectiveness.

19

More broadly, the Productivity Commission recommended the establishment of an Australian Commission for Animal Welfare, with responsibility for developing national standards and guidelines relating to farmed animal welfare.20 It recommended that this independent statutory body play a role in live export regulation:

At a minimum, this role should involve reviewing the performance of the ESCAS, including the performance, independence and effectiveness of the auditing arrangements, and making recommendations for reform. Mandatory rotation of auditors (as discussed above), and specific requirements for auditors to have experience and training in animal health, husbandry and welfare, could improve the effectiveness of the auditing arrangements.

…It should also review other aspects of the regulatory system for live exports, including the Australian Standards for the Export of Livestock. Although not a focus of analysis of this inquiry, the Commission notes concerns raised about these standards, including with respect to the accreditation and independence of veterinarians on board live export vessels.

21

The Australian Government has not yet issued its response to the report.

Awassi Express footage and response In April 2018, Sixty Minutes broadcast footage obtained by Animals Australia from the Awassi Express en route to the Middle East in August 2017, run by Perth exporter Emanuel Exports.22 The footage showed the extreme suffering of sheep on board the vessel, on which approximately 2,400 sheep died from heat stress (3.76 per cent of the total number on board).23 A mortality investigation by the Department, completed prior to the release of the footage, had declined to take enforcement action against the exporter.24

17. N Evershed and C Wahlquist, ‘Live exports: mass animal deaths going unpunished as holes in system revealed’, The Guardian (Australia), 10 April 2018. 18. Productivity Commission, Regulation of Australian Agriculture, Inquiry report, 79, 15 November 2016, pp. 245-259. 19. Ibid., p. 258. 20. Ibid., pp. 236-8. 21. Ibid., pp. 258-9. 22. ‘Live sheep exports’, Sixty Minutes, 8 April 2018. 23. C Wahlquist, ‘Shocking live export conditions not uncommon, say animal rights groups’, The Guardian (Australia), 9 April 2018;

C Tyrrell, ‘Video shows live export toll’, The West Australian, 9 April 2018, p. 13. 24. DAWR, Mortality investigation report—sheep exported by sea to Qatar, Kuwait and United Arab Emirates in August 2017, Report 69, last reviewed 12 April 2018. While not imposing any sanctions, the Department did require Emanuel to review and

comply with a heat event management plan for its next consignment of sheep to the Middle East using the same vessel.

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On 9 April 2018, Minister for Agriculture David Littleproud expressed concern that the Department’s mortality report ‘did not accurately reflect the conditions seen in the vision on the ship’.25 He announced three measures in response:

• a review into the ‘investigative capability, powers and culture of the independent regulator’ (that is, DAWR)

• a whistleblower hotline, allowing anonymous reporting of wrongdoing and

• an intention to increase the applicable penalties for exporters.26

On the issue of penalties, the Minister stated:

Personally, I'd like to see company directors be held more personally accountable if they do the wrong thing, facing big fines and possible jail time. They shouldn't be able to hide behind companies and shelf companies… 27

Minister Littleproud also announced a ‘short, sharp review’ of the standards for the live sheep trade during the Middle Eastern summer, to be conducted by veterinarian Dr Michael McCarthy.28 The report from the review was publicly released on 17 May 2018, and made a number of recommendations for reform, including reductions of stocking densities and movement from a heat stress risk assessment based on mortality to assessment based on animal welfare.29 In response, the Department accepted most of the recommendations, but announced that it would not implement a revised heat stress risk assessment model until further public and expert consultation is undertaken.30

In July 2018, it was reported that Emanuel Exports, whose licence was suspended in June pending investigations into overstocking, was seeking a permit to export sheep from Fremantle to the Middle East, through its wholly-owned subsidiary EMS Rural Exports.31 The Department subsequently announced that it had also suspended the export licence of EMS Rural Exports.32

Calls for export ban The release of the Awassi Express footage led to a renewal of calls for either a total or partial ban of the live export trade, with particular focus on live sheep exports.

