Meat & Livestock Australia says it cannot allow a members resolution calling for major changes to its performance review process to be voted on by levy payers at this year’s annual general meeting, due to legal and constitutional restrictions.
The resolution proposed by former Cattle Council of Australia president Greg Brown calls for future reviews of Meat & Livestock Australia to be “genuinely independent”, and for levy payers, peak councils and industry experts to have a greater say in how future reviews are conducted.
The resolution (printed in full at bottom of this article) was supported by the signatures of more than 150 levy payers.
Mr Brown said that number included many large-scale producers and family-sized operators from all over Australia, people who he described as the “backbone of the industry”.
However MLA confirmed yesterday that Mr Brown’s resolution would not be included in the resolutions that will be put to a vote of members at its November 15 AGM in Fremantle.
The levy-funded research, development and marketing organisation yesterday said four resolutions will be presented to members, which all relate specifically to the election of four nominees for four board positions.
MLA told Beef Central in a statement that while it saw “merit in the intent” of Mr Brown’s resolution, it could not be put to the 2012 AGM as it was not valid under MLA’s constitution and the Corporations Act 2001.
“The resolution would have required the directors to take certain action in relation to MLA’s deed of agreement with the Australian Government, which is entirely the responsibility of MLA directors, not its members,” the MLA statement said.
“Nevertheless the Board sees merit in the intent of the resolution – for peak councils to take a greater role in future reviews of MLA – and has written to each of the peak councils asking them to consider their desire for this.”
Mr Brown said he and many other stakeholders believe MLA should be prepared to accept a resolution giving shareholders an opportunity to vote on the independence of its review process, and the level of involvement that shareholders and peak councils have in the process.
He said the five-yearly reviews MLA was required to conduct as part of its Statutory Funding Agreement with the Federal Government, such as the most recent review conducted by Arche Consulting in 2010, were not fully independent.
He said this was because MLA had the power to choose the company that conducts its major five-yearly reviews, and because peak councils such as Cattle Council of Australia, which represented most MLA levy payers, were not included in the process of framing the Terms of Reference for its reviews.
He added that specific criticisms made by Cattle Council of Australia during the consultation phase of MLA’s last review in 2010, when he was the council’s president, were not acknowledged or mentioned in the final report.
Mr Brown said MLA had indicated to him that changes may be considered for the next review in 2015, but he said he that was totally unacceptable and believed improvements were needed much sooner.
Mr Hansen has defended the independence of the MLA review process, stating that companies seeking to conduct the reviews had to be approved by the Department of Agriculture, Fisheries and Forestry before they could be selected, and were not allowed to have conducted substantive work for the RDC in the previous four years.
He said that all Research and Development Corporations including MLA were recently subjected to a wide ranging performance review by the Productivity Commission, in which all peak councils had participated.
A spokesperson for Cattle Council of Australia said that while the council has not yet taken a formal position on MLA’s advice that the motion does not meet the requirements of the MLA constitution or the Corporation’s Act, it was “supportive of the intent” of Mr Brown’s resolution.
Mr Brown’s proposed resolution reads:
“That the members of Meat and Livestock Australia (MLA) support the appropriate alterations, as defined in the explanatory notes, to MLA’s Statutory Funding Agreement (SFA) to ensure that future reviews of MLA are genuinely independent. This process must require the consulting firm to be externally selected and the terms of reference to be established in consultation with a wide group of levy payers, Peak Industry Councils and others with specific skills. This review will also require a process to ensure that recommendations are suitably actioned.”
The explanatory notes are:
• The funding agreement between the Commonwealth Government and MLA currently places the role of engaging a review company and setting the terms of reference for that review in the responsibility of MLA (in consultation with the DAFF Secretary).
• This contradicts the Peak Council’s role, as defined in the Red Meat MOU “to assess performance of services delivered by MLA or arranged by MLA to be delivered by other persons towards achieving the goals identified in MISP”.
• This resolution proposes changes to the SFA so that:
1. Determining the company that review’s MLA; and
2. Setting the terms of reference for the review of MLA;
3. Presenting the report to DAFF & the Minister with recommendations;
• Would be the responsibility of MLA’s 3 peak councils (in consultation with DAFF Secretary);
• The three peak councils (forming a Review Reference Group) would be referred to in the Deed of Agreement with the commonwealth and would be required to ensure appropriate consultation with the Secretary, Minister and MLA during the review process. This will ensure a truly independent review.