Guideline - Management of Non-Compliance

​Publication details

​Department of Agriculture, Fisheries and Forestry, 2012

The purpose of this guideline is to assist departmental staff about the management of noncompliance in exporter supply chain assurance systems for the export of feeder and slaughter livestock.

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Exporter supply chain assurance system (ESCAS) for feeder and slaughter livestock

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Purpose

The purpose of this document is to provide guidance to Department of Agriculture and Water Resources) staff about the management of non–compliance in exporter supply chain assurance systems for the export of feeder and slaughter livestock.

Scope

The Department may receive and consider substantiated information of adverse animal welfare handling, traceability and control aspects from various sources in various formats including independent audit reports and advice from importing country governments. Substantiated information provided from other sources such as Meat and Livestock Australia, animal welfare organisations and media may also be considered.

In general terms, the Department will assess the available information on a case by case basis and classify the finding into no confirmed non–compliance, minor non–compliance, major non–compliance or critical non–compliance. The action that DAFF may take will be dependent on the classification of the findings.

This document provides some guidance, in terms of non–compliances, for each key component of the regulatory framework; traceability, animal welfare and control. This document also includes information about tolerance levels, classification of findings and the measures that could be applied by the Department in response to a non–compliance. There are differences in the regulatory framework for sheep/goats and cattle/buffalo. The main differences relate to the reporting requirements and the systems of traceability. The section on traceability is accordingly divided into sections specific to these species.

It must be emphasised that each incident will be considered by the Department on a case by case basis and note that it is not possible to identify and predetermine the action(s) suitable for all possible scenarios that may arise throughout the export supply chain.

Definitions

TermDefinition
CRMPConsignment Risk Management Plan
NOINotice of Intention to Export Livestock
PLLPermission to Leave for Loading
DelegateDelegate of the Secretary under the relevant legislation
ESCASExporter Supply Chain Assurance System
Exporter Supply Chain Supply chain that the exporter nominates in the NOI submission, includes all of the components (entities and facilities) from vessel discharge to the point of slaughter.
  • There is usually one supply chain for each importer.
  • An exporter may include several supply chains in an NOI application.
  • Importers may have more than one supply chain.
Components (abattoirs, feedlots) can be included in more than one supply chain
LivestockCattle, sheep, goats, deer, buffalo and camelids, including the young of those animals.
Non–complianceFailure to comply with the approved ESCAS conditions

Information and Activities

Traceability – Cattle and Buffalo

Cattle and buffalo must have unique individual identification and be tracked throughout the supply chain up to the point of slaughter. It is important to differentiate animals in the supply chain that do not have functioning identification consistent with the original tag list (loss of traceability) from those that did not remain in the supply chain (leakage). Figure 1 is a diagrammatic representation of the possible traceability outcomes for exported cattle.

For cattle and buffalo consignments, the exporter is required to provide an end of processing (EOP) report when all the animals are slaughtered, or at a specified time after export, as specified in the approval conditions applied to individual consignments, whichever comes first.

The EOP report must include information on the outcomes for the exported animals including the number of livestock which remain in the supply chain, the number traced back to the original tag list, the number that leave the supply chain and the number not accounted for.

The exporter must also supply an independent performance audit report which evaluates the effectiveness of the traceability system (as well as the animal welfare and control aspects) for the whole of the supply chain. An independent performance audit report must be supplied for the first five consignments exported into a supply chain for an exporter. The frequency of subsequent audits will be based on risk and performance.

