Live Export

Pakistan live export crisis no typical event

James Nason, 23/10/2012

Australian sheep held in PK Livestock import's facility in Pakistan. The shock move by Pakistani authorities to cull a shipment of Australian sheep independently confirmed to be free-of-disease and safe for human consumption has again seen the livestock export trade’s public reputation take a battering.

As the dust settles on the troubling events in Pakistan, the Federal Government will now investigate what went wrong, whether the exporter Wellard Rural Exports breached its obligations under the Exporter Supply Chain Assurance System (ESCAS) and, if so, what penalties or sanctions should apply.

Animal rights activists have been quick to portray the crisis as evidence of the trade’s inability to maintain control over Australian animals once delivered to foreign markets, and typical of the inherent risks that go with exporting animals to another country where Australia has no power to intervene.  

However livestock export industry leaders have been equally active in their attempts to keep the public debate in perspective by pointing to the fact that what happened in Pakistan was an extraordinary event and in no way typical of what happens in the vast majority of markets to which Australian livestock are exported.

Under ESCAS, exporters are held legally responsible for the treatment of animals they deliver to export markets right through to the point of slaughter. This is despite the fact exporters no longer own the animals once they are delivered to the importer at the point of disembarkation.

Wellard Rural Exports has publicly acknowledged that it lost control of the animals in Pakistan.

A loss of control is regarded as a breach under ESCAS, and has prompted a full investigation by the Department of Agriculture, Fisheries and Forestry.

A key issue for investiagors will surround the extent to extenuating circumstances should be accounted for in this instance.

This is because the loss of control stemmed from circumstances beyond the power of the exporter, and not due to a lack of compliance with traceabillity or a lapse in its own level of treatment or care for its animals.

Rather control was lost at gunpoint when armed policemen representing a local Pakistan Government authority moved in and forced the exporter and importer and their representatives to leave the feedlot as it began culling. The cull went against local agreements, Pakistan High Court processes and independent tests that confirmed the animals were fit and healthy and not carrying disease.

Force majeure

A high-level DAFF official acknowledged the extraordinary nature of the events in Pakistan during last week’s Senate Estimates hearings in Canberra.

The senate hearings were held before last weekend's final cull of the remaining sheep, but focused on the similar circumstances that had occurred in early September when Pakistan authorities forcibly ordered the removal of export and import company staff and began culling the sheep on the grounds they had disease, claims which have since proven to be unfounded.

In that instance the importer, PK Livestock, was able to halt the culling by securing a court injunction. At that point an estimated 7500 of the 22,000 head consignment had been killed in what was reported to be inhumane circumstances.

“What happened … was that, as the animals were moving through that approved supply chain, the local authorities from the Sindh province provided armed guards or police to enforce a ruling of the Sindh government to begin the culling of those sheep,” DAFF deputy secretary Phillip Glyde explained at last Monday's Senate Estimates hearing

“The point at which armed guards or police turned up to the approved facility is the point at which Wellard lost control.

“I do not think anyone can expect to maintain control in that circumstance, and Wellard has reported that breach at that time.”

Mr Glyde added that the loss of control had essentially occurred through “force majeure”, through the involvement of police or armed officials from the local authority.

Force Majeure relates to instances where parties essentially seek to be freed from contractual commitments when an extraordinary event or circumstance beyond their control prevents them from fulfilling their obligations under a contract.

Whether Force Majeure provides a defence for Wellard Rural Exports as the DAFF investigation proceeds remains to be seen. 

Possible sanctions

ESCAS categorises breaches as minor, major and critical.

Possible sanctions range from the imposition of additional conditions on an exporter’s license at the lighter end of the scale, to the potential loss of an export license and/or criminal sanctions at the heavier end.

In simple terms ESCAS effectively does two things – it requires exporters to take responsibility for the welfare of Australian livestock delivered for feeder and slaughter purposes in overseas markets, and it enables breaches to be dealt with at an individual supply chain level, without requiring the need for an entire market, or indeed the entire trade, to be shut down when something goes wrong.

DAFF officials at least week’s senate estimates hearing highlighted the fact that despite the incident in Pakistan, more than 850,000 sheep and 25,500 cattle have been exported successfully under ESCAS arrangements to the first tranche countries of Kuwait, Bahrain, Qatar and Turkey since its introduction on March 1.

“There has been that very significant issue with Pakistan, but other than that we have overwhelmingly had the processes operate to provide solid assurance of the OIE standards being maintained and control being maintained for traceability,” retiring DAFF secretary Dr Connal O’Connell told the hearing.

“So, when we say we believe the ESCAS system has worked and provided that level of assurance, we are talking from the basis of, as I say, 851,000 animals in terms of sheep and roughly 25,500 in terms of cattle.

“The Pakistani incident is absolutely regrettable, but it is clearly to do with government intervention in Pakistan.”

In its media release issued on Saturday, Wellard Rural Exports said that what it experienced in Pakistan was “a first for the industry in more than 40 years of operation” and.the most challenging and continuously changing situation the company has seen in its own 30 year history of exporting livestock. 

Wellard Rural Exports is the only Australian exporter with an ESCAS-accredited supply chain in Pakistan and has stated that it will not export to the market for the foreseeable future because it cannot rely on the local authorities to provide acceptable levels of welfare.

"Extraordinary circumstances"

Alison Penfold of the Australian Livestock Exporters Council said possible sanctions would now be a matter for DAFF as the regulator to consider.

She said that whilea loss of control had occured, the animals had clearly been well cared for when they were in the care of the exporter and the importer. 

“These are extraordinary circumstances,” Ms Penfold said.

“It was mentioned this was a force majeur, and I don’t think that should ever be lost on anyone.

“To have staff of the facility marched off the premises by local police, that is an event you just don’t see.

“There are a lot of complicated and extraneous factors here that weren’t foreseen and all need to be taken into account during the investigation.”

Official DAFF comment

In the meantime the Department of Agriculture, Fisheries and Forestry issued the following statement on the Pakistan sheep cull overnight:

“The Australian exporter Wellard has advised the culling of the sheep in Karachi, Pakistan, has concluded. The Department of Agriculture, Fisheries and Forestry (DAFF), the Department of Foreign Affairs and Trade and the Australian High Commission in Pakistan are working to confirm information relating to the culling.

“According to the exporter Wellard, the cull contravened the previous agreement by the local authorities and importer PK Livestock to hand full control of the animals to representatives of the importer and Australian exporter Wellard Rural Exports (WRE).

“The agreement was reached after the Sindh High Court received test results from an independent international laboratory that confirmed the sheep were free from the tested diseases and fit for human consumption.

“Australia’s consistent position is the sheep are and always were fit and healthy for consumption.

“Independent tests supported claims by the Australian Government, importer and exporter that the animals were fit and healthy.

“The Court had ordered the cull to be stopped on 22 September. The order was only withdrawn after PK Livestock withdrew its application for a suspension as part of the agreement to return full control of the animals to PK Livestock and WRE for processing under the Exporter Supply Chain Assurance System (ESCAS) and in accordance with international animal welfare standards.

“Wellard Rural Exports previously self-reported a loss of control of their supply chain in Pakistan when local Sindh authorities entered the facility and commenced culling of sheep. DAFF is conducting a full investigation of this non-compliance under the ESCAS.”


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