Introduction

1.1 Approximately 70 per cent of Australia’s agricultural production value is exported with an average value of $51.8 billion per year.³ In 2020–21, Australian agriculture accounted for 12 per cent of exported goods and services.

1.2 Key Australian export markets are provided in Table 1.1.

Table 1.1: Value of agricultural exports in top five markets by country in 2021

Source: ANAO analysis of departmental documentation.

1.3 Australia exports a variety of agricultural products. The value of exported products changes each year according to production and market fluctuations. In 2021, this figure was $62.8 billion. Figure 1.1 shows the value of the top five Australian agricultural export commodities between 2016 and 2021.

Figure 1.1: Top five Australian agricultural export commodities 2016–2021

Source: ANAO analysis of departmental documentation.

1.4 In October 2020, the Australian Government announced the Ag2030 plan to grow the agriculture sector to $100 billion in output by 2030.⁴ Expanding trade and exports is the first of seven themes for action under the Ag2030 plan and increased access to international markets is identified as ‘one of the greatest opportunities for industry growth’.

1.5 In its 2020–21 Budget and as part of Ag2030, the Australian Government announced the $328.4 million Busting Congestion for Agricultural Exporters package. The funding is to be delivered over four years to encourage growth in the Australian agricultural export sector and support economic recovery in response to the COVID-19 pandemic, bushfires and drought. The package includes proposals to modernise the sector by transitioning the Department of Agriculture, Fisheries and Forestry’s (the department) export system online⁵, introducing flexible assurance methods, investing in technology to improve regulatory activities, and reforming inspection and quality assurance processes.

Legislative reforms

1.6 The Export Control Act 1982 was the foundation of Australia’s previous export control legislative framework. This legislative framework was amended over time and by 2019 it consisted of 17 Acts and 45 legislative instruments. The legislative instruments were due to sunset on 1 April 2021.⁶

1.7 The Australian Government decided to review these legislative instruments as part of a broader review of the agricultural exports legislative framework. In July 2015, the department released a discussion paper outlining the proposed review of the export regulation and commenced consultation with stakeholders, including industry bodies, exporters and state and territory governments.

1.8 The review found that agricultural exports regulation should:

• reduce unnecessary regulation;
• increase flexibility to respond to issues such as new technologies and changing certifications;
• provide more opportunities for government–industry cooperation;
• reduce regulation complexity and duplication;
• provide stronger regulation for compliance and enforcement; and
• be consistently applied and interpreted by the department.⁷

1.9 The Export Control Bill 2017 was introduced to Parliament on 7 December 2017 but lapsed on 1 July 2019 with the prorogation of Parliament for the 2019 General Election. The Bill was subsequently reintroduced in December 2019. The Bill was passed by both Houses on 27 February 2020 after scrutiny by the Senate: it was referred to the Rural and Regional Affairs and Transport Legislation Committee; and considered by the Senate Standing Committee for the Scrutiny of Bills. Royal Assent was given on 6 March 2020. For more information on the consultation on the revision of the legislation see paragraphs 3.27 to 3.31.

1.10 The new legislation commenced on 28 March 2021.⁸

Revised export control framework

1.11 The revised export control legislative framework (the framework) provides the primary means for the department to regulate exported agricultural goods. Table 1.2 compares the number of legislative instruments between the old and revised frameworks.

Table 1.2: Number of Acts, rules regulations and orders under the export control legislative frameworks

Note a: A list of rules under the revised framework as at May 2022 is provided in Appendix 3.

Source: Department documentation and the Federal Register of Legislation.

1.12 The two Acts forming the revised legislative framework are listed below.

• Export Control Act 2020 (the Act). This sets out the overarching legal framework for regulation of exported goods and enables the Secretary of the department to make rules. It allows for the regulation of the whole supply chain and applies to the export operations of foreign persons and bodies in Australia.
• Export Control (Consequential Amendments and Transitional Provisions) Act 2020. This provides transitional provisions and makes consequential amendments to support the Act and the Export Control Rules.

1.13 The Export Control Rules (the rules) are legislative instruments made by the Secretary of the department that set out the operational rules of the Act. As at May 2022, there were 17 rules (see Appendix 3), many of which apply to specific commodities such as fish and fish products, eggs and egg products, and wood and wood chips.

Rationale for undertaking the audit

1.14 The Act and subordinate legislation provide the primary means for the Australian Government to regulate goods exported from Australian territory. The legislative framework is intended to support access to international trading markets for Australian goods, protect Australia’s global trading reputation, allow greater flexibility to respond to changes in technology and requirements, and improve the efficiency of export procedures by reducing complexity and duplication.⁹

1.15 This performance audit was conducted to provide independent assurance to Parliament on the department’s progress in facilitating the framework’s intended benefits. The audit focuses on the department’s arrangements to implement the revised export control legislative framework, including its management of the transition from the previous legislative framework and the development of performance monitoring and reporting arrangements.

Audit approach

Audit objective, criteria and scope

1.16 The audit objective was to assess the effectiveness of the implementation of the revised export control legislative framework by the department.

1.17 To form a conclusion against the objective, the following high-level criteria were adopted.

• Did the department establish an appropriate governance framework?
• Has the department established effective arrangements to support the implementation of the legislative framework?
• Has the department developed appropriate arrangements to manage its performance as a regulator of agricultural exports?

1.18 The audit focused on the department’s establishment of a governance framework, the implementation of the legislative framework and the development of performance monitoring and reporting arrangements. The audit did not examine the department’s regulation of specific commodities, cost recovery activities, and the implementation of the Ag2030 plan.

Audit methodology

1.19 To address the audit objective and criteria, the ANAO:

• examined departmental documents;
• met with relevant departmental staff;
• invited input from external stakeholders; and
• examined IT systems supporting the legislative changes.

1.20 The audit team did not engage with Australia’s international trading partners.

1.21 The ANAO received one submission from the public via the citizen contribution facility on the ANAO website.

1.22 The audit was conducted in accordance with ANAO Auditing Standards at a cost to the ANAO of approximately $515,544.

1.23 The team members for this audit were Hoa Nguyen, Jennifer Myles, Chirag Pathak, Jemimah Hamilton, Jacob Opray, Jennifer Canfield, Chayathri Kulatunge and Corinne Horton.

2.1 This chapter examines whether the department established an appropriate governance framework to implement the revised export control legislative framework. This includes an assessment of the planning and governance processes, risk management arrangements for the implementation project, and the compliance framework to support the change in legislation.

2.2 Effective planning processes are required to ensure there is appropriate governance and oversight around development of strategies and objectives, delivering outcomes, assurance and controls, managing risks, and prioritising resources. Establishing appropriate planning and governance arrangements are necessary to effectively implement the legislative framework.

2.3 Inappropriate project risk management can lead to poor decision-making, reducing the likelihood of achieving the department’s objectives in implementing the revised legislative framework. Previous ANAO audits have identified shortcomings in the department’s risk management processes. Project risk management is critical given the size and complexity of the legislative framework, and the potential impact on the agricultural exports industry.

2.4 A compliance framework is critical in the implementation of the legislation as this establishes plans, policies or procedures for managing compliance.

Have appropriate planning processes been established to implement the legislative framework?

Governance structure

2.5 The department established internal governance arrangements to support the implementation of the legislative framework. There was a hierarchical structure in the establishment of working committees as shown in Figure 2.1, with membership reflecting the level of oversight and responsibility.

