Title Australian Meat Industry - Royal Commission - Report, dated September 1982
Source Both Chambers
Date 21-09-1982
Parliament No. 32
Tabled in House of Reps 21-09-1982
Tabled in Senate 21-09-1982
Parliamentary Paper Year 1982
Parliamentary Paper No. 222
System Id publications/tabledpapers/HPP032016003846


Australian Meat Industry - Royal Commission - Report, dated September 1982

The Parliament of the Commonwealth of Australia

ROYAL COMMISSION INTO AUSTRALIAN MEAT INDUSTRY

September 1982

Presented by Command 21 September 1982 Ordered to be printed 22 September 1982

Parliamentary Paper No. 222/1982

m

REPORT OF THE ROYAL COMMISSION INTO AUSTRALIAN MEAT INDUSTRY

S e p te m b e r 1982

REPORT OF THE

ROYAL COMMISSION

INTO

AUSTRALIAN MEAT INDUSTRY

September 1982

The Hon Mr Justice A.E. Woodward

Commissioner

AUSTRALIAN GOVERNMENT PUBLISHING SERVICE

CANBERRA 1982

© Commonwealth of Australia 1982

ISBN 0 644 02098 9

Printed by C.J. Thompson Commonwealth Government Printer Canberra

TABLE OF CONTENTS

Paras

1 SUMMARY OF MAJOR ISSUES

(a) The adequacy of administrative arrangements for export meat 1.1

(b) The adequacy of administrative arrangements for meat in Victoria 1.23

(c) The adequacy of administrative arrangements for meat in the NT 1.27

(d) Malpractices in the Australian meat industry 1.29

(e) The handling of allegations of malpractices 1.55

(f) Pet meat 1.67

2 THE CONDUCT OF THE ROYAL COMMISSION

(a) Setting up - terms of reference 2.1

(b) Collecting and selecting the evidence 2.16 The Commonwealth Royal Commission 2.17 The Victorian Royal Commission 2.47

The NT Royal Commission 2.57

The decision of the High Court concerning a witness 2.66

(c) Limitations 2.83

(d) Evidence and opinions 2.94

(e) Specific allegations 2.112

3A THE EXPORT MEAT INDUSTRY

(a) Quantities, types and destinations of exports 3.1

(b) The organization of the industry 3.11

( c ) The regulation of the industry 3.13

(d) The steps in the export process 3.16

(i)

3B THE MEAT INDUSTRY IN VICTORIA

(a) The size of the industry - recent trends 3.32

(b) The organization of the industry 3.38

(c) The regulation of the industry 3.43

(d) The steps in producing meat for 3.49

human consumption

3C THE MEAT INDUSTRY IN THE NORTHERN TERRITORY

(a) The organization and size of the industry 3.60

(b) The regulation of the industry 3.69

4A THE LEGAL REQUIREMENTS ON EXPORT MEAT

(a) Preparation on approved premises 4.1

(b) Inspection by qualified persons 4.4

(c) Accurate trade description 4.9

(d) Freedom from disease 4.10

(e) Freedom from contamination or damage 4.14

(f) Certain special requirements 4.18

(9) Breaches of legal requirements 4.21

4B THE LEGAL REQUIREMENTS OF MEAT FOR HUMAN CONSUMPTION IN VICTORIA

(a) Preparation on licensed premises 4.26

(b) Inspection by qualified persons 4.28

(c) Freedom from disease 4.31

(d) Freedom from contamination or damage 4.35

(e) Accurate trade description 4.36

4C THE LEGAL REQUIREMENTS OF MEAT FOR HUMAN CONSUMPTION IN THE NORTHERN TERRITORY

(a) Within Licensed Abattoir Area 4.37

(b) Outside Licensed Abattoir Area 4.41

(c) Storage and transportation 4.42

(ii)

(d) Freedom from contamination

(e) Accurate trade description

5A ADMINISTRATIVE ARRANGEMENTS AND PROCEDURES CONCERNING THE EXPORT OF MEAT

(a) The Commonwealth inspection service (i) DPI organization - proposed changes (ii) Perceived role of meat inspection (iii) Staffing levels and mobility (iv) Administration from Canberra (v) Relations with state services (vi) Dual or unified system

(b) Veterinary Officers and meat inspectors (i) Role of the veterinary officer (ii) Meat inspectors' functions (iii) Responsibilities and pressures (iv) Power and abuse of power (v) Qualifications and training

(c) Approval of premises

(d) . Transport of meat.

(e) Security measures 1 Australia Approved1 stamps and tags Sealing of cartons Sealing of loads Sealing of premises Segregation of export meat

Inventory control General

(f) Export procedures

(g) Sampling and species testing

(h) Penalties

(i) AMLC licensing and quality control

(j) Arrangements for religious slaughter

(k) Arrangements for export of game meat

(1) Arrangements for export of pet meat

(m) Summary

4.43

4.44

5.1

5.4 5.8 5.24 5.40 5.45 5.48

5.80 5.92 5.108 5.113 5.115

5.120

5.165

5.174 5.185 5.193 5.199

5.204 5.212 5.217

5.220

5.244

5.254

5.266

5.289

5.291

5.297

5.301

(iii)

5B ADMINISTRATIVE ARRANGEMENTS AND PROCEDURES CONCERNING MEAT FOR HUMAN CONSUMPTION IN VICTORIA

(a) The Department of Primary Industry 5.302

(b) The Victorian Abattoir and Meat Inspection Authority 5.304

(c) The State meat inspection service Staff numbers 5.311

Role of veterinary officers 5.312

Place of the inspection service in the Department 5.314

Training 5.319

Career development 5.322

Allocation of inspectors 5.323

Keeping of records 5.326

Brands and stamps 5.327

Responsibilities of industry management 5.332 Meat transport vehicles 5.336

Relations with Commonwealth service 5.338 Relations with Victoria police 5.343

Relations with Health authorities 5.347

(d) The Victorian Health Commission 5.350

(e) Summary 5.358

5C ADMINISTRATIVE ARRANGEMENTS AND PROCEDURES CONCERNING MEAT FOR HUMAN CONSUMPTION IN THE NORTHERN TERRITORY

(a) The Department of Primary industry 5.364

(b) The NT Department of Primary Production (i) The meat inspection service 5.367

(ii) Legislative structure and administrative procedures 5.375

(iii) Illegal slaughter 5.388

(iv) Legal slaughter for remote communities 5.390 (v) A combined service with DPI 5.393

(c) The NT Department of Health 5.400

6 THE PET MEAT INDUSTRY

(a) Relevance for purposes of the Commission 6.1

(b) Quantities and types of pet meat 6.6

(c) Organization of the industry 6.19

(d) The Victorian pet meat industry 6.25

(e) The Northern Territory pet meat industry

(iv)

6.39

(f) Dyeing of fresh pet meat 6.68

(g) Export of fresh pet meat 6.80

7 MALPRACTICES 7.1

7A MALPRACTICES CONCERNING EXPORT MEAT

(a) Species substitution 7.4

(b) Local connivance in overseas malpractices 7.12

(c) Substitution of local for export meat 7.17

(d) False description of age, quality or cut 7.25

(e) Misuse of government stamps 7.34

(f) False statement of slaughter date 7.41

(g) Forgery of transfer certificates 7.45

(h) Failure to obtain export documents 7.50

(i) Forgery of export documents 7.56

(j) Halal slaughter and certification 7.57

(k) Corruption of government officials 7.106

Meat inspectors 7.107

Veterinary officers 7.121

DPI action 7.125

Police officers 7.131

7B MALPRACTICES CONCERNING MEAT FOR HUMAN CONSUMPTION IN VICTORIA

(a) Pet food in smallgoods 7.135

(b) Other malpractices 7.144

7C MALPRACTICES CONCERNING MEAT FOR HUMAN CONSUMPTION IN NORTHERN TERRITORY

(a) Corruption of government officials 7.157

(b) Importation of poor quality meat 7.158

from other States

(c) Pet meat 7.162

(d) Illegal slaughter 7.163

(v)

8 ALLEGATIONS AND THEIR TREATMENT 8.1

8A ALLEGATIONS CONCERNING EXPORT MEAT

(a) Department of Primary Industry 8.5

(b) Australian Meat and Live-stock Corporation 8.19

(c) Australian Federal Police 8.28

(d) Ministerial responsibility 8.33

8B ALLEGATIONS CONCERNING MEAT FOR HUMAN

CONSUMPTION IN VICTORIA 8.49

8C ALLEGATIONS CONCERNING MEAT FOR HUMAN

CONSUMPTION IN NORTHERN TERRITORY 8.59

9 RECOMMENDATIONS

9A RECOMMENDATIONS CONCERNING EXPORT MEAT

(a) The inspection service 9.1

(b) The registration of premises 9.24

(c) Industry responsibility 9.32

(d) Sampling and species testing 9.34

(e) Refrigerated containers 9.35

(f) Penalties 9.36

(g) Security arrangements 9.37

(vi)

(h) AMLC licences for export 9.44

(i) AMLC powers of inspection 9.45

(j) Export documents 9.49

(k) Halal slaughter and certification 9.50

(l) Game meat 9.54

(m) Pet meat 9.55

9B RECOMMENDATIONS CONCERNING MEAT FOR HUMAN

CONSUMPTION IN VICTORIA

(a) The meat inspection service 9.56

(b) Standards of meat inspection and 9.59

of premises

(c) Keeping of records 9.60

(d) Industry responsibility 9.61

(e) Penalties and prosecutions 9.62

(f) Relations with police 9.63

(g) Granting of meat establishment licences 9.64

(h) Relations with Health authorities 9.65

(i) Dyeing of pet meat 9.66

(vii)

9C RECOMMENDATIONS CONCERNING MEAT FOR HUMAN CONSUMPTION IN

THE NORTHERN TERRITORY

(a) The meat inspection service 9.67

(b) The legislative structure 9.70

(c) Pet meat 9.75

(d) Health Department 9.78

10 ACKNOWLEDGEMENTS 10.1

(viii)

APPENDICES

Pages

(A) The Royal Commissions 286-295

(B) List of submissions from organizations 296-304

(C) List of witnesses making submissions

or giving general evidence 305-311

(D) List of exhibits containing

general information 312-317

(E) Extract from ruling on BAH files 318-324

(F) Free or cheap meat for meat inspectors

and veterinary officers 320-324

(G) Glossary 325-326

(H) Cases investigated Separate

. . . _ Volume

/V.

/ 2 C 3 . C X

(ix)

CHAPTER 1

SUMMARY OF MAJOR ISSUES

(a) The adequacy of administrative arrangements and

procedures for the supervision of the handling

of meat for export

1.1 Evidence put before the Commission shows clearly that,

before August 1981, arrangements and procedures for export meat

supervision were seriously deficient in a number of ways and

for a variety of reasons.

1.2 As a result of the new security measures introduced

following the meat substitution scandal of August 1981,

administrative arrangements and procedures are now adequate for

their purposes; but there is still considerable room for

improvement.

1.3 In my view the chief deficiency in the arrangements

before 1981 was that the Department of Primary Industry (DPI),

which administers the meat inspection service, was too trusting

about some areas of activity of the export meat industry, while

giving industry managers too little responsibility for

self-regulation in other areas.

1.4 The Department undertook an oversight role which, by

using a large number of officers in abattoirs, placed little

reliance on the ability of managers to produce a safe, good

quality product. In other parts of the export chain, such as

boning-rooms, coldstores and transport, oversight was very

limited, even in the case of operators who were under

suspicion. in the result, many malpractices flourished unseen.

1.5 Penalties provided for breaches of the relevant

regulations were ridiculously low and served as no deterrent to

wrongdoing.

1.6 Following the events of August 1981, the inspection

arrangements for all parts of the export chain were tightened

up in such a way that they became comprehensive and generally

effective, but they also became inconvenient to the industry in

a number of ways and appreciably more costly. They can still

be circumvented by combinations of ingenuity and human error or

human weakness.

1.7 I believe that, although present security measures

must be retained for the time being, better results could

eventually be achieved with arrangements that required industry

managements to accept more of the basic responsibilities for

the soundness, accuracy of description, and security of their

products. At the same time there must be a high probability

that any default would be detected and severely punished.

1.8 Another major deficiency of the export meat

arrangements before August 1981 was that the DPI and the

Australian Federal Police (AFP) paid too little attention to

those malpractices which did come to their notice. Those which

the Department handled were often dealt with in a weak and

indecisive fashion. On most occasions when police were called

in, their work was ineffective.

1.9 There were a number of reasons for the deficiencies in

DPI's administrative arrangements and procedures. Probably the

chief among them was the very fact that the meat inspection

service was placed in the Bureau of Animal Health (BAH) and

administered almost entirely by veterinary officers. This meant

that heavy emphasis was placed on the detection of diseased

animals at abattoirs and the hygienic handling of meat up to the

time of export. The accuracy of trade descriptions was given

much less attention, and any suggestion of serious wrongdoing

in the industry - such as substituting local for export meat or

operating a meatworks out-of-hours in the absence of inspectors

- was seen as a matter to be handed straight over to the

police, for them to prosecute or not as they were advised.

2

1.10 A second important reason for the inadequacy of the

arrangements was the dominance accorded to the United States

Department of Agriculture (USDA) in the Australian approach to

export meat inspection. The United States is a vital market

for Australian beef, and the USDA takes a strong line in

demanding that various detailed conditions be met before it

will approve individual export establishments as suppliers to

USA. The result has been that US requirements have been

generally accepted as the basic standards for export

establishments, and the energies of the Australian service have

been, in no small measure, devoted to keeping the USDA

content. Since that Department can only judge Australian

performance by looking at meat actually received in USA, or by

what its reviewers see in their periodic visits to Australian

establishments, its level of contentment is clearly an

inadequate yardstick for the overall performance of export meat

inspection in Australia.

1.11 I believe that, instead of applying US standards to

all export establishments, and having many different standards

applying to domestic meat production, a uniform Australia-wide

standard for all meat establishments and meat inspection systems should be developed. Efforts should then be made to

have this Australian standard accepted by as many importing

countries as possible, and those countries which insist on

different standards should be catered for in specially

designated and inspected establishments.

1.12 Another reason why past arrangements for export meat

inspection have proved inadequate has been the lack of good

communication and co-ordination between the head office of the

Bureau of Animal Health in Canberra and those responsible for

administering the inspection service in the regional offices

and at meatworks. A good deal that was known in regional

offices about malpractices was never conveyed to Canberra.

Material that did reach Canberra was never properly

co-ordinated and no firm lead was given to regional offices as

3

to how such problems should be tackled. All too often the

regional office showed a preference for the easier path -

particularly when dealing with wrongdoing within the service

itself.

1.13 To sum up what I might call the internal weaknesses of

the Bureau's meat inspection service I can put the matter no

better - and would not wish to be any more harsh - than the

Department in its own frank self-appraisal contained in its

final submission to me. The meat inspection service, in the

words of that submission "has proved to be inefficient, costly,

poorly managed, overstaffed and .... in some respects corrupt".

1.14 Turning then to the external problems of the

Commonwealth service, the first point to note is the existence

of the so-called dual system of meat inspection, whereby

Commonwealth and State services operate side-by-side with

overlapping responsibilities. There is general agreement, in

which I concur, that a unified system of meat inspection is

highly desirable, and perhaps even essential, to the well-being

of the meat industry. Certainly the lack of co-ordination, and

imperfect passage of information, between the various services

has contributed to the general deficiencies of administration

of meat inspection.

1.15 Because of the deficiencies to which I have referred,

the DPI meat inspection service performed poorly in detecting

and preventing malpractices in the industry. It missed

opportunities to avert the major crisis which occurred in

August 1981. Details of the ways in which those opportunities

were missed can be found in Cases 1 and 2 in Appendix H to this

report. The Australian Federal Police must also bear a share

of the blame for those missed opportunities.

1.16 This leads me to refer to the other great external

weakness of the DPI service, and that is its relationship with

the AFP. Not enough cases were passed to the police for

4

action, and those that were handed over were not conveyed with

any sense of urgency, importance, or great interest in their

outcome.

1.17 On the other hand it must be said that the Department

had little to show for those occasions when matters were

referred to police. There were no grounds for confidence that

police inquiries would achieve worthwhile results.

1.18 The lesson which has been learnt from these

experiences, and the very different results achieved since

August 1981, has been the need for close co-operation between

the meat inspection service and the police, both at headquarters

level and, even more importantly, at the regional level. Also,

the inspection service could usefully employ some former police

officers to assist with its own investigations.

1.19 Returning to the Department of Primary Industry

itself, it is only fair to say that, under instructions from

its Minister, it acted promptly and effectively when the meat

substitution scandal erupted.

1.20 The steps taken were drastic, but appropriate to the

situation. There was some confusion as a range of new measures

were hurriedly introduced. Not all the detailed rulings made

amongst the pressures of that time were sensible, but the

Department did succeed in restoring the confidence of the USDA

in a comparatively short time and without excessive disruption

or cost to the Australian industry.

1.21 Since then, and during the Commission's hearings, the

Department has, for the most part, reacted promptly and

appropriately to problems that have been brought to light. It

has not, as it might have done, sat back to await the

Commission's recommendations. Instead it has, while keeping

the Commission appropriately informed, continued to carry out its proper functions of administering the service and forward

5

planning. This has culminated in the proposals set out in the

Department's final submissions, which reflect the determination

of the Minister and the Department to resolve the problems

which now stand revealed.

1.22 I believe that, in consequence of the strong reaction

of the Minister and the Department, and the establishment of

this Royal Commission, the current level of malpractice in the

industry is lower than it has ever been. This desirable

situation should be vigorously maintained.

(b) The adequacy of administrative arrangements and

procedures for the supervision of the handling

of meat for human consumption in Victoria

1.23 The Victorian Department of Agriculture operates a

meat inspection service which is very much smaller than the

Commonwealth service. Although a significant proportion of

meat produced in Victoria is consumed locally, much of it is

produced in export works and the Victorian Government has been

content to leave meat inspection in those works very largely to

the Commonwealth.

1.24 Although run by veterinary officers, the Victorian

service has a much lower percentage of such officers than the

DPI. More reliance and responsibility is placed on meat

inspectors themselves. This seems to have worked well in the

Victorian context and I have no fault to find with the way in

which the service has, in general, performed its duties. In

particular the Victorian service has been prepared to do more

of its own detective work than the DPI and this more inquisitive

approach has, I believe, paid dividends. On the other hand

there have been times when the Victoria Police should have been

called in and were not. There is a need for better

co-ordination between the inspection service and the police.

1.25 I should make it plain that, in drawing comparisons

between the two services which are favourable to the Victorian

6

service, I am conscious of the fact that the Commonwealth

service faces problems of distance, seasonal mobility and

complex overseas requirements which go far beyond anything the

State service has to face.

1.26 In place of the dual inspection system now operating

in Victoria (see para 1.14 above) there should be a combined

inspection service along the lines which have already been

proposed in negotiations between DPI and the Department of

Agriculture.

(c) The adequacy of administrative arrangements and

procedures for the supervision of the handling of

meat for human consumption in the Northern Territory

1.27 The NT Department of Primary Production operates a

very small meat inspection service which has performed

reasonably well in spite of a most inadequate legislative

base. The relevant legislation should soon be amended to cover

the various deficiencies.

1.28 There should in future be a combined Commonwealth/NT

inspection service in the Territory. The precise form it

should take will have to be negotiated by the respective

Governments, having regard to the need for it to work closely

with other organs of the NT Government while at the same time

providing reasonable career prospects for those few present

members of the NT service.

(d) Malpractices in the Australian meat industry

1.29 In summarising my findings on this subject, it is

convenient to consider the export and domestic meat industries

together.

1.30 The main question which the Royal Commission has been

asked to answer is how widespread have malpractices been in the

meat industry in recent years.

7

1.31 Unfortunately there can be little comfort for the

industry or the community in that answer. It is clear that

malpractices in the nature of commercial cheating have been

widespread in the export industry. In saying that I bear in

mind that the Commission has concentrated on wrongdoers and

their misdeeds and has therefore studied a biased sample of the

industry's transactions, the great majority of which are no

doubt perfectly honest.

1.32 However I am also conscious of the fact that a longer

and more detailed investigation than has been possible in the

time available, would undoubtedly have revealed many more

transgressions; and the prevalence of commercial malpractice

disclosed by the evidence - at all levels of the industry -

constitutes a very serious problem. In particular, large

quantities of meat, from animals killed more cheaply at non­

expert abattoirs, have found their way onto export markets, and

the quality, age or other characteristics of export meat have

often been falsely described.

1.33 I have not been asked to consider what effect this

serious level of commercial malpractice may have had on the

export meat industry itself, or on Australia's reputation as a

trading nation. That would, in any event, be difficult to

judge in the absence of any knowledge of the meat industries of

other countries.

1.34 Certainly there will need to be a change of attitude

amongst export meat processors generally, and a much firmer

line taken by government regulatory bodies, if Australian meat

is to attain the high international reputation which it ought

to enjoy.

1.35 So far as meat for human consumption in Victoria and

the Northern Territory is concerned, there is little to suggest

that consumers have been cheated when buying fresh meat from

their local butcher or supermarket.

8

1.36 On the other hand it is clear that purchasers of some

meat products have not always been eating the meat they

expected and have sometimes been eating an unwholesome

product. There has been, particularly in the last few years,

quite a large quantity of pet meat which has found its way into

such products in Victoria and been consumed throughout

Australia. I am speaking here of hundreds of tonnes of

kangaroo, buffalo, donkey and horse-meat which was not killed

or processed in the manner prescribed for human consumption,

but which nevertheless found its way into the human food chain.

1.37 It is necessary to keep a sense of proportion about

this matter. There is no evidence linking this use of pet meat

with any deaths or outbreaks of disease in Australia. Although

many Australians would find it distasteful to eat some at least

of these animals, there is nothing inherently dangerous in

doing so. The risk lies in the methods of slaughter, transport

and preparation which are used. They may be appropriate for

pet food, but not for meat intended for human consumption. The

factor which greatly reduces the risk of illness from eating

such meat is that most of the harmful organisms which would

undoubtedly be present are killed in the cooking process.

1.38 I suspect that it was the successful infiltration of

pet meat into the human food chain in Victoria which gave

several unscrupulous people the idea that the same thing might

be done on a large and very profitable scale in the export

trade. I believe that this has been a comparatively recent

development, that only a handful of operators have attempted

it, and that the amounts involved have not been very large -

amounting in total, perhaps, to several hundred tonnes.

1.39 Although there have been some connexions between the

operators involved, I have found no evidence of a master-mind

behind the schemes. I think several people decided

independently to accept the risks involved, for the sake of the potential rewards, although the idea may have been spread by

contacts between them.

9

1.40 Another area of malpractice which has caused

particular concern, because of its potentially very serious

repercussions in a vital market, has been that involving halal

slaughter and certification.

1.41 Evidence given to the Commission in private sittings

(because of the sensitivity of the subject) showed conclusively

that industry arrangements for securing proper religious

slaughter and certification for Muslim markets have not worked.

1.42 There have been widespread abuses of the system by

industry, considerable inefficiency on the part of the major

Muslim group claiming to ensure the religious nature of the

slaughter and some corruption among Muslim slaughtermen. Costs

to the industry have been far too high.

1.43 Government authorities have, naturally enough, been

reluctant to become involved in religious matters, but it is

now clear that, up to a point, they must.

1.44 The position is greatly complicated by the differing

requirements of various Middle Eastern countries and by

divisions within Muslim communities in Australia.

1.45 In my view the following principles should, so far as

possible, be observed in the arrangements which will be worked

out in the months ahead -(i) the overall integrity of the system for halal

slaughter and certification must be

guaranteed by the Australian Government;

Government inspectors must supervise the

mechanical and objectively assessable aspects

of the system;

(ii) the religious aspects of the system must be

arranged and periodically checked by a Muslim person or body believed, on past record or

other evidence, to be acceptable to at least

10

some importers of halal meat; a monopoly in

such Muslim oversight should be avoided; and

(iii) the Muslim persons or bodies involved should

be permitted to make reasonable charges to

cover wages and out-of-pocket expenses for

their part in the system; such charges

should not be seen as a way of raising

revenue for other Muslim purposes unconnected

with the meat industry.

1.46 I should make it clear that I have no reason to

believe that there has been any malpractice in relation to

halal slaughter and certification in recent months, or that

there is likely to be any in the future, if arrangements along

the lines recommended are adopted.

1.47 The final issue which I need to deal with in this

summary of malpractices relates to the corruption of government

officials.

1.48 The most disturbing evidence to emerge from this

inquiry has concerned bribery and corruption of a number of DPI

meat inspectors and some DPI veterinary officers and Australian

Federal Police officers. It is impossible to avoid using words

such as 1 bribery and corruption1 in this context, although it

is important to understand that, with a few exceptions, the

value of bribes was not substantial and the corresponding

neglect of duty not heinous.

1.49 In many cases the bribe has taken the form of valuable

quantities of free meat or very cheap meat not available to

employees of the meatworks concerned. In a number of cases

cash payments or fraudulent overtime claims have been

involved. In each of the cases I have in mind, there has been

a regular, valuable benefit on which no tax has been paid.

11

1.50 Sometimes such benefits have been extracted from

unwilling operators by the abuse of inspectors' powers.

1.51 Most often the meat has been given, or the payments

made, to ensure that the meatworks will not be subject to

unusually vigorous supervision by inspectors - that it will be

treated at least as leniently as its competitors.

1.52 However in some cases payments were made to ensure

that a blind eye was turned to clearly improper practices. In

the case of police officers, and a senior meat inspector, meat

was given and payments were made respectively in order to

secure advance warning of troublesome inquiries.

1.53 The really disturbing feature of these revelations was

that the people concerned were not evil - many of them would

have been regarded as reliable and effective officers. They

were ordinary Australians, in positions of some responsibility,

who were either demanding, or at least accepting, clearly

improper payments which could only have the effect of

compromising them in the performance of their duties. The

surprisingly widespread nature of these abuses suggests the

need to watch all areas of government licensing and control

where the decision of an inspector on the job, or similarly

placed official, can make a significant commercial impact on

persons in business.

1.54 These practices in the meat industry must of course be

stamped out.

(e) The handling of allegations of malpractices

1.55 Each of my Commissions requires me to consider any

allegations concerning malpractices in the meat industry that,

in recent years, have been made publicly or to Ministers,

departments or authorities of the Commonwealth or the State of

Victoria. I am asked to say whether such allegations were

12

dealt with in a manner that was adequate and effective, or, on

the other hand, whether any illegality or corruption occurred.

1.56 There have been a number of complaints from overseas,

about particular consignments of Australian meat, which have

come to the notice of DPI. Some of them could be said to have

amounted to allegations of malpractice but, until August 1981,

they were no worse than the malpractices which the inspection

service was discovering for itself. The same general

criticisms which I have already made, of DPI's inadequate

handling of such matters, would apply.

1.57 The same could be said about general allegations

concerning the substitution of local for export meat, which

have been made in the Commonwealth Parliament and elsewhere

from·time to time. Both the Department of Primary Industry and

the Australian Federal Police had, in 1977, a fairly accurate

idea as to where the trouble might lie - in certain independent

boning-rooms in Melbourne. But, due partly to a lack of

determination in either body, and partly to an absence of

co-ordination between them, their efforts were inadequate and

ineffective.

1.58 I am bound to record the possibility - I put it no

higher - that another contributing factor to the failure of

these investigations may have been the corruption of certain

police officers with free meat or of a senior meat inspector

with cash payments, which I have referred to in paragraph 1.52

above.

1.59 I have no fault to find with the response of the

Victorian Department of Agriculture or of the Northern

Territory Department of Primary Production to allegations

coming to them from outside sources.

1.60 So far as ministerial responsibility is concerned,

some allegations of malpractice did come to the attention of

13

Ministers responsible for departments administering meat

inspection in the Commonwealth, Victoria and the Northern

Territory.

1.61 In the case of the Commonwealth, I think it fair to

say that not enough of the allegations which came to the

attention of DPI were referred to the Minister and that,

accordingly, successive Commonwealth Ministers were not

sufficiently informed by DPI of allegedly illegal activities in

the industry or of complaints about the efficiency, and in some

cases the integrity, of elements of the meat inspection service.

Generally, such matters as were referred to Commonwealth

Ministers were dealt with adequately and effectively.

1.62 However, I do consider that the findings by the

Hon C.R. Kelly and Mr W. Buettel about the state of the industry

and the DPI inspection service, in their Report of their

inquiry into meat inspection services in 1978-80, received

insufficient attention from the Minister, the Hon P.J. Nixon.

1.63 In presenting their report those gentlemen expressed

strong views about the industry and meat inspection. Although

they did not give specific details to the Minister when making

their report, they described conduct amounting to bribery of,

and blackmail by, inspectors which in my view should have been

the subject of a much more vigorous response from the Minister

and his Department than in fact occurred. Senior officers of

the Department had available to them a good deal of detailed

information which was not passed on to the Minister. They must

bear the major share of responsibility for inaction.

1.64 But I believe that the Minister, having heard from a

responsible source that there had been cases of bribery and

abuse of power in his Department, should have taken positive

steps to investigate the matter. In my view he did not deal

with this allegation in a manner that was adequate and

effective.

14

1.65 So far as Victoria and the Northern Territory are

concerned, I consider that such allegations as were referred to

the responsible Ministers, concerning the handling of meat for

human consumption, were dealt with adequately and effectively.

I have been critical of the delay in legislating to control pet

food in the Northern Territory, but this has not been the fault

of any particular Minister and, on a strict interpretation, may

not be covered by my terms of reference relating to the

Northern Territory.

1.66 Apart from the matter touched on in para 1.58 above,

there is no evidence to suggest that there was any illegality

or corruption on the part of any Minister of the Crown, or any

official, in response to any allegation of malpractice in the

meat industry.

(f) Pet Meat

1.67 Pet meat is only directly covered by my terms of

reference when I come to consider its export. However the huge

quantities of wild animals in this country, which can be used

for pet meat, constitute a very real threat to the integrity

and reputation of the beef industry. It was the use of pet

meat as a substitute for beef which gave rise to the Royal

Commission.

1.68 It has thus proved necessary to devote a good deal of

time to evidence relating to the pet meat industry.

1.69 This has demonstrated that it has been insufficiently

controlled in all States and particularly in the Northern

Territory. Even those States which have had reasonably strict

controls over the sale of pet meat within their own borders,

have been lax in controlling its production for sale to other

States.

1.70 Virtually no records have been kept of the interstate

movement of pet meat, and there has been no general requirement

that such meat should be dyed.

15

1.71 Over a number of years this was seen, by many people

in the Northern Territory in particular, to be a serious

problem; but nothing was done.

1.72 It is essential, for the protection of public health

and of the meat industry, that pet meat be dyed as soon as

practicable after slaughter. It would be a great advantage if

dyeing were uniform, and so readily recognized throughout

Australia for what it was. Uniform packaging would be helpful

for the same reason. I endorse the decision of most States to

adopt brilliant blue as the dyeing medium for pet meat, and to

require all surfaces to be generally and visibly coloured.

Meat being sent under controlled conditions from an abattoir to

a pet food factory can properly be exempted from such

requirements.

1.73 Even pet meat for export should be dyed, in the same

way as local pet meat, unless the exporter can demonstrate a

cast-iron security system for the particular shipment.

1.74 Governments should try to assist the fresh pet meat

industry by stressing, in public statements, the safety and

reasonable handling qualities of brilliant blue dye.

1.75 States, and the Commonwealth and Northern Territory,

must keep each other promptly informed of any suspicious or

untoward developments concerning pet meat.

1.76 Meat inspection authorities, and police forces, must

be prepared to give reasonably high priority to any inquiries

concerning the possible misuse of pet meat.

16

CHAPTER 2

THE CONDUCT OF THE ROYAL COMMISSION

(a) Setting up - terms of reference - first sittings

2.1 On 27 July 1981, a food inspector in San Diego,

California became suspicious of three frozen blocks of

Australian meat. They looked "darker and stringier" than beef

- which they were supposed to be. Samples of the meat were

sent to a laboratory for testing. On 6 August preliminary

screening tests indicated that the meat concerned was horse- meat. Further tests on 10 August produced the same result,

which was formally confirmed on 13 August.

2.2 On either 10 or 11 August the news of these findings

by the US Department of Agriculture (USDA) first reached the

Australian Department of Primary Industry (DPI). Immediate

steps were taken to retain, both in USA and in Australia, meat

from the establishment concerned. Further quantities of

horse-meat from the same establishment were found at Los Angeles

and in Australia. Other meat from the same source, found in

Australia and later in New Jersey, proved to be kangaroo-meat.

2.3 Meanwhile, on 14-15 August, the fact that horse-meat

had been passed off as beef in Australian shipments to the USA

became public knowledge in both countries. The meat

substitution scandal had broken and there was a public outcry,

particularly in Australia.

2.4 On 25 August USDA took steps to locate, examine and

sample all Australian boneless beef then in the country. This

proved to amount to 30 000 tonnes. As a result of this testing,

which continued until 30 October, two other Victorian

establishments were delisted by USDA, because horse or kangaroo-

meat was found in consignments of beef.

17

2.5 Following these developments, allegations were made in

the media, and in Commonwealth and State Parliaments, of

widespread malpractices in the meat industry. It was also

quite widely suggested that the existence of such malpractices

was well known to Commonwealth and Victorian Government

authorities, who had failed to take adequate steps to put an

end to them.

2.6 In the light of these discoveries and allegations, it

was thought appropriate to introduce stringent new security

measures and to establish both a short-term, independent,

administrative review of those security arrangements, to be

carried out by Price Waterhouse Associates Pty, a firm of

management consultants, and a longer-term Commonwealth Royal

Commission of Inquiry. The Royal Commission was to inquire

into certain aspects of the export meat industry, which could

be summarised as

. whether existing administrative arrangements and

procedures are adequate to ensure that export meat

meets all legal requirements,

. whether malpractices have occurred in the

exportation of meat, and

. whether past allegations of malpractice concerning

export meat have been dealt with adequately and

effectively or, on the other hand, whether

investigations into such allegations have been

tainted with corruption.

2.7 The full text of this Royal Commission, which was

issued to me by His Excellency the Governor-General on

12 September 1981, is set out as Appendix A (1) to this report.

2.8 A few days later, on 15 September, His Excellency the

Governor of Victoria issued a Royal Commission which

complemented the Commonwealth Commission, but related to meat

for human consumption in the State of Victoria.

18

2.9 The only other difference between the two Commissions

which is worth noting is that the Commonwealth Commission set

an arbitrary limit of ten years on past malpractices to be

investigated. The Victorian Commission set the cut-off point

at the coming into operation of the Victorian Abattoir and Meat

Inspection Act 1973.

2.10 The full text of the Victorian Commission is set out

as Appendix A (2) to this report.

2.11 In November 1981 His Excellency the Governor-General

issued a further Commission which related to meat for human

consumption in the Northern Territory. A copy of this

document, which is in the same general terms as the Victorian

Commission, is Appendix A (3) .

2.12 No difficulty has emerged in conducting these three

inquiries jointly and concurrently, since there is a considerable degree of overlap between them. This same overlap

has led me to conclude that a single report is the only

practical way in which to discharge my three separate

obligations. However my concluding recommendations have been

carefully segregated.

2.13 I understand that the other States of the Commonwealth

were also invited to issue complementary Royal Commissions, but

they decided not to do so unless some cogent requirement emerged

from the Royal Commission's inquiries. (For convenience I

shall refer to the Commission in the singular).

2.14 In the event, no such circumstance arose and, except

on one issue (see paras 5.50, 5.60 and 5.61), I have not felt

inhibited by the absence of such Commissions. Indeed any

further extension of the limits of my inquiry would have made

it impossible to conclude it by the prescribed date -

originally 1 September but extended in August to

22 September 1982. As it is, I have been grateful for the

19

assistance of authorities in the other states - who have given

it whenever requested - and I hope that my findings and

recommendations in relation to Victoria and the Northern

Territory may be of use in suggesting possible lines of inquiry

and courses of action elsewhere.

2.15 After the Royal Commission had been formally set in

train, it naturally took some time to appoint secretarial

staff, find and furnish premises, retain counsel to assist the

Commission, and establish contact with likely sources of

information and opinions. However a formal sitting was held on

13 October 1981, informal inspections were made of some 30

premises over the next two weeks, and the calling of witnesses

commenced on 5 November.

(b) Collecting and selecting the evidence

2.16 The findings and recommendations made in this report

are based upon the submissions received by, and the evidence

led before, the Royal Commission. The evidence led was that

part of the whole range of material available to the legal

staff of the Royal Commission, relevant to the terms of

reference, which was selected by them as appropriate for

presentation at hearings of the Commission. I think it is

desirable that I should describe the method of collection of

that material, and the selection process by which some of it

became evidence and some of it did not. I am indebted to

Senior Counsel assisting the Commission for some of the

information which follows.

The Commonwealth Royal Commission

2.17 Broadly, the terms of reference of the Commonwealth

Royal Commission called for inquiries in two areas. The first

term concerned the adequacy of existing administrative

arrangements for the handling of export meat. The remaining

terms concerned past malpractices and allegations of

malpractice. The two areas are, of course, closely related.

The existing administrative arrangements were in part devised

20

to prevent expected malpractices. And it is by the study of

past malpractices that the efficacy of the existing

arrangements, and the adequacy and cost-effectiveness of

suggested changes to those arrangements, can best be judged.

2.18 In response to the substitution scandal, DPI

immediately made a number of changes to the then-existing

administrative arrangements. Later, further changes were made

in response to the Price Waterhouse review. The Price

Waterhouse Report, and the experience of government and

industry in dealing with those changes, provide most useful

material for any consideration of appropriate administrative

arrangements for the physical control of meat exports.

2.19 Views on this subject were sought from a wide range of

interested persons; and little difficulty was encountered in

obtaining evidentiary material and submissions in this general

area.

2.20 By way of contrast, obtaining material as to past

malpractices proved to be a more difficult matter. Initially,

both government instrumentalities and industry had been much

shaken by the substitution scandal. However, by the time the

Royal Commission commenced hearing evidence, there seemed to be

a general satisfaction that the new administrative arrangements

were fully adequate to prevent a repetition of that scandal,

that the USDA had been appeased by the introduction of the new

security measures, and thus the export industry was free from

any immediate threat. There was concern that nothing further

should occur to 'rock the export boat'. There was thus little

general enthusiasm for any detailed public investigation by a

Royal Commission of past malpractices, either in the area of

species substitution or elsewhere, because of the publicity that would inevitably ensue.

2.21 Lack of official interest in meat industry malpractices

was not new. In the decade before the substitution scandal, a

21

total of seven persons had been successfully prosecuted under

various Commonwealth Acts for offences relating to export meat

handling. Only one successful prosecution had been brought

under the Exports (Meat) Regulations. In January 1981, the

Bureau of Animal Health (BAH), the branch of the DPI then

responsible for meat inspection, sought information and

assistance from regional directors to aid a review of those

Regulations, because of the considerable difficulties said to

be experienced in proceeding with prosecutions. However, with

one exception, the responses to this request revealed little

enthusiasm for any such review.

2.22 The files of the Australian Federal Police (AFP)

revealed a handful of police investigations conducted over the

previous decade, most of them being unproductive. There had

been no concerted effort by BAH and the police to detect and

prosecute offenders. Indeed, the difficulties of prosecution

inherent in the then-existing regulations, and the trivial

penalties prescribed for offences, provided little incentive

for any such effort.

2.23 Nor did the files of the BAH reveal any systematic

attempt to collect or disseminate information about

malpractices, either in Canberra or at regional level. When

the setting up of the Royal Commission was announced, steps

were taken by DPI to secure the files of the BAH and to search

them to provide information for the Royal Commission. To that

end a Royal Commission Information Centre (RCIC) was

established.

2.24 The labours of the RCIC over several months produced a

bundle of 164 files relating to allegations of malpractice. In

no sense did these files represent a comprehensive body of

information previously available to BAH in the area of

malpractices. They were specially constructed files, consisting of copies of documents gleaned from an examination

of some 30 000 DPI files in Canberra and regional offices and

22

of ' off file' material. This process was necessary because it

was apparent that no comprehensive system of recording

allegations of malpractice as such existed either in Canberra

or in the regions. I had occasion to comment on the BAH files

in giving my ruling on certain allegations that documents had

been improperly destroyed at the time the Royal Commission was

announced. (I found there was no substance in the allegations)

Attached as Appendix E to this report are some relevant

extracts from that ruling.

2.25 Despite the painstaking efforts of the RCIC staff to

produce an intelligible collection of files for the assistance

of the Royal Commission, the result was disappointing. Often

there were obvious gaps in the sequence of events recorded in

the documents on the file. Some files lacked either a clear

starting point or a conclusion. Some lacked both. In many

cases it was impossible to ascertain what action, if any, had

brought the matter to finality. Nonetheless, these files did

provide a useful starting point for a number of significant

investigations conducted before the Royal Commission. It

should be recorded that the RCIC was in no way to blame for any

defects in the material provided.

2.26 Official indifference to, or ignorance of, the true

state of affairs in the industry was reflected in some of the

evidence given in the early stages of the Royal Commission.

The Director of the BAH testified that he had heard rumours of

local meat going for export, but never one that could be

substantiated. He knew of no occurrence, and had not heard

persistent rumours, of the substitution of mutton for lamb.

He had heard no persistent rumours of the substitution of

cow-beef for ox, nor of the use of pet food in smallgoods nor

of the substitution of local offal for export offal. The

Chairman of AMLC testified that he had never heard of the

relidding of cartons for any underhand purposes in his 44 years

in the industry. The Australian Meat Exporters Council stated

that "the Council is not aware of any previous incidence of

23

malpractice in the preparation and marketing of export meat",

and the Executive Director testified that the question of

blatant malpractice had never been raised at a Council meeting

in his 19 years in office.

2.27 As to the meat inspection service, the provision of

free or discounted meat had been seen as a problem from time to

time, and some desultory but unsuccessful efforts to control

the practice had been attempted. The notion that illegal

benefits were being obtained by meat inspectors on any large

scale, whether by cash payments or claims for excessive

overtime or otherwise, was apparently regarded as so unlikely

as not to require any mention.

2.28 It was against this stance by government and industry

officials of real or professed ignorance of malpractices that

the legal staff commenced to search for evidence of past

misdeeds in the industry. That search was to reveal a serious

situation that should have been known to, or at least suspected

by, the officials concerned.

2.29 Late in September 1981, the terms of reference and

first sittings of the Royal Commission were extensively

advertised in newspapers circulating in capital cities, in

regional areas, and in the rural press. Later, there were a

number of press releases relating to interstate sittings of the

Commission. The evidence given at the Royal Commission

received widespread and consistent media attention. The

publicity given to the Royal Commission by these means resulted

in considerable public response.

2.30 All government departments and statutory bodies which

it was thought might conceivably have relevant information as

to malpractices, were requested to search their files for the

past decade and provide such material as they had. This they

did, and I am very grateful to those bodies for the considerable

effort involved in that task. The relevant files of police

24

forces, and of the Deputy Crown Solicitors' offices, were

obtained. The Hansards of the last decade were examined and

those Members of Parliament who appeared to have relevant

information were contacted. The files of the major daily

newspapers and of the rural press, where available, were

searched. Transcripts of public statements made on television

and radio were obtained.

2.31 Producer and trade organizations and trade unions were

requested to provide such material as was available to them.

In addition, the legal staff selected a number of persons in

the industry, thought to be typical of its various aspects, and

requested their individual contributions. Some hundreds of

persons whom it was thought might have useful information were

interviewed by the legal staff. Eventually, some were called

to give evidence and some were not. There are listed in

Appendices B and C to this report the names of those

organizations which provided submissions and those persons who

made submissions or gave general evidence to the Royal

Commission.

2.32 Direct evidence of past malpractices was slow to

emerge. As the Hon C.R. Kelly had found in conducting a

previous inquiry, industry managers professed to be "proud of

the fact that their behaviour was above reproach, but they all

cast grave aspersions on the behaviour of their competitors".

However, when pressed for specific information about their

competitors' activities, these managers showed a general

reluctance to identify individuals or to provide specific

information for the use of the Commission. This approach was

consistent with previous industry practice. Eventually it was

revealed that there had been widespread malpractices in the

industry, and that this was well known, but the industry had

usually preferred to remain silent. Only rarely had industry

leaders reported known or suspected malpractices, and then only

when the activities of some competitors were seen as being so

outrageous as to constitute a serious threat to the whole industry.

25

2.33 To this general attitude of reluctance to assist the

Commission, there were a few notable exceptions. These were

persons who believed that the long-term interests of producers

and of law-abiding processors in the industry would be better

served by frank disclosure than by secrecy. These persons

provided valuable starting points for investigations by the

Royal Commission, and it is to their credit that they did so.

2.34 Shortly before the commencement of the Royal

Commission, a joint police task force had been set up to

investigate the substitution scandal and related events. It

was commanded by a Chief Inspector of the Australian Federal

Police and consisted, in due course, of 37 detectives from the

Australian Federal Police and the Victoria Police, together

with support staff. A public appeal by this force for

assistance resulted in a very considerable response, reflecting

the widespread community concern about the substitution

scandal. However, much of the information supplied initially

was little better than rumour, and in the early stages the

police task force had hundreds of bits and pieces of

information, but little direct, usable evidence.

2.35 Nonetheless it was the combined efforts of this police

task force and the legal staff of the Royal Commission that, in

the end, produced the evidence most useful to the Royal

Commission on the question of malpractices.

2.36 In recent years, Royal Commissions have become

increasingly the vehicles of investigation into areas of great

public concern where other modes of inquiry have seemed to be

inadequate. The appropriate relationship between police forces

and the investigative arms of Royal Commissions has received

little attention, and deserves more. In the case of this Royal

Commission, by a mixture of good will and hard work on both

sides, a proper and effective relationship was established.

26

2.37 Often, an investigation commenced by one side would be

handed over to the other to pursue and, eventually, a joint

presentation would emerge. Commonly, agreed areas of

investigation were pursued concurrently in hearings of the

Commission and through further police investigation. This

proved a particularly effective approach in certain areas of

inquiry. Constant liaison was necessary to ensure a continuing

exchange of information. The result of this co-operation was

rewarding in terms of the evidence it produced.

2.38 A good deal of the hearing time of the Commission was

devoted to the examination of specific instances of malpractice.

It is important that the approach of the Commission to this

question be understood.

2.39 · The terms of reference of the main Commonwealth

Commission theoretically encompassed all malpractices in the

export industry, Australia-wide, over the the previous ten

years. In practice, what the Commission was concerned to do

was to establish generally whether a malpractice existed and

whether it was likely to occur with sufficient frequency to be

significant; to consider the ease or difficulty with which the

malpractice could occur having regard to current administrative

arrangements; and to obtain sufficient knowledge of the method

of the malpractice to be able to recommend effective measures

to prevent or deter its repetition. It was clearly not

possible to deal with all the allegations of malpractice made

during the decade.

2.40 Nonetheless the detailed examination of some specific

instances of malpractice and of allegations of malpractice was

seen as important. Not only did such examination provide the

necessary information about the malpractice itself, it also

provided considerable insight into the attitudes of industry,

the meat inspection service and other government agencies to

the particular case. This was much more revealing than general

statements about malpractices provided from those sources.

27

2.41 The Royal Commission had available to it about 100

sitting days. As the flow of information about malpractices

increased, it soon became obvious that it would be impossible

to deal thoroughly in the hearings with all of the material

coming forward. In consequence, those instances of malpractice

which were dealt with in evidence constituted only a selection

of that material. Many factors affected that selection.

Generally, those instances which provided the best and the most

easily accessible evidence of a particular malpractice were

selected. The more recent instances were selected in preference

to the old. Further proof of an already demonstrated

malpractice was generally avoided.

2.42 The location of the hearing played a part. Although

the Commission also sat in Sydney, Perth and Darwin, Melbourne

was its home base, most of the sittings were held there, and it

was in that city that the main thrust of the police effort was

available. Experience showed that effective evidence was much

more readily available in those places where the Commission sat.

2.43 Chance also played its part. On several occasions,

persons previously unco-operative in providing information to

the police, or to the legal staff of the Commission, gave

revealing evidence when required to testify on oath. This

sometimes opened up unexpected lines of inquiry.

2.44 In Appendix H to this report there are findings of

fact, and some comments, on nearly all the specific instances

of malpractices investigated by the Royal Commission. A few

have been omitted as being of too little value to include.

Although most of them have not been named, the identity of the

persons who have been the subject of those investigations will

be readily ascertainable in the public records of this

Commission after the Appendix is published. It needs to be

understood that the affairs of those persons, and the firms

with which they are connected, fell under the spotlight of the

Royal Commission as a result of the selective process outlined

28

above. In particular, it must not be inferred that they alone

were guilty of malpractice in the past decade, nor that their

conduct has necessarily been any worse than that of others

whose affairs have not been similarly investigated.

2.45 To this general proposition, there is one exception.

This Royal Commission had its origin in the discovery that pet

food had been substituted for export meat, a practice so

obnoxious as to stand apart from other malpractices. In

consequence, the legal staff brought before the Commission all

allegations of pet food substitution in respect of which they

considered there to be sufficiently credible evidence to justify

a public allegation that some particular person had knowingly

and wilfully engaged in the substitution of pet food for export

meat. Appendix H details the parts played by those most closely

involved in pet food substitution. They are referred to by name

to avoid any possible confusion in identification.

2.46 This report was required to be presented by

1 September 1982 - later extended to 22 September. This

necessitated setting a deadline beyond which no further

substantive evidence could be heard. This had two consequences.

First, there were a number of persons who made information

available to the Commission which could not be pursued at

hearings of the Commission. I am nonetheless grateful to them

for their co-operation. Secondly, a number of lines of

investigation, that had been opened up in evidence before the

Commission, remained incomplete when the evidence ceased. The

follow-up of those matters, where appropriate, must be left to

others.

The Victorian Royal Commission

2.47 As the control of Victorian meat inspection services

now belongs almost exclusively to the Department of

Agriculture, access to that Department's senior officers and

files became necessary from an early stage of the proceedings.

The Department conducted a thorough search of its file

29

registries and provided the Commission's staff with detailed

analyses of the files, which assisted in the identification of those matters which fell within the terms of reference. In due

course, many of those files were produced to the Commission and

either became exhibits or formed the bases for segments of

evidence. Other departments such as the Health Commission and

Law Department (Crown Solicitor's Office) also searched their

records and provided files to the Commission.

2.48 Reports and files from such bodies and agencies as the

Public Service Board of Victoria, the Victorian Ombudsman, the

Fisheries and Wildlife Division of the Ministry for Conservation

and the Bureau of Consumer Affairs were also examined.

2.49 Where available, searches of the files of the major

Victorian newspapers were conducted. The object of such

searches was to locate public allegations of malpractice in the

meat industry in order to enable the Commission's staff to

inquire whether such allegations had come to the attention of

the appropriate authorities, and thus to determine whether such

allegations had been handled adequately.

2.50 A search of Victorian Hansards for the period 1974 to

1981 enabled Members of Parliament who appeared to be in a

position to contribute to the Commission to be contacted and,

where appropriate, invited to give evidence.

2.51 All Ministers and ex-Ministers of the Departments of

Agriculture and Health and the Health Commission, and an

Attorney-General, were contacted with a view to ascertaining if

they had, since 1974, received any allegations of malpractice

relevant to the terms of reference. Several ex-Ministers

ultimately gave evidence on this and other more general matters.

2.52 Advertisements placed in the daily press announcing

the formation of the Royal Commission resulted in a good

response from various sections of the meat industry and the

30

public generally. Information obtained as a direct result of

such publicity often proved to be valuable.

2.53 At the time of the setting up of the Royal Commission,

there were some 300 licensed meat establishments in Victoria

(excluding meat inspection depots) which in the twelve months

ending 30 September 1981 processed over 15.5m animals for human

consumption. Despite the Victorian meat industry's size and

dispersal throughout the State, efforts were made to contact

representative operators of all such types of establishments,

no matter where they were located. Operators of export and

local abattoirs, slaughterhouses, boning-rooms, coldstores,

smallgoods and pie factories and retail outlets, as well as

operators of knackeries and pet food establishments, were

contacted and invited to make a contribution to the Commission.

Many such operators eventually gave evidence and provided

important information.

2.54 As one would expect to find in an industry as large

and diverse as the meat industry, there are many trade and

industry organizations and unions covering the widespread views

and interests of the industry's various components.

2.55 Many such bodies responded to the open invitation to

make submissions which was contained in the public

advertisements. In other cases, submissions were made after

discussion with the legal staff of the Royal Commission. In

very few cases did these organizations decline to participate

in the workings of the inquiry.

2.56 As with the Commonwealth Royal Commission, it was

apparent from an early stage of the proceedings that it would

be impossible to present in evidence all relevant material

which had come to the attention of the legal staff. The same

sort of criteria were applied to the selection of Victorian

material as those which were applied in the Commonwealth

inquiry. In a number of cases, the help of members of the

31

police force was sought in the conduct of further enquiries

before a particular matter was aired in the public hearings.

At the time when a decision was made to call no further

evidence, some of these matters were still under investigation

and will need to be pursued by the appropriate authorities.

The Northern Territory Royal Commission

2.57 At the beginning of these proceedings, there was a

widely held view in the Northern Territory that no malpractices

in the meat industry had occurred there in the past ten years.

However, once the Royal Commission established an office in

Darwin, little difficulty was encountered in securing the

co-operation of industry representatives, government departments

and their officials and the Northern Territory Police Force in

obtaining and marshalling material suitable for presentation to

the Commission. On the other hand, it was probably the

Territory belief about malpractices which resulted in virtually

no unsolicited public response to the widespread media publicity

which both preceded the public sittings in Darwin and occurred

during the actual hearings.

2.58 The recent constitutional history of the Northern

Territory necessitated requesting assistance from, and file

searches of, a number of Australian Government departments

which used to have responsibilities in the Northern Territory

meat industry, as well as the Departments of the Chief Minister,

Primary Production, Health and Law in the Northern Territory

Government. Many dozens of files were received from the

various departments, some simply providing useful background

information, whilst others formed the basis of segments of

evidence led before the Darwin sittings of the Royal Commission.

