Chapter 2

Key issues

Stakeholders have had the opportunity to shape the development of the bills during participation in the 2015 Agricultural Export Regulation Review, and through a number of rounds of public consultation on exposure drafts of the 2017 and current bills.
All of the concerns below relate to the main Bill, the Export Control Bill 2019, with no substantive issues being raised by submitters concerning the accompanying bills.

Increased costs

Some submitters raised concerns over potential increased costs associated with the transition to the new regulatory framework.
The Red Meat Advisory Council raised concerns over the recovery from industry of the costs associated with the delivery of required services under the legislative framework, which it argued had increased from under $60 million to over $90 million in less than 10 years.1 In addition to this, the Council raised concerns about the compliance costs of meeting regulatory and operational requirements, such as preparing for audits and addressing documentation requirements.2
The Council suggested that it was difficult for industry to quantify costs in relation to the new scheme, given the Regulation Impact Statement relating to the Bill did not cover the commodity-specific rules, which is where the bulk of regulation will be housed.3
Citrus Australia welcomed the roll-out of the authorised officer model, which they accepted has streamlined the process of inspections under the legislation. However, even with this reform, they expressed concern that costs have not been reduced.4 Citrus Australia also raised general concerns around the cost of increased regulation, providing detail of the documents that citrus businesses, under the existing regime, are required to read, understand and implement prior to an export audit, totalling 207 pages.5
The Department, in its submission, emphasised that it is continuing to work with stakeholders to 'minimise the potential impacts of transition to the new legislation', and drew attention to the Regulation Impact Statement, which estimates that the Bill 'will deliver reductions in the regulatory burden for businesses in the order of $388,000 per year in total'. In addition, it claimed there would be new opportunities for businesses to achieve savings as 'the new framework makes it easier for exporters to understand and comply with their regulatory obligations'.6
The Department also stated that steps have also been undertaken to streamline existing practices. For instance:
the removal of the requirement for meat and livestock exporters to undergo both a person of integrity test (required by the Australian Meat and Livestock Industry Act 1997), as well as a fit and proper person test (required by the Export Control Act 1982); and
the clarification of provisions surrounding the appointment of third party authorised officers that can carry out certain functions, which provides an incentive for exporters to consider the option of engaging these officers to undertake regulatory activities.7
The Department provided an assurance that:
Transitional arrangements have been carefully considered to minimise any costs for exporters and others along the supply chain. Regulatory provisions will be transitioned, where possible, so that, for example, an export registered establishment under the existing framework will be considered an export registered establishment under the new framework. Timeframes for any changes that are required will be consulted with the affected sectors to minimise any possible impacts.8
The Department emphasised that where existing regulatory controls are not able to be transitioned, 'affected stakeholders will be consulted'.9

Accredited properties regime

Citrus Australia, in its submission, expressed dissatisfaction with the process for accrediting properties, provided for in the Bill under Chapter 3. However, they acknowledged that the Bill incorporates into legislation the export listed property arrangements that have existed for some time.
In 2018, and in conjunction with the development of the 2017 bills, an Accredited Properties Order was put in place to improve management of plant exports by strengthening the regulation of properties that produce or prepare certain plant products for export to certain importing countries (the 2018 Order).10
Citrus Australia expressed a view that the prior process of the Department issuing a Phytosanitary Certificate provided a more simple and practical approach than the process for accrediting growers and packers put in place by the Order.11 Under the new arrangements provided for in the Order (and now translated to the Bill), Citrus Australia was of the view that there had been a 'snowball effect' of extra bureaucracy added to the export approval process, with a greater impact on small growers.12
It should be noted that an extensive consultation process was undertaken in developing the 2018 Order. In an explanatory statement accompanying the Order, the Department explained that as part of the process of developing the Order it 'consulted with industry on a regular basis over 18 months prior to commencement', to ensure the Order formalised existing arrangements. Further, the Office of Best Practice Regulation advised in relation to the Order that the amendments 'are minor in nature and do not impost an additional impact on industry'.13

