encompasses measures to mitigate and manage the risks arising from transmission
of infectious diseases, pests, invasive species or organisms. While, in a broad
context, biosecurity may also include issues such as the security of dangerous
pathogens and toxins that exist in laboratories, the focus in this inquiry has
necessarily been on biosecurity as it relates to food processing.
linked to the issue of biosecurity in the food processing sector are matters
concerning food safety. Food safety concerns the methods of producing,
preparing, handling and storing food to ensure it remains safe for consumption.
The specific issue of food safety is not dealt with in length in this chapter; rather,
the chapter focuses on those aspects linked with biosecurity.
inquiry, the committee heard that the key biosecurity and food safety issues
that confront food processors, and which they view as impacting their ongoing
viability, are cost recovery; the plethora of various audit, certification and
quality assurance processes with which they are required to comply; and a concern
that imports and exports do not compete on a level playing field. This chapter
discusses these issues.
for biosecurity in Australia rests with the Department of Agriculture,
Fisheries and Forestry (DAFF). In 2008, the Beale Review of Australia's
biosecurity system recommended against a 'zero-risk' approach to biosecurity
and concluded that the system should 'shift from zero-risk to managed risk,
from barrier prevention to border management, from "no, unless..." to
The review also recommended structural changes to biosecurity regulatory
authorities, proposing that the Australian Quarantine Inspection Service (AQIS),
Biosecurity Australia, and segments of the Product Integrity, Animal and Plant
Health Division in DAFF be combined.
to the Beale Review,
DAFF introduced a range of biosecurity reforms that included integrating AQIS,
Biosecurity Australia and areas within DAFF into the Biosecurity Services
(referred to as DAFF Biosecurity in this report).
In May 2011, the Australian Government announced that DAFF would continue to
deliver biosecurity services, rather than establishing a separate statutory
authority or commission.
Biosecurity deals with matters including agriculture, pastoral issues, fishing,
food and forestry industries; rural industries inspection and quarantine;
primary industries research; administration of export controls on agricultural,
fisheries and forestry industries products; and food security policy and
Australia also provides import and export inspection and certification
services, and is responsible for quarantine controls at the Australian border.
arrangements, agreements and obligations also exist to work in concert with
domestic biosecurity arrangements, including the World Trade Organisation (WTO)
Agreement on the Application of Sanitary and Phytosanitary Measures.
The WTO agreement requires all members of the World Trade Organisation,
including Australia, to consider all import requests concerning agricultural products from
other countries. Requests are assessed against Australia's biosecurity and
quarantine policies, which are overseen by DAFF Biosecurity.
2012, the Senate References Committee on Rural and Regional Affairs and
Transport (RRAT References Committee) tabled its final report on its inquiry
into Australia's biosecurity and quarantine arrangements.
The RRAT References inquiry addressed issues including the import risk analysis
process and levels of resourcing. That committee made a number of
recommendations, including giving higher priority to the Beale Review reforms, and
committee scrutiny of the new biosecurity legislation.
In an interim report, the committee also recommended improvements in
stakeholder consultation and administration, and continuation of the 40 per
cent rebate on export cost recovery.
The RRAT References has signalled its interest in conducting a detailed
examination of the Biosecurity Bill.
also been a number of related parliamentary inquiries into biosecurity over the
last six years.
The role of biosecurity
isolation has given it many advantages from a biosecurity perspective. The
committee consistently heard that stakeholders understand the important role of
biosecurity in protecting and promoting the food processing industry:
plays a critical role in protecting the food supply, providing community as
well as individual benefits. Any actions in this area need to consider all
potential impacts, including human health impacts, socioeconomic costs from
trade losses, and environmental damage. This includes achieving a biosecurity
and quarantine system viewed by all as meeting the letter and spirit of World
Trade Organisation agreements, and not as a trade barrier.
