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Transcripts from the Prime Ministers of Australia

Transcript 5912

STATEMENT ON THE ROYAL COMMISSION INTO THE AUSTRALIAN MEAT INDUSTRY, HOUSE OF REPRESENTATIVES

Photo of Fraser, Malcolm

Fraser, Malcolm

Period of Service: 11/11/1975 to 11/03/1983

More information about Fraser, Malcolm on The National Archive website.

Release Date: 21/09/1982

Release Type: Media Release

Transcript ID: 5912

& AAhI ECHECK AGAINST DELIVER1Yo
PRIME MINISTER
FOR MEDIA TUESDAY, 21 SEPTEMBER 1982
STATEMENT ON THE ROYAL COMMISSION
INTO THE AUSTRALIAN MEAT INDUSTRY, HOUSE OF REPRESENTATIVES
I present the Report of the Royal Commission into the Australian
meat industry. I seek leave to make a statement. In mid-August
1981, discoveries were made in the United States of horse meat
having been substituted for beef by an Australian meat export
establishment. Immediate steps were taken both in the USA and
Australia to retain meat from the establishment concerned. As
a result of these discoveries the Minister for Primary Industry
took a number o-fimmediate steps to which I shall later refer in
more detail. When this substitution became public knowledge in
both countries there was a public outcry, particularly in
Australia. Allegations of widespread malpractice were made in
this Parliament and in Victoria. Despite the immediate
effectiveness of the measures taken at that time the Australian
meat industry had been severely tarnished.
It was imperative that Australia's international reputation
be cleared. The Government believed that the only means by
which this could be achieved to the satisfaction of everyone
in the community was through the establishment of a Royal
Commission of high standing and repute to examine the matter.
Letters patent appointing the Honourable Mr Justice Woodward to
conduct the Royal Commission were issued by his Excellency
the Governor-General on 12 September 1981.
The Commission was charged with inquiring into:
WIfether administrative arrangements and procedures
for the supervision of the handling of meat for
export are adequxate to ensure that all meat exported
from Australia meets the requirements prescribed by-law;
Whether malpractices are occurring, or have occurred,
in the handling of meat for export or the exportation of
meat; Allegations made, whether in public or to a Minister,
Department or Authority of the Commonwealth, of
malpractices alleged to have occurred during the past
ten years, in the handling of meat for export or in the
exportation of meat; / 2

-2
Whether such allegations were dealt with in a manner
that was adequate and effective;
Whether in response to such allegations, any illegality
or corruption occurred."
As allegations had also been made in relation to malpractices in
the Victoria LMeat Inspection Service, His Excellency the
Governor of Victoria issued, on 15 September 1981, a Royal Commission
which-ecomplemented the Commonwealth Commission but
which related to meat for human consumption in Victoria. In
November 1981, the Governor-General issued a further
Commission in relation to meat for human consumption in the
Northern Territory. Because of the considerable degree of
overlap between the three commissions, enquiries in relation
to all three were conducted jointly and concurrently. The
Commissioner has discharged his three separate obligations by
presenting a single Report. However, his concluding recommendations
relating to the three separate governmental jurisdictions are
set out separately..
The Commission's Report was presented to the Governor-General
and the Gocvernr of Victoria and forwarded to the Chief
Minister of the Northern Territory on 17 September. The Caunissioner
recommended that Appendix H, which is a separate volume to the
Report, not be released until after criminal proceedings against
those named or referred to in it have been completed.
At the outset I should say that on a dispassionate reading the
findings of the Royal Commission are overwhelmingly
positive. The Commission has commended the Department and
the Minister in relation to their actions in the wake
of the substitution incident. while there was a great deal
wrong with the meat inspection system prior to the substitution
incident, the Royal Commissioner has found that actions taken
since then have been the appropriate ones. He has also endorsed
most of the proposals advanced by the Department of Primary
Industry for further improving the systmu. The positive suggestions
the Commissioner has made are being and will be followed up
vigorously.
Before going into the Royal Commission Report in detail it would
be useful for Honourable Members if I recalled the total
background against which the Royal Commission enquiry was held.
The. meat industry is one of Australia's vital rural industries.
The estimated value of production last year was $ 3.2 billion
more than a quarter of the gross value of rural production. It
is a substantial export earner with exports of $ 1.3 billion
to some 60 overseas markets.
The problem of wasteful dual meat inspection services in the
four larger states has bedevilled the industry for many years.
Following overseas complaints many years ago, thoriginal Camrcnwealth
Veterinary Service was expanded to an export inspection service
in all states. New United States laws in 1963 and 1967
required greater Commonwealth controls. In 1964 some states,
concerned at the increased Commonwealth role in meat inspection,
sought and obtained agreement that state and Commonwealthi
inspectors work side by side in export establishments. / 3

