PRESSURE is mounting for AWB to convince WA wheat growers that they will be adequately protected fro

25 Oct, 2006 08:45 PM
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Earlier this month, AWB released plans to run each pool as a separate trust in a bid to protect grower entitlements from future liabilities.

Pastoralists and Graziers Association (PGA) Western Graingrowers chairman Leon Bradley described AWB¹s attempts to reassure growers about the security of the pools as flawed and ineffective.

³The trusts seem to be a clumsily designed construct whose only intention is to provide growers with a false sense of security,² Mr Bradley said.

³No self-respecting lawyer would be willing to put their name to such a scheme.

³We can only assume that AWB¹s lawyers have been so preoccupied with the proceedings of the Cole inquiry that they have left it to the AWB Œstakeholder management team¹ to design the trusts as a public relations ploy.²

The Grains Council of Australia (GCA) has already said AWB had failed to win back grower confidence with the trust schemes, accusing the arrangement of failing to provide adequate security for growers.

When it was first announced, GCA offered conditional support for the scheme but has since distanced itself after closer examination of the trust¹s details.

GCA president Murray Jones said the principle of establishing a trust to handle pool finance was acceptable on the surface, but urged there was a need to dig deeper into the matter.

³We are not happy with the detail, as the new trust arrangement does not change growers¹ status from unsecured to secured creditors,² Mr Jones said.

³GCA members consider that the arrangements announced by AWB do not increase security of growers¹ funds in the national pool.²

But AWB International chairman Ian Donges said GCA had it all wrong about the new trust scheme and growers would enjoy more financial security, not less.

³The reason we went down the trust path is that we wanted to give pool participants additional protection against any unforeseen liabilities,² Mr Donges said.

³As everyone appreciates AWBI does not have the capital base and so the legal advice that we had, which was extensive, was that the pool trusts was the way we needed to go to work in favour of the pool participants.

³Each pool will have a trust and that gives us some comfort as directors that some of those liability issues that may go back to previous pools will be protected through those trust arrangements.

³So if it comes to even a fundamental issue like unfair dismissal from a staff member that may go back two or three years, there will be some protection for the directors and the company, through that trust arrangement.

³If there is to be other issues and we don¹t know exactly what they are, then again we believe we have additional protection through that cost structure.²

The issue was also a major topic discussed at last week¹s round of AWB meetings attended by senior staff including new chief executive officer Gordon Davis.

As expected the meetings produced overwhelming support for the single desk, but failed to convince many growers and grower groups that past and future national wheat pools had been adequately protected from impending legal costs.

Lake Grace grower Doug Clarke, who is also WA¹s delegate on the GCA, said he did not hear it clearly enough from AWB at the Lake Grace meeting, that the trust arrangement had provided sufficient protection for growers.

Mr Clarke said many growers he had spoken to shared the same sentiments.

³We have pool trusts set up that make us growers believe that we are secure creditors, but at the end of the day growers would sit in their chairs a lot more comfortably if this arrangement was explained to them a lot more clearly so that they could then understand and believe that they have been protected from these costs,² Mr Clarke said.

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