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Meat and Live-stock Industry Bill 1995



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House: House of Representatives

Portfolio: Primary Industries and Energy

Commencement: 1 July 1995

Note: The Explanatory Memorandum says that clause 2

Provides for Parts 1 and 5 of this Act to commence on the day the Act receives Royal Assent. Parts 2, 3, 4 and 6 are to commence on 1 July 1995. This allows time for the selection process of new board members for the Australian Meat and Live-stock Corporation and Meat Research Corporation to have taken place before these bodies begin operating under the new arrangements on 1 July 1995.

The analysis of clause 2 contained in the Explanatory Memorandum appears to be incorrect. Clause 2 provides:

This Act commences, or is taken to have commenced, on 1 July 1995.

Alternatively, it is possible that clause 2 of the Bill does not reflect the Government's intention and as such is incorrect.

Contents

Purpose

Background

A Policy Objective

B Public Announcement of New Arrangement for Meat Live-stock Industry

C Overview of Commonwealth Role in Australian Meat and Live-stock Industry

(i) AMLIPC Functions, Powers, Membership and Funding

(ii) AMLC Functions, Powers, Membership and Funding

(iii) MRC Functions, Powers Membership and Funding

D Industry Commission Report - Industry Views of

AMPLIC, AMLC and MRC and Industry Commission

Recommendations

(i) Industry Views of Performance and Role of the AMLC

(ii) Industry Views of Performance and Role of the AMLIPC

(iii) Industry Views of Performance and Role of the MRC

(iv) Industry Commission Recommendations

E Industry Consultation

F Industry Support

G Major Effects of New Statutory Arrangements

H Some Policy Issues

Main Provisions

A. Meat industry Council

(i) Object, Establishment, Functions and Powers

(ii) Corporate Plans, Industry Conferences and

General Meetings

(iii) Composition and Administration of MIC

(iv) MIC Funding

B. Australian Meat and Live-stock Corporation

(i) Object, Continuation, Functions and Powers

(ii) Meat and Live-Stock Licences

(iii) Export Quotas

(iv) Registers and Returns

(v) Corporate and Operational Plans

(vi) Composition and Administration of AMLC

(vii) AMLC Funding

(viii) Enforcement

(ix) Delegations, Service of Notices and Annual Report

C. Meat Research Corporation

(i) Object, Continuation, Functions and Powers

(ii) Corporate and Operational Plans

(iii) Composition and Administration of MRC

(iv) MRC Funding

(v) Delegations, Service of Notices and Annual Report

D. AMLC and MRC Membership Selection Committees

E. Miscellaneous Provisions

Ministerial Directions, Liability to Taxation and

Sunset Clause

Purpose

The Bill provides for the establishment of the Meat Industry Council which will have responsibility for developing the strategic directions of the Australian meat and live-stock industry. The Bill also redefines and confines the roles of the Australian Meat and Live-stock Corporation and Meat Research Corporation to program implementation of policies formulated by the Meat Industry Council. This Bill is to cease to have effect on 30 June 1998.

Background

A Policy Objective

This package of Bills includes:

Meat and Live-stock Industry Bill 1995;

Meat and Live-stock Industry Legislation Repeal Bill 1995;

Primary Industries Levies and Charges Collection Amendment Bill 1995;

Australian Meat and Live-stock (Quotas) Amendment Bill 1995;

Cattle Export Charges Amendment Bill 1995;

Beef Production Levy Amendment Bill 1995;

Cattle Transactions Levy Bill 1995;

Live-stock Slaughter Levy Amendment Bill 1995;

Live-stock Export Charge Amendment Bill 1995;

National Residue Survey Administration Amendment Bill 1995;

National Residue Survey (Cattle Export) Levy Bill 1995;

National Residue Survey (Cattle Transactions) Levy Bill 1995;

National Cattle Disease Eradication Trust Account Amendment Bill 1995;

Exotic Animal Disease Control Amendment Bill 1995

The policy objective of this package, as stated by the Government in the Explanatory Memorandum, is

to establish industry arrangements intended to give the industry a greater role and responsibility in deciding its own affairs and move it to a less regulated environment. 1

B Public Announcement of New Arrangements for Meat Live-stock Industry

The statutory arrangements proposed by this package of Bills were publicly announced by the Minister for Primary Industries and Energy in a Media Release of 11 December 1994. The major points to be extracted from the Media Release are in relation to the proposed statutory arrangements.

[G]ive it [the meat and live-stock industry] greater responsibility for its own affairs and move it to a less regulated environment.

[T]he new arrangements [follow] a year long consultation period with industry in response to an Industry Commission report.

[W]ill see the transition of the industry to a non-statutory environment.

The new arrangements have been fully supported by the peak industry councils and will see an effective separation of industry policy and program delivery arrangements.

The key components of the new arrangements is the establishment of a new meat industry policy council [which] will be responsible for industry policy leaving the AMLC (Australian Meat and Live-stock Council) and MRC (Meat Research Corporation) with a much clearer focus on delivery of industry programs.

The new arrangements will be reviewed after two years before any further changes are considered.

C Overview of Commonwealth Role in Australian Meat and Live-stock Industry

The Commonwealth's role in the Australian meat and live-stock industry involves the regulation of meat exports and support of marketing and research and development. The main Commonwealth statutes covering the meat and live-stock industry are the:

Australian Meat and Live-stock Corporation Act 1977;

Australian Meat and Live-stock Industry Policy Council Act 1984;

Australian Meat and Live-stock Research and Development Corporation Act 1985;

Australian Meat and Live-stock (Quotas) Act 1990;

Export Control Act 1982; and

Meat Inspection Act 1983.

The key Commonwealth statutory bodies involved in meat and live-stock marketing, policy and research and development are the Australian Meat and Live-stock Industry Policy Council (AMLIPC), AMLC and MRC.