Figure 1 - Possible Traceability Outcomes for Cattle Exported to Indonesia 

Possible traceability outcomes for exported Cattle and Buffalo

Cattle/Buffalo Only

Animals begin in an approved supply chain, then either:

  1. Animals Remain in Approved Supply Chain until Natural Death or Slaughter
    • Traceability maintained
    • Traceability not maintained (see point i below)
      • Lost and non–functioning tags
      • Human error
      • Equipment Failure

or

  1. On sold as breeder animals (see point iv below)

or

  1. Leakage from system
    • Unknown fate (see point iii below)
    • Known Fate (see point ii below)
      • Moved outside supply chain
      • Escaped animals
  1. Animals remain in the approved supply chain but cannot be traced via the original identification methodology to the original tag list

This will occur if ear tags fall out, if RFID tags or reading equipment stop functioning, or if there is transcription error in recording the tag. However, the exporter may be able to reconcile the individual animal's identification back to the specific consignment by some alternative methodology (for example, back up visual tags, consignment segregation). These animals should not be categorised as 'leakage' because the animals remain identifiable to the specific consignment and remained within the approved supply chain.

Existing information on the performance of NLIS RFID tags generally, and for cattle exported to Egypt, indicates that it may be reasonable to expect that a proportion of animals may not be able to be directly identifiable by scanning against the original tag list. These animals however are still identifiable in the system.

  1. Leakage with known fate:

Includes any animals that did not die (natural or slaughter) within the approved exporter supply chain (and did not leave the approved supply chain for breeding purposes) where the exporter has information on the fate of the animal. This may include animals escaping from approved facilities (due to natural disaster for example); or sending the animals to feedlot(s) and abattoir(s) outside the approved supply chain. There is no acceptable level of leakage for animals that knowingly leave the ESCAS as this is a clear breach of the regulatory framework objectives which include requirements for exporter control throughout the supply chain to ensure animals remain within the approved supply chain.

  1. Leakage with unknown fate:

This will include any animal that is recorded as having been exported but cannot be accounted for at all. There is no acceptable level of leakage for animals that cannot be accounted for (with no explanation) as this is a clear breach of the regulatory framework objectives which include requirements for maintenance of identification throughout the supply chain including replacement of lost or not functioning tags.
For points iii and iv, while there is no acceptable level of leakage, this information will not be used as a sole basis of decision making. All available information, including past performance and explanations will be considered when deciding whether or not to enact compliance or other measures.

  1. Animals that are sold as breeders after arrival

It is possible that some animals may be sold as breeders after arrival into the importing country. The animals which are sold as breeders will depart from the supply chain facilities and records maintained to record their departure and alternative location. The independent auditor must confirm the accountability of the movement.

Traceability – Sheep and Goats

As the regulatory framework does not require sheep and goats to have unique individual identification, exporters must trace the exported sheep and goats up until the point of slaughter using a mob based accounting system. The exporter's supply chain assurance system must include adequate records that account for:

  • the numbers loaded onto and unloaded from the ship;
  • the number of animals that enter and exit each facility within the approved supply chain;
  • the number of non–slaughter mortalities within the approved supply chain;
  • the number of animals slaughtered within the approved supply chain; and
  • the number of animals on–sold as breeders (the regulatory framework does not apply to breeder animals)

The auditor will check supply chain traceability / accounting records to identify whether the system can account for the sheep in the supply chain. The Department requires a relevant statement in the independent performance audit report attesting to whether or not the accounting system and available records:

  • provide evidence accounting for the sheep / goats throughout the supply chain during the audit period, including consideration of count discrepancies, non–slaughter mortalities and slaughter of animals;
  • enable reconciliation of the physical location of sheep / goats throughout the supply chain;
  • provide sufficient detail (company name, location address etc) to demonstrate that sheep / goat movement has occurred within the approved supply chain

The Department assessment of traceability compliance is undertaken based on statements provided by the independent auditor.

An independent performance audit report must initially be supplied every two months, for the first six months of a new supply chain, and then at a frequency determined by a risk–based approach involving a minimum of three audits per year, with two of these to occur at periods of highest risk during the festival periods (where relevant).

