Excuse my ignorance, but was the original journey going to offload in Israel if it went through the Red Sea?
Senator CANAVAN: That’s overall a good outcome. Congratulations for delivering that. Just going to the questions before—I think it was slightly raised. Obviously this is going into a very volatile area. And some of the criticism I’ve heard is that this particular operator did not seem to have other contingencies in place, or many other contingencies. Is that a fair criticism or—would you comment on that at the moment, particularly in terms of what we’re going to do going forward for vessels that leave while the Red Sea is where it’s at?
Mr Koval : Perhaps I can start, Senator. All voyages have to have a contingency plan. This particular exporter had two additional markets that were part of their contingency plan. They had written confirmation they could access another exporter’s ESCAS in those two countries. The importer, which is an Israeli company, asked them not to go to those markets and wanted them to go the long way round, around the Cape of Good Hope, back to Israel.
Senator CANAVAN: Those two contingency markets—were they only navigable either through the Red Sea or going around the Cape of Good Hope?
Mr McDonald: No, they were in the Persian Gulf.
Senator CANAVAN: They were in the Persian Gulf. So what happened to them then?
Mr McDonald: The Israeli importer advised the Australian exporter that the vessel wasn’t to access those contingency markets, on the basis that they held concerns about the security of their vessel going to those markets.
Senator CANAVAN: Because they were an Israeli importer?
Mr McDonald: That wasn’t explicit, Senator.
Senator CANAVAN: I’m not an expert in the geography here. Presumably if it’s going to the Persian Gulf they’re not being offloaded to Israel; they’re being offloaded to another country.
Mr McDonald: Correct.
Senator CANAVAN: The importer that was ultimately the customer was having to transit through other countries. And you don’t need to comment but presumably, given the conflict in that region, that might be problematic for an Israeli importer.
Mr McDonald: Look, it may be. They, however, had arrangements in place with another Australian exporter to use their ESCAS facilities, their quarantine facilities in those markets. The key issue here, Senator, is that we don’t take the view of redirecting a vessel when they have their own security concerns. That’s something that we leave to the vessel master.
Senator CANAVAN: Of course. I’m unfamiliar, but one of the conditions you place on vessels leaving Australia is that they do have some contingency plans?
Mr McDonald: Correct. And in this instance they didn’t utilise those.
Senator CANAVAN: So they had them but they failed, obviously. So have we have we reviewed or are we looking to review what the contingency plan should be going forward for vessels leaving to the Middle East, keeping in mind these contingencies failed?
Mr McDonald: We are we are looking at those things. I think something that is useful to observe in this instance is that most Australian exporting companies have existing arrangements, existing ESCAS approvals for multiple markets. This particular exporter only had an ESCAS arrangement for the state of Israel and therefore they needed to utilise another exporter’s approvals. There are distinctions around the port of disembarkation to be made. There are distinctions around the actual route that’s being transited. And there are distinctions around: does that exporter have multiple market options that are well established and known? And so each time we look at one of these notices of intent to export from an exporter, we’re doing it on a case by case basis, Senator.
Senator CANAVAN: Look, I recognise the difficulties here, given how volatile it is. And it sounds like there’s a bit of a correlation here between the issues in the Red Sea and perhaps other issues this particular importer faced. But that’s good to hear. The other issue that’s been raised with me and that I’ve seen raised is just the time it took here for both the decision and some elements of the communication. Did DAFF direct this vessel to return to Australia on 20 January—is that correct?
Mr McDonald: It was 19 January.
Senator CANAVAN: And then it wasn’t until 5 February that the formal decision was made not to permit re-export. Is that correct?
Mr McDonald: Correct.
Senator CANAVAN: That’s well over two weeks. That seems like a long time to take to make that decision. What was the delay?