(i) AMPLIC Functions, Powers, Membership and Funding

AMLIPC is constituted under the Australian Meat and Live-stock Industry Policy Council Act 1984 (the AMLIPC Act). The functions of AMLIPC include:

to inquire into, and to report to the Minister on, matters affecting the well-being of the industry that, in the opinion of AMLIPC, require investigation or action by, or at the request of, the Commonwealth or a Commonwealth authority;

to inquire into, and to report to the Minister on, matters referred to it by the Minister in relation to the industry; and

to develop recommendations, guidelines and plans designed to safeguard or further the interests of the industry and to submit these to the Minister for consideration by him/her, or for referral.

The AMLIPC Act accords AMLIPC power to do all things necessary or convenient to be done for or in connection with the performance of its functions.

The membership of AMLIPC presently includes a Chairperson, two members representing the Cattle Council of Australia; two members representing the Sheepmeat Council of Australia; two members representing the Australian Meat Exporters' Federal Council, one member representing the Meat and Allied Trades Federation of Australia, the Chairperson of the AMLC, the Chairperson of the MRC, the Chairperson of the Interim Inspection Policy Council, one member representing the Australian Council of Trade Unions, one member representing all the bodies that perform marketing, regulatory or advisory functions with respect to the production or trade in meat declared by the Minister to be relevant bodies, and such members as specified in a Ministerial declaration as representing a body or bodies connected with the industry.

The Commonwealth provides funds to cover the Chairperson's salary, travelling expenses of AMLIPC, other operating expenses of AMLIPC and salaries of the secretariat staff. In 1993-94, AMLIPC's direct allocation was $110 000, with an additional special appropriation of $20 656 for the Chairperson's fees. Salaries for secretariat staff are met by the Department of Primary Industries and Energy. 2

(ii) AMLC Functions, Powers, Membership and Funding

The AMLC is constituted under the Australian Meat and Live-stock Corporation Act 1977 (the AMLC Act). The functions of the AMLC include:

to improve the production of meat and live-stock in Australia;

to encourage and promote the consumption and sale of Australian meat, and the sale of Australian live-stock, both in Australia and overseas;

to encourage, assist, promote and control the export of meat and live-stock from Australia;

to make recommendations to the Minister with respect to the making of certain regulations, including levy and charge amounts.

The AMLC Act accords the AMLC certain powers, including:

do all things necessary or convenient to be done for, or in connection with, the performance of its functions;

charge fees for the provision of services or performance of any other work done by, or on, its behalf;

the doing of such things as it thinks fit in order to improve the quality of Australian meat and live-stock, the methods of production, storage, transport and marketing of Australian meat and live-stock;

purchase meat or live-stock;

export, or sell for export, meat or live-stock;

enter into transactions in relation to the purchase of meat or live-stock, or the export, or sale for export, of meat or live-stock, including transactions by way of meat and live-stock futures;

for purposes of, or incidental to, international undertakings to which the Commonwealth is a party, purchase, meat and live-stock and export, or sell for export, meat and live-stock; and

grant, vary and cancel meat and live-stock export licences.

The membership of the AMLC includes a Chairperson, one member representing the Commonwealth, a Managing Director and eight other members with qualifications relevant to the meat and live-stock industry (eg. cattle production, meatworks operation, meat exporting, international commodity marketing and industrial relations).

The AMLC is funded by industry levies and export charges. Total AMLC income for 1993-94 was $97.5 million and total expenditure $97.2 million. As at 30 June 1994, the AMLC's cash reserves totalled $43.7 million. Income from levies and charges in 1993-94 totalled $89.7 million. 3

(iii) MRC Functions, Powers, Membership and Funding

The MRC is constituted under the Australian Meat and Live-stock Research and Development Corporation Act 1985 (the MRC Act). The functions of the MRC include:

to investigate and evaluate the needs of the meat and live-stock industry for meat and live-stock RD and, on the basis of that investigation and evaluation, develop RD plans;

to co-ordinate and fund meat and live-stock RD activities specified in an annual operational plan; and

to monitor and report to the Parliament and meat and live-stock industry on the RD activities funded by the MRC.

The MRC Act accords the MRC certain powers, including to:

do all things necessary or convenient to be done in connection with the performance of its functions;

make applications, including joint applications, for patents, and dealing with patents vested in it; and

enter into agreements for the purposes of, or for purposes in connection with, the funding of a meat and live-stock RD activity.

The membership of the MRC includes a Chairperson, a government member, the Executive Director and eight other members with qualifications relevant to the meat and live-stock industry (eg. cattle production, meatworks operation, meat exporting, international commodity marketing and industrial relations).

The MRC is funded by levies on livestock producers and meat processors, matched with contributions from the Commonwealth. The Commonwealth provides funds equivalent to levy receipts or 50% of total MRC expenditure (whichever is the lesser) to a maximum of 0.5% of the industry gross value of production in any one year. MRC expenditure in 1993-94 totalled $50 million. 4

D Industry Commission Report - Industry Views of AMPLIC, AMLC and MRC and Industry Commission Recommendations

The statutory arrangements proposed by this package of Bills are said by the Minister, in his Media Release of 11 December 1994, to follow from a year long consultation period with industry in response to an Industry Commission report. The Minister's reference is to Industry Commission Report No. 38 of April 1994, Meat Processing.