2.59 Because of the decentralized nature of the meat

industry in the Territory, the process of searching

departmental registries for the purpose of locating material

relevant to the terms of reference often proved to be a

difficult and time-consuming exercise, involving extensive

32

travel around the Northern Territory. This, coupled with the

loss of and damage to some files and other material in Cyclone

Tracey in 1974, added to the difficulties in collecting and

collating evidence.

2.60 The Commissioner of the Northern Territory Police

Force provided valuable assistance to the Royal Commission by

permitting the secondment of the two members of the stock squad

to assist the staff of the Commission in the preparations for

the hearings. They also conducted searches of the Force's file

registries in Darwin, Alice Springs, Tennant Creek and Katherine

and provided valuable background information on the Territory's

meat industry.

2.61 The corporations of the main towns and cities in the

Northern Territory were contacted with a view to ascertaining

whether they wished to make submissions to the Commission or

had any. material relating to malpractices occurring or alleged

to have occurred in the past ten years.

2.62 All major industry, producer and union organizations

were similarly written to and invited to participate in the

Royal Commission's hearings. A number of representatives of

these bodies ultimately gave evidence at the Darwin sittings of

the Commission.

2.63 Appropriate Ministers of the Crown and politicians

who, as revealed by a search of the records of parliamentary

debates, had spoken on matters of interest to the Commission

and appeared to have useful information were contacted. One

Minister of the Crown, the Minister for Primary Production, and

one Member of Parliament ultimately gave evidence before the

Commission.

2.64 A wide range of individuals involved in the meat industry and thought to be representative of its various

facets, including pet meat producers, abattoir proprietors,

33

operators of mobile slaughtering facilities, station owners and

managers, exporters, retailers, coldstore managers, transport

operators and their drivers, meat inspectors and veterinary

officers were selected by the legal staff and requested to make

their individual contributions. Many of these persons were

called as witnesses, some travelling many hundreds of kilometres

to attend conferences with the staff of the Commission and to

give evidence at the public hearings.

2.65 The files of the major newspapers were examined for

information on malpractices and on the industry generally.

The decision of the High Court concerning

a witness before the Commission

2.66 There is a matter to which, with some diffidence, I

think I ought to refer; and it is convenient to deal with it

at this point.

2.67 One of the witnesses called before me objected to

answer questions on the ground that his answers might tend to

incriminate him. He had been charged with a criminal offence

arising from the events about which Counsel assisting the

Commission wished to question him.

2.68 When the witness, acting on legal advice, objected to

answering any questions, beyond giving his name, address and

occupation, I took the view that, provided the further hearing

was in confidential sittings, there was no reason why it should

not proceed and the witness be required to answer. I indicated

that I would entertain an application that all copies of the

transcript should be retained by the Commission and police

officers excluded from the hearing-room.

2.69 I need not go into my reasons for taking the view of

the law which I did, because the High Court has held that I was wrong, and the relevant law is now to be found in the judgments

given by the Court.

34

2.70 However I believe that I should say something about

the practical results of this decision. The effect of it is

that a person who has been charged with a criminal offence and

is awaiting trial cannot be pressed to answer questions, about

matters relating to the circumstances of his alleged offence,

by a Royal Commissioner appointed by the Executive. It may be

that even a willing witness in such circumstances cannot

properly be questioned. It seems further that the impropriety

of pressing questions applies even if the persons present at

the hearing are strictly controlled or, indeed, if only the accused person and the Royal Commissioner were present. Nor,

it seems, would it make any difference if the Royal Commissioner

had no intention of reporting any findings until after the

trial had been held.

2.71 . The Court also appears to take the view, although it

was not necessary to the decision, that the Commonwealth Royal

Commissions Act 1902 does not take away the right of the

individual to refuse to answer any question asked of him at a

Royal Commission on the grounds that the answer might

incriminate him. All the Justices seemed to be of this view,

and it was not suggested that the hearing of the evidence in

private would alter the situation.

2.72 The main effect of the decision will be that, in any

future inquiry into wrongdoing in some area of community or

public life, the Executive will have to choose between

instituting criminal proceedings promptly, and delaying

relevant parts of the inquiry until those proceedings have been completed, or delaying the criminal proceedings until after the

inquiry has been completed.

2.73 A more difficult problem arises from the expressed

views of the Court about the need for explicit legislative over­

riding of the privilege against self-incrimination before that

right can be lost in proceedings before a Royal Commission. I

am bound to say that, in the light of my experience in this

35

Royal Commission, I consider it would, more often than not, be

a waste of public money to set up a Royal Commission to inquire

into an area of suspected malpractice in society if a right to

refuse to answer questions on grounds of self-incrimination

exists and is maintained. It would not be possible to engage

upon effective inquiry, except in cases where the Commission

had available to it a quantity of useful documentary material.

2.74 I shall illustrate this by reference to the course of

the evidence at this Commission. As I have pointed out, in the

early stages the proffered view of government and industry

officials was that there was little or no malpractice in the

export meat industry, and most individuals involved in the

industry showed a marked reluctance to identify anyone who

might be engaged in any malpractice. By the last week of March

all major industry and Commonwealth submissions had been

received, a number of allegations had been investigated and

half the sitting days had gone. I can only recall one witness

up to that time (apart from a central figure whose evidence I

have commented upon in Case 2 Appendix H) who had volunteered

evidence about his part in a malpractice.

2.75 If this report had been written in April of this year

instead of September, on the basis of the evidence then

available, I would have reported that malpractice in the

industry was rare, and felt compelled to recommend that, in the

light of that finding, many of the present security measures

were unnecessary and that no fundamental change in

administrative arrangements was required to prevent or detect

malpractices. Such a report would have been totally misleading.

2.76 However, between late March and July, the Commission

concentrated on hearing evidence of a number of individual

allegations of malpractice. In almost every case malpractice

was proved and the vital evidence came from some witness who

had himself engaged in the malpractice or who was a party to

it. It was rare for a person to have direct knowledge of a

36

particular malpractice without himself having played some role

in its execution. In only a few cases was there documentary

evidence relevant to the malpractice.

2.77 Whether or not those persons would have been entitled

to refuse to answer the questions which revealed the truth

about the malpractices, even in a very rigidly controlled

private sitting, if that were necessary, must await further

judicial pronouncement. But if such a right did exist, I have

no doubt that it would have been exercised by most, and perhaps

all, of the relevant witnesses at the Royal Commission hearings.

It provides an easy way out for those whose real concern about

giving evidence is not their own part in the transaction, which

may have been minor, but the effect of that evidence on their

associates or their employer. The granting of indemnity in

such cases is, in my view, an awkward and invidious process. I

do not see it as a practical solution to the problem posed.

2.78 There would have been a number of consequences if such

witnesses before the Commission had chosen this way out.

First, I would not have been able to reach any clear conclusion

about the probable level of malpractice in the industry.

Secondly, I would have been deprived of the knowledge of the

mode of execution of various malpractices and, in the absence

of that evidence, I would have been unable to make constructive

suggestions as to how they might be prevented in the future.

Thirdly, whatever I might have suspected to be the true

position, I may nonetheless have had to base my ultimate

findings on the first proffered views of the government and

industry officials. As I have said, those conclusions would

have reflected a quite different situation from that which I

now report - and which is now generally conceded - to be the

actual state of industry malpractice.

2.79 The question of whether or not Royal Commissions

should be established from time to time to investigate

allegations of wrongdoing in Australian society, raises

37

political, social and legal issues which are no concern of mine

in this report. However, my experience of this Royal Commission

obliges me to say that, had an absolute right against self­

incrimination been known to exist and been exercised, I would

have been unable to write a useful and accurate report. I feel

sure that the same observation would apply to most Royal

Commissions enquiring into any general area of suspected

malpractice. The only solution in such cases would appear to

be special legislation to abrogate the right against self-incrimination, coupled with confidential sittings whenever

the possibility of such incrimination arose.

2.80 The question of confidential sittings calls for some

comment before I leave this topic. If the objection to self­

incrimination rests only upon the potential effects on a

possible trial of criminal charges to be brought against the

particular witness, then I believe a Royal Commissioner can

readily devise practical measures to overcome those

difficulties. The potential effects could include the

publicity given to the witness's admissions delaying or even

preventing a fair trial; the possible unfairness of having to

give evidence in the presence of a police officer, who might

make use of it to gather incriminating evidence not otherwise

available to the police; the risk that the witness's version

of events may become known to the prosecutor in advance of the

trial; and the risk of unfair publicity as the result of a

report by the Royal Commissioner being made public before the

criminal trial is held.

2.81 All these possible results could be prevented. The

hearing of evidence from a witness which may have the tendency

to incriminate him can be held in private, in the presence only

of the Royal Commissioner, the shorthand writers, Counsel

assisting, possibly other Counsel, the witness and his legal

advisers. Appropriate undertakings could be obtained as to

non-disclosure of the evidence. Procedures of this type are

used in other areas of the law where confidentiality is seen as

38

important, for example court hearings involving secret trade

processes. Apparently these procedures are successful in

achieving the desired result. I see no reason why the same

result could not be reached at a Royal Commission hearing.

Similarly, the confidentiality of any part of a report by the

Royal Commissioner reflecting evidence given in private could

be maintained as long as was necessary.

2.82 Steps such as these may not be entirely satisfactory,

particularly where there are several malefactors who contradict

each other, but they would at least allow each witness's

testimony to be received, and tested up to a point. The public-

interest in the openness of such inquiries could be served by

release of the transcript at the end of all criminal

proceedings, if that were thought appropriate in the particular

case.

(c). Limitations

2.83 I have already referred, in paragraphs 2.8-14 above,

to the fact that the Commission has been limited to the State

of Victoria and the Northern Territory, so far as meat intended

for human consumption in Australia is concerned. Although a

good deal of evidence relating to other States has been

received incidentally, it must be stressed that no assumptions

concerning meat intended for human consumption in those States

can properly or safely be made on the basis of the findings of

this Commission.

2.84 As I have suggested in paragraph 2.14, the findings I

have made in relation to Victoria and the Northern Territory

may suggest lines of inquiry for other States. Similarly,

recommendations made may be of interest to authorities and the

industry in other States. But that is as far as this Report

can be taken in dealing with the domestic consumption of meat

outside Victoria and the Northern Territory.

39

2.85 In addition to the geographic limitation described, it

must be said that the Commission has worked against a limitation

of time. I make no complaint about this, because it is

obviously a matter of prime importance that the doubts cast

over the export meat industry by the events of August and

September 1981 should be cleared up as soon as possible. On

the other hand those doubts would not be dissipated by anything

less than a thorough inquiry.

2.86 The result has been that I have had to arrive at a

compromise between investigating all allegations which have

come to notice, and dealing only with those of major

significance. In the event, Counsel assisting the Commission

have put before me a cross-section of complaints and

allegations, including all the more serious ones and a

sufficient selection of others to give a fair overview of the

industry and its regulatory problems. I have reviewed the

matters which have not been investigated in detail, have taken

them into account in a general way (without trying to determine

the truth of the matters alleged), and have concurred in their

omission from detailed investigation.

2.87 In addition to limiting the number of allegations and

complaints investigated, the time factor has also influenced me

in determining how wide an interpretation I should give to the

word "meat" in the respective terms of reference. I have been

guided in my decision on this point by the circumstances in

which the Royal Commission was established and by the way in

which material has come forward to the Commission.

2.88 in particular, no organization or person has sought to

involve the Commission, to any significant extent, in the

affairs of the poultry or rabbit industries. Thus, although it

may seem strange that the very large chicken industry appears

to attract so much less attention and regulation than other

meat-producing industries, I have not thought it appropriate to

spend any of the available time on this subject. With this

40

exception, I think it is generally true to say that the

attention given to different types of meat broadly reflects the

numbers slaughtered - whether for human consumption or pet

food. Thus cattle, sheep, pigs, kangaroos, buffaloes and

horses have attracted most of the Commission's time, and deer

and goats very little. Donkeys have been looked at closely in

relation to one producer only.

2.89 Finally, in stating the limits within which the

Commission has operated, it is desirable to point out that the

Commission has not been asked to consider the economics of the

meat industry nor the appropriateness of any of the basic laws

which govern the industry.

2.90 The financial repercussions of any recommendations

made obviously require consideration, but the Commission cannot

be concerned with production or marketing methods, prices, wage

levels, employment opportunities or other economic or industrial

factors. In particular the Commission is not asked to express

a view on what proportions, if any, of the cost of meat

inspection should be borne by the industry or by State or

Federal Governments.

2.91 Although 'administrative arrangements and procedures'

may be given the force of law by regulation-making processes,

it is necessary to distinguish between them and the basic laws

which they are designed to protect and enforce.

2.92 Thus it is no part of the Commission's task to

determine whether game meat (for example, from kangaroos or

wild pigs) should be available in Victorian butchers' shops or

allowed to be exported for human consumption. Nor can the

Commission properly involve itself in determining what diseases

should cause a carcass to be declared unfit for human

consumption.

41

2.93 What it is called upon to do is to determine whether

such laws as exist in these areas are being properly observed

and whether policing measures are adequate.

(d) Evidence and opinions

2.94 The Commission has collected information and opinions

in several different ways. It began with the informal

inspection of some 30 differing types of meat premises. The

purpose of these inspections - to assist in the understanding

of later evidence - was fully achieved.

2.95 The great bulk of the material put before the

Commission has been in the form of sworn evidence, given at

public hearings and subject to cross-examination by Counsel

assisting the Commission or appearing for other parties. Much

of this evidence was volunteered, or given in response to

requests from Counsel assisting the Commission.

2.96 However in the case of investigations into alleged

malpractices, many witnesses were called on subpoena.

2.97 One witness gave some evidence after being subpoenaed,

was advised to seek legal representation and, having done so,

refused to answer any further questions. He was fined $700 in

a Court of Summary Jurisdiction, and then he failed to reappear

before the Commission. He could not be found by the police and

may have gone abroad.

2.98 He is the only witness who failed to answer a

subpoena. Two other witnesses refused to answer questions on

the grounds that their answers might tend to incriminate them.

2.99 Some evidence was taken in confidential sittings. This

was true of evidence relating to halal slaughter and certifi­

cation; the reasons for this are explained elsewhere in this

report (paras 7.77-78). Two other witnesses who, I accepted,

42

were in genuine fear of physical violence, also gave brief

evidence in private.

2.100 I also heard evidence in confidential sittings

concerning one episode which could have been thought to involve

malpractice, though I am now satisfied it did not. The

evidence was heard in private because time did not permit a

full examination of all the facts of the case. Its interest to

the Commission lay in the way in which the incident was handled;

and publicity for facts not fully explained or ruled upon could

have resulted in adverse commercial consequences for the

company.

2.101 Since I am satisfied that the company was innocent of

any deliberate wrongdoing or culpable negligence, I believe

that the evidence on the matter should lose its confidential

status at the same time that that part of my report (Case

No. 10 in Appendix H) is published.

2.102 Some other evidence was taken in private in order to

prevent possible prejudice to pending criminal proceedings.

The High Court's ruling on this question is referred to in

paras 2.66-82 above.

2.103 In the final result, a total of 497 witnesses gave

evidence on just over 100 sitting days. Those who gave general

evidence about the industry, or made submissions as to the

Commission's findings and recommendations, are listed in

Appendix C.

2.104 Over the same period a total of 891 exhibits were

received in evidence. Those which contained information of a

general kind are listed in Appendix D.

2.105 A number of exhibits were received on a confidential

basis. In many cases this was done because persons or

companies were being named as possible malefactors, and it

43

seemed unfair to publicise their names before they were in any

position to respond. In some instances these allegations were

followed up in evidence, and there is no need for exhibits

referring to them to remain confidential. In other cases the

matters alleged were, for one reason or another, not pursued.

All the exhibits received in confidence were so designated by

adding 'C1 to their respective numbers. At the final sittings

of the Commission I directed that a number of exhibits should

lose their confidential status for the reason given.

2.106 The remainder should, in my view, remain confidential

to all but those police and other authorities who need to

determine whether further investigations should be undertaken

with a view to criminal prosecution. I do not believe that

they should be available to regulatory authorities for any

other purpose, since they involve, for the most part,

uninvestigated allegations against persons who have had no

oppportunity to defend themselves.

2.107 In the case of other types of documents received in

confidence (apart from those returned to their source on

grounds of convenience) any further disclosure of them should,

in my view, be a matter for their originators, or others having

a proprietary interest in them, in each case. They should not

be published simply because they were made available to the

Commission. In some cases confidential trading information is

involved.

2.108 In addition to the formal evidence and the exhibits

placed before the Commission, there were two days on which

seminars were conducted as a convenient way of receiving

opinions and submissions.

2.109 I take the view that examination and cross-examination

of witnesses is a slow and inefficient way of eliciting opinion

evidence about future courses of conduct in general and

possible regulatory and administrative measures in particular.

44

2.110 Accordingly I took the chair at separate discussions

of new and proposed Victorian legislation and regulations, and

proposed DPI arrangements for a totally new system of meat

inspection. The transcripts of these seminars have been marked

as exhibits.

2.111 These discussions were held in public and bodies

likely to have an interest were invited to participate in each

case. There was a full opportunity for each participant to

express points of view and question other participants. I

regarded the use of this procedure as being highly successful.

(c) Specific allegations

2.112 As I have already said, Counsel assisting the

Commission selected all the more serious allegations of

malpractice, and a representative sample of others, to bring

before the Commission.

2.113 So far as possible, each allegation was dealt with at

one time and pursued either to conclusion or to a point where

it seemed that any further investigation would not be in the

public interest - having regard to the cost of the Royal

Commission, the relative seriousness of the allegation, and the

lessons to be learned from it. Some complex matters, involving

a number of parties and spreading over several states, had to

be dealt with in parts.

2.114 As soon as it became clear that allegations would be,

or were being, made that a company or individual had broken the

law, the opportunity to obtain legal representation was given.

Many persons and companies were so represented.

2.115 In no case was the name of a person or company, against

whom there was an allegation, made public before the Commission

began to deal in open hearing with the issues involved.

45

2.116 I have not been asked to make recommendations about

prosecutions or other punitive action against persons or

companies referred to in this report, and I have not made any

such recommendations.

2.117 A decision whether to prosecute or not will depend

upon a number of factors - the seriousness of the allegation,

the time which has passed since its occurrence, the extent to

which guilty persons have already been punished in one way or

another (for example by loss of income or reputation or

superannuation entitlements), and the likelihood of a

prosecution being successfully concluded. In many cases I do

not have all this information.

2.118 I hope that it will be possible to publish most of

this report within a reasonable time after it is presented.

Because of the possibility of criminal proceedings, any

detailed findings against named individuals or companies could

lead, in the interests of justice, to delay in publication. I

have accordingly segregated all those detailed findings into

Appendix H.

2.119 In addition, because I am conscious of the fact that

persons against whom allegations have been made have not had,

before the Commission, all the protection afforded by the laws

of criminal procedure, I have decided to avoid using names of

offenders in the body of this report and, except in pet food

substitution cases and one or two serious instances of

corruption, in Appendix H. The identity of those concerned

will be clear enough to those having the responsibility to

consider further action and, when Appendix H to the report is

published, to anyone who takes the trouble to check the public

record of the Commission's hearings.

2.120 Another reason for following this course is that I am

satisfied that, as I have said earlier, there have been many

more instances of malpractice than the Commission has been able

46

to identify. To castigate publicly those persons who have come

to notice for reasons other than the substitution of pet food

or serious corruption - particularly those who have admitted

their faults - would be unfair. It could, in some cases, give

advantage to others who are equally guilty.

2.121 Each of the allegations investigated is dealt with in

appropriate detail in Appendix H to this report. The lessons

to be learned from these cases have been incorporated in the

findings and recommendations in the body of the report. In my

view Appendix H to the report should not be published until any

criminal or quasi-criminal proceedings against persons referred

to in it have been finalized. I might add that I had determined

upon this method of presentation and this recommendation before

the High Court gave its decision in the case referred to above

(para-s 2.66-82). That decision makes it essential that this

course be followed.

47

CHAPTER 3A

THE EXPORT MEAT INDUSTRY

(a) Quantities, types and destinations of exports

3.1 In order to provide a back-drop against which the

results of the Commission's inquiries can be properly

understood, it is necessary to describe briefly the Australian

export meat industry.

3.2 The industry is, of course, subject to considerable

fluctuations in production and potential markets, and thus in

prices. This may be relevant to the development of

malpractices in the industry. With this thought in mind it is

worth recording the broad trends of recent years. These do not

include the effects of the 1982 drought. (All references are

to years ending 30 June) .

3.3 The national cattle herd has stood in recent years at

about 25m. Some 8.5m are killed each year. The national sheep

flock is about 135m, and some 30m sheep and lambs are killed each year.

3.4 Over the last decade, the numbers of cattle slaughtered

per year rose sharply from 1972 to 1978, apart from a dip in

1974. Since 1978 they have declined just as sharply - although

not yet back to 1972 levels. Sheep and lambs, on the other

hand, reached a peak in 1972, declined sharply to 1974 and have

maintained a slight upward trend since then.

3.5 Cattle prices were low in 1977, rising steadily

through 1978 and sharply in the first half of 1979. Since then

they have tended to decline but are still well above 1978

levels. While fluctuating considerably, sheep and lamb prices

have maintained a steady upward trend since 1977.

48

3.6 So far as the most recent history of the industry is

concerned, the following figures can be taken as describing the

general size and importance of the industry.

3.7 Australia exports about 0.9m tonnes of meat each year,

representing about half its total production and almost $1600m

worth of export earnings. Some two-thirds of this export trade

comprises beef and veal, while mutton and lamb make up most of

the balance. The other exports (amounting to roughly 10% of

the total) are, in order, fancy meats (mainly offals), canned

products, smallgoods, goat-meat and pig-meat.

3.8 In recent years a little more than half of Australian

beef and veal production has been exported, while about

three-quarters of mutton production and about one-sixth of lamb

production has gone abroad.

3.9 Generally speaking, beef exports have been declining

in recent years and mutton and lamb exports increasing.

3.10 Australia's largest markets for meat are found in USA,

Japan, the Middle East, USSR and Canada. In 1981 USA took 60%

and Japan 18% of Australia's beef exports. In the same year,

32% of our lamb and mutton went to the Middle East and 38% to

USSR.

(b) The organization of the industry

3.11 The Commission is, of course, only concerned with that

part of the export trade which lies between the point of

slaughter and the point of shipment. About half of this trade

is in the hands of ten large companies. Most of the exporting

is done by companies which are themselves integrated

producers. By this I mean that they own abattoirs,

boning-rooms and coldstores, usually on the same site. However

there are also a number of independent boning-rooms operating,

particularly in Victoria. They purchase carcasses, or parts of

carcasses, from export abattoirs, break them down to their

49

component parts according to the specifications of the importer,

then pack them in cartons for freezing before export. The

freezing is usually done by independent, export-registered

coldstores. Some of these boning-room proprietors are licensed

exporters. Others sell their product to meat brokers, who

handle a significant part of the trade. Meat may change hands

several times before being exported.

3.12 It must be noted that the beef and veal exports are almost entirely of boneless product, while the opposite is true

of mutton and lamb. Beef exports are generally from poorer,

manufacturing quality, animals.

(c) The regulation of the industry

3.13 The Department of Primary Industry has the main role in

regulating the export meat industry. It registers export

premises and provides an inspection service, at all those

premises, for all meat produced, whether it ultimately goes for

export or is sold on the local market. In some states, particularly NSW, the numbers of DPI inspectors are augmented by

state inspectors, particularly where a good deal of the product

goes to the local market, but they all work under the ultimate

control of a DPI veterinary officer.

3.14 The Australian Meat and Live-stock Corporation (AMLC)

has a parallel regulatory role to that of the DPI. It issues

licences to meat exporters (to the business, not to the premises)

and is responsible for quality controls over those exporters

which it licenses. Over 200 licences are issued each year.

3.15 The Customs Bureau is responsible for ensuring that no

meat is exported without appropriate documentation from DPI.

(d) The steps in the export process

3.16 In order to make later segments of this report easier

to follow it is convenient now to give a brief description of

the main steps in the meat export process.

50

3.17 Animals are brought to a registered export abattoir.

They are then inspected before slaughter, usually by a

veterinary officer of the Department of Primary Industry but

sometimes by an experienced meat inspector working under the

general supervision of a veterinary officer. Only those

animals which appear to be fit for slaughter for human

consumption are allowed to go forward to the killing floor.

Any which are suspect are segregated for special examination

after being killed. Others may be deferred until their

condition improves or, if they are found to be dying or

seriously diseased, they will be killed in the yards and either

burned or rendered down for fertilizer.

3.18 Sound animals are slaughtered and dressed under the

supervision of meat inspectors employed by the DPI or, in some

cases, by the relevant State Government department. All these

officers are in turn supervised by a veterinary officer of the

DPI. An interesting point about the work of meat inspectors is

that most of them are directly involved in work on the

production line, known as a meat chain, which, if they were not

there, would need to be done by employees of the abattoirs. In

effect, they perform a number of functions related to quality

control. They examine the head of the animal for signs of

disease. They similarly examine various glands of the animal

and, in the case of the viscera (which includes all the edible

offal) they determine, in the course of their examination,

whether that offal is fit for human consumption, suitable for

pet food, or should be condemned. In carrying out these tasks,

they are not merely checking the work of others; they

physically perform the examination and sorting functions.

3.19 If the head, glands or viscera of the animal, or the

carcass itself, show any signs of a disease that could be

passed to man, or any other defect that could affect the

quality of the meat, then the carcass is segregated until a

final decision can be made as to whether all or part of it

should be condemned entirely or used only as pet food.

51

3.20 At the end of this process a stamp is placed on the

carcass to indicate that it has been approved for export. The

carcasses are then, in most cases, placed in a chiller.

3.21 The next process for most export meat is boning. Only

a very small proportion of beef exported goes in the form of

whole carcasses or smaller sections with the bone left in;

and, as already noted, beef represents about two-thirds of the

export meat trade. On the other hand, most mutton, lamb, goat

and pig-meats are exported bone-in. When meat is exported in

this form there is less scope for breach of the export laws,

because the nature and quality of the carcass can be inspected

and the original export-approved stamp should be evident.

3.22 When the bones are removed, however, the meat itself

no longer carries a brand and its original form and quality are

less recognizable. Thus, for reasons of both volume and

opportunity, any inquiry into breaches of the law relating to

export meat will be mainly - but not entirely - concerned with

boneless meat.

3.23 Some boning-rooms are integral parts of abattoirs;

some (particularly in Victoria) are entirely independent

operations - though often sited next to an abattoir; and some

are part of a cannery or smallgoods operation. In all cases

they are covered by a registration for export and are now

subject to full-time inspection by a meat inspector. Before

August 1981 some boning-rooms were only inspected on a part­

time basis.

3.24 After boning, the meat is placed into appropriately

labelled cartons (normally 60 lbs/27.2 kgs) which are stamped

as being approved for export. This is done under the

supervision of the inspector.

3.25 The meat in cartons, and usually on pallets, is then

placed in a coldstore, awaiting instructions for shipment or,

52

in some cases, delivery to a smallgoods factory or cannery.

This coldstore may be part of the original abattoir/boning-room

complex, or attached to a smallgoods establishment or cannery,

but it will often be an entirely independent storage place.

Carcass meat intended for export may similarly be retained in a

coldstore attached to the original abattoir or consigned to an

independent coldstore for freezing and retention until required for shipment.

3.26 Next, such export meat as has not found its way into

smallgoods or cans will either be loaded into a container at a

coldstore or will arrive at a container depot, wharf or airport

for loading. After it has been finally checked for temperature,

and for the hygienic state of the area into which it is to go,

the inspection responsibilities of the Australian authorities

are concluded.

3.27 It will be seen from the description of meat handling

which has already been given, that there may be several

occasions on which meat for export has to be transported from

one place to another. The meat in one group of cartons could

be moved several times - from abattoir to boning-room in carcass

form and then in cartons, first to a coldstore and then to a

vessel. There could be a further move between different cold-

stores in order to assemble a shipment or because the ownership

of the meat has been transferred from one exporter to another.

3.28 Any movement of export meat must be accompanied and

evidenced by a transfer certificate - signed by a meat

inspector at the point of departure and checked against the

load by another inspector on arrival at its destination.

3.29 The ability to tamper with these certificates and add

non-export meat to the load during transit, has provided one of

the largest loopholes in export procedures in the past. More

careful preparation of the certificates, and the sealing of

loads, have recently been introduced to combat such practices.

53

3.30 Finally it is necessary to produce appropriate export

documents before the Customs Bureau will pass goods for export

and importing countries will receive them. These certificates

are given by officers of the Department of Primary industry and

are based on the sighting, by inspectors at the point of

loading, of the appropriate 1 Australia Approved1 stamps on

carcasses or cartons, and the export and transfer documents

from the registered export establishment where the meat was

last held.

3.31 The firm exporting the meat must hold an export

licence from the Australian Meat and Live-stock Corporation.

Not all export meat processors have such licences and not all

licence holders are meat processors - some operate merely as

brokers.

54

CHAPTER 3B

THE MEAT INDUSTRY IN VICTORIA

(a) The size of the industry - recent trends

3.32 The meat industry in Victoria is important to the

State's economy. Latest available figures before the 1982

drought showed that there were 4.3m head of cattle in the State

(compare Queensland's 9.7m and NSW's 5.3m). There were 25.3m

sheep and lambs (compare NSW's 45.1m and WA's 30m).

3.33 The cattle numbers in Victoria have declined

considerably since the peak year of 1975, but have been steady

for several years. Sheep and lamb numbers declined from 1975

to 1977, but have risen steadily since.

3.34 . Cattle slaughtering figures reached a peak in 1978,

declined greatly in 1979 and 1980 and rose again in 1981.

Sheep slaughtering declined considerably from 1976 to 1979 but

rose steadily in 1980 and 1981.

3.35 Victoria's overseas exports of meat rose steadily

between 1975 and 1978, declined rapidly in 1979 and 1980 but

rose again in 1981. Mutton and lamb did particularly well in

1981.

3.36 In 1981, Victoria was responsible for producing just

under 40% of Australia's mutton and lamb and exporting just

over 40%. In the case of beef Victoria produced 25% and

exported 18% of the Australian totals.

3.37 So far as prices are concerned, cattle prices slumped

in 1975, due to the collapse of major export markets. They

recovered a little between 1976 and 1978, then rose

dramatically in 1979 and 1980 (reaching a peak in June 1979)

before declining to some extent in 1981. Sheep prices have

tended to follow cattle prices, but have remained higher in the

last year or so, thanks to overseas demand.

55

(b) The organization of the industry

3.38 The Commission's interest in the industry in Victoria

lies between the point of slaughter and the retail butcher's

shop, supermarket or delicatessen.

3.39 The first point to be made is that the major part of

the meat consumed in Victoria originates in export-registered

abattoirs. (This is particularly so in the case of mutton and

lamb). Much of it is also processed in export-registered

boning-rooms, smallgoods factories and canneries.

3.40 In June 1981, the following establishments handling

meat for human consumption were licensed to operate in

Victoria -Export abattoirs 19

Local abattoirs 85

Slaughterhouses 29

Meat premises 165

(Meat premises, for this purpose, include boning-rooms,

coldstores, smallgoods factories and canneries).

3.41 Approximately half the animals slaughtered in Victoria

are killed at metropolitan abattoirs.

3.42 The latest available Annual Report of the Animal

Health Group of the Department of Agriculture (1980-81) noted

the growth in the number of boning-rooms and cold-storage

facilities, to keep pace with the increasing number of

take-away food outlets. There is now less direct movement of

meat from abattoir to wholesale or retail butcher than in the

past.

(c) The regulation of the industry

3.43 The regulation of the meat industry in Victoria is in

the hands of the Victorian Abattoir and Meat Inspection

Authority, the Department of Agriculture and the Health

Commission.

56

The Victorian Abattoir and Meat Inspection Authority

3.44 The Authority is comprised of senior officers of the

Department of Agriculture, representatives of the Health

Commission and of municipal councils and industry

representatives. Its chief function is the licensing of

abattoirs and other meat establishments, having regard to the

requirements of the industry and the standards of construction

and equipment of the particular establishment. It is also

responsible for controlling the training of meat inspectors and

issuing them with a certificate of competency.

The Victorian Department of Agriculture

3.45 The Department is responsible for the day-to-day

running of the meat inspection service. Its officers inspect

almost all meat establishments and knackeries. In recent

months.those responsibilities have been extended to cover pet

meat wholesalers and retailers.

3.46 With the application of stricter standards since about

1975 the number of local abattoirs has risen from 74 to 85 but

the number of smaller slaughterhouses has dropped from 84 to 29.

3.47 The only meat establishments not falling within the

responsibilities of the Department are those covered by the

Health Commission.

The Victorian Health Commission

3.48 The Commission, which (under another name) used to be

generally responsible for meat inspection, retains control over

retail butchers' shops and certain smallgoods manufacturers,

canneries and other processors which produce goods only for

local consumption.

(d) The steps in producing meat for human consumption

3.49 As already noted, the larger part of the meat consumed

in Victoria comes from animals killed in export-registered

establishments. The procedures at those places have been

57

described in Chapter 3A. It is appropriate at this point to

set out the differences between the production of such meat

appropriate for export and the remainder of the process of

providing Victorians with meat for human consumption.

3.50 Most animals intended for slaughter in Victoria are

purchased at a saleyard, although some are bought in the

paddock. They are either purchased by the abattoir owner or

sent to a service abattoir by the purchaser.

3.51 Thus animals headed for the domestic market may

already be the property of a retailer before they are killed at

a service abattoir. More often they will be purchased after

slaughter by buyers for the big retailers - such as supermarkets - or sold to a meat wholesaler, from whom smaller

butchers, restaurant owners and other users will make their

purchases.

3.52 Whatever their ownership, the animals are brought to a

licensed abattoir (small abattoirs are officially known as

slaughterhouses). They are inspected by a meat inspector from

the Department of Agriculture on the day they are to be killed,

although the inspection is less thorough than in the case of

export animals. They are either passed, marked for separate

killing because there is some query about them, deferred until

their condition improves, or condemned. If condemned they are

shot and either burned or rendered down and used as fertilizer.

3.53 Sound animals are slaughtered and dressed under the

supervision of meat inspectors employed by the Department of

Agriculture. These inspectors are under the general control

of, and receive periodic visits from, veterinary officers of

the Department.

3.54 The ratio of inspectors to slaughtermen is not as high

as in the case of export-registered premises, and they are not

expected to pay the same meticulous attention to the appearance

58

of the carcass as occurs in export establishments. On the

other hand a similar search occurs for any evidence of disease,

and the inspectors do perform functions covering many aspects

of quality control which, if not done by them, would have to be

done by abattoir employees. Suspect animals are treated in the

same way as at export abattoirs.

3.55 At the end of the inspection process an inspector

places a stamp on the carcass to show that it has been passed

fit for human consumption. The carcasses are then, in most

cases, placed in a chiller before despatch to a wholesale

butcher, retail butcher, boning-room, cannery, smallgoods

factory or coldstore.

3.56 If the meat is to be boned, it may go direct to a

boning-room (which could be in the abattoir complex), or may be

sent to a coldstore first, to be thawed and boned out later.

After boning the meat will normally be packed in cartons and

frozen, before being purchased by a smallgoods factory or other

end user .

3.57 If the meat goes to a retail butcher (which for this

purpose includes a supermarket), or to any other meat premises

specifically exempted by the Minister from the operation of the

Act, it passes beyond the control of the Department of

Agriculture. If it goes to any other establishment, such as a

boning-room, which is subject to such control, it becomes the

responsibility of a visiting meat inspector, who checks the

quantities received by the establishment and the quantities in

store. He stamps the cartons with a stamp, incorporating his

own official number, to indicate that the meat in the carton

has been passed fit for human consumption. He does so on the

basis of his sighting of the Department's stamp on the

carcasses waiting attention each time he calls and on his rough

reconciliation of carcasses coming in from known licensed

premises and the cartons which he stamps as they are prepared for delivery.

59

3.58 similar considerations apply to periodic inspections

of canneries and smallgoods premises. As in the case of

boning-rooms, these are carried out at quite frequent, but

irregular, intervals and the inspector relies upon his sighting

of the Department's stamp on incoming meat, together with his

own observation of the conduct of the premises in question, to

justify his stamping of the outgoing cartons or other

containers as containing meat fit for human consumption.

3 . 5 9 inspection carried out by municipal health officers

completes the process of government regulation of meat

production. Butchers shops and other retailers of meat are

inspected for hygiene, and meat is taken for sampling in order

to ensure that it has not been contaminated by, for example,

excessive use of preservatives in those cases where such

additives are permitted at all.

60

CHAPTER 3C

THE MEAT INDUSTRY IN THE NORTHERN TERRITORY

(a) The organization and size of the industry

3.60 Meat is one of the Northern Territory's three most

important industries. 1.8m cattle are distributed between 317

properties. They fend for themselves in an open range system;

in the more inaccessible areas they are virtually in a wild

state.

3.61 In the southern half of the Territory, traditional

varieties predominate, but in the 'Top End 1 Brahman types do

much better. The southern cattle can, in good seasons, fatten

sufficiently to compete on the domestic market for the butchers'

trade. Northern cattle are mainly used to produce lean meat of

manufacturing quality for export and the home market.

3.62 Of the 378 000 cattle turned off in 1980-81, 55% were

shipped interstate or overseas as live cattle. Of the

remainder, 65% were slaughtered in southern abattoirs.

3.63 In addition to these cattle, there were 41 000

buffaloes slaughtered at NT abattoirs in the same period, and a

further 2 0 0 0 shot in the field but dressed at abattoirs for

export as game meat.

3.64 It is important to note in passing that NT cattle and

buffaloes are remarkably free of disease. Constant vigilance

is necessary to prevent the spread into the Territory of the

very serious diseases which are endemic in countries to the

near north of Australia. These include foot-and-mouth disease

and rinderpest, not to mention various types of insect

infestation which can injure cattle.

3.65 Brucellosis is confined to cattle and mainly to the

southern part of the Territory. Tuberculosis remains the worst problem for both cattle and buffaloes - particularly in the Top

End.

61

3.66 NT abattoirs also handle comparatively small numbers

of pigs and a few horses are killed for human consumption.

3.67 In 1980-81 82% of the total numbers of cattle

slaughtered in the Territory were killed in the three export

abattoirs at Alice Springs, Tennant Creek and Katherine. None

of the meat produced at export abattoirs is exported directly

from the Territory. A small proportion of it is sold in the

Territory, some of it goes to markets in other states and the

bulk of it is exported through Brisbane, Adelaide, Sydney or

Melbourne. Thus road transport is a particularly important

feature of the meat industry in the Territory.

3.68 Most meat consumed.in Darwin, Alice Springs and the

other main centres of population in the Territory, comes from

inter-state. This is necessarily true of all sheep products

and most pork. It also applies to most of the better cuts of

beef. It comes in by sea, road, rail (to Alice Springs) and

air .

(b) The regulation of the industry

Department of Primary Industry 3.69 Since 8 6 % of the cattle slaughtered in the Territory

are killed in export-licensed abattoirs, the main burden of

regulating the meat industry falls on the Commonwealth

department. Generally speaking the same control systems apply

as have been described for the State of Victoria. Differences

in administrative arrangements are dealt with in Chapter 4C

below.

NT Department of Primary Production

3.70 The NT Department which has responsibility for inspection of abattoirs is that of Primary Production. The

Animal Health Branch of that Department contains within it a

small meat inspection service.

62

3.71 That service operates under an Abattoirs and

Slaughtering Act which all witnesses agreed to be inadequate

and out of date. The Act is based on a system which identifies

the Territory's five main centres of population as "Licensed

Abattoirs Areas". It provides that, within these areas, meat

may only be sold for human consumption if it has been marked as

fit for human consumption under the laws of a State or in

accordance with the NT Abattoirs and Slaughtering Regulations.

This means, in effect, that it must have been slaughtered at a

licensed abattoir which is subject to inspection.

3.72 Outside the Licensed Abattoirs Areas it is not

unlawful to sell unmarked meat for human consumption - which

may have been killed and dressed in the field, or at a station

homestead or aboriginal settlement. It is however unlawful to

slaughter an animal in such circumstances unless it is to be

consumed by its owner or his family or employees.

3.73 There is provision for abattoirs to be licensed within

Licensed Abattoirs Areas but, since these are defined as the

township areas in each case, it is not surprising to find that

only one - the Angliss abattoirs in Darwin - is so located.

All the others are some distance from their respective towns or

are deep in the bush near their sources of supply.

3.74 It is open to the Department to object to the grant of

a licence to an abattoir owner if he "is not a fit and proper

person to hold the licence". This provision would be of little

assistance in the case of a company or where the person in

charge of the operation is someone other than the owner of the premises.

3.75 The Act and Regulations provide sufficient control

over the construction of abattoirs and their hygienic

operation. There is also power to enter butchers' shops and

cold-storage rooms for the purpose of checking markings on meat for human consumption and determining whether unmarked meat is

being held for sale. 63

3.76 Maximum penalties for breaches of these laws are

generally either $200 or $400.

Other NT authorities

3.77 In addition to the powers of the Department of Primary

Production under the Abattoirs and Slaughtering Act, the NT

Health Department has powers, under the Public Health Act, to

control the sale of meat in butchers' shops.

3.78 The Stock Squad of the Northern Territory Police also

has some relevant responsibilities in relation to illegal

slaughter. For the most part this refers to unauthorized

killing of stock belonging to other persons, but it also

includes the detection of persons killing feral animals without

observing the laws relating to pet food production.

3.79 Although there are no legal limitations on the

production of meat by aboriginal communities for their own use,

the Departments of Primary Production and Health do provide

advice on hygienic slaughtering and handling whenever it is

sought.

64

CHAPTER 4A

THE LEGAL REQUIREMENTS OF EXPORT MEAT

4.1 The first term of reference of the Royal Commission

asks whether relevant arrangements and procedures "are adequate

to ensure that all meat exported from Australia meets the

requirements prescribed by law".

4.2 It is therefore necessary to establish what the law

does in fact require of export meat. The answer, in summary

form, is

(a) preparation on approved premises,

(b) inspection by qualified persons,

(c) accurate trade description,

(d) freedom from disease,

(e) freedom from contamination or damage, and

( f) certain special requirements.

Each of these topics is dealt with briefly below.

4.3 These requirements are generally to be found in the

Exports (Meat) Regulations (EMRs) which depend for their

validity upon powers given by Sec 112 of the Customs Act 1901

and Sec 11 of the Commerce (Trade Descriptions) Act 1905.

(a) Preparation on approved premises

4.4 The export of meat is prohibited unless it has been

slaughtered, treated and stored only at premises duly

registered as export establishments. This requirement is the

keystone to the whole structure of controls over the export of

meat.

4.5 Not only does registration require that the premises

must be soundly constructed, to standards which make hygienic

handling practices easy to apply; it also provides the basis

for the supply of departmental officers who oversee and direct

all the steps necessary to ensure a sound export product.

4.6 Most of the serious cases of breaches of the law

regarding export meat, have had their origins in work done at

unregistered premises. The resulting product has then been

illegally inserted into the export stream at a boning-room,

smallgoods factory or coldstore. In a few cases it may have

gone straight to a container depot, wharf or airport.

4.7 There have also been some cases in which work has been

performed illegally, out-of-hours or otherwise in the absence

of inspectors, at registered premises; and the law may have

been broken with the connivance of government inspectors. But

most of these cases would also have involved the use of

premises for slaughtering which were not export-registered.

4.8 The requirement of registration of premises for the

export trade is set out in Reg 11, paras 1, 2 and 2A of the

EMRs. Other detailed provisions are in Regs 20-29 and the

Sixth Schedule.

(b) Inspection by qualified persons

4.9 The Regulations provide that the exportation of meat

is prohibited unless it has been "passed for export"

(Reg 12(1) (b) ) . Regs 30, 31 and 33(1) make it clear that the

animal concerned must be slaughtered and dressed under the

supervision of departmental officers and inspected and passed

fit for export by an officer.

(c) Accurate trade description

4.10 The exportation of meat is also prohibited unless an

accurate trade description is applied to it in the prescribed

manner (Regs 15-19). Subject to certain specific exceptions,

the description must be accurate as to

(i) the identity of the manufacturer or producer

(Reg 16 (3)) ,

(ii) the weight of the meat (Reg 16(1) (e)) ,

66

(iii) the type of meat, for example ox beef, heifer

beef, yearling beef, veal, lamb, ewe mutton,

pork, horse-meat (Reg 16(6)(b) and Third

Schedule), and

(iv) the quality (first, second or third) in the

case of bone-in meat (Regs 16(4) and 11(5)).

4.11 These are the required elements of the description.

Any other information supplied as part of the trade description,

such as the cut of meat, must be truthful (Reg 16(1)(b)).

(d) Freedom from disease

4.12 Although the word "disease" is widely defined in

Reg 5(1), the requirement that export meat shall be free of

disease tends to be taken for granted in the body of the

Regulations. It is not stated in specific terms, although the

Second Schedule refers, in paras 1 and 2, to the search for

evidence of disease in the course of inspections. Regs 61B and

63 provide for the handling of condemned animals and condemned

carcasses.

4.13 A health certificate is invariably required by an

exporter. Although the regulations specify a form of health

certificate (form 8 in the Fifth Schedule), some importing

countries require certificates in somewhat different terms.

Form 8 calls for a DPI veterinary officer to certify that the

meat -"has been examined and found by ante-mortem and post-mortem veterinary inspection, to be free from disease and suitable in every way for human consumption".

(e) Freedom from contamination or damage

4.14 The wide definition of "disease" referred to in the

previous section would be sufficient to cover some types of

damage or contamination. It refers to a "deviation from the

normal in the condition of .... any tissue, forming part of the

meat .... as renders the meat .... unsightly or unfit for human

consumption".

67

4.15 The Form 8 Health Certificate, referred to in the same

section, also calls for a statement that "no injurious

ingredient has been used" in the preparation of the meat.

4.16 The Second Schedule requires that meat, once passed

for export, shall not be exposed to direct or indirect contact

with other goods which could cause it to become contaminated

(para 5) .

4.17 Apart from these provisions, the requirement that meat

for export should not be contaminated is assumed by the

Regulations, and provided for by requirements relating to such

matters as the state of the premises, the personal hygiene of

workers, manner of transportation, adequacy of refrigeration

and use of approved chemicals only.

(f) Certain special requirements

4.18 In addition, it should be noted that there are special

requirements

. of some importing countries

. for canned goods, smallgoods and other meat products

. for game meat.

4.19 However, with one exception, none of these has come to

notice in the course of the Royal Commission's inquiries and so

there seems to be no point in detailing them. The one exception

related to the requirements of Muslim countries for halal

slaughter. This topic is dealt with in detail in Chapter 7A.

4.20 Laws relating to the export of pet foods will also

require some attention. This subject is dealt with in

Chapter 6 .

(g) Breaches of legal requirements

4.21 As will become apparent, there have been three main

ways in which the legal requirements set out above have been

breached.

68

4.22 In the first place there have been many instances of

false trade descriptions being used.

4.23 Secondly, large quantities of wholesome non-export

meat, suitable for consumption in Australia, have found their

way into the export trade. This product has not been

slaughtered, and may not have been prepared or packed, on

premises registered for export, and so will not have been

inspected by the proper inspectors. It will however have been

slaughtered and prepared on premises registered for domestic

production and inspected by inspectors appointed for that

purpose.

4.24 Thirdly, some meat has been exported which has not

been slaughtered under any sort of inspection in abattoirs

approved for any purpose. This meat, which could only lawfully

be sold as pet meat for use in Australia, has been exported in

breach of all or most of the legal requirements.

4.25 Thus it has not been prepared on approved premises or

inspected by qualified persons. The species of meat has been

falsely described and, in many cases, the meat has not been

free from disease or contamination.

69

.

■ ;··

■

.

1 > ? ■ ■ "..

S i , . · ■

■ s:

ss ,

s - : '

. ■

' i · ' · , *■>

■ ■

: ■ , ·

- S

-

'

CHAPTER 4B

THE LEGAL REQUIREMENTS OF MEAT FOR

HUMAN CONSUMPTION IN VICTORIA

4.26 The legal requirements of meat sold for human

consumption in Victoria are to be found, for the most part, in

the Abattoir and Meat Inspection Act 1973 and in Regulations

made under that Act.

4.27 They may be summarised by saying that such meat must

be from animals which have been -(a) killed and dressed on licensed premises,

(b) subject to inspection both before and after

slaughter, and

(c) found free from disease which could affect the meat.

The meat itself must be -(d) free from contamination and

(e) truthfully described when offered for sale.

(a) Preparation on licensed premises

4.28 The Act requires that most places which handle meat

have to be licensed. This applies to abattoirs, boning-rooms,

coldstores, canneries, smallgoods factories and places

receiving meat from interstate, classified as "meat inspection

depots". The exceptions to the general rule are retail

butchers' shops and certain specific establishments (mostly

engaged in the manufacture of meat products) designated by the

responsible Minister for exclusion from the coverage of the

Act, presumably on the grounds that they are more appropriate

for coverage under legislation dealing with public health.

4.29 With these exceptions, it is an offence to operate an

unlicensed meat establishment or to sell meat from an animal

not killed at a licensed establishment.

4.30 The purpose of licensing is, of course, to enable

checks to be made on the condition of the premises, the methods

70

of killing and preparing meat at those premises and the

suitability for human consumption of the meat produced or

handled.

(b) Inspection by qualified persons

4.31 The Act gives wide powers to inspectors employed by

the Department of Agriculture. It is an offence to sell meat

which has not been inspected and branded in accordance with the

Act. It is even an offence to remove meat from an abattoir

unless it has either been passed as fit for human consumption

or rendered unusable for such consumption.

4.32 It is part of the Regulations under the Act that stock

for human consumption must be inspected and passed by a meat

inspector, on the day on which it is to be slaughtered.

4.33 The main differences in inspection requirements

between meat for export and meat for domestic consumption in

Victoria are

(i) there is no requirement under State law that

a veterinary officer should be involved in

ante-mortem examinations or in the day-to-day

supervision of work at abattoirs, and

(ii) less attention is given to some detailed

inspection matters which largely relate to

the appearance of the product and are less

relevant when meat is likely to be consumed

soon after killing. Such questions include

the presence of grass seeds in sheep

carcasses and the touching together of

carcasses as they hang in a chiller - which

can produce marking.

(c) Freedom from disease

4.34 The Act defines "disease" as including any of a list

of diseases or conditions set out in a Schedule. The list can

be added to by the Minister. It is an offence to accept a

71

diseased animal at an abattoir, without special authority, and

inspectors can prohibit the slaughter of diseased animals or

condemn any meat or meat product which has any defect or

disease rendering it unfit for human consumption. Diseased

animals are, so far as possible, traced back to their points of

origin, so that appropriate steps can be taken to reduce the

incidence of disease in stock.

(d) Freedom from contamination or damage

4.35 The whole thrust of the Act and Regulations is to

ensure that only meat fit for human consumption reaches the

public. This covers both the initial condition of the meat

after preparation and anything which may happen to it later.

There are many detailed regulations dealing with the cleanliness

of premises, equipment and personnel and with the adoption of

hygienic processes. It is the duty of an inspector to condemn

any contaminated meat which cannot be safely cleansed.

(e) Accurate trade description

4.36 The passing-off of inferior quality meats, of the same

or different species, for superior quality and more valuable

meats would constitute a breach of various legislative

provisions, both Victorian and Commonwealth, which make it an

offence to employ false or misleading descriptions on consumer

items. Such provisions can be found in the Health Act (Vic)

1958, the Consumer Affairs Act (Vic) 1972 and the Trade

Practices Act (Commonwealth) 1974. The Crimes (Theft) Act

(Vic) 1973 also deals with the offence of obtaining a financial

advantage by deception.

72

CHAPTER 4C

THE LEGAL REQUIREMENTS OF MEAT FOR

HUMAN CONSUMPTION IN THE NORTHERN TERRITORY

(a) Within Licensed Abattoir Area

4.37 The chief requirement of meat for human consumption in

the Northern Territory is that, if it is to be sold in a

Licensed Abattoir Area (the townships of Darwin, Alice Springs,

Katherine, Nhulunbuy and Tennant Creek) it must have been

"marked as being fit for human consumption" in accordance with

relevant laws.

4.38 This means in effect that it must have been produced

in a licensed abattoir, and should have been the subject of

inspection by a meat inspector. Only an inspector can lawfully

mark meat.

4.39 There is a qualification to this general provision in

the case of buffalo-meat, which must have been "slaughtered in

pursuance of a licence".

4.40 In practice this means that it must have been either

slaughtered at an abattoir approved for the purpose, or brought

to such an abattoir for butchering within about an hour of

being shot.

(b) Outside Licensed Abattoir Area

4.41 There are no legal requirements which have to be met

in the case where an owner has his own stock slaughtered for

consumption by his family or his employees. Apart from this it

is an offence to slaughter stock for human consumption except

at a licensed abattoir.

(c) Storage and transportation

4.42 The Abattoirs and Slaughtering Regulations contain

some provisions relating to the storage of meat at licensed

abattoirs. There are no provisions about the storage of meat

73

at independent coldstores or about the transportation of meat.

There is no control over the importation of meat into the

Territory. It must however comply with the requirement set out

in section (a) above.

(d) Freedom from Contamination

4.43 The Food and Drugs Act contains general provisions

concerning the protection of food from contamination. Meat is

of course included in this general coverage.

(e) Accurate trade description

4.44 Meat products must, like all other goods for sale, not

be in breach of the Trade Practices Act (Commonwealth) 1974 or

of NT laws relating to false and misleading trade descriptions.

73a

CHAPTER 5A

ADMINISTRATIVE ARRANGEMENTS AND PROCEDURES

CONCERNING THE EXPORT OF MEAT

5.1 A great deal of evidence has been led, and many

opinions have been offered, concerning administrative

arrangements designed to ensure that export meat complies with

relevant laws.

5.2 A study of this subject involves consideration of the

workings of the meat inspection service and other Commonwealth

bodies which have a role in the same area. It also involves a

detailed examination of regulations and procedures which govern

the various stages of production and movement of export meat.

5.3 The position is considerably complicated by the need

to examine three broad sets of arrangements - those in force

before the substitution scandal broke, those introduced as a

result of that scandal, and those now proposed for the future.

