Plaintiffs detail evidence of “rushed” decision in Indonesian cattle ban class action

Today was the first day of the trial held in the Federal Court in Sydney before Justice Rares, with the Brett Cattle Company of the NT lead litigants in the claim that’s seeking about $600 million in damages due to the sudden trade ban.

Justice Rares opened the formal proceedings, in the first stage of proceedings that is scheduled to run to next Friday, by informing representatives of the two legal teams he’d likely to be standing up, due to a spasming muscle in his back.

“So don’t get put off, it’s not about you - when I want to adjourn, I will let you know,” he said.

The plaintiffs’ Senior Counsel Noel Hutley went into detail about the live export trade’s historical background and value to northern communities with figures from 2002.

But Justice Rares urged Mr Hutley to focus on the case’s core legal point of alleged malfeasance of public office by former Labor Agriculture Minister Joe Ludwig, who signed the second control order.

“I’m just wondering why I need to have seven volumes of material, which I’m being taken to, page after page, and then I’ve got to sit down and write a judgment where I’m looking at this Minister’s state of mind when he’s exercising a power,” Justice Rares said.

Mr Hutley said “With respect your Honour, you’re not going to be taken to seven volumes worth of documents”.

“There are seven volumes there,” he said.

“A lot of them were not put in by us.

“I won’t be taking you to anything like seven volumes.”

Mr Hutley said an independent reviewer - Bill Farmer - was named in the government’s initial regulatory response, where cattle trade was also suspended to abattoirs identified in the ABC program, but he wasn’t appointed until 13 June.

“He was tasked to examine the whole live animal export supply chain from paddock to point of slaughter for all markets that receive Australian livestock,” he said.

“So, in other words, the independent examination never got going prior to the second order.

“It was thus, we say, apparent both to the department and to the Minister that they were proceeding on an incomplete understanding of the way the industry operated in Indonesia.

“The department having, we say, a lesser understanding than the Minister.”

Mr Hutley outlined how the intense public and media pressure saw the issue escalate to include the then Prime Minister Julia Gillard’s attention, due to ongoing revelations by trade critics of boats still heading to Indonesia loaded with more Australian cattle, following the ABC broadcast.

“The emergence of the distressing footage…provoked a wave of political pressure from community, interest groups, independents, the Greens, members of the Minister’s own caucus,” he said.

“The political pressure was such that the problem came to be treated as a matter to be solved by the Prime Minister as much as the Minister.

“Much of this political pressure came from groups with the avowed agenda of shutting down the live cattle trade in toto.

“As the Minister well understood, they had an interest in treating the footage in the Four Corners reports as if it were representative of the entirety of Indonesia as a whole as a basis for allowing a complete ban.

“Now, of course, there’s nothing illegitimate about such political approach and we don’t, of course, criticise it.

“But the underlying political agenda was well understood by the Minister.”

Mr Hutley said the minister didn’t share the view that the industry should be shut down.

“He also had the benefit, we say, of much better information about the reality of the trade in Indonesia,” he said.

Mr Hutley said the RSPCA and Animals Australia wrote to the Minister repeatedly calling for the complete shutdown of the industry including on May 30 and again on June 6, “calling for an urgent halt to the animal trade”.

He said they were joined at that time by the Australian Meat Industry Council and one of the “forces” driving the Council was the “packaged trade” which they believed was affected by the live trade’s existence.

“So they joined the call,” he said.

“A petition was compiled by the organisation GetUp! calling for an immediate moratorium on live exports and a transition to no live trade by 2015.

“And in that campaign, GetUp! was paying particular attention to boats and upcoming departure of boats.

“The evidence will show - is that this level of attention to day-to-day information about individual boats leaving Australia was a key factor in prompting an extremely accelerated response by the government.”

Mr Hutley said Animals Australia also called on the Gillard government to end live exports and he read out a statement highlighting the ratchetting pressure coming from critics, in evidence documented for the trial records.

It read, ‘today more cattle are leaving Western Australia for Indonesia. The fourth shipment to leave Australia since these atrocities were reported. Julia Gillard has the ultimate power to stop these shipments and protect Australian animals being brutalised in Indonesian slaughter houses. These ads will run every day until Australia takes appropriate action to safeguard the welfare of Australian animals by immediately halting the trade to Indonesia. The Government’s lack of action is unforgivable. We have no choice but to make the Prime Minister publicly accountable for the continuation of this trade and to appeal to her to intervene to protect Australian animals’.