- The food
processing sector believes that a strong biosecurity regime is essential. While
there is recognition that there is a higher cost associated with not being able
to access cheaper ingredient/input products, in the long run strong biosecurity
measures protects the local quality food chain for Western Australian
also received evidence that the current costs associated with biosecurity
arrangements are an impost on the sector and, if not addressed, will continue
to act as obstacles that impede its ability to compete domestically and in
international markets. Evidence provided to the committee consistently
identified (i) cost recovery; (ii) the need to harmonise the various
audit, certification and quality assurance processes with which food processors
are required to comply; and (iii) the lack of a level playing field for imports
and exports as the main hurdles they face when trying to comply with their
biosecurity obligations in today's challenging market environment.
broadly encompasses fees and charges related to the provision of government
goods and services (including regulation) to the private and other
non-government sectors of the economy.
2002, the government adopted a new broadly based cost recovery policy that was
designed to improve the consistency, transparency and accountability of its
cost recovery arrangements and promote the efficient allocation of resources.
effectiveness of the cost recovery policy introduced in 2002 has since been the
subject of review.
In November 2009,
the Government announced an Export Certification Reform Package (ECRP), which
included a 40 per cent offset of the full cost impact on export industries from
1 December 2009 to 30 June 2011. New export fees and charges, returning
industry to full cost recovery commenced on 1 December 2009.
In its 2010
incoming government brief, DAFF advised the Minister that:
is expected to be fully implemented by 30 June 2011. It is a component of the
broader reforms of Australia’s quarantine and biosecurity system. In addition
to the meat inspection reforms, the ECRP provides funding for reforms to export
regulatory arrangements and the export supply chain and for fee rebates for the
dairy, fish, grain, horticulture, live animal and meat export industries in the
transition to full cost recovery for export certification services.
committee consistently heard evidence that the cost recovery arrangements are a
cause of concern to the food processing sector.
Australian Meat Industry Council (AMIC) expressed concern at the 100 per cent
cost recovery arrangements for AQIS certification charges:
AMIC has entered into agreement with the federal government for the delivery of
a new Australian Export Meat Inspection Service, commonly known as AEMIS, this
is only the start of a drive for new efficiencies. Productivity gains from the
system fell well short of what we negotiated originally and they fell well
short of negating the impact of the costs associated with the removal of the 40
per cent contribution from government. Every Australian packer is paying more.
We are also competing in an international marketplace with countries like the
United States and Brazil that do not charge these government fees.
Mr John Berry
of JBS Australia explained the additional costs that the shift to a full cost
recovery policy will have for its operations:
case, taking away the 40 per cent rebate has meant that overall costs for us in
terms of our AQIS fees and charges have gone from $6 million before the reform
agenda to now $10 million per year, based around the government's full cost
Australia also spoke of the disincentive the cost recovery presents to its
decision to remove the 40% AQIS Export rebate is a negative action by the
Australian Government. Cost recovery is also a disincentive because the ‘real
costs of the service’ are not being charged instead it is ‘full cost recovery’
that builds in a high level of variable costs that are not relevant to the
Industry Advisory Group of Western Australia also suggested that the charges
imposed do not represent value for money:
changes to AQIS fee for service has been controversial and an additional cost
impost on the food processing sector. Comments by processors suggest that they
haven’t seen enough changes to the regime to justify the ‘fee for service’
changes and that the charges are at a level which do not represent value for
submitters noted that in some cases, such as low value products, the AQIS
charges can be a significant portion of the business costs, and in some cases
greater than the value of the products a business is seeking to export:
- It is just
sheer madness. The fact that AQIS have tried to go to full cost recovery is an
impost that most of the companies cannot wear. We are selling a relatively
high-value product into the Asian market and the Middle East, but it is only a very
small part of our operation. Our operation is really profitable because of the
Australian market, not because of export. But if you look at the poultry
industry that are trying to sell low-value product, you will see that it does
not even cover the costs. The value of that low-value product—let us say that
it is the wings and the feet—going to Asia does not cover the cost of AQIS
- Everyone is
charged; there is no such thing as a free audit. Whilst the audits are
undertaken at a charge, as I have indicated, one thing that really concerns us
is the recent spike in AQIS charges. I presume you have come across this
before. Significantly for us, our licence fee went from, I think, $2,000 to
$14,000 a year and the increase in inspection service charges was about 400 per
cent. Given that we do not export significantly a large volume of product into
Singapore and Hong Kong it is a big chunk of any leftover profit for that
little aspect of our business. 