Figure 2 - Possible Traceability Outcomes for exported sheep and goats

Sheep/Goat Traceability Issues

Animals begin in an approved supply chain, then either:

  1. Animals Remain in Approved Supply Chain until Natural Death or Slaughter
    • Animals can be accounted for
    • Animals are unable to be accounted for (see point i below)
      • Human error
      • Counting error
      • Recording error
      • Inadequate records

or

  1. On sold as breeder animals (see point ii below)

or

  1. Leakage from system
    • Known Fate (see point iv below)
      • Moved outside supply chain
      • Escaped animals
    • Unknown fate (see point iii below)
      • Human error
      • Counting error
      • Recording error
      • Inadequate records
  1. Accounting discrepancy

    The independent auditor is not satisfied that the available records, including records for slaughter, non–slaughter mortalities and onselling of breeders, adequately account for the sheep/goats that entered the supply chain.

  2. Animals that are sold as breeders after arrival

    It is possible that some animals may be sold as breeders after arrival into the importing country. The animals which are sold as breeders will depart from the supply chain facilities and records maintained to record their departure and alternative location. The independent auditor must consider the records as part of the assessment of the accounting system.

  3. Leakage with unknown fate:

    This will include any animal that is recorded as having been exported but cannot be accounted for at all. There is no acceptable level of leakage for animals that cannot be accounted for (with no explanation) as this is a clear breach of the regulatory framework objectives which include requirements for maintenance of identification throughout the supply chain including replacement of lost or not functioning tags.
    For points iii and iv, while there is no acceptable level of leakage, this information will not be used as a sole basis of decision making. All available information, including past performance and explanations will be considered when deciding whether or not to enact compliance or other measures.

  4. Leakage with known fate:

    Includes any animals that did not die (natural or slaughter) within the approved exporter supply chain (and did not leave the approved supply chain for breeding purposes) where the exporter has information on the fate of the animal. This may include animals escaping from approved facilities (due to natural disaster for example); or sending the animals to feedlot(s) and abattoir(s) outside the approved supply chain. There is no acceptable level of leakage for animals that knowingly leave the ESCAS as this is a clear breach of the regulatory framework objectives which include requirements for exporter control throughout the supply chain to ensure animals remain within the approved supply chain.

Animal Welfare

Depending on the format and type of information received in relation to adverse animal welfare incidents, assessment and advice from the Department Animal Welfare branch and the Chief Veterinary Officer may be required. The assessment will consider whether the process was compliant with the OIE animal welfare standards and whether there are indications of systematic supply chain issues.

Control

The Department may receive substantiated information demonstrating non–compliance within the control aspects of the documented ESCAS from independent audit reports or documentation provided from other sources. Non–compliance in traceability or animal welfare may also imply there is a reduction or loss of control by the exporter and that remedial action may be necessary in addition to rectifying the specific non–compliance.

Classification of Findings

the Department will consider the available information and classify the process outcomes as no confirmed non–compliance, minor non–compliance, major non–compliance or critical non–compliance in accordance with the information in Table 1.

When categorising a non–compliance, the Department will consider the associated information and evidence in the context of the ESCAS capacity to deliver ongoing, positive animal welfare outcomes. Non–compliances representing real or likely systemic failures in an ESCAS are likely to be categorised as major or critical non–compliances.

Table 1 – Classification of Outcome
CategoryDefinition of Finding
No confirmed non–compliance
  • No substantiated information confirming failure to comply with the approved exporter supply chain assurance system or failure to meet the control, traceability or animal welfare outcomes.
Minor
  • A failure to comply with the approved exporter supply chain assurance system which is not likely to result in systemic failure or reduced ability to meet the control, traceability or animal welfare outcomes.
  • Potential to affect control, traceability or animal welfare outcomes.
Major
  • A failure to comply with the approved exporter supply chain assurance system which is likely to result in systemic failure or materially reduced ability to meet the control, traceability or animal welfare outcomes.
  • A number of minor non–compliances which are likely to result in systemic failure can be considered to be major non compliance.
  • Likely to affect control, traceability or animal welfare outcomes.
Critical
  • A failure to comply with the approved exporter supply chain assurance system which has led to the control, traceability or animal welfare outcomes not being met.
  • Certain to affect control, traceability or animal welfare outcomes.