Mr Hutley said the Minister was regularly provided with references to the extended press coverage of the live animal trade issue at the time, via reports from a clipping service, and that advisers from the Prime Minister’s office had also conveyed their concerns about adverse media, to the Minister’s office.

He said political pressure also materialised from other sources, at the time.

“Within the Minister’s own party there was a private members motion calling for live exports to be phased out,” he said.

“In response to the Four Corners report, the Independents, Mr Xenophon and Mr Wilkie proposed a bill to ban live export.

“That proposal interested, as one would expect, the Prime Minister’s office as to what the Minister’s office was doing.

“And on June 3 the Greens announced a bill to prohibit the live export for slaughter.

“The public campaign against the trade drew attention to particular shipments which were imminent.

“The Minister’s office sought information about pending shipments.

“On June 3, the department provided that information (and it was) passed it on to the Minister.”

Mr Hutley referred to 1900 cattle due to be loaded onto the Falconia at Port Hedland in the early hours of Tuesday June 7.

But he said by the afternoon of Saturday June 4 it was apparent that the Minister’s office was working on “what was described as a two-step proposal”.

Mr Hutley referred to documents showing internal government communications that sought answers to questions about the proposal which were needed ahead of a cabinet meeting on June 6, including for the Prime Minister’s office.

Mr Hutley read one of the emails, saying, ‘reference to two-step proposal refers to a move to a possible temporary suspension, then reopening on either interim arrangements or permanent basis in some months noting that the Minister has not finalised his position and that this is also subject to Cabinet’.

Shortly after, the case was adjourned until 10.15am tomorrow.

Earlier in proceedings however, Mr Hutley explained how the industry had presented the minister with a proposed strategic plan of action and vision for in-market welfare, which the Australian Livestock Exporters Council provided to the Minister’s office, referring to an email of May 6.

He read a section of the plan which said, ‘Ensure all animals exported from Australia are managed through known supply chains, feedlot, transport, abattoir, and treated humanely under endorsed livestock welfare standards from the point of arrival in overseas markets through to the point of processing’.

The second stage of the two part plan included an Indonesia Animal Welfare Action Plan, which described how the strategic vision would be achieved in Indonesia, Mr Hutley said.

“The plan described the means of achieving the strategic vision of ensuring that all animals exported are managed through known supply chains and treated humanely under endorsed livestock welfare standards from the point of arrival in overseas markets through to the point of processing,” he said.

“The department is advised by MLA on May 11 that the plan documents had been developed through significant consultation with the livestock export industry and have the support of wider livestock industries.

“Industry had not been asked by the department or the Minister to identify the best of the existing facilities, or the most secure of the existing supply chains, with a view to determining which parts of the trade might be able to continue if stricter animal welfare conditions were imposed.

“This becomes significant when we come to consider the sudden shift in the Minister’s approach which happens in June 2011.

“Industry was never told that the guillotine was about to drop.

“It was never asked to inform the Minister about those facilities and supply chains which should, logically, be spared the guillotine, even though the Minister was aware that an experienced leader in the industry had told him on 1 April that two major operators were able to supply secure integrated supply chains which used stunning.”

Mr Hutley said the department provided the Minister with a briefing note about the industry plan on about May 13.

He also read from documents outlining the government’s view of the plan, saying ‘We believe progress could be made more quickly and industry should be asked to expedite delivery of this objective. Transparency and accountability are keys to industry successfully gaining broad public support for the strategy and delivering on the milestones. The transparency and accountability elements need to be clarified in the document’.

He also referred to another brief that came forward on April 29 saying ABC FourCorners was likely to air a program on live exports in mid to late May and the minister need to decide whether any action was necessary to amend the government’s current role in live exports, with sufficient time to consult with colleagues, including possibly with cabinet, ‘in a timeframe that allows you to respond to the program’.

“Of these options, our view is that the best approach is to refer to the existing set of actions you have in train - you wrote to industry,” Mr Hutley said in reading the brief to court.