Chapter 4 of
this report considered issues of competition and noted that a diversity of
markets, including export markets, was a strategy to reduce trade exposure of
food processors to the dominance of the major supermarkets. The committee
believes that government can play an important role to ensure that access to
export markets is well facilitated and that cost of access to these markets is
not prohibitive. Greater effort in this policy area is imperative. In recent
years, government action has increased the cost of accessing export markets
through removal of AQIS fee rebates. There is little evidence of facilitation
of additional market opportunities.
presented to the committee is consistent with that raised in previous inquiries
into Australia's biosecurity arrangements.
The committee recommends
government develop a strategic focus on developing access to export markets for
the food industry and facilitate an affordable cost environment for industry to
access these markets.
complexity of issues relating to food safety has increased with rapid
globalisation of food processing, globalised retailing, consumer demand for
more natural and more convenient products, and an overall increase in the
population's susceptibility to food borne illness:
respond successfully to these challenges, there is a need for international
adoption of modern systems for the management of food safety risks. The key
elements include risk-based preventative controls, programs to monitor their
effectiveness, appropriate government oversight, and a strong program of
research on emerging food safety issues.
Commonwealth does not have exclusive power under the Constitution to make laws in the area of
biosecurity and quarantine, the administration of Australia's biosecurity and
quarantine is, therefore, governed by both Commonwealth and state and territory
therefore has a collaborative, multi-jurisdictional approach to food
regulation. The Australia/New Zealand Joint Food Standards System was
established in 1996 by 'The Agreement between the Government of Australia
and the Government of New Zealand establishing a System for the Development of
Joint Food Standards'.
between the Government of Australia and the Government of New Zealand
establishing a System for the Development of Joint Food Standards (hereafter
referred to as The Treaty) 'seeks to reduce unnecessary barriers to trade, to
adopt a joint system of food standards, to provide for timely development,
adoption and review of food standards and to facilitate sharing of
to the Treaty, in July 2008 the Commonwealth, states and territories
signed the 'Food Regulation Agreement', which was designed to provide safe food
controls, cost-effective compliance and enforcement arrangements for industry,
government and consumers and a nationally consistent regulatory approach.
New Zealand Food Regulation Ministerial Council is established under the Food
Regulation Agreement, and has responsibility for the development of domestic
food regulatory policy.
Food standards, which reflect the policy, are developed by Food Standards
Australia New Zealand (FSANZ), and are set out in the Australia New Zealand
Food Standards Code.
border, the Imported Food Control Act 1992 authorises the inspection and
control of intended food imports. Inspections are conducted by DAFF Biosecurity,
which operates a 'risk-based' border inspection program known as the 'Imported
Food Inspection Scheme'. While the inspections are carried out by DAFF
Biosecurity, FSANZ advises on the risks posed by the food under inspection.
Once in Australia, state and territory authorities have responsibility for
monitoring food for sale, whether imported or produced within Australia.
Productivity Commission, in its 2009 research report Performance
Benchmarking of Australian and New Zealand Business Regulation: Food Safety,
noted that while
standards for domestically produced food are uniformly adopted across
Australian jurisdictions, there is no requirement to ensure consistent
implementation and enforcement of these standards in the jurisdictions:
wishing to import food products to Australia are potentially faced with eight
different approaches to implementing a food safety standard for a given
of the Productivity Commission in December 2009, noting the complexity of the existing
were also raised with the committee. The
Australia Food and Grocery Council, commented on the current arrangements, and gave
examples of other influences:
should be driven primarily by sound science and with risk analysis processes to
provide rational assessments of potential impacts including economic impacts.
