STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORTAustralian Quarantine Inspection Service Discussion Senator MILNEI just wanted to have an update on where we are with the New Zealand government and the WTO process. I understand that the option of negotiating it is gone and that New Zealand has made a second complaint, or whatever, which locks in the system. Can someone just tell me where it is up to and what it means? Mr BurnsI think you have summarised it pretty well, really. We are in the process of a dispute with New Zealand. We have not met as a panel in Geneva yet. That will happen in September and we will see what happens. Senator MILNEThere is no mechanism now, it is a locked-in international process? I just think the apple and pear growers would appreciate any detail you can give us, notwithstanding that you are obviously preparing your case so you are not going to talk about that in any detail, but I would like to have as much detail as you can provide about where we are up to. Mr BurnsOne point I would make initially is that the industry is briefed regularly by DFAT, which runs the case, on where the case is up to so they are briefed on that. But the way the WTO process works is that a dispute panel will meet twice. The first meeting is, as I said, in September. The time frames on how that plays out from there we could provide in writing, if you like, because there is a very set process for that. Senator MILNEI would appreciate that. Mr BurnsBut as I said, the panel will meet twice and then there will be a period of consideration. They will issue a report. Depending on what the report says there could be an appeal and normally we would not expect to see an outcome probably for at least another 12 months, at the least, more like 18. Senator McGAURANAt the last meeting we were informed that you were in a dispute resolution, or in out-of-court discussions with New Zealand. What point are you at there? Mr BurnsI think last time we indicated that ministers had indicated that they remained open to finding a mutually agreed solution to this dispute, and that remains our position, but those informal discussions with the New Zealanders have not borne fruit. They seem to want to have their day in court, if you like. Senator McGAURANIs it not a requirement of the WTO that you undertake those discussions? Mr BurnsWe have had those consultations, yes. Senator McGAURANSo you have had the formal and the informal discussions? Mr BurnsYes. Senator McGAURANAnd they have broken down? Mr BurnsI would not say broken down, but we have not reached a resolution. Senator HEFFERNANBloody lawyers, they should shoot all lawyers. Is part of the logic behind the protocol for the importation the acceptance, which this committee was given at an earlier hearing, that indeed we will import fire blight as part of the reasoning and logic behind itI still recall those wordsbut that it will not get out there into the field? Are we still agreeing to a protocol, or fighting a protocol, which has as the main beam the fact that we will probably import fire blight but that it will not get into the field? Is that still part of the thinking? Mr BurnsI would not comment on the import risk assessment. I am just handling the WTOs side of it. Senator HEFFERNANYou can see why it is a conundrum when you can escape that. I just cannot believe that the Australian government, whoever is in government, would be stupid enough to agree to a protocol that actually says, We probably will import the disease but for some miraculous reason it is not actually going to get out of the fruit shop or the garbage can, or wherever. We still do not know how it got into the gardens down there in Melbourne. And, of course, the pear industry are tearing their hair out over this stuff, besides the fact that they have not got any water. You just flick it to someone else? Mr BurnsIt is not a matter of flicking it. It is just not an issue that I would comment on. Senator HEFFERNANIf you are taking a thing to the WTO, are you in charge of that? Mr BurnsDFAT is in charge of the legal Senator HEFFERNANWhat are you in charge of? Mr BurnsI am in charge of the international division. Senator HEFFERNANSurely you would want to know what the logic of the argument is that is being presented that you are in charge of? Dr OConnellIf you are interested in pursuing the content of the import risk assessment and the outcome there, Mr Burns is not an expert in that area. We can provide Senator HEFFERNANAre you another broken-down lawyer, or what are you? Dr OConnellA broken-down teacher. Mr BurnsA broken-down economist. Senator HEFFERNANSurely to God Mr OConnell, and I still do not know what your PhD is all about, it does not make commonsense for Australia to agree to an import risk proposition which on the advice of your people says, We will indeed accept this part of the protocol that will probably bring fire blight to Australia. You would agree that your officer said that here at a recent hearing? Let us just tick it off. That was said here, you agree? Dr OConnellI think probably this would be better left until we get Biosecurity Australia in order to discuss the content rather than Senator FIELDINGHave we determined who