(i) Industry Views of Performance and Role of the AMLC

The Australian Meat Exporters Federal Council (AMEFC) said the AMLC had conflicting roles:

all at the one time the AMLC is policy formulator, regulator, commercial service provider and promoter. 5

The AMEFC also put the view that reform of the AMLC is difficult because it is responsible to both producers and processors:

For some two years, the export processing sector has been seeking reform which would result in a redirection of programs back to private sector responsibility and a windback of levies. Because of the structure of the Act, processors have been unable to secure reform because of opposition from some producers. Herein lies a major issue: for many producers, industry levies cost no more than a few hundred dollars each a year. For individual processors they amount to tens or hundreds of thousands and, in many cases, millions of dollars each year. 6

The Smorgon Meat Group put the view that there is often a lack of dialogue with the major industry:

the AMLC does a good job in many areas. But we often find that there is something of an ivory tower mentality and a lack of respect for those who actually own the product and have their investment on the line, day in, day out. 7

The Australian Council of Livestock Agents put the view that the compulsory levy provides the AMLC with little information on how its services are valued, and because it does not have to compete for funds there is little incentive to be innovative or to minimise costs.

Five Victorian processors put the view that:

The AMLC is not obliged to justify to use in the way in which it spends the funds we contribute to it. Similarly, it need provide no feedback to us on the results of its marketing and other campaigns. Given that the industry has no say in whether it wishes to belong to the AMLC and no opportunity to withhold the levy, we believe that this lack of accountability to processors and lack of representation for our sector within the organisation are matters that should be addressed by government. 8

(ii) Industry Views of Performance and Role of the AMLIPC

The Meat and Allied Trades Federation of Australia, AMEFC, Sheepmeat Council of Australia and Cattle Council of Australia (the Peak Councils) put the view that changes should be made to AMLIPC's charter and make up. The Peak Councils said:

The Councils believe that the Minister has access to a wide range of industry associations depending on individual issues, and does not see the AMPLIC as successful as a general debating forum, partially because most issues involve different mixes of industries and Government agencies. 9

Note: The Peak Councils suggested to the Industry Commission that AMLIPC could become an appropriate body to ensure AMLC and MRC programs achieved industry objectives. It was also suggested that AMLIPC's charter be amended to: approve all plans and programs of the AMLC and MRC prior to implementation; conduct independent audits of selected programs each year; ensure that all programs meet efficiency objectives; and that the new AMLIPC be made up of the major levy payers. 10 The provisions of this Bill can be said, for the most part, to reflect these suggestions.

(iii) Industry Views of Performance and Role of the MRC

The Industry Commission reported that many participants expressed support for the operations and practices of the MRC. The Peak Councils said that the MRC gets a higher return on research funds than other research agencies because of its investment bank philosophy and concentration on returns to the industry; close liaison with industry when setting research priorities and ongoing industry input throughout the life of research programs; and policy of not undertaking RD itself, thereby avoiding the problems of potential vested interest in 'in-house' staff and technologies. 11

The CSIRO expressed the view that:

The MRC has a valuable role to play in the management of industry funds for RD. The meat processing, co-product utilisation and tanning industries are composed of companies which are generally too small to undertake or manage RD. The best interests of the industry are addressed by a single statutory body having the responsibility to channel research funds to solve problems for the whole industry and the nation. 12

(iv) Industry Commission Recommendations

The Industry Commission made the following recommendations with respect to the AMLIPC, AMLC and MRC:

Those programs of the AMLC which are capable of greater commercialisation and/or privatisation should be clearly identified and a timetable for appropriate action developed. 13

AMLIPC should be financed by industry through the general levy mechanism and it should be restructured so as to reflect the interests of levy payers. 14

AMLIPC investigate the scope for moving the AMLC significantly further in the direction of financing individual projects by way of direct charges to the beneficiaries, with concomitant reductions in general levies. 15

The AMLC's Act should be amended to enable the AMLC to engage in market promotion activities which maximise all returns (including inedible products such as hides) to the meat and livestock industries. 16

To encourage RD activities in the meat industry, the MRC should publicise its program of collaborative research with private firms. Funds should be set aside for this program and should increase through time. The programs should not be limited to levy payers, but should be available to any individual or company whose project meets predetermined guidelines. 17

E Industry Consultation

The statutory arrangements proposed by this package of Bills are said by the Minister, in his Media Release of 11 December 1994, to follow from a year long consultation period with industry.

Central to the consultation process was the July 1994 release by the Minister for Primary Industries and Energy of a Meat Industry Discussion Paper.

The purpose of the discussion paper was to facilitate an industry consultation process in response to the Industry Commission report. The key points made in the Discussion Paper, included:

The most significant issue the industry faces is that of competitiveness. Indeed , improved competitiveness is essentially the responsibility of industry. Industry must identify the impediments confronting it, devise commercial responses, and ensure there is a financial and management commitment to carry out those responses.

A key problem for industry has been its inability to develop a shared vision and appropriate industry strategies to address its major competitive challenges.

There is a lack of any satisfactory mechanism for independently evaluating the performance of the statutory bodies and associated industry programs.

Programs administered by statutory bodies should be aimed at establishing or developing initiatives which will assist industry over the short-term with a view to industry taking them over later.

Following the release of the Discussion Paper, the Minister for Primary Industries and Energy requested the Chairperson of AMLIPC to undertake wide ranging discussions in the industry on issues raised in the Discussion Paper and the Industry Commission Report. The Minister requested a report on the consultations, together with any recommendations by the end of September 1994. Over one hundred people and organisations contributed directly to the consultation process. The report was presented to the Minister in October 1994.

The report details a set of principles which, for the most part, can be said to be reflected in the provisions of this Bill. The principles were agreed to by the Cattle Council of Australia, the Sheepmeats Council of Australia, the Australasian Meat Industry Employees Union, the Australian Meat Council, the Meat and Allied Trades Federation, the Australian Lot Feeders Association, the Australian Livestock Exporters Association, the MRC and the Department of Primary Industries and Energy. The principles included:

Industry wants greater responsibility for its affairs, operating with less regulation, and evolving to a non-statutory environment.

Policy formulation and program delivery need to be separately established.

Industry needs a suitably constituted policy body to enhance its capacity for effective decision making.

Industry needs the capacity, through its policy body, to have responsibility for setting industry strategic directions, and for approving the plans, programs and funding.