Executive Board

2.6 The Executive Board oversees the department’s governance structure and business operations. It has responsibility for building capability and promoting collaboration across divisions, other agencies and stakeholders. Chaired by the Secretary, the Executive Board’s focus includes being future ready, innovation, regulatory performance, and high-level strategies.

Regulatory Practice Committee

2.7 The Regulatory Practice Committee provides organisational-wide oversight of the department’s regulatory practice and capability. The committee reports directly to the Executive Board. The chair of the committee is the First Assistant Secretary of the Biosecurity Strategy and Reform Division. The committee members are all First Assistant Secretaries from different divisions.

Agricultural Trade Reform Board

2.8 The Agricultural Trade Reform Board (ATRB) was established on 26 October 2020 to replace the Trade Exports Project Board (established in May 2016) with a revised terms of reference. The ATRB has oversight of the department’s agricultural trade reform. The chair is the Deputy Secretary of the Agricultural Trade Group, who is also the Senior Responsible Owner (SRO) for the agricultural trade reform projects.

2.9 The ATRB terms of reference identifies the chair as the decision-maker for the design and implementation of the overall agricultural trade reform. The chair is also responsible for decisions regarding the delivery of agricultural trade reform projects. This includes approving changes to scope and investment in export reforms. While the ATRB is responsible for the department’s overall trade reform program, agenda items for seven meetings in January through March 2021 primarily focused on the revised export control legislation.

Assistant Secretary Working Group

2.10 The Assistant Secretary Working Group (ASWG) was established in 2016 to consider policy issues in the development of the revised export control legislative framework. An update to its terms of reference was made in June 2018 to reflect positions and to recognise the need to meet more frequently, from intervals of six weeks to every four to five weeks.

2.11 The ATRB and ASWG met more frequently closer to the commencement date of the legislation on 28 March 2021.

Export Legislation Taskforce

2.12 In May 2016, the Export Legislation Taskforce was established. This was an operational branch that provided support in the planning and coordination of the revised legislation. The Assistant Secretary for this branch was the ASWG chair.

Project planning and monitoring

2.13 Two detailed project plans were developed in 2018 and 2019 to support the implementation of the revised legislative framework (see Table 2.1).

• 2018 — Legislation (Bills, Rules and Instruments): this project developed and drafted the instructions for the revised agricultural export legislation, including Bills, Export Control Rules, regulations and explanatory materials (such as regulatory impact statements and statements of accountability).
• 2019 — Implementation Activities: this project developed policies and processes needed to support the change in legislation. The project scope included developing instructional materials (internal policies and procedures), training for staff, IT system changes, forms and applications, and instruments of delegations and authorisations.

Table 2.1: Key details in project plans to implement the revised export legislation

Note a: The project closure reports did not include whether the stated outcomes were achieved (see paragraph 2.16). These reports identified whether the outputs, the number of which are shown in Table 2.1, were completed.

Note b: The department did not prepare a budget for the projects.

Note c: The Trade Export Projects Board was replaced by the Agricultural Trade Reform Board on 26 October 2020.

Source: ANAO analysis of Department project plans.

2.14 Both projects were managed in Planning Hub, the department’s cloud-based internal system for reporting and managing projects and project risks. The department also used Critical Path to monitor and report individual activities within the project plans.¹⁰ Outputs and milestones in the project plans were logically set out with relevant data fields such as start and end dates, defined deliverables, and responsible personnel. Project risks were also identified within Planning Hub. Each identified risk included a description of the risk; the date the risk was reviewed; risk status (open or closed); the assessed risk; the corresponding risk treatment; and the residual risk post-treatment.

2.15 Supporting the two project plans were two sub-project plans. These sub-project plans included the Stakeholder Engagement Plan (see paragraph 3.30) and the Instructional and Training Sub-Project Plan (see paragraph 3.7).

2.16 Project updates were provided to the ASWG with subsequent reporting to the ATRB. The updates covered completion of implementation activities, risks and issues. Project closures reports were prepared for both the implementation activities and legislation projects and the ‘reason for closure’ was reported as ‘Completed’. All risks within the project closures reports were marked as ‘low’.

2.17 The department engaged PricewaterhouseCoopers (PwC) in September 2020 to provide assurance on its preparation in implementing the revised legislation. Referred to as the ‘Business Readiness Assessment’, the report was finalised on 24 February 2021. The final report included fifty-five recommendations and seven observations directed across 14 divisions. All recommendations were assessed as complete by PwC in its board update dated 24 March 2021.

Did the department establish appropriate project risk management arrangements?

Project risk management planning

2.18 Appropriate arrangements were in place to manage project risks associated with the implementation of the legislative framework. These arrangements were underpinned by the:

• Enterprise Risk Management Framework and Policy (ERMFP) that outlines the department’s organisational approach to risk management¹¹;
• Export Legislation Reform Program Risk Management Plan (export legislation risk plan) that outlines the principles, roles and responsibilities, reporting requirements, and resources to manage the risks that relate to the implementation of the export legislation;
• Program Risk Management Administration (risk administration program) that identifies the project risks and provides guidance on how risks will be managed within the export legislation program of work¹²;
• Risk assessment template, an Excel-based worksheet to assist with risk assessment, particularly for activities not linked to a program or project; and
• Planning Hub, the department’s risk management and project management tool.

2.19 Roles and responsibilities in managing project risks were outlined in the export legislation risk plan for risk owners, which included the Executive Board, project senior responsible officer (SRO), ASWG, project managers, First Assistant Secretaries and Assistant Secretaries, and the Export Legislation Taskforce. The SRO’s responsibilities relating to risks under the ATRB terms of reference — ‘approving actions to mitigate risks and issues that may or will impact the successful delivery and implementation of the reform and transformation agenda’ — were not duplicated in the export legislation risk plan.

Project risk assessment

2.20 Risks relating to the two projects (legislation and implementation activities — see paragraph 2.13) were identified in the risk administration program (see paragraph 2.18). Four risks were identified under the legislation project and eight risks were identified under the implementation activities project — 12 risks in total.

2.21 The risks identified in the risk administration program were assessed and detailed in two project risk plans, one for each project. The project risk plans were linked to the project plans (see paragraph 2.13). Four additional risks were outlined in the project risk plans dated July 2020 that were not identified in the risk administration program. Three of these additional risks related to cost recovery and one related to the COVID-19 pandemic. In total, 16 risks were identified in the project risk plans dated July 2020. By October 2020, the four additional risks were removed from the project risk plans as the department considered the risks to be out of scope or had been closed.

2.22 The two project risk plans were managed via Planning Hub. Planning Hub follows a standardised format with key information fields such as the description of risk, status, source of risk, risk consequence and risk controls.

2.23 Planning Hub includes the following information fields for the SRO to complete:

• actual risk rating (including a separate rating for likelihood and consequence);
• risk treatment (including action items, owners, and start and end dates); and
• residual risk (the risk after treatment).

2.24 Not all fields were completed for the two project risk plans dated July 2020. For three risks in the legislation project risk plan, information was missing in several fields (see Table 2.2). This diminishes the completeness of the project risk plan and detracts from how the risk was assessed.

Table 2.2: Completeness of project risk plans dated July 2020

Key: ◆ Fields completed ▲ Fields partly completed ■ Fields not completed

Source: ANAO’s analysis of the department’s project risk plans.