-3
Over the years this situation has led to costly duplication
and some fragmentation of administrative controls. Between
1972 and 1978 there were no fewer than six major state or
Commonwealth enquiries into meat inspection. At* all these
times the objective of the Commonwealth was to participate in any
reasonable arrangements to achieve a single inspection service.
However because of the attitude of some states no progress was
made in this direction. In November 1978 the then Minister for
Primary Industry, in yet another attempt to resolve the issue,
established a Committee of Enquiry with terms of reference
specifically directed to the solution of problems of meat
inspection administration.
I want to address this particular Enquiry in some detail
because it was material in relation to an adverse finding by
the Royal Commission against the Minister for Primary Industry.
The importance of this matter will become clear later in my
statement.
The Chairman of this Enquiry, the Hon C R Kelly and the other
Committee member, Mr W B Buettel presented their Report to the
Minister for Primary Industry on 11 February 1980. The whole
thrust of their Report tabled in Parliament on 27 February
1980 was directed to the establishment of a new type of single
meat inspection system, an Australian meat Inspection Service
or " AMIS". In the presentation of the Report to the Minister On
11 February 1980 evidence shows that the discussion was centred around
the principles and proposed structure of a new AMIS. Mr Kelly
also, at this brief meeting, raised the general issue of
malpractice in meat inspection as reflected on pages-12, 13 and
66 of his Report.
However, at the time and as indeed evidenced in his Report, these
allegations were of a most general nature, and have remained so.
Neither in his Report, nor in his meeting with the Minister
did Mr Kelly put forward any positive or specific evidence
of names-of people engaged in serious malpractice. Even at
the Royal Commission Mr Kelly was not able-to present any
specific information and he has not done so'' since. If. he had they
would have been passed on to the police for investigation.
Some matters of immediate administrativa concern that arose
in tria Kelly Enquiry were passed on to the Department by
Mr Landos, the Departmental executive officer to the Kelly
Committee. I havu been advised that--the Bureau of Animal Health
followed up with their field staff, but as later events showed
not vigorously enough. The notes taken by Mr Landos during
the Enquiry were never referred to Mr Nixon by Mr Landos, or
Mr Kelly. Mr Kelly's key recommendation for the establishment
of an AMIS was studied but rejected by the states. The Commonwealth
was prepared at all times to support AMIS. In further pursuit of
an improved system, a Commonwealth/ state Committee of the
Australian Agricultural Council, set up in 1980 following
the Kelly Report, still failed to resolve the issue of a
single service.
At a meeting of the Australian Agricultural Council in Hobart in
February 1981 the Minister for Primary Industry took yet another
initiative to resolve the issue. A high level working group was
established to consider further options. Yet again, however, no
satisfactory consensus emerged. / 4

-4
It is quite clear that the central pre-occupation and the
priorities attached to both the Kelly Report and the
Commonwealth consideration of it was the achievement of a
single meat inspection service.
This is clear in Mr Kelly's evidence to the Royal Commission and
I quote from page. 10264 of the transcript:
" We were much more interested in the problems of administration
and having inspectors available at the * right time and at-the
right place than we were at that time about the bribery
and corruption. That was a secondary matter to: us. Getting
the machinery to construct it to work well was our first
requirement."
It is even more explicit on page 10267 of the transcript where
Mr Kelly says,
" I was much more interested in the welfare of AMIS than I
I was of the comparatively minor skullduggery that I
knew about."
It is also explicitly clear on page 66 of the Kelly Report
itself: " Starting a new system would give us the opportunity to
turn over a new page."
Mr Kelly goes on to say on page 66 that when the new page is
turned, some specific problems in relation to inspector s and
industry behaviour should be tackled with firm resolution.
The priorities of the Kelly Committee were explicitly-clear.
Their major concern and the thrust of their deliberations was
on a single inspection service.
As I have said, the Commonwealth Government has vigorously
pursued the central recommendation of the Kelly Report. That
is the issue of a single inspection service. Unfortunately,
however, because of jurisdictional problems with some states
these efforts met with little success.
Let me now turn to the so-called issues of malpractice.
As I will demonstrate in more detail not one specific allegation
was put to the Minister ) 11 Mr Kelly. I will further demonstrate
that the inherent problem oi, -hese matters has all along been the
fact that-specific allegations which could . be pursued in an appropriate
way were never given to the Minister. In the Royal Commission Report
itself to which I shall shortly turn the Commissioner confirms
in Paragraphs 2.34 and 2.35 that much of the information supplied
initially on malpractices was " little better than rumour".
And that it finally took a major joint police task force, including
32 detectives from the Australian Federal Police and the Victc~ rian
Police to produce satisfactory evidence.
r-et me again emphasise that the Kelly Report was not a confidential
document. It was tahled in Parliament shortly after it was
received and sent to the stat-es a-d industry for public discussion.
It is easy nowq to be wise after the event but I think it significant
that to the best of my knowledge no question was asked of the Minister in
this House on the malpractice allegations in the Kelly Report
until the publication of an article by Alan Reid in the Bulletin
on 22 September 1981.