(a) The Commonwealth inspection service

(i) DPI organization - proposed changes

5.4 Throughout the period covered by this Commission's

inquiries, the inspection of meat for export has been the

responsibility of the Department of Primary Industry (although

it was, for one brief period, called the Department of

Agriculture). Although the situation is now changing, the

responsibility within the DPI has, from 1975 until now, been

carried by the Bureau of Animal Health (BAH).

5.5 In 1975, the Veterinary Public Health Branch of the

Department, the branch responsible for the export meat

inspection service, was transferred to the Bureau of Animal

Health. It carried with it a staff of about 1900 meat

inspectors and veterinary officers. It became one of five

sections of the BAH. The Bureau had been established in 1974

as a technical unit in the field of animal and poultry health,

designed to co-ordinate and provide a service to Commonwealth

and State organizations, while not directly formulating

policies. The other four sections of the Bureau consisted of

about 40 staff, mainly scientists. These sections operated

with a degree of delegation and independence seen as fitting

for high level scientists and administrators, and the operation

of the Veterinary Public Health Branch was seen in the same

light. In turn, the Bureau itself operated independently from

the main stream of Departmental activities. There can be no

doubt that the Director, Dr R.W. Gee, a distinguished

veterinary scientist, was an appropriate person to direct the

activities of the advisory technical unit contemplated when the

Bureau was first established. However, for Dr Gee and the

Bureau to have thrust upon them the responsibility for a meat

inspection service of this size was to saddle them with a task

of an. entirely different nature.

5.6 It is significant that the first report of the BAH,

covering the years 1974-78 listed 20 functions for the Bureau.

Of those directly relevant for present purposes, No. 17 was

"Provide professional advice on Australian standards relating to export meat and poultry inspection", and No. 20 was

"Pending the outcome of negotiations aimed at introducing a single meat inspection service in Australia, the Bureau would be responsible for all Australian government functions relating to

operational meat inspection."

5.7 It is no doubt in recognition of the fact that the

meat inspection service has sat rather awkwardly and

impermanently within the BAH that the Department has now

established a separate Export Inspection Service, divorced from

the Bureau and headed by administrators rather than

professional veterinary officers.

75

(ii) The perceived role of meat inspection -protection of health or detection of malpractice

5.8 The importance of US Department of Agriculture

requirements to Australian meat inspection has been referred to

in para 1.10 above and is also dealt with at paras 5.27-29

below and elsewhere in this report. One aspect of those USDA

requirements is the emphasis on veterinary presence at plant

level. This, together with the placement of the inspection

service within the BAH, resulted in the inspection service

being strongly oriented towards veterinary matters. In

consequence it concentrated on works hygiene and animal

disease. It undertook little responsibility for quality

control. It did not see itself as responsible for out-of-hours

oversight of meatworks or the detection of malpractices. The

professional training of veterinarians is significant in areas

of health and disease prevention, but has no relevance to the

broader aspects of administering a meat inspection service

which must deal with problems of malpractice in the industry.

5.9 The notion that wrongdoing was a matter for the

police, if it was sufficiently serious to worry about at all,

lies at the heart of most of the weaknesses in the inspection

system which have come to light in recent months.

5.10 Before August 1981 the BAH Compliance and Evaluation

Unit was staffed by two principal veterinary officers reporting

directly to the Senior Assistant Director, Veterinary Public

Health Branch. This unit received monthly reports by senior

veterinary officers on all registered export establishments

listed for export to the United States, reports compiled by

meatworks standards officers, reports from overseas reviewing

veterinarians and reports of trade complaints from, and product

rejections by, importing countries. However, as events have

shown, this unit was not effective in securing continued

general observance of regulations by operators and was not

effective in detecting breaches of regulations by operators.

76

5.11 Although DPI had available to its Compliance and

Evaluation Unit the sources of information about the operations

of registered export establishments which I have just

mentioned, there was no system in the Department whereby

inspection staff at an establishment could be made aware of the

past history of operations at that establishment and, where

appropriate, told that the establishment to which they were

posted was one to which special attention should be given for

one reason or another. Of course from time to time arrangements

were made to inform inspection staff of some matters that had

occurred at particular establishments, but there appears to

have been no systematic early warning system whereby inspection

staff could be alerted to the possibility of trouble occurring before it occurred in fact.

5.12 As I have said, the DPI meat inspection service did

not see itself as being an investigative law enforcement

agency. Where malpractice was suspected, matters were referred

to the Commonwealth Police (later the Australian Federal

Police) for investigation. However, this system proved

ineffective in detecting malpractice or deterring its

repetition.

5.13 Given the attitude of the Department to its role in

the meat industry, this is perhaps hardly surprising. But

apart from that perception on the part of the Department, there

was what DPI has described in its final submission as an

"inadequate legislative base". I refer elsewhere to some

particular deficiencies in the legislation and I need not

repeat them here. Foremost among those deficiencies was the

ridiculously low level of penalties prescribed for serious

breaches of regulations.

5.14 Given the level of penalties prescribed it is not

surprising that Commonwealth Police tended to regard suspected

breaches of BMRs referred to the force by DPI as being matters

of comparatively low priority. This, coupled with a lack of

77

technical expertise, may largely explain the low level of

success the Commonwealth Police force, and more recently the

AFP, had in detecting malpractice before the discovery of

horse-meat substitution.

5.15 Relations between DPI and Commonwealth Police

sometimes showed a lack of co-operation and understanding which

cannot have assisted the investigation of allegations of

malpractice. Thus, in 1977 police sought to be authorized to

act as officers under the EMRs. Legal opinion was sought on

this question and the Department was advised that, as the law

stood, it was not appropriate to appoint police officers in

this way. Yet the Department took no further step in the

matter whether by pressing for changes to regulations or

assigning properly authorized officers to assist the police in

their enquiries. Some years later the police sought to have veterinary officers and inspectors nominated by the Department

as persons to whom they could look for assistance at any time

in the course of investigations into alleged malpractice in the

meat industry. Some arrangements were made in the

Victoria-Tasmania region but despite the fact that this was

reported to the central office of DPI no step was taken to

introduce such an obviously sensible arrangement elsewhere.

5.16 DPI has now established an Investigations Branch

reporting directly to the Director of the Export Inspection

Service. This Branch consists of a Compliance Evaluation Unit

and an Investigations Unit.

5.17 It is said that the Compliance and Evaluation Unit has

a technical audit role together with a responsibility for

continuing evaluation of operational procedures aimed at

improved performance, whereas the Investigations Unit is to

investigate allegations of malpractice relating both to

inspection staff and industry.

78

5.18 I regard the level of performance of both these units

as being of critical importance for the future well-being of

the export meat industry.

5.19 The precise way in which these units are established

and function is a matter that will have to be determined in

part by a process of trial and error. However, the principles

that must underlie the operation of these units are, I think,

clear.

5.20 Unless the industry is to be burdened by ever-rising

costs, operators must take increased responsibility to ensure

that operations at their premises comply with the requirements

which are laid down from time to time. As industry takes up

that responsibility, less emphasis can be placed on having an

inspector on the spot all the time to ensure that rules and

regulations are being observed. Continued compliance by

industry should be ensured by frequent, random, unannounced

checks by compliance staff. Their efforts must be visible,

active and demonstrably efficient. The system must be such that operators will know that if they do engage in malpractice

there is a very high risk that they will be detected in that

malpractice and that such malpractice will be visited by heavy

penalties which may well include loss of their licence to

continue in the industry. The sooner such a system can be

implemented, the sooner expensive and sometimes cumbersome

physical security arrangements which I describe later can be

dismantled, or at least scaled down.

5.21 Clearly, it is essential that better early warning

systems be devised which will enable both inspection staff

assigned to works and compliance staff to identify works likely

to require special attention in particular respects. It may be

that the development of so-called 'risk profiles' will assist

in this regard. However, whether that is so or not, it is

clear that there is little value in sending an inspector to an

establishment where the operator has been suspected of

79

malpractice without telling the inspector to pay particular

attention to matters which have been the cause of suspicion in

the past. It is also obvious that compliance staff should make

more frequent visits to suspect establishments than they should

to those with an unblemished record in the industry over many

years.

5.22 The establishment of an Investigations Unit within DPI

may be seen as usurping the traditional function of the police

force. Defining the relationship between that unit and the

police force is essential to ensure the adequate investigation

of malpractice and effective prosecution of wrongdoers.

Clearly investigative skills are necessary to such a unit. But

there will be investigations which, because of their complexity

or risk, will require resources greater than can be provided by

the unit. On those occasions the unit will obviously look to

the police for assistance.

5.23 Just where the line should be drawn between the

functions of the Investigations Unit and the functions of the

police force is a matter that will have to be worked out in the

future. Much will depend upon the numbers and types of persons

that are to be recruited to the Investigations Unit. I have no

doubt that that unit must include persons with proved

investigative skills, but equally clearly it will not be

possible for that unit to have available all the resources that

are available to the Australian Federal Police. The Department

has begun discussion with AFP on these matters.

(iii) Staffing levels and mobility

5.24 It has not been suggested that any of the problems of

export meat inspection have been brought about by staff

shortages.

5.25 In fact, although numbers have declined a little since

the peak production period of 1978, the meat inspection service

is manned by some 180 veterinary officers and 1650 inspectors.

80

These have been organized on a regional basis, with the head

office of the Bureau in Canberra providing policy guidelines

and co-ordination. Within the regions the regional director

has had nominal control over the service, but the day-to-day

running has been left to the Veterinary Officer-in-charge.

5.26 It will be seen from the numbers quoted that the

Commonwealth Service is very much dominated by veterinary

officers. It is in fact the largest employer of the profession

in Australia.

5.27 This came about in the early 1970s when a fresh

emphasis on the US market led to the imposition of US standards

on all abattoirs which hoped to produce meat for USA. These

standards came to be accepted, for most practical purposes, for

all export establishments.

5.28 I should say in passing that it has been alleged by a

number of witnesses that the requirements insisted upon by the

US Department of Agriculture for US registration are higher

than those imposed in USA - they are merely a device for

limiting the quantities of Australian meat available for the US

market. I have been left with the general impression that US

meatworks approved by USDA (as distinct from those supervised

by state or municipal authorities) are of a similar structural

standard to that which the Department requires in Australia,

but manning levels for inspectors are distinctly higher in

Australia.

5.29 Whatever the truth of those matters, the USDA did

insist that every abattoir registered for export to USA must be

supervised by a full-time veterinary officer. It also required

more meticulous trimming and a more detailed examination of

certain glands and of viscera than was usual in the case of

meat for domestic consumption in Australia. This considerably

increased the number of meat inspectors required on the chain. In fact witnesses have spoken of instances such as an abattoir

81

in Sydney which moved from 27 inspectors to 6 when it

surrendered its export registration - with no change in

throughput - and another in Melbourne which went from 13 to 28

when it obtained export status.

5.30 I believe that, given the comparative freedom from

disease of Australian live-stock, there is scope for

negotiating with the USDA a reduction in numbers of inspectors

required at US-listed abattoirs. (The question of veterinary

officers is dealt with below).

5.31 On the other hand it must be remembered that there are

seasonal factors which create great difficulties for the

Commonwealth service and are likely to lead to shortages at

some establishments at some times of the year and excessive

numbers of inspectors at other places and other times. This is

almost impossible to avoid, and can lead to practices such as

'lapping' which have grown up in the meat inspection service

and are to be found in various abattoirs around Australia.

5.32 This practice involves a proportion of the inspectors

from the killing floor resting in their amenities room while

others take their turn on the chain. Regular changeovers can

produce the result that each inspector only works two-thirds or

three-quarters of the time.

5.33 Attempts have been made to justify this practice on

the alternative bases of seasonal over-staffing and of

excessive fatigue caused by a high throughput of animals.

5.34 I do not find either argument convincing, although I

can imagine days of low production - not expected to last long

enough to justify a change in staffing levels - when some time-

off could sensibly be allowed.

5.35 On the question of mobility of inspectors I have

already noted the inevitable incidence of seasonal movements,

82

but even this could be reduced by encouraging some inspectors

to reside in those towns where the abattoir kills for a large

part of the year.

5.36 There are two possible views of the practices which

have grown up of rotating most inspectors at NT abattoirs every

six weeks and most capital city inspectors every six months.

5.37 The Meat Inspectors Association wants such moves so

that both the advantages (such as overtime earnings) and the

disadvantages (such as monotonous work or long distances to

travel) can be evenly spread amongst its members.

5.38 The Department has been prepared to accede to this

approach, partly as a result of industrial pressure and partly

to reduce the risk of too-cosy relationships being built up

between managements and inspectors.

5.39 There is some merit in these ideas; but I believe

such considerations are outweighed by the disruptive effect on

the industry of constant changes in inspection personnel, with

new inspectors bringing different judgments to bear when

applying regulations, and not fully understanding the local

scene or knowing how best to handle local personalities. In my

view nothing would be lost, and some real advantages would be

gained, by lengthening the tours of duty at each establishment

at least to three months for NT rosters and twelve months in

the case of capital city rosters.

(iv) Administration from Canberra

5.40 The inspection service has obviously suffered over the

years from inadequate delineation of responsibilities, and poor

communications, between Canberra and the various regions. This

is a disease endemic in relations between head offices and

their branch offices when distances are so great.

83

5.41 Its symptoms are a general lack of understanding, at

each end, of the other person's problems, an unwillingness at

the branch level to accept responsibility for difficult

decisions, a reluctance to take the trouble to inform head

office of those problems which are dealt with locally, long and

frustrating delays in correspondence, and a tendency to conduct

much important business by telephone without making any (or any

adequate) record of decisions reached.

5.42 The BAH seems to have suffered markedly from all these

disabilities. (See Appendix E for some earlier findings of

mine as to the state of the Bureau's files).

5.43 Each organ of government must be left to find its own

solutions to such problems, adapted to its special needs. I

would however suggest that, in the case of meat inspection, the

best solution would be to allow more autonomy at the works

level and the regional level, while keeping head office

informed of all decisions made, so that an overview can be

maintained and policy guidelines supplied as required.

Generally speaking each level of authority should be prepared

to back the judgment of the next level down unless it seems

clearly to have been in error.

5.44 Leaving more matters to be decided centrally might

make for greater uniformity of decisions, but might also lead

to bad decisions, because not all the facts are fully conveyed,

and it will certainly lead to delays in decision-making. It

will also lead to feelings of frustration and inadequacy at the

inspection place and in regional offices.

(v) Relations with state services

5.45 Generally speaking, relations between the Commonwealth

and Victorian meat inspection services have been quite good at

a personal level. The Veterinary Officer-in-charge of the

Commonwealth service, in Victoria has been on friendly terms

with his State counterpart. And, at least in recent years,

84

there appear to have been quite good personal relations between

Victorian and Commonwealth inspectors on the job. I am not in

a position to judge the situation accurately in other States,

but I suspect that co-operation is at its best in Victoria.

5.46 From a formal organizational viewpoint, relations in

all States have been dismally bad. There have been many

instances of failure to pass helpful information speedily or at

all. The Commonwealth Meat Inspectors Association has quite

often threatened industrial action to prevent sensible use of

state inspectors at export establishments. Industry has been

forced to construct separate amenities for Commonwealth and

State inspectors.

5.47 These matters have already been detailed in the report

of the Kelly Committee of Inquiry, 1980 , and there is no need

for me to elaborate further. Suffice it to say that there was

little sign of any improvement after that Report was made

public and all my inquiries have only tended to confirm the

findings of that Committee.

(vi) Dual or unified system

5.48 The Kelly Committee, like the Bland Committee before

it, found the problem of overlapping State and Federal

inspection systems to be intractable. Everyone was agreed that

the present 'dual' or 'tandem' system was quite

unsatisfactory. But considerations of constitutional power,

foreign government requirements, States' rights, government

funding and union pressures - all pulling in differing

directions - seemed to make it impossible to find a viable

alternative.

5.49 However a good deal has happened in the last twelve

months, and there is now a climate favourable to change. The

choice now seems to lie between, on the one hand, a simple

Commonwealth take-over of State meat inspection functions and,

on the other, the creation of a joint Commonwealth/State

85

authority, either to operate throughout Australia or to be

formed separately in any State which wishes to adopt such an approach.

5.50 Before saying something about this choice I should make

it clear that I am conscious of the limitations of my terms of

reference. I have not been expressly asked, as the Kelly

Committee and before it the Bland Committee were, to consider

the subject of a unified inspection service. Nor do I have any

right to make recommendations about the systems of inspection

of meat for domestic consumption in States other than Victoria.

5.51 On the other hand I am required by each of my

Commissions to consider the "administrative arrangements and

procedures for the supervision of the handling of meat" and to

make appropriate recommendations for desirable administrative

or legislative changes.

5.52 In this situation it would be difficult, and somewhat

artificial, to avoid comment on an issue which is central to

the arguments of most sectors of the industry whenever the

question of meat inspection arises.

5.53 It is true that a good deal of the discussion of a

unified inspection system revolves around the question of fees.

There are many in the industry who would not mind what system or

systems prevailed provided there was no fee charged or, at most,

a moderate, uniform fee. Much of the strongest opposition to

the dual system arose when meatworks found themselves paying two

lots of fees for meat diverted from export works to the local

trade. Pig producers object to paying export levies for

slaughtering at export works, when very little pig-meat is

exported.

5.54 However there is also much opposition to the dual

system based on arguments of logic and convenience. The

86

consequences of the fragmented nature of current meat

inspection are considered in the following paragraphs.

5.55 In the first place, there is a lack of co-ordinated

control over pet food, including monitoring of its extensive

interstate movement, uniform dyeing and packaging requirements,

and comprehensive powers over the sale and distribution and the

recording of sales of pet food.

5.56 In consequence there is a real risk that pet food may

again find its way into meat destined for export. This

possibility, with its potentially disastrous consequences for

the export industry, constitutes a strong argument in favour of

a unified system.

5.57 . Another important consideration is the absence of

co-ordinated control over 'local' meat being boned-out or

relidded as export meat.

5.58 This became a prevalent malpractice in some areas of

the industry. Often it was not viewed as a malpractice of any

great consequence, probably because it was thought that meat

inspected and packed as fit to be eaten by Australians was fit

to be eaten by residents of importing countries. However, the

evidence showed that the description 'local' meat may cover a

variety of meats. Local operators who supply exporters with

cartoned meat for relidding for export, knowing that it will

not be inspected by DPI inspectors before export, are not

always fussy about what they put in the carton. And the meat

may well have been packed out-of-hours , in the absence of state

inspectors. Further, the encouragement given by operators to

DPI inspectors to turn a blind eye to this practice can be a

starting point for the corruption of those inspectors.

5.59 Finally, there has in the past been a distinct lack of

co-ordination in the investigation and detection of malpractices

87

relating to export meat. A single meat inspection service

should go a long way towards overcoming this problem also.

5.60 For these reasons alone, a recommendation to establish

a single inspection service can be made with confidence. But

in considering more detailed recommendations as to how a single

inspection service should be brought into being, I am

immediately confronted by the limitations in my terms of

reference, already referred to, and thus in the evidence

presented to the Commission.

5.61 One illustration of this problem should suffice. Some

of the State meat inspection services supported the concept of

the single inspection service, but claimed that this should not

be handed over to DPI but should be retained by the States. In

support of that claim they asserted that the State systems were

superior to that of DPI, more economical, more effeccively

staffed, with better morale and so forth. However, except in

the cases of Victoria and the Northern Territory, the Royal

Commission had no power to enquire into State meat inspection

services, nor to establish whether or not such claims were

justified.

5.62 In due course, the DPI in a final submission asserted

that the criticisms of the DPI inspection service in the past

would be overcome by the development of a completely

restructured single inspection service established by the

Commonwealth. This final submission in turn raised a number of

problems relating to Federal/State relationships, the

implementing of necessary legislation, industrial relations,

and the financing of such a scheme. All of these matters are

clearly beyond the terms of reference of this Royal Commission.

5.63 It would seem therefore that, strictly speaking, I

should recommend, as others have done before me, that there be

a single meat inspection service. But I should not make the

attempt that some of those others have, to recommend ways and

88

means. However, partly in deference to those many persons who

went to the trouble to make submissions to the Royal Commission

in this area, I believe it is appropriate that I record my

views about some aspects of this question which came to the

notice of the Royal Commission.

5.64 One question central to the debate was who should

control and conduct a single inspection service. There were a

variety of views, including -(a) Commonwealth control, exercised through the

Department responsible to the Minister, but

overseen by a Council which would include State

representatives and which would have direct access

to the Minister;

(b) control by a statutory corporation which would

include Commonwealth, State, industry and producer

representatives;

(c) control by the States, which would have the

Commonwealth responsibilities for export meat

delegated to them, but work under overall

Commonwealth supervision so far as export meat was

concerned; and

(d) control at State level by a joint meat inspection

service, consisting of an independent chairman and

a representative of both the Commonwealth and the

State, the Commonwealth retaining responsibility

for export meat, the State for local meat.

5.65 Much of the debate on the question of control related

to the past performance and cost-effectiveness of the various

established meat inspection bodies. In this connexion it must

be remembered that the DPI's own assessment of its past

performance as expressed in its final submission to the Royal

Commission was that "the DPI inspection service has proved to

be inefficient, costly, poorly managed, overstaffed and in some

respects corrupt." The Hon Peter Nixon, Minister for Primary

Industry, agreed with this assessment. So do I.

89

5.66 However, in adopting this criticism of the state of

the DPI inspection service as at the time of the setting up of

the Royal Commission, it should not be overlooked that, in the

past, much constructive effort has been injected into the

export meat industry by the establishment of an inspection

service acceptable to importing countries. No doubt many

persons have made significant contributions to this effort.

This must have been particularly so when the USDA requirements

were first imposed on the industry.

5.67 DPI has now prepared a plan for a radically new single

inspection system. There is scepticism in some quarters as to

whether the Department which allowed its inspection service to

fall into the state described can be relied upon to rebuild a

service which will not in time suffer the same fate. Without

doubting the ability and determination of those DPI officers

responsible for devising the new plan, I must say that I have

some doubts on this point.

5.68 As I shall indicate, in Chapter 5B below, the State

inspection service in Victoria, when compared to its DPI

counterpart, appears superior in management and efficiency, and

less prone to corruption. My impression is that the same could

be said of New South Wales and Queensland. This can be no more

than a matter of impression having regard to the absence of any

direct enquiry by the Royal Commission into the meat inspection

services in those States, but it is a clear impression

nonetheless. I had less opportunity to form a view on this

aspect in Western Australia, and none in Tasmania.

South Australia is under DPI control. The Northern Territory

service is small and operates in special circumstances. I

believe that the Territory should endeavour to establish a

joint system appropriate to its particular circumstances.

5.69 If my view about Victoria, and my impressions about

New South w ales and Queensland, are correct, clearly the

virtues of those services should not be lost or swamped in any

90

reorganization of meat inspection. I believe there are a

number of factors which have led to the superiority of these

State services. In the case of Victoria, I refer to them in

paras 5.359-362. The point to be made here is that, in any

single meat inspection service that is established, there

should be heavy emphasis upon day-to-day control being

exercised at State or regional level.

5.70 One vital question in any debate about a unified meat

inspection system is who is going to pay for it? Should the

industry pay the cost or should it be a charge on public

funds? Should a distinction be drawn in this regard between

the export industry and the local industry? Should exporters

bear all the costs of meat inspected for export? If not, is

the current recovery of about 25% of these costs by the

Commonwealth fair, or should the recovery be greater or less?

Should exporters bear any of the cost of meat inspected for

export, but which goes back to the local market, and if so what

proportion? Are the States justified in charging a

re-inspection fee on such meat where there is in fact no

re-inspection but merely re-stamping?

5.71 The debate on these questions is complicated by

differing approaches by several States and continuing

differences of view between producers, exporters, consumers and

government authorities. Such matters are well beyond my terms

of reference, and I only mention them for the sake of

completeness in identifying issues.

5.72 The single inspection service proposal has been

debated for years without resolution. Recently, New South Wales

has agreed in principle to hand over meat inspection services

to the Commonwealth. In part at least this is based on the view

that the new DPI plan can be effectively implemented. At this

stage, that plan contains many problems; some of them are

serious problems, as yet a long way from final solution. They

may be solved, but I doubt if they will be solved quickly.

91

Queensland and Western Australia, whilst willing to review the

position, are still committed to State inspection and delegation

of Commonwealth powers. Victoria has shown a willingness to

seek a solution through a joint authority. However, its final

submission would indicate a great reluctance to hand over

effective control of the system to the Commonwealth, in the

light of the evidence given at the Royal Commission.

5.73 I think it is probably still unrealistic to expect

that any final Australia-wide plan for a single inspection

service can be formulated which has any prospect of universal

acceptance by the Commonwealth, the States and the Territories,

let alone the industry and the unions concerned.

5.74 I believe the best that can be presently achieved is a

commitment by the States to the need for a single service, and

the establishment of interim arrangements which represent a

move towards, and which leave the way open for, a single

service under single control. In any such interim

arrangements, the States should have an involvement equal to

that of the Commonwealth.

5.75 What I have in mind is a joint meat inspection

authority in most States, along the lines developed in recent

discussions between the Commonwealth and Victoria. The

principal features of the proposed authority, identified in

those discussions, are:

- the authority will have a Board of Management

consisting of an independent Chairman, the

Commonwealth Veterinary Officer-in-charge and the

Victorian Principal Veterinary Officer;

- the role of the authority will be to direct

day-to-day meat inspection operations in Victoria

and to bring about an efficient meat inspection

service covering both export and local production;

92

- the Commonwealth will retain responsibility for

standards of export meat production and licencing

of premises; Victoria will retain legal

responsibility for the oversight of local meat

production and registration of premises;

- staff will be seconded to, and paid through, the

joint authority, with superannuation and similar

rights being preserved by the respective

governments;

- inspection staff will move towards complete

interchangeability; and

- a single fee will be introduced for the inspection

of all stock slaughtered.

5.76 I believe such an interim arrangement would have these

advantages -(a) the Commonwealth would retain, through DPI, control

over export meat;

(b) it would allow DPI the time to pursue those many

reforms of its own system proposed in its final

submission which do not depend upon the existence of a

single inspection service, such as new regulations,

the development of trade description standards for

export meat, a decentralised management service, the

re-training of staff, and the reorganization of the

manning schedules in meatworks; I consider that DPI

needs a breathing space to put its house in order

before it could properly be accepted as a body

appropriate to have control of a single inspection

service;

(c) it would allow for the development of an Australian

domestic standard to which each State and the

Commonwealth could contribute through the Australian

Agricultural Council or some other appropriate body;

(d) it would compel a degree of co-operation between the

States and the Commonwealth on a day-to-day basis;

this may give impetus to the solution of many

93

problems, such as standard conditions of employment

for all meat inspectors, which might otherwise involve

years of discussion;

(e) it would provide a framework for the sharing of

knowledge about what is happening in the meat

industry, not only about meat for human consumption,

but pet food also; this shared knowledge would lead

to more effective joint efforts to ensure compliance

with the law and a better integration with police

authorities to that end;

(f) it would permit the continuation, on a joint basis, of

disease trace-back, a function now mainly carried out

by the States; this function is important, and its

continuing success may have an important bearing on

how the role and structure of a meat inspection

service is viewed some years hence;

(g) it would leave intact those aspects of the existing

State services which are seen as vigorous and

competent;

(h) it would facilitate the introduction of a single and

uniform fee collection system (one possible variation

of the system proposed would be a system based on the

number of inspectors required); and

(i) most important, it may lead in time to a fully

integrated single meat inspection service.

5.77 I am conscious that at times, during the hearings of

the Commission, there was a feeling of optimism that this Royal

Commission would be the vehicle which would provide a permanent

solution to the whole problem of the single inspection

service. I am conscious also that the suggestion I have made

for an interim arrangement for the State of Victoria will fall

far short of some people's expectations. However, it is

precisely because all past attempts to find a solution to this

problem have completely failed that I have reached this

conclusion. I am inclined to think that those earlier schemes

failed to gain acceptance, even though they were logical and

94

sensible, because they tried to achieve too much too quickly.

It is not possible to change long-standing practices and

overcome deep-seated prejudices just by making recommendations

or obtaining promises of better performance. It is, however,

possible to hope that, with the effluxion of time and with

increasing goodwill, practical improvements will emerge and

will lead to the final desired result.

5.78 Before leaving this topic I should make it clear that I

have not overlooked the most hopeful conciliatory sign of the

last few years, namely the expressed New South Wales

willingness to accept Commonwealth control. However I cannot

disregard the fact that the New South Wales decision was taken

in the light of a pressing financial problem peculiar to that

State, namely the failure to collect State re-inspection fees.

Further, the new DPI plan, to be really effective, would

require acceptance by all the States. I see little sign of

enthusiasm for such acceptance in Queensland, Victoria or

Western Australia. Nor can the attitude of those States be

said to be short-sighted or parochial. They can point to quite

valid reasons for their concerns.

5.79 As I have said, there is a compelling case for a single

inspection service; there is no simple solution for its

achievement. My suggestion for an interim arrangement is not

intended to delay or defeat that end, but rather to enhance its prospect of ultimate achievement. I am encouraged in my

approach by the evidence relating to the efforts made in

Victoria to achieve a joint inspection authority. They have

seemed to me to be the most realistic and hopeful steps yet

taken in this very difficult area.

(b) Veterinary Officers and meat inspectors

(i) Role of the veterinary officer

5.80 It has been made clear in evidence that veterinary

officers play a major role in some meat inspection services

95

overseas. This is particularly true of some European countries

such as Switzerland and West Germany. It is also true of USA.

5.81 However it does not necessarily follow that the same

level of involvement is required in Australia, bearing in mind

the generally healthy state of our cattle, sheep and pigs.

5.82 It is clear that a high number of veterinary officers

was forced upon the DPI when there was a major switch from UK

to US markets in the early '70s. The USDA insisted (among

other things) upon a high level of veterinary involvement,

before it would list Australian abattoirs and other meatworks

for purposes of exporting to USA.

5.83 Since private practice was lucrative at that time and

it was hard to find recruits in Australia, a large number of

officers had to be attracted from overseas. Even this was not

easy, and the Bureau of Animal Health was forced to take some

officers whose qualifications would not have been recognized

for all purposes in Australia. Some of them also had language

difficulties.

5.84 Officers such as these, and others coming straight

from University, must have found it difficult to assert

authority over experienced meat inspectors. So, although the

veterinary officer was theoretically in charge of all aspects

of inspection at each abattoir, many preferred to confine

themselves to what they saw as their professional duties,

leaving control of the day-to-day work of meat inspection to

the supervising inspector.

5.85 The main professional tasks of the veterinary officer

are to conduct an ante-mortem inspection of all stock, looking

for signs of disease, and to adjudicate on all animals put

aside for closer examination, as a result either of that

ante-mortem inspection or of something found after the animal

96

has been slaughtered. In addition, the veterinary officer is

responsible for obtaining samples from condemned animals for

pathological laboratory testing.

5.86 One obvious concern about such work is that it offers

little professional challenge to a veterinary officer. Some

officers can obtain satisfaction from the other administrative

aspects of their duties - but if they spend too much time on

those, there is little for the supervising meat inspector to

do, and his satisfaction with his job is impaired.

5.87 One step which can be taken is to encourage veterinary

officers to spend time on research work which has either local

or general significance. Regular seminars, involving the

preparation of papers, can assist in maintaining morale and

interest in the job. But research, in many cases, requires

laboratory facilities which may not be available, or capable of

being supplied at reasonable cost, at or near the veterinary

officer's place of work. And seminars involve travel expenses

and the employment of relieving veterinary officers in many cases. It is for reasons such as these that initiatives along

these lines have not had much impact. Nevertheless it is

important that such steps be taken, in consultation with

relevant professional bodies, to maintain the morale and

professional interest of veterinary officers - particularly

those in remote areas.

5.88 It would also be desirable gradually to reduce, so far

as possible, the number of veterinary officers in the field.

In this way it should be possible to ensure that those who

remain are fully extended - perhaps by having responsibility

for more establishments than at present. (This will not, of

course, be possible in remote country areas). Present staffing

levels are largely dictated by the USDA and efforts should be

made to persuade that Department to agree to a somewhat reduced

veterinary presence. In practice there should be no risk in

such a reduction, given the low level of animal disease in

Australia.

97

5.89 The contrast between the levels of veterinary

involvement in the state inspection services, and that required

for export premises, is incapable of justification on logical

grounds. And I am satisfied that, while the state services may

be a little understaffed with professional officers, they are

much nearer a reasonable level than the Commonwealth service.

There is nothing to suggest that the state services in

Victoria, NSW and Queensland are any less effective than the

Commonwealth service - either in the quality of their

administration or in the wholesome nature of the meat produced

under their supervision.

5.90 It is disappointing to have to record that many of the

defects in the Commonwealth system, revealed by this

Commission's inquiries, existed in spite of the immediate

presence, and in fact under the very noses, of veterinary

officers. There is no evidence to suggest that alert

veterinary officers were responsible for detecting the many

malpractices which have now come to light or that they dealt

effectively with those that did come to notice. Indeed the

rather vague demarcation of responsibilities between veterinary

officers and supervising meat inspectors created a situation in

which it was possible for both officers to overlook matters

that clearly should have been attended to.

5.91 Thus more supervision - and in particular more

supervision by veterinary officers - is not the solution to the

problems of meat inspection. On the contrary, there is room

for savings.

(ii) Meat inspectors' functions

5.92 The tasks required of meat inspectors have become

increasingly varied in recent times.

5.93 At an abattoir the first task of the day, usually

carried out by experienced inspectors, is the hygiene

inspection of the premises - designed to ensure that the

98

premises have been meticulously cleaned after the previous

day's work. If any defects are found they normally have to be

rectified before work can commence in the particular area.

Tasks involving repairs to structures may be noted and left to a later time.

5.94 Inspectors will often also assist the veterinary

officer with the ante-mortem inspection of animals due to be

slaughtered that day.

5.95 As slaughtering commences and the chain begins to

move, inspectors will take up allotted positions so that they

can separately examine the head of the animal, the viscera and

the carcass for any lesions or other signs of disease or injury.

5.96 . When any such evidence is discovered they must make

decisions about the disposal of the whole or parts of the

carcass - whether they can be passed for human consumption,

consigned as pet food or have to be condemned. All condemned

carcasses and doubtful cases are put aside to be examined by a

veterinary officer.

5.97 Other inspectors keep an eye on the general work of

trimming and dressing to ensure that no unwanted parts of the

animal, such as pieces of hide or blood clots, are left on the

carcass and that it is not contaminated with matter from the

animal's digestive tract. They also have the task of palpating

or incising certain glands for any sign of disease.

5.98 A final inspector approves the carcass as a whole and

permits the 'Australia Approved' stamp to be placed on it.

5.99 Inspectors are also generally responsible, throughout

the day, for such things as the hygienic condition of workers,

slaughter-floor and equipment, and the proper disposal of

by-products.

99

5.100 Another inspector will normally be responsible for the

security of condemned material and pet food and supervising the

preparation and packing of edible offal.

5.101 Boning-rooms, whether attached to abattoirs or

independently located, require their own inspector. He is

responsible for the hygienic state of the operation, including

the premises and equipment (again an inspection must be made

before work begins), the correctness of trade descriptions on

cartons and the stamping of those cartons with an 1 Australia

Approved' stamp.

5.102 An inspector must be present whenever meat, whether in

carcass or carton form, is loaded into a container or a

transport vehicle. He must check the cleanliness of the

vehicle or container and the proper packing of the load. He

should be satisfied that all product appears to be in good

condition and at the right temperature and that it corresponds

with the trade description which he is asked to place on the

meat transfer certificate. Finally he should seal the load,

complete and sign the transfer certificate and hand it in a

sealed envelope to the driver.

5.103 If meat has to be placed in a coldstore - as is the

case with most meat in the export chain - an inspector is

responsible for monitoring the hygiene and temperature of the

store and the possibility of contamination from other goods,

and above all for the security of the consignment - thus

preventing it from being improperly added to, or having its

description altered, while in the store.

5.104 This is achieved by regular inspections and inventory

checks during working hours and the sealing of the store room

at other times.

5.105 Officers on duty at coldstores must carefully check

seals and stamps on all product and scrutinize transfer

100

certificates and notices of intention to export before releasing product.

5.106 Inspectors also supervise the loading of meat into

cargo holds of ships and aeroplanes. The responsibilities are

the same as for loading into containers.

5.107 Finally it should be noted that inspectors have

detailed responsibilities to supervise the cleanliness and

integrity of cannery and smallgoods operations.

(iii) Responsibilities and pressures

5.108 It can be seen from this description that meat

inspectors accept a good deal of responsibilty and can have a

considerable effect on the profitability of a company. For

example, an over-zealous inspector may be constantly requiring

carcasses to be retained for further attention to trimming. If

the 1 retained' rail becomes full, work has to be interrupted

while those carcasses are attended to.

5.109 Any inspector can require the chain to be stopped or

slowed if he believes he is not being given sufficient time to

carry out his inspection tasks - this may depend on the general

condition of the particular run of animals.

5.110 It is the inspector at the viscera table who

determines which offals are fit for human consumption. Such

judgments are to some extent subjective, and a meatworks can

lose a lot of money if a difficult inspector consigns a high

proportion of offal to pet food.

5.111 On the other hand, the pressures do not all operate in

the same direction. There are reverse pressures also. Every

time a chain is held up, the workers lose time and the company

loses money. Meatworkers are not all gentle people and it may

take some courage for an inspector on the chain to delay or

101

find fault, with the work of a large, and perhaps excitable,

slaughterman with a knife in his hand.

5.112 If the activities of the inspectors are such as to

affect the profitability of the meatworks, and that meatworks

is the economic mainstay of some country town, then even though

they may wish to do their job conscientiously, there will be

great pressure on them not to behave in a way which might

jeopardise the economic viability of that meatworks, or the

capacity of the meatworks to provide employment in the district.

(iv) Power and abuse of power

5.113 It follows from what has been said that, as a group at

any particular establishment, meat inspectors have great power

over the operation. Because they naturally tend to support

each other, and to be supported in turn by their plant

veterinary officer, even an individual inspector can have a

marked impact on the profitability of a business in the short

term. As noted elsewhere, this largely explains the gifts of

free and cheap meat which have been so widespread.

5.114 The Commission has heard evidence about occasions when

meat inspectors have deliberately set out to disrupt production,

either in retaliation for some grievance felt against management

or, more often, in order to wring financial benefits from a

reluctant company. It is impossible to imagine any case in

which such tactics on the part of government inspectors could

be justified, directed, as they are, not against their own

employer for industrial reasons, but against a commercial

enterprise and its employees for reasons of spite or greed.

(v) Qualifications and training

5.115 The best way of ensuring that such events do not recur

is to make sure, through careful recruitment procedures and

good training, that inspectors have a proper appreciation of

their responsibilities and pride in their work.

102

5.116 It is no longer enough to recruit meatworkers who can

handle a knife skilfully. As inspectors progress in their

careers, they will in future be increasingly called upon to

study company books, keep their own records and make out

returns and reports.

5.117 Because of the need for flexibility in staffing, and

reasonable mobility amongst inspectors, no inspector should be

recruited unless he has demonstrated, through school or course

work or aptitude tests, an ability to handle figures and write

intelligent reports. Inspectors must also have personal

qualities appropriate to qualify them as members of a

governmental inspection service, able to resist improper

pressures from management, and not disposed themselves to

resort to the application of pressure on management for

personal gain. They should be selected, trained and paid

accordingly.

5.118 The Commonwealth inspection service must take a more

direct interest than it has in the past in the structure of

technical courses for meat inspectors. These should be pitched

at a realistic level. If they become too academic, or require

too high an entrance standard, they may create false

expectations of the nature of meat inspection, which, for all

its responsibility, is fairly routine and repetitive.

5.119 The recent increase in in-service training of

inspectors should also be maintained. As has been recognized,

this is both important to the development of all-round

knowledge and skills and a useful way of filling in spare time

caused by seasonal fluctuations. Appropriate personnel

management training should also be offered to supervising

inspectors and those being considered for supervisory positions.

(c) Approval of premises

5.120 Premises used in the production of export meat and meat products are now, and for many years have been, registered

103

under the Exports (Meat) Regulations. That registration is

tied to the premises but is in the name of the occupier or

owner. Registration is for a year at a time and is renewable

annually, but ceases automatically when an occupier or owner

ceases so to occupy or own those premises. Registration is

transferable, on application, to a new occupier or owner.

5.121 Detailed standards for the structure of, and equipment

to be used in, export meat establishments are laid down in

manuals which were published by the BAH. Those manuals have no

direct statutory authority and are no more than administrative

directions.

5.122 The standards for structure and equipment are said to

be directed solely to matters of hygiene and are such as to

comply with recognized international norms and the requirements

of major markets to which Australia exports. Plans for new

premises are assessed by standards officers qualified in meat

inspection and public health inspection and major premises are

then inspected from time to time by a standards officer or

veterinary officer.

5.123 I note that New Zealand has found it useful to use

persons with other skills, notably engineering, in approving

premises. Although there is no evidence of dissatisfaction

with the present system in Australia, the New Zealand system is

said to be very successful, and I believe consideration could

usefully be given to broadening the skills available to the

Export Inspection Service in approving plants and laying down

procedures to be used in plants.

5.124 There was little evidence called which was critical of

particular details of standards laid down for registration of

premises and I therefore say nothing about the detail of such

standards.

104

5.125 Several importing countries require specific

registration of premises with their responsible authorities and

some specify requirements different from those ordinarily

required for export premises. The most notable of the specific

country registration lists is that maintained for the United

States of America. Premises are certified annually by

Australian authorities as complying with US requirements. In

addition, USDA veterinary inspectors conduct their own

quarterly reviews of compliance.

5.126 However there has been no basic difference between US

and Australian standards, with the result that, whether or not

they are listed for US export, establishments which fail to

comply with US standards are under pressure to improve their

facilities and procedures or face deregistration for export.

Nevertheless not all plants have sought US listing, presumably

because they do not wish to supply the US market or do not wish

to subject themselves to periodic review by US veterinarians.

5.127 These reviews have tended to be definitive in the eyes

of both the industry and the meat inspection service. The

service has been regarded as effective so long as the export

trade, particularly the trade to USA, has not been impeded.

Success has been measured by the comparative rarity with which

establishments have been delisted by USDA. Special efforts

have been made to satisfy the reviewer, whose reception has

been well prepared and who has not always seen a typical level

of activity. The Australian meat inspection service should

concentrate on establishing and enforcing its own standards

every week of the year rather than on satisfying a US reviewer

once a quarter.

5.128 It was suggested, particularly by some witnesses from

the Northern Territory, that these high US/Australian standards

placed an unnecessary burden upon some works and amounted to

making excessive demands for the requirements of some markets. Thus, it was submitted on behalf of the Northern Territory

Department of Primary Production that it is unreasonable for

Australian authorities to impose restrictions, over and above

those required for the Australian domestic market, on abattoirs

wishing to develop export trade in Australian domestic standard

meat to the less affluent countries of South East Asia, which

are the Northern Territory's most accessible markets.

5.129 In its final submission DPI took up the question of

export standards. DPI proposed that there should be developed

a single Australian domestic standard of meat inspection which

presumably would specify both structural requirements and

operational standards, onto which would be built any added

requirements of those importing countries which would not

accept that base domestic standard. DPI said that the base

domestic standard would have to comply with the principles laid

down in the International Code of Practice, recommended by the

Codex Alimentarius Commission, which it was said are broadly

similar to the standards now insisted on by state authorities

for domestic abattoirs. Although DPI put forward such a

suggestion in the context of its proposal for an integrated

meat inspection service, it made clear that the introduction of

a common export standard for construction, hygiene and

inspection (to which would be added any further requirements

specified by importing countries) was not dependent upon

acceptance of its proposals for the integration of Commonwealth

and State meat inspection services.

5.130 I consider that there is much to commend this

approach, so long as the base standard is fixed realistically

having regard to Australian domestic needs. To fix the

standard at present US requirements would not achieve any

significant advance. It must be remembered that states have

found that their present requirements which, in general terms,

are less stringent than US requirements, are sufficient to meet

the public health needs of their citizens.

106

5.131 Introducing a base domestic standard, from which there

might be several levels and types of variation, could of course

lead to problems in ensuring that meat not produced from

abattoirs meeting those additional standards was not exported

to the countries having such additional requirements. No

longer would it be sufficient to separate the export stream

from the local stream. The export stream would have several

distinct tributaries.

5.132 If the proposal is to work I think it may be

necessary, and at least it would be desirable, that a

significant number of importing countries accept the base

domestic standard. No doubt some countries will seek to use

the imposition of additional requirements as a trade barrier.

The practicality of introducing a base domestic standard having

any real significance in the export trade will depend upon the

response of overseas countries. In those circumstances I can

say only that I regard the proposal as one which should receive

careful consideration by government and, if found practicable,

it should be put into effect.

5.133 One criticism which was made of arrangements for

approval of premises was that there was not sufficient control

over the identity of operators of those premises, particularly

in cases where several independent boning-rooms are available

for lease at an abattoir.

5.134 No immediate step was taken after August 1981 to

change the arrangements for registration of premises. At an

early stage of the proceedings of the Commission AMLC indicated

that it thought it desirable that all operators of export

establishments should be required to seek and obtain export

licenses from AMLC. No doubt this was seen as a method of

controlling operators, especially those whose operations

required no substantial capital investment, who could enter and

leave the industry quickly and thus were relatively free to

engage in questionable practices.

107

5.135 In its final submission to the Commission, DPI said

that it was seeking to have regulations made that would require

persons in whose name establishments were to be registered to

show that they were fit and proper persons. If it is thought

necessary to have special powers to control fringe operators I

would regard this as a more satisfactory way of dealing with

the problem than the more artificial method of requiring all

persons who operate registered export premises to hold a

licence as exporters. Some persons (such as coldstore

operators, for example) may never wish to export meat and I

think it inappropriate to require those persons to hold a

license as exporters.

5.136 At first sight the submission that only fit and proper

persons should be permitted to operate registered export

establishments is very attractive. There has been a

significant level of misconduct in this industry which must be

condemned. There is much force in the proposition that those

who have committed such acts should be forced out of the

industry and others who may commit such acts in the future

should be kept out of the industry. The potential harm that a

single miscreant can do to a vital export industry is enough to

justify unusual restrictions. It is only when further

consideration is given to just who is a fit and proper person

that the difficulties in the argument emerge.

5.137 Questions such as these have been addressed in the

Australian Meat and Live-stock (Amendment) Act 1982 in

connexion with requirements for grant of a licence to export

meat. The amendments made by that Act will require applicants for meat export licences to satisfy AMLC that they are persons

of integrity, competent to hold such a licence, and of sound

financial standing. In the case of corporations, the applicant

will have to satisfy AMLC that each person who participates or

would participate in the management or control of the business

is a person of integrity.

108

5.138 In determining whether a person is a person of

integrity regard is to be had to prior convictions for certain

types of offence, the accuracy of information supplied by

applicants to the corporation and the reputation of that person

or applicant in the industry for reliability in business

dealings. In addition to specified matters AMLC is empowered

to have regard to such other matters as it considers relevant

in determining whether an applicant is a person of integrity.

5.139 Of course, any attempt to define who is 1 a fit and

proper person' or ’a person of integrity' is going to be

difficult. Necessarily, a measure of discretion and judgment

must be vested in the authority determining such questions.

Probably all that can be done by way of assurance is to

prescribe some criteria to which regard must be had in

determining whether an applicant meets the required standard.

5.140 Clearly one of the criteria specified in any such

provision must include whether the applicant has been guilty of

malpractice in the past. But in the case of this industry,

that would mean that regard must be had to a number of

practices which were common in the industry and yet were

contrary to regulations. Should regard be had to all forms of

malpractice? Should regard be had only to those forms of

malpractice which are regarded as 'serious1? If the latter

proposition is accepted, how are malpractices to be

classified? Is the practice of introducing locally killed meat

into the export chain to be regarded as serious or not

serious? If regarded as serious it is likely that a

substantial number of operators have committed a serious

malpractice in the past and have done so persistently over a

number of years. Should they be excluded from the operation of

registered export premises?

5.141 As I have said earlier, operators without substantial

capital invested in the industry have been able in the past to enter and leave the industry quickly and thus have been seen as

109

being more free to engage in questionable practices. It may be

at least partly for this reason that the provisions of the

Australian Meat and Live-stock Corporation (Amendment) Act

1982, to which I have referred, require applicants for meat

export licences to demonstrate that they are of sound financial

standing. However I do not consider that such a requirement is

an appropriate or even effective method of dealing with the

problem I have described.

5.142 Financial standing cannot be measured in absolute

terms beyond enquiring whether the applicant is solvent or

insolvent (and even then there may be grey areas within which

opinions may differ). In determining whether a person is of

sound financial standing, regard must be had to the type and

size of business enterprise which he conducts. The financial

resources required by the operator of a large integrated

meatworks are very different from those required by the

operator of a small independent boning-room. Unless a

significant financial barrier is to be put in the way of those

who would seek to enter the meat industry through operating a

small independent boning-room, I do not consider that the

requirement to demonstrate financial standing will of itself

serve to keep out those who may be seen as more likely to

commit some malpractice. Since it is clear from the evidence

that large and medium-sized companies, as well as smaller

firms, have engaged in serious malpractices, I do not believe

that financial barriers can be justified on these grounds.

5.143 Again, I do not consider that requiring a licensing

authority to form a judgment on the competence of an applicant

to hold a licence will act as any effective screen against

those more likely to commit malpractice. Many of those

operators who have engaged in malpractice in the industry have

been highly competent and skilled operators. Had they been

less competent and skilled their activities might have been

discovered sooner.

110

5.144 Some submissions have requested me to make findings,

specifying which of the individuals and companies mentioned in

evidence before me are not fit persons to continue in the meat

industry. However I do not regard this as falling within my

terms of reference. Even if I believed it did, I think it

would be inappropriate for me to express any such opinion on

the material which has been placed before me.

5.145 As I have explained in Chapter 2, there has been a

degree of chance in the way in which matters have been singled

out for consideration in evidence led before the Commission.

By no means all persons who have committed some form of

malpractice have been examined. In other cases the examination

has had to be truncated by reason of the limited time available

to the Commission for its inquiries. Any question of whether

particular persons are or are not fit and proper persons to

hold meat export registrations or licenses will have to be

determined by the appropriate authorities having regard to the

relevant criteria established in the legislation and the

circumstances existing at the time of the application.

5.146 Although I have found the question a difficult one, on

balance I am of the view that it is desirable to require

applicants for registration of premises for export to show that

those who participate or would participate in the management or

control of the business to be conducted at those premises are

fit and proper persons. If effect is given to this

recommendation I have no doubt that difficult questions will be

raised.

5.147 There will be few operators presently carrying on

business in the export meat industry who can say that they have always abided by every regulation and requirement. Because

circumstances will vary from case to case I can offer no

general prescription of what past conduct should be seen as

relevant in determining whether any particular applicant is not a fit and proper person to be approved as an operator of

111

registered premises. I can see powerful arguments for saying

that those who have participated in pet meat substitution

should be regarded as falling short of the required standard,

whereas those who have participated in the practice known as

1 robbing the pack' should not on that account alone be regarded

as unfit for approval.

5.148 In my view different considerations should apply in

the case of persons who can be shown to have committed acts

dangerous to public health from those applying in the case of

persons who have merely committed a breach of regulations.

However I emphasise that every case will have to be determined

on its individual merits.

5.149 I consider that great care must be exercised when

first implementing any provision requiring applicants to

demonstrate their fitness to be approved as operators of

registered premises. Operators may say, with some force, that

because the introduction of any such provision represents a

significant change in the rules applicable to registration of

premises, conduct before the change in rules should be regarded

differently from conduct occurring after that change. Before

the change in rules, conduct which will now be regarded as

inappropriate for operators of registered premises attracted no

sanction other than a small monetary penalty. It had no effect

on the registration of their premises or their continued

participation in the industry. Again I emphasise that each

case must be dealt with on its merits.

5.150 In the case of allegations that particular persons

have committed acts amounting to criminal acts, a licensing

authority should be permitted, and indeed required, to have

regard to convictions based on that conduct. However, where

the authority only has some information from an outside source

which, if true, would establish the commission of a criminal

offence then, generally speaking, I think it inappropriate for

the authority to embark upon a trial of the issue. That should

112

be left to the ordinary processes of law. There is however no

reason why the authority should refrain from acting on

uncontradicted material, or on other material on which it can

make a confident finding, just because criminal proceedings have not been brought to a conclusion.

5.151 Two further matters should be dealt with. First,

there was some evidence to suggest that operators whose

premises had been de-registered shortly after discovery of

horse-meat substitution, continued their operation at other

premises through other companies. It was suggested that,

although there was no formal connexion between the former

operators and the company conducting business at those other

premises, either by directorship or shareholding, the company

carrying on the business was in fact controlled by the former

operators. For present purposes it is unnecessary to do more

than acknowledge the possibility that that occurred, for it

reveals, a difficulty which must be considered.

5.152 If there is to be effective control of registered premises through the mechanism of a provision requiring proof

that the operator is a fit and proper person, the relevant

judgment to make is whether the persons in actual control of

the business are fit and proper persons, not whether some

nominal controller meets that test. The Australian Meat and

Live-stock (Amendment) Act 1982 tackles this problem in the

case of corporations (see para 5.137 above). The applicant

must be able to show that persons who would participate in the

management of the business as well as those who control it

satisfy the test. Determination of the question of who is in

control of that business may be very difficult. I do not

consider that the licensing authority can be expected to seek

out for itself all the relevant information relating to each

applicant and I therefore think it is necessary to make clear

that it is for the applicant to make all necessary disclosures

in this connexion and to satisfy the licensing authority of the

integrity of all relevant persons.

113

5.153 Secondly, there was some argument before me to the

effect that operators should also be required to specify a

natural person as nominee to take responsibility for the

operation of the establishment - in the same way as holders of

liquor licences are required to specify a nominee. On balance,

I think it unnecessary to go this far. True, a nominee system

would make investigation of malpractice easier in that there

would be a single natural person who would be held responsible

for events at the establishment. However, there would be a

considerable increase in the burden of administering the

registration system, if only because there would no doubt be

frequent changes in nominees. I do not regard the advantage to

be gained as sufficient to warrant the administrative cost. I

consider that it. is enough to require the applicant to show

each year at renewal time that those who will control and

manage the business are fit and proper persons.