2.25 The ERMFP defined eight risk categories: regulatory activities; stakeholder; program management; people; financial; infrastructure and systems; governance; and workplace health and safety. Each risk category contains sub-categories (15 in total), and each sub-category has been assigned different tolerance ratings.

2.26 The ERMFP prescribed risk tolerance as ‘the level of risk-taking acceptable to the department to achieve a specific objective or manage a category of risk.’ Three risk tolerance ratings are prescribed in the ERMFP:

• Limited: A cautious approach towards risk. Seek to limit consequences of risks in these areas.
• Balanced: A balanced approach towards risk taking. Risk exposure is given equal consideration to the pursuit of innovation and opportunity.
• Enhanced: Taking risk is considered part of the department’s strategy. Greater risk exposure is accepted in the pursuit of innovation and opportunity.¹³

2.27 The department did not demonstrate how its projects to implement the revised legislation were aligned with the risk categories, sub-categories, or relevant risk tolerance ratings. For most risk sub-categories, the risk tolerance rating straddles across ‘limited’, ‘balanced’ and ‘enhanced’. There is subjectivity in how the risk tolerance ratings can be applied, and the department has noted that the lack of quantitative measures does not provide clear direction. The department has stated that its ERMFP, including risk tolerance, is being reviewed (see paragraph 2.33).

Shared risks

2.28 Under element seven of the Commonwealth Risk Management Policy (CRMP), an entity must implement arrangements to understand and contribute to the management of shared risk. This is reaffirmed in the ERMFP, which states that ‘the department shares risk with industry, the community and other jurisdictions or governments’ and that arrangements to manage shared risks may include memoranda of understanding (MoU). Coinciding with the implementation of the export legislation, the department signed four MoUs with state regulatory authorities on 28 March 2021. Two MoUs were signed in July 2021 and another in December 2021, allowing the department to have at least one MoU in each state.

2.29 The department’s performance measures in its performance indicator guide (see paragraph 4.19) note that to achieve a reduction in regulatory duplication, it needs to collaborate with other regulatory entities such as state and territories, and to co-design and implement regulatory activities with industry.

2.30 The department has not conducted a shared risk assessment. No shared risks were identified in the project plan or project risk plan and no assurances have been provided to the ATRB that shared risks relating to the export legislative framework have been identified, analysed and treated.

Review of the Enterprise Risk Management Framework and Policy

2.33 The foundation of project risk management relating to the implementation of the export control legislation is the department’s ERMFP (see paragraph 2.18). The current version of the ERMFP was published on 10 August 2020 and communicated to staff on 1 September 2020. On 8 November 2021, the department engaged KPMG to review and develop a revised ERMFP and associated guidance materials to ensure it is fit-for-purpose. The department has advised that the delivery of the revised ERMFP is not expected until after the machinery of government changes on 1 July 2022, to ensure it aligns with the new departmental structure (see paragraph 2.51).

Has the department established an appropriate compliance framework to support the legislative change?

2.35 The Export Control Bill 2019 Explanatory Memorandum notes that the Bill ‘will remove a lot of the duplication in the current framework and enable the harmonisation of requirements’. The previous legislative framework consisted of 17 Acts (the primary one being the Export Control Act 1982) and 45 legal instruments comprising rules, regulations and orders (see Table 1.2).

2.36 The revised legislative framework has reduced the number of Acts and rules to two and 17 respectively — the former being the Export Control Act 2020 and the Export Control (Consequential Amendments and Transitional Provisions) Act 2020 (see Appendix 3). The authority to make rules rests with the Secretary under section 432 of the Act.

2.37 The revised framework adopts a standardised structure whereby the chapters of the rules directly align with the Act. The revised legislation establishes ‘prescribed goods’ that are regulated by the Act and rules. As at May 2022, there were eleven prescribed goods:

• milk and milk products;
• rabbit and ratite meat and rabbit and ratite meat products;
• poultry meat and poultry meat products;
• eggs and egg products;
• wild game meat and wild game meat products;
• plants and plant products;
• fish and fish products;
• wood and woodchips;
• meat and meat products;
• organic goods; and
• animals.

2.38 Prescribed goods must comply with the requirements of the Act and rules before they can be exported. The revised legislative framework also sets out requirements for ‘export operations’ which cover supply chain activities such as production and preparation, storage and handling, transportation, trade descriptions and certification. See paragraphs 2.46 to 2.49 on compliance audits of commodity-based export operations.

Department compliance policy

2.39 On 19 January 2022, the department published an enterprise-wide compliance policy.¹⁴ The policy identifies 12 regulatory systems for which the department is responsible, one of which is ‘certifying that livestock and other agricultural goods for export meet Australian export and importing country requirements.’ The compliance policy sets out the principles that the department follows when carrying out compliance activities and outlines its strategies and tools for managing compliance. The compliance policy outlines that the department:

will publish annual and multi-year plans that communicate the compliance priorities for each regulatory system. These plans contain specific strategies and focus areas relevant to the regulatory objectives of the target system.¹⁵

2.40 Under the compliance policy, areas within the department with responsibility for the relevant regulatory system are required to develop and publish specific compliance plans to support the policy. As at June 2022, the regulatory area responsible for livestock and other agricultural exports had not published a compliance plan that communicates its compliance priorities, specific strategies and tools, focus areas and regulatory objectives in accordance with the compliance policy.

2.41 The compliance policy includes a model on proportionate compliance response and notes risks as the determining factor for the four compliance responses: maintain awareness; provide education and advice; apply penalties and revoke permissions; and apply full force of law (see Figure 2.2).

Figure 2.2: The department’s proportionate compliance response model

Commodity-based compliance

2.42 The department’s organisational structure reflects a commodity-based compliance approach with Assistant Secretaries assigned responsibility for implementing regulatory arrangements for one or more commodities (see Figure 2.1).

2.43 The number of policies and procedures relating to a commodity partly reflect its export volume. For example, wheat, beef and veal, sheep meat, canola and greasy (wool) were Australia’s top five export commodities in 2016–2021 (Figure 1.1). Corresponding with these commodities, Table 3.1 shows that 90 per cent of high-risk instructional materials (IMs) that were completed on commencement of the revised legislation were from the plant, live animal and meat export divisions.

2.44 In January 2022, the department established the Export Control Act Control Risk Assurance Framework (assurance framework). The department described the introduction of the framework as providing ‘a proactive approach that test our current control for high-risk business processes’ and ‘confidence that the arrangement objectives are being achieved within an acceptable level of risk’. This framework outlines three steps to test effectiveness:

• understanding the requirements and changes to the rules for each commodity and aligning with the commodity-based approach to compliance;
• assessing the effectiveness of the controls including the instructional material, IT systems, staff understanding, business processes and stakeholder engagement; and
• enforcing controls through reporting of the tested business process.

2.45 The assurance framework does not include a plan on what specific high-risk business processes will be tested and by when.

Commodity-based compliance audits

2.46 Section 266 of the Act allows the department to conduct audits on the operations of exporters to ensure they are complying with the legislative framework.

2.47 The ANAO tested 73 audit reports against the requirements under the Act and relevant commodity rules. The testing targeted the 10 most recent audit reports for each commodity group as at April 2022. Table 2.3 provides the number of audit reports tested for each commodity.

Table 2.3: Number of audits of each commodity tested

Note a: The department advised that only three audits had been completed since commencement of the revised legislation.