Powers of auditors

Division 2 of Chapter 9 of the Bill provides for audits of export operations and allows for the approval of auditors by the Secretary for this purpose. Clause 272 of the Bill sets out an inclusive list of powers of auditors, who will be able to request a person to produce documents, records or things, or answer questions or provide information in writing; take samples of goods; and test or analyse samples of goods.
Citrus Australia raised concerns over these powers, in particular, the appropriateness of the removal of items or documents from businesses which may contain commercially sensitive material.14 The organisation expressed doubts about the ability of the Department to appropriately implement chain of custody management for documents obtained in such a way, and stated that 'the intellectual property and trade secrets of the businesses we represent would be compromised'.15
The statement of compatibility with human rights accompanying the explanatory memorandum to the Export Control Bill 2019 notes the context under which the Bill provides for audits:
While in some cases goods will be prepared for export at an establishment with an ongoing Government presence, in others the Government's supervision takes the form of periodic and random audits.16
The basis of audits conducted under the Bill is described as 'largely consensual', noting that 'Participants in export operations ought reasonably to be aware that they may be audited when they voluntarily make the decision to become involved in export operations'.17
In relation to the expansive powers of auditors provided for under the Bill, the following rationale was provided:
Australia's agricultural export industries are industries underpinned by trust. Importing country requirements relating to agricultural goods will often relate to the preservation of public health or biosecurity. Noncompliance with those requirements, and with the requirements of the Bill more generally represents a risk to Australia's participation in those markets, as non-compliance may have significant adverse health or biosecurity consequences elsewhere… . Importing countries and other participants in the system expect this additional scrutiny from the Australian Government, which plays a key role in providing assurance about the integrity of the export control system to its trading partners.18
In addition, it is noted that auditors will be required to follow legal and policy requirements when carrying out audits.

Committee views

The committee commends the Department for the extensive consultation that has been undertaken in relation to these bills and consultation drafts of the commodity-specific rules. While the committee acknowledges concerns raised by some submitters about particular aspects of the bills, the committee also notes that the bills have received widespread support from stakeholders, and that, in addition, no concerns have been raised by Australia's trading partners.
The committee welcomes the Government's continuing stakeholder engagement to develop and implement the associated rules. This process will ensure that relevant industry groups and growers are given the opportunity to raise concerns they may have surrounding the appropriate level of regulation for their specific industry.
The committee notes the concerns from submitters about the level of regulation in the industry. However, in the committee's view, removing or diminishing the Commonwealth Government's role in the regulation of exports would pose an unacceptable risk to the export industry and could adversely impact the overall economy.
The committee acknowledges the existing legislative framework has served Australia well over the past 35 years. Over time, however, the framework has become increasingly complex and duplicative.
The committee considers that the bills strike the right balance of continuing to provide the level of regulatory oversight expected by Australia's trading partners, while making the requirements expected by those involved in the system easier to understand and administer through the reduction of complexity, duplication and ambiguity of existing legislation.

Recommendation 1

The committee recommends that the Export Control Bill 2019, the Export Control (Consequential Amendments and Transitional Provisions) Bill 2019, the Export Charges (Imposition—Customs) Amendment Bill 2019, the Export Charges (Imposition—Excise) Amendment Bill 2019 and the Export Charges (Imposition—General) Amendment Bill 2019 be passed.
Senator Susan McDonald

  • 1
    Red Meat Advisory Council, Submission 4, p. 4.
  • 2
    Red Meat Advisory Council, Submission 4, p. 3.
  • 3
    Red Meat Advisory Council, Submission 4, p. 3.
  • 4
    Citrus Australia, Submission 1, p. 4.
  • 5
    Citrus Australia, Submission 1, p. 6.
  • 6
    Department of Agriculture, Submission 2, p. 3.
  • 7
    Department of Agriculture, Submission 2, p. 3.
  • 8
    Department of Agriculture, Submission 2, p. 5.
  • 9
    Department of Agriculture, Submission 2, p. 5.
  • 10
    Export Control (Plants and Plant Products) Amendment (Accredited Properties) Order 2018, Explanatory Statement, p. 1.
  • 11
    Citrus Australia, Submission 1, p. 3.
  • 12
    Citrus Australia, Submission 1, pp. 3, 6.
  • 13
    Export Control (Plants and Plant Products) Amendment (Accredited Properties) Order 2018, Explanatory Statement, p. 1.
  • 14
    Citrus Australia, Submission 1, p. 7.
  • 15
    Citrus Australia, Submission 1, p. 7.
  • 16
    Export Control Bill 2019, Statement of compatibility with human rights, p. 5.
  • 17
    Export Control Bill 2019, Statement of compatibility with human rights, p. 30.
  • 18
    Export Control Bill 2019, Statement of compatibility with human rights, p. 30.

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