25. D Littleproud (Minister for Agriculture and Water Resources), Live exports, media release, 9 April 2018. 26. Ibid. The review into the Department’s regulatory capability and culture is due to report to the Minister by 7 September 2018: DAWR, ‘Review into our regulatory capability and culture’, DAWR website. 27. Littleproud, Live exports, op. cit. 28. D Littleproud (Minister for Agriculture and Water Resources), Review of standards around Middle Eastern Summer live sheep

trade, media release, 10 April 2018. 29. M McCarthy, Independent review of conditions for the export of sheep to the Middle East during the northern hemisphere summer, Report to the Minister of Agriculture and Water Resources, 11 May 2018. 30. DAWR, Regulator’s response to the McCarthy Review, 17 May 2018. A number of the report’s recommendations have since

been implemented through the following legislative instruments: Marine Order 43 (Cargo and cargo handling—livestock) 2018 (Cth) (amending requirements for the safe carriage and stowage of livestock on board export vessels); Australian Meat and Live-stock Industry (Standards) Amendment (Reportable Sheep Mortality Level) Order 2018 (Cth) (reducing the reportable mortality level for sheep—discussed at footnote 14); Australian Meat and Live-stock Industry (Export of Sheep by Sea to Middle East) Order 2018 (Cth) (imposing additional conditions on exporters transporting sheep by sea to the Middle East between May and October); Export Control (Animals) Amendment (Approved Export Programs and Other Measures) Order 2018 (Cth) (amending the regulatory scheme regarding approved export programs). 31. N Evans, ‘Suspended live exporter in permit bid’, The West Australian, 11 July 2018, p. 12; L Bourke, ‘Disgraced exporter set to

sail with more sheep’, The Age, 11 July 2018, p. 11. 32. Karp, ‘Live animal exporter hit with second licence suspension’, op. cit; DAWR, Second live export licence suspension, media release, 12 July 2018.

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In May 2018, Liberal MP Sussan Ley introduced a private member’s Bill to phase out long-haul exports of live sheep and lambs to the Middle East.33 The ALP has indicated support for the Bill, with Shadow Minister for Agriculture, Joel Fitzgibbon, announcing that if elected, a Labor Government would develop a transition plan to end live sheep exports.34 The Australian Greens have also said they will support Ms Ley’s Bill, and have released a plan to transition the live sheep export trade to a locally-processed chilled meat trade.35 In June, cross-bench Senators Lee Rhiannon, Derryn Hinch and Tim Storer introduced an almost-identical version of Ms Ley’s Bill into the Senate.36 A list of all live-export Bills currently before Parliament is provided at Appendix A.

The Government has criticised calls for a ban. In his second reading speech for the present Bill, Minister Littleproud reaffirmed support for the live trade, stating:

The calls to ban live-stock exports disregard the value of this trade to our farmers and others in rural and regional Australia. Banning, or even suspending, live-stock exports at this time is simply a 'knee-jerk' reaction, and would be a poorly considered decision. 37

Committee consideration

Selection of Bills Committee On 21 June 2018, the Senate Standing Committee for the Selection of Bills recommended that the Bill not be referred to committee.38

Senate Standing Committee for the Scrutiny of Bills On 20 June 2018, the Senate Standing Committee for the Scrutiny of Bills reported that it has no comment to make on the Bill.39

Policy position of non-government parties/independents While stating that it will support the measures in the Bill, the ALP has introduced amendments which replicate Sussan Ley’s Bill to phase out the live sheep trade.40 Shadow Agriculture Minister, Joel Fitzgibbon has stated:

Labor supports the Bill, it can do no harm. But increasing penalties which are never applied will not change the settled science on heat stress and associated issues in the live sheep trade.

Labor's amendments replicate those contained in Sussan Ley's Private Member's Bill. They offer something better; an immediate end to the tortuous northern summer trade and the phase out of the balance of the sheep trade within five years.

33. Parliament of Australia, ‘Live Sheep Long Haul Export Prohibition Bill 2018 homepage’. The Bill proposes a five-year transitional period in which exports are only banned during the northern summer months of July to September. 34. J Fitzgibbon, Interview with ABC NSW Country Hour: transitioning the live export sheep trade, transcript, 3 May 2018. 35. R Di Natale, Greens' plan to transition live sheep export industry to local processing backed by meat workers union, media

release, 22 April 2018; A Bandt, Greens announce support for Sussan Ley’s Private Member’s Bill to end live sheep exports, media release, 19 April 2018. 36. Parliament of Australia, ‘Animal Export Legislation Amendment (Ending Long-haul Live Sheep Exports) Bill 2018 homepage’. The only change from Ms Ley’s Bill is an additional requirement that during the five-year transition period, voyages be

conducted in accordance with international animal welfare standards. 37. D Littleproud, ‘Second reading speech: Export Legislation Amendment (Live-stock) Bill 2018’, House of Representatives, Debates (proof), 24 May 2018, p. 10. 38. Senate Standing Committee for the Selection of Bills, Report, 6, 2018, The Senate, Canberra, 21 June 2018, p. 3. 39. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, 2018, The Senate, Canberra, 20 June 2018, p. 54. 40. Parliament of Australia, ‘Export Legislation Amendment (Live-stock) Bill 2018—amendments’; K Murphy, ‘Turnbull pulls live

export bill after Sussan Ley signals intent to back Labor plan’, The Guardian (Australia), 31 May 2018.