5.154 The Australian Meat and Live-stock Corporation

(Amendment) Act 1982 provides that applications may be made to

the Administrative Appeals Tribunal for review of decisions of

AMLC refusing applications for export licences. If there is to

be a provision requiring operators of registered export

premises to show that they are fit and proper persons or

persons of appropriate financial standing, I consider that it

would be essential to provide a mechanism of appeal against any

refusal of approval which was founded on a judgment of such

matters. I say founded on a judgment of these matters because

I do not consider it necessary to allow appeals against refusal

of approval which are founded on technical matters such as, for

example, standards of construction. Those are more readily

capable of objective measurement than questions of integrity,

in which a large measure of discretion and judgment must be

vested in the licensing authority.

5.155 The system of approval of registered premises now runs

parallel with the system of licensing of meat exporters. There

are different licensing authorities and, as legislation stood

114

immediately before the 1982 amendments to the Australian Meat

and Live-stock Corporation Act, there was little need to

co-ordinate the two systems. If however there are to be

provisions governing grant of export licences and registration

of export premises, which both have some requirement for

applicants to show that they are fit and proper persons, I

think it necessary that the two systems should be

co-ordinated. The best method of achieving that co-ordination

is itself a difficult question.

5.156 In my view DPI bring to the question of approval of

premises expertise which may not be available immediately to

AMLC. Likewise AMLC bring to certain commercial aspects of the

export of meat expertise not available immediately to DPI. I

have considered whether a joint authority should be established

to consider such applications, but I tend to think that such an

arrangement would be clumsy. The difficulty which it is sought

to avoid is a judgment by one body that a particular person is

not 'fit and proper1 followed by a judgment by the other body

that the same person does have the necessary integrity. I

think that that can be cured by providing that the criteria to

which regard should be had in determining that question should

include any formal expression of opinion by the other licensing

authority. But I do not think it right that that expression of

opinion should be conclusive of the matter. Each body must

make up its own mind. In order to assist it in matters of

procedure and admissibility of material, I think it highly

desirable that a barrister or solicitor be retained to advise

at all its licensing deliberations, at least in the first year

or so of applying the new criteria. It would be helpful if the

same person were retained to advise both DPI and AMLC.

Difficulties must be resolved by the good sense of the two organisations concerned, and, if need be, ultimately by

decisions of the Administrative Appeals Tribunal.

5.157 Events immediately after the discovery of horse and

kangaroo-meat in boneless beef packs exported to the

115

United States revealed weaknesses in the provisions then

governing the withdrawal of approval of premises as registered

export premises. Powers of cancelling registration were vested

in the Secretary of the Department, but only on proof of one of

a limited number of grounds relating to structural

requirements, the efficiency or hygienic manner of conducting

operations, or failure by the owner or occupier to comply with

a provision of the EMRs applicable to him. However, if

premises were de-registered, the owner or occupier could

re-apply for registration and, upon proof that the premises

were structurally satisfactory and equipment was adequate to

carry on operations efficiently and hygienically, the Secretary

was bound to register the premises as an export establishment.

This led to the odd result that operators of some premises

connected with substitution were able to have their premises

re-registered after a comparatively short period of

de-registration. Nevertheless, having been removed from the US

list, they remained unable to prepare meat for export to that

market.

5.158 There appears to have been no procedure established

within the Department for dealing with cases of possible

cancellation of registration. Perhaps this is not surprising

when it is recalled that in the ten years before August 1981

there had been only one case of cancellation of registration

and that occurred where an operator ordered inspection staff

off the slaughter-floor at his establishment. Thus when the

registration of some establishments was cancelled after

discovery of horse-meat in their product, some of those

operators commenced action in the courts challenging that

cancellation.

5.159 One of the grounds relied on by the operators was that

they had been given no opportunity to be heard on the matter,

and indeed they had not. Their registration had simply been

cancelled without notice. Although this was understandable in

the climate of the time, I consider that if procedures are not

116

provided by legislation, at least Departmental rules should be

established such that, in any future case of possible

e9istr ion, the operator is given an opportunity to show

cause why his registration should not be cancelled.

5.160 There is now no power under the EMRs to suspend

registration of premises, only power to suspend operations.

The power to suspend operations is vested in the senior DPI

officer at the establishment and is exercisable only for the

purposes of ensuring preparation of meat under hygienic

conditions and facilitating proper inspection of meat. It is

not directed to penalizing breaches of regulations or enabling

investigation of suspected breaches. DPI says that it wishes

to have a power of suspending registration as well as a power of suspending operations.

5.161 Since it is reasonable that an opportunity be given to

operators to show cause why registration should not be

cancelled, before cancellation is effected, and since the

requirement to be given a hearing in these circumstances may be

assumed to be imposed by law in any event, it would be

desirable to set up a simple procedure for temporary

de-registration for a limited period which could be used in

urgent cases pending a full consideration of the

circumstances. I have in mind, for example, any further

discovery of pet food on export meatworks. Any such procedure

should be availed of only in truly urgent cases, and the

decision to use it should rest with the responsible Minister.

5.162 The power of suspending operations was used in

relation to operations in all Victorian independent

boning-rooms and coldstores in September 1981 until new

security measures and species testing procedures were

introduced. In most cases the suspensions were lifted very

quickly; but a general suspension at all establishments of a

particular kind, followed by progressive lifting of that suspension over a period of time, led some operators to believe

117

that competitors, back in operation before they were, were able

to steal a march on them. I think that the general suspension

of operations was necessary on this occasion, but I would hope

no similar step would ever again be necessary.

5.163 In my view the weaknesses in arrangements for

withdrawing approval of premises, which were demonstrated in

1981, will be rectified if a scheme of regulations along the

lines proposed by DPI in its final submission is brought into

effect. Provisions for cancellation or suspension of

registration would include a series of criteria based on

failure by the operator to comply with directions or

regulations, relevant persons ceasing to be fit and proper

persons and other criteria drawn from the present EMRs.

However I believe such powers should be exercised by the

Minister, hot the Secretary as proposed by DPI.

5.164 The scheme contemplates that where registration has

been suspended or cancelled, the onus of showing that the

matters leading to suspension or cancellation have been

rectified will rest on the applicant, not the department. I

regard that as a necessary measure to prevent recurrence of

malpractice. The provision that, on reinstatement of

registration, the department may impose conditions necessary to

ensure proper operation of the establishment, should prove a

further useful measure.

(d) Transport of Meat

5.165 The EMRs regulate the transport of meat from one

export establishment to another only in the most general

terms. The regulations require that vehicles used for the

purpose must be clean and of a kind approved by the Secretary;

meat may be handled only by persons wearing clean outer

garments; meat must be inspected before and after it is moved

and the inspector who examines the meat before it is moved is

to issue a certificate describing the meat and naming the

export establishment from which it is to be moved and the

118

export establishment to which it is to go; unfrozen meat must

be moved as a hanging load. The regulations do not go beyond these matters.

5.166 The meat substitution practices which were discovered

in August 1981 have shown that the importance of regulating the

transporting of meat between establishments cannot be

over-estimated.

5.167 Apart from one possible area, there was no significant

criticism of present regulations governing the transport of

export meat. Some criticism was made of the practice known as

1 snow shooting' which involves the use of carbon dioxide as a

refrigeration agent in containers of meat being transported by

road. This method is used widely in the Northern Territory.

Little expert evidence was led before me on this subject and I

therefore think it inappropriate for me to embark on any

discussion of the technical questions raised; but if the

method is to continue to be used, it would seem desirable that

operators give further attention to the condition of containers

and the techniques involved, for otherwise some meat will

deteriorate before it arrives at its destination.

5.168 It may be that this is an area in which DPI considers

that it can offer some technical assistance, but whether or not

this is so I doubt that it is a matter which is appropriate to

be dealt with by regulation. The present regulations are

couched in terms which are directed to the achievement of an

end result, namely that meat should be in a condition fit for

export. I think this is sufficient, except that there is no

provision for re-examination at the wharf of the contents of

refrigerated containers which have travelled long distances in

very hot climates. This problem requires further consideration.

5.169 The weaknesses highlighted by the discovery of

substitution practices centre upon the lack of security that

previously existed in control of transport of meat from one

119

export establishment to another. It was because of those

weaknesses that it was possible to introduce pet meat into the

export chain.

5.170 Some weaknesses in existing systems had been

identified before August 1981. In particular, the Victorian

region of DPI had begun a trial of a new form of transfer

certificate. Before this trial, meat transfer certificates

recorded no more than that a particular number of cartons or

carcasses of a particular kind of meat had been despatched from

an identified export premises. Although the certificates were

numbered, and issued in duplicate, no record was kept of those

numbers and it simply was not possible to correlate

certificates with particular-loads of meat after those loads

had been delivered. Further, those certificates did not make

plain whether the meat the subject of the certificate was fit

or unfit for export to those destinations which had specific

requirements relating to the preparation of meat.

5.171 The Victorian trial was directed to enabling

correlation between a particular meat transfer certificate and

a particular notice of intention to export meat. That is, it

was directed to establishing a form of inventory control. A

new form of transfer certificate was designed which required a

fuller description of the product the subject of the

certificate and required specification of markets for which the

product was not acceptable for export. This form of

certificate must be seen as a considerable improvement on

earlier forms and has now been adopted for use throughout

Australia. I shall deal later with the need for and efficacy

of inventory control (see paras 5.212-216).

5.172 Although the meat transfer certificate system is an

important documentary control on the movement of meat within

the export system, in my view it cannot be seen as a panacea.

DPI has conducted a survey of the accuracy of meat transfer

certificates and found a significant level of error in the

120

completion of such certificates. Given the circumstances in

which they are completed, I think it inevitable that there will

continue to be a significant level of error. Even if that is

not so, unless there is some regular audit process, it must be

acknowledged that there is a possibility of the use of a false

transfer certificate to accompany meat which ought not to be in

the export stream. With or without the connivance of

inspectors, the dishonest operator will obtain certificates for

loads that ought not be certified. Present requirements that

transfer certificates be completed in words and figures and

ruled off, and that copies be spot-checked against originals,

are very useful. But I do not consider that meat transfer

certificates can be regarded as being in themselves a

sufficient control. Other measures are necessary to ensure that substitution does not occur.

5.173 In my view it is the possibility of discovery, and the

serious consequences which would follow such discovery, which

represent the most significant deterrent to malpractice.

(e) Security measures

'Australia Approved' stamps and tags

5.174 Where meat intended for export has been prepared under

the supervision of an officer, inspected by an officer and

passed fit for export, the meat may be stamped with an

inspection stamp, or a prescribed tag the front of which has

been stamped with an inspection stamp may be affixed to or

packed with the meat (EMRs reg 33). The EMRs prescribe the

stamp to be used: the 'Australia Approved' (AA) stamp

incorporating the number allotted to the export establishment

concerned.

5.175 In the past AA stamps have always been supplied by

operators. The stamps have been obtained, from any of a number

of stamp makers, as often as the operator has wanted and in the

quantity he has ordered. All that the inspection service

demanded before August 1981 was that the operator made available

121

sufficient legible stamps for use by inspectors. In theory,

operators were expected to order no more stamps than were

necessary and give them up to the inspector in charge who would

keep them securely. In fact not all stamps were given up and

sometimes those that were given up were easily accessible to

the operator.

5.176 Generally the AA stamp is not applied by the inspector

himself to meat or a carton containing meat, but is applied by

works emp]oyees. Nominally that application of the stamp is

supervised by inspectors assigned to the establishment. Before

inspectors were assigned full-time to independent establish­

ments such as boning-rooms and coldstores it was of course

inevitable that the supervision of activities at such

establishments was imperfect at best. Even at large integrated

works where several inspectors would be assigned full-time,

there have been times when inspectors have been unable to

supervise all operations all the time. I have been given the

impression that, in such cases, boning-room operations have

been one of the first points to lose an inspector if men were

short. The operator has then been left to get on with the job

with little immediate supervision.

5.177 These circumstances led to a number of recurring

difficulties. The system for provision of AA stamps led to a

number of operators using stamps, which cannot be said to have

been improperly obtained, in places other than registered

export establishments and on meat other than meat inspected for

export. The system whereby works employees applied AA stamps

led to the stamp being applied to meat and to cartons to which

it should not have been applied.

5.178 Some of these deficiencies had been recognized by the

Department before August 1981 but little had been done to

correct them.

122

5.179 The AA stamp was in fact critical in the control of

the export of meat. Inspectors, particularly those at

independent coldstores and at boning-rooms, relied on the

presence or absence of the AA stamp on carcasses, wraps or

cartons to determine whether meat was or was not export meat.

As I have said earlier, the meat transfer certificate system

used before 1981 did not allow identification of the meat

described in the certificate after the meat had been

delivered. Thus the inspector supervising the loading of a

container at a coldstore could do no more than look at the

cartons to see whether they appeared to be sound and to have

been packed at export premises. As it turns out, the meat

concerned may not have been killed at export premises but may

have been local meat which had been relidded; in some cases it

was pet meat packed in unregistered premises.

5.180 Although DPI made many changes to procedures relating

to operations at registered establishments soon after the

discovery of horse-meat substitution, only a few of those

changes related to the AA stamp. The system of operators

providing the stamp continued but improved security was

provided for the stamps when not in use.

5.181 At first sight it may seem strange that no further

changes were made: that old stamps were not recalled and stamps

of new design issued by DPI. Instead, the main emphasis in the

changes that were made was on physical security measures

intended to ensure that only export meat entered the export

system. It seems to me that events have justified that choice,

in the sense that the security measures introduced in

October 1981 appear to have worked reasonably well, without any

change in the designs of stamps.

5.182 It was said, and I think rightly, that it was not

enough simply to say there must be new stamps. It was necessary

to design a new stamp with some care and allow importing

countries time to make administrative arrangements to accept

123

that new stamp. It was also essential that regulatory

provisions be made to ensure that the fresh supply of stamps

would be properly regulated by DPI, and wrongful possession or

use of stamps prohibited.

5.183 In its final submission, DPI has now proposed measures

for the introduction of new stamps which will replace the AA

stamp, and new controls over the procurement, possession and

use of such stamps. Those proposals should be implemented.

5.184 It is clear that there was some doubt in the past

about how far DPI was responsible for the accuracy of trade

descriptions applied to meat. It was said that the inspection

staff was responsible for ensuring that the trade description

was accurate and that the AA stamp attested to that accuracy.

Yet there is no doubt that DPI inspectors turned a blind eye to

some so-called commercially acceptable practices of

misdescription of product. Control over quality and grading of

product is, of course, difficult. However, so far as it is

possible, I consider that the AA stamp or its replacement

should attest to the accuracy of the trade description of meat

bearing that stamp.

Sealing of cartons

5.185 It seems clear that before August 1981 the practice of

relidding cartons was quite common. Meat produced at local

abattoirs and packed in two piece cartons would be sent to a

boning-room or a coldstore where the lids on the cartons would

be changed for lids bearing export legends and AA stamps.

5.186 To counter this practice, in October 1981 DPI

introduced a requirement that all cartons of meat produced at

export premises should bear an adhesive seal bearing a unique

serial number and so placed that any attempt to open the carton

would result in damage to the seal or the carton surface or

both. This requirement was borrowed from New Zealand which has

used the system for some years, apparently with success.

124

5.187 Its introduction in Australia met some opposition from

operators. Most if not all operators found that they needed to

use more labour to apply the seals. Some operators regarded

the sealing of cartons as unnecessary when coupled with

requirements for securing premises and taking species tests.

Some operators criticized the quality of seals supplied, saying

that they could sometimes be peeled off and replaced, and often

proved not strong enough to withstand normal handling. Some

meat inspectors felt, perhaps with some justification, that the

task of reconciling seals issued with cartons produced, and

recording daily usage of seals, was turning them into mere

tally clerks, who had to rely on the operator for too much of

the basic information they were recording.

5.188 All of these criticisms have some basis. Use of seals

is costly: seals must be bought and labour employed to apply

them. Seals do break. Inspectors are now required to do far

more clerical work than they used to do. But the question is

whether other means can be used to achieve the same end of

preventing relidding.

5.189 I was told that glued cartons cannot be used for all

types of product: cartons of that kind will break if filled

with some types of primal cuts. In any event not all operators

are set up to glue cartons. Nor does it seem that other one

piece cartons find general acceptance, for they are said not to

be as strong as two piece cartons. Western Australian

operators do use 'ordinary slotted containers' which are one

piece cartons, in spite of an increased risk of damage to the

carton; but that is because they are much cheaper in

Western Australia than two piece cartons.

5.190 I have considered whether industry should be given a

choice of using one piece cartons, or glued cartons or adhesive

seals on two piece cartons, but I think there is much force in

the argument that such a system would create confusion overseas.

I do not think it useful to institute a system which leads to

125

the export of some cartons which bear official government

adhesive seals and others which do not. For similar reasons, I

do not think that some establishments should be exempted from

requirements to seal cartons.

5.191 Unless there is a concerted move from industry to use

one piece cartons or glued cartons universally, I consider that

adhesive seals remain the best method of indicating physically

that a carton has not been tampered with after packing.

Consideration should be given to whether such a seal could be

incorporated in, or replaced by, strapping similar to that now

used to secure the carton. If this could be done, some of the

present double handling of cartons could be avoided.

5.192 Whether it is necessary to persist with any physical

evidence of the integrity of cartonned meat is a separate

question. Where requirements for export meat differ from those

for domestic meat, it is important to ensure that local meat is

not introduced into that export stream. Unless the possibility

of improper relidding of meat can be excluded with reasonable

certainty by other means, I consider that sealing of the carton

remains the preferred solution, expensive as it is. But it

must be said that both DPI and industry should continue to look

for cheaper alternatives to sealing cartons and continue to

look for improvements in the sealing system.

Sealing of loads

5.193 I have referred earlier to the importance in

preventing malpractice of regulating the transport of meat

between establishments. One weakness perceived after August

1981 was that product being carried from one place to another

could be added to or tampered with unless the vehicle carrying

that meat was sealed.

5.194 In October 1981 DPI directed that transport of product

to and from registered export premises would be permitted only

in vehicles sealed or secured so that any tampering with the

126

product would be obvious. Previously there had been no

requirement that vehicles be sealed. Numbers on seals are to

be recorded on the meat transfer certificate. In the case of

consignments to more than one registered export establishment,

separate meat transfer certificates are to be completed for

each delivery and the vehicle is to be resealed after each delivery.

5.195 One problem revealed in evidence before me is that

hauliers may wish to carry a mixed load of frozen product of

which only some is export meat. Unless the last place of

collection and first place of delivery are registered export

premises, such a load cannot remain sealed. I appreciate that

this creates difficulties, but so long as the sealing system

remains I do not think it capable of solution. If the sealing

system is to remain, I consider that only inspectors should be

permitted to apply and remove seals and that only rarely, in

obviously innocent circumstances, should a load on which the

seal is broken be permitted to remain in the export stream. To

permit others to apply or remove seals or to allow frequent

exceptions to the requirement for integrity of the seal would

reduce the value of the sealing system to vanishing point.

5.196 Of course seals are of little use unless their numbers

are checked at the place of receipt. There is no system now

for receiving inspectors to sign for receipt of the meat

received. Consideration might usefully be given to instituting

such a system and incorporating a requirement that inspectors

acknowledge checking the seal. This could be done quite simply

on the transfer certificate.

5.197 The seals used by DPI are aluminium seals which are

not tamper proof and, it seems, are known not to be tamper

proof. I cannot say what other types of seal are available but

if sealing is to serve its purpose it is important that the

seals be, and be thought to be, secure. Of course cost must be

considered, but I would be surprised if better seals than those

127

now in use were not available. The design of truck doors,

which may permit them to be lifted from hinges, or to have

bolts unscrewed, without breaking the seal, must also be borne

in mind.

5.198 Again, as with other aspects of security, I do not

think that the worth of sealing of loads can be assessed in

isolation from other security measures. For example, it may be

possible to grant exemptions from sealing loads in cases where

firm documentary controls, perhaps linked to carton

identification, can be demonstrated. .

Sealing of premises

5.199 In addition to introducing, in October 1981,

requirements for sealing of cartons and sealing of trucks, DPI

also required for the first time the sealing of premises.

Chillers at meat works and boning-rooms were to be secured by

seals when inspection staff were not present. Areas, chambers

or stores at nominated coldstores where export meat was kept

were also to be secured by seals when inspection staff were not

present.

5.200 Assuming that sealing of premises is desirable, I do

not think that chillers will always be the best point to seal

at all works. If a particular works may more readily be sealed

at some other point, that should be provided for.

5.201 Introduction of these measures seems to have produced

early difficulties, but those difficulties appear now to have

been largely cured. One complaint which remains is the cost

and delay in getting a meat inspector to break a seal out of

normal working hours - often because of a refrigeration problem

or some other reason unconnected with the movement of meat.

5.202 I believe consideration should be given to allowing a

nominated senior officer of the company to break the seal in

such circumstances, after notification to the meat inspection

128

service. Visits could be made to such incidents on a random

basis. There would be a requirement for a written explanation from the company official.

5.203 The only general criticism made of sealing

requirements was based on the proposition that either these or

other security requirements were unnecessary in view of all the

measures which had been introduced. Again the validity of the criticism depends upon an examination of all the security

measures that are in force.

Segregation of export meat

5.204 In 1978 the EMRs were amended to provide that, subject

to some minor exceptions, meat other than meat inspected and

passed as fit for export should not be brought into an export

establishment. The regulations had previously provided and

still provide that, save with the approval of an inspector,

which could be given only in special circumstances, meat passed

for export should not be kept under refrigeration in a room

with meat that had not been passed for export.

5.205 Clearly it was intended by these 1978 amendments to

ensure that export meat was separated from local meat at all

times. In fact that intention could not always be put into

effect.

5.206 There is little difficulty in prohibiting registered

export abattoirs and boning-rooms from accepting local meat on

the premises. Enforcement of that prohibition has proved

difficult in the past, but few problems are caused to honest

operators by the prohibition.

5.207 I think some independent coldstore operators saw

difficulty flowing from a requirement to segregate export meat

from local meat and other products on their premises, at least

if that segregation involved separation by secure physical

129

barriers. Operators feared that such a requirement would

deprive them of flexibility in the use of large freezer chambers.

5.208 Yet when DPI made such a requirement in October 1981

it seems that the operators were able, after some initial

difficulty, to cope with the problems of operating such a

system. However, such a system is not consistent with a

general prohibition against accepting local meat on registered

export premises - it is founded upon the making of suitable

arrangements whereby meat passed for export may be kept under

refrigeration in a room with meat not passed for export.

Clearly the regulations must be amended to reflect this. The

general prohibition should be directed only to those

establishments to which it is intended to apply, namely

abattoirs and boning-rooms.

5.209 DPI has administered the regulations on a basis that

amounts to permitting dispensations from the general

prohibition of the regulations. While this may be an expedient

solution, it should not be allowed to continue. Necessary

amendments should be made.

5.210 A clear difficulty arises in the case of canneries and

smallgoods premises. Some of those premises are registered

export establishments, but in fact export only a small

proportion of their output. Much of the meat received at such

premises for use in canned goods or smallgoods. is local meat.

Again this is permitted by DPI as an administrative expedient.

Theoretically DPI inspectors are required to ensure that only

export meat goes into product for export, but given that

commonly there is only one inspector at such a plant, I doubt

that this can always be done.

5.211 The requirement that only export meat be permitted on

export registered premises was introduced at the insistence of

US authorities. Most smallgoods, and significant quantities of

130

canned goods, exported from Australia are exported to other

countries. If those countries of destination have no objection

to the use of local meat in products sent from Australia, I

consider that the regulations should be amended to reflect that

fact. Requirements for use of export meat in processed meat

products should be made only to the extent necessary to satisfy

importing countries. If US authorities in fact require rigid

segregation of export meat from local meat at smallgoods and

canning plants preparing product for the US market, that should

be enforced. If the US or other importing countries do not

require rigid segregation, but do require use only of export

meat in smallgoods and canned product, then that too should be

enforced. However, whatever the requirement is in fact,

regulations should be made and administered which reflect the true position.

Inventory Control

5.212 . Theoretically the most effective method of monitoring

the possible introduction of unauthorised product into the

export stream would be to take stock of how much meat was in

the export stream at any given time and compare that with the

amount of meat legitimately produced at export establishments.

The practical difficulties of implementing any such system are

enormous. Nevertheless I am firmly of the view that continued

examination of inventory control proposals is not only

worthwhile, but is essential. Only with the introduction of

some form of inventory control can there be a substantial

withdrawal of the present expensive physical security measures.

5.213 DPI had made little progress towards inventory control

before August 1981. The amended form of meat transfer

certificate introduced in Victoria was one small step towards

such a system of control, but little other progress had been

made .

131

5.214 In October 1981, as part of the general review of

security arrangements designed to prevent substitution of local

for export meat, DPI required boning-rooms and nominated

coldstores to keep inventory records showing the origin and

quantities of meat taken to the premises and the destination

and quantities of meat leaving the premises. These records

were to be made available for examination by inspectors.

5.215 While this measure gave an appearance of control by

DPI, I suspect that the control was more apparent than real.

Inspection staff do not have the training necessary to allow

them to audit the figures kept by management. Often there

would be little time available to inspectors to conduct even a

rough stocktake at premises, let alone an audit of the records

kept by management. I doubt that the requirement to keep

records would stand in the way of an operator determined to

introduce non-export meat into the export stream. It would

simply mean that the records would be altered to the extent

necessary to hide the introduction of illicit product. Without

properly trained persons to audit records kept by operators, I

would regard provisions such as those introduced in October

1981 requiring operators to keep inventory records as having

only limited value. Such records can, however, provide a

starting point for further inquiries.

5.216 In its final submission DPI indicated that it was

hoping to develop and test an inventory control system by

1 July 1983. I consider that it is highly desirable that work

in this field proceed. Of course even the testing and

developing of such a system will prove to be expensive. Its

implementation may be even more expensive. However, if an

adequate inventory control system can be introduced, I consider

that present physical measures can be considerably relaxed. If

that happens, there will be cost savings. But until some

effective inventory control system can be introduced, I

consider that a number of physical security measures must

continue.

132

G e n e r a l

5.217 I have no doubt that industry sees the present

security measures required by DPI as being over-elaborate.

Equally I have no doubt that, had it not been for the discovery

of horse-meat substitution, the security measures now in place

would never have been introduced. Nevertheless, I consider

that those measures are necessary and must be maintained at

least in the immediate future. I do not think it desirable to

forgo any of the measures now in place. Sealing of premises,

transport and cartons should continue. Locally killed meat

should not be permitted in export abattoirs or boning-rooms.

Export meat should be carefully segregated in coldstores. Just

how much segregation is necessary at canning and smallgoods

factories should be determined having regard to requirements of

importing countries.

5.218 How long these procedures must be maintained will

depend upon the progress made in developing better

alternatives. No better alternatives ready for immediate use

were presented before me.

5.219 One further point must be made, for there may be a

danger of becoming mesmerized by security arrangements. I have

said elsewhere in this report that I am of the view that the

most effective incentive to persuade operators to obey the law

is the fear of being detected and then subjected to heavy

penalty. Whatever security measures are used will be capable

of being broken. What is important is that the security

measures should make the breaking of the law more difficult and,

even more importantly, make the chance of being detected in that

breach more certain. I regard the security arrangements now in

place as generally effective to achieve both ends. However,

other better methods may well be devised in the future.

Present arrangements must not be regarded as immutable.

133

(f) Export procedures

5.220 Nominally, procedures which existed before August 1981

were designed to ensure that meat for human consumption was not

exported unless it had been slaughtered, treated and stored

only at approved premises, had been inspected by qualified

persons, bore an accurate trade description and was free from

disease, contamination or damage. Further, no meat could be

exported by any person unless that person was licensed by AMLC.

5.221 Meat for human consumption might not then (and may not

now) be exported without a permit. That permit was, and is,

issued by officers of DPI. The EMRs require an exporter to give

the Department notice of intention to export meat. An inspector

must then certify that the meat is marked in the prescribed

manner with the prescribed trade description and that he is

satisfied that the conditions and restrictions applicable in the

EMRs have been complied with. The export permit which is

printed on the notice of intention is then completed.

5.222 On its face, such a system appears to be satisfactory

to ensure that only appropriate product is exported. However,

it had deficiencies, some of which had been recognized by the

Department before August 1981.

5.223 The system took little account of the fact that meat

might have moved several times since leaving the place of

packing, let alone the place of slaughter, and took little

account of the differing requirements made by importing

countries. Although meat could not move from one export

premises to another without a transfer certificate, that

certificate used not to record whether the meat concerned met

the requirements for export to particular destinations.

Although steps had been taken by DPI in Victoria to try a new

system, which included recording that information on transfer

certificates, that system was not in use generally in

August 1981. Thus, when inspectors were called on to certify

134

that meat was fit for export, there was often no means of

telling whether it was fit for export to its particular

intended destination.

5.224 Commonly, DPI inspectors were not assigned full-time

to independent boning-rooms or independent coldstores; they

were assigned to a number of such premises and made periodic

visits to check their activities. There was no system of

inventory control at such premises, whereby DPI inspectors

could check whether all meat entering or leaving the premises was meat which had been slaughtered, treated and stored only at

export premises. Inspectors relied on the presence or absence

of an 'Australia Approved' stamp on the carcass or carton to

determine whether or not the meat was export meat. Even had

the inspection service been minded to do so, it seems that,

except in gross terms, there was no practical method of using

transfer certificates to reconcile the number of carcasses or

cartons of meat entering a coldstore, and recorded on transfer

certificates, with the number of carcasses or cartons packed at

the coldstore into containers or otherwise sent for shipment

overseas.

5.225 The use of shipping containers has led to the practice

of exporters specifying, in notices of intention to export, a

number of cartons or carcasses slightly greater than they

expect to be able to pack in each container. Understandable as

this practice is, it does not assist any system of inventory

control.

5.226 Procedure for issuing export permits by DPI varied

considerably from region to region. In some cases the

certifying meat inspector signed the permit; more often, all

permits were issued only at regional offices. Uniform

procedures have now been instituted and, apart from some

outports, all export permits are issued by regional offices.

135

5.227 Invariably importers require exporters to produce

health certificates attesting that the meat is fit for human

consumption and, in many cases, attesting to the absence of

certain animal diseases in Australia or in the particular area

where the animals concerned were slaughtered. DPI provides

exporters with health certificate forms which, when filled out

by the exporter, are presented to a DPI regional office for

signature by a veterinary officer and sealing with the

departmental seal. The EMRs require that certificates may be

issued only after the meat has been loaded aboard the vessel or

aircraft in which it is to be exported. Special arrangements

are made for air freight consignments so that the health

certificate may accompany the load, but in the case of

consignment by sea, the exporter must produce a signed bill of

lading to DPI before the certificate will be issued. Details

given on the certificate are checked against the export

permit.

5.228 While at first sight it may appear unwise to make

blank forms of health certificate freely available, it must be

recalled that some 90 000 certificates are issued annually. I

do not regard it as practicable to have DPI prepare all

certificates. In one instance drawn to the attention of the

Commission an exporter arranged for the supply of forged health

certificates to an importer, thus enabling the exporter to pass

off pet meat as being fit for human consumption. (See

paragraphs 6.86-89). No doubt the free availability of blank

health certificate forms facilitated that deception.

Nevertheless, I do not regard this matter as one warranting any

change in the system of preparation of health certificates.

The difficulty exposed in that matter can and should be dealt

with in other ways.

5.229 As events have shown, the system of documentary

controls in use in August 1981 was not effective to prevent the

export of meat which should not have been exported.

136

5.230 Notices of intention to export bore certificates from inspectors who had never seen the meat which they were

certifying had been prepared in conformity with the EMRs; the

inspectors had seen only the cartons or wrapping surrounding

the meat, which may have been slaughtered in one place, packed

in another and presented for export at a third place.

Inspectors signed the certificate in the belief that the system

was such that only meat eligible for export was presented for

export. It is clear that any such belief was wrong.

5.231 It may be said that no criticism should be made of DPI

in this regard because no one contemplated events of the kind

that did occur; and even if such events had been within

contemplation, it is unlikely that industry, or for that matter

government, would have agreed to the introduction of elaborate

security and inventory control schemes of the kind now in force

or proposed. No doubt there is force in this argument.

Further, it may be said that in fact DPI had moved some short

way towards an inventory control system before August 1981.

But it is now clear that the documentary controls then in force

were not effective to prevent export of meat ineligible for export.

5.232 Some changes were made soon after the discovery of

species substitution. Boning-rooms and coldstores were

required to keep inventory records, which were to be made

available for inspection by DPI staff. This may have had some

slight tendency towards making good the assumption that only

export meat entered and remained in the system. Much more

significant was the introduction of elaborate physical security

measures and full-time inspection of independent premises.

5.233 In essence, the whole system of documentary control

over the export of meat was, and still is, one based on the

twin assumptions that only export meat enters and remains in

the system and that cartons, labels, tags and accompanying

documents describe the meat in question accurately. That must

137

remain the basis of the system for as long as the system is one

where those documents may be brought into existence after the

meat has moved from its place of preparation, and by persons

other than the inspectors who supervised that preparation. No

doubt it would theoretically be possible to devise a system

whereby the inspectors who supervised preparation of the meat

were responsible for issue of any necessary certificates. But

the practical difficulties of instituting and operating such a

system would be immense.

5.234 In any event, such a system would itself.be dependent

upon an assumption that the meat presented for export was

identifiable as, and identical with, meat inspected possibly

months before and many miles away.

5.235 DPI has indicated in its final submission to the

Commission that it is examining the use of electronic

information and communication systems for transmission of

documents and information between export establishments and DPI

offices. It is thought that the use of such systems, perhaps

in conjunction with improved inventory control systems, may

enable the introduction of more efficient documentary controls

and the removal of some physical security measures at plants.

The proposal is only in its infancy. Much work will have to be

done before it can be seen whether it is practical, efficient

and worth the expense of implementing it. Nevertheless I

consider that the proposal is well worth exploring not only to

see whether a more efficient documentary control system can be

devised, but also in the hope that such a system may permit

withdrawal of some expensive physical security.

5.236 However, I think it most unlikely that any documentary

control system can of itself prevent the export of product that

should not be exported. It can make the introduction of

non-export meat into the system more difficult and more likely

to be detected but, in the end, any system of control depends

upon the efficiency and integrity of those who must implement

138

it and those whose activities it seeks to control. If one

cannot rely on that integrity, and past events suggest that

often one cannot, then fear of detection of malpractice is in

my view the best available method and perhaps the only

available method of bolstering the integrity of those who might

waver.

5.237 Ideally a system would permit the identification of

any suspect meat and the tracing of that to a particular

plant's production on a particular day when a particular

inspector was charged with supervising production. Whether

that could be done by physical identity marks on cartons or

carcasses I cannot say. The numbering of cartons might well

prove possible and would assist with the worst problems. Just

as importantly I cannot say whether such a system, if possible,

would-be reasonably practical and cost-effective. All I do say

is that while documentary controls are a necessary step in

ensuring the integrity of the export chain, I think it unwise

to regard such controls as being a sufficient step.

5.238 DPI regarded its control over the export of meat as

ceasing once the export permit was issued; thereafter it

became a matter for control by the Bureau of Customs.

5.239 Not surprisingly, Customs' first concern lies with

control of imports into Australia; in that sense control of

exports assumes a relatively low priority. Perhaps for this

reason, before August 1981 a degree of looseness crept into the

administration of Customs' control over exports of meat. Before

August 1981, export permits were not always produced to Customs

before clearance of the vessel. Repeatedly Customs was asked

to clear a vessel when not all required export permits for meat

and other commodities had been produced. This led in 1978 to a

'letter of guarantee1 system for dairy products, which was later

extended to other commodities including meat. When an exporter

did not make an export permit available before the time of

clearance of the vessel, the shipping line would provide

139

Customs with a letter guaranteeing to supply the permit. In

fact permits were not always supplied. Sometimes exporters

would assure the clearing clerk that a permit had been issued

and even quote a permit number in support of that contention

and, in that event, no letter of guarantee was normally

required. Since blank forms of permit bearing the relevant

number were freely available to exporters, and were not

accountable documents, such an arrangement had obvious defects.

Nevertheless there is no evidence to suggest that this practice

was connected with any export of meat that should not have been

permitted.

5.240 Discovery of horse-meat substitution caused Customs to

look back over past events and practices. Enquiries made in

August and September 1981 showed that, in some cases, meat had

been shipped without being recorded in the interim cargo

manifest used by Customs to clear the vessel and without permits

having been produced to Customs for that meat. But again, there

is no evidence to suggest that that was related to any

malpractice in the meat industry. Indeed it would seem to be

no more than another symptom of a casual attitude which had

developed among shipping companies and exporters in relation to

export procedures for meat.

5.241 The letter of guarantee system was stopped in

October 1981 and tighter Customs controls instituted. Apart

from cases where no permit is available because DPI is at

fault, no cargo is to be shipped on board without production to

Customs of any necessary permit. In cases where DPI is at

fault, DPI is to give written advice of the permit details to

Customs.

5.242 No evidence critical of those new procedures was led,

and I therefore think it safe to assume that they are working

well.

140

5.243 Health certificates are important commercially in that

letters of credit often require production of a health

certificate before funds may be drawn against the credit.

There was some suggestion before me that documentary controls

over exports of meat should recognise that commercial

significance and make the health certificate a key control

document. I do not consider that to be appropriate. Apart

from the fact that the health certificate is a document

directed to the authorities of the importing country, rather

than Australian authorities, and apart also from the practical

difficulties of introducing greater control over the issue of

health certificates, I think it important that attention not be

directed away from the export permit. That should remain the

most important document governing whether goods can be placed

on board a ship or aircraft destined overseas.

(g) Sampling and species testing

5.244 Before August 1981 DPI had no system for the regular

taking of samples from meat prepared at export establishments,

or ultimately presented for export, and testing the species of

that meat. Some tests were made for undesirable chemical

residues in meat where importing countries required that to be

done. No regular tests were made for bacteriological quality

or cleanliness in general. Very infrequently DPI became

involved in commercial disputes about the quality of meat to

the extent of having a representative examine meat either in

Australia or overseas, but more usually these matters were

dealt with by AMLC.

5.245 The United States Department of Agriculture did

conduct regular examinations of imported meat on a statistical

sampling basis. In the case of meat from producing

establishments having a good record of past performance, a

so-called 'skip lot1 system was used which entailed examination

of fewer shipments from those establishments.

141

5.246 If meat was rejected for entry to the United States,

USDA would advise DPI of the fact of the rejection and the

reason for the rejection. DPI maintained a record of those

rejections, by reference to producing establishments, and

arranged for veterinary officers to visit those establishments

to investigate the cause of those rejections. Meat could be

and was refused entry for any of a number of reasons ranging

from being in what was termed 'off condition1 to having

excessive undesirable chemical residues.

5.247 As a result of its own horse-meat scandal in the

1960s, USDA introduced routine species testing for both its

domestic and imported meat. But in 1974, after more than ten

years without any detection of species substitution in imported

meat, species testing for imported meat was stopped. The

stopping of regular testing was not made known to Australian

authorities; and indeed at the time of the discovery of

horse-meat in August 1981, DPI officers did not know what, if

any, species testing USDA was performing. I cannot say whether

it was known in the United States or Australian industries but,

if it was, I doubt that it was known widely. Although USDA

inspectors were instructed to sample any suspicious product,

the first discovery of horse-meat in Australian boneless beef

packs was made not as a result of inspections at the port of

entry of the meat but by an inspector at a processing plant.

5.248 As soon as DPI was advised of the discovery of

horse-meat, it began random species testing of meat then being

held in coldstore before it was exported to the United States.

On 14 September 1981 it began a planned programme of

statistical sampling and testing of meat from all registered

export establishments. USDA agreed with the sampling and

laboratory test procedures adopted. Export meat establishments

were classified into three different risk categories and the

number of samples to be taken was fixed by reference to the

142

category to which establishments were assigned. All export

meat other than items readily recognized on visual inspection

were to be subject to test.

5.249 Although DPI approached state departmental authorities

suggesting that states institute routine species testing, not

all states did so. For this reason, I cannot exclude the

possibility that some meat originally destined for export, and

which was not as labelled, was diverted to domestic consumption.

5.250 Two kinds of species test are presently used: an agar

gel diffusion test (AGDT) and an iso-electric focussing test

(IEFT). The AGDT detects the difference between cattle, sheep,

horse and kangaroo-meat. It does not differentiate beef from

buffalo or goat from mutton. The IEFT does differentiate

between these related species but, compared with the AGDT, is a

specialised and expensive test. Subject to the limitations I

have mentioned, both tests are sensitive and accurate.

5.251 The species testing programme is time consuming and

expensive. Inspection staff must take the samples. In itself

this is an expense and may be seen by exporters as leading to

delay in the preparation and despatch of shipments. No doubt

there are now and will be occasions when delay is caused. On

top of this, considerable laboratory effort must then be

devoted to testing the samples taken.

5.252 Of the many thousands of samples taken since

September 1981, only a very few samples have proved to be meat

of a species other than that appearing on the label, and those

were taken from meat produced before August 1981. It may be

said that this suggests that the programme should be

discontinued, but in my view it must be maintained. Its

existence is a real deterrent to species substitution. It must

be remembered that Australia has abundant wild animals

providing a ready source of meat for the unscrupulous. Fear of

detection of the introduction of such meat into the export

143

chain is the surest safeguard against recurrence of incidents

of the kind discovered in August 1981. Continued negative

results of such testing should be seen as no more than proof

that the deterrent is effective; they should not be seen as

reason to abandon, or greatly reduce the scale of, the

programme. It is to be hoped that further research may

simplify and cheapen the task of species testing.

5.253 No substantial evidence was led to suggest that it was

either necessary or desirable to institute regular testing of

the bacteriological condition of meat presented for export or

make other tests for cleanliness in general. Nothing in the

material presented to me suggested that the cleanliness of meat

exported from this country was such as to require any regular

testing regime. In any event, there is nothing before me to

suggest that such a regime is necessary to deal with any

recurrent malpractice.

(h) Penalties

5.254 The EMRs prescribed penalties for breach of a number

of provisions of the regulations. The maximum penalties

prescribed remained unchanged for many years and, fixed as they

were at a fine of $100, did not represent any deterrent at all

to continued malpractice in the industry.

5.255 Immediately after the discovery of horse-meat

substitution, legislation was passed increasing penalties for

breach of some of the provisions of the EMRs - relating to

improper use of inspection stamps, interference with official

marks and false or misleading statements in declarations

furnished under the EMRs. The penalties were increased to a

fine of up to $100 000 or imprisonment for up to 5 years, or

both. These penalties were reviewed when the Export Control

Act 1982 was passed and some changes were made. Penalties were

prescribed for some conduct not previously prohibited and in

the case of the offence of making false or misleading

144

declarations, the penalty was reduced from a fine of $100 000

or 5 years imprisonment or both to a fine of $2000 or 12 months imprisonment or both.

5.256 It is clear that the penalties which were fixed by the

EMRs were inadequate.

5.257 Not only were the penalties too low to act as a

deterrent against, or as a punishment for, wrongdoing that may

have resulted in great financial advantage to the wrongdoer,

there were also significant gaps in the penal provisions of the

regulations governing the industry. Some of those gaps were

revealed by matters which had come to the attention of DPI in

the ten years before the appointment of this Royal Commission.

Generally, DPI's response to the revelation of such gaps was

disappointing. Little was done to attempt to fill even the

most obvious of them.

5.258 Early in 1981, before the discovery of meat

substitution, central office of DPI began a review of the penal

provisions of the EMRs with a view to clarifying or redefining

offences and examining the magnitude of penalties. That review

revealed that only rarely had regional offices of DPI attempted

to initiate prosecutions for breach of the EMRs. Generally,

they had preferred to use persuasion and the threat of possible

action to obtain compliance with the regulations. The

Victoria-Tasmania region had referred a number of matters to

Commonwealth Police and there had been some prosecutions, but

these had resulted in the imposition of relatively small

fines. The response of many of the VOICs and regional

directors to the request for information by central office

revealed a low level of interest in the subject of the review

and a general lack of appreciation of the problems that past

events had revealed.

145

5.259 Foremost among the problems that those events had

revealed was the ridiculously low level of penalty that could

be exacted from wrongdoers. In November 1979 a company was

discovered substituting boneless mutton for boneless beef.

Thirty cartons were found and it seems that at least 167

cartons of mutton had been described as 'beef'. The same

company had been suspected earlier of substituting mutton for

hoggett and beef kidneys for sheep kidneys. The principal of

the company was charged with applying a false trade description

to the meat which had been described as beef. He was convicted

and fined the maximum amount of $100. The company continued on

its way and was later discovered substituting cow beef for bull

and mutton for lamb, both on a very large scale.

5.260 Despite this and other incidents where similarly low

penalties were exacted, nothing was done by DPI about that

level of penalties until the institution of the review I have

mentioned.

5.261 Events in the ten years before the discovery of

horse-meat substitution revealed a series of problems related

to the 'Australia Approved' stamp. I have said earlier that

inspectors at coldstores and boning-rooms relied on the

presence or absence of that stamp on carcasses, wraps or

cartons to determine whether or not meat was export meat. Yet these stamps were provided by operators and this was allowed to

continue for years. In 1977 a VOIC wrote to Central Office

noting that inspection staff could control all official stamps

conscientiously but never be sure of how many new stamps were

in the possession of the operator. From time to time questions

arose as to whether an 'Australia Approved' stamp was an

'official mark' within the meaning of Part V of the Crimes Act

1914 and thus a mark the forgery of which was punishable with

up to two years imprisonment.

146

5.262 On several occasions matters came to the attention of

the Department where it was clear that 'Australia Approved1

stamps had been applied without authority and that the stamps

had been obtained in circumstances where they should not have

been obtained. Apart from one case in 1972 where an operator

was charged with, and pleaded guilty to, an offence of making a mark resembling an official mark, arising out of the misuse of

an 'Australia Approved' stamp, no conviction was recorded

before August 1981 for an offence related to the misuse of such

stamps. Despite these and other similar matters, no move was

made to close the gaps which had been revealed.

5.263 Several cases were referred to DPI where it seemed at

least highly probable that meat produced at non-export

abattoirs had been introduced or was intended for introduction

into the export chain.

5.264 In 1979 an operator was discovered at unregistered

premises, in possession of an 'Australia Approved' stamp,

packing meat stamped with an 'Australia Approved' stamp, into

cartons stamped in the same way. When advice was sought from

the Deputy Crown Solicitor, the Department was told that there

was insufficient evidence to establish a prima facie case

against the operator. Whether that advice was right or wrong,

the events should have suggested a need to change the regulations to ensure that meat could not be packed in this

way, yet no step was taken.

5.265 It is unfortunate that it took the discovery of

horse-meat substitution to induce any positive action to deal

with these matters. They are now dealt with in the Export

Control Act 1982. I do not propose to deal with the provisions

of that Act in any detail. It is enough for me to say that I

regard the penalties provided as realistic and far more likely to deter malpractice than were the previous provisions.

147

(i) AMLC licensing and quality control

5.266 The Australian Meat and Live-Stock Corporation was set

up in 1977 and replaced the Australian Meat Board (AMB) which

had been formed in 1935. AMB had statutory responsibility for

meat only whereas AMLC has responsibility for export of both

meat and live-stock. There are other differences between the

powers and functions of the two bodies, but it is not necessary

to deal with those for present purposes.

5.267 AMLC considers itself to be an organ of the Australian

live-stock and meat industries. Its income is derived from

those industries; it has elaborate machinery for consultation

with elements of the industry. It seeks to fulfil its statutory

function of encouraging and promoting the consumption and sale

of Australian meat in Australia and overseas by providing a wide

range of technical and marketing services of a kind which it is

said individual industry participants could not.

5.268 The Act setting up AMLC was amended significantly in

1980, and further amending legislation was passed in 1982 but

that later legislation had not been proclaimed at the time of

writing this report. Nevertheless I assume that the 1982

amendments will come into force.

5.269 For present purposes, the key provision in the

Australian Meat and Live-Stock Corporation Act 1977 is that

which prohibits the export of meat from Australia except by

persons holding a licence issued by AMLC. Strangely, until the

1982 amendments to the Act, the legislation did not provide a

penalty for breach of the provision prohibiting export by

unlicensed persons. Licence-holders were required to comply

with the conditions and restrictions imposed on their licence

and breach of any of those conditions or restrictions was

subject to penalty.

148

5.270 The 1982 amendments to the Act made very significant

changes to the provisions governing the licensing of meat

exporters. Before dealing expressly with those provisions,

something should be said about the licensing arrangements that

existed before the 1982 amendments.

5.271 Not all operators of registered export premises are

licensed by AMLC to export meat and not all those who are

licensed to export meat conduct meat premises. Many licensed

exporters are simply traders in meat and other commodities who

seldom, if ever, see the meat they buy and sell. As I

understand it, the 1982 amendments are not intended to effect

any change in this general position. As I have said earlier

(para 5.135), I think it inappropriate to require all operators

of registered export premises to obtain licences to export meat.

5.272 Before the 1982 amendments, the Act did not make clear

whether AMLC had a discretion to refuse licences to applicants,

or, if it had such a discretion, how wide that discretion was.

It was clear that the licensing power was conferred for the

purpose of enabling the Corporation effectively to control the

export of meat from Australia and was exercisable only for the

purpose of achieving the objects of the Corporation specified

in its Act. But to what extent this permitted the Corporation

to refuse an application for a licence remained unclear. Both

before and after the 1982 amendments, provision was made for

applicants who were refused licences to apply to the

Administrative Appeals Tribunal for review of the decision.

5.273 AMLC has always had power to cancel or suspend

licences, but that power has been restricted. Until the 1982

amendments it was clear that the power could be exercised only

when AMLC was satisfied that a licensee had contravened or

failed to comply with a condition to which the licence was

subject. The Corporation took the view, and I think rightly,

that it could not use the power of suspension of licence as a

form of punishment for past misconduct. The power of suspension

149

was intended for use in circumstances where a licensee was

required to effect some changes to his manner of conducting

business, in order that he might be compelled to comply with

the conditions of his licence. The power of cancellation of a

licence was to be used only where a licensee had demonstrated

that he was not capable of fulfilling the terms and conditions

of his licence. Again, decisions made by the Corporation to

cancel or suspend licences were subject to review by the

Administrative Appeals Tribunal.

5.274 The Act made plain that licences were, issued subject

to the condition that a licensee should not export meat except

in accordance with written directions given by the Corporation.

As I have noted above, it is an offence for a licensee to export

meat in contravention of a condition of his licence. Until

October 1981, that offence carried a penalty of $2000; after

the amendment of penalties in relation to meat exports that was

made in October 1981, that offence carried a penalty of a fine

of up to $100 000 or imprisonment for five years or both.

5.275 AMLC has issued many directions in writing to its

licensed exporters. Many of them related to the application of

quotas for export of Australian meat to particular markets.

Other directions required exporters to report their export sales

to the Corporation. In 1979, the Corporation issued a direction

to all licensed meat exporters requiring each of them to

"ensure that the class, quality, standard, grading and preparation of any meat for export in his name is as specified in any agreement (whether in writing or otherwise) for the sale or supply of that meat".

5.276 This had the consequence that thereafter it was an

offence to export meat where the exporter had failed to ensure

compliance with contract specifications. No doubt proving such

an offence would be difficult, particularly where the meat in

question was overseas and the exporter was not the producer of

the meat. No evidence was led before me of any attempt to

prosecute for such an offence. However it was a step that was

150

open to the Corporation. In my view, the failure to abide by

contractual obligations should not of itself form the subject

of criminal sanctions.

5.277 I have referred previously to the fact that the 1982

amendments will require applicants for licences to show that

they are persons of integrity, who are competent and of

sufficient financial standing. I have said (paras 5.141-143)

that I have doubts whether provisions relating to competence

and financial standing are effective to achieve any significant

control over malpractice. It may be thought appropriate to

make such requirements for the purpose of protecting

Australia's reputation overseas against the acts of

incompetents or of those without sufficient financial backing

to honour their commitments. That is not a judgment I am

called o.n to make. It is enough for present purposes for me to

say that I doubt that those provisions would have any

significant effect in preventing malpractice.

5.278 I have expressed (paras 5.135-140 and 5.144-156) a

number of views about a proposed DPI provision requiring

applicants for approval of premises as export premises to show

that they are fit and proper persons for registration. I

regard those comments as equally applicable to the

administration of the provisions for licensing of meat

exporters; I need not repeat them.

5.279 For some years AMLC has attempted to persuade the

industry to institute efficient quality control programmes.

Indeed the general direction to meat exporters about compliance

with contract specifications, which I have mentioned earlier,

may be seen as one such step.

5.280 AMLC employs some four or five officers for its

quality assurance programme. Those persons have not had right

of entry to premises, but in fact have encountered little

difficulty in gaining access to plants by invitation. It was

151

said that their object is not quality control but quality

assurance. AMLC naturally regards operators as having the

primary obligation of ensuring that their product meets required

specifications. The Corporation's assurance staff is there to

respond to complaints, identify what, if anything, was wrong

with the product, investigate what caused that fault and suggest

methods of preventing its recurrence. On occasions the

Corporation has taken the extreme step of requiring individual

operators to permit AMLC staff to supervise preparation and

packing of product.

5.281 I can well understand the importance of ensuring that

inferior quality meat is not exported. A general reputation

for good quality meat satisfying contractual specifications, is

obviously vital to the export trade. Indeed, the satisfaction

of public health standards may be seen as no more than one

aspect of that general concern for the reputation of Australian

product. Nevertheless, I think it important that the industry

should not be unnecessarily burdened by controls and,

particularly, should not be subject to control by any large

number of different authorities.

5.282 The greater the number of authorities that have

control over the meat industry, the more likely it is that

inefficiency, gaps and duplication will result. In my view the

primary responsibility for ensuring that good quality product,

meeting contract specifications, is exported must rest with the

individual operator. It is certainly not appropriate, and

perhaps not even possible, for any supervisory service to

assume the major responsibility for quality control.

