Biosecurity and Trade Flexibility - how to link two opposites

A speech to the Customs Brokers and Freight Forwarders Federation of New Zealand Conference 3 May 2007

Murray Sherwin, Director General Ministry of Agriculture and Forestry

Hello everybody and thank you for inviting me to speak today. MAF had the pleasure of hearing from your President, Willie van Heusden at our last annual Biosecurity Summit held in November 2006. I am delighted to be able to return the favour here today.

The title assigned to me sets up the notion of a conflict between biosecurity and trade flexibility. Let me puncture that at the outset. I don’t see any automatic or inevitable conflict. New Zealand is a trading nation. We survive and even prosper on the back of exports of our primary products into the rich markets of the world. We need to export. Equally, we need to import. It is through the competition, economies of scale, and specialisation of effort made possible by international trade – both imports and exports - that we enhance our standards of living over time.

Biosecurity is essentially about understanding and managing biological risks crossing in and out of New Zealand. Imports into New Zealand could bring in unwanted pests and diseases and our exports could present some biosecurity risks for our trading partners. We need to be sure that the standards we are applying to products coming into New Zealand are consistent with the standards that we are prepared to meet for our products entering other countries.

So are biosecurity and trade flexibility incompatible concepts? Not in my book.

International trade is essential to our wellbeing. And nothing will interfere quicker with the flow of imports into New Zealand than persistent biosecurity breaches. We know from analysis done by the Treasury and Reserve Bank around 5 years ago that a small incursion of foot and mouth disease, speedily dealt with by MAF, of course, could knock around 8% off GDP, with persistent negative impacts extending for some years.

We know that the Painted Apple Moth eradication programme in West Auckland cost taxpayers close to $70 million, but subjected 170,000 people to the stress of repeated aerial spraying. However safe the spray product, the experience is not one that communities would wish to repeat without very good reason.

We are currently actively involved in over 100 incursion responses with some being for particularly unpleasant pests, like the Red Imported Fire Ant. We have successfully eradicated 2 incursions into New Zealand of red imported fire ant in recent years, and are currently working on a third incursion just north of Napier. We have also stopped numerous populations at the border. This is a nasty little stinger and if it were to establish here it could fundamentally alter our outdoors lifestyle. The Queensland Government has spent in excess of $175 million (Australian) on RIFA eradication programmes to date without getting rid of it. None of us would wish to see it establish here.

Didymo in our South Island rivers is a devastatingly ugly and unwelcome arrival, with no known control methods at this stage. New Zealand is the only country thus far to have attempted to better understand and manage this new pest and is now the world leader. A rather dubious honour! So far we have spent over $10 million on the Didymo programme which includes social marketing and scientific research. Didymo is only one of a number of freshwater pests and has made New Zealand realise how important it is for everyone to play their part and Check, Clean, Dry equipment between every waterway.

The list goes on as long as you could possibly wish to hear my voice.

The point is that some pests and diseases are very damaging and costly. The public and our politicians are increasingly concerned with ensuring that we don’t have to endure these new arrivals.

For that reason, I argue that very few things will interfere with trade flows faster, and complicate your lives more, than an ineffective biosecurity system.

Likewise, I contend that good biosecurity and trade flexibility are not inevitably in tension and conflict as your session title implies. Rather, they are thoroughly compatible, essential partners even, in a thriving New Zealand economy.

I would expect that message to resonate pretty well with CBAFF members. From our surveys and discussions of your members, we know that you see yourselves as having a vested interest in protecting our environment, our economy and our people. Through the provision of a thoroughly effective and efficient biosecurity system, we benefit not only as residents of New Zealand but also as businesses.

In 2004 we commissioned a report on the Costs of Compliance for Achieving Biosecurity Clearance. It highlighted that compliance costs are lowest when obligations are clear and relatively stable over time, but increase if they are inconsistently applied, are inflexible, do not recognise international equivalency, and where resources limit processing of goods in a timely manner.

We understand that while minimising costs are important, the two most important things the your industry wants from MAF, are;

  1. Timeliness - that is quicker processing of consignment documentation and greater certainty around clearance and inspection timeframes; and
  2. To be more actively involved in the Biosecurity system, able to engage in the decision making process and contribute to the design of successful policies and standards.

