Tech & Science : Wool industry leadership elections on the way amid claims of dirty tricks - - PressFrom - Australia
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Tech & Science Wool industry leadership elections on the way amid claims of dirty tricks

23:55  15 november  2019
23:55  15 november  2019 Source:   abc.net.au

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Accusations of dirty tricks, letters from the Agriculture Minister and questions about animal welfare — this is wool industry politics in the lead-up to an election which will help shape the sector's future.

Traditionally, board elections for agricultural research and development body organisations do not attract much interest. But this vote is anything but normal.

Parts of the wool industry are pitted against each other, as woolgrowers prepare to vote for those who will best serve their interests on the board of Australian Wool Innovation (AWI).

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AWI conducts research, development and marketing for the wool industry and is funded through compulsory grower levies and government contributions.

The vote continues the battle among wool producers for control of the most powerful organisation they own.

Eight candidates are standing for three positions on the board, which will be voted on at the Annual General Meeting on November 22.

As an elected board member, they will be among the few with the power to control millions of dollars of woolgrower funds.

Even the Federal Agriculture Minister Bridget McKenzie has recognised the importance of this election.

"I think this will be a real display of leadership at AWI to bring some confidence that this body will actually work for its levy payers," she said in an .

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Controversy and AWI

The organisation is no stranger to controversy.

In 2017 — its then chairman and now board member — Wal Merriman was caught secretly watching a focus group of leading sheep breeders, without their knowledge, from behind a mirror.

Farmers in the focus group had been told their comments would be anonymous.

The chairman then told an ABC reporter to F*** off when questioned about the so-called, "man in the mirror" scandal.

Mr Merriman later apologised to woolgrowers for the remark: "The language I used was more fitting for a shearing shed ... I'm from the bush and I need a lot more polish to operate in these surroundings."

The incident led to a scathing Senate Estimates hearing, when it was revealed that as chairman, Mr Merriman controlled up to one-fifth of proxy votes at the last board election and could cast them as he saw fit.

"How do you expect me to stop them [farmers] from giving them to me?" Mr Merriman remarked whilst telling senators he had been given 20,000 of the 90,000 shareholder votes for the election.

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It was these incidents and questions of transparency that prompted the Federal Government to pay $900,000 for a review by Ernst and Young into performance and governance at AWI.

Greater transparency recommended

The Ernst and Young (EY) report made 82 recommendations to improve transparency.

The report recognised "an amount of stakeholder distrust that is not in line with good governance behaviours", and its recommendations included the introduction of a 10-year limit of board tenure, some limiting of the chair's power and better communication with growers.

The then federal agriculture minister David Littleproud told the ABC in 2018 that it was a "clear pathway for the modernisation of AWI".

"My expectation is that the board of AWI will embrace it and lead it," he said.

He then warned he would consider an "Armageddon approach", with legislation to enforce the adoption of the recommendations, if AWI failed to implement them all.

Australian Wool Innovation has implemented 58 per cent of the recommendations — 48 out of a total 82.

The 10-year term cap has been a sticking point in governance reform, with AWI initially wanting to take it to a vote of shareholders along with four other changes.

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But this plan was cancelled after AWI revealed it had negotiated outcomes with peak lobby group WoolProducers Australia (WPA) for all the outstanding governance issues, except board tenure.

WPA chief executive Jo Hall said they were frustrated that AWI's board term has not been sorted.

"If the recommendation was put to shareholders as written ... there was no way the 75 per cent of shareholder support would have been obtained, so nothing would have changed," she said.

At the AGM, shareholders will be able to vote on a number of proposed changes including introducing a 10-year board term limit, as recommended in the EY report.

Minister unhappy with AWI's slow progress

The Federal Agriculture Minister Bridget McKenzie was also unhappy with AWI's progress with the recommendations and has sent a "please explain" letter to the wool body.

"I have been disappointed to hear the dissatisfaction expressed to me by levy payers about AWI's implementation progress, and the spirit in which it has gone about delivering the recommendations," the letter said.

The letter came after the Federal Government announced in September that it was reviewing all research and development organisations — a move that has raised concern about mergers.

Senator McKenzie's letter demanded "a greater level of transparency" to levy payers and a detailed update on AWI's progress.

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AWI said it has implemented 76 per cent of the governance changes but WoolProducers Australia's Jo Hall said AWI's self-reporting was "suspect".

Some in the industry want stronger oversight from Government.

Growers and taxpayers pay for AWI: The Government contributes $20.8 million to the company while levies from farmers make up $68 million.

Growers showed their dissatisfaction with AWI this year, taking the unprecedented step of voting to drop the compulsory levy from 2 per cent to 1.5 per cent of their wool income.