5.283 The 1982 Amendments to the Australian Meat and

Live-stock Corporation Act confer very wide powers on AMLC

officers to ensure compliance with that Act and the conditions

to which export licences are subject. I was told that, after

extensive negotiations between AMLC and DPI, it had been agreed

that AMLC would become responsible for quality assurance in

152

boning-rooms and offal rooms and would monitor carcass meats at

load-outs for product description and quality.

5.284 DPI is to be responsible for health, hygiene, product

description, carcass description and trade description

including questions of religious slaughter, net weight and

labelling to meet both Australian regulations and requirements

of importing countries. In order to fulfil the functions which

are to be assigned to AMLC, the Corporation considers that it

will need a staff of approximately thirty to monitor

boning-rooms and offal rooms.

5.285 The agreement to which I have referred was reached

bearing in mind that DPI proposes to introduce as much

objective measurement of carcass and other meats as is

possible. It is said that contract specifications go beyond

what is objectively measurable, and are matters for AMLC rather

than DPI because subjective questions are more likely to

produce overseas complaints. AMLC has now, and for some years

has had, a number of officers stationed at various overseas

posts. The functions of those officers include investigation

of marketing disputes. Although AMLC will not embark upon the

arbitration of any dispute it does lend the expertise of its

officers, and their good offices, to the settlement of those

disputes.

5.286 The quality assurance proposals to which I have

referred are said to be interim measures. It is proposed by

both DPI and AMLC to transfer responsibility for some aspects

of hygiene, quality control and product description to operators. Company graders are to be trained by DPI and AMLC

together and AMLC is to train company quality assurance

personnel.

5.287 Whether these proposals to place more formal

responsibility on industry are practical or not can only be

determined in the light of experience. There is no reason

153

apparent to me why they should not work, and indeed work well.

However, I emphasise that I think it would be unwise to allow

the development of a further substantial supervisory service,

independent of existing services, even if directed only to

questions of quality control. As I have said earlier, I

consider quality control to be primarily the responsibility of

the individual operators. I would like to think that the

oversight of that responsibility could be integrated into the

one meat inspection service even if it did call for persons

having special expertise.

5.288 Some efforts have been made in the United States to

introduce voluntarily quality control programmes. Those

programmes have apparently met with mixed success. Ultimately,

the success of any such programme in Australia will depend upon

the efforts made by the inspection services and by the

industry. If the industry is unwilling to participate fully in

such programmes they are bound to fail and it may then be that

the only alternative is greater regulation with the inevitable

consequence of increased costs to the industry.

(j) Arrangements for religious slaughter

5.289 Until recently the slaughter of animals in accordance

with the tenets of religious faiths which require particular

methods of slaughter, has been regarded as a private matter to

be dealt with by the industry, without supervision of that

aspect of the preparation of meat by any government entity.

DPI has had no role in the supervision of compliance with

religious requirements in the preparation of either kosher or

halal meat. Since 1979 AMLC has had a limited role in the

certification as halal of meat for export to Iran, but

otherwise has had no direct involvement in these matters.

5.290 For a number of reasons both DPI and AMLC have now

proposed that they should each play a role in the certification

as halal of meat which is to be exported to Islamic countries.

I deal in more detail with that subject in Chapter 7.

154

(k) Arrangements for export of game meat

5.291 I have noted elsewhere in this report that Australia

has a large population of wild animals which may be regarded as

a source of meat for human consumption. The difficulty in the

way of using that resource lies in ensuring its disease-free

preparation.

5.292 Until 1980 it was illegal to export field-shot game as

product fit for human consumption. It could be exported only

as pet food. In fact, significant quantities of kangaroo-meat

were exported as pet food and, in the case of exports to some

markets, notably Taiwan, most of it appears to have been

diverted to use for human consumption. Product that was

exported as pet food was nevertheless often accompanied by a

health certificate from DPI. Buyers required sellers in

Australia to supply such a certificate. There was no form apt

for the purpose and DPI made a practice of issuing certificates

in such cases which were normally used for the export of skin

and hides. Such documents certified that Australia was free

from certain diseases, notably foot-and-mouth disease and

blue-tongue disease, and that the district of origin was free

from certain other diseases, notably anthrax.

5.293 There is a significant market for game meats in parts

of central Europe and Scandinavia. In 1980, DPI published a

set of operational guidelines for inspection of game meat for

export, and export of game meat commenced. Regulations

governing preparation of game meat for export were not

promulgated until 1981. The guidelines and the regulations

fixed times within which animals must be bled, eviscerated and

refrigerated after shooting. The regulations provide broadly

similar documentary controls for the export game meat to those

which are required for the export of other meats for human

consumption.

5.294 The total market for game meat is not large when

compared with the market for other meats for human consumption,

155

and the number of operators in the field is very small.

Nevertheless, even taking these facts into account, the present

level of inspection by DPI appears to be hardly adequate. DPI

does inspect the works at which animals are processed, inspects

carcasses, notes the time between slaughter and receipt of the

carcass at the processing works, notes the temperature of the

carcass of the time of receipt at the processing works and

inspects carcasses for pathological conditions. There is

however little, if any, systematic inspection of field

operations.

5.295 In my opinion it is desirable to devote some greater

attention to inspection of field operations of game meat

producers. By their nature, these are operations that must be

conducted in large part unsupervised, but at least some

attention should be directed to setting standards for equipment

to be used in field operations, to ensure that the opportunity

is there for hygienic preparation of carcasses in the field and

some system should be instituted for regular random inspection

of field operations.

5.296 Without such a system, there is a risk that effective

measures to ensure that game meat is free from disease will be

left to the goodwill and sense of propriety of individual

operators. A potentially valuable industry could be destroyed by one irresponsible operator.

(1) Arrangements for export of pet meat

5.297 There was no government control over the export of pet

food until after discovery of horse-meat substitution. I deal

with some aspects of the export of pet food in Chapter 6.

5.298 I have noted in para 5.292 above the practice of using

'skin and hide' health certificates to accompany exports of pet

meat. Apart from the issue of such certificates, DPI had no

role at all in export of meat unfit for human consumption until

13 November 1981, when export of inedible meat was prohibited

156

unless authorised by permit issued by DPI. From 1 March 1982,

further requirements were made that all inedible meat exports

from Australia should be labelled as 'Inedible meat. Not fit

for human consumption'.

5.299 Past events have made plain that such controls are necessary.

5.300 I have referred in Chapter 6 to a number of practices

whereby diversion of pet meat into human consumption overseas

was facilitated. I regard the regulations which were brought

into effect after August 1981 as effective to prevent

recurrence of the practices I have mentioned there.

(m) Summary

5.301 It will be apparent, from all that I have said in this

chapter, that I believe administrative arrangements and

procedures, for supervision of the handling of meat for export

have been far from adequate to ensure that such meat has met

the requirements prescribed by law. I believe that they are

now adequate, but could be made more cost-effective and more

certain. My recommendations to bring this about are in

Chapter 9A.

157

CHAPTER 5B

ADMINISTRATIVE ARRANGEMENTS AND PROCEDURES CONCERNING

MEAT FOR HUMAN CONSUMPTION IN VICTORIA

(a ) The Department of Primary Industry

5.302 A large part of the meat consumed in Victoria comes

from abattoirs registered for export. Some of it reaches the

local market through export-registered boning-rooms, coldstores,

smallgoods manufacturers or canneries. Thus a great deal of

the inspection of meat and meat products consumed in Victoria

is performed by the Commonwealth Department of Primary Industry.

Large parts of the description given and comments made in

Chapter 5A are therefore directly relevant to Victorian

consumers. .

5.303 It is only necessary here to make the point that the

problems have tended to be greater in Victoria than elsewhere

because of the large number of independent, export-registered

boning-rooms and coldstores. Another relevant factor is the

large number of export-registered smallgoods manufacturers in

Victoria, many of which have been permitted to receive meat

killed in non-export abattoirs for use in non-export lines of

product. This has been hard to avoid in cases where only a

small part of the factory's product goes to export. If the

rules requiring only export product on export-registered

premises were strictly enforced in such cases, the manufacturer

would either have to purchase exclusively the more expensive

meat from export abattoirs or give up his export trade

altogether. Nevertheless, as I have already said (paras 5.209­

211), practice and regulations must be brought into line.

(b) The Victorian Abattoir and Meat Inspection Authority

5.304 This authority was created in 1974. Officers of the

Department of Agriculture, on behalf of the Authority,

immediately set about the task of reviewing existing non-export

abattoirs and slaughterhouses. Over the succeeding years these

were either brought up to required standards or closed down.

158

In more recent years, similar attention has been given to

boning-rooms, coldstores, smallgoods factories and other meat

establishments.

5.305 Since no issue concerning the standards of construction

or equipment of licensed establishments in Victoria has been

raised before the Commission, there is only one aspect of the

licensing system to which I need refer.

5.306 This relates to the provision in the Abattoir and Meat

Inspection Act 1973 that the Authority may refuse to issue a

licence "if the Authority determines that the application should

be refused having regard to .... the unsuitability of the

applicant or the lack of merit in the application" (Sec 27(c)).

5.307 Until recently, this seems to have been taken by the

Authority to refer in particular to the experience and

financial standing of the applicant, and his or its ability to

conduct a viable enterprise.

5.308 However it is clear from evidence given about a

particular recent application that the Authority now regards

itself as free - and perhaps obliged - to take into account the

behaviour in the industry of persons closely associated with

the application.

5.309 I must say that I support this view, as a matter both

of statutory interpretation and of desirability. The Authority

could certainly have regard to cases where there has been

deliberate and serious disregard of public health (as where pet

meat, or product known to be unfit, has been sold for human

consumption). It could also take into account serious cases of

fraudulent misrepresentation of product.

5.310 These however are questions of policy, to be

determined by the Authority, subject to normal procedures for

the review of such administrative decisions. My comments in

159

paras 5.135-156 above are also relevant here. The Authority

will no doubt take the advice of the Victorian Crown Solicitor

as to its powers and obligations in such cases - particularly

on the question of the type of relationship between a

particular wrongdoer and the applicant which could justify a

refusal.

(c) The State meat inspection service

Staff numbers

5.311 The Meat Inspection Branch of the Department of

Agriculture was established late in 1974. It is headed by a

principal veterinary officer, who is responsible to the Chief

of the Division of Veterinary Public Health. Apart from the

branch head, there are 5 oth.er veterinary officers, some 250

meat inspectors, including supervising meat inspectors and a

principal meat inspector, and 30 branders.

Role of veterinary officers

5.312 It will be noticed from these figures that the

proportion of veterinary officers to inspectors is very much

lower than in the case of the DPI. It is, of course, the

requirements of the USDA and other importing countries which

have played the major part in causing the DPI to be so heavily

veterinary-oriented. And, naturally enough, the DPI is

concerned to defend the system it has become used to, just as

emphatically as the Victorian Department defends its system.

5.313 I can only say that, having regard to.cost factors, to

the current level of animal disease in Victoria, the lower

likelihood of exotic diseases appearing in Victoria than in the

northern States, and the generally younger age and higher

quality of animals killed for the domestic market, I do not

believe the Victorian Department is significantly understaffed

with veterinary officers. I say "significantly understaffed"

because I do not want to be taken as expressing a view on the

precise number of veterinary officers desirable for the

effective management of the Branch. Nor have I considered

160

whether senior officers with other skills - as administrators

or construction and equipment experts, for example - could

usefully be employed. I am merely saying that I believe that

the general Victorian approach to veterinary involvement in

meat inspection is right for Victoria's purposes.

Place of the inspection service in the Department

5.314 Before the Meat Inspection Branch was established, all

meat inspection was in the hands of municipalities, under the

general control of the Commission of Public Health. The

details of these arrangements are no longer important; nor are

most of the reasons which led the Victorian Parliament to hand

control of meat establishments over to the Department of

Agriculture.

5.315 . One significant point about the changeover should

however be noted. The direct involvement of the Department of

Agriculture in meat inspection at abattoirs ensured that

information on stock diseases could more readily be connected

with the farm of origin and thus linked in with the

Department's programmes of disease eradication. This is an

important consideration which must never be lost sight of when

planning a meat inspection service.

5.316 I am assured by senior officers of the Department that

relations between the meat inspection service and related

services of the Department, concerned with such matters as

disease control, industry development and the provision of

field services, is excellent at all levels. I have no reason

to doubt this.

5.317 One reason for such good integration of the meat

inspection service is that it sees itself as having

responsibilities going well beyond the ensuring of wholesome

meat for the public. It believes that it should also try to

improve the efficiency of abattoirs, play a part in animal

disease control, review the adequacy of regional meat

161

processing facilities, generally supervise the pet meat

industry and, through research and encouragement, seek to

improve the quality and efficient marketing of meat for human

consumption.

5.318 Although I have some doubts about the division of

responsibility for meat inspection between an appointed

Authority and a government department, and I suspect that such

arrangements have not always worked well in other States, the

system has been effective in Victoria.

Training

5.319 One area in which the Authority has, with the support

of the inspection service, been active is that of training. A

good deal of thought and planning has gone into the development

of courses in meat inspection and the selection of students for

those courses. The task of developing such courses has been

complicated by the fluctuations in demand for meat inspectors.

There have been occasions in recent years when significant

numbers of new recruits were needed quickly. At other times

there has been very little demand.

5.320 In-service training also received close attention when

the service was first established and was developed until 1978,

when lack of manpower and funds unfortunately forced its

curtailment. It is only resuming this year.

5.321 I have expressed elsewhere (5.115-119) some general

views on future training requirements for meat inspection

services. All I need say here is that I believe Victoria has,

to the limit of its resources, played a full and effective role

in the training of meat inspectors in recent years.

Career development

5.322 On the subjects of recruitment and career development

it seems that the Victorian service competes quite well with

the Commonwealth service. Although it is much smaller, its

162

fewer veterinary officers mean that there are a number of

responsible and quite well-rewarded jobs available to meat

inspectors in the Victorian service. And although overtime

earnings tend to be a good deal higher in the Commonwealth

service, there seems generally to be more stability of postings

in the State service - which has, of course, no requirement for

temporary interstate transfers.

Allocation of inspectors

5.323 I have described in Chapter 3 the various steps in

meat production and the role of meat inspectors in relation to

each of these steps. In doing so I mentioned the presence of some State inspectors on export-registered establishments. The

extent to which State inspectors are so employed varies

considerably throughout Australia.

5.324 In Victoria there are about 40 state inspectors at

export establishments. Of these some 27 are at four meatworks

which have a considerable local through-put. Under a senior

meat inspector they are generally responsible for inspections

at the beginning and end of the chain and at the viscera

table. They also have boning-room responsibilities when meat

is being packed for local consumption.

5.325 Apart from inspectors stationed at abattoirs, the Meat

Inspection Branch has, under a supervisor, a team of six

experienced meat inspectors each of whom is responsible for

about 25-30 meat premises - boning-rooms, coldstores and meat

inspection depots. Their responsibilities are to check the work

being performed at the time of each visit, the meat awaiting

processing and the packs of finished product. They also examine

records kept by the establishment. All this is done to ensure

that hygienic standards are maintained, that meat being

processed comes from a licensed abattoir, properly branded or

stamped, that the product being produced is accurately described

on its cartons or other containers, and that, generally

speaking, there is nothing to arouse suspicion of any breach of

the law.

163

Keeping of records

5.326 At the moment there is no prescribed form in which

records concerning the production, storage and movement of meat

have to be kept. It would obviously assist the inspection

process if there were some consistency of records required, and

this is now in hand.

Brands and stamps

5.327 Brands and stamps are an important part of the meat

inspection system. They are purchased by the Department and

they remain in the possession of the inspectors at the various

establishments. They are applied by the inspectors themselves

or by branders employed by the Department. Most brands

incorporate the number of the licensed establishment but, in

the case of those inspectors responsible for a range of meat

premises in a geographic area, the number used is that of the

inspector himself.

5.328 Brands are increasingly being varied to enable

distinctions to be drawn between, for example, lambs, hoggetts,

goats, kids and deer.

5.329 In addition to marking individual carcasses and

cartons, the inspector appointed to each establishment (or the

senior inspector if more than one) is required to maintain

daily records of the quantities of meat packed and processed.

5.330 This should enable him to detect any movement of meat

which has occurred without appropriate branding taking place.

The system does, however, break down at times and meat is

despatched unmarked, either because the processor could not be

bothered notifying the visiting inspector of its imminent

departure, or because the inspector's other functions prevented

him from getting to the establishment in time. In such cases

the inspector responsible for the receiving end of the

164

consignment ought to be notified by telephone of the unstamped

consignment and should do the stamping - but the human element

quite often intervenes and this does not occur.

5.331 In the course of its informal inspections of Victorian

establishments, the Commission noted several examples of stacks

of cartonned meat which should have had 'D of A' stamps but did not.

Responsibilities of industry management

5.332 I do not believe that the solution to any security

weaknesses in the Victorian system lies in the employment of

more inspectors. I think, rather, that more acceptance of

responsibility by management would be a great help. Instead of

regarding the inspection system as being something superimposed

on their commercial arrangements, for which they have no direct

responsibility, operators should regard the inspection system

as part of their own quality control mechanisms. Thus if a

batch of cartons come into the works unbranded, the foreman

should take the initiative in drawing them to the attention of the visiting inspector and querying the occurrence. The

inspector should begin his visit by asking appropriate

management representatives if there is anything he should know

about. He should then rarely be in the position of discovering

anything untoward for himself and should report any apparently

deliberate non-disclosure.

5.333 Managements which, over the years, build up a

reputation for straight dealing and for bringing any problems

they have into the open, should attract sympathetic responses

and be permitted a greater degree of self-regulation. Those

which volunteer nothing that they do not have to, should

attract the continuing close attention of inspectors.

5.334 Those establishments which are dealt with on a

visiting basis - and particularly those which are suspected of

cutting corners, or indulging in any form of malpractice -

165

should be visited at random times and in varying sequences, so

that no predictable pattern of inspection emerges. This has

always been the aim of the service, but it is easy to slip into

reasonably regular ways and difficult to avoid giving an

appearance of distrust if two visits are made in quick

succession. But if an operator is contemplating some dishonest

act, he is most likely to initiate it immediately after an

inspector leaves - believing that he will at least be safe for

the rest of the day.

5.335 I believe that none of these difficulties is insoluble

and that common-sense supervision can produce an effective

inspection service which is not too expensive of manpower.

Meat transport vehicles

5.336 One difficult area of supervision for the Meat

Inspection Branch is meat transport vehicles. Almost 3000 such

vehicles are licensed, after inspection, by the Branch. Two

inspectors are engaged full-time on these duties. Other

inspectors, stationed at meat establishments, have a general

responsibility to keep an eye on the cleanliness and general

condition of vehicles coming to the premises.

5.337 Since standards are not always high, a large number of

operators are warned in writing each year. Apart Lrom an apparent unwillingness to launch prosecutions, I have no reason

to think that the Branch is not taking all reasonable steps to

maintain proper standards for these vehicles. Prosecutions

should only be launched for serious or repeated offences, but I

suspect the Department has been too lenient in the past.

Re 1ations with Commonwealth service

5.338 Generally speaking, relations between the Victorian

and Commonwealth inspection services have been friendly, but

not fully effective.

166

5.339 At the plant level there has been little evidence of

the antagonism between the two services which has been apparent

in some other states until quite recent times.

5.340 The veterinary officers at the head of the two

services in Victoria in recent years have co-operated well

whenever one has approached the other for assistance or

action. Most of the weaknesses to which attention was drawn

during the Commission's hearings arose from a lack of any

communication on the particular topic.

5.341 In most cases the failure was on the Commonwealth side

and seemed to arise from a desire to get on with an inquiry and

achieve a degree of certainty before notifying the Department

of Agriculture of what had occurred. Such a tendency is

natural, but must be resisted when the State has a genuine

1 need to know' in order that it may take appropriate action or

institute its own inquiries.

5.342 The Department of Agriculture seems to have

successfully resisted this temptation and passed information

promptly. This has not always produced the vigorous response

it might have hoped for.

Relations with Victoria Police

5.343 The Department of Agriculture has been much more

prepared than the DPI to pursue its own investigations into

apparent breaches of its Act or Regulations. It has done this

by means of teams containing a judicious mixture of head office

investigatory experience and local knowledge. Such teams of two

or three officers have been established whenever a need arose

and, generally speaking, seem to have operated effectively.

5.344 The main criticism which can be directed against this

practice is that some more serious cases, which should have been

referred to police - particularly when the alleged criminal

conduct of meat inspectors was in issue - have not been.

167

5.345 This seems to have arisen partly from a sense of

sturdy self-confidence in the Branch and partly from a

disappointing experience in 1979, when inquiries into the

misuse of pet food were compromised by a leak to the press,

which was believed by the Branch to have come from within the

Victoria Police.

5.346 The Department is considering the establishment of a

compliance section, along with the related question of the

extent to which the Victoria Police should be involved by the

Department in investigations of malpractice, including questions

relating to the integrity of its own inspection force. Both

Dr Rees and a previous Minister, the Hon I.W. Smith, were

inclined to concede in retrospect that the Department had taken

more upon itself than it should have done, and required less of

the police force than it should have done. However I did not

gain the impression that the Department was looking with much

favour at the prospect of increased police involvement. I

think this is wrong. I would recommend that the Department

seek the setting up of a permanent compliance unit along the

same lines as I have recommended for the DPI (5.22-23). This

will require close co-operation with the Victoria Police. The

Department should recognize that it has neither the resources

nor the skills to pursue certain types of investigation.

Relations with Health authorities

5.347 When the Meat Inspection Branch was first established,

it seems to have met with a good deal of opposition from

municipal health surveyors. This was understandable since the

work of meat inspection was being removed from their general

area of control.

5.348 Some ill-feeling and sensitivity seems to have

persisted over the years, though all agree that relations have

been much better in recent times.

168

5.349 I was invited to consider one quite recent bad case of

lack of co-operation between officers of the meat inspection

service and of a Melbourne municipal council. Having done so I

was left with the clear impression that there had been errors

of judgment and some rather foolish behaviour on both sides,

but that the episode contained no useful lessons for the future

- beyond the obvious necessity for all public servants to work

together to achieve the degree of protection from unwholesome

meat to which the public is entitled. I have not thought the

episode worthy of any detailed description in this report.

(d) The Victorian Health Commission

5.350 The Health Commission retains the responsibility for

supervision of retail butchers' shops and of certain other

premises where meat is used in the preparation of food products

5.351 The present dividing line between the responsibilities

of the Meat Inspection Branch and the municipal health

surveyors, working under the general control of the Health

Commission, is somewhat anomalous.

5.352 In April 1978, a number of smallgoods and other

similar establishments sought and obtained, from the then

Minister, exemption from the provisions of the Abattoirs and

Meat Inspection Act. This meant that they were beyond the authority of the Meat Inspection Branch. Immediately

afterwards, many of them discovered that, without a certificate

from the Branch, they could not send their products inter-state

Those establishments then obtained revocation of their

exemptions. There is no logical reason why one group of such

operators should be supervised by meat inspectors and the other

by health surveyors.

5.353 The important consideration from the meat inspection

point of view is that the Branch should be able to trace meat

up to the point where it loses its identity in a manufactured

food product, is cooked for eating, or is sold by retail.

169

5.354 It seems more appropriate that the cleanliness of such

premises, and the wholesomeness of the product, should be seen

as a health responsibility. Thus municipal health surveyors

routinely sample meat and meat products in shops and take

action if any adulteration is found (typically preservative in

minced meat) or if there is any breach of regulations

prescribing, for example, meat content in sausages or pies.

5.355 But the ability to demand an answer from a smallgoods

manufacturer, restaurant owner or wholesale butcher, to the

question "Where did that meat come from?" is vital for the

functioning of an effective meat inspection service. And if a

manufacturer is handling so much meat that it is desirable to

have constant or regular inspection of his operations, there

seems no point in not accepting responsibility for the hygiene

of the premises and workers at the same time.

5.356 In spite of the arbitrary line of demarcation to which

I have referred, which is repeated in the case of small boning-

rooms attached to retail butchers' shops, relations between the

meat inspection service and the health authorities now seem to

be good and improving. It is important that they should not be

compromised by any changes that might take place in the

inspection service.

5.357 One recent case which tested the ability of a number

of authorities, including DPI, the Department of Agriculture

and the Health Commission, to work together in a crisis, is

reported in Appendix H (Case 10). As described in the

Appendix, that case pointed up the need for quality controls

and batch-coding of smallgoods - particularly products which

were cured rather than cooked. It also showed the need for the

authority most directly involved in any major investigation to

take control of it and co-ordinate the contributions of other

authorities.

170

(e) Summary

5.358 I have been impressed by the standard of the work of

the Victorian meat inspection service. This has been

demonstrated by the files examined and by the quality of the written and oral evidence placed before me by the Branch. I

believe that, speaking generally and subject to certain

recommendations for improvement made in Chapter 9B, the

administrative arrangements and procedures of the service have

been adequate to ensure that meat for human consumption in

Victoria has met the requirements of the law. It is meat coming

from export establishments and released onto the domestic market

which has quite often failed to meet legal requirements.

5.359 However in saying this, and drawing an apparently very

marked distinction between the Victorian and the Commonwealth

service, I am conscious of a number of off-setting factors. In

the first place, the Victorian service is smaller, more compact

and so much more manageable. Secondly it does not have the

range of problems to deal with that beset a service which has

to cater for the requirements of many diverse overseas markets

and move inspectors across the country to cope with seasonal

demands. Thirdly, the Meat Inspection Branch has not had to

deal with a well-organized, determined and militant union such

as the Commonwealth Meat Inspectors Association. It has

undoubtedly enjoyed a better union co-operation and freer hand

in the allocation of duties than the DPI has been able to

achieve.

5.360 Further, the Victorian Department spent a great deal

of time, effort and money in presenting its case to the

Commission through its legal representatives. They actively

defended the Department's record at all points. A departmental

view well orchestrated by legal advisers does not encourage the

emergence of critical dissenting views from within the

department, and in consequence the Royal Commission may have

lost the value of conflicting viewpoints which might have

exposed existing problems. On the other hand, the DPI was not

171

legally represented (although the Minister was personally

represented) and was content to let individual officers present

the facts as they knew them and let the Royal Commission pass

judgment on them.

5.361 In saying what I have I am not intending to criticize

either approach. It is seldom easy in such cases to determine

whether the cost to the taxpayer of legal representation of a

government department can be justified, or even how the

interests of the Royal Commission can best be served.

Certainly the fact that the Department of Agriculture was

represented relieved the legal staff of the Royal Commission of

a good deal of routine work associated with the preparation of

written submissions.

5.362 Finally, it is my impression that the Victorian

service has been particularly fortunate in having an officer of

the calibre of Dr Bryn Rees in charge of its day-to-day

operations in recent years. His extensive and varied

experience, coupled with his personal qualities, have fitted

him well for the task. And he has apparently been allowed

sufficient independence by his superiors to enable him to put

his mark on the service. I suspect that his personal

contribution has affected the quality of both the service

itself and its performance before the Royal Commission. It

does not necessarily follow that a compact state service will

always perform better than a larger and more widely spread

Commonwealth service, or that the Victorian service will always

be as good as it appears to be today.

5.363 It must be understood that all that I have said in

this section has to be read in conjunction with my

recommendations in paras 5.48-79 above for a combined meat

inspection service in Victoria. The comments and

recommendations in this section are designed to stand alone

whatever the fate of that proposal.

172

C H A P T E R 5C

ADMINISTRATIVE ARRANGEMENTS AND PROCEDURES CONCERNING

MEAT FOR HUMAN CONSUMPTION IN THE NORTHERN TERRITORY

(a) The Department of Primary Industry

5.364 There are some differences between the arrangements

for DPI inspection in Victoria and those applying in the

Northern Territory. The two main differences are, first, that

the system is managed from Adelaide and all meat inspectors and veterinary officers working in the Territory are seconded from

South Australia or other States. Some stay in the Territory

for the whole of the 6-9 months season. Some go only for short

periods (typically six weeks) and are then relieved by others.

5.365 This arrangement produces problems, in that some of the

officers concerned have been posted against their will; others

may find the heat, and the isolation of some abattoirs, worse

than they had expected. Such conditions should, of course

attract appropriate compensation. In all cases, rapid turnover

of inspection staff leads to variations in interpretation of

requirements and problems arise from a lack of familiarity with

the local scene. Remote control from Adelaide adds to the

difficulties of isolation and rapid turnover.

5.366 The second main difference from Victoria is that no NT government inspectors are employed in the export abattoirs, even

though a significant part of the production of some of them is diverted to domestic markets. The 'Australia Approved' stamp,

whether obliterated or not, is accepted in the Territory for

all purposes of local consumption.

(b) The Northern Territory Department

of Primary Production (DPP) (i) The meat inspection service

5.367 The line of responsibility for meat inspection in the

Northern Territory is not entirely clear. A recent

re-arrangement of responsibilities in the senior echelons of

173

the Department has yet to produce a clear picture of

responsibilities above that of the Chief Veterinary Officer and

Chief Inspector of Abattoirs, Dr G.R. Fallon. These

uncertainties are not important for present purposes, although

it is obviously necessary that precision be achieved in time.

Experience elsewhere would suggest that the officer most

immediately responsible for meat inspection throughout the

Territory should, in time of need, have direct access to the

Secretary of his Department.

5.368 Dr Fallon has immediate responsibility for such

matters as animal health, quarantine, brucellosis and TB

eradication, veterinary laboratories and field research as well

as meat inspection. The meat inspection service is now headed

by a veterinary officer class 3, Dr B.L. Rideout, who has under

him a team of seven qualified meat inspectors supervised by a

district stock inspector, seconded for the purpose. Until this

year the only direct supervision of meat inspectors came from

the district stock inspector.

5.369 There are four meat inspectors in the Darwin area, one

at Katherine and two in Alice Springs. From time to time stock

inspectors are given meat inspection duties to perform; but

this is unsatisfactory because they have only had one or two

days formal training as meat inspectors to add to their years

of experience with stock. Less use has been made of them in

the last year or two.

5.370 Because of the seasonal nature of the meat industry in

the Territory, the Department likes to employ meat inspectors

who are also qualified as stock inspectors. But this may be

becoming less important as the killing seasons are tending to

lengthen as much as the supply of stock will permit.

5.371 Meat inspectors have qualified elsewhere, in the

States or overseas, but have no Territory meat inspection

manual available to them and no opportunities for further

174

training. It would be simple for the Department of Primary

Industry in South Australia to include the NT department's meat

inspectors and veterinary officers in appropriate seminars and

training courses which it conducts for its own officers. This

would both help to keep them up to date with the latest

developments in the field and maintain their motivation.

5.372 It is obvious that motivation will be particularly

important to this service as long as it maintains its separate

identity. When small numbers and lack of promotional

opportunity are added to the disadvantages of life in remote

areas of the Territory (particularly for families), and the

problems of monitoring workers amongst whom you live, it can be

seen that the service has real difficulties to grapple with.

5.37-3 In these circumstances it is not surprising that

officers of the Department of Primary Production have, until now, seen their role as being, in the main, to support meat

industry operators rather than to detect and punish offenders.

They have sought to obtain co-operation by persuasion in

preference to punishment.

5.374 A good example of this mild approach is the case which

occurred in the Alice Springs area about six years ago when a

butcher was detected offering for sale beef from beasts which

had been killed and butchered in the bush. The chief

veterinary officer of the day decided that the condemnation of

the 20 carcasses involved was a sufficient punishment and no

further action was taken. A similar course was followed early

this year in the case of two or three bodies of field-shot beef

found in an Alice Springs boning-room. They were sprayed with

dye by a meat inspector and allowed to be sold as pet food.

(ii) Legislative structure and

administrative procedures

5.375 However, the greatest problem of the service in

identifying its proper role arises from the inadequate

175

legislative structure under which it operates. There are a

number of major gaps in the system. In particular, meat

inspectors have no authority over transport vehicles carrying

meat or over independent boning-rooms (there is fortunately

only one such boning-room in the Territory, and it is not

registered for export). Their only authority in coldstores and

outchers' shops is to look for brands. In other words they have

no effective powers over meat after it leaves the abattoirs.

5.376 In the case of meat coming into the Territory from

inter-state they have virtually no authority at all. There is

no power of re-inspection provided the product is appropriately

marked for human consumption.

5.377 The result of this is that no records are kept of the

movement of meat into the Territory and the certificates given

for movement out of the Territory have no legal sanction

(although they are relied upon by other States). They are of

course issued only when the interstate destination of the meat

is known. Until recently, it was quite common for meat to go

from an abattoir to a coldstore with no accompanying

certificate. When a certificate was required, it was quite

often given by an inspector who had not even seen the meat in

the coldstore or at load-out. If he did inspect it, he could

only look at the stamps - there was no signed certificate

relating the batch of meat to any particular production run at

the abattoir from which it had come.

5.378 In the same way, an inspector might not always be

present when meat left an abattoir - perhaps at a weekend. The

evidence makes it clear that in such circumstances it was quite

usual for the inspector to make out the certificate in advance,

leaving the quantities of meat to be filled in by the management

when the truck or container had been loaded.

5.379 There was, however, some tightening up of these

procedures following allegations of lax inspection at a remote

176

abattoir in 1979 (see Appendix H Case 21). In February 1981 a

letter to meat inspectors from the then Secretary of the

Department included instructions that

no meat is to leave an abattoir without a completed inspection certificate . all load-outs from abattoirs are to be supervised . no inspection certificates are to be issued

until the meat is loaded into the truck . all stamps and blank certificates are to be maintained under close security, and are not to be left at the abattoir in the absence of

the inspector."

5.380 Later in the year all existing stamps were recalled

and inspectors were issued with new stamps incorporating a

number personal to the inspector. Certificate of Inspection

forms were also serially numbered and made accountable

documents. A central register of certificates issued was established.

5.381 The lack of authority over meat transport vehicles and

coldstores has however continued to inhibit the effectiveness

of the inspection service. Because of the long distances and

extreme heat through which the vehicles have to travel, the

quality of refrigeration is critical. It is not always

adequate for the purpose, but this is a matter over which

inspectors have no control.

5.382 Even more important, interstate experience has shown

that transports and coldstores are the places where

substitution of one species for another, or of inferior for

better quality meat, can most easily occur.

5.383 It is essential that an inspection service has ample

powers to stop and inspect meat-carrying vehicles, without

having to rely on the police to supply the necessary

authority. Coldstores should also be regularly visited, meat

for human consumption segregated from pet meat, and detailed

records of the ownership of meat available for inspection. It

177

should be possible to put out of the meat business any

transport operator or coldstore owner who commits a really

serious breach of the laws relating to meat handling.

5.384 Further, there are no provisions concerning the

packaging and labelling of meat - provided it is "marked" as

being fit for human consumption.

5.385 Even in the area of abattoirs inspection there are

some weaknesses, in practice, in the DPP system.

5.386 Generally speaking an inspector will be present on

slaughter days and, because throughputs are low, one inspector

can give adequate supervision. However there are many

occasions at the Tennant Creek local abattoir, and some days at

Curtin Springs and other abattoirs, when no inspector is

present.

5.387 In addition to the supervision of licensed abattoirs,

the Territory presents special problems of slaughter in other

circumstances - both legal and illegal.

(iii) Illegal slaughter

5.388 In an area like the Northern Territory, where large

numbers of cattle are spread over great distances, and many

small communities are looking for cheap meat, it is not

surprising that problems of illegal slaughter arise from time

to time.

5.389 The Department of Primary Production believes that it

has succeeded in reducing greatly the level of illegal

slaughter in recent years. It has done this by threats of

prosecution and by appealing to a sense of responsibility -

particularly among road-house proprietors and others who might

be tempted by cheap meat, but who depend on a flourishing

tourist trade for their livelihood.

178

(iv) Legal slaughter for remote communities

5.390 So far as aboriginal communities are concerned the

Department has offered advice and given a degree of supervision

to operations in those cases where it has the right to prevent

the operations altogether if it sees fit - that is in those

cases where only meat from a licensed abattoir should be sold

in a community store.

5.391 I believe that this has been a sensible approach, and

better than compelling the community to deal with a distant

abattoir. The Act and Regulations should be amended

appropriately to authorise and regulate such controls.

5.392 There are, however, very similar communities living on

cattle stations which are operated on a commercial basis, and

which therefore fall within the exemption entitling "employees"

to be supplied with station-killed meat. I believe that, for

the protection of all concerned, there should be some controls

available in such cases which are similar to those applying to

other aboriginal communities. Since it would not be practicable

or appropriate to distinguish between aboriginal-owned stations

and others in framing such regulations, it should be possible

to limit the long-standing total exemption from control to

situations where less than (say) 20 people are being supplied

with meat from the property.

(v) A combined service with DPI

5.393 So far as the composition of the inspection service is

concerned, it should be noted that, although inspectors are

trained and experienced in looking for TB and brucellosis, they

cannot be expected to have the same eye for possible introduced

diseases as a veterinary officer would have; and such

officers, although available in case of need, are often a

considerable distance away. There is a case for wider

availability of veterinary officers, which would be met if the

Commonwealth were involved in a combined meat inspection

service in the Territory.

179

5.394 There seem to be adequate provisions for the DPP to

obtain kill figures and disease statistics from its own

officers and from the DPI. Disease trace-back could however be

improved, and this is in hand.

5.395 Although there is little formal contact between the

officers of the DPP and DPI, relations are basically good and

only one instance of alleged lack of co-operation was referred

to in evidence. It was not sufficiently important to pursue,

particularly since the problem seems to have been overcome by

consultation. .

5.396 It is tempting to recommend an immediate take-over of

the NT meat inspection service by the Commonwealth. It is so

small as to be hardly viable from a career point of view and

the precedent has already been set in South Australia, whose

DPI officers service the Territory.

5.397 On the other hand the DPI has not yet shown its

capacity to handle its own affairs in the Territory

effectively, and the Territory is a place where local knowledge

is all-important. Relations with other Territory authorities,

such as the Stock Squad, will continue to be very important.

5.398 I think it best that I should recommend that there be a combined service in the Territory, suggest several principles

to be observed and then leave it to the respective authorities

to determine the precise framework within which meat inspection

in the Territory will be carried on.

5.399 The principles I have in mind are -. the service should be administered from Darwin, not

Adelaide,

. it should have responsibility for pet meat as well

as meat for human consumption; it should be able

to exercise all Territory powers in this area,

180

. the closest liaison should be maintained between

the service, the police, the Health Department and

other relevant arms of NT Government, and

. the fullest possible use should be made of

veterinary officers posted, or temporarily

attached, to the service. In other words,

Commonwealth officers should be able to spend any

available time on other veterinary affairs of the

Territory in addition to meat inspection.

(c) The Northern Territory Department of Health

5.400 Because the public health responsibilities of the

Department of Health include the safety of food and food

handling practices, the Department is involved with the

storage, handling and sale of meat for human consumption and

with some aspects of pet meat marketing. Thus it can and does

require that pet meat be displayed for sale separately from

meat for human consumption.

5.401 The Department in its submission said that it was

satisfied with the extent of its powers over the cleanliness of

butchers' shops and meat delivery vehicles and the hygienic

handling of meat at the retail level. It did not, however,

have adequate powers to deal with meat which it had determined

to be unfit for human consumption. It also had some difficulty in applying appropriate objective standards to laboratory

findings of salmonella in meat.

5.402 The Department is hoping that the early adoption by

all States of a model Food Act will provide the solution to

these problems.

5.403 Another area of particular concern to the Department

is the deficiency of its powers to enforce standards of

refrigeration. These should be extended at least so far as may

be necessary to ensure the soundness of meat and meat products.

181

CHAPTER 6

THE PET MEAT INDUSTRY

(a) Relevance for the purposes of the Royal Commission

6.1 Although there is no specific mention of the pet meat

industry in the Commission's terms of reference, there are

several reasons why I have had to give some consideration to

it, and now include a chapter on it in my report.

6.2 In the first place, the terms of reference which

relate to the handling of meat for export are not confined to

meat for human consumption. They clearly extend to the

exportation of pet meat.

6.3 Secondly, the pet meat industry has been the source of

considerable quantities of meat, not intended for human

consumption, which have found their way into the human food

chain both in Australia and abroad.

6.4 Thirdly, it is one of the tasks of a meat inspection

service to see that meat not suitable for humans, but suitable

for animals, is so designated and consigned.

6.5 Finally, I am conscious of the fact that some

recommendations I could make for the protection of meat for

human consumption, could have a serious detrimental effect on

the pet meat industry. I must be careful not to make

recommendations which cast an unnecessary or unjust burden on

that quite important industry.

(b) Quantities and types of pet meat

6.6 It has been estimated by one witness that the total

value of meat products sold either as fresh pet food or as a

result of manufacturing is in the order of $350m per annum. In

the year 1979-80 inedible meat (a description of meat in which

the Australian Bureau of Statistics has also included some game

meat) to the value of $3.2m was exported from Australia. In

182

1980- 81 the value of inedible meat exports was $10.6m; but in

1981- 82 it dropped back to $2.7m. It was suggested that the

introduction of a variety of export controls by DPI, after the

meat substitution scandal, was a possible cause of this

significant drop in the value of inedible meat exports. I

shall deal with the new export controls later in this chapter.

6.7 Whatever the total monetary value of the pet meat

industry, it is apparent that its value to the producer of meat

for human consumption is significant. As the manufacturers of

processed pet food mainly use the parts of animals which are

not used for human consumption, a meatworks operator can, by

selling those parts to a pet food manufacturer, obtain

approximately three times the price he could achieve by

rendering those parts into blood-and-bone or meat-meal. It has

been estimated that Australian meatworks gain an additional

income of approximately $30m per annum from the manufactured

pet food market, a market which has contributed to sustaining

the viability of marginal abattoir operations, thus providing

employment in rural areas.

6.8 Further, since it appears that an estimated 30% of the

pet meat intake of dogs and cats in Australia is supplied by

the fresh pet meat industry, that part of the pet food industry

is a substantial user of meat which is derived from poor

quality and injured stock, and feral animals, which would

otherwise have little commercial value.

6.9 It was unfortunate that neither the responsible

authorities in the Northern Territory, nor those in any state

in which the Commission sat, were able to supply me with

accurate or reliable figures on the value or quantities of pet

meat produced in their areas of control. This has resulted in

my being forced to rely upon estimates which are, at best,

approximations. It is important that reasonably accurate data

be collected regularly on the pet food industry. Its importance

183

lies not simply in the maintenance of checks on the types and

numbers of animals being processed for pet food, but also in

monitoring the movement of pet meat around the continent.

6.10 It is clear that pet meat, today, is a highly

marketable and mobile product; and at least one government

department conceded that an important aspect of the problem of

the substitution of pet meat for food for human consumption was

the inadequate information available to the department as to

the volume of pet meat being imported into the state. However,

as was pointed out to me, an operator's record . books, and thus

a department's or authority's statistics compiled from those

books, are only as useful for investigation purposes as the

operator is honest.

6.11 Although, as I have said, reliable figures are not

available, the pet food industry in the Northern Territory has

been estimated to be worth approximately $10m per annum. I

believe that any such figure underestimates the industry's true

value to the local economy.

6.12 In the first place, it provides employment for a

number of people and supplies good quality pet food at

reasonable prices for both residents of the Territory and

others. Further, it helps to control the large populations of

buffalo, feral cattle, horses and donkeys found particularly in

the Top End. However, the factor which in the short or medium

term makes the pet food industry of greatest importance in the

Northern Territory, is its role in the campaign to eradicate

tuberculosis and brucellosis in Territory live-stock. The

provision of a reasonable market for affected live-stock is an

important element in any eradication programme.

6.13 A variety of animals are used to produce pet meat in

Australia. In the Northern Territory, the bulk of the pet meat

is derived from feral animals such as buffaloes, scrub bulls

and cattle, horses, donkeys and a small number of camels. In

184

Victoria, poor quality and injured cattle, dead stock, horses,

and kangaroos imported into the state from New South Wales and

Queensland, are the main types of animals being processed as

pet meat. In the other states of Australia, one finds that

kangaroos, horses, donkeys and dead and 'downer' cattle are the

main sources of pet meat.

6.14 It has been estimated that the kangaroo population of

Queensland is between 20m and 25m animals. As this represents

approximately 65% of the total number of kangaroos in

Australia, it is not surprising that this State has the largest

harvest of kangaroos. Its total shooting quota for all species

of kangaroos has been 1.5m for the last three years, although

the actual harvest was 1.2m in 1979, just over lm in 1980 and

below 0.7m in 1981. The eastern grey species of kangaroo is

the most populous (with an annual quota on its slaughter of

900 000) followed by the red kangaroo (with an annual quota of

450 000).

6.15 Kangaroo shooters are required to be licensed by the

Parks and Wildlife Department and may only operate in

designated areas. They are required to purchase carcass tags.

There are over 150 licences for different areas, although over

half of them are held by four companies which, between them,

would handle 60% of Queensland's Kangaroo production. Freezer

boxes and boning-rooms are required to be licensed and are

subject to inspection by the licensing authorities. Dealers

must keep a fauna register and submit monthly returns to the

Australian National Parks and Wildlife Service listing carcass

and skin purchases and tag sales. I was informed that about

two-thirds of all kangaroos shot in Queensland are killed for

their skins alone, no meat being taken.

6.16 Most of New South Wales' 7m kangaroos are located on

the inland plains and in the west of the State. The State's

National Parks and Wildlife Service has divided the State into

ten kangaroo management zones for the purpose of kangaroo

185

harvesting, although some of those zones are now closed to

commercial shooting. The red kangaroo is, presently, the most

common species of kangaroo found in NSW. For 1982, out of a

total quota of 843 000 kangaroos, the National Parks and

Wildlife Service permitted the harvesting of 550 000 red and

288 000 grey kangaroos.

6.17 The total quotas for NSW for the last few years have

varied between 645 000 in 1979 and 1980 and 843 000 in 1982.

Except for 1980 when the harvest of kangaroos exceeded the

quota by 35 000, the number of animals shot has never reached

the quota. As all macropods in NSW are protected, all kangaroo

shooters (called "trappers" under the National Parks and

Wildlife Act, 1974) are required to be licensed, maintain

records and tag carcasses and skins.

6.18 Shooters can sell kangaroos only to licensed fauna

dealers who, themselves, must keep records of sales. Kangaroo

management zones are allocated to a licensed fauna dealer who

is known as the zone operator. Such a dealer may be allocated

more than one zone. Other fauna dealers, licensed to trade in

skins only, are not allocated zones and may purchase skins in

any of the zones. Chillers must be licensed and may only be

operated in specified zones. All interstate movements of

kangaroo products are subject to a licensing system, although

the constitutional validity of the system may be doubtful.

Unlike Queensland, there is pressure in NSW for the full

utilization of the kangaroo carcass, and shooters are permitted

to shoot kangaroos solely for their skins only if their

licences are specially endorsed for this.

(c) The organization of the industry

6.19 There are three main ways in which animals are

processed for pet food. First, in the case of feral animals

they are shot and butchered in the field and the meat is

transported to nearby base camps where it is trimmed, dyed

(where required), packaged and either chilled or frozen in

186

mobile chillers or freezers. In the case of field-shot meat

there is a high risk of contamination and spoilage of the

product through contact with the ground and insects, the

unsanitary equipment and containers used, the often hot and

humid conditions under which the meat is prepared and the

distances required to be travelled before the raw meat can be

chilled or frozen. As such operations are carried out as

quickly as possible, scant attention can be paid to some steps

(such as post mortem inspection) which could ensure a higher

quality product.

6.20 The second main method of pet meat production is the

processing of stock in knackeries. The bulk of a knackery's

output is derived from the processing of horses and poor

quality and injured live-stock. However an important part of

any knackery's production is inevitably derived from the

processing of dead stock which have been collected from the

paddock, or wherever else they may have fallen. In Victoria,

in the year 1980-81, licensed knackeries processed a total of

nearly 44 000 dead animals, which represented 45% of their

annnual throughput of stock. As a result of evidence which

has established that some knackeries were the sources of pet

meat which found its way into the human food chain, it may be

suggested that it is undesirable to permit knackeries to

process dead stock. In my view, now that adequate controls on

knackeries have been introduced in Victoria and the Northern

Territory, they should be free to continue to provide this

valuable public service.

6.21 The quality of the product derived from knackeries

depends upon both the standards of the knackery management and

the degree of control exercised by the supervising or licensing

authority in the particular state.

6.22 The third method of pet meat production is through the

use of carcasses, parts of carcasses, offals, organs and other

meat products from abattoirs and slaughterhouses which are

187

either judged to be unfit for human consumption or not in

demand for such purposes. The quantities of such products used

as pet food varies from state to state and abattoir to

abattoir. At present, the greater proportion of such meat and

meat products is derived from export abattoirs where, since

1972, there has been in existence a security system for the

handling of condemned and inedible material.

6.23 In Volume 1 of the Australian Bureau of Animal

Health's "Manual of Instruction for Meat Inspection and Meat

Handling Procedures", the aim of the security system is stated

as being "to ensure that material which has been designated

unfit for human consumption is converted to a form which

effectively precludes its utilisation as human food". This

system, referred to before me as a "sealed distribution chain",

has proved to be an efficient and effective method of

controlling material destined for use as pet food.

6.24 In the absence of any evidence to suggest that the

system has been abused or that meat or meat products derived

from export abattoirs and passing through the security system

have found their way back into the human food chain, I see no

reason to alter the system by requiring such products to be

dyed, at least in cases where the product is to be used within

Australia. I shall later deal with pet food which is exported

from Australia.

(d) The Victorian pet meat industry

6.25 Since 1977, all knackeries and pet food establishments

in Victoria have been required to be licensed by the Victorian

Abattoir and Meat Inspection Authority. Local municipal

authorities still retain some control over knackeries

(principally their location and registration) through provisions

of the Health Act. However, the day-to-day supervision and

control of the 36 knackeries and 17 pet food establishments

which were licensed in Victoria as at 30 September 1981, falls

within the responsibilities of the Department of Agriculture.

188

6.26 Unlike most other states and the Northern Territory,

Victoria has virtually no pet meat produced through the local

slaughter of feral animals. Most fresh pet meat is either

produced by knackeries scattered throughout the state, or

imported into Victoria from New South Wales, Queensland,

Western Australia and the Northern Territory. Pet food

manufacturers, on the other hand, appear to obtain the bulk of

their raw material from export abattoirs.

6.27 As with the Northern Territory and those other states

in which the Commission sat, there are no reliable figures

available as to the size of the Victorian pet food industry or

the extent of the interstate importation of pet meat. Apart

from the fact that records of the Department of Agriculture show

that in the year 1980-81 the 36 licensed knackeries processed a

total of. nearly 68 000 cattle, horses and other animals, I am

left to speculate as to the actual size of the industry.

6.28 The Deputy Director-General of Agriculture for

Victoria stated the principles of control of pet food in

Victoria as being -(i) licensing of pet food establishments and knackeries;

(ii) minimum standards of construction of licensed

establishments;

(iii) supervision of hygiene and procedures at

licensed establishments;

(iv) staining requirements of carcasses dressed at

knackeries;

(v) strict labelling and handling requirements of

pet food produced from licensed

establishments;

(vi) supervision of transport vehicles used for

pet food operations and distribution; and

(vii) requirement for the keeping of records of

incoming and outgoing produce at all licensed

establishments.

189

6.29 This provides a comprehensive code which, together

with recent amendments to the Abattoir and Meat Inspection Act

1973 and the Health Act 1958 (effected by the Meat Control Act

1981) and the introduction of two new sets of regulations under

the Abattoir and Meat Inspection Act (being the Knackeries and

Pet Food Establishments Regulations 1982 and Retail Pet Meat

Shops Regulations 1982), ought to provide protection to the

public against the inadvertent or illicit transmission of

pet meat into the human food chain.

6.30 As most of the fresh pet food, consumed in Victoria is

derived from knackeries, it is not surprising that the

Department of Agriculture should have directed most of its

attention to that area of the pet food industry when attempting

to stamp out the use of pet food as food for human

consumption. Since 1975 the Department has struggled to

balance the competing interests of the pet food producers and

users and the meat-eating public in attempting to produce a set

of effective and workable regulations which, while protecting

the human consumer, did not so over-regulate the pet food

industry as to make it economically precarious. Nowhere is

this more clearly demonstrated than in the debate over the

requirements concerning the dyeing of fresh pet meat.

6.31 In late 1977 attempts were first made to enforce

regulations, promulgated in February 1975, which required that

carcasses or parts of carcasses should not be removed from a

knackery unless they were "thoroughly sprayed on all surfaces

with a solution of methyl violet". The attempted enforcement

drew protests from knackery operators, pet food establishment

operators, retail pet shop owners, greyhound racing

associations and pet owners. The protests resulted in an

amendment to the regulations in March 1978, which required

carcasses to be marked with a continuous 5 cm wide strip of

methyl violet running along both sides of the carcass. In

December 1980 the regulation was further amended by making it

an offence to remove the methyl violet stain.

190

6.32 The 1978 amendment was introduced despite the

opposition of at least some officers of the Department of

Agriculture concerned with meat inspection. However

Mr I.W. Smith, the then Minister of Agriculture, said in

evidence that he "would not have unilaterally made that

decision without the recommendation and support of the senior

officers" of his Department. Although the move to strip-

staining proved to be a mistake in the light of subsequent

events, I do not believe that it was an unreasonable decision

in all the circumstances then prevailing.

6.33 In October 1979, a person was discovered packaging

knackery meat for human consumption. In late 1979 and early

1980, a series of investigations were launched into allegations

that pet meat, mainly kangaroo, was finding its way into

smallgoods and other products for human consumption in

Victoria. Although some of these allegations were

substantiated, deficiencies in both the Health Act and Abattoir

and Meat Inspection Act effectively precluded prosecutions

being launched. I should add that these legislative

deficiencies have been overcome by the Meat Control Act 1981.

6.34 I suspect that it was partly because of the results of

these investigations that the Department of Agriculture in

September 1980 pressed for tighter Victorian and Australia-wide

controls on the pet food industry, and sought the concurrence

of the other States and Territories in the introduction of a

system of certification and re-inspection of interstate pet

meat. Further, the Department urged the need for a clearer

means of identification of pet meat, through full carcass

staining and stricter labelling and packaging requirements.

Partial success in this campaign was achieved by the amendments to the statutes and introduction of the new regulations already

mentioned. As the amendments and regulations only came into

operation in the first half of 1982, it is too early to judge

their effectiveness.