I should also point out to the House that the Commissioner
himself reports in Paragraph 2.75 that if he had had
to report in April of this year, after seven months of
investigations with the full powers of the Royal Commission that:
" on the basis of the-evidence then avaibable I would have reported
that malpractice in the industry was rare and felt compelled
to recommend that, in the light of that finding many of the
present security measures were unnecessary and , that no
fundamental change in administrative arrangements was
required to prevent or detect malpractices."
In other words, in April 1982, some 26 months after Mr Kelly
presented his Report-to the Minister for Primary Industry, the
Royal Commission after seven months investigation still did not
have any substantive_. evidence of malpractices. It took three
more months of the.-investigations by the Royal Commission, with the
full powers that such a Commission has, to satisfactorily uncover
the malpractices of sections of the meat indiistry and of corrupt
activities of some members of the-Mat Inspection Service and of
some members of the-police.
In relation to malpractices, I would-particularly like to draw
attention to what the Commissioner said in Paragraph 7.4 of
his Report:
" The malpractice which led directly to the setting up of the
Royal Commission, namely species substitution, _ proved to be
the most serious malpractice which the Commission uncovered."
The Commissioner goes on to say in Paragraph 7.6 that:
" So far as the most serious cases of species substitution
are concerned thereis no.. evidence-. thatthis occurred in the
export trade before late 1979."
Significantly therefore, according to the Commission, in
relation to the most serious malpractice ever to come to light,
species substitution in the export trade, there was little or
no evidence to show that it occurred before Mr Kelly brought his
Enquiry to an end.
It is worth not'ing. that there is no reference to meat substitution
in the Kelly Report and~ there is-absolutely no suggestion
whatsoever that Mr Kelly raised this most serious malpractice'
with the Minister. Let me now turn to the events of August
1981 which led to the establishment of the Royal Commission.
Following the first ever confirmed finding on 13 * August 1981
of horsemeat in a shipment of Australian boneless beef to the
United States the Australian meat industry found itself in
a crisis situation with the potential of immense damage to
it. The Minister for Primary Industry took immediate action.
Establishments were de-registered, spot checks were introduced
in all states, security and surveillance were immediately
increased.

-6
Further measures were introduced within days., A-new system was
devised for security seals, a special task force was set up to
co-ordinate a nationwide sampling and species testing programme, and
police investigations were intensified.
Shortly afterwards the Minister for Primary Industry introduced
legislation to substantially increase penalties.. for illegal
export of up to $ 100,000 fine or five years imprisonment or
both; stringent* new security control measures were introduced
in cold stores with the sealing of meat transport vehicles
and containers; and an outside consultant was appointed to review
these measures. The Minister for Primary Industry convened
a special meeting of the Australian Agricultural Council on
4 September to review the measures taken and to examine policies
and practices for controlling knackeries, denaturing pet
meat and identifying game meat for human consumption.
The Minister for Primary Industry is to be commended for his
prompt and decisive actions on this matter. As early as
17 August the US Special Trade Representative Ambassador Brock
expressed to him satisfaction with the way in which the Australian
Government was dealing with this issue. This confidence of the
United States administration was reflected in the release to the
United States market on 4 September of 24,000 tonnes of
Australian beef valued at $ 40 million.
The Parliament now has before it the Report of the Royal
Commission presided over the by the Honourable
Mr Justice A E Woodward. I propose to take the terms of
reference of thie-Royal Camiaission in the form the Royal Commission
dealt with them and address myself to the Commissioner's findings
in each.
Firstly " the adequacy of administrative arrangements and
procedures for the supervision of the handling of . meat
for export"... The Commissioner's findings are that, whilst
once seriously deficient, administrative procedures are now
adequate for their purposes although still with room for improvement.
The Government generally endorses the Commissioner's recommendations
and will be pursuing them vigorously In doing so I point
out that many of the recommendations have been or a~ e in the
process of implementation.
I would also like to point out that on the--central
issue of a single inspection service, the Royal Commissioner
has not made recommendations that went beyond what the
Government is already doing. He has recognised the inherent
nature of the problan arising from the need for the " Commonwealth
to be involved to protect export markets, and the traditional
position which the states take in relation to what they
regard as their sovereign responsibilities. Nevertheless,
that matter will also be pursued with full vigour,

