Wellard's first-hand experiences with banks refusing service

Wellard's first-hand experiences with banks refusing service

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Exporter Wellard forced to run principal banking offshore.

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THE first-hand experiences of prominent livestock exporter Wellard in being refused service by big Australian banks has been outlined as part of a parliamentary inquiry.

Western Australia based Wellard, which has been shipping livestock around the globe for more than 40 years, has been forced to organise its principal banking out of Singapore.

One in three cattle exported from Australia depart on a Wellard ship.

In a submission to the Prudential Regulation of Investment in Australia's Export Industries, Wellard's executive chairman John Klepec said the live export trade provided farmers with important price competition for their cattle, and a means to rapidly destock in times of drought to avoid on-farm animal welfare catastrophes.

"Therefore, it is important that financial institutions are not coerced or weaponised in the campaign by animal activists to shut down a legal, law-abiding industry which is so important to rural Australia, but that they do not accept," he said.

The company also said the importance of the live export sector cannot be measured in dollars to Australian farmers alone.

Indonesia, China, Vietnam, and the Middle East are crucial trading partners to Australia, as well as the principal buyers of Australian livestock, it pointed out.

"To restrict exports of livestock to these countries, provided they meet Australia's animal welfare requirements, undermines their quest for food security to the detriment of Australia's diplomatic and trade relations with each," Mr Klepec said.

"This vital fact is often overlooked, or conveniently ignored, by those opposed to the trade, and the organisations that they compel to support them."

ALSO SEE: Gov't urged to strip banking licenses

Wellard's submission said it was provided notice by the Commonwealth Bank in 2018 that all services the bank provided would be withdrawn within 12 months.

"Our company was experiencing some financial difficulties at the time, so the refusal to extend credit could be characterised as a business decision. It is clear to Wellard, however, that the withdrawal of all banking services by CBA was a choice made by the bank based on the type of industry in which Wellard operates," Mr Klepec wrote.

"Wellard's discussions with other Australian banks, including NAB, Westpac, ANZ, and BankWest, all resulted in a refusal to service the company with even an everyday operating account.

"It was clear in each of these discussions that the refusal was based on each bank's credit committee and policy settings, which specifically exclude live export.

"It should be noted that when Wellard was interacting with these Australian banks, it had conducted a very extensive financial restructure, and was cash-at-bank positive, with zero bank debt. Notwithstanding this, many Australian banks would not open an account and accept a cash deposit from Wellard.

"It is our understanding that other live export companies have experienced similar issues with other financial institutions.

"It is incredibly frustrating that these financial institutions effectively become a moral arbiter, refusing to do business with legitimate, legal businesses."

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Wellard said it considered itself fortunate to have found alternatives but would not name those institutions, as they are likely to be targeted by activist groups.

The Commonwealth Bank provided this statement in response: "We have no policy that prohibits the funding of live exporters however all business are assessed on a case-by-case basis."

MORE TO COME: Banks respond to claims they are being influenced by animal activists.

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