ALIGNED to a key recommendation in the Freight and Trade Alliance submission to the Inspector-General of Biosecurity, the Department of Agriculture and Water Resources is introducing “safeguarding” arrangements in time for the upcoming 2019/2020 brown marmorated stink bug season.

Safeguarding arrangements may be applied to import supply chains that can demonstrate appropriate biosecurity controls from the point of manufacturing to the point of embarkation (the point at which containers are loaded onto the ship at the port of export). Importantly, approved supply chains may be eligible to bypass treatment requirements entirely, if they can demonstrate appropriate controls to identify and address pest risk at the country of origin.

While the department is conducting a trial by invitation with a limited number of supply chains, it is expected that applications for safeguarding arrangements will be formally open to all eligible import supply chains before the beginning of the next BMSB season commencing in September 2019. At this stage, there will be a minimum trade volume requirement to be eligible for the scheme. However, the department is willing to allow some flexibility in this regard.

Close cooperation
FTA and the Australian Peak Shippers Association will continue to work closely with the department as they move towards finalising the safeguarding arrangements policy. This includes determining:

  • Reporting requirements under the scheme;
  • Audit regimes under the scheme;
  • Alignment to industry best practice programs, including the CTU code, ISPM 4 and ISPM 10;
  • Relevant training;
  • Compliance requirements; and
  • Dedicated departmental staffing.

Cost recovery
As highlighted by the introduction of the safeguarding arrangements, the import statutory reporting environment is changing with a move away from “one size fits all” processes. The Australian Border Force is proudly, and justifiably so, promoting the Australian Trusted Trader Program. The initiative rewards importers, exporters and intermediary service providers with benefits including a dedicated account manager, duty deferral and priority processing.

Entities that can demonstrate compliant practices and a secure supply chain are given a differentiated level of intervention allowing ABF officers to focus on remaining higher risk entities.

Key question
The question needs to be asked that if we are moving away from a one-size-fits-all regime, shouldn’t Australian Trusted Traders pay a differentiated fee if their actions are reducing the risk for the ABF? Perhaps those traders remaining higher risk entities, absorbing valuable ABF resources, should be paying a commensurate rate?

In a similar manner to ATT, the safeguarding arrangements reduce the government’s biosecurity resourcing burden allowing officers to focus on high risk consignments. This leads to an argument that those reducing risk should be rewarded with a differential cost recovery fee.

While we continue to advocate for this outcome, the federal government announced in the 2018-19 budget “a levy on imports by sea to invest in a stronger, fit-for-purpose biosecurity system”. The government stated that the levy, estimated to raise $325m over three years, would “contribute to onshore surveillance, diagnostic, data analytics, research and adoption of new technology to help us detect, identify and respond to exotic pests and diseases earlier…”

Levy administration
It is important to note this levy will be administered above and beyond the existing cost recovery arrangements. Like all taxes, it is likely that this will require legislative backing. The challenge will be whether some form of flat fee will be implemented in terms of a form of taxation or whether cost recovery principles will be introduced to apply costs against risks.

The Biosecurity Levy Steering Committee is due to report its finding this month (June 2019) with the outcomes critical by way of setting another precedent for ongoing tax and cost recovery reform.

The outlook
Now we have the stability of the Morrison government established for another three-year term, FTA/APSA will escalate its advocacy calling for increased transparency and fair implementation of levies and taxes aligned to risk.

Importantly, such regimes must provide incentives for industry to invest and deploy processes to minimise border and biosecurity risks.

* Paul Zalai is director at Freight & Trade Alliance

This article appeared in the June 2019 edition of DCN Magazine