-7
I might point out that in respect of the matters I have already
referred to, the Commissioner acknowledges in paragraph 1.19 that
" Returning to the Department of Primary Industry
itself, it is only fair to say thatunder instructions
from its Minister, it acted promptly and effectively
when the meat substitution scandal erupted."
The Commissioner goes on in paragraph 1.21 to state that
" Since then, & nd during the Commission's hearings, the
Department has, for the most part, reacted promptly
and appropriately to problems that have been brought
to light. It has not, as it might have done, sat
back to await the Commission's recommendations. Instead
it has, while keeping the Commission appropriately
informed, continued to carry out its proper functions of
administering the service and forward planning. This
has culminated in the proposals set out in the Department's
final submissions, which reflect the determination
of the Minister and the Department to resolve the
problems which -now stand revealed."
What the Commissioner has said is clearly reflected by the
establishment in March 1982 in the Department of Primary Industry
of the Export Inspection Service which has been structured under
a new legislative framework, the Export Control Act. The new
Export Inspection Service was created with characteristics
designed to overcome problems and inadequacies disclosed in the
Commissioner's investigations. Features of the new inspection
service are a strong decentralised management system, a strong
compliance program, and an investigations unit capable of
pursuing allegations of malpractice in co-operation with Federal
Police and the Meat and Livestock Corporation.
Further measures are being pursued to raise the calibre of
inspection staff such as new inspection procedures and standards;
new award and employment conditions, better aligned to industry
requirements, and new training programs. Innovations proposed
to increase the general efficiency of the industry include the
introduction of Australia wide objective measurement and product
descriptions for carcasses and meat, and the electronic
transmission of all documentation and monitoring of product.
In order that the industry itself should become more involved
in the inspection process, and me more conscious of the costs
of providing inspection services, the Department of Primary
Industry has proposed arrangements to provide services as a
tailor made package to each establishment, under contract, on
a fee for service basis, and progressively transfer responsibility
for the preparation of hygiene, quality control and product
description to the companies themselves.
The full implementation of many of the above arrangements still
requires the agreement of unions, state governments and
the meat industry. The Department of Primary Industry is
currently engaging several consultants on key aspects of the
revised system. / 8

8-
I now wish to turn to the next of the terms of reference
relevant to the Commonwealth " Malpractices in the Australian
Meat Industry." In reference to this I would-first like to
quote paragraph 7.2 of the Commissioner's findings:
" I should say at the outset that I have no doubt that
the industry has never been more free of malpractices
than it is today. All references, unless otherwise
stated, are to the past most of them applying
particularly to the last two or three years."
Further, I quote paragraph 1.22 of the findings:
" I believe that, in consequence of the strong reaction
of the Minister and the Department, and the
establishment of this Royal Commission, the current
level of malpractice in the industry is lower than
it has ever been. This desirable situation should be
vigorously maintained."
There is not much doubt as evidenced in the Royal Commission
hearings that there have been malpractices in this industry.
By the very * nature of the industry and its widespread. geographical
locations it may well be difficult to totally eradicate all
instances of malpractice.
However, it is to the full credit of the Minister for Primary
Industry that the Commissioner considers the measures he has
taken to have reduced the incidence of malpractice to an all-time
historical low. Moreover, as the Commissioner points out in
paragraph 8.15 the matter should be kept in some perspective,
and I quote: " In order to help keep the whole question of export
quality in perspective it is worth noting that,
against an overall rejection rate in USA of 0.5% in
recent years, Australia's rate has been This
compares with Canada's experience of 0.8% and New
Zealand's
I point out that the measurement in question is over a period
of recent years. As the Commissioner says in paragraph 8.17
" the record seems quite reasonable". Nevertheless, the Commissioner
does refer to certain areas of malpractice where greater attention
needs to be given and recommendations relevant to them will
be processed as a matter of urgency.
The Commissioner dealt with the next three terms of reference
in one section of his Report and I will follow the same practice.
These are " the handling of allegations of malpractices and
whether they were dealt with in a manner that was adequate and
effective, or, on the other hand, whether any illegality or
corruption occurred." Taking the last point first, in paragraph
1.66 the Commissicner concludes that apart from the possibilityand
he puts it no higher than that of corruption relating to
certain police officers and of a senior meat inspector and I
quote:

9-
" There is no evidence to suggest that there was any
illegality or. corruption on the part of any Minister
of the Crown, or any official, in response to any
allegation of malpractice in the meat industry."
On the point of allegations made to departments, the Commissioner
has certain criticisms in relation to the Department of
Primary Industry and the Federal Police. The deficiencies
he points to will, I believe, be overcome by the new organisational
procedures that I have referred to.
Let me now turn to the question of ministerial responsibility.
At the outset I want to define precisely what the Commissioner
has actually said. The Commissioner in paragraph 1.61 says that:
" Generally, such matters as were referred to
Commonwealth Ministers were dealt with adequately
and ef fectively.
In paragraph 8.39 the Commissioner says:
" Insofar as allegations were reported by the
Department to Mr Nixon, I do not consider any
criticism can be levelled at his handling of them."
In paragraph 1.19 the Commissioner says:
" Returning to the Department of Primary Industry
itself, it is only fair to say that, under instructions
from its Minister, it acted promptly and effectively
when the meat substitution scandal erupted."
And in paragraph 1.22:
" I believe that, in consequence of the strong reaction
of the Minister and the Department, and the establishment
of this Royal Commission, the current level of malpractice
in the industry is lower than it has ever been."
As far as the Kelly Report is concerned, although he does so in the
cntct of a passage wich is critical of action taken in relation to malpactices,
the Caiuissicn makes the point in paragrapn 8.48 that:
" They ( the Minister and is senior advisers) seem
to have given all their attention to the central issue
dealt with by the ( Kelly) Committee."
That is, the question of a single meat inspection system.
Evidence before the Commission clearly showed the strong and
determined efforts made by the Minister to deal with these matters.
It is clear that in respect of all of these matters, the Royal
Commissioner has found that Mr Nixon behaved responsibly and
effectively. There is only one point which the Commissioner
is critical of the Minister and that is his handling of the
Kelly Report in relation to malpractices. As the Commissoner says
in paragraph 8.39:

" The only possible criticism of his handling of his
responsibilities in this area relate to his
reaction to the Report of the Kelly Committee of
Enquiry in 1980."
I will now examine in detail those areas where the Royal
Commissioner has been critical of Mr Nixon. In paragraphs
1.62 to 1.64 the Royal Commissioner says, first, that
Mr Nixon paid insufficient attention to the findings of Mr Kelly
and Mr Buettel. According to the Royal Commissioner, the
Minister, having heard from a responsible source that there had
been cases of bribery and abuse of power in his Department,
should have taken more adequate and effective steps to deal with
the matter.
Let me again state unequivocally that the matters covered in
these paragraphs had nothing whatsoever to do with meat
substitution. If Mr Kelly had unearthed significant information
about meat substitution, I am quite sure that he himself a
farmer would have jumped up and down more than we ever saw
him do in this House in relation to tariffs. He most certainly
would-have made very strong representations to the Minister,
or if not to him then to me. He did not.
In addition, he would not have sat on such information until
his Report was completed. He would have known the immense
significance of such information, andhe would have acted on it
immediately. The fact is. that Mr Kelly did not draw any such
evidence to our attention.
The conclusions drawn by the Royal Commission relate to different
matters and-the Commission's-argument supporting its conclusions
is to be found in paragraphs 8.39 to 8.45. This evidence boils
down to two points:
1. In relation to certain statements in the Kelly
Report itself ( pages 12, 13, 66) the Minister did
not act adequately and effectively; and
2. That certain statements were made to the Minister
in a meeting with Mr Kelly on 11 February 1980 and
that these were not adequately followed up.
To examine the Royal Commissioner's conclusions we must turn
back to the specific evidence on the statewnts that were alleged
to have been made to the Minister on 11 February 1980 and to
the specific information contained in the Kelly Report. I shall
deal with the 11 February meeting first. Let us be clear in
dealing with this matter, that we are dealing with the issues which
the Kelly Committee itself regarded as secondary to the major
conclusions of the Report. This is evident from Mr Kelly's
own evidence to the Royal Commission. For example on page 10264
of the transcript he says: / 11

11
" We were much more interested in the problems of
administration and having inspectors available at the
right time and at the right place than we were at that
time about the bribery-and corruption. That was a
secondary matter to us. Getting the machinery to
construct it to work well was our first requirement."
And on page 10267:
" I repeat it was a minor part of our duty that was laid
on us when we were doing the Report and I was much
more interested in the welfare of AMIS than I was of the
comparatively minor skullduggery that I knew about."
In assessing the significance of his meeting with the Minister,
it is important to note what Mr Kelly himself said about
various aspects of it. In his primary evidence on page 10243,
Mr Kelly said:
" The primary purpose of the meeting was to present
the Report and any discussions had in relation to
areas outside the terms of reference of the Committee
would have been general and merely coincidental to the
meeting."
Then, in relation to the discussion itself, Mr Kelly referred
to a minute prepared by Mr Landos which he said recorded that
at the. meeting with the Minister, the Committee expressed
strong views as to the sordid nature of the meat industry and
meat inspection. However, later Mr Kelly was asked:
" Is the position this in reality that you, apart from
Mr Landos' minute or document that was referred to have
no independent recollection of precisely what was said
at the meeting with the Minister on 11 February at all?"
He responded: " That is right, no precise memory." ( Transcript 10259).
When he was then asked whether he was prepared to accept
that what was in Mr Landos' document must be accurate he said:
" No. I am not saying it must be accurate. I am
prepared to say I repeat, I was startled and
gratified to find that I myself had refreshed my
own memory."
As to the specifics discussed with the Minister, the question was
put: Mr Kelly, you were asked whether or not at the meeting
with the Minister you provided the specific names of
particular places where malpractices were said to have
happened, and my recollection is that you said that
you either did not or that you had no recollection of
doing so; is that correct?" / 12

12
Mr Kelly said:
" That is right". ( Transcript page 10275)
And when asked why he had not reported his findings tothe
Commonwealth Police or to the Federal Police, Mr Kelly said:
" Never even thought of it. It has nothing to do
with me. My responsibility was to chair my Committee
that had to examine this question of dual inspection
problems. That was all I was worried about." ( Transcript
page 10272).
Mr Landos Lalso gave evidence ( page 10277A of the transcript) that:
" By far the great majority, if not all, of the
allegations received by the Committee were based on rumour
or on second-hand evidence. The Committee found a great
reluctance to for any people to pass on first-hand
experience."
He also stated ( page 10288 of the transcript) that the real
purpose of the meeting was
" to present the Report to the Minister and to stress
to him the necessity of structural change with
regard to the meat inspection arrangements."
Mr Landos, when asked whether any examples of graft or misuse
of inspector power were raised at the meeting, replied: ( page 10282)
" I do not believe any specific examples were raised with
the Minister."
I should mention at this point that in the transcript of the
Royal Commission evidence, and in paragraph 8.41 of the Report
reference is made to notes prepared by Mr Landos during the
Kelly Inquiry and to a minute he wrote sometime after the meeting
between Mr Kelly and the Minister. This minute was designed as
Mr Landos' final overall impressions of the Kelly'Enquiry. It
was not a response to the meeting etween Mr Kelly and the Minister.
It was prepared for internal Departmental use after a discussion
with Mr Cleary
The Royal Commissioner said of the suggestions in this minute:
" They never reached the Minister" ( paragraph 8.43)
Similarly, Mr Landos' notes never reached either the Minister
or the Secretary of the Department.
The evidence actually given by Mr Landos that no specific examples
were raised with the Minister adds emphasis to the fact that the
primary purpose of the Kelly Committee was to look into the
structural change needed to make meat inspection arrangements
effective. The Committee was concerned with the causes of any
problems evident in meat inspection and regarded symptoms of
malpractice as incidental to the primary purpose. 13