Industry programs need to have clear, commercial objectives and time frames, with objective evaluation to ensure targets are met.

All industry organisations need to be properly accountable to the industry's levy payers.

Industry needs clear separation of standard setting from inspection and service delivery.

F Industry Support

The statutory arrangements proposed by this package of Bills are said by the Minister, in his Media Release of 11 December 1994, to have been fully supported by the peak industry councils.

The Government had the support of peak industry bodies in the process leading up to the introduction of this package of Bills. For example, the report presented to the Minister in October 1994 detailing the principles which, for the most part can be said to be reflected in the provisions of this Bill, was agreed to by the Cattle Council of Australia, the Sheepmeats Council of Australia, the Australasian Meat Industry Employees Union, the Australian Meat Council, the Meat and Allied Trades Federation, the Australian Lot Feeders Association, the Australian Livestock Exporters Association, the MRC and the Department of Primary Industries and Energy.

The Cattle Council of Australia, in a News Release of 12 December 1994, welcomed the proposed statutory arrangements. Cattle Council President, John Mactaggart said:

... the new arrangements present industry with the chance to truly self-determine policy and industry development.

The creation of a more industry-based Meat Industry Council, empowered to approve plans, Corporation budgets and develop cross-sector industry policy presents an opportunity for the industry and its statutory corporations to operate in a more collaborative manner.

G Major Effects of New Statutory Arrangements

The following points can be made about the effect of the statutory arrangements proposed by this package of Bills (the list is not exhaustive).

The statutory arrangements proposed by this package of Bills substantially redefine the power relationship between AMLIPC, the AMLC and MRC:

- AMLIPC is abolished and a statutory authority, the Meat Industry Council (MIC) established. Unlike AMLIPC, the MIC is accordedconsiderable determinative powers.

-The MIC is accorded power to formulate and implement industry policy. In practical terms, this means that it is the MIC rather than the AMLC that will be responsible for coordinating industry position, and directing industry response, to issues that emerge which effect the industry.

- The MIC is accorded power to implement industry policy through its power of approval of AMLC and MRC corporate and operational plans, and power to have AMLC and MRC programs evaluated. In addition, the AMLC and MRC are specifically required to perform and exercise their functions and powers in compliance with the broad policies formulated by the MIC.

The MIC will effectively control the budgets of the AMLC and MRC through its power to recommend levy and charge rates at industry annual general meetings.

The MIC is accorded an express power to develop proposals for self-regulation.

Unless sooner repealed, the proposed Act ceases to have effect on 30 June 1998.

H Some Policy Issues

Bills Digests provide an impartial analysis of the purpose, background and main provisions of Bills introduced into the Parliament. Unlike Explanatory Memoranda, which exclusively canvass the views and perspective's of those introducing legislation, Digests seek to identify issues and approaches that may arise in debate. In the interests of brevity, where possible areas of controversy are identified, actual and potential criticisms are couched in terms which as sharply as possible define the competing approaches to an issue. The presentation of critical arguments should not, however, be taken as an endorsement of such criticisms by the Bills Digest Service. It is in this context that the following section briefly discusses some policy issues relating to the restructuring of meat marketing as proposed by this package of legislation.

While there has been an extensive consultation process leading to the introduction of this package of Bills, a major reservation can be identified. This is that the process was conducted against the background of issues raised in the Industry Commission report and the Discussion Paper and these, almost exclusively, focussed on perceived deficiencies in current arrangements, and concerns over the effectiveness of AMLC programs.

Consequently, relatively scant attention appears to have been paid to those aspects of the present meat marketing system which are operating satisfactorily. Nor has there been any indication of the tangible benefits that presumably would flow from the package or of what, if any, the costs might be.

The assertion that the proposed arrangements will provide a less regulatory operating environment for the industry is not yet supported by any evidence. While there has been a rearrangement of the roles and powers of various statutory bodies, in total the same array of objectives, functions and powers will largely endure.

Furthermore, the proposed arrangements do not give industry a full self-determination role in policy and industry development because of two key powers vested in the Minister. These is the power to veto/vary MIC, AMLC and MRC corporate plans and the power to issue exceptional circumstances directives with respect to performance of MIC, AMLC and MRC functions and powers. The Minister will also have a degree of influence and involvement through the likes of guidelines and approvals (such as appointments and export licences).

It remains to be seen whether or not those who want the role of the AMLC phased down or out (the Australian Meat Council view), or those who wish to see statutory marketing and promotion continue (the producer groups and Meat and Allied Trades Federation of Australia view) can be reconciled, particularly given the MIC's levy setting responsibility.

Given that there has to date been no commercial evaluation, or rigorous analysis of the worth of the AMLC and MRC to the meat and live-stock industry, it is possible that a minimally staffed MIC will not be able to mount well thought through proposals without the information base of the AMLC and MRC.

The Australian meat and live-stock industries have not reconciled the age-old conflict between producers and processors to the extent that has occurred in the dairy industry.

While the MIC may be able to make more progress on issues such as quality assurance and food safety than under the unsupported AMLIPC arrangements, it is questionable that it will make progress in the establishment of progressive incentive structures to take advantage of the industry's opportunities while the industry remains divided over statutory arrangements.

Main Provisions

A. Meat Industry Council

(i) Object, Establishment, Functions and Powers

Part 2 ( clauses 6-50) of the Bill deals with the Meat Industry Council (MIC). The object of Part 2 is set out in clause 6 and is to establish a statutory authority, which represents all sectors of the meat and live-stock industry, for:

the purpose of making the production of live-stock, and the processing and marketing of meat and meat products, more competitive, productive and efficient; and

to achieve that purpose by ensuring the Australian Meat and Live-stock Corporation (AMLC) and Meat Research Corporation (MRC) can develop and carry out programs within the framework of MIC strategic directions.

The MIC is established as a corporation which may acquire, hold and dispose of property, and sue and be sued by clause 8.