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… If Labor's amendments fail, we'll accept the will of the Parliament, as currently constituted, and vote for the unamended Bill. 41

Other non-government parties and independents have not commented on the Bill to date. Minister Littleproud has stated that the Government will reintroduce the Bill for debate if the ALP provides written assurance that it will support the Bill unamended in both Houses.42

Position of major interest groups The RSPCA and National Farmers’ Federation have both expressed a desire for the Bill to be passed promptly.43 At the same time, the RSPCA has noted that the effectiveness of increased penalties will depend largely on the regulator’s willingness to take action against exporters.44

There has been little comment about the Bill from other stakeholders, with much of the current public debate about live export focused on the outcomes of the McCarthy review, and questions about whether the live-stock trade should continue.

Financial implications The Explanatory Memorandum states that the Bill will have no financial impact on the Australian Government Budget.45

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.46

Parliamentary Joint Committee on Human Rights On 19 June 2018, the Parliamentary Joint Committee on Human Rights reported that the Bill does not raise human rights concerns.47

41. J Fitzgibbon (Shadow Minister for Agriculture), PM playing politics with the live sheep trade, media release, 18 June 2018. 42. D Littleproud (Minister for Agriculture and Water Resources), Littleproud statement on Al Shuwaikh, media release, 10 July 2018. 43. B Worthington, ‘RSPCA, farm lobby furious over political delay in live export abuse penalties’, ABC News website,

18 June 2018; D Littleproud (Minister for Agriculture and Water Resources), Ag Minister thanks NFF, RSPCA for calls to put politics aside on live export penalties, media release, 18 June 2018. 44. Ibid. 45. Explanatory Memorandum, Export Legislation Amendment (Live-stock) Bill 2018, p. 3. 46. The Statement of Compatibility with Human Rights can be found at pages 4-13 of the Explanatory Memorandum to the Bill. 47. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 5, 2018, Canberra, 19 June 2018, p. 53.

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Key issues and provisions

Relationship to the Export Control Bill 2017 The Export Control Bill 2017, introduced in the Senate in December 2017, proposes the consolidation of existing Acts and legislative instruments to streamline Australia’s legislative framework for the export of goods, including live-stock.48 If passed, the Bill will replace existing export laws including the AMLI Act and EC Act.

The Government has not expressly stated whether the penalties in the current Bill, which relate specifically to live-stock export, will be incorporated into the new legislative scheme. However, a number of the changes proposed by the current Bill broadly mirror the compliance and enforcement provisions in the Export Control Bill 2017, including through:

• the introduction of a civil penalty regime, which triggers the Regulatory Powers Act

• the inclusion of aggravated offences where a contravention causes damaging economic consequences for Australia or where the person intends to obtain a commercial advantage and

• the imposition of liability on executive officers of bodies corporate.

The Export Control Bill 2017 was still before the Senate at the time of writing.49

Proposed changes to penalties The Bill increases the penalties applicable for contraventions of certain live-stock export offences under the AMLI Act and EC Act. The Explanatory Memorandum states that the measures are intended to act as a deterrent to non-compliant behaviour and ‘reflect the seriousness of failing to comply with requirements of live-stock export legislation’, noting:

This will assist in driving a positive cultural change in the live-stock export sector. These penalties are also intended to meet community expectations by allowing the courts to impose significant penalties where there has been a serious breach of law. 50

AMLI Act offences Under existing section 54 of the AMLI Act, it is an offence to export meat or live-stock from Australia without the appropriate export licence, or to intentionally or recklessly contravene a condition of an export licence.51 A maximum penalty of five years imprisonment currently applies.52

Items 20 to 22 amend section 54 to remove references to live-stock export and specify that that provision deals only with offences relating to meat export. These amendments reflect the fact that offences relating to live-stock export will now be dealt with in separate provisions.