13
This if further confirmed by Mr Gee in giving evidence before
the Royal Commission. In responding to a question of
whether many of his discussions with the Minister were directed
to the AMIS recommendation for a single inspection service, he
respsponded: yes, that is correct and it is important,
I think, to get that completely in context. That
was the absolutely overriding public and political
issue, to find a solution to the meat inspection
administration." ( page 10338). / 14

14
Notwithstanding the fact that there was no specific information
given the Minister the
evidence clearly shows that the Minister spoke with Mr Gee
and asked if there was anything that could be followed-up.
When Mr Gee was asked whether in fact he followed-up problems
of the kind raised by the Kelly Commnittee, he replied
did not follow it up with Mr Kelly. I went to
Mr Landos and enquired of him as to what evidence, what
data they did have from their hearings and from their
conversations and from the submissions they raised and
John Landos related to me that there was nothing substantial,
that there was nothing of what we would call hard evidence
and I said, ' are you sure?' to my recollection, ' are you
sure there is nothing that would warrant us investigating
further or going to the police?' and he was of the
opinion that there was not anything of that nature. On
the basis of his advice I did not pursue it directly
with Mr Kelly." 10339 of the transcript).
Now I ask you how could the minister, given no specific
information, have taken any further action to deal with these
allegation3? I submit that on the basis of all the available
evidence he could not have. Where is the substance on
which a Minister could be blamed and condemned?
There is another matter in the Royal Commission Report
which disturbs me.
The Report, on the top of page 259, quotes half of Mr Kelly's
diary entry. I have confirmed that with Mr Kelly, whom I
contacted on Sunday night, and it is confirmed in the full
transcript of the evidence, *( page 10244). It is the half
that is damaging toMr Nixon, rather than the half that
would offer support for his action.
The quote contained in paragraph 8.40, is as follows:
" I went to Melbourne for the day to present meat
report to the Minister, Peter Nixon. It was worth
it because it gave me the chance to tell him a few
of the notes that we could not put in the report,
such as the bribery and blackmail which is so prevalent
in the meat inspection game. Poor Peter is now to see
what can be done."
However, the full entry also contains the following words
immediately after the previous sentence:
" We were gratified today to hear that the Victorian
Minister of Agriculture has stated bluntly that the
present position cannot be allowed to continue. I told
Nixon that both of us, Buettel and I would be prepared
to help him get something done."

15
Mr Kelly has advised me on the telephone yesterday that
it is almost certain that the statement referred to by the
Victorian Minister would have related to problems of dual
administration of the Meat Inspection Service the central
thrust of what the Kelly Committee Report was all about.
Clearly, the full diary entry reinforces the priorities of
the Committee. They were' concerned with the overwhelming
complexity of the major problems of fixing up the administration
arrangements for meat inspection.
In my view the last reference in Mr Kelly's diary entry to
helping get something done, clearly related to the develcpment
and implementation of AMIS.
The preoccupation of the Kelly Committee with the AMIS proposals
is confirmed by Mr Buetell's account of the meeting. In a
telephone discussion with the Secretary of the Department
of Primary Industry on 19 September, Mr Buettel confirmed
that the bulk of the meeting was concerned with the Committee's
recommendations of AMIS. Mr Kelly spoke only in very general
terms about " a lot of nonsense around the ridges".
Having regard to the fact that the Minister took broad,
vague allegations, indeterminantly made, and subsidiary to
the main elements of the report having regard to the fact
that he took these allegations sufficiently seriously to
pass them on to Mr Gee, and that Mr Gee consulted Mr Landos
who confirmed that there was nothing in the allegations
that could be put to the police, I suggest that it is not
possible to condemn the Minister on the grounds of failure
to act. I suggest it is not possible to condemn him on
the evidence about what was said at that meeting. I remind
the House of Mr Landos' evidence, stated above, that the
great majority of the evidence received by the Committee
was based on rumour or second-hand evidence.
I now come to the actual Report itself. As the Royal
Commissioner has put it in paragraph 8.46:
" I think it may be that Mr Kelly did not hammer home
his concern in any very emphatic way, but he obviously
said something about the problems he saw and the Report
was there to be read; ! it was clear enough."
Indeed the Report was there to be read but let us see if it
has been properly read and if it was indeed clear enough.
Presumably, the Royal Commissioner was referring to those
paragraphs of the Report which he himself quoted. His first
quotation was taken from the top of page 12 of the Kelly Report.
This was as follows:
" Complaints were received of excessive zeal at times stemming
from a grievance, real or fancied, on the part of an
inspector. It is a fact that production can be slowed by
unwarranted stoppage of chains to the annoyance of employees;
or condemnations, allegedly unwarranted, to the annoyance
of management." ( page 12)