The functions of the MIC are set out in clause 9 and include:

. develop a vision and strategic directions for the meat and live-stock industry;

make policies that the AMLC and MRC must comply with;

develop motions for MIC general meetings, for the purpose of providing funding for the MIC, AMLC and MRC;

develop proposals for industry self-regulation; and

develop a united industry approach to issues affecting the industry.

The powers of the MIC are contained in clause 10, and include:

anything necessary for, or in connection with, the performance of its functions; and

with the written approval of the Minister:

-hire people to provide services to the industry;

-form, or participate with others in the formation of, companies;

-acquire, hold, or dispose of shares, debentures and other securities issued by a company; and

-enter partnerships, or arrangements for the sharing of profits.

Clause 11 provides the MIC with power, subject to guidelines determined by the Minister, to pay expenses incurred by eligible industry bodies in consulting with AMLC or MRC. The term 'eligible industry bodies' is defined by clause 3 to mean the Cattle Council of Australia, the Sheepmeat Council of Australia, the Australian Meat Council, the Meat and Allied Trades Federation of Australia and any prescribed body.

(ii) Corporate Plans, Industry Conferences and General Meetings

Divisions 2 and 3 of Part 2 ( clauses 12-28) are standard administrative provisions relating to corporate plans, industry conferences and the annual general meeting of the MIC. The more important provisions:

Require the MIC to convene an annual meat and live-stock conference. The purposes of such a conference include to help the MIC identify matters of concern to the industry and to foster consensus on polices to be instituted to safeguard the interests of the industry. Notice of a conference must be published in a newspaper circulating throughout Australia. Any person who is entitled to attend an annual general meeting (AGM) of the MIC is entitled to attend and participate in a conference ( clause 21).

The MIC must convene an AGM at each annual conference. AGMs have two purposes. First, to provide a chance for registered persons ( see clause 88) to consider the annual reports of the MIC, AMLC and MRC. Secondly, to consider particular motions. Only certain motions may be considered by registered persons at an AGM, including:

-endorsing or rejecting a recommendation the MIC proposes to make to the Minister in relation to levy and charge amounts; and

-motions of no confidence in the MIC, AMLC and MRC or their chairpersons ( clause 23).

-The only people entitled to attend and participate at an AGM are members of the MIC, AMLC, MRC, registered persons or their proxies, or people invited by the Chairperson to attend. Only registered persons or their proxies are allowed to vote on a motion ( clause 26).

- The MIC may also convene special general meetings. Such meetings may only be convened for the purpose of enabling registered persons to endorse or reject a recommendation the MIC proposes to make to the Minister in relation to levy and charge amounts ( clauses 22 and 25).

(iii) Composition and Administration of MIC

Divisions 4 and 5 of Part 2 ( clauses 29-42) deal with the composition of the MIC, the management of the MIC and standard administrative matters such as disclosure of interests, resignations, termination of appointments, meetings and staffing. The more important provisions provide that:

The MIC is to have at least eighteen members consisting of: a Chairperson; four members appointed on the recommendation of the Cattle Council of Australia, two members appointed on the recommendation of the Sheepmeat Council of Australia; three members appointed on the recommendation of the Australian Meat Council; three members appointed on the recommendation of the Meat and Allied Trades Federation of Australia; one member appointed on the recommendation of the Australian Council of Trade Unions; one member appointed on the recommendation of the Australian Livestock Exporters Association; one member appointed on the recommendation of the Australian Lot Feeders Association; one member appointed on the recommendation of the Australian Supermarket Institute; one member representing the Commonwealth Government; and such other members as are prescribed by the regulations ( clause 29).

MIC members are appointed by the Minister. Where the Minister is not satisfied of the suitability of a person recommended for appointment to the MIC, the Minister may request the body making the recommendation to make another recommendation. MIC members are to be part-time members and hold office, in respect of matters not provided for in Part 2, on any terms and conditions determined by the Minister ( clause 29).

Appointment by the MIC of a Chief Executive Officer. Subject to Ministerial approval, the MIC determines the terms and conditions of service of the Chief Executive Officer ( clause 39). To the extent determined by the MIC, the Chief Executive Officer is to manage the affairs of the MIC. The Chief Executive Officer must manage the MIC in accordance with MIC policy and directions ( clause 41).

(iv) MIC Funding

Division 6 of Part 2 ( clauses 43-47) deals with the MIC funding and what purposes funds can be put to.

MIC funds will comprise amounts of levy and charge receipts, including penalty payments, received by the Commonwealth ( clause 43). MIC funds can only be used for purposes including:

expenses, charges, obligations and liabilities incurred or undertaken by the MIC in the performance or exercise of its powers and functions; and

payments to the Commonwealth for costs incurred in the collection of levies and charges ( clause 44).

The MIC is subject to Division 2 of Part XI of the Audit Act 1901 which imposes requirements in relation to bank accounts, investments, audits, annual reports and financial statements which the MIC must comply with ( clause 47).

B. Australian Meat and Live-stock Corporation

(i) Object, Continuation, Functions and Powers

Part 3 ( clauses 51-163) of the Bill deals with the Australian Meat and Live-stock Corporation (AMLC). The objects of Part 3 are set out in clause 51, and include:

to promote, control, protect and further the interests of the meat and live-stock industry in relation to exports of meat and live-stock; and

to promote, control, protect and further the interests of the meat and live-stock industry in relation to the sale and distribution, after export, of meat and live-stock.

The corporation known as the AMLC prior to the commencement of this Bill will continue in existence subject to the provisions of Part 3 of this Bill ( clause 53).

The functions of the AMLC are set out in clause 54 and include:

to encourage and promote the consumption and sale of Australian meat and live-stock, both in Australia and overseas; and

make recommendations to the Minister with respect to meat and live-stock export licences.