Mr McDonald: I can go through it. It precedes even the 19th, because the vessel had diverted away from the Red Sea prior to that date of its own accord. And it was only after we engaged with the exporter around their alternative plans and proposals and found them to have degrees of uncertainty that didn’t give us confidence that we did eventually make the decision to direct the return of the vessel to Australian waters. Thereafter we worked with the exporter around what their proposed plans were for the livestock on board, and they expressed a preference for the animals to be re-exported after re-provisioning in Australia. The secretary noted at the beginning, and I believe it’s been tabled, my public statement of reasons where—I was the decision-maker, Senator. I refer you to that because there’s been considerable effort, both by the exporter and by the department, around our interactions and how we work through this issue. I also believe that the department was extremely responsive in dealing with this issue. We worked through multiple time zones, various time zones across Australia—what was happening in the eastern states and Western Standard Time. We were also engaging regularly with our representatives in the Middle East on their time zones as well. And we worked through weekends. So best endeavours were made both by the exporter and by the department to work through this. And really, notwithstanding what we could do and what we worked through, all we can do is evaluate what’s before us on the evidence that is before us, Senator.
Senator CANAVAN: I’m not questioning—obviously you would have been working very hard through this. I’m more just saying—what led to it taking so long for someone to make a decision? Were there questions outstanding or were you following up on particular solutions that you didn’t know would work or not? Can you take me through that over that two-week period?
Mr Fennessy : Senator, I’ll start and then I’ll pass back to Mr McDonald. I think quite rightly a lot of industry and other interested stakeholders were asking: when are we going to see a decision? One reason we published a far more detailed statement of reasons—the one that I’ve tabled is 14 pages long—is to show the complexity of all the factors we had to take into account that we couldn’t otherwise communicate until the decision had been made. I think that’s important. And we had industry roundtables or briefings. I think we had at least six. I was getting direct feedback from industry. And it’s quite right, because it’s the department that’s the regulator of animal exports, that we weren’t communicating enough about the timing and complexity of the decision-making. So getting that feedback directly, particularly from industry—we got much more involved. In fact I got directly involved to communicate when the decision was going to be made and that it was a complex and unique situation. Until the decision was made, because of the way the Export Control Act works, we couldn’t then go into all the details in the statement of reasons. Now that we can, and we’ve tabled that with the Senate, that at least shows the real-time negotiations we have to have with the exporter, because it’s really the exporter’s decision to work out what to do with its livestock, not ours, and also then the work we do through our international staff and networks as well as local. So I think it’s a fair question to ask. It took longer from an external perspective, if you weren’t aware of the complexity of the process. Hence the statement of reasons and the importance, which I took on board, of clear, constant communication, which I did, as well as our Chief Veterinary Officer. That was important to give confidence both to our international trading partners and to industry. That, I think, goes to the top line.
Senator CANAVAN: I haven’t had a chance to get through the full detail, and I suppose many won’t, so I’m asking questions as an opportunity here to just briefly explain what these complexities are. So the owner of the ship wanted to go around the Cape. I think it’s public that they asked for that.
Mr McDonald: Yes.
Senator CANAVAN: How long did it take you to make the decision ‘No, that’s not a viable option’?
Mr McDonald: That that decision was made on 5 February.
Senator CANAVAN: And why did that take that long—just that particular aspect?
Mr McDonald: As I stated in my, statement of reasons, the development of a really thorough and sound what we call extended long-haul management plan by the exporter was crucial to us being assured about the health and welfare of the animals for such a long journey. If that if that journey was to proceed, it was going to be the longest journey ever approved from Australia. So it was of utmost importance to us that we had a sound long-haul management plan with the exporter. That involved lots of interactions and considerable work and effort by the exporter, which they undertook diligently. That plan wasn’t approved until 3 February by the department.
Senator CANAVAN: So that plan was approved?
Mr McDonald: Yes, a plan was approved.
Senator CANAVAN: To go round the Cape?
Mr McDonald: No. The extended long-haul management plan was approved as a subset of the broader approval considerations. That took quite a while to work through with the exporter. And that’s no reflection on them; it’s a very complex and challenging issue to work through. Moreover, the department needed to have several interactions with the Israeli competent authority about all of this. And, as I alluded to before, dealing with the different time zones between us and them also took time. It was important for us to ensure that we understood their requirements and what their expectations were, because ultimately a journey of this duration was going to end up in their country, and we wanted to have confidence that they were comfortable with what was being contemplated.
Senator CANAVAN: Excuse my ignorance, but was the original journey going to offload in Israel if it went through the Red Sea?