Note b: The ANAO did not examine audit reports on wood and woodchip commodities. The Export Control (Wood and Woodchips) Rules 2021 do not contain provisions for the conduct of an audit of processes for dealing with any non-compliance with a requirement. Paragraph 11(2)(d) of the Export Control (Wood and Woodchips) Rules 2021 contains general requirements for records to be ‘accurate, legible and able to be audited.’

Note c: All audit reports included commencement and completion dates. Five audit reports were not signed by the auditor.

Note d: The department advised that there was limited production for rabbit and ratite meat products, therefore it did not conduct any audits for these products.

Source: ANAO analysis of departmental records.

2.48 Each report must meet general requirements contained within the Act and rules for individual commodities, shown at Table 2.4. There are also specific requirements for a select group of commodity types, shown at Table 2.5. Of the 13 requirements tested, six were met. The requirements for timeliness of the report were not met. Two requirements could not be determined due to insufficient information.

Table 2.4: General legislative requirements for the conduct of audits

Key: ◆ Requirement met ▲Requirement partly met ■ Requirement not met

Note a: Some examples of the specified matters include whether export operations comply with the requirements of the Act, whether matters stated in a government certificate or tariff rate quota certificate is correct, and export operations have been carried out in accordance with an approved arrangement.

Note b: Requirements under the Export Control Act 2020.

Note c: Requirements under the legislative commodity rules.

Note d: The legislative rules for plants and plant products does not include this requirement.

Note e: The Secretary delegated the powers and functions relating to receiving audits reports within 14 days to Senior Executive Service (SES) officers. The department advised that summary reports on audits conducted, completion rates, and non-compliance trends was provided to the Export Assistant Secretaries on a quarterly basis, and the Audit and Assurance Assistant Secretary on a monthly basis.

Source: ANAO analysis of departmental documentation.

Table 2.5: Legislative requirements for conduct of audit on specific commodities

Key: ◆ Requirement met ▲Requirement partly met ■ Requirement not met.

Note a: Of the 51 reports identified, 11 had a start and an end time but not the total time spent in hours as required by the rules.

Source: ANAO analysis of departmental documentation.

Reporting non-compliance

2.49 The legislative framework contains requirements relating to reporting of non-compliance found as a result of an audit. The ANAO tested 73 audit reports (see Table 2.3 and Table 2.4) and found that 32 audit reports (43.8 per cent) identified non-compliances. The department was not effective at meeting the requirements for audit reporting when a non-compliance had been identified.

• For the audit reports relating to meat, poultry, wild game and rabbit commodities, the relevant person must be notified ‘immediately after completing the audit’ — for these audits, there were 16 reports that identified a non-compliance. Of these 16 reports, four met this requirement (25 per cent).
• For audits relating to eggs, fish and milk commodities, the relevant person must be notified ‘as soon as practicable’ after the audit report is finalised — for these audits, there were nine reports that identified a non-compliance. Of these nine reports, none met this requirement.
• For audits relating to all commodity groups (except for organic goods, plant, and wood commodities), the audit report must state whether the non-compliance amounts, or contributes to, a finding of ‘critical non-compliance’ — for these audits, there were 25 reports that identified a non-compliance. One of these reports identified whether a non-compliance was critical.

Review of compliance business processes

2.51 The department is revising its compliance and regulatory system over four years as indicated in its 2021–22 corporate plan. The department advised that it expects that the revision and subsequent changes will result in amendments to compliance policies and procedures relating to export controls. These include:

• centralising the compliance and enforcement functions to develop a single portal for compliance management;
• upgrading IT and business processes;
• implementing internal audit’s recommendations relating to the design of the regulatory functions to ensure the department’s approach and capability for meeting regulatory objectives are met;
• a new internal controls framework that provides methodology to support the department in the design and monitoring of control effectiveness in business processes;
• reviewing the ERMFP to provide practical guidance on a risk-based approach to compliance activities (see paragraph 2.33);
• establishing a Future Export Regulatory Model over five years to improve the regulation of export goods; and
• identifying and developing cross-commodity instructional material that applies across multiple export divisions.

2.52 The department is also revising its regulatory and assurance business processes. This is expected to change how export control compliance will be conducted through streamlining of policies and processes, upgrading IT systems and engaging with stakeholders.

2.53 The department’s ERMFP is being revised to ensure it supports the compliance policy (see paragraph 2.33). The department also advised that it is designing a Regulatory Practice Statement that links the compliance and risk aspects highlighting the need to understand the regulatory risk relating to regulatory objectives and legislative authority and recognising and responding to non-compliance. The department further advised that work is still progressing on implementing a model for the agriculture regulatory exports.

2.54 The structural change in business processes and delays in updating IMs, compliance policies and procedures to reflect the revised legislation, creates uncertainty and risk in how compliance is managed for export controls. Appropriate risk management and assurance arrangements to support the business reforms will be critical in ensuring the compliance activities remain effective throughout the reforms.

3.1 This chapter examines whether the department established effective arrangements to support the implementation of the legislative framework. This includes an assessment of the policies and procedures to support the changes in legislation, the department’s engagement with external stakeholders before and after the commencement date, and the planning for IT changes to support the legislative transition.

3.2 The department’s Instructional, Training and Information Products for Export Legislation Implementation Strategy identified that instructional training and related information materials are ‘important in supporting staff to understand, implement, and comply with changes under the new export legislation.’ Policies and processes should be reviewed, developed and amended to ensure that they are fit-for-purpose.

3.3 The Australian Public Service Commission outlines that early engagement with stakeholders is important, as well as having a clear plan and purpose for stakeholder engagement. The Commission also notes that success includes identification of stakeholders, providing updates to stakeholders on consultation findings, and evaluation.

3.4 Project planning for IT changes is critical to ensure the IT systems support the department’s and external stakeholders’ transition to the revised legislation. The department uses IT systems to support export activities, such as record-keeping, generating receipts, certification, compliance activity, and data collection and monitoring. This includes processes around the governance and approval of changes, stakeholder engagement, and controls designed to ensure that changes are properly identified and tested before implementation.

Do policies and processes support the implementation of the legislative framework?

Planning and monitoring for change to instructional material

3.5 The department’s internal policies, guidelines, work instructions, standard operating procedures, templates, and references are captured in instructional materials (IMs). The IMs are contained in the instructional material library (IML), an online database that can be accessed by staff on the department’s internal intranet. The IMs cover the department’s operations and regulations and are not specific to export controls.

3.6 The implementation project plan identified two outcomes: instruction material updated; and IT systems reviewed and updated if required (see Table 2.1). One of the milestones in the implementation project plan was the mapping and prioritisation of IMs to be completed by 29 March 2020 with all IMs published on IML by 29 March 2021.

3.7 At its meeting on 11 March 2020, the Assistant Secretary Working Group (ASWG) was provided with two key documents.

• Instructional training and information products for export legislation implementation strategy. This document outlined the overarching principles and approach to review, develop and amend instructional, training and related information. The document provided guidance on a risk-based approach to IM development.
• Instructional and training sub-project plan. This document outlined the individual tasks and milestones to support divisions to review, develop and amend instructional, training, and related information.

3.8 On 9 September 2020, the department engaged PwC to provide an assessment of the department’s ‘business readiness’ in implementing the revised export control legislation (business readiness report). The draft report to the department dated 23 December 2020 noted ‘There is a large volume of Instructional Material and other key documents that have yet to be updated for the new legislation.’ PwC board update report dated 19 February 2021 — a month before the commencement of the revised legislation — noted ‘There remains a significant volume of IM and other documentation to be completed prior to commencement. There is a risk of errors being made in IM due to tight timeframes for completion.’