AFGC considers that to a large extent the methodologies utilised by Biosecurity
Australia and State and Territory agencies are generally consistent with this
principle. Notwithstanding this AFGC is concerned this is not always the case
with outcomes being inappropriate on occasions due to:
arbitrary regulatory requirements;
of funding; and
to audits arising from federal and state and territory regulatory requirements,
customers of food processors also often impose their own food safety and
quality assurance standards verified through third party audits. The Productivity
Commission was advised that it is the view of industry organisations and
businesses that there is overlap between AQIS/NZFSA audits and inspections and
commercial audits required by supermarket chains and overseas buyers:
poultry processing plants in Australia have around 25 full-day audits per year.
While two of these include the state health department (or equivalent) and
another one or two per year are from AQIS, the remainder are private commercial
audits [which are often]... directed at food quality rather than food safety. 
Industry Advisory Group informed the committee that:
have Woolworth's accreditation, Cole's accreditation, Safe Quality Food (SQF)
and Hazard Analysis Critical Control Point (HACCP), there is no room for local
health departments any more. Our local health department audit is just a waste
of time. Once you achieve a standard, it is like sending someone who has a PhD
at university back to primary school. The health department comes in at a
certain standard and they are really replicating something and the business is
at a far higher standard.
submitters highlighted the impact of large companies pushing standards to a
high level and that in some cases they have enough market influence to require
their standards to be met:
- The retailers
and others will push the standards to the highest level they can, because it
makes it easier for them to guarantee product and get quality.
If you are
going to deal with Coles and you want their business, you have to play by their
rules. If you are going to deal with Woolworths and you want their business,
you have to play by their rules. 
of Economic Development, Tourism and the Arts noted the interaction of the
problems of the increased biosecurity cost recovery and the duplication of
commercial and regulatory audits:
concern of industry is that it will have to pay for AQIS’ functions as it moves
to a cost recovery approach. Tasmanian Agricultural Productivity Group (TAPG)
Board members believe that many QA functions achieve the same results as AQIS
and that the government should explore systems to reduce duplication and adopt
an outcome approach to compliance (for example, where a QA requirement and AQIS
regulation are the same, then AQIS recognises that and accept its standards as
Australian Dairy Industry Council raised similar concerns:
national biosecurity system with adequate resources to cater for risk
mitigation and border control, and to manage existing incursions would be a
great step forward. While the dairy industry supports the consistency, we are
concerned about directions in these negotiations towards cost shifting to
producers for strategies fundamental to maintaining livestock industries and
heard from a witness, that while standards exist, there is constant pressure
causing changes to those standards, resulting in additional costs in the supply
problem I see with the food safety situation in Australia is that all these big
companies are on a path of continuous improvement. ... They are continually
fiddling with those standards.
to Nashi, McDonalds, Woolworths, Coles, Spotless and I do not know who else.
Every single one of those companies now has taken that basic HACCP standard—or
we operate off a British standard called the British Retail Consortium (BRC),
which is the British supermarket or retail consortium—and fiddled with it and said,
'We want that, but we also want this bit', and (a) it is totally unnecessary
and (b) half the time it is exactly the same thing. 
considered the Global Food Safety Initiative (GFSI) which was created to
harmonise food safety standards in order to reduce audit duplication throughout
the supply chain:
therefore chose to go down the route of benchmarking, developing a model that
determines equivalency between existing food safety schemes, whilst leaving
flexibility and choice in the marketplace. This benchmarking model is based on
the GFSI Guidance Document, a multi-stakeholder document
that was drafted with input from food safety experts from all over the world,
and defines the process by which food safety schemes may gain recognition by
GFSI and gives guidance to these schemes.
encourages companies buying food products to accept certification to GFSI
recognised food safety schemes, thereby enabling their suppliers to have a more
efficient audit process:
umbrella of GFSI, many major retail, manufacturer and food service companies
have come to a common acceptance of the GFSI recognised food safety schemes.
