Ag minister Littleproud warns AWI: “it’s time for personalities to leave”

Terry Sim, September 7, 2018

Minister for Agriculture and Water Resources David Littleproud addresses the Rural Press Club of Queensland.

AUSTRALIAN Wool Innovation and its chairman Wal Merriman have received their biggest warning yet from the Minister for Agriculture and Water Resources David Littleproud to adopt all recommendations of AWI’s latest performance and governance review.

At the Rural Press Club of Queensland yesterday, Mr Littleproud said “it’s time for personalities to leave” the wool industry research, development and marketing company.

But this has been rejected by Mr Merriman, who when asked today if he believed there were any “personalities” who needed to leave AWI, said: “No, certainly not.”

The AWI is yet to formally commit to all of the Ernst&Young review’s 82 recommendations, including a 10-year director term cap, which if implemented this year would end Mr Merriman’s tenure and that of directors Meredith Sheil and David Webster.

Despite Mr Littleproud previously stating that AWI should signal an intent to comply with all the review’s recommendations and take that to shareholders, AWI chief executive officer Stuart McCullough has said that since the release of the review report 9 July this year, 85 percent of the recommendations are “already underway with a number of these now complete”.

“This is despite the Department of Agriculture, Water and Resources setting Friday 19 October 2018 as the due date for the implementation plan,” Mr McCullough has told Sheep Central.

Mr Merriman has been seeking industry support to delay shareholder consideration of key review recommendations, including the 10-year director term cap, until an extraordinaory general meeting next year. But Mr McCullough has said despite claims being made by industry stakeholders, AWI and its board “has embraced the recommendations, as evidenced by our progress with 70 of the 82 recommendations underway.

“This clearly demonstrates there are no implementation delays.”

AWI wants to put at least nine of the review recommendations to a shareholder vote, although Mr Littleproud has said: “EY states only four of 82 recommendations require shareholder approval.” The minister has also said he preferred AWI show leadership on the recommendations “rather than forcing me to legislate.”

Is the wind up of AWI on the table?

A big crowd listens to minister Littleproud at the press club.

At the Queensland Rural Press Club yesterday Mr Littleproud was asked by Queensland Country Life editor-in-chief Mark Phelps if he was prepared to wind up Australian Wool Innovation if the organisation did not adopt the 82 recommendations of the AWI’s latest performance and governance review.

Mr Littleproud did not directly answer the question by ruling out the winding up of AWI, but said the review was important for AWI.

“I’ve had a number of conversations with the chairman and some of its board members.

“My expectation is for them to lead,” he said

“I get sick of industry’s coming to me, expecting me to lead for them; I expect them to show the leadership their levy payers expect…”

“We have a pathway forward, there are some challenging pieces in those 82 recommendations that need to be addressed,” Mr Littleproud said.

“I’ve had a number of conversations with the chairman around the pathway to do that.

“My expectation as the government and as also a levy payer myself is that we move toward addressing that,” he said.

Littleproud approached ALP for bi-partisan support on AWI review

Labor’s agriculture spokesman Joel Fitzgibbon.

Mr Littleproud told the press club delegates had had “reached out” to the Shadow Minister for Agriculture, the Australian Labor Party’s Joel Fitzgibbon, to ensure bi-partisan support for the addressing of the AWI review recommendations.

“I also want to make sure that we do that in a bipartisan way and I’ve reached out to my counterpart Joel Fitzgibbon.

“Because I think it is important that any reform that happens… and if government has to get involved, it is done in a bi-partisan manner, particularly for something that should be as bi-partisan as AWI or any other parties involved,” Mr Littleproud said.

“So I’m working to make sure that that happens in a timely manner.

“There some challenges but I think it is time for personalities to leave and it is time for leadership,” he said.

“We’ve got a great wool industry, a really great wool industry — the first time in decades they are making a quid — and I think those farmers many of who I represent in western Queensland expect that leadership, expect that leadership to take it to the new level.

Mr Littleproud said the Federal Government wanted all of Australia’s research and development corporation’s to be “fit for the future”, the minister said

“It is great for the work that they (AWI) have done for the past – I congratulate them for it — but we’ve got to be fit for the future; how do we take it to the next level?

“The EY report goes into addressing some of those issues, so we’ve got to work through constructively, but calmly,” he said.

“It’s a bit like the Murray Darling, we’re trying to take the personalities out of it – it’s time to lead, and I’m expecting AWI to do it with me.”

Mr Fitzgibbon said Mr Merriman has raised with him “what appear to be legitimate process issues which could delay the adoption of the report’s recommendations.”

“I will work with the minister (Mr Littleproud) to ensure an appropriate response is in place as soon as is possible,” the shadow minister said.

No need for “personalities to leave”: Merriman

Mr Merriman yesterday said he didn’t know who or what Mr Littleproud was referring to in regard to “personalities to leave” AWI and queried if the minister meant shareholders would have a role in this.

“Well, that’s about all I need to know.”

Mr Merriman disputed that there were any “personalities” within AWI who needed to leave.

“No, certainly not.

“I don’t know what he means by that, I think there might be some personalities that are getting in his ear.”

Mr Merriman has said he would remain a director of AWI while he had the support of shareholders. The AWI chairman said the AWI’s implementation plan for the review recommendations would be completed by October 19.

“The implementation plan is virtually complete and will certainly be done by the due date.”

Under the Statutory Funding Agreement 2016-2020, between AWI and the Federal Government, Mr Littleproud has the power to review AWI’s performance and governance at any time. The Federal Government can also terminate the SFA if there is an insolvency event, if AWI ceases to be the industry services body under the Wool Services Privatisation Act, if there has been a material breach by AWI, its officers or directors of the SFA, the Act or Corporations Law, or if there has been a change to AWI’s Constitution which the government considers to be in conflict with the SFA or the Act.


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  1. Paul Favaloro, September 7, 2018

    Considering AWI wants the shareholders to give direction, a 1.5 percent WoolPoll vote would give a fair indication of their desire for a change.
    If the 10-year term is put to a shareholder vote, does the chairman hold the proxy votes? This being the case it may be quicker and easier for legislation to solve the impasse.

  2. Andrew Farran, September 7, 2018

    It is a good thing in all the circumstances, past and present, that government interventon on this occasion is made a bipartisan matter.

  3. Andrew Farran, September 7, 2018

    While in principle one doesn’t encourage government intervention in industry internal affairs, there are real issues concerning stakeholder funds, including government funds, which have been begging for this. Let the AWI board show that it will do what it is required to do, in the hope also that there will not be a similar build up of issues in that regard in future. A classic example is depriving wool growers of the option of a 1 percent levy in the forthcoming WoolPoll.

  4. James Hegarty, September 7, 2018

    It’s time for new innovative leaders to take over. We need leaders that embrace change. I still can’t understand why our sheep and wool industry still has a leader that does not embrace innovation and new technology. Tradition won’t make you money or get young people back to the industry. Why do you think young people flock to cropping? Because it’s exciting and they embrace new technology and innovation.

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