191

6.35 However, one matter is already clear. As happened in

1977 when attempts were made to enforce regulations requiring

total carcass staining, the 1982 regulations, which saw a

return to such total dyeing, were greeted with dismay and

prophecies of disaster from the fresh pet meat industry and

other interest groups. Not only has the noise of protest

abated and no evidence been led before me to substantiate such

prophecies, but also such evidence as does exist on the matter

suggests that the introduction of the new staining requirements

has had no significant adverse effect on the industry.

6.36 Having had the opportunity to view photographs and a

video-tape of a staining demonstration conducted by the

Department of Agriculture, and having heard the views of a

number of pet meat producers and industry representatives, I

suspect that the ready acceptance of the new requirements by

both the industry and the public is substantially attributable

to the relatively light level of staining presently required by

the Department. This, in itself, has created a problem for the

Department, for it has given rise to a degree of suspicion in

the minds of the pet meat industry that the Department, after

an initial phasing-in period, will require pet meat to be more

heavily stained. I believe that this matter can safely be left

to the good sense of the Department.

6.37 There is, however, another problem. The wording of

the new dyeing regulation speaks only of a requirement that the

dye, brilliant blue, is to be "visible on all surfaces", which

could refer to a very small area on each surface. I believe

the regulations need to be amended to enable a pet meat producer

to know with greater certainty what is expected of him. The

requirement should be to the effect that the greater part of

all surfaces must be visibly dyed. The precise wording is a

matter for the Parliamentary Counsel.

6.38 The present code for controlling pet meat in Victoria

is, as I have already stated, comprehensive. However, it still

192

relies heavily upon the co-operation and honesty of the pet

meat producer. In this as in other areas I take the view that

the most effective way of deterring dishonest operators from

attempting any form of meat substitution is through constant

supervision of works, frequent and random species testing of

meat for human consumption, and substantial penalties for

offences against the legislation. These measures, coupled with

the type of record and inventory system now in operation in

Victoria, should achieve an effective level of control over the

pet meat industry without any significant increase in cost.

(e) The Northern Territory pet meat industry

6.39 I have already made some reference to the importance

of the pet meat industry to the economy of the Territory. I

was therefore surprised to hear evidence that, although this

importance was acknowledged, few effective steps had been taken

until very recently to regulate an industry which had been a

source of concern for many years, principally because of its

lack of regulation. In 1974, this concern led to an

investigation and report by a senior officer of the Animal

Industry Branch of the Commonwealth Department of the Northern

Territory. This branch has now been absorbed into the NT

Department of Primary Production (DPP).

6.40 The terms of reference for the inquiry were quite

comprehensive and, although it was not conducted publicly, a number of interested people were interviewed.

6.41 One acknowledged weakness of the inquiry was that it

was carried out in the wet season, when a number of pet meat

operators who lived in other states were away from the

Territory. For the same reason the inquiry concentrated mostly on the Darwin area.

6.42 In dealing with the history of the buffalo, the

report, published in May 1974, noted that the animal was

introduced to various settlements along the coast of the

6

193

Territory in the mid-1800s and by the turn of the century it

had bred up into large numbers. The buffaloes were killed for

their hides in the early part of this century, but this trade

had virtually died out by the late 1940s. It was only in the

late 1950s that buffaloes began to be exploited as a source of

pet food. Their killing for human consumption began a few

years later, becoming much more extensive in the late 1960s and

early 1970s. At the time of the report, ten abattoirs were

killing buffaloes for human consumption.

6.43 The substantial use of the buffalo a s .a source of food

for human consumption was, no doubt, one of the main reasons

that the inquiry found that horse and donkey-meat represented a

larger part of the NT pet meat production than buffalo.

Another reason was that buffaloes are confined to certain parts

of the Top End, while wild horses and donkeys are scattered

more widely through the Territory. In this context it is worth

noting that, until May 1980, horses were not covered by the NT

Abattoirs and Slaughtering Act and so they were free of any pet

meat requirement, such as dyeing. Donkeys have been covered

for the first time by the Pet Meat Act 1982 (see para 6.60

below).

6.44 The inquiry found that an estimated total of just

under 3500 tonnes of pet meat was produced in the Territory in

1973. At least three quarters of this total would have gone

interstate, mostly to New South Wales, but also to South

Australia and Victoria. The report noted a strong reaction in

New South Wales to the introduction of dyeing of NT meat in

1973. Consumer resistance, particularly to methyl violet dye,

was thought likely to have a very serious effect upon the trade.

6.45 Apart from these useful statistics, the bulk of the

report was concerned with permit systems for the killing of

buffalo and with the respective claims of leaseholders,

abattoir owners and pet meat operators. These are not matters

relevant to this Commission.

194

6.46 The report did however contain a useful summary of the

replies from the States to queries about their requirements for

pet food imported from the Territory. These showed that, in

1974, only Queensland had a proper system of control for such

pet food. This included notice of shipment, arrangements for

inspection and the requirement of dyeing.

6.47 The report recommended legislation "for the sole

purpose of regulating the pet food industry". One of the chief

reasons given for this was stated in the following terms -"... pet meat being relatively cheap is an attractive substitute in human consumption products such as sausages, hamburgers etc. or even as straight grilling steak. Since it is prepared, transported and packed under the most primitive conditions it presents a potent public health hazard. Buffalo, in particular, have a high

incidence of bovine tuberculosis which is ■ communicable to man. In addition, buffalo are potential carriers of Salmonella organisms, perhaps . the most common cause of gastro-intestinal

infections in man, and the opportunity for contamination of the meat with faeces or intestinal contents is high. The introduction of beef measles - the intermediate stage of the giant tapeworm of man - cannot be overlooked. It is becoming an

important parasite in Southern Australia and it is only a matter of time before a human carrier introduces it to the Northern Territory. It is

important therefore that legislation should be introduced to control the processing and marketing of pet meat for public health reasons."

6.48 The report went on to list the main points which, it

was thought, should be included in the proposed legislation.

These included -(i) an appropriate definition of pet meat;

(ii) appointment of inspectors;

(iii) registration of pet meat premises;

(i v) registration of vehicles, chillers and

freezers;

(v) licensing of pet meat shooters;

(vi ) firearm controls;

195

(Vii) requirement of dyeing in the field and on

packing premises;

(viii) minimum permitted sizes of meat pieces;

(ix) labelling requirements;

(X) packaging requirements;

(xi) creation of offences protecting the human

food chain;

(xii) segregation of pet food in coldstores;

(xiii) the keeping of appropriate records;

(xiv) written authority from the landholder for

the carriage of pet food; and

(xv) appropriate penalties for breaches of the legislation.

6.49 This was a persuasive report, which pointed to a need

for prompt legislative action. The coming of Cyclone Tracy in

December 1974 is sufficient explanation for inaction in the

years immediately following. However it is difficult to

explain or condone the delay until 1982 before appropriate

legislation was passed.

6.50 The belief that pet meat from the Northern Territory

was finding its way into the human food chain in southern

states was widely held in recent years. Typical evidence given

on this point included the following -"I think lots of people had heard rumours for a long time that perhaps some pet meat might have been finding its way down South and perhaps it might have entered the food chain" - a member of

the Legislative Assembly.

"... we were worried that, with no control, truck-load after truck-load after truck-load of meat going down South, we did not know where it was going and it could finish up in the human chain" - meat inspectors supervisor t

"It appeared that the major illegal activity was the sending of undyed and unmarked cartons of pet meat South with the knowledge that the meat was destined for human consumption" - a member of the Northern Territory Police Stock Squad.

196

6.51 This popular belief also found its way into official

documents. The veterinary officer responsible for the Darwin

area made the following comments in quarterly reports to his

superiors -"Large quantities of unmarked and undyed pet meat continued to find its way into the human consumption market, both in Darwin and southern markets. An

intensive campaign to break this illegal operation is required" (July-September 1979).

"Shonky pet meat buyers are still operating. One particular fellow is offering big money for pet meat in special cartons. Dyed and properly marked this meat is sent to Melbourne, repacked in other cartons and apparently sent overseas for human consumption" (April-June 1980).

These allegations apparently attracted little attention. I

suspect that this was because they contained nothing very new.

The reference to meat being "sent overseas" probably related to

Taiwan (see section (g) below).

6.52 Between 1973 and 1982 the only legislation relating to

pet meat was to be found in Reg 46 of the Abattoirs and

Slaughtering Regulations, which provided for the dyeing or

dusting with charcoal powder of pet meat "at the time of

slaughter", and the packing of pet meat in portions not

exceeding four kilos and dyed or dusted overall, in cartons

marked 'PET MEAT NOT FOR HUMAN CONSUMPTION'. The legislation

reflected the fact that nearly all pet meat originating in the

Territory was produced by field-shooting feral animals.

6.53 The prescribed dyes were tartrazine and methyl violet,

but in practice the only one used was the yellow tartrazine.

This did colour the fatty tissues, in a not-too-obvious way, but was virtually invisible on red meat. Since most of the pet meat

concerned was very lean, the tartrazine caused little adverse

reaction from pet owners.

6.54 It is apparent that these few legal requirements for

pet meat were ignored before 1979. As one operator said in

evidence -

197

"It was common knowledge in the pet meat industry that no-one was complying with the regulations and as there appeared to be no attempt by the police or the Department of Primary Production to enforce the regulation, there was no incentive for pet meat operators to alter their methods of producing to comply with the existing laws. In addition,

southern uuyers had clearly indicated their preference for undyed pet meat."

6.55 The first sign of a re-awakened interest in the problem

which pet meat represented came from the NT Police Stock Squad.

This two man 1 squad' has, among its chief responsibilities,

investigations into cases of cattle-duffing and the illegal

slaughter of cattle. It seems that it has also been accepted

generally in the Territory that enforcement of provisions for

the dyeing of pet meat is a responsibility of the Stock Squad

rather than the Department of Primary Production (or its

predecessor the Animal Industries Branch) although the senior

member of the Squad expressed the view that it ought to be a

DPP responsibility.

6.56 In fact there was no enforcement of the provisions by

anyone betwen 197J and 1978; but in 1979 the Stock Squad

started taking its duties in this area seriously. Several

prosecutions were launched for failure to dye meat. Particular

attention was given to those cases in which it seemed that the

meat concerned might have been destined for the human food

chain.

6.57 For various reasons, these prosecutions were not often

successful. Nevertheless, they had the desired effect of

spreading the word that a new era had arrived, in which the very

limited provisions of the law relating to pet meat would be

enforced.

6.58 In order to get some idea of the quantities of pet

food produced in the Territory in recent years it is necessasry

to consider the evidence relating to individual processors.

198

Because no documentation was required for the production or

transport of pet food, no overall figures are available from any

source. The evidence obtained by the Commission was as follows -(Note. Approximately 600 cartons = 1 container = 18 tonnes)

Elston Pet Meats 1 container per month sent to Victoria

between February and September 1980.

- 36 tonnes to one Victorian purchaser

between August and September 1980.

- 65 tonnes and 38 tonnes for the years

1980 and 1981 respectively to a NSW

purchaser.

Howard Springs Pet

Meat Supplies Producing 8000 to 9000 cartons per annum.

NT Exports Selling 450 cartons per week (equivalent to

3 containers per month).

Pt Stuart Bought in between 15 and 20 tonnes over a

Station three month period in 1978-79 and between

1200 and 1800 cartons in late 1979 or early

1980.

Mt Rinqwood

Station Produced a little over 3000 cartons in 1981.

Wildman River Produced an average of 3 tonnes (100

Station cartons) per week in 1980.

Koolpinyah Produces approximately 1.5 tonnes per week.

Station In 1980, supplied one NSW purchaser with

Pty Ltd between 10 and 15 tonnes.

K.J. Carrick In August 1980, negotiated to supply two Victorian purchasers 2 tonnes per day.

Mr Carrick in fact supplied pet meat at this

199

K.J. Garrick rate for only a short time (due to

(cont) mechanical difficulties) and later reduced

his rates of production to 1.5 tonnes and

lower per day.

TBT Industries During 1980 supplied 8 containers (of

approximately 680 cartons per container) to

two Victorian purchasers.

Suburban

Supplies

Pet

Pty Ltd

Markets approximately 100 tonnes of

horse-meat, from the NT each year in Victoria

6.59 It is difficult to get a reliable picture of the size

of the Northern Territory pet food industry from the above

data. However, it is apparent that if the Northern Territory

was capable of producing just under 3500 tonnes of pet meat in

1973 and, in 1980, one operator was capable of supplying up to

2 tonnes of pet meat per day, the industry is important to the

Territory's economy.

6.60 This then was the large and diverse industry which was

sought to be regulated by the Pet Meat Act 1982, which was

assented to on 8 April but is not yet supported by regulations

- although these have been drafted.

6.61 I do not believe it is necesssary to comment on the

legislation in any detail. It has been generally supported by

responsible operators in the pet meat industry and it meets

most of the requirements of the 1974 recommendations. Much

will depend upon the capacity of the departmental and police

authorities to enforce its provisions. This can best be

achieved by irregular, unannounced visits to field chillers,

packing sheds and coldstores and the random stopping and

document-checking of refrigerated vehicles headed out of the

Territory. Liaison with the States over any doubtful movements

is vital.

200

6.62 Such checking should be seen as both a departmental

and a police responsibility. The notion, which prevailed until

recently, that pet meat was no part of the responsibility of

the Department of Primary Production has clearly been

dissipated. Both meat inspectors and stock inspectors can play

a useful role in the random checking of the industry.

6.63 The Stock Squad should also maintain its interest in

the subject and, if its size is not increased, other police

officers in the Centre should be asked to take part in random

checking procedures.

6.64 Although I have said that I do not propose to comment

in detail on the new legislation, there are one or two points

which I think could usefully be made.

6.65 The requirement of dyeing in the field is obviously

not popular with those concerned. They claim that it is

time-consuming and unnecessary. I believe that, if pet meat is

to be dyed at all, it should be dyed whenever it is collected

in such quantities that it could profitably be diverted to the

human food chain. I am, however, attracted to the suggestion

of a senior stock inspector, who had a hand in preparing the

1974 report, that it would suffice if each layer of meat thrown

into the box used by field slaughterers were sprinkled or

sprayed with dye.

6.66 This would typically involve dyeing one half of a

buffalo or donkey before proceeding to the second half. This

sounds like a sensible compromise between no dyeing at all and

dyeing each piece of meat as it is removed.

6.67 I have distinct reservations about continuing to

permit the use of tar trazine to dye pet meat. Not only have

doubts been expressed about its safety as a food dye, but

because of its acknowledged tendency to enhance the appearance

of red meat and be almost visually undetectable, the Department

201

of Primary Production would, I believe, be acting properly if

it were to terminate its use as an approved dye. It will no

longer be permitted on pet meat exported to the Eastern States,

and a uniform approach seems highly desirable.

(f) Dyeing of fresh pet meat

6.68 The level of control over the pet meat industry varies

markedly from state to state. In New South Wales, the Director

of the State Meat Inspection Service conceded that, in many

instances, control-"had been perfunctory at best and it took the export substitution disclosures to induce a lot of people to accept the need for a more regular form of inspectorial control".

Further, it appeared that for many years, despite legislative

requirements to spray knackery meat with methyl violet, very

little pet meat was being dyed and, in fact, no kangaroo-meat

produced within the state was being dyed. However, a new set

of regulations aimed at controlling the operations of

knackeries, and the traffic in pet meat through to the retail

level, has recently been approved and ought to be operative

shortly. It has been decided that brilliant blue dye will be

prescribed in future.

6.69 In Queensland, where pet food is produced in

knackeries, by field-shooting of kangaroos and by way of

diverting stock slaughtered for human consumption to pet food,

the level of control is high. Knackeries and pet food shops

are required to be licensed or registered and inspected and all

carcasses or flesh must be dyed with brilliant blue dye before

removal from the knacker's yard. Brilliant blue replaced

methyl violet in July 1982.

6.70 Imports of pet meat from other states require a notice

of intention to import. However, exports of kangaroo-meat to

interstate markets do not require dyeing under the Queensland

legislation.

202

6.71 In Western Australia, the control of pet meat has

primarily been the responsibility of local health authorities.

At present, knackeries are licensed by local authorities.

Under the Health Act it is an offence to kill horses and

donkeys for human consumption. Following recent meetings of

the Australian Agricultural Council, draft regulations have now

been compiled to control the shooting and slaughter of animals,

refrigeration, transport, hygienic processing at wholesale and

retail premises, structural standards of premises and the dye

marking of pet food. I was informed that the Western

Australian government has elected to require the strip-branding

of carcasses with tartrazine. It seems, however, that this

will not be acceptable for WA exports to any other State.

6.72 It is inevitable that there will be always a marked

difference between the prices of pet meat and meat for human

consumption. Throughout the hearings of the Royal Commission,

many witnesses have given evidence of that difference.

6.73 Early in the life of the Commission, the director of

one large meat export company said that one could buy kangaroo

suitable for export at 35 or 400 per pound whilst export

quality beef cost between 70 and 750 per pound. Evidence in

the Northern Territory suggested that the price difference was

of the order of 35 or 400 per kilogram.

6.74 For as long as there is such a price difference, the

incentive for pet meat substitution will remain. It is

therefore incumbent upon me to make recommendations which will

increase the difficulty of successfully achieving the

substitution and deterring the would-be offender.

6.75 I am of the opinion that there needs to be an

Australia-wide code for the dyeing of pet meat. All pet meat

produced in this country, other than pet meat derived from

export abattoirs and hence subject to the security system in

force in those establishments, ought to be dyed as soon as

203

practicable after production, by means of general carcass

dyeing with brilliant blue FCF (disodium salt).

6.76 In making this recommendation I am fully conscious of

the evidence of a number of witnesses who have expressed fears

that such a step will lead to the collapse of the fresh pet food

industry and disadvantage areas such as the Northern Territory

which has no pet food canning industry which could absorb an

over-supply of fresh pet meat. I think that whilst such claims

were made in good faith, with belief in their accuracy, they

are exaggerated and unsupported by any persuasive evidence.

Although it was suggested that the long term safety of the dye

is yet to be established, and accordingly it was inappropriate

to permit its continued use, I am satisfied on the evidence

presented to me that doubts about its possible safety are

unwarranted and should not prevent its use as a dye for pet

meat. I believe that Ministers and government officials should

assist the fresh pet meat industry by public statements

supporting the use of the dye.

6.77 In reaching the conclusion that I have, I considered a

number of other suggestions as to methods of 'decharacterising'

pet meat. Alternative dyes, such as methyl violet, tartrazine

or brilliant yellow were considered and rejected as being too

objectionable in colour, too difficult to handle, too easily

removed, unsafe or inadequate to provide clear identification

of the meat being stained.

6.78 Powdered charcoal received no support from any

quarter. Aniseed and other colourless flavourings and a

repugnant meat-meal powder appear unattractive propositions

because of the odour they would leave in a pet owner's

refrigerator. Strip-staining, as opposed to general carcass

dyeing, was rejected because of Victoria's experience as to the

ease with which the strip could be removed and still enable

substitution to take place.

204

6.79 Dyeing with brilliant blue, coupled with the

maintenance of sufficient records to enable authorities to

monitor the production and movement of pet meat throughout

Australia and within individual states, regular and unannounced

inspection of all establishments at which pet food is produced,

processed and stored (including, where animals are field shot,

mobile chillers and packing sheds) and frequent species testing

of meat for human consumption, are required to control the

industry adequately.

(g) Export of fresh pet meat

6.80 On 13 November 1981 export of inedible meat was

prohibited unless authorized by permit issued by DPI. From

1 March 1982 further requirements were introduced that all

inedible meat exports from Australia should be labelled as

'Inedible meat. Not fit for human consumption1.

6.81 Before these requirements were introduced, pet meat

could be exported from Australia without restriction. While

the market for pet meat overseas was comparatively small, it

was very lucrative - especially to Taiwan.

6.82 The reason that the Taiwanese market was so lucrative

was that much of the product exported as pet meat was in fact

being used for human consumption.

6.83 It would appear that the practice of diverting pet

meat exported from this country into the human consumption chain has not been restricted to Taiwan. Over the last five

years DPI has received complaints from the United Kingdom and

the Federal Republic of Germany that meat exported from

Australia as pet meat has been found in the human consumption

chain. Although these complaints have been few and sporadic

they suggest the existence of a problem that has extended

beyond one country of destination.

205

6.84 I cannot say whether any Australian producer or

exporter has been involved in that diversion to human

consumption in the European cases referred to DPI. However

there is no doubt that some Australian operators well knew that

pet meat they were sending to Taiwan would be used for human

consumption. In many cases, perhaps the majority, the

operators have taken no positive step to facilitate that

diversion, beyond ensuring that the meat sent was either not

dyed at all or was only lightly dyed.

6.85 In other cases, operators have had the meat packed in

two piece cartons, the lids of which have been printed as for

edible product but which have then been put on inverted, so

that to all appearances the carton is a plain carton. Of

course it has then been easy for the importer to invert the

lids, thus exposing the printed label as edible product.

6.86 In at least one other case, which occurred before the

changes in regulations to which I have referred, the exporter

went a stage further. By a relatively simple series of steps

he was able to provide documents for the importer which were

apt for edible product.

6.87 He booked space on board a suitable vessel, describing

the product to be shipped as "hard frozen pet food". The

shipping line's records, submitted to Customs for clearance of

the vessel, thereafter described the shipment in those terms

and, relying on that description, Customs cleared the vessel

without requiring a permit for that product. However the

exporter prepared bills of lading for issue by the shipping

company which described the product as "frozen boneless

buffalo-meat" which, while accurate, facilitated his

deception. Armed with a bill of lading which was apt to

describe edible product, he then took a form of health

certificate used for edible product, which was a form freely

available from DPI, and completed the form with the details of

the shipment. Then either he, or another person on his behalf,

206

forged a signature purporting to be that of a veterinary

officer and applied a facsimile of a DPI stamp to the form.

This then gave the importer of the product a set of documents,

being bill of lading and health certificate, which enabled the

importer to pass the product off as edible.

6 . 8 8 How much was exported using this method, I cannot

say. The exporter concerned said that, although he had thought

of this scheme himself, he believed many others had done what

he had done. There is no evidence which enables me to say

whether or not this is so.

6.89 This exporter exported at least nine full container

loads of buffalo-meat in this way, perhaps more. Some at least

of the meat was 'certified' buffalo (that is, fit for human

consumption) but given the circumstances in which the deception

was discovered, I am satisfied that some of the buffalo-meat

was field-shot pet meat. These facts came to light because a

person who bought some cartons of the product in Taiwan, as

edible meat, complained that it was grossly contaminated. He

made his complaint to the Australian producer whose name

appeared on the cartons. That producer had not shipped product

to Taiwan and complained to DPI that its cartons appeared to

have been misused. Subsequent police investigations led to

discovery of the matters I have described.

6.90 The trade in pet meat to Taiwan appears to have been

brought to an end in 1981, when the Taiwanese Government

imposed restrictions on imports of inedible meat. I cannot say

exactly how much pet meat was sent from Australia to Taiwan but

the size of the market may be judged from the facts that, in

1980, one company exported between 300 and 400 tonnes to that

country in its own name and sold another 100 tonnes to another

exporter for sale to Taiwan. In the same period another

company sold 13 full container loads of pet meat for export to

Taiwan.

207

6.91 I have no doubt that the participation of Australians

in this sort of trade is highly undesirable and capable of

bringing great discredit upon the Australian meat industry. It

was said that the purchasers of the meat in Taiwan knew the

nature of the product they were buying, that officials in

Taiwan were aware of what was going on, and it was even

suggested that the meat was of a higher quality than one would

normally find being used for human consumption in Taiwan or

other comparable markets. Even if all this were so, and I have

no way of judging the truth of these statements, such a trade

does not help our reputation.

6.92 In order to avoid a repetition of the Taiwan-type

trade and, more particularly, for the protection of the human

food chain generally, I recommend that all fresh and frozen pet

meat exported from this country should be dyed with brilliant

blue in the same way and to the same extent as pet meat

produced for local use will be dyed. It has been said by some

people who have exported pet meat that such a requirement will

lead to other countries that do not have similar restrictions

capturing whatever markets may exist. I consider that the

export market for meat for human consumption is too valuable to

be put at risk. The existence of large quantities of undyed

pet meat anywhere in Australia would, in my view, create an

unacceptable risk. The only exception which I could envisage

without concern would be one in which the exporter was able to

demonstrate that there would be exceptional security measures

covering the consignment from the point of production to the

point of shipment. In such a special case an exemption in

writing could be appropriate.

208

CHAPTER 7

MALPRACTICES

7.1 The central task of the Royal Commission is to answer

the question "whether malpractices are occurring or have

occurred" in the export meat industry or in the domestic meat

industry in Victoria or the Northern Territory. My general

answer to this question has already been given in section (d)

of Chapter 1 above. I turn now to consider the question in

more detail.

7.2 I should say at the outset that I have no doubt that

the industry has never been more free of malpractices than it

is today. All references, unless otherwise stated, are to the

past - most of them applying particularly to the last two or

three years.

7.3 At one stage of the Royal Commission's hearings it

became necessary for me to consider the meaning which should be

given to the word "malpractices" appearing in the terms of

reference of each of my Commissions. I see no reason now to

alter the ruling I gave there, which was in the following

terms:-"I take the expression "malpractices", in its context, to mean corrupt, dishonest or otherwise improper practices, involving actions which are

illegal or, if not strictly in breach of any law, at least morally reprehensible."

209

CHAPTER 7A

MALPRACTICES CONCERNING EXPORT MEAT

(a) Species Substitution

7.4 The malpractice which led directly to the setting up

of the Royal Commission, namely species substitution, proved to

be the most serious malpractice which the Commission

uncovered. This was so not merely because horse, donkey or

buffalo was being substituted for beef, but because the animals

concerned were being slaughtered, transported and processed in

conditions which might have been suitable for pet food but were

certainly not suitable for meat for human consumption.

7.5 A few isolated cases came to light of meat which was

fit for human consumption being substituted for meat of a

different species. Examples included mutton being packed as

beef, and beef livers and kidneys being described as lamb

livers and kidneys. This of course was commercial fraud, but

it raised no public health issues.

7.6 So far as the most serious cases of species

substitution are concerned, there is no evidence that this

occurred in the export trade before late 1979. Almost all

industry witnesses said that they had never heard rumours of

such an occurrence before August 1981; and the general tenor

of their evidence was that, if they had thought about it, their

belief would have been that no-one would be silly enough to

attempt it, at least in exports to USA, because they would be

bound to be caught.

7.7 The fact is, of course, that one small operator did

get away with the practice for almost a year - in which time he

had sent at least 20 0 tonnes of horse and kangaroo-meat to

USA. I should say in passing that I do not know if there was

any collusion at the US end of these transactions. There was

no evidence to support such a possibility, which is of course a

matter for the US authorities in any event.

210

7.8 Perhaps a year earlier and, I believe, quite

independently, a medium-sized company also saw that large

profits could be made by exporting pet food as food for human

consumption. It is clear that that company purchased some

hundreds of tonnes of donkey and buffalo-meat, fit only for pet

food, and sold it for human consumption. The evidence suggests

that the majority of this meat was exported (apart from a few

tonnes still held in store as pet food). However it is not

possible to say just how much went overseas, or to what

destination.

7.9 In giving this summary of that company's operation I

have treated another smaller company as being part of that

operation. I am satisfied that the owners of the two companies

were tightly interlocked financially and that they worked

hand-in-glove on these enterprises. I see no point in trying to segregate their interests.

7.10 One or two other small companies may also have

knowingly exported small quantities of pet meat as meat for

human consumption. The evidence is not clear.

7.11 There is probably little point in speculating about

the motives which led those involved to embark on the courses

they followed. Certainly the high prices and scarcity of beef

between 1979 and 1981 provided an incentive to look elsewhere

for meat which would enable orders to be filled and profits

greatly increased.

(b) Local connivance in overseas malpractices

7.12 It is convenient at this point to deal with a

different aspect of species substitution involving no breach of

Australian law and, in some cases, no breach of law overseas

but nevertheless constituting a deception of foreign consumers of Australian meat and a public health risk in the countries

concerned. Such activity constitutes, in my view, a

malpractice within the Commission's terms of reference.

211

7.13 I am not here speaking of those cases (such as have

come to light in the United Kingdom in recent months) where

kangaroo or horse-meat has been exported in good faith as pet

food, and has been put into the human food chain by some

unscrupulous foreign operator.

7.14 The cases I am concerned with are those in which the

Australian exporter of pet meat has known perfectly well that

his product was going to be used for human consumption in the

importing country. And he has gone as far as he can, in the

labelling of the product and the preparation of shipping

documents, to assist in the process of substitution.

7.15 This certainly happened in the case of the export of

many hundreds of tonnes of buffalo pet meat to Taiwan (see

para 6.90). The fact that some officials in that country may

have connived at the deception does little to reduce the moral

turpitude of the conduct.

7.16 Certainly Australian Government agencies have an

obligation to see to it that the documents they issue or

certify contain no tendency to mislead the authorities in the

importing country. They should state explicitly the species

and status (pet food or human consumption) of the meat. This

is now provided for.

(c) Substitution of local for export meat

7.17 Rumours that meat coming from non-export abattoirs was

finding its way into the export trade have been common for many

years. However it seems that such rumours were seldom

sufficiently specific for any government authority to be

encouraged to take action on them, or to pursue any determined

investigations.

7.18 It is clear from the evidence which has now come to

light that the practice was not uncommon, and was indulged in

by some quite substantial companies as well as a number of

smaller operators.

212

7-19 The reasons for the practice were, of course, purely

financial. Slaughtering costs at a non-export abattoir have

always been significantly lower than at a registered export

establishment. The same is true, to a lesser extent, of

boning-rooms. So if an export boning-room could take in

carcasses from a non-export abattoir, its profits on that

consignment would increase considerably. If the work were done

after hours, and paid for in tax-free cash, concealed under

some other heading in the books of account, there would also be

savings in such areas as payroll tax and workers compensation premiums.

7.20 If the meat came from a non-export boning-room, and

was simply relidded at a coldstore or in transit, even greater profits could be made.

7.21 It is difficult to say just how widespread this

malpractice has been. Certainly it will have varied from time

to time, depending on the general availability of live-stock

and the percentage difference between the costs of similar meat

coming from the two classes of abattoirs. The activity

probably reached its peak between 1978 and 1981.

7.22 Undoubtedly the incidence of this form of substitution

has varied as between States, and has been worst in Victoria.

This is not, I believe, because Victorians are less honest or

more greedy. It has to do with the more fragmented nature of

the industry in that State and, in particular, with the numbers

of independent export boning-rooms and export coldstores. It

also has to do with the ready availability of export-type

cattle and the excess of certain types of domestic production

(such as forequarters and offal) over domestic demand in

Victoria.

7.23 Allegations were made by a number of operators of

large export works that in the winter of 1980 there was a

discernible upsurge in the purchase of export-type cattle by

213

local abattoirs in the Gippsland area of Victoria. It was

suggested that the buying patterns and quantities were such as

to lead inevitably to the conclusion that the local works were

either involved in or facilitating the transmission of large

quantities of local product to the export market. It was

claimed that such purchases ceased when the export meat scandal

broke in August 1981.

7.24 I have carefully reviewed the evidence of the

witnesses who made these claims and that of the Gippsland

operators who were called on the matter. I have also studied

the submission of the Department of Agriculture and the

statistical material appended to it. In the event, I find that

the evidence available to me does not support the contentions

of the export operators who made the allegations. Although it

is probable that some substitution of local for export meat

took place in Gippsland, as in other areas of the State, I am

satisfied that it did not occur on the scale suggested by the

export operators.

(d) False description of age, quality or cut

7.25 It is clear that certain types of false description

have been common in the export meat industry. Perhaps the most

serious has been the misdescription of mutton as lamb. I have

no doubt that hoggett has quite often been packed as lamb, but

the evidence indicates that much older sheep have also, at

times, been slaughtered and packed as lamb. A number of such

cases have come to light as a result of overseas complaints

which have been investigated by AMLC officers. It seems that,

as a result of such practices, the reputation of the Australian

Meat Industry in the Middle East is well below that of the New

Zealand industry.

7.26 I suspect that, in some cases at least, the Middle

East importer has a shrewd idea of the quality of meat he is

getting, because of the price he is paying. Nevertheless a

214

fraud is being practised on the ultimate consumer and the good

name of the Australian industry is at stake.

7.27 Judging from the list of trade complaints to AMLC, it

would seem that only a few firms have engaged in this

practice. One in particular, which is no longer trading,

exported some 4000 sheep as lamb in a period of ten months.

7.28 It seems also to have been a not infrequent

malpractice for processors to describe cow as steer-meat, and

steer as bull-meat. In each case a marginally better price has

provided the incentive.

7.29 A practice on which a good deal of evidence has been

given is that known generally as 1 robbing the pack'. This

involved removing a good cut of meat (usually a scotch fillet

or cube roll) from a boned leg of beef, without disclosing the

fact by adding an 'R' (for ' residue1) to the coded description

of product.

7.30 There is no doubt that this practice was rife

throughout the industry; the only question is whether it was

wrongful. Many witnesses were prepared to defend it as

commercially acceptable, saying that the overseas purchaser

knew just what he was getting and was quite content. The

coding system referred to applied only to the US market, and

the evidence showed that US purchasers were only interested in

the leanness of the meat, not in the component parts of the

pack.

7.31 On the other hand there was a price differential

involved and it is significant that the DPI made a number of

ineffectual attempts to halt the practice. The Department

received little support in this from its own officers - at

least until August 1981 - because they all believed the

practice was rife and they were reluctant to put the company they were supervising at a competitive disadvantage. At least

215

that explanation puts the best possible construction on the

inactivity of veterinary officers and inspectors, which in some

cases may in fact have been due to laziness, or defective

vision induced by free meat. In some cases they would have

been getting some of the cuts in question.

7.32 Some producers seem to have felt that such a 1 robbed'

pack was better than a true residual pack and did not merit

that description. The fault may well lie in the coding system,

but until now neither the industry nor the DPI has taken any

steps to bring theory into line with practice.

7.33 I believe that, because of the existence of the code

and the price differential involved, 'robbing the pack1 must

rank as a malpractice, but only a venial one.

(e) Misuse of government stamps

7.34 The 'Australia Approved1 stamp is an important part of

the mechanism of government control of the export meat

industry. Its misuse is arguably an aid to the carrying out of

some other malpractice, rather than a malpractice in itself.

It is, however, convenient to deal with it separately. This

stamp tells the foreign importer that the meat concerned has

been slaughtered and dressed under hygienic conditions, with

careful ante-mortem and post-mortem examination by, or under

the close control of, a veterinary officer. In particular it

means in most cases that the requirements and standards of the

USDA have been complied with, including the requirement that

the meat has been slaughtered and processed only at

establishments registered for the purpose of export.

7.35 The stamp also represents a guarantee to an Australian

processor or dealer that the meat concerned has been duly

approved for export.

7.36 The number on the seal indicates the establishment at

which the meat was slaughtered or processed.

216

7.37 It follows from this that the safe custody of these

stamps, giving access to lucrative export markets as they do,

is a matter of great importance to the integrity of the

industry.

7.38 Until now, these stamps have been ordered and paid for

by the managements of export establishments. There has been no

control over the numbers ordered and, although reasonable care

of them has been taken by inspectors to whom they have been

delivered, instances of loss and theft have occurred, with

little follow-up action being taken by the Department.

7.39 It is obvious that in this situation an unscrupulous

operator could order a stamp for use out of hours or away from

registered export premises, and not even the stamp

manufacturer's suspicions would be aroused. This has occurred

on a number of occasions in the past but will be much more

difficult in future (para 5.183 above).

7.40 The practice whereby the stamp is applied to meat or

to cartons or other packages by employees of the operator,

under the general supervision of a meat inspector, is

reasonable and should be allowed to continue. It is a

mechanical task, to indicate that the meat has successfully

passed the scrutiny of the inspectors concerned.

(f) False statement of slaughter date

7.41 Some importing countries insist on the meat they

receive, though frozen, being reasonably fresh. Others will

accept meat a year or more old without demur.

7.42 A number of instances came to light, in the course of

the Commission's hearings, in which cartons of meat had been

relidded, labels amended or tickets replaced, for the purpose

of changing the apparent dates on which the animals were

slaughtered.

217

7.43 Since this date stamp is applied at the same time as

the 1 Australia Approved' stamp, and is one of the things that

stamp is intended to authenticate, such a change of date is an

important matter from the DPI's point of view.

7.44 It is clear that some quite large companies have

indulged in this malpractice at times. When caught by DPI

officers, as they have been on occasions, the only penalty they

have suffered has been the cost of replacing the false date

with the correct date. This would, presumably, also prevent

them from using the meat for the purpose they had intended.

(g) Forgery of transfer certificates

7.45 An essential link in ■the chain of export meat

inspection is the transfer certificate which is signed by a

meat inspector as meat leaves his control to go to another

export establishment (perhaps for boning or freezing) or to a

container depot, wharf or airport.

7.46 The meat inspector at the receiving end relies on this

certificate as indicating that the meat has in fact come from

an export establishment and has been produced under the

supervision of departmental inspectors. This provides

insurance against the misuse of the 'Australia Approved' stamp.

7.47 However there have been weaknesses in the system which

enabled false entries to be made in these certificates. In

particular it was common practice before August 1981 to show

the number of cartons (or carcasses) in a consignment in

figures only. It was thus a simple matter to alter a

certificate for 140 cartons to 440, 740 or 1140. The

additional cartons, falsely stamped, could be picked up en

route and the receiving inspector would not suspect any

malpractice. There was no system for later reconciling the

copy retained by the originator with that delivered with the

meat.

218

7.48 Further, the certificate forms were readily available,

and were not accountable, and thus a completely false

certificate could be produced. The receiving inspector would

often not know the inspector who signed the certificate and

would not necessarily be familar with his signature even if

they had met.

7.49 Here again changes have been made to the system to

reduce greatly the risks of forgery. Copies are reconciled

with originals on a spot-checking basis, signatures are

registered and similarly checked, quantities are written in

words as well as numbers and blank certificate forms are kept

under lock and key.

(h) Failure to obtain export documents (5.239-243)

7.50 · The Royal Commission's inquiries from the Customs

Bureau brought to light the fact that many exporters had been

breaking a gentlemen's agreement developed with the Bureau over

a number of years.

7.51 It seems that, when loads are made up for shipment at

the last minute, it may be difficult to obtain the necessary

export permits from the DPI and present them at the dockside

before the ship is ready to sail.

7.52 In these cases it has been common to allow the vessel

to sail, on the understanding that the permit is already in

existence and will be presented soon after the date of sailing.

7.53 The Bureau has found it impossible in practice to

follow up all these cases, and it now appears that its

confidence in the exporters' sense of responsibility was quite

often misplaced. In many cases, no permit was ever presented.

7.54 It seems that, in most if not all cases, a permit did

actually exist, although it may not have accurately described

the amount of cargo finally placed aboard.

219

7.55 These procedures have now been tightened up and the

gentlemen's agreement cancelled. Accurate export permits must

be produced before the ship is allowed to sail.

(i) Forgery of export documents

7.56 A reasonably comprehensive check of export documents

issued in 1981 was carried out by the Customs Bureau and it

revealed only one case of apparent forgery of such documents.

This case has been referred to police. It does not seem to be

of importance to the Commission's inquiries.

(j) Halal slaughter and certification

7.57 In 1981 Australian exporters shipped just over 100 000

tonnes of meat to Middle Eastern destinations. Sheep meats

represented 69 000 tonnes of those shipments. The Middle

Eastern market is the third most important for Australian meat

exports and is worth hundreds of millions of dollars each

year. It is by far the most important market for sheep meats

from Australia. It was said in evidence that without access to

it "the bottom would fall out of the Australian sheep meats

market".

7.58 Australian access to markets for sheep meats other

than the Middle East is becoming more restricted. Formerly

Australia had free access to the United Kingdom, Greece and

other Western European countries for its sheep meats, but now

exports to those countries come under restrictions imposed by

the European Economic Community. The current quota for all

sheep meats imports by EEC members from Australia is 17 500

tonnes per annum. Thus the importance of the Middle Eastern

market for Australian meat producers is clear.

7.59 The religion of Islam requires its adherents to

consume meat of permitted animals which have been slaughtered

in a particular way.

220

7.60 While some groups of Muslims differ from others in

their specific requirements concerning slaughter, Islamic

religious laws, generally speaking, require that the animal

should be slaughtered by a Muslim with a knife in such a way

that the animal bleeds to death. While slaughtering each

beast, the slaughterman recites the Arabic prayer

"Bismillah-Allaho-Akbar" (In the name of Allah, the Almighty,

Great). Meat slaughtered in accordance with Muslim principles

is generally referred to as 'halal' or 'permitted'. Pig-meat

is forbidden to followers of Islam and accordingly Islamic law

requires that there should be no contamination of halal meat by

pig-meat or by equipment used for its production.

7.61 Importers of meat, and presumably consumers, in

Islamic countries have sought assurances that meat bought by

them is religiously acceptable, that is, is halal. Meat has

been exported from Australia to Islamic countries over a long

period of time. Certification of its religious acceptability

has been provided by private individuals, companies and

religious societies. For many years the Commonwealth

Government, the Department of Primary Industry and the

Australian Meat Board understandably took the view that the

religious status of product was a commercial matter in which

the Government and its organisations should not become involved.

7.62 In 1974 a two-man delegation from Saudi Arabia visited

Australian capital cities and looked at the needs of Australian

Islamic communities. As a result of this visit, the Australian

Federation of Islamic Councils (AFIC) was given $1.2m by the

Saudi Arabian Government for distribution among the Islamic

societies of Australia for the erection of places of worship

and Islamic centres. The Saudi Arabian delegation recommended

to the Muslim communities in Australia that AFIC should be

recognised as the sole representative of Muslims in Australia

and that AFIC should become the sole authority in Australia to

certify that meat had been killed in accordance with Islamic rites. The delegation said that it was

221

"worth mentioning ... that such a decision if practised would provide (A FIC) with an income estimated at $400 000 annually and the local community associations would also earn the same which ( w o u l d ) reduce their dependence on foreign

assistance and make them self supporting".

7.63 In 1975 the Ministry of Finance and National Econony

of the Kingdom of Saudi Arabia gave AFIC sole certification

rights for all meat coming from Australia to Saudi Arabia. A

circular issued by the Ministry in 1976 said (amongst other

things)

"There is no specific authority abroad designated to issue such certificate ( n a m e l y , t h a t a n a n i m a l o r b i r d w a s s l a u g h t e r e d in a c c o r d a n c e w i t h I s l a m i c r u l e s a n d r e s t r i c t i o n s ) and there is no specific form, but this Certificate in any case should state that the animal or bird has been slaughtered under the supervision of a devout Muslim who is competent and qualified in Islamic Jurisprudence as a Mosque Iman, or a member in an Islamic Organisation, or a member in an Islamic Centre, or a member of an Islamic Country Embassy, except in Australia where the slaughter Certificate should be issued by the Union of Islamic Societies in Australia (AFIC) in accordance with the Royal Decision No. 4211 dated

(15 F e b r u a r y 1976) provided that this Certificate is to be attested and authenticated by the Saudi Embassies or by any other Islamic Embassy in those countries from which the meat is exported and where

there are no available Saudi Embassies."

7.64 It is to be noted that Australia was singled out as a

special case. It seems that halal slaughter is in fact more

centrally controlled in Australia than in any other producing

country.

7.65 About 20% of Australia's exports of meats to the

Middle East go to Saudi Arabia. But that represents only some

8 or 9% of that country's total meat imports. While the main

meat imported is chicken, the rest of the product (being beef

or sheep meats) come from New Zealand, South America, members

of the EEC and to a lesser extent Eastern Europe, as well as

from Australia.

222

7.66 It would seem that most of those competitors of

Australia for the Saudi Arabian market do not have a system of

halal certification of product similar to the system which now

exists in Australia. Although little evidence was given about

the systems of halal certification used in those countries,

Mr McSporran, Chief Executive of the Western Australian Lamb

Marketing Board, expressed the view that those other countries

had less cumbersome arrangements for halal certification than

Australia. Whether or not that characterization of arrangements

for halal certification in this country or elsewhere is

accurate, it seems clear that Australian arrangements are

significantly different from those applying to most of its

major competitors in the Saudi Arabian market, and that this

difference is seen by some processors and brokers as a trading

disadvantage.

7.67 · Following nomination of AFIC by the Saudi Arabian

Government as sole halal certifying authority in Australia,

AFIC has set up an increasingly elaborate system for

registration of slaughtermen and certification of meat as

halal. In 1980 the United Arab Emirates extended sole halal

certification rights to AFIC for product from Australia. In

1982 Kuwait required AFIC certification for meat imported from

Australia. Although Saudi Arabia, Kuwait and United Arab

Emirates may have formal requirements for certification by AFIC

of meat imported from Australia, it seems clear that these

requirements have not been regularly enforced and, at times,

meat covered by halal certificates issued by persons or bodies

other than AFIC has been accepted in those countries.

7.68 AFIC is a federal body. It has over 50 Islamic

societies as members and in each state the member societies of

that state have formed a State Islamic Council which is

affiliated with AFIC. While there are groups within the Muslim

community which are not affiliated with AFIC, and some of them

are quite large, I am satisfied that AFIC is the most representative single body of Australia's 250 000 Muslims.

223

Nevertheless, those groups which are not affiliated with AFIC

cannot be ignored. Some of them, such as the Muslim

Association of Brisbane and the Adelaide Mosque Islamic Society

of South Australia, provide efficient halal certification

services.

7.69 AFIC1s present system of certification of halal meat

is founded upon certificates issued by slaughtermen registered

by AFIC, certifying that beasts have been slaughtered in the

required manner. Slaughtermen are registered by AFIC upon

application to the relevant State Islamic Council and upon

payment of an annual fee of $10. Each slaughterman is given a

registration number and a record is kept of the works at which

he slaughters.

7.70 The slaughterman, on request, issues what is described

as an interim certificate to the meatworks. That certificate

describes the meat, gives details of its export destination,

and specifies the works at which and date on which the beasts

were killed. The interim certificate is signed by the

slaughterman and counter-signed by a person authorized to do so

on behalf of the works. That interim certificate is then

presented to the State Islamic Council for issue of an official

AFIC halal certificate. That document again records

consignment details, the place of slaughter and the name of the

slaughterman. It is sealed with the AFIC seal and signed by

one of a limited number of AFIC officials authorized for that

purpose. The document certifies that the meat:

"has been slaughtered by this Federation's Registered Muslim Slaughtermen using knife and according to Islamic rites. The meat of the animal so slaughtered is halal and, therefore, suitable for consumption by Muslims in any part of the world. Each animal's carcass is branded with the Federation's halal Stamp for identification and adequate precaution is taken to prevent contamination with non-halal meat and pig-meat."

224

7.71 The official AFIC halal certificate is issued on the

faith of the interim certificate. Some checks are made of the

authenticity of the interim certificate, such as verifying the

slaughterman's signature by reference to specimens held by the

State Islamic Council, but if the interim certificate appears

to be regular, a final certificate issues as of course.

7.72 AFIC and its member state councils have few permanent

staff. AFIC now has only two full-time staff - an executive

officer and his secretary. In some cases state councils employ

a full-time supervisor of halal slaughter, who may have some

expertise in the meat industry, but speaking generally AFIC and

its state councils have little practical expertise in the meat

industry. Nor have AFIC or its state councils sought to claim

such expertise, for they would say that their task is

essentially a religious one.

7.73 Certification schemes operated by the Muslim

Association of Brisbane and the Adelaide Mosque Islamic Society

of South Australia are broadly similar to the AFIC scheme.

Those societies are very critical of AFIC, and their

submissions make it clear that they oppose any move which would

enhance the power or position of AFIC. Equally it is clear

that the differences between the Brisbane Association and the

Adelaide Society on the one hand and AFIC on the other go well

beyond matters of halal slaughter and represent a sharp

division between groups in the Muslim community.

7.74 That kind of division is also reflected in the

differences which have existed and appear still to exist

between AFIC and at least one private slaughtering contractor

who offers a halal slaughter and certification service.

7.75 The Halal Sadiq Company, conducted by Mr Sadiq Bux has

provided such a slaughter and certification service in Western

Australia since 1956. It is clear that, following a division

in the Muslim community in Perth, which it is not necessary to

225

look at in any detail, Mr Bux and his company were labelled as

religiously unacceptable by some sections of the Muslim

community in Australia and overseas. Such evidence as was

adduced before me on the matter leads me to the view that the

charges levelled against Mr Bux were baseless and have been

shown to be so on more than one occasion. However this may be,

it is clear that the religious aspect of the task of halal

certification and slaughter can be productive of deep division

of opinion between elements of the Muslim community in this

country as well as overseas.

7.76 AFIC certification is not acceptable in Iran. In 1979

the Iranian Government made special arrangements for

certification of meat destined for that country. An Iranian

religious supervisor is stationed in Australia and retained by

AMLC. He is responsible for approving abattoirs at which

beasts are killed for the Iranian trade and registering Muslim

slaughtermen who work at those abattoirs. Those slaughtermen

may also be registered by AFIC. The supervisor issues his own

certificate that product has been killed and dealt with

according to Islamic rites.

7.77 Before I commenced hearings on the question of halal

slaughter and certification it was clear that some persons

interested in the subject matter wished to have the Commission

deal with it in private session. Accordingly, application was

made to me in the course of the Commission's hearings in Perth

that I should hear all evidence relating to halal slaughter and

certification in private. The application was made on behalf

of the Western Australia Lamb Marketing Board and was supported

by AFIC, AMLC, Australian Meatworks Federal Council and Mr Bux

of Halal Sadiq Company. Both the Minister for Primary Industry

and DPI made clear that they neither supported nor opposed the

application.

7.78 Essentially the application was put on the basis that

any public discussion of weaknesses in existing systems for

226

halal certification, or public enquiry into any past

malpractices connected with halal certification, could have

serious adverse effects on Australia's trade in this area. It

was said, and I accepted, that any reference to these matters

would be circulated widely in Middle Eastern countries and

elsewhere with probable adverse consequences. For these

reasons, I granted the application and heard all evidence on

halal slaughter and certification in private session. In doing

so, I was particularly mindful of the damage that could flow

from incomplete or unbalanced reports of evidence which could

not be completed for some months or ruled upon for an even

longer period.

7.79 For some years now, AMLC and large sections of the

meat industry producing for Islamic countries, have been

dissatisfied with the AFIC halal certification system. That

dissatisfaction has stemmed primarily from beliefs that AFIC

has charged too much for its services and has not been

sufficiently 1 commercial1, meaning efficient, in its attitude

and operation. In the middle of 1978, meat processors and

exporters discussed these matters with AMLC and it was decided

that AMLC should seek from the Saudi Arabian Government equal

certification rights to those held by AFIC. Those rights were

not granted, AMLC being told, in effect, to sort out its

problems with AFIC for itself. Accordingly, discussions were

held between AFIC and AMLC in 1978 and 1979 in an attempt to

seek some common ground. No resolution was achieved. In

February 1981 the Australian Minister for Trade,

Rt Hon J.D. Anthony, renewed the request to the Saudi Arabian

Government that AMLC be granted equal certification rights.

Again the Saudi authorities suggested that discussions should

be held with AFIC to seek common ground. Again no progress was

made .

7.80 It was not until March 1982 that something was

achieved when, instead of seeking to set up a separate system

of certification, AMLC proposed that a single joint system of

227

supervision and certification be established by AMLC, DPI and

AFIC. Discussions on that proposal have continued until the

time of writing this report. While some broad agreement has

been reached, there is still much detailed work to be done.

However, if the principles so far agreed upon could be put into

effect without ignoring minority rights, most of the

difficulties encountered in this area in the past should be

avoided in the future.

7.81 The cost of the AFIC halal certification scheme has

been a subject of great criticism by the industry. AFIC told

me that its income from halal meat certification fees varied

from $131 726 for the year ended 28 February 1981 to $232 413

for the year ended 28 February' 1982. It would seem that, for

some reason which could not be explained by AFIC, the 1980-81

receipts were abnormally low and that an income of more than

$200 000 per annum represents the norm. Half of AFIC's

receipts has been returned to state Islamic Councils and half

used to meet the costs incurred by the Federal body in the

halal certification scheme as well as for the general purposes

of the Federation. The sums received by state Councils have

been used to defray their expenses incurred for halal

certification; but again there has been a surplus of receipts

over those costs, which has been devoted to the general

purposes of the Councils.

7.82 Another less frequently stated ground for

dissatisfaction with the AFIC system has been the widespread

belief that it has been open to abuse. I have no doubt that

the system has been abused, and abused on a very large scale.

A number of meat processors and brokers have engaged in

systematic evasion of the AFIC system over periods of some

years. They have done so in ways, and to an extent, that lead

me to conclude that the present AFIC system of certification

cannot be permitted to remain. To allow that system to stand

would be to invite the repetition of practices which, sooner or

later, would become known in importing countries. This would

228

lead to serious adverse consequences for Australian meat

exports to Islamic countries.

7.83 Meat processors and brokers have provided, or arranged

for the provision of, certificates purporting to be AFIC halal

certificates where no such certificate should have been

issued. In some cases the form of certificate and necessary

seals and signatures have been forged. In others, genuine

forms have been used but seals and signatures have been forged

or procured from AFIC by deception. In at least one case the

seals and signature of the consular representative of an

Islamic country have been forged.

7.84 The principal motive for engaging in these practices

has been financial. Where certificates have been forged, or

seals and signatures obtained otherwise than through AFIC,

AFIC1 s' charges have been avoided. Those charges have remained

at their present level for many years, but are still regarded

by the industry as too high and are hard to justify on any

objective criterion. In any event their avoidance gives a

dishonest operator a significant financial advantage over his

competitors.

7.85 A number of operators have used forged AFIC

certificates. In addition, many genuine certificates have been

obtained from AFIC by presenting an interim certificate signed

by a registered slaughterman who in fact had not slaughtered

the beasts which were the subject of that interim certificate.

One large meatworks operator obtained false certificates for

very large quantities of meat in this way.

7.86 One meat broker who had forged AFIC certificates and

consular seals and signatures sought to say that such forgeries

had been motivated, at least in part, by an inability to obtain

genuine documents in time to meet air freight deadlines for

chilled carcasses. Some difficulty may have been encountered

229

in this way, and may lend weight to the criticism of AFIC that

it is not sufficiently 'commercial1 in its operation.

