INFORMATION PAPER Development of a Quality Assurance and Risk Management System for the livestock export industry

In 2011 the Australian Government commissioned the Farmer Independent Report into the livestock export trade and recommended the desirability of industry developing a through-chain quality assurance (QA) system to complement government regulatory and compliance programs. In response to this report and following the implementation of ESCAS, industry commissioned the MLA/LiveCorp Live Export Program to fund research into the feasibility of a risk management and quality assurance program to complement ESCAS. The purpose of the research was to consider the relevance of an industry-initiated risk management and QA program or management solution; conformance with which would facilitate ESCAS compliance The purpose of the LiveCorp research was to: Identify all existing systems and resources being utilized to achieve ESCAS compliance and assess the strength and weakness of such systems Identify, review and document risk management and QA models in place in other industries and sectors Examine the cost of compliance with the current ESCAS framework Consider the relevance of an industry-initiated risk management and QA program or management solution; conformance with which would facilitate ESCAS compliance Make recommendations for the development of such a program

Through a competitive tender, Schuster Consulting Group Pty Limited was awarded the consultancy and undertook extensive research and consultation with exporters. Ten non-livestock export QA and/or risk management programs were reviewed in detail. A further 17 programs, manuals, reports, guides and documents were also reviewed. The approach to the project included an examination of how exporters manage ESCAS compliances including procedures and documentation developed and identification and assessment of existing QA programs which could be transposed in part or in full to the live export industry. The Final Report made 26 recommendations and considerations including and importantly that: A QA Program complemented by a risk assessment component be developed to support the live export industry in aspiring to best practice and achieving ESCAS compliance That the requirements under ESCAS form the normative standards for the Program such that conformance with the Program will mean compliance with ESCAS That the Program be independent of industry That the Program be underpinned by third party certification The Program should be implemented to allow for and encourage international participation and presents a significant opportunity for improving global animal welfare standards

In order to avoid issues associated with sovereignty, the Program must be independent of government In order to avoid issues regarding conflict of interest, the Program must be independent of government Government must have a high level of confidence in the certification process That it be a unit/node based so exporters can build supply chains That the risk management component is included to strengthen compliance/conformance assurances That implementation be phased to mitigate costs of entry The Program be driven by an independent international steering committee to deliver sovereignty not currently present within ESCAS It should include a central management system There should be recognition of Program participation through appellation ie. a Program that delivers a recognisable value proposition to participants that could be a marketing asset

On the 30th October 2013, members of the Australian Livestock Exporters Council endorsed the research report and agreed to the next phase of research which will deliver a design and implementation plan, timeline and costings. Questions and Answers 1. This is just self regulation, isnt it? No. The Program would be independent of industry. Compliance with ESCAS requirements will be achieved under any alternative Program - ESCAS will remain the normative standard. Furthermore, a condition of export would be conformance with the Program as demonstrated through third party certification. 2. How will breaches of ESCAS be dealt with under the QA system? The QA program is yet to be designed, however appropriate measures will be built into any QA system to manage non-conformance. A non-conformance with the Program would be addressed through corrective actions. For example if a facility in-market received a non-conformance, it would not be able to be utilised by an Australian exporter until such time as those non-conformances were rectified.

3. We keep seeing terrible abuses of Australian animals in overseas markets. How does the industry really expect to manage itself through QA? Australian industry will continue to be required to meet the animal welfare outcomes set out under the ESCAS framework.

Information Paper: QA and Risk Management System: 8 November 2013

Page 2

3|Page A QA program could facilitate greater adoption of systems for improved animal welfare across international borders without being perceived to be impinging on a countrys sovereign rights. 4. What oversight and control will the Australian Government have over livestock exporters? Exporters will still need to demonstrate to the Australian Government's satisfaction that they have an ESCAS compliant supply chain. If they cannot, they will not receive the necessary export approval. The Program would assist in demonstrating compliance.

5. How would this Program differ to ESCAS in ensuring in-market compliance? The QA system is yet to be fully designed, however careful consideration will be given to key drivers that better facilitate the adoption of improved practices and oversight systems to ensuring animal welfare outcomes.