Item 23 inserts into the AMLI Act a series of new provisions dealing with contraventions in relation to the export of live-stock. The basic versions of each offence are the same as those which currently exist under section 54, but with heavier penalties attached, as well as newly available civil penalties. There are also new aggravated versions of each offence.

48. Parliament of Australia, ‘Export Control Bill 2017 homepage’. 49. For more information about the proposed changes, see: DAWR, ‘Improving agricultural export legislation’, DAWR website. 50. Explanatory Memorandum, Export Legislation Amendment (Live-stock) Bill 2018, p. 2. 51. AMLI Act, subsections 54(2) and (3). 52. Section 4B of the Crimes Act 1914 (Cth) provides that a court may impose a pecuniary penalty as an alternative to (or in

addition to) a term of imprisonment.

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Export of live-stock without licence

Under proposed subsection 54A(1), a person commits an offence if they export live-stock from Australia without holding a live-stock export licence. The maximum applicable penalty is eight years imprisonment and/or 480 penalty units.53 This is a heavier penalty than the five years imprisonment currently applicable under section 54.

A person contravening this section is also liable to a civil penalty of 960 penalty units.54 The Regulatory Powers Act provides that a court may not make a civil penalty order against a person for a contravention of a civil penalty provision if the person has been convicted of an offence for the same (or substantially the same) conduct.55 However, criminal proceedings may still be commenced against a person when a civil penalty order has already been made for the same (or substantially the same) conduct.56

Contravention of conditions of export licence

Under proposed section 54D, the holder of a live-stock export licence commits an offence if they contravene a condition of the licence. This would capture, for example, breaches of the exporter’s ESCAS. There are two versions of the basic offence:

• a fault-based offence where the licence holder contravenes the condition either intentionally or being reckless as to the licence condition—the applicable maximum penalty is eight years imprisonment and/or 480 penalty units57 and

• a strict liability offence where it is sufficient that the licence condition is contravened, regardless of whether the licence holder does so knowingly—the applicable penalty is 60 penalty units.58

A licence holder who contravenes this section is also liable to a civil penalty of 960 penalty units.59

Aggravated offences

There are two aggravated versions of each of the contraventions discussed above. These apply where a person commits the contravention and either:

• intends to obtain a commercial advantage over their competitors, or potential competitors, as a result of exporting the live-stock without a licence60 or in breach of a licence condition61 or

• the contravention (being either the breach of a licence condition or export without a licence) causes, or has the potential to cause, economic consequences for Australia.62

The phrase economic consequences for Australia is defined as including substantial damage to Australia’s trading reputation, and restrictions on or closures of access to one or more overseas markets for goods from Australia.63

53. A penalty unit is currently $210: Crimes Act 1914 (Cth), section 4AA. Subsection 4B(3) of the Crimes Act 1914 provides that the maximum penalty that may be imposed on a corporation is five times the maximum penalty that could be imposed on an individual for the same offence, unless the legislation in which the offence appears indicates a contrary intention. 480 penalty units is therefore currently equivalent to $100,800 for an individual or $504,000 for a body corporate.

54. Proposed subsection 54A(2). 960 penalty units is $201,600 for an individual or $1,008,000 for a body corporate. 55. Regulatory Powers Act, section 88. The application of the Regulatory Powers Act is triggered by proposed section 56A of the AMLI Act. 56. Ibid., section 90. 57. Proposed subsection 54D(1). 58. Proposed subsection 54D(2). 59. Proposed subsection 54D(3). 60. Proposed subsection 54B(1). 61. Proposed subsection 54E(1). 62. Proposed subsection 54C(1) and 54F(1).

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An individual committing either of these aggravated offences is liable to a maximum penalty of imprisonment for ten years and/or 2,000 penalty units.64 Heavier penalties apply to body corporates—these are explained below. The Bill further provides that a defendant on trial for one of these aggravated offences may be found not guilty of that offence but guilty of the basic version of the offence, provided that they have been accorded procedural fairness in relation to the finding of guilt.65

A person may also be liable to a civil penalty for any of these aggravated breaches. The applicable penalty is 4,000 penalty units for an individual.66 Bodies corporate are subject to the penalties set out below.