Nevertheless, I am satisfied that financial gain has been the

principal motive for misconduct in connexion with halal

slaughter and certification.

7.87 Plainly, existing systems have not prevented the

widespread occurrence of such misconduct. Existing systems

have relied upon the honesty of operators, brokers and

slaughtermen. There has been little if any check on that

honesty. In particular, government and governmental agencies

have had no role in the area. The size of Australia's trade in

meat with Islamic countries is such that I consider it

imperative that some government agency have sufficient control

or power of supervision in the area to prevent recurrence of

malpractices in connexion with halal certification.

7.88 There are specifically religious aspects of that

process in which it may well be thought inappropriate for

government to play any part; but there are also aspects of the

matter where government can, and in my view should, participate.

7.89 The principles which have been agreed upon by AFIC,

AMLC and DPI in their recent discussions are directed to

achieving several objectives:

(a) that there be a single system of halal slaughter

certification from Australia with an official

Australian government certificate and an official

Australian government stamp;

(b) that this system be under direct and continuous

supervision by the Export Inspection Service of DPI;

(c) to have AFIC provide authentication as to the

religious acceptability of the meat covered by the

certification;

(d) to control costs and charges being imposed upon the

industry by AFIC; and

230

(e) to eliminate any fraud and malpractice associated

with the issue of false and forged certification.

7.90 I regard the first two objectives as essential steps

to be taken in this area. It would follow that product

description, documentation and stamps would have the same status and attract the same penalties for misuse as will be the

case in other aspects of meat inspection arrangements. In

itself this would go a long way to achieving the last and most

important objective of eliminating fraud and malpractices.

7.91 AMLC and DPI are not equipped to deal with religious

aspects of halal certification and, in any event, as I have

said earlier, it may be thought inappropriate for government to

play any part in such matters. Determination of whether an

individual slaughterman is or is not a true Muslim is clearly a

religious question. Questions of slaughtering technique and

segregation of halal product from non-halal product are matters

of religious significance, but are capable of lay supervision.

It may be said that day-to-day oversight of these matters

should be the immediate responsibility of the Export Inspection

Service. But since what is sought by the certification system

is an assurance from a religious source that meat is

religiously acceptable, there must be some method established

whereby religious authorities may themselves be satisfied that

appropriate slaughtering techniques are used, that halal meat

is segregated from non-halal meat, that halal meat is not

contaminated by pork and so on. In my view this could be best

achieved by giving a right of entry to the meatworks in

question to a halal supervisor accredited by AMEC, who would

have power to report any deficiencies he identified to AMLC or

to DPI for appropriate action.

7.92 Who then is to provide the supervisor and thus the

assurance that the meat is religiously acceptable?

231

7.93 Some importing countries have placed great reliance on

AFIC and, it would seem, wish to have that organization

continue with a role in halal certification. No doubt that

wish must be respected. But it does not necessarily follow

that only AFIC should have such a role.

7.94 AFIC's past record of performance in this area is

poor. That is demonstrated by the high level of malpractice

that has occurred. As an organisation, AFIC has not shown any

ability to administer the system of halal certification

effectively. Changes in its small permanent staff cannot have

helped. I am unable to say whether those changes in staff have

been connected with discovery of participation in malpractice,

for the new administrators of the system have professed

ignorance of the reasons lying behind their predecessor's

departure.

7.95 However in one case, when it was discovered that

interim certificates had been issued by an AFIC registered

slaughterman even though he had not slaughtered the beasts, the

then executive officer of AFIC arranged to provide

certification for that product, apparently on the basis that

some obligation was owed to a company that had 1 employed' an

AFIC-registered slaughterman. I cannot say whether or not in

that case final certificates were issued in the belief that the

product was halal, for that executive officer of AFIC was

replaced by AFIC before the incident was examined by the

Commission and was not available to give evidence. However, it

is clear that the final certificates were issued in

circumstances where they should at least have been delayed

pending further enquiries.

7.96 I doubt very much that AFIC or bodies such as the

Adelaide Mosque Islamic Society and the Brisbane Muslim

Association could, or for that matter would wish to, work

together. The matters that divide those groups go beyond

questions of halal slaughter and certification.

232

7.97 However I do not believe that the introduction of

government controls to this area, for the first time, should be

an occasion for the grant of a monopoly, even over the

religious aspects of halal slaughter, where it is not presently enjoyed. In particular I do not believe such a monopoly should

be granted to a body which has yet to prove its efficiency and

objectivity in the area under consideration.

7.98 Certainly there is no case for AFIC to be given any

active role in relation to exports to Iran. Nor do I see any

reason why the Adelaide Society should be required to hand its

role at an Adelaide abattoir over to AFIC, or the Brisbane

Association its role in Brisbane. Nor should Halal Sadiq's

long-established business be put at the mercy of people with

AFIC connexions who have, it seems, some personal or family

feud with Mr Bux.

7.99 Any system that is introduced must not only be fair

but also be seen to be fair; and it must secure the confidence

not only of the industry but also of the Muslim community.

Apart from principles of natural justice and the protection of

the rights of minorities, there are also practical considerations. If it were thought that AFIC was using or

might use its position to achieve ulterior purposes there is,

in my view, a real risk that the dissension which would

inevitably follow could be transmitted to importing countries

in the form of doubts about the religious acceptability of the

product. This would, of course, have adverse consequences on

trade to Islamic countries.

7.100 I consider that, in the first instance, use should be

made of such bodies as are now in the field and are willing to

continue to offer a service of the kind I have described -

providing one or more supervisors, accredited by AMLC, who can

deal with the religious aspects of halal slaughter and

certification. Similar recognition should not be extended to

233

any groups other than those now in the field unless AMLC is

satisfied that there appears to be an overseas demand for the

services of the group in question.

7.101 I believe that the government certification should

indicate which previously acceptable Muslim authority accepts

responsibility for the halal status of the product. It should

contain a clause to the general effect that the named Muslim

authority (for example, AFIC or the Brisbane Muslim

Association) has registered the Muslim slaughterman and

approved the arrangements for halal production of the meat

covered by the certificate. It should make plain that the DPI

role is only to supervise the non-religious, objectively-

observable aspects of halal slaughter.

7.102 One way of taking some of the heat out of this

controversy will be to eliminate the profits which have been

made in the past, I believe quite wrongly, from halal

certification.

7.103 I was told that the available theoretical income for

certification of product exported in 1981 to various Islamic

markets other than Iran, amounted to more than $579 000 when

calculated according to AFIC1s current rates of charge (7.81

above). I am unable to say why there is such a large

difference between that sum and AFIC's statement of its income

from certification.While private certifiers would account for

some part of the difference, they would not account for

anything like all of it. Again, false certificates may account

for some part of the difference; but although the evidence

available to me suggests that forgery was widespread, I do not

consider that that would account for the difference. Nor do I

have any other information that would lead me to doubt the

accuracy of AFIC1s accounts.

7.104 In any event, whether the annual cost of certification

is $580 000 or $230 000, it is a significant cost to the

234

industry which should be contained as far as possible if

Australia is to remain competitive in Islamic markets. The

past system has meant that Australian meat producers have been

paying fees which, in part, have been devoted to the general

purposes of Islamic groups in this country. This should not be

permitted to continue. AMLC has entered the present

negotiations with AFIC and DPI with an attitude that recognizes

that AFIC would have costs to meet which would have to be

reimbursed, while maintaining that the certification scheme

should not be a profit-making venture. AFIC has expressed

general agreement with this principle, and in my view effect

must be given to it.

7.105 When the certification system was essentially a

private matter, the setting of fees was likewise a matter for

private arrangements. If government is to be involved, and I

consider that it must be, fees recovered in favour of a private

group should be no more than the amount necessary to recoup

fully that body's costs reasonably incurred in providing its

service. In the present case, those costs could be met out of

a levy made by AMLC on exporters and producers dealing in the

market for halal meat.

(k) Corruption of government officials

7.106 One of the most serious and disturbing matters to

emerge from the Royal Commission's inquiries has been the level

of corruption and abuse of power amongst government officials.

Meat inspectors have provided all the worst instances of this,

but veterinary officers have not remained free from taint and

there is clear evidence of some police corruption.

Meat Inspectors

7.107 One of the difficulties inherent in any attempt to

describe this problem is that it takes almost as many different

forms as there are meat establishments. And the coloration of

the various practices ranges from white through shades of grey

to a distinct black.

235

7.108 At the lighter end of the range no meat is available

at all - in service abattoirs, for example - or inspectors are

only able to buy meat from the meatworks at wholesale prices

which are also available to all employees and perhaps to the

general public. There can be no harm in that.

7.109 The shades of grey begin to emerge when only salaried

employees of the works share the meat inspectors' privileges,

and where the prices charged are below wholesale levels.

7.110 When meat is free and available only to meat

inspectors, there is something seriously wrong; although the

situation will cause less concern if the quantities are small

and the meat is consumed at meal-breaks on the premises.

7.111 Even more disturbing are those cases, of which a

number have come to light, where management has knowingly

signed false overtime claims. These claims have ultimately had

to be paid by the company and so they amounted to a concealed

bribe - as to which nothing had to be said and no direct

payment was involved.

7.112 Other abuses of overtime entitlements have occurred in

cases where more inspectors than were necessary were employed

at overtime rates. Evidence was given of two cases where

management agreed, under pressure, to accept such a situation.

But in these cases the inspectors did in fact attend at the

stated times, so they are instances only of improper pressure

on management for financial gain.

7.113 The most serious cases of all are those in which

inspectors have received regular cash payments from

management. The Commission has discovered widespread payments

in the Northern Territory and a number of instances involving

independent boning-rooms in Victoria. There was also an

isolated case in Western Australia.

236

7.114 It is quite possible that such payments have been made

at a number of other meatworks around Australia and the

Commission has been given no lead which would enable it to

uncover them. On the other hand the two main areas in which

such payments have come to light are, for different reasons,

rather exceptional. I prefer to believe that there have not

been many other cases where regular payments of money to meat

inspectors have occurred.

7.115 The reasons for making such payments - whether in cash

or in meat - are somewhat blurred. Certainly they are made in

the general belief that they help to make management's life

easier. Most managers giving evidence regarded free or cheap

meat for meat inspectors as a custom of the industry which they

did not·feel safe in ignoring. Some spoke of experiences they

had had when inspectors applied pressure for such concessions

by working ridiculously slowly or finding fault in so many

little ways that the day's production was seriously affected.

7.116 Thus many managers saw the free or cheap meat as an

insurance against malicious or pedantic fault-finding by

inspectors. Naturally, the larger the amount involved, the

more management was likely to expect in return. When regular

cash payments were involved in the Victorian cases, there was

an expectation that a blind eye would be turned to deliberate

breaches of regulations, substitution of local for export meat

or fraudulent misdescription of product. The consequences of

similar payments in the Northern Territory have been less

serious - probably because of the very different conditions

which gave rise to such payments.

7.117 Generally speaking, there is nothing to suggest that

the practice of giving and receiving free or cheap meat has

resulted in harm to consumers either in Australia or overseas.

I accept that the great majority of meat inspectors continued to

do their work conscientiously and well even though they were

receiving benefits from management. Indeed the very fact that

237

such benefits were widespread, and generally accepted in the

industry, meant that an inspector had nothing to lose by doing

his job properly.

7.118 The same could even have been said of the cash payments

made in the Northern Territory, which seem to have had their

origin in the poor living and working conditions then available

to the meat inspectors - who were all on transfer.

7.119 The really pernicious cash payments were those made in

isolated cases known only to those directly involved. The worst

case before the Commission related to payments made to a senior

meat inspector who by reason of his position in the Department

was able to give warning to operators of impending investigation

and who accepted considerable cash payments to provide this

service over a period of years.

7.120 Evidence relating to direct payments to meat

inspectors is summarized in cases numbered 1, 3, 4, 5, 6 , 18,

20 and 24 in Appendix H to this report. A summary of evidence

about free and cheap meat is in Appendix F.

Veterinary Officers

7.121 Receipt of free or cheap meat by veterinary officers

is also referred to in Appendix F, and Case No. 27 in Appendix H

deals with a particularly bad example of a senior veterinary

officer putting himself in an untenable position in connexion

with such gifts.

7.122 Generally speaking it is true to say that veterinary

officers stationed at meatworks have received the same benefits

as meat inspectors, although in some cases they have done better

and in others it seems that they have properly declined such

benefits.

7.123 There can be little, if any, excuse for well-paid

professional officers accepting gifts from the industry they are

supposed to regulate. 238

7.124 Particularly is this so when the gifts (or other

benefits) are from a company with which the veterinary officer

has only infrequent dealings. If it is wrong for such an

officer to have benefited from a scheme at his work place,

available to meat inspectors and staff as well, it is worse for

a visiting veterinary officer to take gifts away with him, or

for free or cheap meat to be delivered to senior officers at a

regional headquarters.

DPI action

7.125 The Department was unwilling to tackle the problem of

free or cheap meat for its officers until evidence before the

Royal Commission highlighted the problem. This has been

typical of the lack of resolve shown by senior officers of the

Department in handling problems not directly related to disease

control. Some of them may also have been inhibited by the fact

that they were still receiving, or had recently been receiving,

similar benefits.

7.126 Occasional circulars reminded officers of the general

Public Service provisions relating to the receipt of gifts.

But no attempt was made to find out exactly what was happening,

or to take positive steps to put an end to undesirable

practices.

7.127 However the Department has now acted resolutely by

applying a blanket ban on the receipt of benefits, and

requiring written approval for any exceptions. This is clearly

the proper course.

7.128 No inspector or veterinary officer can be confident

that he will be unaffected by a gratuity which depends on the

goodwill of the management. Nor should any management feel

that it has to make gifts, or a loss on some of its sales, in

order to ensure that it will receive fair treatment from a

government official.

239

7.129 On the other hand I am conscious of the facts that the

practice of discounting meat is a long-standing one; it is

common, in one form or another, to many workers in the

industry; and many meat inspectors come from the ranks of meat

workers and work beside them on the chain, performing duties

which would have to be performed by employees of the works if

inspectors were not used.

7.130 In these circumstances I believe that the public

interest would be served if strict limits were placed on the

entitlement. The Department should only give its consent to

cases in which

(a) the price paid by the officer is at or about the

wholesale price of the product, and

(b) the same terms are available to the general public

or to meatworkers or, at least, the same or better

terms are available to full-time staff.

Police officers

7.131 I am satisfied that one company provided free meat to

officers of the Australian Federal Police (two at a time) for a

number of years. The entitlement to receive this meat was

handed on from one officer to another when an officer currently

enjoying the benefit was posted away from Melbourne.

7.132 The officers concerned were in a position to know

about police inquiries into breaches of the Exports (Meat)

Regulations and could well have been in charge of the inquiries

themselves.

7.133 No doubt the company expected, or at least hoped, in

return for its meat, to receive prompt warning of any police

inquiries which seemed to be heading in its direction and,

perhaps, a less than diligent pursuit of such inquiries.

240

7.134 I am unable to say precisely what the company did

receive for all the meat it gave away over several years;

it is certain that, until this Royal Commission was

established, the company was never made the subject of the

rigorous inquiries which allegations against it should have

suggested were necessary.

but

241

CHAPTER 7B

MALPRACTICES CONCERNING MEAT FOR HUMAN

CONSUMPTION IN VICTORIA

(a) Pet food in smallgoods

7.135 By far the most serious malpractice affecting

Victoria's meat supplies has been the use of pet food in

smallgoods and similar products in which the meat is difficult

to identify.

7.136 I think it is likely that this has been going on in a

small way for a number of years; there have certainly been

rumours to that effect. But all the evidence enables me to say

with confidence is that many tonnes of pet food, apparently

destined for this part of the local market, have come into

Victoria in the last two or three years.

7.137 The perpetrators of the malpractice have, for the most

part, been the suppliers who relidded, or otherwise disguised

the nature of the meat they were selling to the manufacturer.

Certainly some reputable smallgoods companies which received

and used such meat were entirely innocent of any wrongdoing.

7.138 However I am satisfied that some manufacturers must

have known, or at least strongly suspected, the true nature of

the meat they were using. Its general condition and the price

they were paying for it must have alerted them in some

instances.

7.139 Since Victoria is the State with the largest

production of smallgoods and similar products in Australia, and

its products are widely sold in other States, it is clear that

many Australians have been eating kangaroo, buffalo, horse and

donkey-meat without realizing it.

7.140 Most of the information about the quantities of pet

meat going into smallgoods and similar products in recent years

242

has come from the supply end of the chain. There is little

direct evidence to show just where this meat has finished.

7.141 However, there have been a number of reported cases in

Victoria involving the use of small quantities of pet food for

human consumption.

7.142 With one possible exception, all these cases arose

between mid-1979 and 1980 and many of them are inter-related -

involving the activities of two or three central figures. In

two cases prosecutions have resulted in fines in the order of

$300 or $400. Other prosecutions are pending and police

investigations continue.

7.143 The one possible exception referred to involved a

country- knackery owner who also owned a nearby butcher's shop.

Suspicions were aroused from time to time, but apparently

nothing sufficient to warrant a prosecution emerged.

(b) Other malpractices

7.144 Most of the instances of alleged malpractice

concerning meat for human consumption in Victoria were provided

to the Commission by the Department of Agriculture.

7.145 The Meat Inspection Branch produced about 740

instances of inquiries it had conducted since 1975. About 120

of these related to pet food - mostly illegal knackery

operations or breach of knackery regulations, usually failure

to dye meat.

7.146 Of the remaining 620 instances, some involved repeated

inquiries into the same allegation, so the actual number of

separate transactions would have been rather less.

7.147 Almost two-thirds of these 620 cases were concerned

with allegations of illegal slaughter in country areas. It is,

of course, legal for a property owner in the country to kill

243

stock for consumption on the property. It is illegal to sell

meat from any animal killed outside a licensed abattoir or

slaughterhouse. It is easy to understand that stockowners are

sometimes tempted to sell meat to friends or to a local butcher.

7.148 Much of the work of the Department in dealing with

such cases involves explaining the law, issuing warnings and

maintaining some surveillance over later conduct. A few clear

and deliberate breaches of the law are prosecuted. Some

investigations prove the innocence of the persons accused and

many are inconclusive.

7.149 Another area of difficulty has centred on the many

small slaughterhouses closed as a result of the Department's

insistence on higher standards in the mid-70s. A number of

owners of such premises have been tempted to use them

illegally. Here again there have been prosecutions when the

evidence was sufficient to justify them.

7.150 A number of cases of unbranded meat found in butchers'

shops are probably related to instances of illegal slaughter.

However the majority of the recorded cases of unbranded meat

relate to export or inter-state meat on which the payment of

're-inspection' fees has been evaded. There was no risk to

public health in those cases.

7.151 Cases of stolen brands have been reported at the rate

of two or three per year. These could have been used to evade

fee payments or to cover the use of pet meat for human

consumption.

7.152 In addition to these 620 instances of inquiries

concerning particular locations, there have also been, during

the same period, over 1 0 0 0 investigated cases of alleged

breaches of the Meat Transport Vehicles Regulations. These are

not sufficiently important to be considered here, beyond noting

that only 3 cases resulted in prosecutions and there were 50

244

cases where prosecution was recommended. In the other cases

the only action taken was to send a warning letter.

7.153 Finally the question arises as to the level of

malpractices detected by health surveyors at the food

manufacturing and retail sales end of the meat chain. Some of

the cases referred to by the Department of Agriculture were

brought to notice by health surveyors. This would happen

whenever meat from a dubious source was found on premises being

inspected.

7.154 In addition, health surveyors take a number of samples

of meat from food premises each year. They tend to concentrate

on mincemeats and tripe, to check the amount of preservatives used, and on products which are required to contain prescribed

proportions of meat.

7.155 Collated figures provided by the Health Commission

show that over 6000 meat samples are taken each year by council

health surveyors. Of these, the proportion found not to comply

with the relevant regulations averaged 9% in 1979 and 1980.

This resulted in about 350 prosecutions in each year. The main

causes of non-compliance were excess preservatives, fat or

water. It is interesting to note that the proportion of

non-compliance was significantly higher in city premises (7%)

than in the country (2 %).

7.156 In order to put these figures into perspective it is

worth noting that, of the 2 0 0 telephone calls per day received

by the Inspection and Services Branch of the Health Commission,

only a small proportion relate to meat or meat products.

245

CHAPTER 7C

MALPRACTICES CONCERNING MEAT FOR HUMAN

CONSUMPTION IN THE NORTHERN TERRITORY

(a) Corruption of government officials

7.157 There was some evidence that Department of Primary

Production inspectors received 'perks', principally in the form

of free meat, free accommodation in isolated areas and, in one

case, beer or soft drink rations. There was no evidence that

they had demanded such benefits or that the conduct of their

duties was significantly affected by them.

(b) Importation of poor quality meat from other States

7.158 The fact that a very substantial proportion of meat

consumed in the Northern Territory comes from interstate

highlights the lack of control over that meat. Meat may be

imported into the Territory for sale there or re-export without

an accompanying certificate. All that is required is that the

meat should at some time have been stamped as fit for human

consumption.

7.159 This has led to a situation where the Northern

Territory can be used as a "dumping ground" for poor quality

meat from other States. There was evidence of two cases where

Northern Territory meat, properly regarded as unfit for human

consumption in other States, was returned to the Territory

without notice to the Territory inspection service.

7.160 The Department of Primary Production has thus been in

a position where it has no way of knowing the quantities or

origins or ownership of meat imported into the Northern

Territory. While the health surveyors in the Northern

Territory Department of Health have controls over meat stored

and offered for sale in the Territory retail outlets, the

historical details of imported meat might be unknown to the

retailer .

246

7.161 Fortunately, in recent times, meat inspection

authorities in other States have been aware of the inadequacies

of current Northern Territory legislation and have co-operated

with Northern Territory Departments of Health and Primary

Production by advising them of the impending arrival or return

of suspect meat. It is clear that this problem can only be

alleviated by granting the Northern Territory authorities power

of re-inspection over inter-state meat (necessary because of

the long distances and hot conditions of transport) and by

introducing a requirement for the production of such

documentation as would enable the DPP to track the movement of

meat around the Northern Territory.

(c) Pet Meat

7.162 The question of pet meat has been dealt with at length

in Chapter 6 . All that need be said here is that there was no

evidence of NT pet meat entering the human food chain in the

Territory, although this may have happened in small quantities.

(d) Illegal Slaughter

7.163 As I have said earlier (paras 5.374, 5.387-389), the

Northern Territory has had, not surprisingly, problems of

illegal slaughter.

7.164 Certain persons, both landholders and trespassers,

have been suspected of field-killing cattle in breach of the

Abattoirs and Slaughtering Ordinance. One operator estimated

that about 250 beasts were illegally slaughtered on his

property near Darwin over a period of 12 months, but this may

have been an exaggeration.

7.165 In the past, the DPP appears to have done little about

these practices, although attempts have of recent times been

made by the Department to reduce the incidence of illegal

slaughter by promoting an inexpensive and reasonable standard

of slaughterhouse for isolated areas where meat can be produced

247

for local consumption only. This has been so in the case of

aboriginal settlements. It appears, also, that with

increasingly regular transport allowing improved movement of

meat from major centres, the extent of illegal slaughter should

be declining.

248

CHAPTER 8

ALLEGATIONS AND THEIR TREATMENT

8.1 The terms of reference of my Royal Commissions call

for an inquiry into "allegations made, whether in public or to

a minister, department or authority .... of malpractices alleged

to have occurred" in recent years in the export meat industry,

or in Victoria or the Northern Territory. I am asked to say

whether such allegations were dealt with adequately and

effectively and whether any illegality or corruption occurred

"in response to such allegations".

8.2 I should say immediately that there was no evidence

before me to suggest illegality or corruption on the part of

any Minister of any government or of the senior officials of

any department concerned or any police force. The only

possible qualification to this relates to the foolish

acceptance of quantities of free meat by one quite senior

veterinary officer. However there was no link between his

acceptance of free meat and any failure to respond to any

allegation. He has since been dealt with by the Department and

has retired.

8.3 There is however, reasonably clear evidence of a few

instances of what I might call low-level corruption, which has

in the past affected inquiries into certain malpractices in the

export meat industry in Melbourne (see paras 7.119, 7.131-134).

No other evidence of illegality or corruption in response to

allegations has emerged.

8.4 So far as the adequacy and effectiveness of the

response to allegations is concerned, it will be clear from

what I have already said in section (a) of Chapter 1, and from

what follows, that I have found the responses of the Department

of Primary Industry and the Australian Federal Police to have

249

been generally inadequate and ineffective. In one instance I

believe that the response of a Commonwealth Minister was

inadequate. In all other cases, again speaking generally, I

have found the responses of various ministers, departments and

authorities to have been adequate and reasonably effective.

250

CHAPTER 8A

ALLEGATIONS CONCERNING EXPORT MEAT

(a) Department of Primary Industry

8.5 For the most part, allegations concerning malpractices

in the export meat industry came to the DPI. They generally

arose in the regions, and reached the Veterinary

Officer-in-charge or regional director. All too often they

went no further - the head office in Canberra was not

notified. Sometimes, even in serious cases, the whole matter

was dealt with by telephone calls or conversations and no file

was raised.

8 . 6 Generally, however, reports of malpractices were

passed to Canberra - but not always in writing. Most commonly

they were handled locally and head office was merely notified

of the occurrence and the action taken. I make no criticism of

that. As I have said elsewhere, I believe that to be the best

method of dealing with such matters.

8.7 What I must, however, be critical about is the

generally weak response of regional offices to alleged

malpractices - which the Bureau's head office did nothing to

correct. In some cases, specious explanations were accepted at

face value. In most cases the feeling seemed to be that, once

the immediate problem had been rectified, no more action was

needed. Indeed there was a feeling abroad that any form of

publicity was dangerous to the export trade, and so a muted

response was often preferable.

8.8 Where matters were handed to the Australian Federal

Police for investigation, little was done to press the police

for results and, if told that there was insufficient evidence

to launch a prosecution, no alternative action was taken by way

of warnings or increased surveillance.

251

8.9 The best example of this was the failure to take any

special action with regard to the operator who caused the meat

substitution scandal, even after he was caught forging transfer

certificates early in 1981, and refused to answer any police

questions. (See Appendix H, Case 2, paras 47-48) .

Opportunities to detect the worst corporate offender were also

missed. (See Appendix H, Case 1, paras 47-51, 80-82) .

8.10 All this stemmed directly, as I have said before, from

the basic philosophy of the veterinary officers of the Bureau

of Animal Health, that their task was to protect consumers in

Australia and overseas from diseases which can be communicated

from animals to man. They were not trained, nor were they in

most cases temperamentally suited, for the conduct of inquiries

into wrongdoing.

8.11 The Bureau's liaison with State inspection services

and the AMLC was no more effective in dealing with malpractices

than its liaison with the police.

8.12 Information was passed to those other services in most

of those cases where it was obvious that they needed to be told

and there was some action they might be able to take. But

there were many other cases when, in my opinion, information

should have been passed and was not. It ought to have been the

rule to take these other responsible bodies into the Bureau's

confidence, about alleged malpractices which should have been

of interest to them. In fact it was the exception.

8.13 Having made all due allowances for the way in which

the senior officers of the Bureau saw their role, and for the

possible injustice involved in being wise after the event, it

must nevertheless be said that the response of the Bureau and

the Department to malpractices in the export meat industry in

recent years was weak. And that weakness played a significant

part in creating the climate for the gross malpractices that

led to the setting up of this Commission.

252

8.14 Another possible source which the DPI had for

allegations of malpractice was the monthly confidential return

of USDA. This indicated quantities of meat rejected, the

registered number of the export establishment concerned, and

the cause of rejection. The cause was expressed in a few

words, but greater detail could have been obtained from the USDA if required.

8.15 In order to help keep the whole question of export

quality in perspective, it is worth noting that, against an

overall rejection rate in USA of 0.5% in recent years,

Australia's rate has been 0.2%. This compares with Canada's

experience of 0.8% and New Zealand's 0.3%.

8.16 Of the Australian meat rejected between January and

July 1981, almost two-thirds was rejected for "unsound

condition", a further large quantity on "miscellaneous"

grounds, comparatively small quantities for "processing

defects" or "contamination" and a very small quantity for

"container condition". There were 15 separate instances of

"unsound condition" and three of each other complaint - making

27 instances in all.

8.17 Bearing in mind that some of these problems -

particularly "unsound condition" - could be caused by events

after the meat has been loaded for export, the record seems

quite reasonable.

8.18 Such rejections were followed up by DPI with the

export establishment concerned. Here again it must be said

that any resulting investigations have been more in the nature

of assisting the establishment to overcome a problem rather

than a vigorous probing for any possible wrongdoing.

(b) Australian Meat and Live-stock Corporation

8.19 Most of the complaints about Australian meat coming from importers overseas or from foreign governments were

253

received by AMLC. Some were made directly to AMLC officers,

either in Australia or abroad. Others were referred to AMLC by

Australian consular or trade officials posted to importing

countries.

8.20 The long list of such trade complaints referred to the

Australian Meat and Live-stock Corporation and its predecessor,

the Australian Meat Board, show, for the most part, failures to

comply with specifications for the meat sold. There are not a

large number of cases which could be ascribed to malpractices.

8.21 However the AMLC does list the following as instances

of apparently deliberate misdescription which have come to

light in recent years:-Boneless beef described as boneless bull

Young beef " " veal

Mutton " " lamb

Beef kidney " " lamb kidney

livers and kidneys " lamb livers and kidneys

Mutton " beef

Manufacturers beef " " T-bone steaks

Veal trunks " " veal legs

8.22 Another misleading practice reported by the AMLC has

been the packing of third quality boneless beef in cartons

which are intended to be used for first quality meats of other

types.

8.23 Finally the falsifying of packing dates has come to

notice on a number of occasions.

8.24 Generally speaking, AMLC saw its role as one of

quality oversight. It was prepared to look into trade

complaints to the extent which its limited manpower resources

would permit. If it thought they were justified, it would try

to persuade the Australian exporter to find a sensible

commercial solution to the problem. But it would not attempt

254

to coerce the exporter and it would not directly adjudicate on

such matters. It would go no further than to express an opinion.

8.25 It should be noted that AMLC's only powers were over

exporters. It could, and occasionally did, impose special

conditions on the export licences which it issued, requiring an

exporter who had seriously transgressed to submit to additional

inspections to ensure the integrity of the export product.

8.26 Where evidence from overseas suggested a weakness in

inspection procedures at export establishments, AMLC would

normally notify DPI. It seems that AMLC did this more

consistently in recent years that its fore-runner, the

Australian Meat Board, did in the years up to 1977. However

there were a number of instances looked at by the Commission

where information should have been passed to DPI and there is

nothing to show that it was. Here again the picture may be

confused by the tendency to make telephone calls on such

matters, with no formal note of the conversation being made at

either end and no written confirmation being sent.

8.27 In addition to complaints coming from overseas, AMLC

officers made occasional visits to export establishments in

Australia to check on quality controls.

(c) The Australian Federal Police

8.28 A number of allegations of malpractices were passed by

DPI officers to AFP for investigations. The record of the

police in these inquiries, before August 1981, was particularly

poor .

8.29 There were a number of reasons for this. In the first

place, I do not believe that DPI officers were sufficiently active in conveying to police officers all they needed to know,

including the background to the particular inquiry. They did

255

not display much enthusiasm in following up their initial

contacts with the police in each case.

8.30 For their part, the police officers assigned to most

of these inquiries seem to have pursued them with little sign

of keenness or ability. They do not seem to have sought enough

help from the Department and so usually managed to impress the

people they were interviewing with their ignorance of the

matters under discussion.

8.31 In most cases they seem to have merely gone through

the motions of making inquiries. Many obvious leads have

remained unfollowed and the inevitably negative report has

marked the closure of the file.

8.32 One reason for this may have been that the offences

alleged seemed unimportant, by comparison with other inquiries

on their list at the same time. Unfortunately another reason,

in some cases, may have been that they were receiving benefits,

by way of free meat, from the persons being investigated.

(d) Ministerial responsibility

8.33 Since the Director of the Bureau of Animal Health had

so little knowledge of malpractices in the export meat industry, and his Permanent Head even less, it is not

surprising that no inkling of the seriousness of the position

filtered up to the responsible minister. The Department in

Canberra was not aware of the level of malpractice in the

industry and, in the absence of any adequate collation of

allegations of malpractice which had in fact reached Canberra,

the Department would not have been able to provide the Minister

with an accurate picture of the industry's defaults even if it

had wished to do so.

8.34 As to particular allegations, the Department rarely

referred these to the Minister. For example, the

Rt Hon Ian Sinclair testified that during the periods of some

256

six years in total that he was the relevant Minister, on no

occasion did the Department initiate advice to him about

instances of malpractice. He said that a check of the files

revealed that on some eleven occasions allegations of

malpractice had been canvassed with him, but none had

originated from the Department.

8.35 He was, however, concerned in dealing with allegations

coming from other quarters. Two of these involved statements

made by Mr W. Curran, Secretary of the Victorian Branch of the

AMIEU and by Senator Primmer in 1977 and 1978. They were

referred to the Australian Federal Police. One prosecution

eventually resulted. The activities of the police in this area

are dealt with in other parts of this report. However, such

information as Mr Sinclair was provided with in response to the

reference to the police would certainly not have alerted him to

the true state of affairs in the industry. Mr Sinclair

testified that

"at no stage during my terms as Minister for Primary Industry was I aware of any widespread practice then existing of killing and boning in unregistered works, the misuse of AA stamps, or the

relidding of cartons of meat for export as alleged by Mr Curran. I can recall no allegation of species substitution ever being made to me and I certainly did not believe that this had ever occurred".

8.36 Neither the material in the files provided by DPI, nor

any other credible evidence put before the Royal Commission,

contradict that statement.

8.37 The Hon Peter Nixon succeeded Mr Sinclair as Minister

for Primary Industry in September 197 9. On occasions the

Department informed him of allegations of malpractice.

Mr Nixon testified that, of a total of 42 allegations referred

to the Department during his period of office before the

substitution scandal, only 11 were referred to him. Mr Nixon

was critical of the Department for its failure to report

257

allegations of malpractice to him and, in some instances, of

the paucity of the information provided and the belated nature

of reports.

8.38 I am bound to say that I agree with him on this

score; but the weakness lay not merely at the interface

between the Minister and his Department. It rather took the

form of a general clogging of the arteries of communication,

from regional offices to Canberra, from the two or three

knowledgeable officers in Canberra to their Director, from the

Director to his Permanent Head and from both of them to the

Minister.

8.39 Insofar as allegations were reported by the Department

to Mr Nixon, I do not consider any criticism can be levelled at

his handling of them. He seems to have made appropriate

enquiries and acted on advice which must have seemed to him to

be reasonable. The only possible criticism of his handling of

his responsibilities in this area relates to his reaction to

the Report of the Kelly Committee of Inquiry in 1980.

8.40 In 1978 the Hon C.R. (Bert) Kelly accepted a request

made by the then Minister, the Rt Hon Ian Sinclair, that he

chair a small Committee to advise how to resolve the problem of

the dual inspection services, State and Commonwealth. The

other member of the Committee was Mr W. Buettel.

Mr J.F. Landos, a senior Departmental officer was appointed as

executive officer to the Committee. The Committee's

deliberations resulted in a report commonly known as the Kelly

Report. On 11 February 1980, the Committee went to Melbourne

to present the report to the Minister, by this time

the Hon Peter Nixon. Clearly, one purpose of that visit, so

far as Mr Kelly was concerned, was to provide the Minister with

information the Committee had gleaned about the DPI inspection

service which was not strictly relevant to the report and would

not be fully spelt out in it. Mr Kelly's diary records, among

other things,

2 58

"I went to Melbourne for the day to present meat report to the Minister, Peter Nixon. It was worth it because it gave me the chance to tell him a few of the notes that we could not put in the report, such as the bribery and blackmail which is so prevalent in the meat inspection game. Poor Peter

is now to see what can be done."

8.41 Mr Landos was also at the meeting. In the course of

the Committee's investigations and discussions with various

persons in the industry, Mr Landos had taken summary notes

which included references to particular allegations of

malpractices including the manipulation of overtime, stealing,

the provision of cheap and free meat, and the obtaining of

concessions by inspectors by the enforcement of ridiculous

standards. Mr Landos, in a minute subsequently sent to the

Acting Secretary of the Department, the Director of BAH and

other senior officers, recorded that -' "The Committee in meeting the Minister last week expressed strong views as to the "sordid" nature of the meat industry and meat inspection. Particular

reference was made to examples of graft and the misuse of inspector power, both by DPI and State inspection staff and to the poor reputation that

the DPI service has in too many quarters of the industry."

8.42 The views of the Kelly Committee on this subject, as

expressed at this meeting, were reflected, although somewhat

less directly, in the following passages of the Report,

"Complaints were received of excessive zeal at times stemming from a grievance, real or fancied, on the part of an inspector. It is a fact that production can be slowed by unwarranted stoppage of chains to the annoyance of employees; or

condemnations, allegedly unwarranted, to the annoyance of management." (Page 12)

"... an inspector, if he wants to be vindictive, can press the stop button on a killing chain. This puts meat inspectors in positions of considerable industrial power. That this power has not been used more often is a tribute to the sense of

responsibility of most meat inspectors, but it has been used. The fear that it may be used has encouraged some abattoirs managers to give inspectors gifts of meat, or to sell them meat at

ridiculously low prices. It has been alleged that

some managers have given inspectors this kind of inducement not only to ensure industrial peace, but to induce inspectors to turn a blind eye to procedures that give considerable financial advantage to management." (Page 12-13)

"All works strenuously denied that they indulged in these doubtful practices. However, some of them were quick to point out that they wished they could be certain that their competitors practised their own high standards." (Page 13)

"... one aspect of the meat industry which should be tackled with firm resolution ...... is the

problem of some managers trying to buy the co-operation of inspectors by giving them meat at ridiculously low prices, or countenancing excessive overtime claims, or of meat inspectors demanding cheap meat backed by the implied threat of slowing the killing chain or forcing higher offal or other condemnations if management is not compliant. Legislation should include heavy punishments for administrators, VOs, meat inspectors and management. That this kind of practice has been

too common in the past we know too well. It must be stopped in the future." (Page 6 6 )

8.43 The response by the Department to the information

obtained by the Committee was totally inadequate. Mr Landos

saw the problem as stemming from inadequate control by

veterinary officers, and made some constructive suggestions in

his minute for a review of supervisory control. These were not

acted on by the Department. They never reached the Minister.

There was no adequate Departmental follow-up of the matters

raised by the Commitee at the meeting with the Minister, nor of

matters recorded in Mr Landos' notes, nor of those passages in

the Kelly Report.

8.44 Information concerning the specific instances upon

which the Committee had formed its general impression was

available to anyone wishing to seek it out. In any event, the

general assessment of the Kelly Committee as to the state of

the meat inspection service, coming from the source that it

did, was a matter deserving vigorous further investigation.

Anyone who had assumed previously that, by and large, Commonwealth meat inspection was functioning well, ought to

260

have been jolted out of complacency by what the Kelly Committee

had to say. It is pertinent to observe that what the Kelly

Committee said on this subject was, in due course, fully

substantiated at the hearings of this Royal Commission.

8.45 I have carefully considered the Minister's role in

this matter, having due regard to the responsibility

attributable to senior departmental officers, the heavy

workload which Ministers accept and the potential unfairness of

looking at one issue in isolation. In spite of these

considerations, I am bound to record my view that the Minister

did not deal with these allegations adequately and effectively.

8.46 He says that he can recall Mr Kelly saying that it was a pretty "shonky" industry, but he says that Mr Kelly did not

give specific information about particular instances of

malpractice at the meeting - which lasted about 20 minutes. I

think it may be that Mr Kelly did not hammer home his concern

in any very emphatic way, but he obviously said something about

the problems he saw and the report was there to be read; it

was clear enough.

8.47 However the conduct described in the report is to be

categorized, it was clear that the Kelly Committee felt that

action could and should be taken to correct a very serious

situation. The possibilities of such action should have been

fully investigated; instead it was assumed that nothing could

usefully be done.

8.48 Thus neither the Minister nor his senior advisers took

any substantial steps to look into the questions which had been

raised by the Kelly Committee. They seem to have given all

their attention to the central issue dealt with by the

Committee - the question of a single inspection system - and

hoped that any problems of corruption or abuse of power would

right themselves in due course. In the event, of course, they

did not.

261

CHAPTER SB

ALLEGATIONS CONCERNING MEAT FOR HUMAN

CONSUMPTION IN VICTORIA

8.49 As I have already indicated, in paras 7.145-152, the

Meat Inspection Branch of the Victorian Department of

Agriculture made over 600 inquiries, during the period 1975 to

1981, into possible instances of malpractice in the handling of

meat for human consumption. The Branch was diligent and active

in the investigation of a wide range of possible malpractices

including illegal slaughter, sale of unbranded meat,

substitution of non-export for export meat and several cases of

species substitution. Some of the matters came to light from

the Branch's own activities, but many originated with complaints

from the public or from health surveyors or others.

8.50 The Department, conceded that it preferred to carry out

its activities by a process of persuasion rather than coercion

and it seems clear that in some cases the Department may have

been too lenient and too slow to involve police, but these

judgments are made in the glaring light of the meat substitution

scandal. Looked at in July 1981, the Department's record in

this area would probably have attracted no adverse criticism at

all.

8.51 Although the Department saw itself as bearing primary

responsibility for the meat inspection services in Victoria, it

showed a willingness to co-operate in the exchange of

information and conduct of inquiries where other departments or

bodies were seen to have an interest in the matter. Generally,

the Department's level of co-operation with, and trust in,

these other departments or bodies improved as it gained greater

experience and confidence in the exercise of its various

functions and powers under the relevant legislation.

8.52 Apart from what I have said about a tendency to be too

lenient and unwilling to involve police, I have no criticism to

262

make of the handling by the Department of Agriculture of

allegations of malpractice.

8.53 So far as Victorian Government Ministers are concerned,

I heard evidence from two ex-Ministers for Agriculture and one

ex-Attorney-General, and received as exhibits letters from other

Ministers and ex-Ministers, as to their handling of allegations

made to them. I am satisfied that in all cases involving the

handling of meat for human consumption, these matters were dealt

with expeditiously and efficiently and, where appropriate, were

properly referred by the Ministers to other Departments.

8.54 One such case of referral occurred when a Minister for

Agriculture was the recipient of allegations that a particular

meat company was defrauding the Government of inspection fees

and was possibly involved in other malpractices.

8.55 With regard to one aspect of those other malpractices,

the Minister satisfied himself that they were primarily a matter

for Commonwealth authorities and that those authorities had been

informed.

8.56 Other aspects were seen by the Minister as appropriate

for consideration by the Attorney-General. He referred them to

his fellow Minister, who caused a full inquiry to be conducted

by a senior officer of his Department. No evidence was found

which would have justified a prosecution. In any event the

matters involved did not relate to the handling of meat.

8.57 With regard to the allegation concerning fraud in

relation to State inspection fees, there is something of a

mystery. The Minister believes that he referred the matter to

his Department; his informant says that a senior officer of

the Department was present when he told the Minister of the

matter. On the other hand it seems that all senior officers of

the Department at the time have been contacted and say they

have no knowledge of the allegation.

263

8.58 Since the matter is concerned with receipt of

Government revenue and has marginal relevance, if any, to "the

handling of meat for human consumption", I did not attempt to

unravel this minor mystery.

264

CHAPTER 8C

ALLEGATIONS CONCERNING MEAT FOR HUMAN CONSUMPTION IN THE NORTHERN TERRITORY

8.59 There have been remarkably few allegations in the

media, the Legislative Assembly, or by way of direct

communications to government authorities, concerning meat for

human consumption in the Northern Territory.

8.60 The few matters which have been brought to notice in

recent years have been handled with reasonable efficiency -

given the very poor legislative support for the meat inspection

system, which would have made vigorous action difficult in any

event.

265

CHAPTER 9A

RECOMMENDATIONS CONCERNING EXPORT MEAT

(a) The inspection service

Re-organization (5.4-21)

9.1 The Department of Primary Industry should proceed to

reorganize the Commonwealth meat inspection service along the

lines indicated in its final submission to the Commission. In

particular, the removal of the service from the Bureau of

Animal Health and placing of it in a newly-formed Export

Inspection Service is commended. Unless otherwise stated, the

Department's proposals for its new inspection system - so far

as they fall within the Commission's terms of reference - are

endorsed. This applies to both legislative changes and

administrative arrangements.

The dual inspection system (5.48-79)

9.2 The relationship between the reformed Commonwealth

service and the various state services will depend upon

negotiations between respective governments. So far as

Victoria is concerned, it is recommended that a joint authority

be established along the lines already negotiated and reported

to the Australian Agricultural Council. See further

paras 9.56-58 below.

9.3 In the case of the Northern Territory it is

recommended that a similar result be aimed for, although the

very small size of the Territory service would suggest a

comparatively larger role for the DPI. See further

paras 9.67-69 below.

Staffing economies (5.20, 5.28-30, 5.80-91)

9. 4 Wherever overseas requirements and local circumstances

permit, numbers of veterinary officers posted to meatworks

should be reduced, more reliance being placed on senior meat

inspectors, supported by visiting veterinary officers. All

possible steps should be taken to add to the interest of

266

veterinary officers' work. Combined services should provide

additional opportunities for this.

9.5 So far as is practicable, in the light of overseas

requirements and sound meat inspection practices, managements

should be encouraged to take over responsibilities for work on

the chain now performed by meat inspectors. The numbers of meat

inspectors should be correspondingly reduced but, on average,

their work should become more responsible and call for greater

experience and higher personal qualities. The introduction of

approved quality controls and compliance checking methods may

enable numbers of inspectors to be reduced in other areas

also. Such possibilities should be regularly reviewed.

Recruitment and training of meat inspectors (5.115-119)

9.6 · Increases in average responsibilities, together with

greater emphasis on the checking and keeping of records, make

it essential that there should be high quality in-service

training available for inspectors. Appropriate management

training should also be given to those inspectors in

supervisory positions, or likely soon to be appointed to such

positions, who can benefit from it - having regard to their age

and the nature of their duties.

9.7 The Department should accept responsibility for

co-ordinating the basic training courses available to meat

inspectors in the various States. Recruitment policies should

ensure that persons taking up those courses have the necessary personal qualities and abilities to cope with the higher demands

which will be placed upon them as meat inspectors of the future,

particularly by way of inspecting and keeping records and

writing reports.

Delegation of authority (5.40-44)

9.8 Decisions on particular questions of meat inspection,

or concerning the security of export meat, should be made at

plant or regional office level unless they could create an

267

important precedent or otherwise raise policy issues. All

decisions going beyond day-to-day routine should be reported to

head office for information and, if necessary, comment.

Rotation of meat inspectors (5.35-39)

9.9 Meat inspectors should normally be posted to

establishments for a minimum of one year unless family

separations or other hardships are involved. In those cases,

three months postings would be reasonable.

Detection and investigation of malpractices (5.16-23)

9.10 The Department should, as a matter of some urgency,

reorganize its Compliance and Evaluation Unit and establish an

Investigations Unit, as proposed in its final submissions. The

relationship between the Investigations Unit and the AFP will

require close attention - a good working arrangement between

the two is essential. The employment of some former police

officers in the Investigations Unit is recommended.

Information management (2.23-25, 5.41-42, Appendix E)

9.11 All telephone communications on matters which are not

routine should be recorded in writing and filed appropriately.

Complicated or important matters should be confirmed by letter.

9.12 Any incidents of possible malpractice should be fully

documented and filed both on the file relating to the

particular establishment and on a file relating to the type of

malpractice.

Free or cheap meat or other benefits (7.106-130)

9.13 Gifts of free meat to meat inspectors, veterinary

officers or other government officers should not be permitted

in any circumstances.

9.14 The purchase of meat by such officials from meatworks

at prices available to the general public, or to all workers at

the premises, should be permitted.

268

9.15 The purchase of meat by officials in any other

circumstances should be permitted only with the written approval of the Department.

9.16 In no circumstances should officials be permitted to

purchase meat on terms better than those available to the

full-time staff of the meatworks.

9.17 Any meatworks which supplies meat, or official who

receives it, in contravention of the rules prescribed should be

subject to appropriately severe penalties.

9.18 Any meatworks which gives money or other valuable

benefit to an official, without the approval in writing of the

Department, or which helps an official to make a false claim

for overtime payments, reimbursement of living or travelling

expenses, or other money payment - whether from the meatworks

or from the Department - should also be subject to severe

penalties. So, of course, should the official concerned.

Penalties for past transgressions by officials

9.19 It would not be practicable to attempt to discipline

all those officials who have come to notice as the recipients

of wrongful benefits. It would not be fair to punish only

those who have confessed to receiving money. On the other hand

some types of conduct cannot go unpunished.

9.20 I recommend that the cases which should be

particularly pursued, with a view to appropriate prosecution or

other disciplinary action, are those where substantial personal

benefits have been demanded by an official, with express or

implied threats, and those in which substantial benefits have

been offered and received in circumstances suggesting that a

particular return, by way of neglect of duty or other clearly

wrongful act, was expected of the recipient.

269

The role of the unions

9.21 The Australian Meat Inspectors Association will have a

vital role to play in the months ahead in helping its members

come to terms with new organizational arrangements,

particularly where merging, or working closely, with State

government employees is involved. There will also be changes

in manning scales and in responsibilities. Finally, inspectors

will have to adapt to doing without certain valuable 1 perks1 of

office - to put the matter in the kindest possible terms.

9.22 The Association has been very active in support of its

members over the years and will no doubt wish to be closely

involved in the developments which will now occur. The

Department must recognise this fact and consult closely with

the Association before committing itself to proposals which

could affect the industrial interests of meat inspectors. I am

confident that the Association will respond in a responsible

way to the clear need of the industry for a new approach to

meat inspection.

9.23 The Professional Officers Association should similarly

be closely involved in any proposed changes affecting the

industrial interests of its veterinary officer members.

(b) Registration of premises (5.120-164)

9.24 It is recommended that the DPI should promote in every

way possible the concept of common standards of construction,

hygiene and meat inspection for Australian meatworks. This

Australian domestic standard should then also be applied in the

case of all foreign markets which are prepared to accept it.

Different special standards will then be applied only to those

meatworks wishing to produce for export to those countries

which insist upon such special standards.

9.25 The requirement that applicants for export premises

registration should be 'fit and proper persons' is endorsed,

but it is recommended that the power to refuse registration on

270

this ground be used sparingly, particularly in relation to

activities which did not endanger public health and which were

indulged in before the requirement was introduced. With regard

to future misdeeds, refusal or cancellation of registration

should usually be based on conviction for a relevant criminal

offence or failure to 'show cause' in the face of some cogent

evidence of serious wrongdoing. The Department should have

legal advice available at hearings of difficult registration

applications.

9.26 It will be necessary to apply the test of fitness and

propriety to persons who would participate in the management of

the business as well as those who actually control the business.

9.27 Considerations of financial standing or technical

competence should not be used as indicators of likelihood to

indulge in malpractices, though they may be relevant for other

purposes.

9.28 Appropriate appeal provisions should permit the

testing of any adverse decision about a person's fitness to be

associated with a registered establishment.

9.29 The DPI proposal to make it a condition of

registration that meat may not be given to DPI officers, and

may be sold to them only on terms approved in writing, is

generally endorsed. See paras 9.13-18 above.

9.30 There should be provision for the Minister to suspend

the registration of an export establishment in cases where

there is cogent evidence of serious or repeated malpractice.

The onus should then be thrown upon the applicant to show cause

why the registration should be restored pending the

cancellation hearings. Again there should be appropriate

provision for appeal.

271

9.31 The DPI should consider employing officers with

appropriate expertise in the construction of buildings and in

mechanical equipment to assist with technical aspects of

applications for registration. Other disciplines, such as food

technology, should also be considered.

(c) Industry responsibility (5.20-21, 5.288)

9.32 Much greater emphasis should in future be placed upon

the acceptance of responsibility by managements for the quality

and wholesomeness of their products. The meat inspection

service should see its role primarily as policing controls

instituted by industry, rather than providing those controls

itself.

9.33 Recent history would suggest that a close watch needs

to be kept on most operators, but where high standards are

maintained and the inspection service believes the operator's

self-regulation can be trusted, there should be some relaxation

of controls - with a consequential financial benefit to the

operator. For such an approach to succeed, both carrot and

stick are necessary. A direct relationship between levels of

surveillance and cost to the operator (based perhaps on the

number of inspectors) would provide the carrot.

(d) Sampling and species testing (5.244-253)

9.34 The stick is provided by likelihood of detection in

malpractice and the resulting penalties. Some aspects of the

inspection service's role in this have already been dealt with

(para 9.10 above) I also recommend that the random sampling and

species testing of export products should continue indefinitely.

However there should be a marked concentration of effort in

areas of greatest risk, such as manufacturing beef awaiting

shipment in independent coldstores and minced products. The

areas and level of sampling should be reviewed from time to

time. Samples should also be taken from any batch of meat

which has given cause for concern about its nature, either

because of its appearance or because of doubts about seals or

documentation.

272

(e) Refrigerated containers (5.167-168)

9.35 There should be provision for at least a limited check

on the contents of refrigerated containers which have arrived

at a wharf after travelling long distances relying on 'snow

shooting'.

(f) Penalties (5.254-260, 5.265)

9.36 The penalties provided for breaches of regulatory

provisions must have regard not only to the underlying

criminality of the offence (as where public health is put at

risk), but also to the damage which breaches could do to a

vital industry. EMRs should be kept constantly under review,

so that they are not out of step with industry requirements, as

appears to have been the case with 1 robbing the pack' . (7.32)

Because the rewards for villainy can be very great, so must the

sanctions.be; the recently introduced and proposed levels of

penalties are appropriate. On the other hand, when it comes to

enforcement, there should not be an over-reaction against past

weakness. Sanctions should be invoked with proper discretion,

having regard to all the circumstances of the particular case.

(g) Security arrangements (5.174-219)

9.37 Generally speaking there should be no increase in the

levels of physical security which were imposed on meat in the

export chain after the substitution scandal. Those arrangements

should be kept under review and some requirements should be

relaxed as soon as it is thought that compliance and

investigation units are firmly established.