We share this sentiment, and our current three to five year goals include:

  1. Everyone takes responsibility for biosecurity risks and interests which involves the New Zealand public, industry and overseas visitors actively contributing to the integrity of the biosecurity system by managing their own biosecurity risks such as importers and exporters working to minimise the biosecurity risks associated with trade.
  2. We make timely and informed decisions. We intend decisions to be based on accurate and timely information, integrating science and the full range of values at stake (social, cultural, environmental and economic across the spectrum of land, freshwater and marine environments). We want real integration of effort, monitoring of performance and control of critical processes, and for stakeholders to be assured that MAF takes account of their interests in the decision making process. This doesn’t mean that we can always meet your wishes. But we are committed to genuine engagement and exploration of options and alternatives.
  3. We have effective interventions at the border. This means improving the best pre-border and border risk interventions in the world by introducing a suite of new intervention methods that meet the challenges of increasing volumes of passengers and products.
  4. We work collaboratively across organisations for better biosecurity outcomes including learning from other peoples’ efforts to improve biosecurity and apply these experiences to our own organisational performance.

But, for these to be achieved we have a number of challenges to face first.

MAF has a number of IT systems that are, frankly, archaic. When I started at MAF I made it a priority to ensure that the core applications we depend on, and our IT infrastructure, were brought into the 21st century. There is no sense in developing new systems at the border if our core architecture is not robust.

Our core system architecture has now been extensively upgraded. We now have a platform on which we can run decent business applications. We well understand that MAFs operational IT applications need significant investment in order to keep up with the realities of global trade. We also understand that the industries we work with have extensive investment in their own business systems, and don’t much want to have to reinvent wheels in order to do business with Government parties. We see ourselves needing to do a number of short term fixes to make MAF’s Biosecurity/Quarantine teams easier for you and others to work with. I will speak further about what is in that pipeline shortly.

Longer term, and working with the other Government border agencies such as Customs, Immigration, Food Safety and Aviation Security, we need to create a whole of Government IT architecture that provides for efficient interaction with our clients in the private sector. We intend to contribute to a faster, cheaper and more effective border system, and intend to link these systems with industry IT systems as well.

This is cost recovered activity for us, so what we do is ultimately funded by you and your clients. You need to be engaged in these systems development processes, and we need to understand the balance as you see it, between, for instance, faster or slower clearance of goods, versus additional investment in IT and other systems versus processes that add or reduce labour costs. There will be tradeoffs to be made in these decisions. We need to ensure that you are able to have your say.

Over the last 12 months MAF has successfully trialled the use of PDAs to replace manual worksheets on the Auckland wharf for the clearance of used cars. This has led to the permanent implementation of mobile PDAs by Quarantine Officers on the Auckland, Christchurch and Wellington wharves. The PDA’s enable QO’s to access and enter clearance information straight into the database while out in the field, decreasing the turn around time for car clearances significantly. This technology is being rolled out in Tauranga, Napier and Nelson this month and the IT platform established will be adapted to other cargoes and similar applications within MAF and other Government agencies.

Another recent development in the car clearance area includes the development of an interactive stakeholder website. This has been trialled and will be implemented in July this year. Importers will be able to enter the VIN number into the website and find out where in the clearance process a car is.

This is being trialled for two reasons;

  1. To allow vehicle importers and car carriers to better plan transport arrangements to get used vehicles from the wharf; and,
  2. To test MAFs ability to offer safe, albeit limited, web-based access into our systems.

We expect to see more of these web-based systems in the future and wish to be confident about security aspects.

Other IT improvements include the development of an email releases system which is now also linked to the Ports of Auckland container tracking system to ensure that container holds are removed in a timely fashion. There are some limitations on the use of this system. We intend to get it running smoothly and then, working with industry groups, we will roll this system out across New Zealand.

The Electronic Sea Cargo Risk and Information Profiles function - or ESCRIP - is the first of what I expect will be a number of collaborative initiatives between MAF and Customs. ESCRIP allows MAF to use the data in the Customs’ CUSMOD system for Biosecurity clearances. The CUSMOD system automatically passes information into MAF systems on sea cargo of certain risk profiles. This has dramatically reduced the amount time spent on manual data entry for our inspectors and has improved our ability to track risk cargo.

The benefits of ESCRIP have led the Government agencies at the border to look for other areas of collaboration. The National Targeting Centre was opened last year. Through it, MAF is working with Customs to assess the feasibility of using Customs IT platforms to perform aircargo and FAK/LCL cargo risk profiling. This work will enhance our ability to place basic profiles and intelligence alerts through common systems. These programmes directly link intelligence with operational delivery, collating three key business groups comprising Intelligence, Trade and Marine Evaluators and the Airport Evaluators. This work will help to develop the ‘single window’ called for by Industry, where information on imports is provided once and clearance agencies can access the information each needs.

A review of all single border agency reviews conducted recently has identified that the border agencies need to provide a seamless or virtual “single border agency.” This means that each agency would continue to focus on each of their core activities whilst using the same primary data and systems.