is actually going to front up to the World Trade Organisation and actually work out who is going to have this detailed information to make sure that Australia is defended well? Senator MILNEDFAT. Senator FIELDINGWe have got someone here saying that they do not know, Thats not me. Thats someone else. I hope we do not get lawyers over there to say the same thing. Senator SherryI think the point is that at this stage of the process, now it has gone to a formal tribunal, it is the Department of Foreign Affairs. They are now handling the presentation of the case. Senator McGAURANWhat is their expertise? Senator SherryHang on a second. CHAIRThis witness is half-way through answering the question. The minister has the call. Senator SherryAssuming the Department of Foreign Affairs and Trade is receiving some input from this department, the officers may be able to outline in great detail the assistance they are providing if they have got some information about their liaison and who is liaising with the Department of Foreign Affairs and Trade and who is helping prepare the case, et cetera. I am sure they can give you a rundown. Senator FIELDINGThe apple and pear industry would be pretty keen to know who is actually going, because this is their livelihood. Senator SherryThe officer can go into this but he did indicateI am not sure whether you were herethat the industry itself is being kept informed about this process and the timelines and the Department of Foreign Affairs Senator HEFFERNANThey are spewing. Senator SherryWhether or not they are spewing, they have been kept informed Senator HEFFERNANThat is small comfort. Senator SherryI agree. So, if the officer has got anything further to add about who is providing backup and support and research to foreign affairs, who is presenting the case in foreign affairs and who will be representing us at the tribunal and who from the department will be liaising and providing any technical advice as required, et cetera, et cetera, I am sure Senator HEFFERNANAre you happy to have all those questions you have just kindly put to us on notice? Senator SherryYes, of course. Senator HEFFERNANYou will put them on notice for us? Senator SherryYes. Senator HEFFERNANGod bless you. Senator SherryI do not really think it is my job to give you the question that you put on notice to me Senator HEFFERNANNo, you are doing really well. Senator Sherrybut I do recall some discussion about these issues when we were last in government, which is Senator HEFFERNANYes, it has been going on for a while. Senator Sherrytwelve or 13 years ago, so they are not new questions to me. CHAIRThank you. In all fairness, Senator Milne did start off with the question. Senator MILNEI wondered if Mr Bowen could perhaps answer some of those questions to save them going on notice, if he has any of that information with him now. Mr BurnsBefore Mr Bowen answers, to get back to the issue that was just discussed of how it is being done, there is a taskforce that is being set up. It is led by the Department of Foreign Affairs and Trade because they have competency in this matter across government. Any dispute on any issue is led by the Department of Foreign Affairs and Trade Senator HEFFERNANTechnical or legal? Mr BurnsBoth. And the Attorney-Generals department is also part of that group as is a taskforce that is being set up within DAFF which Mr Bowen is leading on the DAFF side. That includes people from the international area but also from BA and AQIS. The role of DAFF is that we provide the technical support to the legal debate which is run from DFAT and the Attorney-Generals Department. Senator MILNEI thought Mr Bowen was going to add something. Mr BowenI think Mr Burns covered the fact that there is a whole-of-government approach here for our defence of the case. The only thing extra I would add to the information is that we have also hired the Chief General Counsel from the Australian Government Solicitors Office to provide advice to the team that has been put together for the defence. Senator HEFFERNANIs this a court that uses court rules? Mr BowenIt is a mixture of the courts. It is a trade organisation which has a panel which has been appointed and has people required to make submissions and Senator HEFFERNANWhat is the driver? Is it the law? Mr BowenThe driver is a WTO agreement called the Sanitary Agreement, and New Zealand has alleged that Australia has broken some of the rules under the WTO SPS agreement in regard to the conditions, or measures, set out for imports for apples and they are challenging those conditions. Senator HEFFERNANBut there is a codified law. The difficulty with the courts, as you would be aware, is that they are absolutely about the law and not necessarily about the truth. That is just a fact. If you are guilty of something and you go to court and you get a QC or SC to take your case, his job is to avoid the truth to get you off the hook and he will use every trick in the law to do that. In terms of quarantine issues, certainly terrorism issues and the issue we are confronted with today, fire blight, people can use the law to dud Australias farmers. The protocol clearly says that, as part of the acceptanceand everyone just nodded