The powers of the AMLC are set out in clauses 55 and 57 and include:

charge fees for the provision of services;

anything it thinks fit to improve the production, consumption, sale and export of meat and live-stock in Australia and overseas;

form, or participate with others in the formation of, companies;

acquire, hold, or dispose of shares, debentures and other securities issued by a company;

enter partnerships, or arrangements for the sharing of profits; and

with the consent of the Minister, enter into arrangements with a State or Territory.

The AMLC is expressly excluded by subclause 55(5) from buying meat or live-stock, exporting, or selling for export, meat or live-stock, and entering into transactions for the purchase, export, or sale for export, of meat or live-stock.

The AMLC must comply, in the performance and exercise of its functions and powers, with any broad policies of the MIC (clause 58).

(ii) Meat and Live-stock Licences

Subdivision B of Part 3 ( clauses 59-77) deals with meat and live-stock export licences. The more important provisions:

Provide the AMLC with power to grant, or refuse to grant, an export licence ( clauses 61 and 64). Where a grant is refused, notice of the decision must be given to the applicant and such decision is reviewable by the Administrative Appeals Tribunal ( clauses 64 and 65).

Require that the AMLC not grant an export licence unless satisfied that the person or corporation is of integrity, competent to hold an export licence and of sound financial standing ( clause 63).

Provide the AMLC with power to make and give certain orders and directions, not inconsistent with the regulations, to be complied with by export licence holders. Orders and directions may be made with respect to matters including the quality, standard and grading of meat and live-stock, the terms and conditions of the sale of meat and live-stock, and the sale and distribution of meat and live-stock after export. Orders and directions may prohibit or require certain actions of export licence holders, including not exporting, or offering for sale for export, meat or live-stock, or requiring export licence holders to obtain prior AMLC approval for each export, or each export of a particular kind ( clause 68).

Where the AMLC considers it necessary or desirable for ensuring that Australian producers receive a fair return for their produce, it may prohibit, either absolutely or unless particular conditions are complied with, the export, or sale for export, of meat or live-stock to a monopoly importer ( clause 69). These powers may also be exercised where the AMLC is satisfied, having regard to MIC policies, that use of the powers would be good for the development, or further development, in a foreign country, of a market for meat and live-stock and would be in the best interest of the meat and live-stock industry.

Provide that clause 68 and 69 ( see above) orders and directions are subject to disallowance by the Parliament ( clause 70).

Provide the AMLC with power to cancel or suspend export licences in certain circumstances, including where the export licence holders have ceased to be a person or corporation of integrity, or have breached a condition of an export licence. A notice of suspension or cancellation, must include reasons for the decision and be given to the export licence holder. Decisions to suspend or cancel an export licence are subject to review by the Administrative Appeals Tribunal and the export licence holder is to be notified of that avenue of review ( clauses 74, 75 and 77).

(iii) Export Quotas

Subdivision C of Part 3 ( clauses 78-87) deals with powers of the AMLC in relation to export quotas. The more important provisions:

Empower the AMLC to establish and administer quotas, including in relation to the body that is to administer the quotas, the time for which quotas are to operate, the way quotas are to be allocated, the transfer of quotas, or parts of quotas, and the surrender or cancellation of quotas, or parts of quotas ( clause 79).

Require that the system of granting and administering quotas is in accordance with MIC policies ( clause 80).

Provide the AMLC with power to vary the period of validity of a quota, the quantity or description of goods covered by a quota, and the condition or conditions attaching to a quota ( clause 81).

Require the AMLC, where a quota was bought and so varied as to reduce the rights granted by the quota, to reimburse the holder a proportionate amount of the sale price ( clause 82).

AMLC decisions fixing the period of validity of a quota, or varying a quota, are subject to review by the Administrative Appeal Tribunal, and affected persons are to be notified of that avenue of review ( clauses 83 and 84).

Require holders of export licences to comply with subsection 5(2) of the Australian Meat and Live-stock (Quotas) Act 1990. That subsection requires export licence holders to comply with a AMLC notice limiting the amount of goods, or a specified class of goods, that may be exported to a specified country ( clause 85).

(iv) Registers and Returns

Subdivision D of Part 3 ( clauses 88-95) deals with registers the AMLC is to keep. These registers are important as they list levy and charge payers and determine eligibility to attend and vote at AGMs, and attend industry conferences. The more important provisions:

Require the AMLC, in a way prescribed by the regulations, to keep a register of live-stock producers, a register of cattle producers, and a register of exporters of meat or live-stock and processors of meat. The regulations may prescribe the classes of persons involved in production, processing and export of meat or live-stock who are entitled to be registered and the circumstances in which those registered cease to eligible for inclusion ( clause 88).

Empower the AMLC, at prescribed times, to require registered persons to send the AMLC returns containing certain information, including prescribed information relevant to establishing that a person has not ceased to be entitled to be registered and any prescribed information in respect of live-stock or cattle owned by a registered person ( clause 91).

AMLC decisions to refuse to enter, or remove, a persons name and particulars on or from a register are subject to review by the Administrative Appeals Tribunal and persons affected by such decisions are to be notified of that avenue of review ( clause 95).

(v) Corporate and Operational Plans

Division 3 of Part 3 ( clauses 96-108) provides, for the most part, standard administrative provisions relating to corporate and operational plans. Significantly, clause 99 requires the AMLC, as soon as practicable after preparing a corporate plan to seek the MIC's approval of the plan.

(vi) Composition and Administration of AMLC

Divisions 4 and 5 of Part 3 ( clauses 109-124) deal with the composition of the AMLC, the management of the AMLC and standard administrative matters such as disclosure of interests, resignations, termination of appointments, meetings and staffing. The more important provisions provide that:

The AMLC is to comprise a total of seven members, these being a Chairperson, a Managing Director, a Government member and four other members. The aforementioned four other members are to be persons who have qualifications or experience in certain fields, including live-stock production, processing and export of meat, business management and international marketing. AMLC members, other than the Managing Director are appointed by the Minister. People who are members of a Commonwealth, State or Territory Parliament or legislature, or an individual who is the president or chairperson of a prescribed organisation, may not be appointed as an AMLC member. A non-government AMLC member holds office, in respect of matters not provided for in Part 3, on any terms and conditions determined by the Minister [ subclause 109(10)].