We’ve had, as many of you will be too well aware, a substantial stuff up in our phone systems rollout at the new Auckland Biosecurity Centre. We now have a new VOIP phone system across MAF, which integrates our computer and voice communications system, will provide substantial savings in teleco costs, and will also enable us to roll out other cost saving technology in future – including videoconferencing in place of physical travel. However, we missed some important factors in the move to the ABC, and overloaded our new phone system, meaning you had extreme difficulty accessing our fax systems and our people. For that I apologise. We understand the quick fix of hiring temps to answer phones has worked well. Since then we have been working with our Telco to implement a new call centre where instead of getting an engaged signal, people calling in join a queue and also have the ability to leave a message in that place in the queue so calls can be processed and returned in the same order that they are received. This system will also have a menu up front to assist callers to access the right person to help them. This call centre was, as scheduled, up and running perfectly at the end of April.

That’s a useful start, but we have further significant investment and development planned for our work at or around the border.

Clive Gower Collins, Charles Hatcher and Fergus Small met with your Executive in March and discussed our decision to integrate Biosecurity New Zealand and MAF Quarantine Service - into the new ‘MAF Biosecurity New Zealand’. Essentially, we will be putting our risk assessors, policy makers and standard setters right alongside our service deliverers. This is a massive undertaking involving around 900 personnel. It will be in place by 1 July. We want this integration to be real. It is intended to result in MAF being more responsive to emerging threats, and more effective in developing and delivering our risk management interventions. The integrated group will be expected to build a better understanding of our own business processes – from end-to-end, and to facilitate the development and adoption of new ways of doing business, new technologies, with a sharper eye to both efficiency and effectiveness.

This involves more than just changing the structure. It is aimed at reshaping our service culture, sharpening our performance management, adding flexibility to our deployment of personnel, enhancing training capacity, adding an aggressive programme of investment in systems and technology, and enhancing our capacity to provide the integrated, comprehensive biosecurity system our 2004 Biosecurity Strategy document called for.

In short, this is intended to be a fundamental rebuilding of our border function. The MAF Quarantine Service as it now exists will disappear.

And this will not be just a MAF initiative. You will see closer engagement with other border agencies, notably Customs, with more shared technology platforms, and shared strategies, with considerable work going on to ensure that we understand each other’s business processes and make them more user-friendly to the customer. We will be aiming to much better understand what it feels like to be a company trying to bring a product across the border and dealing with not just MAF Biosecurity New Zealand, but the whole of the Government regulatory apparatus.

A good illustration of this approach is the new one stop shop at our new Auckland Biosecurity Centre soon to be opened at Auckland Airport. Here we will have Customs and Biosecurity officers operating from the same place, offering a one-stop shop for customers needing to clear goods through the system.

We have made some recent improvements to our consultation process. At the border, MAF has been asked for two things by industry – Consistency and Flexibility. As you would understand this leaves us in an interesting juxtaposition. MAF has often been responsive at the border to a fault – we respond to one party, but often at the expense of complicating life for others, or adding costs and complexity in our systems and for our staff.

To address both these issues, MAF Quarantine Service set up the MAF/Industry Cargo Consultative Committee known as the MICCC. The MICCC meets quarterly and is a small group that has high level representation from each of the industry components from the logistics chain. CBAFF is one of the members of the MICCC. This committee allows MAF to discuss significant existing or emerging issues with stakeholders and prioritise them from a whole of industry perspective. Where issues arise that require additional analysis or consultation, a sub committee is formed with the affected industry groups.

We are aware there is still some way to go in improving our consultation processes, particularly in setting appropriate levels of protection and in the standard setting area. This integration programme will give us the opportunity to involve others more in our decision making.

I know you all are very interested in co-regulation schemes such as the Compliance Agreements that AQIS and the Customs Brokers have in Australia. We also think that co regulation or co-management systems are the sensible way for the future. Research shows that co-regulation systems in place internationally and here in NZ (with Customs) work well. They not only minimise risk, and speed up trade, but also place more responsibility for managing biosecurity risk onto industry.

It seems to me that there are two essential components to successful co regulation schemes:

  1. Having appropriate and common IT systems between industry and government (something we are working on); and
  2. Making sure the incentives are right.

MAF is party to co-regulation already. We have 18,500 non-MAF people nationally accredited to undertake some biosecurity checks. However, in my view, there are too many accredited transitional facilities, too many accredited people, with too little training, too little incentive to do the job well, with poor biosecurity outcomes facilitated by too little review and audit. And when mistakes are made, the whole industry is vulnerable to a regulatory backlash driven by public and political reactions.