16
If the Report had gone back a sentence or two, it would
also have included in this particular quotation:
" The Committee recognises the inspector's task to be
a difficult one exposed to friction with both works'
management and works' employees." ( page 11)
And then the first sentence from the paragraph that
the Report quoted is also omitted. This sentence reads:
" Inspection is a matter of individual subjective
judgment and opinion."
In my view these two sentences give a quite different perspective
to that first paragraph on page 12. Without specific evidence,
what can a Minister do in relation to a sentence of that kind?
The Royal Commissioner then quoted from the bottom of page 12
and on to page 13. The quote reads:
an inspector, if he wants to be vindictive, can
press the stop button on a killing chain. This puts
meat inspectors in positions of considerable industrial
power. That this power has not been used more often is
a tribute to the sense of responsibility of most meat
inspectors, but it has been used. The feat that it may
be used has encouraged some abattoirs managers to give
inspectors gifts of meat, or to sell them meat at
ridiculously low prices. It has been alleged that some
managers have given inspectors this kind of inducement
not only to ensure industrial peace, but to induce
inspectors to turn a blind eye to procedures that give
considerable financial advantage to management."
I want to draw particular attention to one sentence in that
quotation by the Royal Commissioner. It reads:
" That this power has not been used more often is
a tribute to the sense of responsibility of most
meat inspectors, but it has been used."
Here the Kelly Committee would seem to be saying that problems
posed by excessive use of such power were rare, especially
against the background that all works strenuously denied that
they indulged in such practices as the next paragraph quoted
by Commissioner Woodward makes plain.
I do not believe in the light of all the circumstances, in
the light of the fact that the priorities in the Kelly Report
relatted to the establishment of AMIS and in the light of
community concern at the existence of two meat inspection services
rather than one I do not believe in the light of these
facts that the quotations on pages 12 and 13 amount to sufficient
substance to require Mr Nixon to take more action than he did.
This view is significantly reinforced by the treatment given
to a certain paragraph taken from page 66 or Mr Kelly's Report.

17
As quoted by the Royal Commission that paragraph reads:
one aspect of the meat industry which should be
tackled with firm resolution is the problem of
some managers trying to buy the co-operation of
inspectors by giving them meat at ridiculously low
prices, or countenancing excessive overtime claims,
or of meat inspectors demanding cheap meat backed
by the implied threat of slowing the killing chain
or forcing higher offal or other condemnations if
management is not compliant. Legislation should
include heavy punishments for administrators, VO's,
meat inspectors and management. That this kind of
practice has been too common in the past we know
too well. It must be stopped in the future." ( 8.42)
I agree fully that if you take the words as quoted in the Royal
Commissioner's Report, they seem to be saying in very plain terms
that there is a certain matter that should be tackled immediately
with firm resolution and that certain malpractices were mentioned.
In fact that is not what the Kelly Committee said. That
particular quotation does not accurately represent the findings
of the Kelly Report.
There were two critical omissions from this quotation. They
have the effect of substantially modifying the meaning of
that paragraph especially when placed in the context of the
paragraph that preceded it. I now quote the paragraph as it
was actually written in the Kelly Report, along with the preceding
paragraph, " Starting a new system would give us the opportunity
to turn over a new page. We know that the firmly held
stances of the past will not be lightly abandoned but
at least there is more chance of this happening in a
new situation.
There is one aspect of the meat industry which should be
tackled with firm resolution when the new page is
turned, and that is the problem of some managers trying
to buy the co-operation of inspectors by giving them meat
at ridiculously low prices, or countenancing excessive
overtime claims, or of meat inspectors demanding cheap
meat backed by the implied threat of slowing the killing
chain or forcing higher offal or other condemnations if
management is not compliant. AMIS legislation should
include heavy punishments for administrators, VO's,
meat inspectors and management who try to extract improper
advantages out of the system in this manner. That this
kind of practice has been too-common in the past we know
too well. It must be stopped in the future."
In the first place, the words " when the new age is turned" are
omitted. It is worth noting [ hat tis-significant and particular
omission occurred not only in the Royal Commissioner's Report
but also in the primary evidence given by Mr Kelly ( Page 10249).