Mr McDonald: Yes. And then there was also an injunction brought before one of the Israeli courts that was seeking to prevent the Israeli competent authority from issuing import permits, which added degrees of uncertainty to the decision-making. And, as I also stated in my statement of reasons, what that did was really have the potential to take the decision-making away from the Israeli competent authority and put that with the courts. So whilst that didn’t proceed, because the decision was to refuse, that could have ended up in a different situation to having the Israeli competent authority having full discretion.
Senator CANAVAN: That was an Israeli action, was it, in the Israeli court?
Mr McDonald: Yes.
Senator CANAVAN: Just so I’m clear, the risk to us was: we approve this vessel; it leaves; it gets into the Mediterranean; the Israeli courts rule ‘No, you can’t upload’; and it’s stuck there now.
Mr McDonald: Yes. And then we would have had a different situation to what we’ve experienced, which no one wanted as well. Moreover, there were several submissions made to the department with relevant factors that required consideration as well along the way. And all combined, these things just take time, Senator.
Senator CANAVAN: Okay. Having gone through what you’ve gone through, would it be fair to say that you could make a quicker decision if something very similar to this happens again, given the situation we have in the Middle East?
Mr McDonald: I would say it depends on the circumstances. Exactly the same circumstance again—it would obviously have lessons to be learned. However, you do have to, and we’re obliged under the act to, look at everything in their individual circumstances.
Senator CANAVAN: Were you having daily meetings with senior leaders of the department or the minister or the minister’s office on this issue?
Mr McDonald: Personally I wasn’t, but the department was involved.
Senator CANAVAN: I’m not sure how it works.
Mr Fennessy : I might start to answer that. In one respect it was important for me as the secretary to make sure that the decision-maker was separate from all of the normal situation updates. So we had convened a daily response coordination group. These were triggered under our incident management processes for any broader emergency that happens in a departmental context. While this wasn’t an emergency, it was a complex issue. So we had a coordination group that met every day in the organisation. Plus we had an incident management team meeting. So there was a range of meetings. And then as it became closer—acknowledging always that this was a decision by the exporter—we had to do contingency planning based on the possible new application or negotiation. And then we also put in place twice-daily meetings with the Western Australian government once the Bahijah had docked at Fremantle and the possibility of offloading became apparent. So there were a lot of meetings. Those meetings were all triggered as part of our normal incident management processes.
Senator CANAVAN: When did those daily meetings start?
Mr Fennessy : I might need to take advice from some of my officials, but they started after the ship was on its return to Fremantle, before it came back into Australian waters. My colleagues can give the exact dates on that.
Mr Koval : We set it up on the Friday after the decision was made on the 15th. So that was the 22nd, I think.
Senator CANAVAN: So 22 January was the first meeting of that—
Mr Koval : Right. But as an operational area, we were meeting every day. And as this became more complex, we opened it up into an incident response.
Senator CANAVAN: Did those daily meetings involve the ship owners?
Mr Koval : No.
Mr Fennessy : I’ll start and then I’ll throw to Matt. The departmental response was very frequent. And then separately, making sure we created that separation, Mr Koval and Mr McDonald would meet with the ship owners and also the owners of the consignment.
Mr Koval : We as an agency set up our incident to make sure that across the agency we had the right resources—operational, legal, all those types of things—that we normally do for a response. From an operational—
Senator CANAVAN: I’m mindful that there are other senators here who want to ask questions. Just a simple—did you have daily meetings with the owner of the ship and, if so, when did they start?
Mr Koval : We had daily meetings with the ship owner once the decision was made about what’s next.
Senator CANAVAN: What was that date?
Mr Koval : I would have to go back and see if we set up on 6 or 7 February.
Senator CANAVAN: You only set up the daily meetings with the business owner on 6 February?
Mr Koval : Prior to that, we were having regular engagement many times a day about what was required.
Senator CANAVAN: I’d gotten this feedback that they were requesting high-level daily rather than ad hoc discussions. And so that was only set up on 6 February. Is there a lesson to be learned here? I’m not trying to be too critical. Obviously it’s a difficult situation. But maybe that could have been done on a more regular, formal basis.