Consultation process

Internal consultation process

The Department will follow a structured consultation process to support decision making in relation to appropriate action to take in response to each potential or actual non–compliances identified in the end of processing reports, independent audit reports and other relevant information received in relation to the performance of an exporter supply chain assurance system. Responsibilities in the consultation process are listed in Table 2.

Table 2 ESCAS Consultation Responsibilities
AreaResponsibility
The Department – Live Animal Export ProgramPrimary responsibility for receiving, recording and assessing the applications to export, supply chain assurance systems, end of processing report and independent audit report and making recommendations to the relevant delegate on the appropriate action to take.
Assistant Secretary, Animal Export Operations BranchAs required, discuss non–compliances with the LAE program and provide guidance to the program on the action to be taken.
Take decisions under the relevant section of the Australian Meat and Live–stock Industry Act 1997 regarding livestock export licenses and other relevant legislation regarding other sanctions.
Secretary or Delegate of the Secretary under the Export Control (Animals) Order 2004Take decisions on the applications to export, supply chain assurance systems and compliance measures.
The Chief Veterinary Officer / The Department Animal Welfare AreaAs required, attend discussions with the LAE program and provide written advice to the program on the classification of animal welfare non–compliances.
External consultation process

The Department will engage the exporter if non–compliances within the approved supply chain are reported. The Department will advise the exporter of the plan for consideration of the findings and provide an opportunity for the exporter to submit additional information. The actions that an exporter may be required to take will depend on the nature and number of findings and could include an investigation of the incident and reporting to The Department.

Compliance Measures

Attachment 1 shows the range of compliance measures that can be applied to licensed livestock exporters.

Examples of minor, major and critical non–compliances are provided in Attachment 2. This list of examples is not exhaustive and evidence of potential or actual non–compliances will be considered on a case by case basis.

The range of actions available to the Department has been included in Table 3. A minor, major or critical non–compliance may have one or more actions for the exporter and the components of the supply chain. For example if there is a major or critical animal welfare finding at an abattoir, the Department may ask the exporter for explanation, refuse the approval of further Notices of Intention (NOI) to export and issue a show cause notice to the exporter.

Compliance measures may be applied until sufficient information is provided, with confirmation by an independent auditor, to demonstrate that the non–compliance has been rectified and that the required control, traceability and animal welfare outcomes can be achieved.

In addition, and depending on the severity and nature of the non–compliance, if there is a major or critical non–compliance, the Department may consider refusing the approval of further exports to supply chains that include the problematic facilities or to problematic supply chains for the specific exporter and other licensed exporters.

As a consequence of the mob based accounting system that applies for sheep and goat exports, compliance measures may apply to multiple exporters supplying a specific supply chain. This is in line with the IGWG report that notes compliance measures will be applied across exporters that share a supply chain given the lack of an individual animal identification system that allows for the tracing of animals back to a specific consignment and exporter.

