A simpler, more streamlined framework for agricultural exports on the way

By Zac Chami, Andrew Hay, Dan Moore and Caitlin McConnel

28 Sep 2017

Agricultural exporters should be scrutinising the draft Export Control Bill 2017 and consider making a submission by 24 October 2017.

The agricultural export industry is a step closer to a more streamlined and efficient regulatory framework, with the release of the draft Export Control Bill 2017 and a Regulatory Impact Statement (RIS) for public comment, which closes on 24 October 2017.

The impetus for the reform is a review into exporter user satisfaction with the existing framework; the current legislative instruments are due to sunset on 1 April 2020.

The Bill and the (as yet, undrafted) Export Control Rules would consolidate the current export control framework, which consists of 17 Acts, including the current Export Control Act 1982 (Cth), and over 40 legislative instruments. The consolidation will affect all agricultural export industries and current legislative instruments, which are contained at Appendix A to the RIS.

The policy objectives underlying reform of export control

The Bill seeks to outline the critical objectives and methods for best-practice regulation so that goods exported from Australia:

  • meet importing country requirements;
  • comply with government or industry standards or requirements;
  • are traceable and maintain integrity;
  • contain accurate trade descriptions; and
  • give effect to Australia’s rights and obligations under international agreements to which it is a party.

Consolidation of duplicated and complex export requirements

The existing framework is a complex network of legislation, legislative instruments, specific industry standards and international obligations under bilateral and multilateral agreements. As each part of the framework has developed over time, the resulting system has become increasingly unwieldy and burdensome.

By way of example, and as the RIS illustrates, under the current framework, an Australia beef exporter (meat or livestock) has to comply with:

  • the Australian Meat and Livestock Industry Act 1997 (Cth) and Australian Meat and Livestock Industry (Export Licensing) Regulations 1998 (Cth) to acquire an export licence;
  • the Export Control Act 1982 (Cth), the Export Control (Prescribed Goods - General) Order 2005, the Export Control (Animals) Order 2004 and the Export Control (Meat and Meat Products) Orders 2005 to understand the requirements of preparing beef and livestock for export;
  • legislative instruments providing for the allocation of tariff-rate quotas; and
  • legislation and associated instruments that detail the applicable charges.

The Bill and associated Rules would overcome these issues by consolidating all legislative requirements into two single legislative instruments.

The Bill provides the skeleton of the Rules associated with exports, through consolidation of the Export Control Act 1982 (Cth), and acts including the Australian Meat and Livestock Industry Act. The Rules will provide the operational and technical requirements for specific industries, in keeping with the current export control rules (eg. Export Control (Prescribed Goods - General) Order 2005 and the industry-specific Orders).

The RIS lists the following areas of the export legislation that will be consolidated and streamlined through these changes:

  • the registration of establishments for export operations;
  • the approval of arrangements that provide for a kind of export operation to be carried out in relation to a kind of prescribed good;
  • the issuing of export permits and government certificates;
  • trade descriptions and official marks;
  • export licences;
  • fit and proper person provisions;
  • authorised officers;
  • exemptions from obligations within the Act;
  • audit and assessment of goods;
  • monitoring, compliance and investigation powers; and
  • other administrative provisions, including review of decisions, record-keeping and cost recovery.

Improving the flexibility of the existing framework by giving the Secretary greater power to make instruments

In line with developing a flexible and efficient regulatory system, the Bill proposes to transfer the primary mechanism for making legislative instruments from the Governor-General to the Secretary of the Department of Agriculture and Water Resources.

The RIS claims that the delegation of instrument-making powers to the Secretary will provide the flexibility and clarity which the existing framework lacks. The proposed change will enable the Secretary to amend export requirements in response to changing importing country requirements at short notice and without prior parliamentary approval.

However, while this may improve the flexibility of the existing framework, the proposed change is not without risk. The Rules made under the proposed Act would still be subject to Parliamentary scrutiny and may be later disallowed under the Legislation Act 2003 (Cth). They will also be subject to judicial review if parties contend that the making of certain rules by the Secretary is outside the scope of the power delegated by the Bill. The solution proposed by the Bill presupposes an export framework where the Secretary is able to issue and amend export requirements frequently and at short notice in order to minimise disruption to trade.

One part of a larger puzzle for agricultural exporters

The proposed Bill assists in identifying the key issues and objects for creating a foundation for a contemporary, flexible and efficient regulatory system. As identified by the review of stakeholder satisfaction with the current system by the Department of Agriculture and Water Resources, there is a desire for simplicity, certainty and minimal disruption to trade. The RIS has estimated that the proposed changes to the export framework will provide the foundation for a contemporary, flexible and efficient export system and yield a net regulatory saving of $388,000 a year.

Nonetheless, all change brings with it some inherent risk, and so too with legislative change. Therefore, until the ultimate form of the Rules is known and we see the use and effect of the delegated power to the Secretary and authorised officers there will be some uncertainty.

The Bill will only replace a single piece of a complex network of domestic legislation, legislative instruments, industry standards and obligations under international agreements that form Australia's export framework. Exporters will still be required to navigate through multiple pieces of legislation, rules and standards in order to understand, and comply with, the requirements of lawfully operating their businesses.

Additionally, attention needs to be given to ensuring cohesion with the remaining parts of the export framework. In particular, this should be achieved through the provision of stable rules that clearly and comprehensively address the operational and technical requirements of exporting specific goods without requiring resort to further or frequent ad hoc instruments.

Nonetheless, the Bill is an encouraging start. As a result, agricultural exporters should be scrutinising the draft Export Control Bill 2017 and consider making a submission by 24 October 2017, as well as keeping an eye out for further consultation down the track.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.