It’s easier to wreck a critical institution than to repair one

Aug 16, 2023
Armidale,_New_South_Wales-c Image: Wikimedia Commons/ Terry Cooke, CC BY 2.0, via Wikimedia Commons

When Barnaby Joyce forced the Australian Pesticides and Veterinary Medicines Authority (APVMA) to relocate from Canberra to Armidale, he couldn’t have chosen a more vulnerable, complex or vital institution to damage.

APVMA’s job is to safeguard the health and safety of people, animals and the environment by regulating dangerous chemicals used in veterinary medicines, pesticides, herbicides, fungicides and the like. Its staff are highly trained and skilled scientists, ever in high demand and short supply.

APVMA sits in a cooperative state and territory statutory scheme, and administers at least 22 items of technical legislation, including Acts, Regulations, Determinations, Standards, Orders and Instruments.

Joyce’s plan was to establish a Centre of Agricultural Excellence by co-locating APVMA with the University of New England in Armidale in his own electorate. There was no opposition from Prime Minister Turnbull or the Cabinet who must share responsibility for the consequences.

Relocation was achieved by the imaginative device of the non-disallowable Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016 made by Finance Minister, Mathias Cormann, under the 2013 PGPA Act.

The Act empowered Cormann to make a compulsory “order that specifies a policy”. The 2016 Order specified “the policy” that APVMA was to relocate close to a regional university “recognised for research and teaching in… agricultural science”. That, not unexpectedly, was asserted to be in Armidale.

It is worth noting that the PGPA’s objects include requiring the Commonwealth to “meet high standards of governance” and “use… public resources properly”. Ministers are liable for loss of money or property if due to their “serious disregard of reasonable standards of care”. There is, of course, no liability for losses to the Treasury caused by ill-informed policies.

Although a fait accompli, the relocation was opposed or criticised by many, including APVMA, an Ernst and Young cost/benefit/risk analysis, a Senate Committee and the National Farmers Federation.

Now, just over 3 years after relocation in 2019, a July 2023 Strategic Review by Clayton Utz, for agriculture minister, Murray Watt, reveals serious and systemic problems in APVMA’s administration and governance.

Before the move, it was estimated that APVMA would need a minimum of 60 scientists to remain functional, and twice that number to restore full competence. Fewer than 15 of 140 full time staff relocated. The loss of scientific expertise and corporate knowledge was profound, as was the impact on performance and morale.

With the lack of experienced staff, APVMA skewed towards collaboration and engagement with so-called “stakeholders” – the people it was supposed to regulate. “Alignment” with the chemical industry’s interests appeared to be “embedded”. There was an overwhelming focus on timely delivery of industry chemical approvals.

Enforcement of rules and standards, even for serious breaches, collapsed into informal educative counselling or warning. Recommended criminal prosecution and civil proceedings were dropped. Enforcement through penalties was not seen as core business.

There were allegations of outright capture by the chemical industry. To cap it, a formal staff complaint was made every 4 to 6 weeks for years on end.

Clayton Utz did not interview current or former staff to gauge the human cost of the relocation.

While the precipitating cause of APVMA’s fall was Joyce’s decision, the deeper cause lies in the nature of APVMA as a purportedly independent statutory authority, but one subject to real political and ideological constraints.

APVMA was subject to the Department of Finance’s “Resource Management Guide for Regulators” which urged “Collaboration and engagement” with stakeholders.

The key purpose of the government’s “Regulator Performance Framework” was to “improve regulator performance” by “not unnecessarily impeding the efficient operation of regulated entities”, and by ensuring that compliance and monitoring were “streamlined”.

A March 2022 ministerial statement of expectations required APVMA to prioritise timeliness while somehow practicing robust science. “Enhanced engagement with stakeholders” in the regulatory process was required. APVMA was expected to be a “responsive agency… that minimises compliance costs for business”.

The government hand-picked the Board, and the Board appointed the CEO. The whole outfit was dependent on industry fees for almost 90% of its annual budget, with inevitable questions about conflict of interest.

APVMA functioned under a government that championed a deregulation agenda. APVMA’s own rules were seen by some in government and industry as unnecessary “red tape”.

If ever there was a recipe for alignment with industry to be embedded in regulatory priorities and culture, with consequent risks to human and animal health and safety, surely this was it. The trauma of relocation wrecked whatever tenuous balance of the conflicting and contradictory political requirements APVMA might previously have managed.

Now only a radical reappraisal and realignment of such arrangements will enable APVMA to again become a trusted safety regulator for community, industry and government alike.

Senator Watt has asked Ken Matthews, former Secretary of the Department of Primary Industry, to review APVMA and report by 1 September 2023. How will radical reappraisal and realignment sit with him?

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