3.9 The department also engaged Noetic Group (Noetic) on 21 October 2020 to assess whether the department was on track to review existing IM, amend or develop new IM, and to communicate the changes to relevant staff. Observations identified by Noetic in its report to the ASWG at its meeting on 10 December 2020 included:

• multiple stakeholders did not seem confident that they would achieve the desired outcome citing insufficient resources for writing, editing and publishing and the competing demands of operational roles;
• the volume of IM that needed legal review had not been fully quantified; and
• significant choke points in legal review and clearance, approvals, editing and IML publishing are looming and there is no clear picture of the liability or a processing schedule.

3.10 In its response to recommendations made by Noetic, the ASWG agreed to identify high risk IMs that must be developed or amended for implementation and deferred medium- and low-risk IMs until post commencement, after 28 March 2021. The original plan was to have all IMs published by 29 March 2021 (see paragraph 3.6).

3.11 IM dashboard reports have been provided to the Agricultural Trade Reform Board (ATRB) since its commencement in October 2020 (see paragraph 2.8). The dashboard identified the number of IMs that were required to be amended or created against the total number of IMs. The dashboard also included the IM development stages and noted whether legal review was required. The total number of IMs varied according to when the dashboard was created as IMs were continually created and archived.

3.12 In the IM dashboard for March 2021, the department identified 595 IMs related to export control within the IML. Of these, 204 were categorised as high-risk that required completion on commencement of the revised export control legislation, as shown in Table 3.1. The remaining IMs were to be completed following the commencement date (337) or archived (54). The 204 IMs equate to approximately 38 per cent of all IMs that required updating on or before the commencement date.¹⁶

3.13 At its meeting on 22 March 2021, the ATRB was advised that 207 IMs were completed to support the implementation of the revised export control legislation. This final number reflects completed high-risk IMs, as well as medium and low risk instructional material. In the instructional training and information products (see paragraph 3.7), the conditions for ‘high risk’ included all new IMs or significant change to existing IMs (for example, significant change to terminology, roles, policy, processes, procedures or descriptions of legislation critical to support defensible and lawful decision making).

Table 3.1: Instructional material dashboard report

Source: Extract of IM Status Report March 2021.

3.14 After the commencement of the revised export control legislation on 28 March 2021, divisions were responsible for reviewing and updating the remaining non-high-priority IMs for their respective business unit. The department’s rationale to assign this responsibility to the export business area was that the business areas are best placed to understand their IMs and prioritise their updates according to their risks.

3.15 The IM Policy for export operations, as endorsed by the ATRB at its meeting on 4 February 2021, requires IMs to be reviewed every two years. Other than this requirement, no specific timeframe was set for when non-high-priority IMs relating to the export legislative changes must be reviewed, updated or archived by the export business areas.

3.16 The ANAO assessed an extract of the IML from March 2022.¹⁷ Out of 2303 IMs, 850 related to the department’s export activities and the export legislation. Of the 850, 358 or 42 per cent, had been updated over the two years to March 2022 (see Table 3.2). The other 492 or 58 per cent, had not been reviewed every two years as required.

Table 3.2: Instructional material library

Source: Extract of IML from 9 March 2022 as provided by the department.

3.17 Of the 492 IMs published prior to March 2020, 374 IMs related to export legislation. Of these 374 IMs, 174 or 47 per cent were for work instructions (see Table 3.3).

Table 3.3: Break-down of IMs related to export legislation with publish date prior to March 2020

Source: Extract of IML from 9 March 2022 as provided by the department.

3.18 Non-compliance with the mandatory two-year review increases the risk that the IMs are not up-to-date and fit-for-purpose. The consequence may be that staff are provided with outdated templates, guidelines and work instructions and do not consistently apply the revised export control legislation.

External website content

3.19 Reference materials are also publicly available on the department’s website, enabling external stakeholders to understand their rights and obligations under the revised legislation. The materials include departmental policies (including those relating to compliance and regulatory sanctions), approved forms, applications, authorisations, certificates, and fact sheets.

3.20 At its meeting on 22 March 2021, the ATRB was advised that webpage update was 99 per cent complete and full completion was expected on 29 March 2021.

3.21 In reviewing the department’s website on ‘Exporting from Australia’ in March 2022¹⁸, the ANAO identified content that referenced repealed legislation.¹⁹

3.22 There are provisions within the Export Control (Consequential Amendments and Transitional Provisions) Act 2020 to accommodate the transfer of legal arrangements to the revised export control legislation. For example, section 3 of the Export Control (Consequential Amendments and Transitional Provisions) Act 2020 notes that certain instruments, certificates or another document referencing the old Export Control Law can continue in force under the new Export Control Act 2020.

3.23 The department does not know how many webpages are not reflective of the revised legislative framework. In March 2022, the department developed a project plan to update its website content to ensure it reflects the revised legislation. The project plan identified approximately 30–40 webpages that were outdated. On 6 April 2022, the department advised that ‘20 or so webpages’ were outdated and required updating. The department’s website risk assessment stated that there were ‘25 departmental webpages that referenced repealed legislation either directly or through hosted documents’ and noted that all webpages had a ‘low’ risk rating. The ANAO has identified 46 weblinks not included in the department’s website risk assessment that reference repealed legislation.

3.24 The risk rating in the website project plan rated the risk that external stakeholders may be using superseded forms and templates which may contain wrong information as ‘high’. No risk treatments were identified in the website project plan, yet the residual risk was downgraded to ‘medium’.

Have effective external stakeholder engagement arrangements been implemented?

Engagement pre-commencement

3.27 Consultation on the review of the legislation commenced in July 2015 when the department released a discussion paper to stakeholders as part of its Agricultural Export Regulation Review. This review formed the department’s assessment of the existing export regulation, including whether export regulation met the needs of industry and government, was flexible to respond to situations and issues, and was readable.²⁰

3.28 The consultation included:

• 80 external stakeholder views presented through workshops, one-on-one meetings and teleconferences;
• one-on-one meetings with 26 state and territory government, and Australian Government agencies;
• tours of export facilities with 13 industry stakeholders; and
• written submissions.

3.29 In May 2016, the department published summaries of stakeholders’ feedback and submissions in its Agricultural Export Regulation Review Consultation Report (see Appendix 4 for key milestones).

3.30 The second stage of the reform process commenced in 2016. To support the second stage, the department developed a Stakeholder Engagement Plan (April 2016), a Communication Plan (July 2016) and a Stakeholder Engagement Strategy (November 2016). The Stakeholder Engagement Plan, Strategy, and Communication Plan covered key messages, approach, activities, target audience, and implementation dates.

3.31 The department published information on its website, emailed industry advice notices, placed advertisements, produced articles, prepared presentation slides, held focus groups, and sent letters to counterparts in international agricultural departments. Two ministerial releases were also published. The department published summaries of the feedback on its website, as well as written submissions²¹, that it had received for six of the seven of consultation rounds (see Appendix 4).²²

Engagement following commencement of the revised legislation

3.32 Between February 2021 and May 2021, the department had two stakeholder engagement plans. The first plan articulated ‘how the department will communicate and engage with internal and external stakeholders to ensure the successful implementation of Australia’s new agricultural export legislation.’ The second plan was to seek feedback from stakeholders on how the department engaged with them during the development of the new legislation. The plans included key messages to be communicated to stakeholders, communication objectives, communication channels, target audiences and a survey.