GFSI has set
up sub-sectors of the food supply chain including Good Agricultural Practice
(GAP), Good Manufacturing Practice (GMP), Good Distribution Practice (GDP),
Good Catering Practice (GCP) and Good Retail Practice (GRP).
In the GAP sub-sector, a separate organisation—FoodPLUS GmbH—has developed a
good agricultural practices standard, GLOBALG.A.P:
is a pre-farm-gate standard, which means that the certificate covers the
process of the certified product from farm inputs like feed or seedlings and
all the farming activities until the product leaves the farm.
2009, the GFSI and GLOBALG.A.P announced the development of a joint approach to
about simplifying the certification and audit processes, Woolworths noted the
need to take care regarding competition laws:
very difficult for us to initiate any such change. We have to be careful that
we do not go and breach any regulations in terms of collusive dealing in the
marketplace. If there is some agency out there that can bring the various
schemes together to a level that allows us to be satisfied with the
outcome—that it is no less robust than the process we have in place today. We
do not seek to impose any additional costs on any of our suppliers because at
the end of the day it gets passed on to the consumer. We would like to be as
efficient and effective as possible. I am not sure what the mechanism is to
reach that point, but we would support getting to a point that is more
effective and efficient than today's.
is encouraged by the potential the GFSI has to reduce costs through the food
supply chain and noted that a range of companies operating in Australia are
participating in the GFSI. This includes Woolworths, which has claimed
commitment to world class quality assurance programs.
also noted continuing efforts to align regulations across domestic jurisdictions.
Therefore, a remaining significant source of duplicative audit requirements is
the misalignment between commercial and regulatory standards.
endorses the Productivity Commission finding that to the extent that commercial
requirements exceed the domestic and export standards enforced on businesses,
the costs to business of separate audits by government agencies may be reduced.
The committee is therefore of the view that there is significant potential to
reduce costs throughout the supply chain by moving to a more appropriate level
of mutual recognition of commercial and regulatory audit standards, possibly
through the use of the GFSI standards benchmarking process.
recommends that the government take the lead in pursuing a more appropriate level of
mutual recognition of commercial and regulatory standards and audit outcomes,
possibly through the use of the Global Food Safety Initiative standards
exports are required to satisfy importing country conditions to gain market
access. Importing countries generally require agricultural commodities to be
certified by the 'national competent authority, which issues certificates on a
government-to-government basis. DAFF Biosecurity operates export
inspection/auditing systems and provides export certification that reflects the
requirements and expectations of importing country governments. Importing countries
thereby rely on exporting countries to ensure that their standards are met.
When import requirements have been set by a country, exporters are required to have
specific arrangements to ensure compliance.
heard from witnesses who were seeking more assistance from DAFF Biosecurity in
reopening markets (particularly overseas markets) following biosecurity
incidents. The committee heard of issues with duck exports to both Indonesia
and New Zealand. Mr John Millington of Luv-a-Duck outlined the issues his
I think it is
one of the areas where they could go into bat for us. Indonesia and New Zealand
are two other areas that we have been trying to get into for nearly 10 years
now. Since the Bali bombing we have not sold a duck into Indonesia; prior to
that, we were selling quite well into there. ... There are artificial trade
barriers created with Indonesia. We have not been able to get a straight answer
as to why we cannot deal with that country....AQIS are the people that control
the ability to export to those countries.