18
Without the omitted words, the injunction from the Kelly Committee
would have been that the Minister should move immediately to
tackle certain problems with firm resolution. Now with those
words, the injunction is consistent with the whole UihFuTst of everything
Mr Kelly said in his own report and with much of what he said
before the Royal Commission. That was that attention should
first be given to creating a new system. Then and indeed as
a part of the' new system, attention should be given to those
instances of skullduggery, using Mr Kelly's word.
Indeed there was some discussion in the Royal Commission about
what these words meant. I refer you to page 10266 of the
transcript.
The other omission, which is in no way even indicated in the
quotation in the Royal Commissioner's Report, is that the Kelly
report said " AMIS legislation should include heavy punishments
for administrators, VO's, meat inspectors and management who
try to extract improper advantages out of the system in this
manner." The fact that Mr Kelly said such Punishment should be included
in AMIS legislation again shows plainly that the thrust of
the injunction from the Kelly Committee was that the creation
of a new system was the first priority. it happened that
I think it is reasonable to ask how/ Mr Kelly, in his primary
evidence, and how it happened that the Royal Commission report,
omitted, in two placas, words of such stark and significant
importance, especially when the reputation of a Minister was
at stake. ./ 19

19
If all the omitted words had been included, they would have
altered the balance of the evidence substantially in the
Minister's favour. The fact that they were not included is
a sad and unhappy omission, with a most unfortunate consequence.
Mr Speaker, -there can be no doubting that the Royal Comrmissioner
acted in good faith in drawing the conclusion that he did.
But on the basis of the evidence that I have outlined, I cannot
accept that the one adverse finding against the Minister has
been substantiated. I unequivocally reject it.
The object of the Royal Commission's criticism of the
Minister was that Mr Kelly had said certain things in
the meeting of 11 February, or that the Report itself said
certain things, that were not adequately followed-up. That, as
the Royal Commissioner said, was the only point of cricitism.
I believe I have rebutted it adequately and effectively.
In summary, Mr Speaker, the Report of the Royal Commission
is a very positive and valuable document. The Very conduct
of the Commission an~ d the response that it stimulated, has
been of great benefit to the meat industry.
Overwhelmingly, the Royal Commissioner's findings have been
positive in character. Since the subtitution incident,
the actions of the Minister and his Department have been
found to be appropriate and by and large effective. The
Department's recommendations for further improving the
service have also been favourably commented upon. The
Royal Commissioner has rightly emphasised that there is
further room for improvement and he has suggested avenues
for the pursuit of this improvement. These avenues will
be followed up vigorously.
We are of course, still left with the difficult and complex
problem of dual inspection. That matter must be resolved.
The Commissioner's comments will be drawn upon heavily in
our efforts to resolve that matter with the States.
We are indebted to the Royal Commissioner and his staff
for their efforts. Let me stress again that I believe the
Commission has been a very productive one, notwithstanding
my reservations in relation to one finding.
I turn now to a broader consideration of which meat
substitution was one symptom.
Mr Speaker, it makes me very angry indeed to see people
who have been treated well-in this country, who are largely
prosperous, and who are often in control of affluent
businesses seeking for no other reason than greed to become
even wealthier by means which are unethical and dishonest.
Those people are undermining our whole system.
In the case of those involved in meat substitution, they run
the risk of destroying the livelihoods of many honourable
people in the meat industry and in the farming and pastoral
world, because these practices have the potential of destroying
our markets.

20
The Royal Commissioner has indicated that current penalties
for those people are severe. Personally I would not mind
if they were very much more severe. The people who have
been involved in meat substitution have exhibited the same
corrupt attitude towards society as those who have sought
to evade paying their taxes. This Government ia determined
to do everything It can to make these practices unprofitable
for the participants. it would want to do whatever it can
to eradicate these practices once and for all.
In conclusion, Mr Speaker, there is one general point
that I want to make.
We all know quite well that in the last decade or so, there
have been significant breakdowns and administrative failures
in a number of areas of government administration. The
Narcotics Bureau and the Federal Police have been reorganised
and the recent issues concerning the Crown Solicitor's Office
provide a further example.
These are matters of the gravest concern to all Australians.
There have obviously been considerable strains on the Public
Service and I want to emphasise that I do not think the
Public Service, with its traditional modes and manner of
operation, can or should necessarily be blared for these failures.
Overwhelmingly members of the Public Service do their
jobs honourably and with a degree of dedication and commitment.
That is not recognised as it should be in the broad community.
But I also believe that in recent years the Public Service
is having to face new and difficult challenges, and it needs
to be equipped to meet the changes that have occurred.
The business ethics of a minority have deteriorated and it
is quite clear that unethical people who wish,. to cheat on
their obligations to others have * left Ministers and the Public
Service with a massive problem in'attempting to catch up with,
and overtake, their unethical practices.
They have at times, as we have found in this Report, found
people who will assist them from within the Public Service,
but I should emphasise that Public Servants like that are
a small minority who will be ' condemned by the overall membership
of the Public Service.
But because there have been these breakdowns and because there
would seem to be elements in the community able to manipulate
the increasingly complex and diverse business world, some
significant changes may well be needed within the Public Service
to put it in a position of being ahead of rather than behind those
who seek to despoil that system which is important to all of us.
This is a very broad proposition, but it is a matter which is
receiving my own urgent and vigorous attention and I will
be saying something more about it shortly.

Transcript 5912