3.33 The department published information on its social media platforms, website and in newspapers. In June and July 2021, the department conducted consultation sessions in Canberra, Hobart, Melbourne, Perth, Adelaide, Sydney, Brisbane and Darwin. There were 81 attendees, including industry participants, peak bodies, state and territory governments and departmental staff.

3.34 A stakeholder survey questionnaire was also conducted as part of the consultation process, for which the department received nine responses.²³ Six of nine respondents reported that the department’s communications were easy to understand and that they had gained a better understanding of legal requirements under the new export legislation.

3.35 The department published a summary of the consultation after 5 May 2022 (see paragraphs 3.29 and 3.31), noting the consultation had closed on 15 July 2021.

3.36 The department commissioned PwC to conduct a post implementation review of the revised legislative framework. The review was delivered in March 2022 and found that the department’s external stakeholder engagement post implementation was not as extensive as its engagement prior to the commencement of the revised legislation. The department accepted the review’s recommendation that it:

continue stakeholder engagement on a half yearly or yearly basis (provided there is cost and resource allocation) in relation to informing industry of the legislative amendments and understanding what the appetite is for further legislative changes.²⁴

Was there appropriate planning for changes to IT systems to support the legislative framework?

Planning for changes to IT systems

3.37 The department advised it has 54 IT systems which span multiple areas of the department including exports, imports, corporate and information management. Of these 54 systems, the department identified 12 systems that related to export controls as shown in Box 1.

Note a: See paragraph 2.37 for a list of prescribed goods regulated by the Export Control Act 2020 and the Export Control Rules 2021.

Note b: This is a requirement under section 148 of the Export Control Act 2020. An establishment that is registered by the department to prepare goods for export is called a registered establishment. For example, freight forwarders, manufacturers, and storage facilities are registered establishments if they prepare goods for export.

3.38 The department advised the Australian Government in 2015 that IT business requirements would be determined during the development of the revised legislative framework.

3.39 In May 2016, the Deputy Secretary approved planning documents for the improvements to the export legislation. This project plan noted that the development of improved legislation may have flow on implications for the relevant IT systems. The plan identified that changes to business requirements would be fully scoped between November 2015 and December 2017.

3.40 In the project plan, the department intended to scope IT business requirements between June 2016 and December 2016, with IT costings to be completed between January and February 2017. The department did not complete scoping by the end of 2016 and did not have a list of required IT changes until March 2021, which led to the implementation of two IT changes after the revised legislation commenced (see paragraph 3.45).

Coordination activities

3.41 A timeline of coordination activities is shown at Figure 3.1 These activities focused on changes to the departmental IT systems.

3.42 Different parts of the department ran coordination activities. The Export Legislation Taskforce (see paragraph 2.12) requested divisions to identify existing IT systems and whether these systems would require adjustments upon commencement of the revised legislation. It was also discussed at ASWG meetings that each division was responsible for providing to the IT area its requests for IT changes required before the commencement of the revised legislation. Reporting to the ASWG noted that the Taskforce, the Agricultural Trade Group (see paragraph 2.8) and the department’s corporate function, identified required IT changes:

• the Taskforce identified three terminology changes;
• the Exports and Veterinary Services Division identified required changes to EXDOC and ER (in addition to three terminology changes);
• the plant export area identified 14 critical IT enhancements and system administration matters; and
• the Finance Division identified that business systems where the department administers fees and charges need to be updated.²⁵

3.43 The IT systems related to exports are also used by external stakeholders such as other government entities and industry stakeholders (see Box 1). The department included consultation on technology systems when it consulted external stakeholders before and after the revised legislation commenced (see paragraphs 3.27 to 3.36). There is no evidence that the department considered the feedback it had received during consultation when identifying required IT changes. Feedback received by the department included improving departmental systems and services to make them flexible, easier to use and responsive to commercial requirements.

Implementation of changes to IT systems

3.44 The department was not able to provide assurance on the number of required IT changes that were implemented. The department’s system for IT change management may not have captured all changes in the implementation of the revised legislation.

3.45 The Export Legislation Taskforce advised the ANAO that there were three changes to IT systems, which were minimal and limited to ‘terminology’ changes. For example, changing Export Control Act 1982 to Export Control Act 2020. For the department’s implementation of IT changes identified by the Export Legislation Taskforce, the ANAO noted that:

• recordkeeping was not in accordance with the department’s requirements for making IT changes. Recordkeeping was poor for one change and did not exist for two of the changes;
• despite project planning commencing in 2016, one change was classified as an ‘emergency change’ and another one was categorised as an ‘urgent change’ by the department. These classifications reduce the level of standard testing and controls expected of ‘normal’ IT changes²⁶; and
• two of the changes were made after the legislative commencement date.

3.46 The department’s change management guide states that ‘all changes will have a requisite set of documentation that describe the change, the business reason for the change, the risk, the solution design, the test plans and test results.’ The ANAO noted that for changes made by the Export and Veterinary Service Division, and the plant export area, records for work related to IT changes were not maintained in a systematic and accessible way. The IT changes required by these areas were not identified in the system as being changes related to the revised export control legislation. This impacted the retrievability of documentation to support that the requested IT changes were implemented.

4.1 This chapter examines whether the department has developed appropriate arrangements to demonstrate whether the intended outcomes have been achieved and if reporting arrangements have been established.

4.2 A benefits realisation framework is important to ensure there are strategies that describe the measures, baselines, targets — qualitatively or quantitatively — of the benefits under the revised legislation. The ANAO assessed whether a benefits realisation framework has been implemented and whether the intended benefits of the legislative change have been realised.

4.3 Ongoing monitoring and reporting of regulatory performance contributes to a better understanding of whether the revised export control legislative framework is performing as intended and achieving its objectives.

Have arrangements been established to monitor and measure the intended benefits of the legislative framework?

Expected benefits of the legislative framework

4.4 In November 2015, the department sought Australian Government approval for ‘improvements to agricultural export legislation.’ It advised the Australian Government that the changes will lead to a more flexible and effective legislative framework and included the following benefits:

• streamlined and consolidated existing legislation;
• maintaining the current baseline for regulating exports, allowing for continuity on a number of commodity specific administrative issues and the setting of standards for export related matters;
• improved management for export certifications;
• clearer powers for verification activities such as audits and inspections;
• a broader range of monitoring, investigation and enforcement powers; and
• the ability to manage consequential and transitional matters arising from the enactment of the improved legislation.

4.5 The department’s submission to the Australian Government noted that the revised legislative framework would lead to a reduction of regulatory burden due to improved business processes. In its submission to the Australian Government, the department stated that as the revised legislative framework was developed, further reductions in regulatory burden ‘will be identified’ and ‘will be quantified’ as part of the final regulation impact statement (RIS).²⁷

4.6 The department released two draft RISs during the stakeholder consultation periods — one for each of the draft Export Control Bills in 2017 and 2019. The contextual information in both draft RISs changed slightly and the benefits of the proposed legislative changes were broadly the same.

4.7 As part of the 2019 consultation on the proposed legislative changes, the department advised stakeholders that ‘we are improving Australia’s agricultural export legislation. This is part of our wider initiative to strengthen and grow Australian agricultural exports and market access.’

4.8 In the 2019 RIS, the department noted complexity, duplication and inflexibility as ‘problems’ with the previous export legislative framework that would be addressed by the revised legislation.