Penalties for bodies corporate Where a body corporate is liable to a penalty for contravening one of the aggravated offence or aggravated civil penalty provisions of the AMLI Act, proposed section 54G provides that the amount of the penalty will be an amount no more than the greatest of the following:

• 20,000 penalty units67

• three times the value of any benefit obtained directly or indirectly by the body corporate (and any related body corporate) that is ‘reasonably attributable’ to the conduct which constitutes the contravention or

• if the court cannot determine the value of the benefit obtained, ten per cent of the body corporate’s annual turnover in the 12 months prior to the contravention.68

There is no minimum penalty prescribed under this section.

EC Act offences Part IIA of the EC Act concerns the accreditation of veterinarians to undertake ‘approved export programs’, which are programs aimed at ensuring the health and welfare of live animals (and animal reproductive material) in the course of export.69 Division 2 of this Part contains a number of offences in relation to this, including where a veterinarian undertakes an approved export program without accreditation or fails to keep records or provide reports as required.70

Existing section 9K provides that a person commits an offence if they obstruct or hinder an accredited veterinarian or authorised officer in the undertaking of any activities in an approved export program. The offence is one of strict liability, which means that the prosecution does not need to prove the defendant’s fault (that they intended to obstruct or hinder the veterinarian/authorised officer)—the conduct itself is sufficient.71

63. Schedule 1, item 2 inserts a definition of economic consequences for Australia into existing section 7 of the AMLI Act. 64. Paragraph (a) of the penalty provisions under proposed subsections 54B(1), 54C(1), 54E(1) and 54F(1). 2,000 penalty units is $420,000. 65. Proposed subsections 54B(2), 54C(2), 54E(2) and 54F(2). 66. Proposed subsections 54B(3), 54C(3), 54E(3) and 54F(3). 4,000 penalty units is $840,000. 67. 20,000 penalty units is currently $4.2 million. 68. Proposed subsections 54G(1) and (2). The method of calculating the annual turnover of a body corporate for the purposes of

this provision is set out in proposed subsection 54G(3). 69. EC Act, subsection 9A(2). 70. Ibid., sections 9F and 9G. 71. Ibid., section 9K. A person can still raise a defence of honest and reasonable mistake to a strict liability offence—for more

information see: Attorney-General’s Department, A guide to framing Commonwealth offences, infringement notices and enforcement powers, Canberra, 2011, pp. 22-4.

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The maximum penalty is 50 penalty units.72

Item 31 repeals existing section 9K and inserts proposed sections 9K and 9KA. Similar to the existing provision, proposed section 9K provides that it is an offence to obstruct or hinder accredited veterinarians or authorised officers in the undertaking of any of the activities in an approved export program. The new provision retains the offence of strict liability (with the same applicable penalty of 50 penalty units), but also adds:

• a fault-based offence (that is, where it can be proven that the person had an intention to obstruct or hinder)73 with a heavier maximum penalty of eight years imprisonment and/or 480 penalty units74 and

• a civil penalty of 960 penalty units.75

Enforcement of civil penalties Proposed subsection 56A(1) of the AMLI Act and proposed subsection 13A(1) of the EC Act trigger the operation of Part 4 of the Regulatory Powers Act in relation to the enforcement of the civil penalty provisions of each Act.76

Civil penalty orders The Regulatory Powers Act enables an ‘authorised applicant’ to apply to a relevant court for a civil penalty order, which is enforceable as a debt to the Commonwealth.77

The Bill provides that the Secretary of DAWR is an authorised applicant for the purposes of the proposed civil penalty provisions under the AMLI Act and EC Act.78 The Secretary may delegate their powers as an authorised applicant:

• under the AMLI Act, to an APS employee at the SES level within DAWR79 and

• under the EC Act, to any person appointed by the Secretary as an ‘authorised officer’.80

As the Explanatory Memorandum notes, section 85 of the Regulatory Powers Act will apply in relation to the AMLI Act and EC Act, allowing a relevant court to make a single civil penalty order against a person for multiple contraventions (where the proceedings are founded on the same facts, or if the contraventions are part of a series of contraventions of the same or a similar character).81

Infringement notices As an alternative to an enforcement order made by the courts, the Regulatory Powers Act also provides that an ‘infringement officer’ may issue an infringement notice for an alleged contravention, if they believe on reasonable grounds that the contravention has occurred.82 A

72. 50 penalty units is $10,500. 73. Criminal Code Act 1995 (Cth), section 5.6 specifies the fault elements which apply where a fault element is not specified under the relevant law. 74. 480 penalty units is $100,800. 75. Proposed subsections 9K(1) and (3). 960 penalty units is $201,600. 76. Item 24 inserts proposed section 56A into the AMLI Act; item 46 inserts proposed section 13A into the EC Act. 77. Regulatory Powers (Standard Provisions) Act 2014 (Cth), sections 80-83. Relevant court means the Federal Court of Australia,