Table 3 Example Non–Compliances, Possible the Department Actions and Legislative Mechanisms
Non–CompliancePossible Department ActionsLegislative Mechanism
  • Providing false and misleading information to a Department officer
  • Falsely representing compliance with conditions
  • Exporting in contravention of conditions or restriction under the EC regulations (which includes orders)
  • Exporting in contravention of a condition of an export licence under the AMLI Act
  • Failure to provide the Secretary or delegate with information requested under section 11Q ECA or section 51 of the AMLI Act
Criminal Sanctions
  • Criminal Code, Sch s 136.1
  • ss 54 and 55 Australian Meat and Live–stock Industry Act 1997 (AMLI Act)
  • ss 8 and 9, Export Control Act 1982 (EC Act)
  • s 11Q EC Act and s 51 AMLI Act
  • Exporting in contravention of conditions or restriction under the EC regulations (which includes orders)
  • Exporting in contravention of a condition of an export licence under the AMLI Act
  • Failure to provide the Secretary or the delegate with information requested under section 11Q EC Act or section 51 of the AMLI Act
  • Critical non–compliance for traceability, control, animal welfare auditing or reporting
  • Repeated or multiple major non–compliance for traceability, control, animal welfare auditing or reporting
Under the AMLI Act: Notice of Show Cause, Suspend Licence, Cancel Licence, or
Under the ECA Order: vary or revoke ESCAS approval, refuse to approve future NOI/CRMP or ESCAS or refuse to Approve ESCAS which includes a particular supply chain
  • s 23 AMLI Act
  • s24 AMLI Act
  • ss 2.44 & 2.46A Export Control (Animals) Order 2004 (ECA Order)
  • Exporting in contravention of conditions or restriction under the EC regulations
  • Failure to provide the Secretary or the delegate with information requested under section 11Q EC Act or section 51 of the AMLI Act
  • Critical or major non–compliance for traceability, control, animal welfare auditing or reporting
  • Repeated or multiple minor non–compliance for traceability, control, animal welfare auditing or reporting
Under the AMLI Act: Apply Conditions to Licence, or
Under the ECA Order: vary or revoke ESCAS approval, refuse to approve future NOI or ESCAS refuse to Approve ESCAS which includes a particular supply chain
  • s 17 AMLI Act
  • ss 2.44 and 2.46A ECA Order
  • Secretary or delegate are not satisfied that the consignment of live–stock will be the subject of transport, handling, slaughter and related operations which are in accordance with relevant OIE recommendation
  • Any non–compliance for animal welfare traceability, control, auditing or reporting
Refuse to Approve NOI and/or ESCAS, Apply Conditions to NOI and/or ESCAS Approval or refuse to Approve ESCAS which includes a particular supply chain
  • s 2.44 ECA Order
  • Any non–compliance for traceability, control, animal welfare, auditing or reporting
Apply Conditions to NOI and/or ESCAS Approval or refuse to Approve ESCAS which includes a particular supply chain
  • s 2.44 ECA Order
  • Any non–compliance for traceability, control, animal welfare, auditing or reporting
  • Insufficient information provided by exporter in ESCAS application for the Secretary or his delegate to be satisfied that the consignment of live–stock will be the subject of transport, handling, slaughter and related operations which are in accordance with relevant OIE recommendations.
Seek Additional Information
  • s 54 AMLI Act
  • s 11Q EC Act
  • Insufficient documentation provided to the AQIS regional office to demonstrate that the consignment has been prepared in accordance with the relevant Australian legislation, importing country requirements and approved NOI/CRMP and ESCAS or (in relation to export permits) insufficient information to demonstrate that the exporter is in a position to comply with the ESCAS
The Secretary or delegate may refuse, suspend or cancel a Permission to Leave for Loading (PLL) or refuse or revoke an export permit
  • ss 2.54, 2.57, 2.59 (1)(c)(v), 2.60 & 2.61 ECA Order

Attachment 1

Attachment 2 – Examples of non compliances

Examples of minor non–compliance

Control and Traceability – Cattle and Buffalo
  • Minor inaccuracies in documents for trucking to feedlot or abattoir.
  • Movement of animals from vessel/aircraft, feedlot and/or abattoir to any place not included in the approved exporter supply chain assurance system with and evidence provided that outcomes for animal welfare were met.
  • Minor inaccuracies in record of animal identification check on arrival at or induction into feedlot.
  • Minor inaccuracies in record of reconciliation of animals that arrived at feedlot against animals expected to arrive at feedlot.
  • Minor inaccuracies in record of management of animal identification in feedlot.
  • Minor inaccuracies in record of feedlot mortality.
  • Minor breakdown in segregation between groups of animals in feedlot.
  • Minor inaccuracies in record of animal identification check on departure from feedlot.
  • Minor inaccuracies in record of animal identification check on arrival to abattoir.
  • Minor breakdown in segregation between groups of animals in abattoir.
  • Minor inaccuracies in record of management of animal identification in abattoir.
  • Minor inaccuracies in records when animals on sold as breeders.
Control and Traceability – Sheep and Goats
  • Minor discrepancy in the records that account for the sheep and goats that entered the supply chain with the records that account for slaughter, non–slaughter mortalities and onselling of breeders.
Animal Welfare
  • Minor non compliance with animal welfare checklist.
Auditing and Reporting
  • Exporter, feedlot or abattoir documentation requested by independent auditors not provided in the expected timeframe but within 5 days of expected timeframe.
  • End of processing report or performance audit report for the entire supply chain not provided in the expected timeframe but within 10 days of expected timeframe.