4.9 In both RISs, the department identified two aspects of the new legislation that would reduce regulatory costs: streamlining the ‘fit and proper person’ test; and the appointment of authorised officers.²⁸ The combined reduction in regulatory burden to businesses for these two items, was estimated at $0.38 million per year or $3.88 million over 10 years.

4.10 The 2019 RIS stated that ‘A benefits realisation plan will be developed for the implementation phase. It will describe the benefits and how they will be realised, measured and reported.’

4.11 The department did not have a benefits realisation plan in place before the commencement of the revised legislative framework. In July 2021, the Agricultural Trade Reform Board (ATRB) was provided with the Portfolio Benefits Management Strategy (benefits management strategy) for noting. The purpose of the strategy was to explain how the department will demonstrate value creation for external customers and stakeholders via standard measures. The strategy was for the department’s Agricultural Trade Group and was not specific to the implementation of the revised legislation. The benefits management strategy outlined two measures for benefits realisation: programs delivered on planned business improvements and a $24.1 million in efficiencies for exporter fees by 2023–24.

Benefits management after commencement

4.12 Arrangements to monitor and report benefits are underpinned by the following documents, which were developed after commencement of the revised export legislative framework:

• Benefits Realisation Plan, Export Legislation Reform Project (benefits realisation plan), September 2021;
• Portfolio Benefits Management Strategy, November 2021; and
• Benefits and Performance Indicators of the Export Control Act 2020 (performance indicator guide), January 2022.

Benefits realisation plan

4.13 The purpose of the benefits realisation plan was to explain how the realisation of benefits from the revised export legislation would be monitored and reported. Reporting of benefits would be monitored by the ATRB. The plan identified two quantitative benefits stemming from the revised export control legislation, which were in the 2019 RIS.

• Reduced cost of compliance burden by streamlining approval of third party authorised officers. The department estimated that the financial benefit from increased efficiency of regulatory processes and reduced operational costs for businesses to be $0.286 million. The plan noted that this benefit was realised after the deed of obligation was removed under the revised legislative framework.
• Reduced cost of regulation for businesses by streamlining the export licence application relating to fit and proper person test. The department estimated that the financial benefit for businesses would be $0.102 million. The plan noted that this benefit was not realised as it did not adequately capture the additional workload required by department staff in preparing the relevant reports under the revised legislative framework.

4.14 The benefits realisation plan also noted that ‘improved customer regulator experience’ was a non-financial benefit of the revised legislative framework, and that this benefit would be measured ‘by repeatable surveys’. The department has yet to conduct these surveys.

Portfolio benefits management strategy

4.15 The portfolio benefits management strategy:

explains how the portfolio will demonstrate value creation for external customers and stakeholders and DAWE [the department] by monitoring and reporting benefits via identified standard measures throughout the life of the Trade Reform Portfolio.

4.16 The strategy focuses on measuring the benefits of the export legislative reform, as well as other trade reforms the department is responsible for, such as the $328.4 million Busting Congestion 2020 budget measure. The strategy provides broad guidance to projects and programs within the trade reform area of the department on the principles, reporting and measuring of benefits.

4.17 The portfolio benefits management strategy also advised that baselines for reporting on benefit improvements will be established where there has been a change in business process. A revised updated benefits management strategy will be considered by ATRB post July 2022.

4.18 The portfolio benefits management strategy also outlines that case studies will be used to illustrate benefits realised. No methodology was identified to select case studies. Consequently, there is the potential for bias in reporting of benefits realisation.

Performance indicator guide

4.19 The performance indicator guide outlines the benefits from the revised export control framework and how they will be measured. The plan identified six anticipated benefits from the revised legislative framework by:

• reducing regulatory duplication;
• supporting the export of a broader range of agricultural exports;
• providing for regulatory changes to be made much more quickly to support changes in importing country requirements, industry practice, technology and regulatory requirements;
• encouraging the uptake of innovation by farmers and exporters to meet regulatory requirements;
• supporting automated decision making in some circumstances; and
• providing a suite of enforcement mechanisms to deter breaches of the legislation.

4.20 The six anticipated benefits would be measured through 18 performance indicators. The performance indicators are all quantitative, covering aspects, such as the number of legislative instruments consolidated, number of guidelines and training materials developed, and the number of automated decisions implemented. None of the performance indicators have targets or specify when the benefit will be achieved.

4.21 The department has benefits reporting for meat exports. The Excel-based worksheet outlines the measures, forecasts and methodology of benefits realisation, with specific reference to the revised export control legislation and the six anticipated benefits identified in the performance indicator guide. Similar reporting did not exist for other commodities.

Are external monitoring and reporting arrangements effectively supporting the legislative framework?

4.24 The Act sets out the overarching legal framework for the regulation of exported goods, including food and agricultural products from Australia.²⁹ The objects of the Act include:

• to ensure that goods that are exported meet the relevant importing country requirements, comply with government or industry standards, or other requirements relating to the goods exported from Australia;
• to ensure goods that are exported are traceable and, if necessary, can be recalled;
• to ensure the integrity of the goods;
• to ensure that trade descriptions of the exported goods are accurate; and
• to give effect to Australia’s rights and obligations under international agreements (in relation to the goods that are exported), to which Australia is a party.³⁰

4.25 The department has reported on the export legislative framework in its corporate plans, annual reports and self-assessments. This reporting mostly addresses the objectives of the Act. Since the commencement of the Act in March 2020, the department has published three corporate plans (2019–20, 2020–21, and 2021–22), and two annual reports (2019–20 and 2020–21) under the Commonwealth performance framework.

Corporate plans and annual reports

4.26 The Commonwealth performance framework requires entities to report on their purposes and performance measures to assess their performance in achieving their purposes.³¹ The Public Governance, Performance and Accountability Rule 2014 (PGPA Rule) requires that the entity’s purposes, key activities and performance measures must be included in the entity’s corporate plan. The PGPA Rule also requires that the entity’s performance measures relate directly to one or more of the entity’s purposes or key activities. To provide accountability to Parliament and the public, results against these performance measures are required to be reported in the entities’ annual performance statements.

2019–20 corporate planning and annual reporting

4.27 The Department of Agriculture’s 2019–20 Corporate Plan³², identified two strategic risks related to export legislation, including that the department does not:

• identify or influence opportunities to open, improve or maintain export markets; and
• develop and implement effective regulatory frameworks and practice.³³

4.28 The Department of Agriculture stated its purposes³⁴, three strategic objectives, and six functions in its 2019–20 Corporate Plan. To underpin its purposes, objectives and functions, it identified six performance measures related to exports, shown in Table 4.1. This plan identified the implementation of the Act as one of the department’s 2019–20 priorities in its regulation and service delivery function. The Act was subject to passage of legislation during 2019–20.

4.29 In the 2019–20 Annual Report, the department reported against these performance measures.³⁵ Four of the six performance measures used by the department in 2019–20 directly related to the objects of the Act (see Table 4.1).

4.30 In 2019–20 Annual Report, the department reported that the Act would come into effect in March 2021 and that the legislation would underpin the department’s reputation as a supplier of safe and reliable food and other products.

Table 4.1: Export-related performance measures for 2019–20

Note a: See subsections 3(a)–3(d) of the Export Control Act 2020.

Note b: This performance measure relates to the department’s key activities of tackling trace challenges and market access.

Note c: This performance measure relates to one of the department’s key activities focused on improving export regulation.

Source: ANAO analysis of departmental documentation.

