AWI head tackles Senate criticism

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Bob GarnantThe West Australian
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AWI chairman Wal Merriman has hit back at Senate criticism of some of the wool marketing, innovation and research body’s activities.
Camera IconAWI chairman Wal Merriman has hit back at Senate criticism of some of the wool marketing, innovation and research body’s activities. Credit: Bob Garnant

Australian Wool Innovation board chairman Wal Merriman has written a letter to woolgrowers in relation to issues raised by a recent Senate Estimates Committee hearing, which questioned AWI’s main office location in Sydney and its ex-gratia payments to former employees.

Mr Merriman defended AWI’s Sydney premises despite the Federal Government’s decentralisation agenda.

“In January 2014 the AWI board considered a relocation as our previous lease was expiring,” he said. “It was decided to keep a Sydney office location and in September 2015, AWI moved to its current site and in doing so saved 30 per cent in rental costs.

“This location is well placed to work alongside major retailers and brands selling woolgrowers’ wool.”

Mr Merriman said many of AWI’s on-farm research staff, extension networks, wild dog staff, Lifetime Ewe Management staff and shearer trainers lived in regional Australia.

“However, in response to the call to relocate, AWI will undertake a cost-benefit analysis to ensure the view of the board remains correct,” he said.

The letter also covered the AWI staff redundancies and ex-gratia payments that were criticised at the hearing as being excessive.

“In February 2016, AWI made the difficult decision to make seven senior staff roles redundant and pay the entitlements owed to these people,” Mr Merriman said.

“In the case of two employees, an ex-gratia payment was made to mitigate potential legal action.

“Anyone who knows me knows that I don't give money away unnecessarily but sometimes a cost must be incurred to make a saving. Given these positions have not been replaced, the saving thus far has been $700,000 and will be $2.3 million every year after that ($10 million over the next five years).”

Mr Merriman said the “significant saving” allows AWI to invest in new areas such as finding a viable shearing alternative and other strategic targets.

He said at a recent briefing with the AWI Woolgrower Industry Consultative Committee, AWI sought its endorsement of its actions as part of these redundancies, which was provided.

“Since the Senate Estimates hearing, some wool lobby groups have called for greater oversight of the AWI board,” he said.

“Such a move would undermine the fiduciary duty of the AWI board and hinder the decision-making of those people directly elected by woolgrowers.

“Should we be forced down this route, individuals who have not been elected by shareholders would assume power without being held to the same level of accountability as the AWI board directors. We believe this would be a detrimental step, and make it difficult to attract directors with the skill sets we need to comply with the statutory funding agreement that AWI has with the Federal Government.”

Mr Merriman said there were six woolgrower industry bodies that AWI chose to treat equally and keep informed by way of the AWI Woolgrower ICC.

“In 2017, we will expand this group to include other innovative woolgrower groups, like the A-SHEEP Group from the Esperance area,” he said. “I am very proud of what we have been able to achieve, our accountability and our transparency.

“Importantly, the direct elections at AWI provide the democratic right to nominate and vote for a representative.”

Woolgrowers also set the levy rate directly every three years through a Wool Poll vote.

These two democratic votes hold both AWI and the board directly accountable to woolgrowers, Mr Merriman said.

“The wool industry’s future has rarely looked brighter and we are confident that our strategic direction is making a real difference,” he said.

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