AWI in auditors’ headlights

National audit proposed for Australian Wool Innovation


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Queensland Senator Barry O’Sullivan.

Queensland Senator Barry O’Sullivan.

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Queensland Senator Barry O’Sullivan is calling for an investigation into Australian Wool Innovation.

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Queensland Senator Barry O’Sullivan is calling for an investigation into Australian Wool Innovation.

Senator O’Sullivan proposed the Australian National Audit Office examine the governance of AWI,​ following revelations of extraordinary redundancy payouts, influential control of board elections and code of conduct breaches.

This week’s Senate estimates raised serious questions about the compulsory levy-funded industry group, which received more than $60 million in woolgrower levies and $14.7m in federal government funding last financial year.

“Issues were raised at the Senate estimates hearing that have concerned woolgrowers and we want to ensure the decision making processes at AWI operate in a fully transparent manner,” a spokesperson for Senator O’Sullivan said.

The wool industry’s leadership has been under intense scrutiny in recent weeks, with AWI chairman Wal Merriman at the centre of the controversy.

During the Senate Rural and Regional Affairs and Transport Legislation Committee in hearing in Canberra on Tuesday, Mr Merriman admitted breaching the industry group’s code of conduct during an incident when he verbally abused a journalist over questions about the so-called “man-in-the-mirror” scandal.

AWI chairman Wal Merriman.

AWI chairman Wal Merriman.

Mr Merriman reacted to questions relating to an incident in June where he covertly watched an anonymous focus group of objective breeders without their knowledge behind a one-way mirror.

During the hearing it was also revealed Mr Merriman holds a powerful grip on woolgrower voting outcomes, potentially controlling half the votes cast for AWI board candidates.

The hearing disclosed Mr Merriman also had ongoing access to voting trend data during the three week AWI election process, which could influence the outcome of board elections.

Senator O’Sullivan’s investigation is expected to focus on the decision making processes at AWI, selection of independent board members on the Election Nominations Committee and research and development investments.

Following the estimates hearing, WoolProducers Australia (WPA) called on AWI to improve their governance, including transparency and accountability to woolgrowers.

“It was revealed, amongst other things that the Chair receives an enormous amount of proxies and does not have to declare where he allocates undirected proxies,” WPA chief executive Jo Hall said.

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“WoolProducers does not believe that there is adequate transparency or accountability in this process and calls on AWI to rectify these issues immediately.

 “The lack of transparency reinforces WPA’s call for arm’s length oversight of AWI and broader industry structural reforms.”

Ms Hall denied levy payers had the power to direct the company, and said voting in biennial director elections or triennial WoolPoll were the only meaningful way to direct the company.

“(This) is neither agile nor timely enough for woolgrowers paying a compulsory levy,” Ms Hall said.

“As an industry owned, grower funded body, if woolgrowers are not happy with how their company is working for them, they must make their views known. Woolgrowers deserve better.”​

Comment is being sought from AWI.​ 

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