IN LATE May there was a fascinating exchange between Senator Chris Back, a member of the Senate Rural And Regional Affairs And Transport Legislation Committee, and Eva Bennet-Jenkins, the Chief Executive of the Australian Pesticides and Veterinary Medicines Authority (APVMA).
The exchange occurred during the Committee’s enquiry into aspects of the federal budget, in a process known as Estimates. Such inquiries play a key role in parliament’s scrutiny of the executive arm of government, including senior public servants.
Senator Back has a keen interest in the rural sector. His interest in the APVMA arises from the fact that it regulates crop chemicals and veterinary medicines and therefore plays a crucial role in the timely availability of modern chemicals and access to export markets. Delays, inefficiencies, undue costs and unreasonable barriers can cost the farming sector dearly.
The crop protection and animal health industries have become increasingly unhappy with the performance of the APVMA over the past few years, particularly since Dr Bennet-Jenkins’ appointment at the beginning of 2008.
A major sign that things were not well came in mid-2008 when WA company Imtrade admitted it had given a fictitious name and address in China of the manufacturer of certain active constituents. It was contrary to the rules, but a bureaucratic offence.
With the Australian Federal Police the APVMA raided Imtrade’s Perth premises and imposed a compulsory recall of the affected products, 47 in total, and cancelled their registrations.
Imtrade appealed to the Administrative Appeals Tribunal, which promptly ordered the recall stayed. The APVMA took it to the Federal Court, which found the APVMA had acted unlawfully and ordered the reinstatement of the registrations. The APVMA ended up paying Imtrade’s costs and was probably saved from massive damages because the products were only off the market for two weeks.
The WA MP for the seat of Tangney, Dennis Jensen, criticised the APVMA in Parliament, saying, “Such conduct smacks of a police state and is abhorrent to Australians.”
All might have been forgotten if the general performance of the organisation had been acceptable. But the APVMA has developed a chronic inability to meet legislated timeframes for its evaluation of registration applications. It is also bogged down in bureaucratic inefficiency, fails to live up to its own performance charter, and its evaluators are regularly accused of playing favourites and delivering inconsistent decisions. Many good personnel have left.
The APVMA is funded by fees and levies imposed on chemical registrants, not the government. The price of its deficiencies, including legal misadventures, is therefore borne by the agricultural and veterinary industry.
Those fees and levies have been under review for over a year, with the organisation proposing an increase based on a promise to deliver the same levels of performance it promised four years ago.
Which brings us back to Senator Back’s questions.
The APVMA currently imposes fees for registration applications based on forty percent upon application and sixty percent via a sales levy once the product is on the market.
Senator Back noted that the Animal Health Alliance (the industry association representing animal health companies) had proposed a system based on fifty percent of the applicable fee up front and fifty percent when the product was registered.
He suggested the current approach is open-ended and provides no incentive for the APVMA to encourage efficiency, effectiveness or timeliness to arrive at an endpoint.
Dr Bennet-Jenkins and a spokesman from the Department of Agriculture advised that a review of the approach to cost recovery would start in July or August and extend over the next two years. Meanwhile, new regulations that impose additional constraints on registration applicants will be introduced this year.
Senator Back then asked whether a company with a product it wanted to introduce into the market urgently could pay a premium to have it assessed more rapidly.
Dr Bennet-Jenkins indicated there was no way for that to occur.
Then Senator Back asked about an international survey undertaken every five years comparing the regulatory agencies of Australia, the US, Canada, Europe and Japan, based on the views of the crop chemical and veterinary pharmaceutical companies.
Dr Bennet-Jenkins said she was aware of the survey and that a new one had recently been completed, but had not seen the results.
Senator Back had the results. Five years ago the APVMA was ranked equal top with the US, but the latest results indicated the APVMA was now near the bottom.
Some believe the APVMA’s problems relate to governance. Since July 2007 the Chief Executive has reported directly to the Minister for Agriculture rather than a Management Board.
Others say it is a matter of leadership. Dr Bennet-Jenkins’ contract with the APVMA, which expires at the end of the year, will not be renewed. Advertisements for her replacement have been running in national newspapers.
David Leyonhjelm is an agribusiness consultant with Baron Strategic Services. He may be contacted at firstname.lastname@example.org