their head and went to sleepyes, we will bring fire blight but we will not infect Australias farms. That is crazy. Senator SherryBut I think the point you are making goes to the legal basis apparently in international law for the handling of disputes like this. I am sure we can find a paper that would outline that for you with some case precedent and what has happened and previous disputes to respond to your question. Senator HEFFERNANBut the difficulty, with great respect, is that that is what I am frightened about, because that will fail the practical testthe reason they did not kick down the door at Emerald that time. This is a thing that keeps apple and pear growers awake at night when they are reminded about it, and they will be reminded about it as a consequence of todays hearings. Senator Fielding, you are right: it is a very serious issue for Australia for us to be playing around with the law. The venerable scientists have said, Yes, we will bring it in but we will not infect anyone. If that all goes to custard, no-one will get the sack, but a lot of Australias apple and pear growers will grow broke. Senator SherryYou have made your point very forcefully and frequently. As to the debate around the adoption of an international quarantine protocol, and whatever the processes are, I am not familiar with when that occurred, but I am sure that there were some internal discussions, debates in government and in the community at the time. If it is any help, we will not only get a copy of the treaty, protocol, or whatever the particular technical legal term is, and also the background for signing of such an approach and any debate that occurred at the time. Senator FIELDINGWhen is the hearing for the WTO? What is the date of that again? Mr BowenThe first panel hearing is 2 and 3 September. Senator FIELDINGThat is not that far away. I know DFAT is taking the lead role, but who is taking the lead role AQIS? Is there some representative here who is taking the lead role in helping DFAT mount the case? Mr BowenThere are officers from the department, AQIS and also Biosecurity Australia involved in a group working across government to prepare the defence for the case. Senator FIELDINGHas there been a project manager or leader or manager who has been assigned from your area to be the lead person to mount this case with DFAT? Mr BowenMy role is the head of the Apple Dispute Task Force. Senator FIELDINGCould you outline what you have been doing so far in preparation for this big challenge that Australia faces at the WTO? Mr BowenYes. The department has been working closely with the Department of Foreign Affairs and Trade and the Attorney-Generals Department to prepare our case. New Zealand has set out a claim of what they are challenging. Their first submission is due on 18 June. From when we see their first submission, we will have about four weeks to prepare a first submission on our behalf to counter their points. The other development that has occurred is that we have challenged the procedures that New Zealand has raised, the nature of their request, and questioning whether it meets the law set out by the WTO. We are waiting for the panel to give a preliminary ruling on the scope of their claims. Senator FIELDINGCan you outline the experience you have had with the WTO before with these types of things? I am trying to get a bit of a feeling for this. The public would like to know how we have handled these things before. In other words, have we run a case with the WTO before? Mr BowenAustralia has been involved in a number of dispute cases in the WTO before. As Mr Burns said, the Department of Foreign Affairs and Trade obviously runs on those and they cover issues other than agriculture. I am not sure what specific thing you are asking. Senator FIELDINGFor example, have you had experience in mounting a case before the WTO? Mr BowenI have been involved personally myself, yes, in the case against the EU on the sugar regime. Mr BurnsWhich we won. Senator FIELDINGSo, 18 June is obviously an important date. That is only a few weeks away. Mr BowenYes. Senator FIELDINGWho else is working on it? Is it you and a whole group of people? Mr BowenI have a team of three people working with me in the international division. There are two or three people in Biosecurity Australia working on it and two or three people in AQIS working as part of this team with, as I said, the Department of Foreign Affairs and Trade and the Attorney-Generals Department. We have been trying to prepare for this case for, off the top of my head, probably three or four months already. Senator FIELDINGWho is the link with the apple and pear industry? Is it through you or is there a single point of contact? That case is important to them. Is there a link? I know you say you are frequently in touch with them and whatnot. I am just trying to work out who is in touch with that particular case. Mr BowenThe Department of Foreign Affairs and Trade calls consultation meetings with the industry. Our records show that six consultations with the industry have occurred since September last year. Senator FIELDINGHave you met with the industry? You are the lead person covering the case. Have you heard it firsthand