- We have been
trying to get into New Zealand for five years. ... The excuse is that a disease
occurs in poultry in Australia which does not occur in New Zealand. Our
argument has been that that disease does not occur in ducks but does occur in
chickens. We have been able to demonstrate that it is not in ducks. Still to
this day we have not exported one bloody duck to New Zealand
was informed that ways have been found around this issue for exports to other
countries, such as Japan:
have agreed that there is a problem with pigeons in Victoria, avian influenza
in the case of the outbreak down just north of Melbourne. They say, 'We'll put
a 50 kilometre exclusion circle around that. We'll trade from the rest of
Victoria and the rest of Australia, but not within this 50 kilometre radius.'
suggested that portfolio responsibilities between trade and agriculture were
unclear and were not leading to optimal market outcomes for Australian
the same organisation deal with market access to international markets and
market entry into Australia is creating problems for industry. There should be
two distinctly different bodies and people dealing with the two different
acknowledges that there appear to be some tensions in the relationship between industry
and DAFF Biosecurity. It considers that a strong relationship between these
parties is vital to achieving growth in export markets, and appeals to industry
and DAFF Biosecurity to work together to this end.
is of the view that the federal government should consider the evidence
provided to the committee with regard to international biosecurity trade
recommends that industry and DAFF Biosecurity consider establishing a forum in
which they can meet to discuss and resolve factors that inhibit export market
access, growth and development.
standards applying to imported and domestic products
was informed of concerns about different standards applying to imports, exports
and domestic products. Commenting on the importance of biosecurity, Ms Jennifer
Dowell, National Secretary of the Food and Confectionery Division of the
Australian Manufacturing Workers Union, stated:
biosecurity are very important to Australians, yet we know that the testing
regime and standards applied to imported food goods are not necessarily as high
as those applied to Australian-made goods. Many examples have been explained to
us by our manufacturers and members of imported ingredients and goods that have
been found to be unusable as they fail to conform to the appropriate standards.
Nonetheless, the products have been allowed in and delivered to the local
Coles raised related
issues, but was also concerned to ensure that the problem was resolved without
increasing trade barriers inappropriately:
regulation in food safety and quality are amongst world’s best practice. As
cheaper food product imports increase into Australia, it is critical to ensure
that these standards are applied universally to protect consumer safety (and
not simply provide increased barriers to trade).
Productivity Commission also considered this issue and was informed by industry
in Australia has noted a number of areas in which domestic food safety
standards are being implemented more stringently on domestic businesses than on
competing import businesses. In some areas this may be due to the impact that
differences in implementation of food safety requirements across jurisdictions
has on the standards imposed on imports (as discussed above).
Productivity Commission went on to make the following point:
of food safety requirements throughout the production chain for domestic
businesses, but not for imported businesses, may unduly raise the opportunity
costs of domestic businesses (unless similar requirements are made in the
importer’s home country) and has contributed to some products that are not
approved for production nevertheless being imported.
Productivity Commission also noted that 'for food importing businesses, these
differing requirements have the potential to create confusion, necessitate
contact with multiple jurisdictions/agencies and lead to additional costs in
demonstrating compliance with food standards, both at border inspections and
Beale Review recommended that 'the Commonwealth’s biosecurity legislation
should provide that authority given by the Commonwealth to import goods into
Australia also authorises the goods to be imported into a state or territory on
the same conditions (if any)'. The government at the time (18 December 2009)
agreed in-principle with the recommendation of the Beale Review and indicated
that it intended to negotiate a new agreement with states and territories by
the end of 2009.
In March 2012, the Government, in its update on the Beale Review, indicated
that this would now be implemented in the new biosecurity legislation.
notes the continuing concerns raised about differing standards and is keen to
see this issue addressed. The committee suggests that it may be appropriate for
the Senate RRAT committee to continue to monitor this matter through the
passage of the new biosecurity legislation and its implementation.
recommends that the Senate Rural and Regional Affairs and Transport References
Committee examine the new biosecurity legislation to assess whether it will
appropriately address the problems of different standards applying to imported
and domestic products and consider monitoring the implementation of relevant
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