Review of the Tasmanian Poppy Industry Regulation

July 2013

Report

Contents

TERMS AND ABBREVIATIONS

EXECUTIVE SUMMARY

RECOMMENDATIONS

BACKGROUND & CONTEXT

The Terms of Reference

Observations on the Terms of Reference

Issues Arising in the Review falling outside the Terms of Reference

Consultation with Stakeholders and Submissions received

A BRIEF OVERVIEW OF THE TASMANIAN REGULATORY STRUCTURE

The Details of the Regulatory system

The Regulators

The Minister for Health and Human Services

The Minister’s Delegate

The Poppy Advisory and Control Board

Advice on the Regulatory Structure and its Administration

Administration

Compliance with the Regulatory Regime

WHY REGULATE THE TASMANIAN POPPY INDUSTRY?

General

Regulation of the use of Opium Poppies

Specific Reasons for Tasmania to Regulate

International Obligations – The Single Convention on Narcotic Drugs 1961

National Obligations and the Narcotic Drugs Act 1967

Access to the US market – 80/20 Rule

The Safety of the Tasmanian Community

Weed Control

The Reputation of the Tasmanian Industry

CURRENT REGULATION

Regulation of Growers

Regulation of Processors

Regulation for Security and Community Safety

Regulation for Weed Control

CHANGES IN THE INDUSTRY AFFECTING THE REGULATORY STRUCTURE AND REGULATION

Constant overarching regulatory requirements

A competitive Tasmanian environment

REVIEW ISSUES

The Need for a Regulatory System

The Need to Licence Processors and Growers

Licensing Processors

Licensing of Growers

Growers Licence Applications

Community Safety

Warning Signs on Fences

Weed Control

An Independent Regulator – Roles and Responsibilities

The Role of the Board

Involvement of the Board in Decision Making

The Board’s General Advisory Functions

Regulatory and Advisory Role Issues

The need for a Board

Liaison with the Commonwealth to fulfil International Obligations

Performance of the Board

The Keach Matter

Accessibility and responsiveness of the Board

Administration and Enforcement

Composition of the Board

Current Composition

Possible Industry Representation

Chairperson of the Board - Independence

Board Membership – Health, Primary Industry and Police

Commonwealth Nominee Membership

Board Membership – Secretary of the Department of Justice or Nominee

INDUSTRY, INDUSTRY DEVELOPMENTS AND THE BOARD

Industry Development

Industry Development Issues and the Board

R & D Programs

Processor Research, Scientific Study or Innovation, Sample Products

Poppy Straw Processing Waste Products

Cultivation of the Poppy Plant Papaver Bracteatum

Industry and Board Engagement

Annual Board/Industry Forum

Board Technical or Advisory Committees

APPENDICES

TERMS OF REFERENCE – REVIEW OF THE TASMANIAN POPPY INDUSTRY REGULATION

WRITTEN SUBMISSIONS

CONSULTATIONS

AN OVERVIEW OF THE REGULATORY REGIME

GROWERS LICENCE - INFORMATION REQUIREMENTS

GROWING ADDITIONAL CROPS OR CROPS ON A DIFFERENT LOCATION - INFORMATION REQUIREMENTS

CROP LOCATION - SECURITY ASSESSMENT CRITERIA

GROWERS LICENCES – SPECIFIC REGULATORY CONTROLS

PROCESSORS LICENCES – SPECIFIC REGULATORY CONTROLS

CROP INTERFERENCE RECORDS

TERMS AND ABBREVIATIONS

growers– Tasmanian farmers who are licensed to grow poppy crops

growers associations – PGT and TFGA

processors – the three companies who are licensed to process and manufacture products from poppy straw - Tasmanian Alkaloids; GSK; TPI

the Act – the Poisons Act 1971 (Tasmania)

the Convention – the Single Convention on Narcotic Drugs 1961

Board - Poppy Advisory and Control Board

Government – the Tasmanian Government

GSK – Glaxo Smith Klime

Health Department - the Department of Health and Human Services (Tasmania)

INCB – International Narcotics Control Board

Inspectors – field officers appointed by the Department of Justice and authorised under the Act to support the activities of the Board

Opium poppy plant – the plant papaver somniferum

Police – officers of Tasmania Police

PGT – Poppy Growers Tasmania Limited

Tasmanian Alkaloids – Tasmanian Alkaloids Pty Ltd

TFGA – Tasmanian Farmers and Graziers Association

T.P.I – TPI Enterprises Ltd

EXECUTIVE SUMMARY

The activities conducted and regulated, the sum total of which combine to constitute the Tasmanian poppy industry, are diverse in nature. While the activities are not dissimilar to the growing, processing and sale of other crops, the poppy sector has a series of regulatory controls that are unique and which apply at various stages of the agricultural, manufacturing and sale cycle.

Regulation for security purposes, for the crop in the ground, the harvested raw material, its processing, the product derived and its transportationand the people able to be involved in the industry, is a paramount consideration. Details of the area of the crop sown and the product processed and produced, is also a Tasmanian regulatory requirement.