Mr Koval : The challenge—and it is one of those things that Mr McDonald and the secretary have talked about in reflections—is, as a regulator, how you actually make sure that you help but not step into the space.
Senator CANAVAN: Just listening to this, I’m a little concerned that the independent regulator is so independent he’s out of the loop. How did you keep him—you’re having these daily meetings. You’re obviously spitballing different contingencies, and he’s not in the room to listen to them. So how does that—
Mr Fennessy : I’ll start by answering that. There was the incident management control process, which is automatically triggered. My focus was on that side to make sure the department was responding. Mr Koval was talking to the exporter very frequently, on more than a daily basis, including before the 5th. So that was happening.
Senator CANAVAN: I recognise that.
Mr Fennessy : And then Mr Koval was also chairing the incident briefings. Because we had to be prepared for a range of contingencies for the exporter, we had separately activated a whole lot of risk-based contingency planning in our biosecurity area for anything that would come back onto Australian soil and for our trade area on the range of possibilities. So there was a lot of work going on. To give it structure, we used the incident management framework that we have in the department. Matt, you should confirm this, but you were talking very frequently to the exporter the whole way through, particularly the closer they got to Australia.
Mr Koval : Yes. And, just to clarify, our response coordination group included Mr McDonald, because that’s how we respond to it. Our discussions with the minister’s office didn’t include Mr McDonald.
Senator CANAVAN: You had the minister’s office involved?
Mr Koval : In terms of the minister’s office, that was to keep them updated on what was happening—nothing to do with—
Senator CANAVAN: To keep the independence?
Mr Koval : Correct.
Mr McDonald: Senator, if I can put it as simply as this, the decision-making under the act related to the notice of intent to export that was lodged with the department on 26 January, and the decision I made on 5 February related specifically to the exporter’s proposal to re-provision the ship upon arrival back into Australia and to depart again via the Cape of Good Hope for Israel on that route. So my decision-making was contained to that proposal. What my colleagues are referring to is a broader range of contingencies and planning should that proposal not transpire. And that wasn’t my primary focus at that time.
Mr Koval : In terms of engagement with the exporter, we would go through and talk about calculations around pen density, so stock density in pens, and those types of things. We had regular engagements about what was needed, what information was provided, what more information was needed. And our live animal exports regulatory team was in constant contact with them about how we do that.
Senator CANAVAN: Mr McDonald, I’m ignorant of this area. Is your independence statutorily created?
Mr McDonald: No. It’s an expression that the department utilises because of some of the evidence we gave earlier to Senator Cicconi around—the powers under the Export Control Act 2020 relate to the decision-making powers being conferred upon the secretary and their delegates, of which I’m one, and the minister’s powers relate to whether the minister chooses to issue broad directions to the secretary and exercise their powers or to make determinations. So the expression independent regulator is just that. It’s an expression in the sense that it’s not something the minister would have reason to—
Senator CANAVAN: That’s fine. I just wanted to make sure there wasn’t some legalese here creating all these Chinese walls. I’m just a little concerned about that. I think when lawyers start getting involved, that’s when decisions get really bad.
Mr Fennessy : I will just confirm or reiterate the point that the minister can’t give the regulator—through me, in this case, Mr McDonald—directions on how to make or deal with specific decisions under either the Export Control Act or the Biosecurity Act. So that is a very important part of the—
Senator CANAVAN: But, by the sounds of it, you could.
Mr Fennessy : I can certainly—while I was very closely involved, any influence that we have within the department on the process of decision-making can create legal risk for either the exporter or other external groups to challenge the matter at court. So to me, it’s about the robustness of the process.
Senator CANAVAN: But they’d be challenging that on the basis of a process or a treatment. If you made the decision—I just want to make this clear for me—and I’m not asking for hypotheticals about how the act works. If you made the decision, that in and of itself is not in contravention of the act?
Mr Fennessy : No, I could make decisions. But because we literally do hundreds of these in constant flow, they’re delegated. And I need to ensure as secretary we’ve got the right process and that only relevant considerations are taken into account and procedural fairness is given. That’s was the complexity in this matter.