CPC tour gives ESCAS insights

That’s the view of Consolidated Pastoral Company (CPC) CEO Troy Setter who accompanied Mr Fitzgibbon on a three-day tour of Indonesia last week, inspecting in-market operations for the nation’s biggest private cattle business.

CPC is one of several Australian entities seeking financial compensation via a class action claim over the former Labor government's abrupt suspension of live cattle exports in 2011.

The ALP’s suspension arrived during an unprecedented public uproar over animal welfare conditions in Indonesian abattoirs but at the height of peak trading season.

The month-long ban caused severe financial losses for major cattle exporters like CPC and damaged smaller associated businesses like transport companies and individual producers.

A class action claim of an estimated $1 billion was subsequently filed more than 12 months ago in the Federal Court with CPC’s share reportedly worth $80 million.

However, the suspension also resulted in the rapid development and implementation of a new system of animal welfare safeguards – the Exporter Supply Chain Assurance System (ESCAS).

A report on the progress of ESCAS released in January said 1,554,108 cattle had been exported to Australia’s largest market Indonesia, under the new regulatory system, with only 384 (0.02 per cent) head affected by non-compliance.

Last week, Mr Fitzgibbon was given a first-hand look at ESCAS in action and supply chain standards, during his first visit to Indonesia as CPC's guest.

The first part of his tour took in CPC’s joint venture feedlot in Sumatra, providing a close-up view of how cattle are fed and cared for, in the Indonesian market.

In Sumatra, they also visited local farms where CPC and another joint-venture fund local farmer programs to help increase beef self-sufficiency in Indonesia.

Mr Setter said they also visited CPC’s other abattoir and feedlot facilities in Jakarta to see ESCAS in operation and live export’s impact on local communities.

The Australian Livestock Exporters Council (ALEC) also paid for Mr Fitzgibbon’s senior policy adviser to attend the tour which included meetings with Indonesian government officials.

Mr Setter said the delegation met officials from both sides of Indonesia’s parliament and local agricultural policy administrators to help increase understanding of the market “and strengthen the relationship between Australia and Indonesia”.

“We saw the full traceability of ESCAS – from stepping off the ship all the way through to the feedlots system and then followed the cattle through to the abattoir,” Mr Setter said.

“We watched the processing and electronic reconciliation of ESCAS and followed that meat through to the wet market the next morning and saw that full supply chain.

“I think Joel would be a voice of truth and honesty and reason (in the ALP party room) given exactly what he’s now seen in the market.

“But we don’t see there will be calls for another ban or suspension with Indonesia.

“The welfare issues are very mature in the market and certainly all importers and exporters have invested significant capital in Indonesia to ensure animal welfare outcomes are optimal.”

Mr Fitzgibbon said he saw enough evidence during last week’s Indonesian tour “to give me full confidence in the supply chain”.

“I’m willing to say that the standards that I saw in Indonesia are at least as high as you’ll find them here (in Australia) and therefore Indonesia has come a long way since 2011,” he said.

Mr Fitzgibbon said one abattoir he visited was featured on the ABC 4Corners report in 2011 which highlighted animal welfare issues and subsequently sparked the controversial trade suspension.

He said in that abattoir he saw a Mark 4 box and stun gun in operation and independent observers looking on “and a very clean facility and humane process”.

The senior Labor MP also secured a “better appreciation of cultural issues and what Indonesian consumers are demanding” during his wet market visit.

“That is; fresh meat that has come from an abattoir, only hours before,” he said.

Overall, Mr Fitzgibbon said the Indonesian supply chain was as he’d “envisaged”.

“That allows me to come back and say ‘I’ve inspected the abattoirs and I’ve inspected the feedlots and I’m more than satisfied that the standards are that which should be acceptable to Australians’,” he said.

“The slaughter of cattle is not a pretty thing no matter where it’s done but we’re great protein and meat consumers and they’re doing nothing in Indonesia that we don’t do here in Australia.

“I’ve no doubt that the offer (from CPC) came because they were confident that I would appreciate what I saw.

“And that in turn would allow me to come back to the country, stand in the caucus or any public meeting and say, ‘well I’ve been there I’ve seen it and I know what I’m talking about and I’m satisfied with the standard and think this is a trade we should be encouraging’.”

Mr Fitzgibbon said the live export sector earned Australia around $1.5 billion in foreign exchange each year and employed or supported the self-employment, of tens of thousands of Australians who mostly live in rural and regional Australia.

“I still believe broader community support for the sector could be achieved by quarterly ministerial reports to Parliament: outlining the sector's economic contribution over the period; any problems which may have emerged; and, importantly, action taken to address them,” he said.

“We should not fear greater transparency in a sector which has made huge strides since the 2011 trade suspension.”

On Monday, he also made a presentation to the ALP caucus committee detailing discoveries made on his three-day tour but would not breach caucus confidentiality by saying what the reaction was, of other party colleagues.

Mr Setter said CPC invited the Opposition’s agriculture spokesperson on the three-day tour as part of its bipartisan approach to the Indonesian market and other operations in South-East Asia.

He said Mr Fitzgibbon had been to Indonesia previously but had not inspected feedlots, the ESCAS and meat processing operations, in local communities and cities.

“He certainly improved his understanding and hands on view of the supply chain and how ESCAS actually works in-country, and how robust the processes and the systems are, but also the huge opportunity for the Australian agricultural industry and the Australian economy to work closely with Indonesia,” he said.

“Indonesia is certainly a massive growing economy, not only in agriculture with Australia but with tourism and mining and other industries.

“The relationship between Australia and Indonesia needs to be continually worked on and it was great to do that.”

Mr Setter said CPC’s investment in two Indonesian feedlots provided annual through-put capacity of about 110,000 head of cattle with animal welfare a key priority.

“We’d always had pretty substantial investments in Indonesia and animal welfare was always at the forefront of our mind,” he said.

“We’ve now continued to invest further including buying stunning infrastructure that’s going into local abattoirs that also process local cattle, not just our cattle from Australia.

“Our two feedlots in Indonesia have 12,000 families directly linked to those facilities in terms of the flow on benefits, from feed suppliers and truck owners and staff, to meat workers and sales staff.

“That has a huge impact on the local community in Indonesia and a big impact on the profitability of the northern cattle industry.”