Tasmania in effect has used co-operative government regulatory activity to achieve the necessary regulatory control. The activities of three government agencies (the Departments of Health, Primary Industry and Agriculture and Police) are co-ordinated through a (now) statutory body,the Poppy Advisory and Control Board, which has a mix of broadly defined advisory and regulatory powers, and supported by a fourth agency (the Justice Department), which has no specific regulatory role save the staff that it employs, provide resources and administrative support to the Board.

The regulatory controls over industry participants are vested in a Minister (the Minister for Health), who delegates those powers to a senior government official in the Health Department. The Board is responsible to a different Minister, the Attorney General.

Tasmania has unified the cultivation, harvesting and processing parts of the industry by making a crop purchase contract with a processor, a prerequisite to a grower obtaining a licence to cultivate a poppy crop. In this way there is effective integration of the different licence obligations of growers and processors, thus achieving a regulatory requirement to identify areas on which crops are grown and to establish the volume of crop harvested and processed and the resultant product.

The aboveis hardly a textbook regulatory model, but over some 40 years of evolution and operation, it has worked, enabling the Tasmanian industry to enjoy a dominant position in an internationally regulated market.

It light of the above success, one might question why changes need to be considered. However there are a number of factors in play in the current industry that warrant a consideration of changes to the regulation of the industry now and for the future.

The following report recommends some clarification of and changes to the regulatory structures and controls that currently operate in relation to the Tasmanian poppy sector. However it is fair to describe the recommended changes as adjustments to aspects of the current system, rather than a significant structural reform. While this view has been formed as a result of a consideration of all the information presented to the review and other available information, it is fair to say that this approach is consistent with almost all of the views that were provided in the review process.

The most significant change is to establish a clearer separation between the industry development and regulatory functions in the system and the role that the Board performs in these matters. Essentially, the Board should become the actual as opposed to defacto regulator of the system and cease being a general advisory body on all aspects of the industry.

RECOMMENDATIONS

Recommendation 1:

  • That there continues to be a system of registering the names of the growers of poppy crops and of the location of the properties on which poppies are grown.

Recommendation 2:

  • That there be a simplification and streamlining of the current long standing annual licensing process for growers. For example:
  • Growers who have held a licence for more than three consecutive seasons, and who have not been the subject of serious compliance requirements by the Board should be placed on a standing register of growers
  • Any new grower, or a grower who has ceased growing for two or more consecutive seasons, should be required to submit a detailed application to secure registration.
  • To maintain registration a grower must provide to the Board annually the following information:
  • Any changes to the ownership of the property, its management, and the persons who control or manage or who have access to the poppy crop
  • The details of the contract with the processor to grow poppies
  • The indicative area and location of the area to be grown
  • A site suitability self-assessment on proximity to sensitive areas and roads, meeting the fencing requirements and the placement of warning signs as required.
  • To enable a grower to undertake a site suitability assessment the Board should publish site suitability guidelines which should include the following:
  • sensitive areas in which crops are not be located
  • classification of roads and streets where warning signs are to be located on fences
  • the fencing standards required for classified roads and streets
  • the criteria to be applied in making an assessment of where to fix warning signs to fences or gates.
  • The licence obligations of both growers and processors should be changed to place the responsibility for advising the Board, on actual areas sown to crop, on the processors with whom a grower has a contract and to remove that responsibility from the growers.

Recommendation 3:

  • That growers assume the responsibility for affixing and removing the poppy crop warning signs on fences and gates in accordance with criteria established by the Board.

Recommendation 4:

That the Act be amended

  • to remove the Board’s general advisory functions in relation to any matter relating to the alkaloid poppy industry
  • to enable the Board at any time, to advise the Attorney General and the Minister, on the need for any changes to the regulatory structure or powers necessary to regulate the industry or the making of specific regulations
  • to enable theMinister to delegate to the Board the responsibility to determine and issue all poppy industry licences under the Act other than licence applications for new processors to enter the industry or licences for the importation of quantities of poppy straw or other narcotic product for commercial processing.

Recommendation 5:

  • That the Board’s functions should continue to include liaison with the Commonwealth on fulfilling Australia’s international obligations.

Recommendation 6:

  • That the Board review and re-establish effective and responsive administrative practices and procedures
  • That the Board undertakes a review of its current practices and procedures with a view to publishing appropriate guidelines or codes of practice to inform and assist the industry participants and the general public on how the industry is regulated.
  • That the Department of Justice, in consultation with the Board, undertake a review of the Board’s business processes and administrative procedures, in particular the activities of the Board Inspectors, with a review to ensuring that the activities undertaken are as cost effective as possible.
  • That the Board review and make recommendations to the Attorney General on any additional enforcement powers that should be available to the Inspectors to facilitate efficient enforcement of the requirements of licences and any other relevant provisions of the Act.

Recommendation 7:

  • That the Board continue to be comprised of membership with no association with the industry.

Recommendation 8:

  • That the Act be amended to specify that the Chairperson of the Board is to bean independent Chairperson.

Recommendation 9:

  • That the representation from the areas of health, primary industry and police be maintained on Board membership and that the appointees have practical and operational expertise in their discipline area.