9.38 'Australia Approved' stamps (5.174-183, 5.261-264)

should be replaced with ones of fresh design as soon as

arrangements for their smooth introduction are completed.

Their future production and distribution should be strictly

controlled. Penalties for theft, wrongful possession and

forgery should be heavy.

273

9.39 DPI should continue to use its present system of

carton sealing (5.185-192) for the time being. It should

continue to investigate, and to consult with the industry

about, the use of one piece cartons, and improved methods of

sealing. Unless present sealing methods can be made more

effective and less costly their use should be reconsidered as

soon as the Department is satisfied that its Compliance and

Investigation Units are operating effectively. The possibility

of numbering cartons for better documentary control and tracing

purposes should be further considered (5.237).

9.40 The sealing of loads (5.193-198) should also continue

for the time being. Here again there is a need to keep

technical aspects and record-keeping procedures under review in

the light of evidence about how the present seals can be

circumvented. Because of the great inconvenience and added

costs which sealed loads can cause in some cases, the

Department should investigate, with the export meat industry

and the transport industry, ways in which exemptions from

sealing could be granted. This will probably depend upon the

development of a surer system of documentary controls than

exists at present. In time it may be possible to eliminate the

need for sealing loads. In the meantime consideration should

be given to requiring receiving inspectors to sign for meat

received and acknowledge the seal number.

9.41 The sealing of premises (5.199-203) should be the

first of the current security measures to be relaxed when the

inspection service feels sufficiently confident of its policing

arrangements to do so. The first step of relaxation should

permit senior officers of a company to break seals provided

advance telephone warning is given to a nominated officer of

the inspection service and a written report is made of the

circumstances by the company officer. Such incidents should be

attended by DPI officers on a random basis.

274

9.42 The complete segregation of export meat from other

products in coldstores (5.204-209) should only be required

where there is a real possibility - because of the nature and

method of packing of the products - that the goods could become

contaminated or confused with similar goods or where domestic

product could be deliberately substituted for export product.

The degree of segregation required in each case should depend

upon what is reasonable, given the physical set-up of the

coldstore and the current pressure on storage space. The

regulations concerning segregation of export meat in

coldstores, smallgoods factories and canneries (5.208-211)

should be in line with permitted practices. Accepted

non-observance of regulations creates a dangerous precedent.

9.43 The Department should press on with its studies of

inventory controls (5.212-216) as part of its armoury of

weapons against malpractice and, in particular, as a possible

replacement for expensive physical security methods. At the

least, company records should disclose certain prescribed types

of information and be readily available to meat inspection

officers. They would provide a starting point for

investigations and, in the hands of properly qualified persons,

could provide valuable evidence of malpractices.

(h) AMLC licences to export (5.269-278)

9.44 AMLC should retain its separate function of licensing

exporters, whether or not they operate export meatworks. Only

those who intend to export on their own account should be

licensed. The principles for the grant of a licence should be

similar to those applying to the grant of registration of

export premises, with due allowance for the differences in the

two functions. Close liaison between DPI and AMLC should be

designed to prevent anomalies in the grant or refusal of

registrations and licences. Legislative provisions should

permit the two bodies to have regard to each other's decisions

(5.156) .

275

t

(i) AMLC powers of inspection (5.279-287)

9.45 While reluctant to argue strongly against an increased

inspection role for AMLC (particularly since it is on the

borders of my terms of reference), I am bound to point out the

illogicality of trying to unify State and Federal inspection

systems while, at the same time, creating an additional Federal

system.

9.46 I believe that there should be a method whereby any

shortcomings in export quality can be investigated, advice

given and repeated failures to comply with overseas

requirements dealt with. This system should be independent of

the day-to-day inspection system, which may itself be partly at

fault.

9.47 However I am not convinced that this type of

'trouble-shooting' could not be performed under the overall

umbrella of the Export Inspection Service - given proper

liaison and co-operation with AMLC.

9.48 This is something to be worked out between DPI and

AMLC, having due regard to possible cost savings and the risk

of overlapping functions on the one hand, and the need for

independent expertise in the field of quality control on the

other .

(j) Export documents (5.235-237)

9.49 DPI should proceed with its plans to obtain

independent advice on the possible benefits which Automatic

Data Processing could bring to documentary controls over the

export of meat. There is potential here for much greater

efficiency without loss of security, but the initial costs will

be high, and all interested areas of government and industry

should be closely consulted before any commitments are entered

into. The present manual system works reasonably well and the

supposed benefits of technological change could prove illusory.

276

(k) Halal slaughter and certification (7.57-105)

9.50 It is recommended that there be a single system of halal slaughter certification in Australia with an official

Australian government certificate and an official Australian

government stamp. This system should be under direct and

continuous supervision by the Export Inspection Service of DPI.

9.51 Description of product as halal, documentation for

halal product and halal slaughter stamps should all be accorded

the same status as other product descriptions, documentation

and stamps and attract the same penalties for misuse.

9.52 With provision for the possible acceptance of others,

those now in the field should be responsible for the religious

aspects of halal slaughter. As long as those in the field are

able to provide a satisfactory service, any further additions

should be limited to those who appear to be capable of providing

a similar service which would be accepted at least by some

Muslim countries. The continued role of AFIC and the other

bodies in the field should be reviewed from time to time in the

light of their performance. There should be no monopoly of

supervision of the religious aspects by AFIC, or any other

body, if that can be avoided.

9.53 The reasonable costs, and only those costs, incurred

by AFIC and the other bodies in the performance of their

supervisory functions should be reimbursed. The necessary sum

could be raised by a levy on exporters and producers dealing in

the market for halal meat.

(l) Game meat (5.291-296)

9.54 The meat inspection service should give the fullest

possible coverage to companies or persons wishing to develop

the game meat industry. It seems clear that the industry can

only hope to develop successfully if there are tight quality

controls observed by the companies involved and reasonably close supervision by the inspection service. This must include

277

some supervision of field operations, because lax standards in

the field can only lead to a product which is a health risk -

and one bad incident of this type could easily put paid to

whatever fledgeling industry may have developed.

(m) Pet meat (6.80-92)

9.55 Generally speaking, all pet meat for export should be

dyed with brilliant blue and come under the control of the meat

inspection service. Written exemption could be considered in

return for special security measures. Premises where such meat

is processed should be registered and periodically inspected by

the service or its agents. Prescribed records should be kept.

278

CHAPTER 9B

RECOMMENDATIONS CONCERNING MEAT FOR HUMAN

CONSUMPTION IN VICTORIA

(a) The meat inspection service (5.48-79, 5.363)

9.56 As already recommended, there should be a combined

meat inspection service in Victoria for export meat and meat

for local consumption. This service should be developed, in

the first instance along the lines already discussed and

tentatively agreed between DPI and the Department of

Agriculture.

9.57 Consideration should be given in due course, and in

the light of experience with a combined service, to the

complete unification of this service.

9.58 It follows that, if the Commonwealth and Victorian

services are to be combined, many of the recommendations made

for the export service will automatically apply to the combined

service - for example, recommendations concerning free or cheap

meat for inspectors. Such recommendations are not repeated

here .

(b) Standards of meat inspection

and of premises (5.120-164)

9.59 The Department of Agriculture should do all it can to

promote the concept of a common Australian standard for meat

inspection and meat premises, which will ensure that meat from

any state is accepted in any other, without any re-inspection

being required just because it has moved from one state to

another. Spot checks for meat covering long distances -

whether inter-state or intra-state - may of course be necessary.

(c) Keeping of records (5.326)

9.60 Without necessarily requiring complete uniformity of

records to be kept by meatworks or coldstores for meat

279

inspection purposes, regulations should stipulate what

information is to be kept in each case.

(d) Industry responsibility (5.332-335)

9.61 As in the case of producers for export, producers for

local consumption should be encouraged to take as much

responsibility as possible for the quality and wholesomeness of

their products. Levels of inspection should depend to some

extent upon the performance of the individual operator, and

should be reflected in the charges made to the operator - so

that he has a positive incentive to improve his performance in

this regard.

(e) Penalties and prosecutions (5.336-337)

9.62 Now that more appropriate penalties have been

prescribed for malpractices in the meat industry, the

Department should be more inclined than it has been in the past

to prosecute for serious or repeated malpractices. This has

particular application to the activity of meat transport.

(f) Relations with police (5.343-346)

9.63 It is essential for any meat inspection service in

Victoria to have a clear understanding with the Victoria police

about co-operation and lines of demarcation. This will be even

more important if, as is recommended, a combined meat

inspection service is established, with an in-built

investigation capacity.

(g) Granting of meat establishment licences (5.308-310)

9.64 The integrity of owners and managers should, with

care, be taken into account in granting or withholding

licences. Compare paras 9.25-28 above.

(h) Relations with Health authorities (5.350-357)

9.65 At some convenient time there should be a review by

the Department of Agriculture, the Health Commission and

representatives of municipal authorities, of the present rather

280

arbitrary line of demarcation of inspection responsibilities.

Generally speaking, food manufacturing premises should be left

to the oversight of health surveyors unless the quantities of

meat handled are such that regular visits by meat inspectors

are necessary and they are therefore in a better position than health surveyors to supervise hygiene. There should be no

duplication of responsibilities even if both meat inspectors

and health surveyors have occasion to visit the same premises -

as will often be the case.

(i) Dyeing of pet meat (6.75-79)

9.66 The Department of Agriculture should persist with its

requirement for brilliant blue dyeing of all pet met. The

regulations, descriptive publications, and the practice of meat

inspectors should all make it clear to the industry that what

is required is a coating of dye over the greater part of all

surfaces of the meat in question (6.36-37), such that its

status as pet food is unmistakeable, undyed smaller pieces of

meat cannot readily be cut from it, but it is not rendered

unduly obnoxious to the observer. The only exemption from

dyeing should be in the case of meat from abattoirs which is in

a 'sealed distribution chain' (6.22-24). Records covering the

production and movement of pet meat must be available for

inspection. Pet meat premises should continue to be visited

frequently, but at irregular intervals.

281

CHAPTER SC

RECOMMENDATIONS CONCERNING MEAT FOR HUMAN

CONSUMPTION IN THE NORTHERN TERRITORY

(a) The meat inspection service (5.396-399)

9.67 It is recommended that responsibility for all meat

inspection in the Northern Territory should be taken by a

combined service, the form of which should be negotiated by the

respective governments. It should be a condition of this

arrangement that the service would be administered from Darwin,

not Adelaide, and would work in close liaison with the other

relevant organs of the NT Government. It must have

responsibility for pet meat.

9.68 The conditions of service for officers of the combined

meat inspection service must have regard to the isolation, heat

and comparative lack of amenities from which many officers must

necessarily suffer. These should be adequately compensated for

by appropriate allowances, whether the ultimate cost is borne

by the meatworks operator or by government. All such

allowances must be out in the open (7.157). So far as possible

the need for such allowances should be reduced by sensible

rostering (not for too-short periods, see para 9.9 above) and

by improving accommodation standards and other amenities.

(5.365)

9.69 In-service training has not been available for DPP

officers in the past. Whatever happens to the existing

services, DPI training facilities should be made available to

DPP officers by arrangement between governments. (5.371)

(b) The legislative structure

9.70 The Department should proceed as rapidly as possible

with its proposed amendments to the NT Abattoirs and

Slaughtering Act, and with the introduction of its proposed Pet

Meat Regulations.

282

9.71 The proposed amendments to legislation should provide

adequate coverage of the previously neglected areas of

boning-rooms, coldstores and meat transport (5.381-383) and in

particular the movement of meat from other states (5.376,

7.159-162). They should also provide adequate penalties for

breaches of the law relating to meat for human consumption.

9.72 There should be administrative provision at least for

spot-checking on arrival the contents of refrigerated containers

and trucks which have travelled long distances in the Territory

relying on 'snow shooting1 for their refrigeration. (5.167-168)

9.73 Further attention needs to be given to standards of

hygiene in slaughtering carried out for substantial communities

of aborigines and others in remote areas, including cattle-

station communities. This will require a mixture of advice,

assistance and regulation. (5.390-392)

9.74 Penalties should be sought in all cases of illegal

slaughter where public health is put at risk. (5.374)

(c) Pet meat

9.75 Considerable attention should be paid to the

activities of pet meat producers. Mobile chillers and packing

sheds should be visited unannounced, from time to time, by meat

inspectors, stock inspectors and police officers. (6.61-63)

9.76 Dyeing requirements should be strictly enforced once a

sensible arrangement for dyeing in the field has been achieved.

(6.65-66)

9.77 The continued use of tartrazine as an approved dye

should be reconsidered. (6.67)

(d) Health Department

9.78 It seems that the Health Department needs wider powers

to deal with meat declared unfit for human consumption and to

283

enforce proper standards of refrigeration in coldstores and

refrigerated vehicles. Objective standards for the presence of

salmonella in meat would also be helpful if they can be agreed.

(5.401-403)

9.88 If there are no early prospects of the adoption of an

Australia-wide model Food Act which would solve these problems,

they should be further considered by the Northern Territory

Government.

284

CHAPTER 10

AC KNOWLEDGEMENTS

10.1 The Royal Commission has been particularly well served

by the legal, administrative and clerical officers appointed to

assist it.

10.2 The Secretariat, under the leadership of

Mr L.R. Dudley, has handled all the clerical, financial and

other administrative work of the Commission with unfailing

efficiency.

10.3 The legal staff of the Commission has carried out the

very large task of collecting and sifting evidence which I have

described in Chapter 2 above.

10.4 In particular, I wish to pay tribute to the work of

Counsel assisting the Commission. Mr N.R. McPhee QC and

Mr K.M. Hayne were briefed just under twelve months ago, and

they were joined by Mr J.W. Rapke when the amount of inter-state

work was appreciated some weeks later. All three have worked

extremely hard and effectively ever since. Their respective

contributions to the work of the Commission have been in the

highest traditions of the Bar.

10.5 Finally I would like to record my personal debt,

for their hard work, and constant support, to my Associate,

Mr Shane L. Stone, and my Personal Secretary,

Miss Sally Withers, who has seen this report through a number

of drafts in a short space of time.

285

APPENDIX A (1)

COMMONWEALTH OF AUSTRALIA

ELIZABETH THE SECOND, by the Grace of God, Queen of Australia and Her other Realms and Territories, Head of the Commonwealth:

TO The Honourable Albert Edward Woodward, O.B.E.

GREETING:

WE DO by these Our Letters Patent issued in Our name by Our

Governor-General of the Commonwealth of Australia on the advice

of the Federal Executive Council and in pursuance of the

Constitution of the Commonwealth of Australia, the Royal

Commissions Act 1902 and other enabling powers, appoint you to

be a Commissioner to inquire, for the purpose of the exercise

and performance of the powers and functions of the Parliament

and Government of the Commonwealth, into the following matters,

namely -(a) whether administrative arrangements and procedures for

the supervision of the handling of meat for export are

adequate to ensure that all meat exported from

Australia meets the requirements prescribed by law;

(b) whether malpractices are occurring, or have occurred,

in the handling of meat for export or the exportation

of meat;

286

(c) allegations made, whether in public or to a Minister,

department or authority of the Commonwealth, of

malpractices alleged to have occurred during the past

ten years, in the handling of meat for export or in

the exportation of meat;

(d) whether such allegations were dealt with in a manner

that was adequate and effective;

(e) whether in response to such allegations, any

illegality or corruption occurred.

AND We direct you to make such recommendations arising out of

your inquiry as you think appropriate, including

recommendations regarding the legislative or administrative

changes, if any, that are necessary or desirable:

AND We.declare that, notwithstanding any other provision of

these Our Letters Patent, you are authorized, at your

discretion, to defer your inquiry into any matter that is the subject of a police investigation or of criminal proceedings in

a court:

AND We further declare that if Our Governor-General of the

Commonwealth of Australia so approves, you may conduct your

inquiry into any matter under these Our Letters Patent in

combination with any inquiry into the same or related matters

that you are directed or authorized to make by any Commission

issued, or in pursuance of any order or appointment made, by

any of Our Governors of the States:

AND We require you as expeditiously as possible to make you r

inquiry and -(f) if you consider it appropriate to do so, to furnish to

Our Governor-General of the Commonwealth of Australia

an interim report or interim reports of the results of

your inquiry; and

287

(g) not later than 1 September 1982 or such later date as

We may be pleased to fix, to furnish to Our

Governor-General of the Commonwealth of Australia a

report of the results of your inquiry and your

recommendations.

WITNESS His Excellency the Right Honourable Sir Zelman Cowen, a member of Her Majesty's Most Honourable Privy Council, Knight of the Order of Australia, Knight

Grand Cross of the Most Distinguished Order of Saint Michael and Saint George, Knight Grand Cross of the Royal Victorian Order, Knight of the Most Venerable Order of the Hospital of Saint John of Jerusalem, one of Her Majesty's Counsel learned in

the law, Governor-General of the Commonwealth of Australia and Commander-in-Chief of the Defence Force.

Dated this twelfth day of September 1981.

Zelman Cowen

Governor-General

288

APPENDIX A (2)

ELIZABETH THE SECOND, BY THE GRACE OF GOD QUEEN OF AUSTRALIA AND HER OTHER REALMS AND TERRITORIES, HEAD OF THE COMMONWEALTH.

To Our Trusty and Well-beloved

THE HONOURABLE ALBERT EDWARD WOODWARD, O.B.E., Q.C., a Judge of the Federal Court of Australia

GREETINGS:

WHEREAS the Governor-General of the Commonwealth of Australia

on the.advice of the Federal Executive Council and pursuant to

the Constitution of the Commonwealth of Australia, the Royal

Commissions Act 1902 and other enabling powers, has appointed

you ALBERT EDWARD WOODWARD, O.B.E., Q.C., a Judge of the

Federal Court of Australia, to be a Commissioner to inquire

into, and report upon certain matters relating to the

exportation of meat from the Commonwealth of Australia.

AND WHEREAS the Governor of the State of Victoria, in the

Commonwealth of Australia, by and with the advice of the

Executive Council of the said State, hath deemed it expedient

that a Commission should forthwith issue to you in the terms

set out below.

NCW KNOW YE that WE reposing great trust and confidence in your

knowledge and ability, have constituted and appointed and by

these presents do constitute and appoint you ALBERT EDWARD

WOODWARD, O.B.E., Q.C. a Judge of the Federal Court of

Australia, to be Our Commissioner to make inquiry into the

following matters, namely -

289

(a) whether administrative arrangements and procedures for the

supervision of the handling of meat for human consumption

in Victoria are adequate to ensure that all such meat meets

the requirement prescribed by law;

(b) whether malpractices are occurring, or have occurred in the

handling of meat for human consumption in Victoria;

(c) allegations made whether in public or to a Minister,

Department or Authority of the State, of malpractices

alleged to have occurred since the coming into operation of

the Abattoir and Meat Inspection Act 1973 in the handling

of meat for human consumption in Victoria;

(d) whether such allegations were dealt with in a manner that

was adequate and effective; and

(e) whether in response to such allegations any illegality or

corruption occurred.

AND WE direct you to make such recommendations arising out of

your inquiry as you think appropriate, including

recommendations regarding the legislative or administrative

changes, if any, that are necessary or desirable.

AND WE declare that, notwithstanding any other provision of

this Our Commission, you are authorised, at your discretion, to

defer your inquiry into any matter that is the subject of a

police investigation or of criminal proceedings in a court.

AND WE declare that you are authorised to conduct your inquiry

into the matters mentioned aforesaid under this Our Commission

in combination with any inquiry into the matters that you are

directed or authorised to make by any Commission or Commissions

issued, or in pursuance of any Order or appointment made, by

the Governor-General of the Commonwealth of Australia or the

Governor of any State of the Commonwealth of Australia.

290

AND WE do by these presents give and grant you full power and

authority to call before you such person or persons as you

shall judge likely to afford you any information upon the

subject of this Our Commission and to inquire of and concerning

the premises by all other lawful ways and means whatsoever.

AND WE will and command that this Our Commission shall continue

in full force and virtue and that you shall and may from time

to time and at any place or places proceed in the execution

thereof, and of every matter or thing therein contained

although the same be not continued from time to time by

adjournment.

AND WE direct you as expeditiously as possible to make your

inquiry and -if you consider it appropriate to do so, to furnish US an

interim report or interim reports of the results of your

inquiry; and

not later than 1 September, 1982 or such later date as WE

may be pleased to fix, to furnish US a report of the

results of your inquiry and your recommendations.

IN TESTIMONY WHEREOF WE have caused these Our Letters to be

made Patent and the Seal Of State to be hereunto affixed.

WITNESS His Excellency the Honourable

Sir Henry Winneke, Knight

Commander of the Most

Distinguished Order of Saint

Michael and Saint George,

Knight Commander of the Royal

Victorian Order, Officer of

the Most Excellent Order of

the British Empire, Knight of

the Most Venerable Order of

the Saint John of Jerusalem,

291

one of Her Majesty's Counsel

Learned in the Law, Governor

of the State of Victoria and

its Dependencies in the

Commonwealth of Australia,

etc. etc. etc. at Melbourne

this 15th day of September

One thousand nine hundred and

eighty-one in the thirtieth

year of Our Reign.

Henry Winneke

292

APPENDIX A (3)

COMMONWEALTH OF AUSTRALIA

ELIZABETH THE SECOND, by the Grace of God, Queen of Australia and Her other Realms and Territories, Head of the Commonwealth:

TO The Honourable Albert Edward Woodward, O.B.E.

GREETING:

WHEREAS by Letters Patent issued in Our name on

12 September 1981 by Our Governor-General of the Commonwealth

of Australia, acting with the advice of the Federal Executive

Council and in pursuance of the Constitution of the

Commonwealth of Australia, the Royal Commissions Act 1902 and

other enabling powers, We appointed you to be a Commissioner to

inquire into certain matters relating to the handling of meat

for export and the exportation of meat:

AND WHEREAS it is desirable that your inquiry be extended to

certain matters that do not fall within the matters to be

inquired into under the Letters Patent issued on

12 September 1981:

NOW THEREFORE, We do, by these Our Letters Patent issued in Our

name by Our Governor-General of the Commonwealth of Australia

on the advice of the Federal Executive Council and in pursuance

of the Constitution of the Commonwealth of Australia, the Royal

Commissions Act 1902 and other enabling powers, vary the

Letters Patent issued on 12 September 1981 so as to require

you ~

293

(a) to inquire, for the purpose of the exercise and

performance of the powers and functions of the

Parliament and Government of the Commonwealth, into

the following matters, namely -(i) whether administrative arrangements and

procedures for the supervision of the handling

of meat for human consumption in the Northern

Territory of Australia are adequate to ensure

that all such meat meets the requirements

prescribed by law;

(ii) whether malpractices are occurring, or have

occurred, in the handling of meat for human

consumption in the Northern Territory of

Australia;

(iii) allegations made, whether in public or to a

Minister, department or authority of the

Commonwealth, of malpractices alleged to have

occurred during the past ten years in the

handling of meat for human consumption in the

Northern Territory of Australia;

(iv) whether such allegations were dealt with in a

manner that was adequate and effective;

(v) whether in response to such allegations any

illegality or corruption occurred; and

(b) to make your inquiry as expeditiously as possible and

(i) if you consider it appropriate to do so, to

furnish to Our Governor-General of the

Commonwealth of Australia an interim report or

interim reports of the results of your inquiry

into the matters specified in the Letters Patent

issued on 12 September 1981 or an interim report

or interim reports of the results of your

inquiry into the matters specified in these

Letters Patent;

294

(ii) not later than 1 September 1982, or such later

date as We may be pleased to fix, to furnish to

Our Governor-General of the Commonwealth of

Australia a report of the results of your

inquiry into, and your recommendations

concerning, the matters specified in the Letters

Patent issued on 12 September 1981; and

(iii) not later than 1 September 1982, or such later

date as We may be pleased to fix, to furnish to

Our Governor-General of the Commonwealth of

Australia a separate report of the results of

your inquiry into, and your recommendations

concerning, the matters specified in these

Letters Patent.

Witness His Excellency the Right Honourable Sir Zelman Cowen, a member of Her Majesty's Most Honourable

Privy Council, Knight of the Order of Australia, Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George,

Knight Grand Cross of the Royal Victorian Order, Knight of the Most Venerable Order of the Hospital of Saint John of Jerusalem, one of Her Majesty's Counsel learned in

the law, Governor-General of the Commonwealth of Australia and Commander-in- Chief of the Defence Force.

Dated this twenty-sixth day of November 1981

Zelman Cowen

Governor-General

295

APPENDIX B

LIST OF SUBMISSIONS FROM ORGANIZATIONS

Organization Witness/Author

Adelaide Mosque Islamic Society of South Australia Mr C.M. Ashraf, Honorary Secretary

Australian Commercial Pig Producers Federation

Australian Consumers Association

Dr F.E. Peters

Australian Federal Police Det Chief Inspector

L.N. Elkington

Australian Federation of of Islamic Councils Inc.

Mr I. Altallah, National President

Mr A.R. Yahaya, Vice President, Western Australia

Mr A. Saleem, Administrative Officer Head Office

Australian Institute of Health Surveyors

Mr D.J. Hawkins, Member of Council

Australian Meat and Live-stock Corporation

Mr R.G. Jones, Chairman

Mr R.S. Jordan, General Manager

Mr L.E. Brownlie, Director, Technical Services

Mr M.E. Basile, State Manager, Western Australia

Australian Meat Exporters Federal Council Mr P.A. Bartlett, Executive Director

296

Organization Witness/Author

Australian Meatworks Federal Council

Australian Pig Industry- Research Committee

Australian Veterinary Association

Mr K.F. Gooley, Chairman

Australian Wildlife Protection Council

Mr P .A . Preuss, Director

Australasian Meat Industry Employees Union Mr J.D. O'Toole, Federal Secretary

Mr W. Curran, Secretary, Victorian Branch

Mr W . Finn, Northern Territory Representative

Cattle Council of Australia Mr A .J . Robb,

Executive Director

Cattlemen's Union of Australia

Cold Storage Association of Australia

Commonwealth Ombudsman

Council of the Australian Public Abattoir Authorities

Mr R .A. Farley, Executive Director

CSIRO

Department of Business and Consumer Affairs

Mr C.F. Vassarotti, Senior Assistant Collector of Customs, (Services Branch),

Bureau of Customs

297

Organization Witness/Author

Department of Business and Consumer Affairs (cont) Mr R.E. Kennedy, Director,

Internal Affairs Bureau

Department of Primary Industry Hon P.J. Nixon MP, Minister

Hon K.S. Wriedt MHA, former Minister

Rt Hon I.McC. Sinclair MP former Minister

Mr G.L. Miller, Deputy Secretary

Mr P.T. Core, Assistant Secretary, Executive Secretariat

Mr J.F. Landos, Assistant Director, Export Inspection Service

Bureau of Animal Health Dr R.w. Gee, Director

Dr J.A. Hart, Senior Assistant Director, Veterinary Public Health

Dr P.T. Preston, Assistant Director, Inspection Operations Section

Dr C.G. Field, Assistant Director, Technical Services and Standards Section

Dr J.H. Auty, Principal Veterinary Officer, Technical Services and Administration Branch

Dr K.R. Constantine, Veterinary Officer-in­ charge, NSW

298

Organization Witness/Author

Department of Primary Industry (cont)

Dr P.J. Gleeson, Veterinary Officer-in­ charge, Victoria and

Tasmania

Dr G.D. Hore, Senior Veterinary Officer, Tasmania

Dr P.F. Robinson, Veterinary Officer-in­ charge, Queensland

Mr P.T. Tierney, Regional Executive Officer South Australia and the Northern Territory

Dr S.J.L. Lionnet, Veterinary Officer- in-charge , South Australia and the

Northern Territory

Mr L. Jury, Regional Executive Officer, Western Australia

Dr R.D. Hartwell, Veterinary Officer-in­ charge, Western Australia

Dr J. Heitz Acting Veterinary Officer-in-charge, Western Australia

Department of Prime Minister and Cabinet

Department of Trade and Resources

Fresh Pet Meat Industry Association

Mr R.W. Davis, President

Mr J.B. Fitzsimmons, Vice-President

299

Organization Witness/Author

Greyhound Racing Control Board Mr N.J. Banks, Secretary

Institute of Trading Standards Mr W.H. Binks, Member

Kangaroo Processors Association Western Australia Mr J.R. Saunders, Chairman

Kennel Control Council Mr W.C. Kinsman,

Registrar

Meat and Allied Trades Federation of Australia

Mr R.H.J. Noble, National Director

Mr I.D . Landells, Senior Vice President

Meat Inspectors Association, Australian Public Service Mr G.J. McColl, General Secretary

Mr B.V. Waters, Honorary Secretary, Victorian Branch

Mr K. Milne, Honorary Secretary, Western Australian Branch

Meat Inspectors Group, Victorian Public Service Association

Mr R.P. Hand, Honorary Secretary

Mr N.M. Kelson, Delegate (South West Region)

Mr L.H. Ruddell, Delegate (South East Region)

Muslim Association of Brisbane Mr J. Hoar,

Secretary

300

O r g a n i z a t i o n W i t n e s s / A u t h o r

National Farmers Federation State Council

National Meat Canners

New South Wales Department of Agriculture Hon J.R. Hallam MLC, Minister

Mr W . A. Mayger, Director, State Meat Inspection Service

New South Wales National Parks and Wildlife Service Dr J.R. Giles, Assistant Director

Mr T.A. Hill, Senior Investigator

New South Wales Meat Industry Authority Mr G.L. Langley, Senior Licensing Inspector

Northern Territory Department of Health

Dr J.V. Quinn, Assistant Secretary, Environmental Health

Northern Territory Department of Primary Production Hon R.M. Steele MLA, Minister

Dr C.H. Gurd, Secretary

Dr G.R. Fallon, Assistant Director, Animal Industry Branch

Dr D.A. Newton-Tabrett, Regional Director, Northern Division

Dr B.L. Rideout, Veterinary Officer

Dr K.B. Locke, District Veterinary Officer

301

Organization W itness/Author

Northern Territory Department of Primary Production (cont) Dr D. Thomson, District Veterinary

Officer

Dr J.E. Niethe, Veterinary Officer

Mr C.M. White, District Stock Inspector

Petfood Manufacturers Association of Australia

Mr R.J. Inward, Member, Technical Sub-committee

Primary Industry Association of Western Australia Mr G. Porter, President,

Meat Section

Professional Officers Association, Australian Public Service

Mr B.G. Williams, Senior Industrial Officer

Dr W.C. Murray, President, Queensland Veterinary Group

Public Service Association of New South Wales

Queensland Department of Primary Industries

Mr B . Parkinson, Director, Veterinary Public Health Branch

Queensland Agricultural College

Queensland Fauna Dealers Association

Mr C.F. Thomas, President

Queensland Pork Producers State Council

Retail Traders Association of Victoria Mr K.E. McDonald, Executive Director

302

Organization Witness/Author

South Australian Department of Agriculture

Tasmanian Division of Public Health

Hon E. Kent MLC, Minister

Hon T.L. Austin MLA, former Minister

Hon I.W. Smith MLA, former Minister

Dr D.E. Here, Deputy Director-General, Chief Veterinary Officer, Animal Health Group

Dr A.J. Turner Chief, Division of Veterinary

Public Health

Dr J.B. Rees, Principal Veterinary Officer, Officer-in-charge, Meat Inspection Branch

Mr B.G. Williams, Director, Administrative Services

Victorian Department of Agriculture

Victorian Department of Health Hon T. Roper MLA, Minister

Hon W. Borthwick, former Minister

Hon W .V. Houghton MLC, former Minister

Hon A. Scanlan, former Minister

Dr J .W. Harrison, Acting Assistant Director of Public Health (Inspection Services)

303

Organization W itness/Author

Victorian Farmers and Graziers Association

Victorian Horse Council

Victorian Master Pastrycooks Association

Victorian Meatworks Association

Wagga Wagga City Council

Western Australian Department of Agriculture

Western Australian Meat Commission

Western Australian Meat Industry Authority

Western Australian Pig Producers Association

Western Australian Lamb Marketing Board

Western Australian Meat Exporters Association

Mr K.G. Shiell, Executive Officer, Pastoral Group

Mr R.O. Johnson, Executive Member

Mr D.G. Culbert, Executive Officer

Mr G.H. Green, Senior Abattoir Inspector

Mr I.S. Flack, Manager, Midland Division

Mr I. Barker, Chairman

Mr M. McSporran, Chief Executive

Mr J . Ware, Chairman

304

APPENDIX C

LIST OF WITNESSES MAKING SUBMISSIONS OR GIVING GENERAL EVIDENCE

Mr M.A. Abed, Honorary Secretary, Islamic Council of Victoria

Mr B.R. Abel, Senior Meat Inspector, Southern Division, Department of Primary Production, Northern Territory of Australia

Mr L.C. Ah Toy, Director, Koolpinyah Station Pty Ltd

Rt Hon J.D. Anthony M P , Minister for Trade and Resources

Mr I.B. Backman, Knackery Operator

Mr R.W. Baker, Stock Inspector, Department of Primary Production, Northern Territory of Australia

Mr D.W. Baldie, Meat Processor/Exporter,

Mr N.J. Bargwanna, Assistant General Manager, Angliss Group of Companies

Mr V.W. Bates, Director, Vacik Trading Pty Ltd

Mr M. Bertocchi, Bertocchi Smallgoods

Mr E.R. Bones, R & R Meats

Mr R.E. Bright, Managing Director, Batchelor Enterprises Pty Ltd

Mr K. Bugg, Manager, Koolpinyah Station Pty Ltd

305

Mr S. Bux, Manager, Halal-Sadiq

Mr M.D. Campbell, Member, Victorian Abattoir and Meat Inspection Authority,

Mr C. Clarke, Director, Itoman (Australia) Pty Ltd

Mr R.F. Condon, formerly General Manager, Katherine Meatworks

Mr R.S. Condon, Managing Director, NT Exports

Mr H.S. Conkey, formerly Managing Director, Conkey and Son

Dr W.E. Crogan, Senior Veterinary Officer, Department of Primary Industry

Mr D.A. Culley, Director, Culley & Russell Pty Ltd

Mr R.F. Dann, Manager - Victoria, AMLC

Mr N. Dickens, Manager, Tusker (Australia) Pty Ltd

Mr A .J . Digby, Manager, W. Angliss & Co (Aust) Pty Ltd

Mr B.C. Drew, Assistant Manager/ Chief Engineer, Darwin Cold Stores

Mr D. Dunkerley, Manager, Woodmasons Cold Storage,

306

Mr B .L . Dwyer , Managing Director, Melbourne Cold Storage Company

Sir Donald Eckersley, Primary Producer

Mr D.N. Einsiedel, Managing Director, Noble Einsiedel Pty Ltd

Mr J.L. Every General Manager, TNT Refrigeration

Mr J.B. Fitzsimmons, Knackery and Kennel Owner

Mr D . Fogarty, Manager, Independent Boning Room

Rt Hon J.M. Fraser M P , Prime Minister of the Commonwealth of Australia

Mr J.F. Callaway, Journalist, Queensland

Mr G.A. Gathercole, Abattoir Operator

Mr T.W. George, Director, Wholesale Pork Butchers

Mr J.A. Gilbertson, Chairman, R.J. Gilbertson Pty Ltd

Mr P.H. Greenham, Director, H.W. Greenham & Sons Pty Ltd

Mr T.R. Raise, Howard Springs Pet Meat Supplies

Mr J.A. Hewitt, Managing Director, Austral Pacific Exports

Mr A. James, Director, NT Exports

307

Mr A.J. Keeling, Manager, Kinloss Nominees Pty Ltd

Hon C.R. Kelly, Chairman, Kelly Committee of Inquiry into Meat Inspection

Dr N.L. King, Senior Research Scientist, CSIRO

Mr M.H.M. Leach, Manager, Mt Ringwood Station

Mr E.A.C. McDonald, Manager, Charles David Pty Ltd

Mr N. McDonald, General Manager, Stuarts Foods Pty Ltd

Dr J.G. McLean, Faculty of Veterinary Science, Melbourne University

Dr D.G. McPhee, Department of Microbiology, La Trobe University

Dr K .A . Mannan, Veterinary Officer, Department of Primary Industry

Mr G. Massie, Manager , Souery Foods Pty Ltd

Mr E.J. Meehan, Director, Moree Meat Pty Ltd

Mr W .G. Meehan, Officer-in-charge, Summary Prosecutions Branch, Crown Solicitors Office, Law Department, State of Victoria

Dr H.R.C. Meischke, Senior Veterinary Officer, Department of Primary Industry

308

Detective Senior Constable T.J. Milera, Northern Territory Police Force,

Mr J.A. Morris, General Manager, Smorgon Consolidated Industries

Mr H.E. Munyard, Chief Health/Building Surveyor, Northam Shire Council

Dr K .G. Newton, Senior Bacteriologist, Australian Government Analytical Laboratory,

Constable R.C. Nuttal, Australian Federal Police

Mr A.L. Oxley, Manager, P & 0 Cold Storage

Mrs C.N. Padgham-Purich MLA, Legislative Assembly, Northern Territory of Australia

Mr D. Pearson, Manager , Point Stuart Station

Mr J.D. Pendarvis, General Manager, Northern Pastoral Services

Mr M.J. Phillips, Animal Health Officer, Victorian Department of Agriculture

Mr A.J. Quinn, Manager, Gunbulanya Meat Supply, Oenpe11i

Mr P .V. Quinn, Director, Flemington Cold Stores

Mr J. Randles, Technical Officer, Quality Assurance, AMLC

309

Mr D.W. Roberts, Senior Research Officer, Western Australian Department of Agriculture

Mr K. Smelzer, Manager, T.A. Field Pty Ltd

Mr G.J. Smith, Honorary Ranger, New South Wales National Parks and Wildlife Service

Hon H. Storey MLC, Former Victorian Attorney-General

Sir Frederick Somerset, Consultant

Mr S. Swart, Wildman River Station

Mr G.O. Tancred, General Manager, Tancred Brothers Industries

Mr A. Teys, Chairman, Teys Brothers Holdings Pty Ltd

Mr M .R. Thomason, NT Pet Meat Supply

Mr C.W. Tuckey M P , House of Representatives, Commonwealth of Australia

Dr J.D. Tulloch, Supervising Veterinary Officer, Victorian Department of Agriculture

Mr J . Ware, Managing Director, Metro Meat Limited

Dr G.E.L. Watt, Senior Veterinary Officer, Department of Primary Industry

Mr K. Watt, Senior Inspector Public Buildings, Public Health Department, Western Australia

310

Mr A.J. Webster, Manager, Craig Mostyn & Co Pty Ltd

Mr J . Weninger, Weninaer Meats (Australia) Pty Ltd

Dr G.R. Wilson, Director, National Conservation Strategy Task Force, Department of Home Affairs and Environment

Mr M.T. Williams MLA, Legislative Assembly, Victoria

Dr R.T. Williams, Research Officer, Australian Public Service

Mr A.H. Woods, Managing Director, North Australian Cattle Company Pty Ltd

Mr J .V. Wragg, General Manager, E.G. Green & Sons

Mr J.C. Wroth, Commonwealth Meat Inspector

Mr D. Yeaman, Victorian Crown Solicitor

Dr F. Yeh, Supervising Veterinary Officer, Victorian Department of Agriculture

311

APPENDIX D

Exhibit

1

2

4

5

6

7

8

9

10

11

12

LIST OF EXHIBITS CONTAINING GENERAL INFORMATION

NO. Description

List of relevant Commonwealth legislation

Lists of relevant Victorian legislation

1974-78 Report of the Bureau of Animal Health

1978-79 , 1979-80 Reports of the

Bureau of Animal Health

1978-79, 1979-80, 1980-81 Reports of the

Department of Primary Industry

Organization chart of the Department of Primary

Industry

Organization chart of the Central Office of the

Bureau of Animal Health

Manuals of Instruction for Meat Inspection and

Meat Handling Procedures (3rd ed) Vols. 1 & 2

Exports (Meat) Regulations Explanatory Notes

(Construction and Equipment Requirements

(2nd ed))

Department of Primary Industry list of

Registered Meat Export Establishments

File of forms relating to meat exportation

Training manuals for meat inspectors and related

documents

312

Exhibit No. Description

13

14

15

16

17

30

35

Report of Committee to Inquire into joint

arrangements for meat Inspection in New South

Wales, January 1973

Report on career development needs of meat

inspectors and veterinary officers in the

Australian Department of Agriculture,

R.M. Barker Pty Ltd, August 1975

The Report of the Royal Commission on Australian

Government Administration, 1976

Report of the Administrative Review Committee.

Meat Inspection. ('Bland Committee'), March 1976

Report of the Committee of Inquiry to Examine

Commonwealth and State Meat Inspection Systems

('Kelly Report'), January 1980

Proposed AMLC Regulations, dated 21 August 1981

1980-81 Reports of the Australian Meat and

Live-stock Corporation

36 Handbook of Australian Meat (3rd ed) AMLC

37 1980-81 Statistical Review of Live-stock and

Meat Industries (AMLC)

38 List of licensed live-stock exporters as at

1 July 1981

39 Submission of the AMLC to the 'Kelly Committee',

May 1979

313

41

45

46

47

48

49

50

51

53

74

Description

Returns of meat and live-stock exported (A Guide

to Completing AMLC Returns)

Policy statement relating to abattoirs and

slaughterhouses (Victorian Abattoir and Meat

Inspection Authority) dated 15 May 1975

1975-81 Annual Reports of the Victorian Abattoir

and Meat Inspection Authority

1978-81 Animal Health in Victoria (Annual Reports

of the Animal Health Group, Department of

Agriculture, Victoria)

Submission by the Government of Victoria to the

Committee of Inquiry into Meat Inspection in

Australia ('Kelly Report')

Appendices to the Submission by the Government

of Victoria to the Committee of Inquiry into

Meat Inspection in Australia (1 Kelly Report1)

Interim Report from the Meat Industry Committee

of Abattoirs, Meat Inspection and Animal Health

(together with Minutes of Evidence and

Appendices), dated 3 December 1969

Summary of investigations by the Department of

Agriculture of malpractice in the meat industry

Fifty-first to Fifty sixth Reports of the

Commission of Public Health

Submission from the Meat Exporters Association

of Victoria in support of use of the Department

314

74 (cont) of Primary Industry meat inspectors of meat at

works engaged on production for both export and

local consumption (1966)

Exhibit No. Description

100

147

148

195

223

Syllabus Information. Applied Science Courses

Meat Inspection (1979)

Report. Standing Committee on Agriculture.

Progress on consultations between the

Commonwealth and Victoria on meat inspection,

dated 18 September 1981

Report. Standing Committee on Agriculture.

Report of the High Level Working Group on meat

inspection, dated 31 July 1981

Staffing table of Department of Primary Industry

officers stationed in New South Wales

Queensland Department of Primary Industries

submission to the Kelly Committee

236

259

266

267

268

Department of Primary Industry operational

guidelines for the inspection of game meat for

export

Bundle of Department of Primary Industry

circulars concerning trade descriptions

Map of Kangaroo Management Zones, New South Wales

Kangaroo harvesting quota figures for the States

for the period 1980-1982

Bundle of nine pages of kangaroo products

statistics 315

364

504

532

635

642

817

821

846

853

Exhibit No. Description

Department of Primary Industry duty statements

for veterinary officers, Classes 1 and 2

Submission to the Chief Minister and Acting

Minister for Primary Production by The Angliss

Group concerning Limited Export Licenses to

South East Asia, dated 8 March 1982

Report on the pet food industry of the Northern

Territory by the Animal Industry and Agriculture

Branch, Department of Primary Production of the

Northern Territory of Australia, May 1974

IARC monographs on the evaluation of the

carcinogenic risk of chemicals to humans,

Volumes 1-20, September 1979

Scientific papers relating to FCF Brilliant Blue

Food Safety and Inspection Service Board of

Inquiry Report on the Australian meat

substitution incident USDA

Report of the Meat Legislation Review Group of

the Institute of Environmental Health Officers,

United Kingdom

Report on New Zealand meat inspection

arrangements

Report of Dr Donald Houston, Administrator Food

Safety and Quality Services, USDA Quality Control

Inspection

316

854

883

886

887

Exhibit No. Description

Report of USDA Food Safety and Inspection

Service Integrity Programme

Report of Price Waterhouse Associates pty

concerning effectiveness of revised system for

documentary and physical control of export meat

together with 3 volumes of Visit Reports, dated 27 November 1981

Transcript of the symposium on the review of

Victorian legislation held 8 July 1982

Transcript of the symposium on the final

submission of the Department of Primary Industry held 5 August 1982

317

APPENDIX E (See para 2.24)

The State of the Bureau of Animal Health files, as revealed

by an independent audit arranged by the Royal Commission

It is clear that many of the Bureau's files, including

some of particular interest to the Commission, were in a very

poor state. The public servants who carried out an audit were

very critical of what they found. Those responsible for the

maintenance of the information systems in the Bureau readily

conceded that there were serious defects in those systems

before about 1977, but claimed that they had improved greatly

in more recent years.

One thing which was quite clear was that the systems

had not proved adequate to cope with the sudden rush of new

material and of file searching which followed the breaking of

the meat substitution scandal in August 1981.

As soon as this became apparent, an officer was

appointed to search out all relevant papers and create special

new files appropriate to the issues which were arising. This

was done, but it occurred outside the normal information

systems and thus created fresh problems.

When the Royal Commission was announced it was decided

to establish a special section of the Bureau's Information

Centre to deal with the Commission's requirements. The first

thing that section did was to restore the special files to a

place in the overall system.

All this meant that many documents, very relevant to

the Commission's interests, were moved about from one file to

another and then perhaps to a third, in a period of a few

weeks. Folio numbering was certainly disturbed in this process

- although the findings of the audit team suggest that, in any

event, it was not as accurate as it should have been.

318

One explanation given for this, and for other defects

in the files, was that the Information Centre was constantly-

beset by staff shortages and the necessity to train

inexperienced staff. I have no difficulty in accepting this as

a partial explanation of the state of the files. Nor do I doubt

that this problem was compounded by professional officers doing

their own filing and re-filing in the course of their work -

without always observing the correct procedures for such filing

Generally speaking the files, in spite of some folios

being missing and others badly out of numerical sequence, were

in chronological order. And, in so far as there were apparent

gaps, these were just as serious in files having no relevance

to the Commission's work as they were in relevant files. There

was no demonstrable pattern of deficiencies in relevant files.

One possibly disturbing feature of the files was the

number of times that references to a particular event or

allegation simply petered out - with no definite conclusion or

action being recorded on file. Having inquired into many such

cases in great detail during the course of the Commission's

hearings, I can only say that this file situation does not

greatly surprise me. My reasons for saying that will be set

out in my final report; suffice it to say now that I find

nothing sinister in that situation so far as the files are

concerned.

My conclusion, from a careful study of the audit

report and all the other evidence about the files, is that the

poor state of many of them does not provide any corroboration

for allegations of improper removal and shredding of

documents. The apparent deficiencies can be fully explained on

other grounds, and it is clear from the evidence of officers

who had worked on them between mid-August and the weekend of

5/6 September, that they were in a bad state before the alleged

shredding occurred.

319

APPENDIX F

FREE OF CHEAP MEAT FOR MEAT INSPECTORS

AND VETERINARY OFFICERS

Est No. 201

Free meat was made available to meat inspectors. The quantity

of meat was limited to personal consumption, but could be taken

off the premises. Works employees were permitted to purchase

meat at a reduced rate.

Est No. 54

Free meat to the value of $22 per person was made available to

senior DPI staff (veterinary officer and senior inspector) and

works staff. Other DPI personnel and works employees were

permitted a 20% discount, up to $7 per person each week, on all

meat purchased.

Est No. 80

Meat inspectors and veterinary officers were able to purchase

meat at a reduced rate - $5 worth of meat for $1. The meat was

limited to personal consumption, but could be taken off the

premises. Some years previously, free meat had been supplied

to veterinary officers in DPI's Melbourne Office.

Est No. 761

Free meat to the value of $15 per person was made available to

senior DPI staff (veterinary officer and senior inspector) and

the senior Department of Agriculture inspector. Other DPI

personnel could purchase meat and have $6 deducted from the

account, or take free meat to the value of $6. The same system

obtained for other Department of Agriculture personnel to the

value of $7. Works employees may purchase meat at a 20%

discount to a maximum of $8 off the total account.

320

Est No. 195

Meat inspectors and works employees could purchase meat at a

20% discount to a maximum of $8 off the total account, Works

staff are permitted free meat to the value of $20 per person each week.

Est No. 157

As for Est No. 195.

Est No. 294

Meat inspectors were able to purchase meat at a reduced rate - one cut for $2 to $3.

Est Nos. 7, 20, 2, 40, 503, 13, 423

Veterinary officers and meat inspectors could purchase meat at

a 20%. discount. Works staff and employees may purchase meat at

the same rate.

Est No. 41K

Free meat was made available to the senior meat inspector, in

the order of one cube roll per week.

Est No. 771

Veterinary officers and meat inspectors could purchase meat at

a discounted rate. Works staff and employees may also purchase

meat at the same rate.

Est No. 712

Meat inspectors could purchase meat at a discounted rate.

Works employees may also purchase meat at the same rate. The

general public may purchase meat direct from the works at

wholesale prices.

Est No. 775

Free meat was made available to meat inspectors and the

supervising veterinary officer. The quantity of meat was

321

limited to a specified cut and was given on an irregular

basis. Free meat was also made available to members of the

Australian Federal Police.

Est No. 140

Free meat was made available to meat inspectors and veterinary

officers. Approximately ten lambs each week were shared among

the inspectorial staff.

Est No. 1562

Some years previously meat at a discounted rate was delivered

to the DPI Office, Sydney for distribution to meat inspectors

and veterinary officers.

Est No. 63

More recently meat at a discounted rate was delivered to the

DPI Office, Sydney for distribution to meat inspectors and

veterinary officers.

Est No. 236

Free meat to the value of approximately $20 per week was made

available to a senior veterinary officer.

Est No. 128

Meat inspectors could purchase meat at wholesale prices. The

same benefit is extended to works staff and employees.

Est No. 439

A free carton of meat was provided for meat inspectors on

completion of their six-weeks tour of duty. Further, meat

inspectors could purchase meat at a discount of approximately

10j z f to 15$zi per pound. This same benefit was extended to works

employees.

Est No, 449

Free meat was provided for meat inspectors' lunch. This same

benefit was extended to works employees.

322

Est No. 172

Free meat was provided for lunch for DPI and Public Health

Department personnel. This same benefit was extended to works

staff. Further, free meat to the value of $7 to $10 per person

was made available to works staff. Meat inspectors could

purchase meat at a discount. Works employees may purchase meat

at the same rate.

Est No. 572

Free meat in substantial quantities was made available to the

senior meat inspector. On the occasion of large beef kills,

free meat was made available to inspectors for lunch on the

proviso that they shared their cooking facilities with the

works foreman and manager. Meat inspectors could also purchase

a side of lamb at a reduced rate of $4. Works staff may

purchase meat at the same rate.

Est No. 1537

A free carton of meat of approximately 30 lb was provided for

meat inspectors on completion of their six-weeks tour of duty.

Est No. 1242

Free meat was provided for meat inspectors' lunch - usually a

chop or steak. Further, on completion of their six-weeks tour

of duty meat inspectors could purchase a carton of meat at a

reduced rate of $12.

Est No, 622

In 1980 the resident meat inspector was provided with free meat

each week, usually a hindquarter.

Est No, 295

Free meat was provided for meat inspectors, usually various

cuts of lamb.

323

Est No. 203

Free meat was made available to meat inspectors and veterinary

officers during 1 smoko1 and lunch. This meat was available for

consumption on the premises only.

Est No. 218

Meat inspectors and veterinary officers were able to purchase

meat at a reduced rate - $1 for 10 lb (approximately $20 worth)

of meat. This same benefit was extended to works staff.

Est No. 642

Prior to 1977 free meat was made available to meat inspectors.

There was also a special provision of meat for breakfast for

the early morning shift of inspectors. After 1977, meat

inspectors could purchase meat at a discount. Works staff

could purchase meat at the same rate.

Est No, 1352

Some years previously meat was made available to meat

inspectors and veterinary officers at a reduced rate - $3 for a

family pack (comprising mince, sausages and some steak). More

recently, and up until 1981, 7 kilos could be purchased for $5

or one cut for $1. Further, free meat was provided for meals

on the works.

Est No. 1272

Free meat was provided for meat inspectors.

324

APPENDIX G

GLOSSARY

'AA stamp' - the 1 Australia Approved1 stamp placed on carcasses and cartons of meat and meat

products that have been passed for export

(See para 7.34)

AFP - Australian Federal Police (successor to

Commonwealth Police Force and ACT Police

Force) began operations 19 October 1979

AMLC - Australian Meat and Live-stock Corporation

(successor to Australian Meat Board) began

operations late 1977 (See para 3.14)

BAH - Bureau of Animal Health (See para 5.5)

boning-room - for description of function see paras 3.11,

3.21 and 3.23

chiller - a room or moveable container in which the

temperature of meat is reduced by

refrigeration, but not frozen

coldstore - a place where meat can be frozen and kept in

store indefinitely

container - a metal box for transporting goods - in the

case of meat, capable of refrigeration; holds

over 600 cartons or about 18 tonnes of meat

DPI - Department of Primary Industry (See para 5.4)

DPP - Department of Primary Production,

Northern Territory (See para 5.36)

325

EMRs - Exports (Meat) Regulations

halal - a word used by Muslims for meat killed in

accordance with the religious requirements of

Islam (literally = permitted, see para 7.60)

hoggett - a yearling sheep

integrated - used to describe an abattoir which has boning

and coldstore facilities incorporated in the

same premises (See para 3.11)

knackery - a place where horses and poor quality cattle

are killed for pet food and where dead animals

may also be processed

meatworks - an expression used in this report to include

abattoirs, boning rooms and factories in which

meat is processed

robbing the - removing a prime cut from a boneless pack

pack without disclosing the fact on the label

(See para 7.29)

smallgoods - an expression generally used to describe processed meat products such as sausages,

bacon and cooked meats but not meat pies,

hamburgers or canned meat products

USDA - United States Department of Agriculture

viscera - the internal organs of an animal, including edible offals such as tripe, liver and kidney

VOIC - Veterinary Officer-in-charge (of a region)

326