Australia: Chain of Responsibility for the livestock industry

Last Updated: 30 April 2017
Article by Nathan Cecil
Most Read Contributor in Australia, September 2017

The livestock industry throws up certain unique considerations for Chain of Responsibility (CoR) compliance not faced by other industries. In this article, we look at some of these unique compliance issues and hot topics for the livestock industry.

Industry structure

One of the prevailing characteristics that sets the livestock industry apart from others is the level of decentralisation or lack of vertical integration. That is, the livestock industry seems to be populated by a larger number of smaller players and 'independents' than a lot of other industries.

Many livestock processors and exporters consolidate animals born and bred elsewhere, often from a substantial number of breeders and growers. This consolidation may happen a number of times before reaching the ultimate processor/exporter, e.g. livestock may be consolidated locally and then again regionally before being delivered for processing or export.

This structural feature means that the number of parties within any livestock supply chain is likely to be greater than those in other industries. Controlling or influencing the compliance conduct of a larger number of third-party participants increases the complexity and administrative burden of compliance.

In such circumstances, formal control measures are necessary. These can be rolled out to multiple parties without significant cost or administrative burden. The best examples include pre-qualification compliance screening of supply chain parties, and the incorporation of a CoR compliance policy and compliance assurance conditions in all supply chain contracts.

Secondly, apart perhaps from agriculture, more than any other industry, the livestock industry supply chain is predominantly regional. Typically, livestock breeding, growing and processing sites are located outside of major cities. The centrality of regional and long-distance travel raises considerations of fatigue management to a degree not faced by some other industries.

Breach identification

Particular attention should therefore be paid to fatigue management in all pre-qualification compliance screening. Information, instruction and training in fatigue management and breach identification should be high on the list for all employees involved in loading and unloading consignments, and scheduling loading, unloading and transport.

Also, the decentralised and regional nature of the livestock industry may mean that many participants in the chain will not have ready access to compliance infrastructure, such as weighbridges. The costs of installing weighbridges at every single transition point in such a decentralised and remote supply chain would be prohibitive.

Consideration should be given to implementing mobile weighing solutions. Alternatively, mass should be verified at the destination or other consolidation points and, if overloading occurs, measures should be put in place to ensure that it does not reoccur.

Thirdly, livestock move around a lot, although not necessarily on their own two or four feet. Many livestock supply chains are branched, with livestock breeders being separate from livestock growers, being separate from livestock processors, being separate from livestock exporters.

This means that by the time livestock arrives on our shelves or for export, they have likely been moved around from specialist facility to specialist facility, earning many frequent flyer points in the process. With each move, compliance has to be actively verified and enforced. Again, it is essential that the formal and documentary compliance tools of a CoR compliance policy and compliance assurance conditions are contained in all contracts. They have the benefit of being written, are easy to understand, and are able to be referred to time and again by those in the chain.

What goes in must come out – a moving target

Waste is a by-product of the production process in the many industries. In the case of the livestock industry, this is literally. Waste produced at a farm, which is removed and sold or disposed of, simply adds another link in the livestock supply chain.

Unlike other products, livestock continues to produce waste while in transit. General road rules provide for fines for escaped waste on the roads, but this is treated more as a general load restraint or even a littering issue, rather than being treated as a shared responsibility in relation to load preparation and restraint under the CoR.

There continues to be a very vocal call from many operators in the livestock industry for regulators to start to treat this issue as one of shared responsibility under CoR and shine the compliance spotlight on livestock consignors in relation to this issue.

Consignors and transport operators should resolve how to deal their sights. Either livestock needs to be prepared differently or infrastructure must be put in place to deal with effluent, e.g. effluent tanks on trucks and effluent disposal points. In either case, the costs consequences will need to be apportioned.

An existing model for compliance?

The compliance wheel does not have to be reinvented. The livestock industry already has in place an established code for shared responsibility in the transport of livestock, the Land Transport of Livestock Code, which operates in many States and Territories. Although aimed at livestock welfare during transport, the code sets out the shared responsibility of all participants in the livestock supply chain for livestock welfare.

The code outlines the parties' responsibilities for planning, handling, loading, transporting and unloading livestock, including the coordination that must take place among parties in the chain.

A CoR compliance policy could easily be modelled off the existing code, with the benefit that its users should already be familiar with the concept of shared responsibility. So, although faced with many peculiar compliance issues, the livestock industry has an in-built compliance framework that can provide a model for CoR compliance.

Sub-contractor pre-qualification screening is an essential CoR compliance measure that should be implemented in the livestock industry. Screening is intended to allow you to assess the CoR awareness and compliance of any potential CoR counterpart (e.g. supplier, customer) and/or sub-contractor. You should therefore focus on compliance and incident prevention measures that are (or should be) in place, and incident response and rectification measures.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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