Federal Circuit Court of Australia or a state or territory court that has jurisdiction in relation to matters arising under the AMLI Act or EC Act (as applicable): items 4 and 29. 78. Proposed subsections 56A(2) (in relation to the AMLI Act) and 13A(2) (in relation to the EC Act). 79. Proposed subsection 70(3) of the AMLI Act (inserted by item 26). 80. EC Act, section 19 (as amended by item 47) and section 20. 81. Explanatory Memorandum, Export Legislation Amendment (Live-stock) Bill 2018, pp. 30, 41. 82. Regulatory Powers Act, section 103.

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person who receives an infringement notice can choose to pay a specified amount as an alternative to having court proceedings brought against them.83

The Bill provides that infringement notices may be given only in relation to offences against proposed subsection 54D(2) of the AMLI Act—that is, for strict liability contraventions of live-stock export licence conditions. The Secretary of DAWR is an infringement officer for the purposes of these provisions, and can also delegate this power to an APS employee at the level of an SES Band 1 or higher.84

The amount which can be payable under an infringement notice is the lesser of:

• one-fifth of the maximum penalty that a court could impose on the person for the contravention and

• 12 penalty units for an individual, or 60 penalty units for a body corporate.85

Liability of executive officers The Bill inserts provisions into both the AMLI Act and EC Act imposing criminal and civil liability on executive officers for offences committed by their body corporate. Currently, there is no provision in either Act which expressly extends liability in this way. However, as noted above, similar provisions are also contained in the Export Control Bill 2017, which is still before Parliament, in relation to civil (but not criminal) liability.86

Criminal liability Proposed section 56D of the AMLI Act provides that an executive officer of a body corporate commits an offence if the organisation contravenes one of the fault-based offence provisions proposed by the Bill, and the officer:

• knew, or was reckless or negligent as to whether, the contravention would occur

• was in a position to influence the body corporate’s conduct in relation to the contravention and

• failed to take all reasonable steps to prevent the contravention.87

Proposed subsection 56D(3) specifies a number of (non-exhaustive) factors to which a court may have regard in determining whether an executive officer of a body corporate failed to take all reasonable steps to prevent a contravention. These include any action taken by the officer upon becoming aware of the contravention, and any actions taken to ensure:

• the body corporate arranges regular professional assessments of its compliance with the proposed offence provisions, and implements any appropriate recommendations arising from this

• the body corporate’s employees, agents and contractors have a reasonable knowledge and understanding of the requirements to comply with the proposed offence provisions and

• the body corporate has in place adequate procedures to prevent the contravention.

An executive officer found guilty of an offence under proposed section 56D is liable to a maximum penalty of eight years imprisonment or 480 penalty units (in the case of a contravention of the

83. Ibid., section 107. 84. Proposed section 56B and proposed subsection 70(3) of the AMLI Act. 85. Proposed subsection 56C(2). 12 penalty units is $2,520; 60 penalty units is $12,600. 86. Export Control Bill 2017, clause 357. 87. Proposed section 56D is inserted into the AMLI Act by item 24 of the Bill.

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basic offences) or ten years imprisonment or 5,000 penalty units (for contravention of an aggravated offence).88

Proposed section 13B of the EC Act imposes criminal liability on an executive officer of a body corporate which contravenes proposed subsections 9K(1) or 9KA(1) of that Act. This provision is in almost identical terms to its equivalent under the AMLI Act.89

Civil liability Proposed section 56E of the AMLI Act and proposed section 13C of the EC Act impose civil liability on an executive officer of a body corporate for the organisation’s contraventions of the proposed civil penalty provisions under each Act. The same requirements apply as for criminal liability—that is, the officer: knew that, or was reckless or negligent as to whether, the contravention would occur; was in a position to influence the conduct of the body corporate; and failed to take all reasonable steps to prevent the contravention.90

An executive officer found liable is subject to a maximum civil penalty of 960 penalty units; a higher penalty of 10,000 penalty units applies to contraventions of the proposed aggravated civil penalty provisions under the AMLI Act.91