2020–21 corporate planning and annual reporting

4.31 The department’s 2020–21 Corporate Plan reported that its strategic priorities included improving market access and opportunities for agricultural exports, and transforming the export regulatory system. The 2020–21 Corporate Plan had five objectives to ensure that its work supported its purposes, including one objective focused on agriculture: ‘to assist industry to grow a $100 billion agricultural sector by 2030.’³⁶ Two performance measures related to exports were established under this objective.³⁷ These measures were reported on in the department’s 2020–21 Annual Report, as shown in Table 4.2.³⁸

4.32 One of the two performance measures related directly to the objects of the Act. The 2020–21 Annual Report also outlined the department’s continuing consultation on implementing the Act.

Table 4.2: Export-related performance measures for 2020–21

Note a: See footnote 33.

Note b: This performance measure relates to one of the department’s key activities focused on negotiating free trade.

Source: ANAO analysis of departmental documentation.

2021–22 corporate planning

4.33 The department’s 2021–22 Corporate Plan reported its purposes and objectives³⁹, including one objective focused on agriculture: ‘Assist industry to accelerate growth towards a $100 billion agricultural sector by 2030.’⁴⁰ Under the agriculture objective, the 2021–22 Corporate Plan included five performance measures relating to exports (see Table 4.3). The department’s performance measures in 2021–22 supported monitoring and reporting on the objects of the Act.

Table 4.3: Export-related performance measures for 2021–22

Note a: As at June 2022, the department has not yet published its annual report for 2021–22 on the five performance measures. The department expects to publish its annual report in October 2022.

Note b: The department explained in its 2021–22 Corporate Plan that ‘This measures core outcomes of the government’s package of reforms for Australian agricultural exporters. We seek to make it faster and cheaper for farmers to get their product to market. Reducing regulatory costs and costs of compliance contributes to this goal.’

Source: ANAO analysis of departmental documentation.

4.34 The department’s 2021–22 performance measures partly met the requirements for using sources of information and methodologies that are reliable, verifiable and unbiased. The ANAO’s Performance Statements Audit examined the department’s performance reporting information for the five performance measures⁴¹, relating to exports, that were included in the department’s 2021–22 Corporate Plan. The ANAO’s Performance Statements Audit’s interim findings included that:

• all five performance measures related directly to the department’s key activities or purposes;
• four of the five performance measures had a clear target to measure against and all were measurable over time⁴²;
• the ANAO could not determine whether the five performance measures used sources or information that were reliable and methodologies that were verifiable; and
• none of the five performance measures provided an unbiased basis for the measurement and assessment of the department’s performance.

4.35 In February 2022, the Minister for Agriculture signed a statement of expectation. The department advised that this statement of expectation was not published as it was waiting for the statement of intent to be finalised.

Regulator Performance Framework

4.36 Under the Act, the department has regulatory powers: compliance powers (including monitoring and investigation) and enforcement powers (including applying for civil penalty provisions or injunctions, issuing of infringement notices, and entering into enforceable undertakings).

4.37 The Department of Prime Minister and Cabinet’s Regulator Performance Framework, released in October 2014, requires Australian Government regulators to publish annual self-assessments on their performance against six performance indicators.⁴³

4.38 The department published a self-assessment report for 2020–21 and reported against the six performance measures, as required by the Regulator Performance Framework.⁴⁴ In 2020–21, it used a maturity scale for reporting on its regulatory performance, as shown at Figure 4.1. The department self-assessed its regulatory performance at an overall maturity level of ‘emerging’. The ‘emerging’ maturity level is below the benchmark of ‘mature’. The department reported that it had six regulatory function areas, one of which was exports.⁴⁵ For its regulatory function specific to exports, the department reported an ‘emerging’ maturity level for each of the six performance indicators. The department’s self-assessment noted its implementation of the Export Control Act 2020, development of IT systems, and processes as factors for its emerging maturity level.

Figure 4.1: Maturity scale for reporting regulatory performance in 2020–21

Source: Department Regulator Performance Framework Self-Assessment Report 2020–21.

4.39 In July 2021, the Department of Prime Minister and Cabinet released a Regulator Performance Guide, replacing the 2014 Regulator Performance Framework, and integrating regulator performance reporting as part of reporting obligations under the PGPA Act.⁴⁶ In its 2021–22 Corporate Plan, the department stated that its 2021–22 reporting of regulation performance information will occur under the October 2014 Regulator Performance Framework for the last time, and it will transition to the July 2021 Regulator Performance Guide for its 2022–23 annual report. This audit did not assess the department’s performance against the 2021 Regulator Performance Guide as the measures will not come into effect for the department until 2022–23.

Other reporting

4.40 The department provides other external reporting for industry stakeholders that is not required by the legislative framework. This includes market access advice notices and industry notices.

4.41 Market access advice reports are drafted to advise stakeholders and departmental staff of changes to export trade conditions. Market access advice reports focus on defining changes to import country requirements, notifying stakeholders of a key food or product safety event, or defining changes to the department’s policy and procedures related to export market access. The department prepares the advice to support the broad objectives under the legislative framework.

4.42 Industry notices are drafted to advise stakeholders and departmental staff of general issues or changes to operational requirements. The department advised that these are prepared for stakeholders to ensure compliance with the legislative framework more generally, as opposed to specific requirements of importing countries.

4.43 For dairy, eggs and fish related products, both market access advice and industry advice notices are prepared, using the same template. Meat, organic and plant commodities have their advice prepared under separate templates.

4.44 Both market access advice and industry notices are published on the department’s website. All commodities (excluding meat) published an industry advice notice notifying stakeholders of the changes under the revised legislative framework.

Appendix 1 Department of Agriculture, Fisheries and Forestry response

Appendix 2 Improvements observed by the ANAO

1. The existence of independent external audit, and the accompanying potential for scrutiny improves performance. Improvements in administrative and management practices usually occur: in anticipation of ANAO audit activity; during an audit engagement; as interim findings are made; and/or after the audit has been completed and formal findings are communicated.

2. The Joint Committee of Public Accounts and Audit (JCPAA) has encouraged the ANAO to consider ways in which the ANAO could capture and describe some of these impacts. The ANAO’s 2021–22 Corporate Plan states that the ANAO’s annual performance statements will provide a narrative that will consider, amongst other matters, analysis of key improvements made by entities during a performance audit process based on information included in tabled performance audit reports.

3. Performance audits involve close engagement between the ANAO and the audited entity as well as other stakeholders involved in the program or activity being audited. Throughout the audit engagement, the ANAO outlines to the entity the preliminary audit findings, conclusions and potential audit recommendations. This ensures that final recommendations are appropriately targeted and encourages entities to take early remedial action on any identified matters during the course of an audit. Remedial actions entities may take during the audit include:

• strengthening governance arrangements;
• introducing or revising policies, strategies, guidelines or administrative processes; and
• initiating reviews or investigations.

4. In this context, the below actions were observed by the ANAO during the course of the audit. It is not clear whether these actions and/or the timing of these actions were planned in response to proposed or actual audit activity. The ANAO has not sought to obtain assurance over the source of these actions or whether they have been appropriately implemented.

Appendix 3 Rules in the revised export control legislative framework, May 2022

Source: Federal Register of Legislation, Export Control Act series, available from https://www.legislation.gov.au/Series/C2020A00012/Enables [accessed 4th May 2022].

Appendix 4 Timeline of stakeholder consultation