from the apple and pear industry? Mr BowenSince the task force has been formed I have participated in a teleconference that has been held. Senator HEFFERNANCould you inform us as to who represents the industry in these consultations with DFAT? Mr BowenYes. The consultations have been held with Horticulture Australia Limited, Apple and Pear Australia Limited and the National Farmers Federation. Senator HEFFERNANThe individual person. A lot of these people are golliwogs. CHAIRThat is a new one. Senator HEFFERNANWho are the individuals, so we can ring them up? Mr BowenIf you are interested in Apple and Pear Australia Limited, Darryl Ashton, and John Corboy is the head of their Fire Blight Task Force, and Tony Russell. Those are the names that come to my mind at the moment, but I would have to get a complete list. Senator HEFFERNANYou can take that on notice. CHAIRTake it on notice. It is five minutes until the dinner break and staff has been working very hard all day. We will not keep them from their dinner break. Senator Fielding, you have the call. If there is time, I will ask one question. Senator FIELDINGWill this committee be meeting after 18 June? I would like a private meeting with this department after 18 June to find out about the case being mounted. CHAIRThis was an issue raised with our committee but certainly not in estimates. Senator FIELDINGCould you take that on notice? It is very important to have a briefing after 18 June, maybe within that week after 18 June. I do not know what the formal process is, but I think it is important. Senator McGAURANSenator Fielding, it is more than one day. Senator FIELDINGYes. Senator McGAURANYou would like an ongoing briefing. CHAIRAny other questions? Senator OBRIENI was not sure if we had been made fully aware of exactly who the parties are to the New Zealand dispute and what positions they are taking in the matter. Senator HEFFERNANYes, what is their brief? Mr BurnsYou mean the panel members? Senator OBRIENNo, I mean those who may have joined the dispute in some form or other. Mr BowenThe third parties to the dispute are the United States, the European Commission, Chile, Japan, Taiwan and Pakistan. Senator HEFFERNANAre any of those people fire blight free? Mr BowenThat is a Senator HEFFERNANThey are not. Senator OBRIENJapan? Mr BowenI think Japan would say they probably were. Senator OBRIENWe are not sure about Taiwan? Mr BowenI am not sure about Taiwan. We would have to check what their conditions are, but they are third parties. Senator OBRIENDo we know whether they are supporting or opposing the New Zealand position? Mr BowenAt this stage we do not know. They have an opportunity to put submissions to the panel as well. There is a timeline for that. When they put their submissions in we will obviously see their position. Senator OBRIENHave no submissions been made yet by those parties? Mr BowenNo, there is a time line. The third parties can put in their first written submission on 23 July. They obviously see the submissions from New Zealand and Australia before they put their submissions to the panel. CHAIRI have one very brief question before the break. Did you say Biosecurity is leading the defence argument? Mr BowenThere are officers from Biosecurity Australia on the team that Australia has to defend the case. DFAT is leading the case but they are part of the team. CHAIRI fully understand. Senator HEFFERNANWhere does all that happen? Mr BurnsThe actual hearings happen in Geneva. You raised an issue before about the rules. In addition to the fact that this is being challenged under the sanitary and phytosanitary agreement, there is a dispute settlement understanding which, if you like, is the rules around how these disputes happen, which are exactly the same rules that we used when we won the lamb case again the United States and the sugar case against the European Union. Everybody plays by the same rules. Senator McGAURANWho does make up the panel? Mr BurnsThe panels are drawn from WTO members. They are individuals who are regarded as having some expertise in WTO legal issues. Mr Bowen has the names of the individuals. Senator McGAURANFrom which countries? Mr BowenThe chair of the panel comes from South Africa. The other two panel members come from Uruguay and Canada. Senator HEFFERNANHave they all got fire blight? Mr BowenThat is a technical question and I do not know the answer to that. Senator HEFFERNANWe need to know the answer. This committee has had lots of experience where other countries have tried to get our status to their status. BSE is a really good example of that. It evens the trading. This is a marketing edge for us; we simply do not have fire blight. All those lawyers and all those gladhanders and lunchers and professional holidaymakers that will go to Geneva will not give a rats about the fact that the protocol actually says and accepts that we will import fire blight under that protocol. I just think every person concerned with that ought to be absolutely disgusted. Mr BurnsThe people going to Geneva would be going there to win the case. Senator HEFFERNANYes. CHAIRThank you very much. We will be back at 7.30 on the dot, continuing about apples and pears I have no doubt. Thank you.