Examples of major non–compliance

Control and Traceability – Cattle and Buffalo
  • Major inaccuracies in documents for trucking to feedlot or abattoir.
  • Movement of animals from vessel/aircraft, feedlot and/or abattoir to any place not included in the approved exporter supply chain assurance system, with no evidence that animal welfare outcomes were met.
  • Major inaccuracies in record of animal identification check on arrival at or induction into feedlot.
  • Major inaccuracies in record of reconciliation of animals that arrived at feedlot against animals expected to arrive at feedlot.
  • Major inaccuracies in record of management of animal identification in feedlot.
  • Major inaccuracies in record of feedlot mortality.
  • Major breakdown in segregation between groups of animals in feedlot.
  • Major inaccuracies in record of animal identification check on departure from feedlot.
  • Major inaccuracies in record of animal identification check on arrival to abattoir.
  • Major breakdown in segregation between groups of animals in abattoir.
  • Major inaccuracies in record of management of animal identification in abattoir.
  • Major inaccuracies in records when animals on sold as breeders.
Control and Traceability – Sheep and Goats
  • Major discrepancy in the records that account for the sheep and goats that entered the supply chain with the records that account for slaughter, non–slaughter mortalities and onselling of breeders.
Animal Welfare
  • Major non–compliance with animal welfare checklist, including but not limited to:
    • Non–compliance in animal handling during transport or at the abattoir or feedlot.
    • Facilities with poor infrastructure.
Auditing and Reporting
  • Exporter, feedlot or abattoir documentation requested by independent auditors not provided in the expected timeframe but more than 5 days after expected timeframe.
  • No information on end of processing report or independent audit report on the performance of the supply chain provided more than 10 days after the expected timeframe.

Examples of critical non–compliance

Control and Traceability – All Species
  • Providing false and misleading information.
  • Known movement of animals from vessel/aircraft, feedlot and/or abattoir to any place not included in the approved exporter supply chain assurance system, with evidence of adverse animal welfare outcomes.
  • Exported animals unaccounted for.
  • Cattle or buffalo not individually identified before departure from Australia.
  • Animal identification not checked on arrival at or induction into the feedlot.
  • Reconciliation of cattle and buffalo that arrived at feedlot against animals expected to arrive at feedlot not performed.
  • Segregation between groups of cattle and buffalo in feedlot not performed.
  • Management of lost animal identification in feedlot not performed.
  • Removal of animal identification in feedlot.
  • Cattle or buffalo present in feedlot that are recorded as slaughtered.
  • Feedlot mortality not recorded or reconciled for cattle and buffalo.
  • Feedlot mortality not recorded or accounted for sheep and goats.
  • Cattle and buffalo identification not checked prior to departing feedlot.
  • Cattle and buffalo identification not checked on arrival to abattoir.
  • Segregation between groups of cattle and buffalo in abattoir not performed.
  • Management of lost animal identification in abattoir not performed.
  • Removal of animal identification in abattoir prior to slaughter.
Animal Welfare
  • Critical non–compliance with animal welfare checklist, including but not limited to:
    • slaughter without stunning in Mark 1 box or other equipment not compliant with OIE recommendations.
    • slaughter with more than one cut in multiple non–stunned animals.
Auditing and Reporting
  • Feedlot documentation or access to feedlot requested by auditors not provided.
  • Abattoir documentation or access to abattoir requested by auditors not provided.
  • Auditors not permitted access to facilities when requested.
  • End of processing report or independent audit report on the performance of the supply chain not provided to the Department​ (following request to provide overdue end of processing report).
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