Government faces live export trade ban payout

One Pilbara pastoralist, several Northern Territory pastoralists and Elders Ltd are among two groups wanting compensation from the Federal Government over last year's ban on live export to Indonesia.

The Budget papers last week revealed the Federal Government received two compensation claims because of the move by Agriculture Minister Joe Ludwig to suspend the trade on June 6, 2011.

Members of the public and animal welfare groups called for the trade to be stopped, after footage from Animals Australia showed Australian cattle being cruelly treated in Indonesian abattoirs.

Pastoralists across the north were horrified by the vision and left devastated when the ban on live trade was put in place.

It was lifted on July 6 and exporters were required to comply with the Export Supply Chain Assurance Scheme but trade did not resume until the end of August, meaning the ban effectively halted the industry for three months.

Budget papers state 'the Australian Government may become liable for compensation' and a 'potential class action has been received from a law firm on behalf of 21 clients'.

A second claim from law firm McCullough Robertson Lawyers, acting for three clients, has also been received.

A Department of Agriculture, Fisheries and Forestry spokesman said it would be inappropriate to comment on any matters that might be subject to action before the courts.

Minter Ellison partner Andrew Gill, a Melbourne commercial litigation and dispute resolution specialist, is acting for the group of 21 clients.

Mr Gill told Countryman he was not in a position to speak but they were in the early stages of discussions with the Commonwealth.

"Nothing has been served in court and there is no class action … it's simply a negotiation," he said.

While discussions are believed to have started just after the ban was lifted, the cost to industry includes 326 jobs with more than 274,000 cattle stranded and more than half of northern cattle producers affected.

The ripple effect was felt by stock feed suppliers, transporters, live exporters, ship owners, contractors, communities and by Indonesian businesses.

Even the top end of business was affected.

An Elders spokeswoman confirmed the company was in discussion regarding compensation but she was not in a position to disclose the content or status of the discussion.

Last December, Elders group general manager Tony Dage told ABC the ban cost them $7 million in lost business and Australian Agricultural Company quoted at least $5 million to $8 million.

Both companies, along with others, saw the market react with a drop in their share price.

But the impact of the ban is still costing cattle and sheep industries.

Pastoralists and Graziers Association president Rob Gillam said pastoralists were finding they lost more money than first realised and the effects were still flowing through.

He speculated individual claims from pastoralists could be in excess of $1 million, a figure easy to reach if a pastoralist had 5000 cattle at $200 a head.

Cattle import permits to Indonesia for April to June are also full, just as the season begins to enter its peak.

Landmark Broome agent Andrew Stewart said that the odd shipment would go to Indonesia in June but there were a lot of cattle needing a market.

"Exporters are working on other destinations, such as the Philippines, Malaysia and the Middle East, but we are really in the lap of the gods," Mr Stewart said.

Last year Australia exported 410,000 cattle to Indonesia compared with 520,000 in 2010 and 750,000 in 2009.

Producers and exporters also carry the concern some countries will not participate in the Export Supply Chain Assurance Scheme (ESCAS) and will look to source livestock from other markets.

Sheep producers could also feel the heat.

Emanuel Exports, which is not involved in either claim, warned earlier in the year the time lag for ESCAS approval was putting Australia's long-term markets at risk.

Managing director Graham Daws said at the time it expected to ship only a third of sheep numbers compared to 1.5 million head last year.

Wellard Group confirmed it was not involved in the claims, while the Northern Territory Cattlemen's Association would not comment.

From the 2012 Federal Budget papers *

Compensation claims arising from suspension of livestock exports to Indonesia:

·The Australian Government may become liable for compensation following the decision by the Minister for Agriculture, Fisheries and Forestry to suspend the export of livestock to Indonesia for a period of one month in 2011. A potential class action has been received from a law firm on behalf of 21 clients. The Department of Agriculture, Fisheries and Forestry has also received a claim under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA) from a law firm on behalf of three of its clients. The department is working with the Department of Finance and Deregulation, the Australian Government Solicitor and the Attorney General's Department to progress the claims.

_Source: Statement 8: Statement of Risks, Contingent Liabilities - unquantifiable _