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Social licence: an asset to be built, maintained and defended

THE success of Australia’s livestock export industry relies as much on the right social settings as it does on its economic drivers.

This is due to the part industry has played in the reform process over the past five years since the live trade to Indonesia was suspended in 2011.

The economics behind Australian livestock exports and its role within the red meat industry supply chain are strong. The live trade’s value was $1.8 billion in the 2015/16 financial year, making it one of Australia’s top 10 agricultural exports.

The trade forms an important part of total off-farm value of Australia’s red meat industry which is worth almost $18 billion annually to Australia’s economy and is now Australia’s largest value-added manufacturing activity.

The livestock export industry’s unique contribution to the red meat sector includes Australia’s leading role in the global export of beef and dairy cattle, sheep and goats, with sophisticated supply chains and collaborations with overseas customers.

Australia’s Consolidated Pastoral Company is a great example of this leadership. CPC’s joint venture in Indonesia represents the largest private vertically integrated cattle business between our two countries. The joint venture involves cattle importing, feeding and fattening across two feedlots, as well as breeding projects, which creates flow-on employment to 12,000 Indonesians.

At home, independent analysis of our industry shows the livestock export sector generates employment for up to 10,000 Australians, mostly in regional and rural Australia.

But it isn’t just enough to focus on our economic clout. We know that good animal welfare practices and outcomes represent good business, which is in step with community expectations that we go beyond the economics of our trade and actively maintain a social licence to operate.

Since the implementation of ESCAS, the industry’s in-market programs have delivered training to 11,000 participants across our international markets
The Hon Simon Crean

The fall-out arising from the events of 2011, when the export of cattle to Indonesia was suspended, dramatically brought home the need for social licence to operate to all participants in our industry.

Livestock exporters are not alone in this regard. For the major banks, the issue of social licence must be seen and incorporated into how it deals with its issues across customer, community, regulator and government interface. And as the greyhound industry has experienced in NSW, a perceived lack of social licence can quickly manifest into political over-reaction.

Such experiences show how social licence needs to both support and be incorporated into an industry’s operations. Evidence of livestock cruelty, such as that seen at the Echuca abattoir recently, requires businesses and entire industries to sign-up to and fully commit to the standards set by both the community and the relevant regulatory framework.

The livestock export industry knows that social licence isn’t just something you instantly create. Like anything of value, it’s an asset that is built, maintained and defended.

With that in mind, Australia’s livestock export trade seeks to reinforce our commitment to a ‘no fear, no pain’ objective in the management of animals in our supply chains.

Our industry exports a lot more than just a commodity. We’re also sending services and capability abroad, which is far more of a commitment than just trading the livestock alone.

According to the World Organisation for Animal Health (OIE), Australia is the world leader in animal welfare practices in the trade. Part of this leading role is our determination to imbed transparency and systematic accountability into our supply chains.

Our commitment to the Exporter Supply Chain Assurance System (ESCAS) and support for the Livestock Global Assurance Program (LGAP) in the future set us apart from the other 100 or more livestock exporting nations around the globe and ensures we continue to set new benchmarks in the trade.

Since the implementation of ESCAS, the industry’s in-market programs have delivered training to 11,000 participants across our international markets.

The Hon Simon Crean is the Chairman of the Australian Livestock Exporters’ Council.

The Meat Industry Strategic Plan 2020 outlines animal welfare as the biggest risk and potential impact facing the industry in the foreseeable future, which is why we are address welfare issues head-on. Indeed, the biggest budgetary commitment from our service-provider, LiveCorp, is on initiatives promoting animal health and welfare.

Translated into international markets, these investments have seen the rates of stunning in core markets rise dramatically. In Indonesia, stunning rates have risen from less than 10 per cent five years ago, to as much as 95 per cent today. In emerging markets like Vietnam, exporters have embraced additional control and traceability measures in the supply chain, complementing the existing regulatory requirements under ESCAS, including the suspension of importers, feedlots and abattoirs which are non-compliant with Australian welfare and traceability requirements.

Australia is also the global leader in the transport of livestock to import markets and our exporters continue to invest heavily in modern vessels which promote good animal welfare more than ever before. I have personally been on board one of the newest vessels in the Australian fleet, the MV Greyman Express, and couldn’t help but be impressed by how these ships incorporate the latest in fodder, water and ventilation technologies.

None of this is an easy path for the industry to take, especially given commercial sensitivities and past relationship experiences, but it is a path we are committed to
The Hon Simon Crean

That experience was another reminder that, even though our industry is not perfect, if Australia was taken out of the global livestock export equation, welfare standards would drop dramatically because other exporting nations who don’t adhere to our standards would quickly fill the growing demand for live animals around the world.

There is no single reason for this ongoing demand. The increase in median incomes in key importer nations in South East Asia and the Middle East is certainly increasing demand for red meat as a source of protein. But whereas chilled or frozen meat might help meet this demand, a lack of supply chain infrastructure and the affordability of meat sourced from locally slaughtered livestock, plus embedded cultural preferences, means the demand for live animals will remain strong.

Since 2011 we have made huge progress, but that is not to say that we have eliminated all risks. We don’t just recognise that there is still significant improvement to be made, we embrace the fact.

That realisation has driven our industry’s work aimed at building new trust with the community. We are building this trust – and incorporating social licence – by identifying measurable risk ranges and strengthening transparency and traceability across all markets. We’re demonstrating the integrity of our supplying by proactively reporting non-compliance and acting on them through corrective actions and market sanctions.

As such, we are able to engage with key stakeholders, including welfare groups and activists, more effectively and with enhanced credibility. Maintaining dialogue with our critics also acknowledges their legitimate interest in our industry.

None of this is an easy path for the industry to take, especially given commercial sensitivities and past relationship experiences, but it is a path we are committed to.

Without making these strategic investments, it would be difficult for an industry like ours to take the Australian public along with us in our journey, which is risk we are simply not willing to take.

*The Hon Simon Crean is the Chairman of the Australian Livestock Exporters’ Council. This article is an edited version of a speech delivered by Mr Crean at the Australian Meat Processor Corporation’s conference in Sydney, which can be viewed here.

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