Appointment by the AMLC of a Managing Director. Subject to Ministerial approval, the AMLC determines the terms and conditions of service of the Managing Director ( clause 119). To the extent determined by the AMLC, the Managing Director is to manage the affairs of the AMLC. The Managing Director must manage the AMLC in accordance with AMLC policy and directions ( clause 121).

(vii) AMLC Funding

Division 6 of Part 3 ( clauses 125-134) deals with AMLC funding, the purposes funds can be put to, borrowing's and auditing of AMLC accounts and asset records. The more important provisions:

AMLC funds comprise amounts of levy and charge receipts, including penalty payments, received by the Commonwealth ( clause 125).

AMLC funds can only be used for purposes including:

-expenses, charges, obligations and liabilities incurred or undertaken by the AMLC in the performance or exercise of its powers and functions;

-payments to the Commonwealth for costs incurred in the collection of levies and charges; and

-in making, whether in Australia or overseas, loans, provided the AMLC is satisfied a loan is consistent with the objects of Part 3 ( clause 126).

Require that the AMLC use money from quota sales in accordance with MIC policies ( clause 126).

Provide that where AMLC borrowing's exceed $5 million, the AMLC is required to obtain the approval of the Treasurer for additional borrowing's ( clause 127).

Provide that the Commonwealth is not liable for any contractual debt incurred by the AMLC ( clause 128).

Require that the Auditor-General annually inspect and audit the accounts and assets of the AMLC. The Auditor-General is required to immediately draw to the Minister's attention any irregularity disclosed by an inspection and audit that in the Auditor-General's opinion is of enough importance to justify such action ( clause 133).

(viii) Enforcement

Division 7 of Part 3 ( clauses 135-158) contains standard compliance monitoring provisions relating to the powers of inspectors to search premises, seize things and require the giving of information or production of documents. Division 7 contains a number of significant offence provisions including:

It is an offence, punishable by a maximum term of imprisonment of five years, for a person who is not the holder of a meat or live-stock export licence to intentionally, and without reasonable excuse, to export meat or live-stock from Australia. It will not be an offence to export meat declared by the regulations to be, for the purposes of Part 3, unfit for human consumption ( clause 155).

It is an offence, punishable by a maximum term of imprisonment of twelve months, for a person who is not holder of a meat or live-stock export licence, without reasonable excuse, to intentionally or recklessly hold themselves out as a licence holder or as someone who can export meat or live-stock from Australia. The same penalty will apply to non-licence holders who without reasonable excuse, intentionally or recklessly contract to export meat or live-stock. It will not be an offence to export meat declared by the regulations to be, for the purposes of Part 3, unfit for human consumption ( clause 157).

(ix) Delegations, Service of Notices and Annual Report

Division 8 of Part 3 ( clauses 159-163) contains standard administrative provisions relating to the delegation of AMLC and Managing Director powers, operation of certain Commonwealth laws, service of notices and annual reporting. The more important provisions:

Require the AMLC to prepare and present to the Minister, an annual report as soon as practicable after the end of each financial year, and financial statements for the financial year in a form approved by the Minister for Finance. The Minister must table the annual report and financial statements in Parliament within fifteen days of receipt. The annual report must contain certain information, including:

-an assessment of the extent to which the AMLCs operations during the year have met the objectives and achieved the performance required by the performance indicators, and carried out its operational plan;

-particulars of quotas sold or allocated, including names of the holders; and

-shares and securities subscribed for, bought and sold during the year (clause 163).

C. Meat Research Corporation

(i) Object, Continuation, Functions and Powers

Part 4 ( clauses 164-213) of the Bill deals with the Meat Research Corporation (MRC). The objects of Part 4 are set out in clause 164 and include:

improve the productivity and market performance of the meat and live-stock industry by improving the efficiency and effectiveness of meat and live-stock research and development (RD);

further the sustainable use and management of natural resources; and

improve accountability for expenditure on meat and live-stock RD.

The corporation known as the MRC prior to the commencement of this Bill will continue in existence subject to the provisions of Part 4 of this Bill ( clause 166).

The functions of the MRC are set out in clause 167 and include:

investigate and evaluate the needs of the industry for meat and live-stock RD and develop RD plans;

co-ordinate and fund meat and live-stock RD mentioned in an operational plan;

monitor and report to Parliament and the industry on RD activities funded by the MRC.

The powers of the MRC are set out in clauses 168 and 171 and include:

enter into agreements for the carrying out of RD activities by other people;

consult with industry and meet travel expenses reasonably incurred by persons or bodies other than an eligible industry body in connection with consultations; and

with the approval of the Minister, acquire, hold, or dispose of shares, debentures and other securities issued by a company.

The MRC must comply, in the performance and exercise of its functions and powers, with any broad policies formulated by the MIC ( clause 172).

(ii) Corporate and Operational Plans

Division 3 of Part 4 ( clauses 173-187) provides standard administrative provisions relating to corporate and operational plans. Significantly, clause 176 requires the MRC, as soon as practicable after preparing a corporate plan to seek the MIC's approval of the plan.