Adverse publicity orders The Bill inserts into the AMLI Act and EC Act provisions which enable a court, on its own initiative or on application by the Secretary or Director of Public Prosecutions, to make an ‘adverse publicity order’ in relation to a person who is found guilty of an offence or ordered to pay a penalty for contravention of a livestock-export civil penalty provision (under the AMLI Act) or approved export program civil penalty provision (under the EC Act).92

An adverse publicity order may require a person to publish and/or disclose to specified persons the details of the contravention or offence, including its consequences, the penalty imposed and any other related matter. The person must give the Secretary, within 14 days after the end of the period specified in the order, evidence of having taken the required actions.93

The Explanatory Memorandum states that these amendments are intended to incentivise compliance through raising the prospect of adverse publicity, noting ‘such orders can draw public attention to a particular wrongdoing and can be an effective deterrent for an organisation that is concerned about its reputation’.94 Similar orders are provided for under consumer laws.95

88. 480 penalty units is $100,800; 5,000 penalty units is $1,050,000. 89. Proposed section 13B is inserted into the EC Act by item 46 of the Bill. 90. Proposed subsection 56E(3) of the AMLI Act and proposed subsection 13C(2) of the EC Act provide that an officer is reckless as to whether the contravention would occur if they are aware of a substantial risk that it would occur and having regard to

the circumstances known to the officer, it is unjustifiable to take the risk. Proposed subsection 56E(4) of the AMLI Act and proposed subsection 13C(3) of the EC Act provide that an officer is negligent as to whether the contravention would occur if their conduct involves ‘such a great falling short of the standard of care that a reasonable person would exercise in the circumstances’ and such a high risk that the contravention would occur, that the conduct merits the imposition of a pecuniary penalty. These are largely in line with the provisions under the Criminal Code Act which specify when a person is reckless (section 5.4) or negligent (section 5.5) under criminal law. 91. 960 penalty units is $201,600; 10,000 penalty units is $2,100,000. 92. Item 24 inserts proposed section 56F into the AMLI Act; item 46 inserts proposed section 13D into the EC Act. 93. Proposed subsection 56F(3) of the AMLI Act; proposed subsection 13D(3) of the EC Act. 94. Explanatory Memorandum, Export Legislation Amendment (Live-stock) Bill 2018, p. 35. 95. Competition and Consumer Act 2010 (Cth), section 86D; National Consumer Credit Protection Act 2009 (Cth), section 182.

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Concluding comments The Bill substantially increases the maximum penalties available for live-stock export related offences, introduces a new civil penalties regime and imposes liability on executive officers of export corporations. While these are significant changes to the existing compliance and enforcement regime, the Bill’s impact will necessarily depend on whether DAWR, as the independent regulator, chooses to pursue criminal and civil penalties against exporters.

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Appendix A—live export Bills currently before Parliament

Bill Introduced by Date Summary

Export Control Amendment (Equine Live Export for Slaughter Prohibition) Bill 2018

Senators Lee Rhiannon (Greens) and Derryn Hinch (Ind)

26 June 2018 Amends the EC Act to prohibit the export of live equines for slaughter (with immediate effect).

Inspector-General of Animal Welfare and Live Animal Exports Bill 2018

Joel Fitzgibbon MP (ALP) 18 June 2018 Establishes an independent Inspector-General of Animal Welfare and Live Animal Exports with responsibility for reviewing the operation of live export laws and the exercise of powers or functions under these laws.

Animal Export Legislation Amendment (Ending Long-haul Live Sheep Exports) Bill 2018

Senators Lee Rhiannon (Greens), Derryn Hinch (Ind) and Tim Storer (Ind)

18 June 2018 Almost identical to Sussan Ley’s Live Sheep Long Haul Export Prohibition Bill 2018, with an additional requirement that voyages be conducted in accordance with international animal welfare standards.

Live Sheep Long Haul Export Prohibition Bill 2018 Sussan Ley MP (Lib) 21 May 2018 Phases out live sheep exports by ship where the voyage is for ten days or more, and enters the Persian Gulf or Red Sea.

There is a five-year transitional period in which exports are banned only during the northern summer (July to September).

Export Control Bill 2017 Government 7 Dec 2017 Consolidates existing Acts and legislative instruments to

provide a streamlined legislative framework for regulating export (including live-stock export).

Live Animal Export (Slaughter) Prohibition Bill 2017

Senator Lee Rhiannon (Greens) 21 June 2017 Prohibits the export of live-stock for slaughter, with a two-year period for commencement.

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