It meant AWI lost a quarter of the wool levy revenue at the same time as the global price for wool slumped, affected by the US-China trade war.

Brutal board election

Eight candidates are standing for three board positions.

They are: Paul Cocking, George Falkiner, Noel Henderson, Janelle Hocking Edwards, Philip Holmes, Michelle Humphries and current AWI directors Wal Merriman and David Webster.

Both Mr Merriman and Mr Webster, who have been on the board since 2004 and 2008 respectively, would be ruled ineligible to stand if the proposed 10-year term limit from the Ernst and Young report was in place.

"The culture needs to change and that won't change without three new directors," Mr Cocking said.

"I think its appalling that in the midst of gripping drought, the fact AWI are willing to use company resources, to push back on the EY recommendation of 10-year terms.

"I mean what is the problem, why is anyone on any board for more than 10 years? That's really annoyed me."

With governance and board terms a hot topic for the wool industry ahead of the vote, many growers were outraged when an endorsement for board candidates was released by AWI from a Board Nomination Committee set up to independently assess board candidates.

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The committee endorsed four candidates for the three positions: Mr Merriman, Mr Webster, Ms Humphries and Mr Henderson.

Mr Webster said if he were re-elected it would be his final term and he cannot understand the criticism of his endorsement.

Wal Merriman declined an interview with ABC Rural.

"If they've been there for 10 years or more that doesn't matter to me, the priority is to have the best people on the board," Ms Humphries said.

Concerns with election process

Meanwhile another candidate, George Falkiner believed the company needed to improve communications with woolgrowers and the election process was part of the problem.

"There are only 21,000 or so AWI shareholders and 61,000 levy payers: So that's only one in three that are actually taking part and having a say in the company's future.

"The fact you need 100 signatures from shareholders to be eligible to stand is counterproductive."

"I think it prevents high-calibre candidates in the city applying for the board."

WA Farmers spokesman Steve McGuire agreed.

"It's up to each levy payer to make the effort to register and that's where it's falling down.

"It's a shame because half of the wool growers will not get a chance to vote at this election."

There has also been a number of campaigns from individuals and grower groups asking farmers registered to vote to not give proxies to the chair (who can use them as she sees fit) and vote for themselves.

In the past, there have been similar campaigns, which have failed to significantly lower the proxy vote at previous AWI elections.

After the recent vote to lower the wool levy, growers will get another chance to vote either against the current regime, or endorse it, that it may continue in its current form, albeit with lower funding.

Animal welfare and the board election

The debate about how the industry tackles the issue of mulesing has been fraught for many years, but over the past year the debate has focussed on pain relief for lambs.

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Mulesing involves cutting wrinkles of skin away from a lamb's backside to prevent the build-up of faeces, which can attract blowflies that lay maggots.

Animal activists and fashion houses have long lobbied Australia to phase out the practice, comparing it with New Zealand and South Africa.

Victoria could become the first state to make it mandatory for pain relief after mulesing, under proposed animal welfare laws by its State Government.

Industry groups are split on the move, and so are the AWI board candidates.

Mr Cocking, a woolgrower in southern NSW, wants to see more money for researching alternatives.

"I think it's appalling that people push back against 100 per cent pain relief when mulesing," he said.

Board candidate and sheep breeder Mr Falkiner backs mandatory pain relief, but does not want to see mulesing banned without a viable alternative for growers.

Michelle Humphries is a veterinarian and supporter of former chairman Wal Merriman but differs on some key policy areas, particularly on the use of genetic testing to breed sheep that do not require mulesing (genomics).

"The thing with Wal and me, I'm pushing this genomics thing and he hasn't done that in the past," Ms Humphries said.

"What he [Merriman] recognises is that's my skill set.

"I respect his expertise in marketing and experience with the organisation."

Battle nearly over

The battle for the board will be decided at the Australian Wool Innovation AGM in Sydney on November 22.

Individuals and growers groups have been running campaigns asking growers not to give their proxy votes to the chair, and instead vote for the candidate they prefer.

These styles of campaigns have failed in the past.

Whatever the outcome, this election will decide the short term future of the most powerful organisation in the wool industry.

Will the industry endorse its current leadership to manage it through a period of declining incomes or ask someone new to take on the task?

Westpac urged to consider the future of its leadership team .
Politicians across the aisle are calling on Westpac to consider the future of its leadership team after the bank was accused of 23 million breaches of anti-money laundering and counter terrorism finance laws. CEO Brian Hatzer said he was "disgusted and appalled" by the breaches, but rejected claims the board was indifferent to the risks that triggered them.Mr Hartzer confirmed he did not intend to resign, but Prime Minister Scott Morrison said the bank needed to reflect on its misconduct.

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