(iii) Composition and Administration of MRC

Divisions 4 and 5 of Part 4 ( clauses 188-202) deal with the composition of the MRC, the management of the MRC and standard administrative matters such as disclosure of interests, resignations, termination of appointments, meetings and staffing. The more important provisions:

The MRC will comprise seven members: a Chairperson, Managing Director, a Government member and four other members. The aforementioned four other members are required to be persons who have qualifications or experience in certain fields, including live-stock production, commercialisation of the results of RD, or conservation and management of natural resources, and environmental and ecological matters. MRC members, other than the Managing Director, are appointed by the Minister. Members of a Commonwealth, State or Territory Parliament or legislature, or an individual who is the president or chairperson of a prescribed organisation, may not be appointed as an MRC member. A non-government MRC members holds office, in respect of matters not provided for in Part 4, on any terms and conditions determined by the Minister [sub clause 188(10)].

Appointment by the MRC of a Managing Director. Subject to Ministerial approval, the MRC determines the terms and conditions of service of the Managing Director ( clause 198). To the extent determined by the MRC, the Managing Director is to manage the affairs of the MRC. The Managing Director must manage the MRC in accordance with MRC policy and directions ( clause 200).

(iv) MRC Funding

Division 6 of Part 4 (clauses 203-209) deals with MRC funding, the purposes funds can be put to, liability of the Commonwealth for MRC debts, and auditing of MRC accounts and assets. The more important provisions are as follows:

MRC funds comprise:

-amounts of levy and charge receipts, including penalty payments, received by the Commonwealth; and

-amounts, from the Commonwealth up to 50% of MRC expenditure, or up to 0.5% of the gross value of production of the meat and live-stock industry, which ever is the lesser ( clause 203).

MRC funds can only be used for purposes including expenses, charges, obligations and liabilities incurred or undertaken by the MRC in the performance or exercise of its powers and functions, and payments to the Commonwealth for costs incurred in the collection of levies and charges ( clause 205).

The Commonwealth is not liable for debts incurred by the MRC arising from a contractual obligation ( clause 207).

The MRC is subject to Division 2 of Part XI of the Audit Act 1901. Division 2 imposes requirements in relation to bank accounts, investments, audits annual reports and financial statements which the MRC must comply with ( clause 208).

(v) Delegations, Service of Notices and Annual Report

Division 7 of Part 4 ( clauses 210-213) contains standard administrative provisions relating to the delegation of MRC and Managing Director's powers, service of notices and annual reporting. The more important provisions:

Require the MRC to include in its annual report certain information, including:

-an assessment of the extent to which the MRC operations during the year have met the objectives and achieved the performance required by the performance indicators, and carried out its operational plan; and

-particulars of meat and live-stock RD activities the MRC funded during the year, together with an assessment of the extent to which that funding helped achieve its principal objectives ( clause 213).

D. AMLC and MRC Membership Selection Committees

(i) AMLC and MRC Membership Selection Committees

Part 5 ( clauses 214-220) of the Bill contains provisions dealing with the establishment and functions of selection committees. Selection committees nominate persons other than the Chairperson, Managing Director and Government member for members to the AMLC and MRC. The more important provisions state that:

A selection committee is to comprise a Chairperson and three other members. The Chairperson is appointed by the Minister and the three other member also by the Minister, but on the nomination of the MIC. Where the Minister is not satisfied about the suitability of a nomination, he/she may ask the MIC to make a further nomination/s. Selection committee members hold office on terms and conditions (other than relating to remuneration and allowances which is determined by the MIC) determined by the Minister ( clause 214).

The Minister may reject a nomination where he/she is not satisfied with any of the people nominated, and request the committee to make further nominations [ subclause 217(6)].

E Miscellaneous Provisions

(a) Ministerial Directions, Liability to Taxation and Sunset Clause

Part 6 ( clauses 221-227) of the Bill contains provisions dealing with: Ministerial directions; the liability of the MIC, AMLC and MRC to Commonwealth, State and Territory taxes, the remuneration and allowances of members of the MIC, AMLC, MRC and government members of those bodies; the establishment of committees by the MIC, AMLC and MRC to assist the performance and exercise of those bodies functions and powers; and power of Governor-General to make regulations; and the termination of this proposed Act. The more important provisions provide that:

The Minister may give the MIC, AMLC and MRC directions, with which those bodies must comply, in respect to the performance and exercise of there functions and powers. The Minister can only exercise this power where he/she is satisfied it is necessary to ensure the performance or exercise of the functions or powers of the MIC, AMLC or MRC, or to ensure that those bodies doe not conflict with major government policies. Prior notice of a direction must be given, and the Chairperson of the relevant body must be given an adequate chance to discuss the proposed direction with the Minister. Directions must be tabled in each House of the Parliament within six sittings days of the direction being given ( clause 221).

The MIC, AMLC and MRC are subject to Commonwealth taxes, other than income tax. In addition, the MIC, AMLC and MRC are not subject to State or Territory taxes, except for stamp duty and where the regulations specify otherwise ( clause 222).

Unless repealed sooner, this proposed Act ceases to have effect on 30 June 1998 ( clause 227).

Endnotes

(1) Explanatory Memorandum, Meat and Live-stock Industry Bill 1995, p. 2.

(2) Australian Meat and Livestock Industry Policy Council , Annual Report 1993-94, p. 15.

(3) Australian Meat and Livestock Corporation, Annual Report 1993-94, p. 11.

(4) Meat Research Corporation, Annual Report 1993-94, p. 4.

(5) Industry Commission, Meat Processing, Vol 1, Report No. 38, April 1994, p. 151.

(6) Ibid.

(7) Ibid.

(8) Ibid., p. 152.

(9) Ibid., p. 157.

(10) Ibid., p. 158.

(11) Ibid., p. 156.

(12) Ibid., p. 136.

(13) Ibid., p. 153.

(14) Ibid., p. 160.

(15) Ibid., p. 162.

(16) Ibid., p. 163.

(17) Ibid., p. xxvii.

Ian Ireland (06 2772438)

Bills Digest Service

Parliamentary Research Service

9 May 1995

This Digest does not have any legal status. Other sources should be consulted to

determine whether this Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

Commonwealth of Australia 1995

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