Co-regulation can be said to work when business is facilitated with speed, flexibility and low costs, and biosecurity standards are maintained, also with low cost and low intervention by the authorities.

We don’t have that balance right yet.

Let me be frank. While we want to make trading easier and quicker for you, and for ourselves, compromising biosecurity standards is not an option. Any co-regulation scheme MAF enters into will involve strong compliance and performance agreements, rigorous audit procedures, and hard-hitting consequences for non-compliance. This is not only fair to those who are complying, but also essential in meeting biosecurity objectives, and ensuring that we can build durable partnerships with industry.

A successful biosecurity system needs to cope with many different pressures. Our biosecurity system spent a long time in permanent catch-up mode – running desperately to keep up with demands. This is not sustainable in the long term, and I think that the reforms that created Biosecurity New Zealand – the policy advisory, risk assessment and standard setting end of the system – have worked very well to get us more onto the front foot.

The service delivery end, represented mostly by MAF Quarantine was left aside from that earlier work, and I think is still in more or less permanent catch up mode. That is what we aim to overcome.

The task is mammoth.

Last year we cleared approximately 8000 more aircraft, 140,000 more containers, 17,000 more used cars and a million more passengers than 5 years earlier.

We made approximately 121,000 seizures of biosecurity risk goods at airports; including over 13 tonnes of fruit fly material, 6.6 tonnes of meat products, 2.7 tonnes of diary products and nearly 95,000 seizures of contaminated equipment or footwear. Risk from these items is not all the same.

We are putting real effort into gaining a better understanding of risks crossing the border, and how much of it we are identifying and stopping. We can’t realistically aim to stop everything, but we aim to stop the important risks. Overall, we estimate we are detecting approximately 75% to 85% of potential risk coming through the passenger pathway.

We have less success in other areas. In recent work, we have undertaken intensive examination of samples used cars and machinery, going well beyond what our standard, and quite intensive, visual inspections can achieve. What has emerged is that a significant amount of potential risk is not readily detected with visual inspections. That is what is driving the development of a new draft Import Health Standard for used cars and machinery, with added emphasis on the possible use of fumigation or heat treatment to achieve what visual inspection cannot.

Sea containers are very difficult to inspect; they are large, heavy and can be in poor condition, with significant risks both inside and outside, especially underneath. Even with empty containers, we are finding disturbing quantities of risk material, inside and out.

Our slippage surveys highlight the scope for significant reductions in biosecurity risk. As already noted, we don’t expect to get to zero risk. But we do expect to provide an effective and efficient risk identification/risk management regime. That means understanding the risk pathways we face, and targeting our effort on the highest risk pathways. I don’t expect there to be any stomach within the public or political domains for adopting a more relaxed attitude to biosecurity risk. All the more reason for your organisations, and mine, to be collaborating closely.

  • We all know how important trade is to New Zealand. Our closer relationship with the industry through the MAF/Industry Cargo Consultative Committee is increasingly important. This committee is becoming more and more valuable and provides a forum to consider and prioritise things from a whole of industry perspective.
  • We know that New Zealand’s trade patterns are increasingly diverse. We have new products coming from new countries, carrying new and different risks and getting here quicker.
  • The vessels and aircraft carrying goods are getting bigger and faster.
  • In the last 10 years, the number of sea containers crossing New Zealand borders each year has increased by over 200,000 containers - or by 40%. The containers are getting bigger, with industry increasingly preferring 40 footers over the traditional 20 footers.

These facts are not new, and these trends are unlikely to reverse. We need a border protection system which is fit-for-purpose – meaning effective, efficient, innovative and easy to deal with. The work we are doing on the system within MAF is a major step in that direction. We need to be fully engaged with you if this broader systems approach to the task is to take hold.

We wish to lift our level of engagement with your industry. You are an integral part of the cross border logistics process, and therefore an integral part of our national biosecurity system.

Our mandate is to deliver an effective and efficient biosecurity system, not to do it all ourselves. In doing so, we must interpret the Government’s wishes in setting biosecurity standards and in implementing those – in other words, what we have to find is a proxy for the public and political appetite for risk in biosecurity vs the public, political and industry appetite for compliance costs. We aim to be as transparent in that process as possible, but as I said at the outset, few things will impede your business quicker than public or political disquiet about the effectiveness of our biosecurity regime.

Finally, we are very clear about the importance of the relationship we have with this group and the industry you represent. We look forward to building that relationship and assisting each other to do our respective jobs better.

Contact for Enquiries

Director-General
Ministry of Agriculture and Forestry
PO Box 2526
Wellington

Tel: +64 4 894 0100
Fax: +64 4 894 0720
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