Mr Hutley also read details of references to different options to improve in-market animal welfare including using closed loop systems which provide the “highest assurance that standards are met”.

But he said that advice also said closed loop systems “would not be viable for cattle in most markets in the near/medium term, implying a likely cessation of trade and are resource intensive for the government under current arrangements”.

“Now that, we say, reflects a degree of ignorance within the department, because we say that the Minister has been informed that, in effect, there are closed loops in Indonesia,” he said.

“Not on an industrywide basis, but on individual basis.”

Mr Hutley said “But what we say ultimately happens and where….the process verges into irrationality” is regulation is originally proposed, to prevent live trade “excluding closed loop systems”.

“But then on the evening of the 6th, after a Cabinet meeting, that’s all removed and the absolute ban for six months is put in,” he said.

“Absolute ban.

“And that, of course, means that there’s an absolute ban for the entirety of Indonesia.

“And even closed loops, what could be satisfied as closed loops, get closed out.

“They don’t even get a look in, they don’t get looked at.

“But you could imagine the significance, your Honour, of an absolute ban in the industry.

“Not just the time, a six month absolute ban, imagine – we will say that will have a profound contractual effect.

“It must have been obvious to anyone”.

Justice Rares said it “Also creates issues of sovereign risk”.

Mr Hutley also provided background to animal welfare controversies in the live trade, which, he said when the minister had to consider issues in late May and June 2011, “he appreciated that that was a flashpoint in a long term ongoing policy issue for government and industry”.

“One of the important aspects of the evidence that the applicant will emphasise: that any reasonable person who was informed on the issue of animal welfare and the live export trade, appreciated that this was a complex issue that did not lend itself to simplistic solutions,” he said.

“For those who supported a policy of maintaining the export trade, whilst still seeking to deliver improved animal welfare outcomes, it was clear that the problem called for tailored solutions based on accurate information about the existing conditions and reliable means of improving the conditions.

“Reasonable and informed people dealing with this matter well understood that these were not matters that could be solved overnight or dealt with in a broad brush way.

“One of the reasons why management of this policy was complex was the limited reach, of course, of Australian law.

“Essentially, Commonwealth laws allowed for control of exports and the imposition of conditions of export, but there was a practical limitation upon the capacity of the Australian Government to regulate what occurred in a foreign country.”

Mr Hutley said producers of cattle for live export were located in northern Australia and about 98 per cent originated from Queensland, Western Australia, and the Northern Territory.

“Those regions offer limited access to other markets due to the distance, isolation, transport regulations, climate, and lack of infrastructure such as abattoirs,” he said.

He said as of 2011, over 90 per cent of the value of farm exports from the Northern Territory came from live cattle exports

In another document Mr Hutley read out advice referring to a draft of recommendations which said the “fundamental policy choice for the Australian government is the relative weight to place on maintaining the live export industry, and the rural/regional communities that depend on it, on meeting animal welfare standards in importing countries”.

‘At the extremes, the choices would be: support the live well export trade, accepting that a proportion of Australian animals will have animal welfare outcomes below the prescribed OIE standards in importing countries. (2) ensure that OIE standards are consistently met for handling Australian animals in imported countries, and, therefore, be prepared to prevent trade by not issuing permits with those market where this cannot be demonstrated’, it said.

Mr Hutley said, “That’s the extremes. And that’s what they chose, which they recognised was the extreme”

He said a speech by the minister had also shown that the government’s policy was to maintain the live animal export trade, while seeking to improve the treatment of animals in the process.

That was the Minister’s stated approach and it was his stated approach throughout the period, coming up to the events leading to the six month ban with which this case is concerned of the export trade to Indonesia, he said.

“Where the process miscarried, to the point we say of irrationality, disproportionality, and unreasonableness of an invalidating kind was in formulating an appropriate regulatory response to achieve that objective,” he said.

“The applicant will show that the Minister, under intense political pressure, was rushed into taking the dramatic step of suspending the entire live cattle trade to Indonesia for six months.”

Mr Hutley said the former minister “may or may not give evidence in this case”.

“We’ve got an outline from the Minister, the Minister is available to give evidence, and may well give evidence,” he said.

Justice Rares said “Well, he may - yes.”