Recommendation 10:

That the Act be amended to:

  • remove the requirement for Commonwealth membership of the Board
  • provide for formal observer status on the Board for the nominee of the Secretary of the Commonwealth Department for the grant of licences under the Commonwealth Narcotic Drugs Act , and for that person to be given access to all Board papers, minutes etc.

Recommendation 11:

  • That the Act be amended to provide for the Secretary of the Department of Justice or nominee to be appointed to membership of the Board.

Recommendation 12:

  • That the Act be amended to require the Minister to obtain the advice of the Minister for Primary Industry and the Attorney General, prior to making any decision in relation to the granting of a licence for new processors to enter the industry or licences for the importation of quantities of poppy straw or other narcotic product for commercial processing.
  • That the Act be amended to require the Attorney General to seek the prior advice of the Board on any domestic, Australian or international regulatory issues associated with any processor or import application.

Recommendation 13:

  • That processors should submit an annual research and development plan to the Board which indicates any regulatory approval that may be required into the future.

Recommendation 14:

  • That collaboration between the industry processors and supporting government agencies should take place to ascertain whether the regulatory requirements of the Act can be met to establish beneficial uses, commercial or otherwise, for industry waste products.

Recommendation 15:

  • That the Board seeks to resolve the future status of the commercial development of papaver bracteatum in Tasmania.

Recommendation 16:

  • That the Board convene an annual industry Board forum to review developments in the industry on an international, national and local level that impact on the regulation of the Tasmanian industry
  • That the Board, as appropriate, convene special technical or advisory groups or committees to consider and provide recommendations to the Board relevant to the regulation of the industry.

BACKGROUND & CONTEXT

The Terms of Reference

The Tasmanian Attorney General is the Minister responsible for the Poisons Act 1971 (the Act) in so far as it relates to the Poppy Advisory and Control Board (the Board). In that capacity the Attorney General commissioned a review of the regulation and oversight of the poppy industry in Tasmania.

Advice was sought on

  • options for a contemporary regulatory framework that supports and protects the Tasmanian Poppy Industry, provides appropriate safeguards for the community, and meets national and international obligations for the safe and secure growing of poppies.

Further, advice was sought on

  • the role and functions required into the future for regulation and oversight of the poppy industry in Tasmania, taking account of the views of the relevant stakeholders.

This includes –

  • the need for independent oversight and regulation
  • the international regulatory framework
  • State and Federal legal requirements
  • security issues
  • supporting and growing the Tasmanian industry
  • keeping the regulatory and cost burden on industry to a minimum and avoiding unnecessary duplication
  • current industry and farming practices

Recommendations were sought as to:

  1. The optimal structure for the regulation of the industry
  2. A suitable mechanism for future industry engagement with the regulatory body, while maintaining strict independence of the regulator’s functions and decisions.

The full terms of reference for the review are at Appendix 1, where the list of the relevant stakeholders is also set out.

Observations on the Terms of Reference

There are several observations about the Terms of Reference.

First, while ‘regulation’ generally means a rule or order for conduct prescribed by authority, ‘oversight’ has a wider meaning, being supervision or watchful care. Thus the Terms of Reference for the review are interpreted to include not simply the strict legal regulatory structure for the Poppy Industry, but also to embrace a wider supervisory approach.

Second, the Terms of Reference include references to supporting, protecting and growing the Tasmanian Poppy Industry. This is understood in terms of a regulatory and supervisory framework to be a framework that ensures the ongoing commercial and agricultural viability of the industry and its access to markets.

Third, the clear indication from the Terms of Reference is that there is a requirement that the regulator and the regulatory structure be independent from the industry. The Terms of Reference lead to this conclusion by phrases such as, “the need for independent oversight and regulation” and “maintaining strict independence of the regulators functions and decisions.”The review has been conducted in the context of these observations.

Issues Arising in the Review falling outside the Terms of Reference

There were two issues at the forefront of the minds of many participants in the sector during the review process. These views emerged in both written submissions and in consultations, and tended to dominate consideration of other regulatory aspects of the review. While both issues are effectively outside the scope of the review in terms of recommendations, their relevance to the review is outlined below.

Industry payment for the activities of the Board

The first issue was the decision of the Tasmanian Government to require the industry to pay a levy to meet the cost of the operation and activities of the Board. There was uncertainty as to the actual cost of the operations of the Board, which it was assumed would be the cost sought to be recovered from the levy. But there was also uncertainty as to whether the payment requirement extended to the cost of the activities of Tasmania Police in relation to their role in regulation of the industry.

The views expressed on this issue essentially centred on what was perceived to be a failure on the part of Government to continue to invest in a regulatory system necessary and appropriate for the industry. It was considered that the industry was not only vital to the prosperity of the Tasmanian rural sector, but important to the economic interests of the State, as the benefits from the industry were shared by the wider Tasmanian community (contractors, agribusinesses and suppliers etc.), not just the growers and processors.

However, for some, the likely implementation of the levydecision did result in thought being given to the activities conducted by the Board and its staff. If the industry was going to be required to pay for the Board and its activities, the industry did not wish to pay for unnecessary activities that were part of any regulatory structure.