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AWI Wool Exchange Portal plan hit by data and ownership rift with AWEX

by Terry Sim, 13 September 2017
10

AUSTRALIA’S proposed Wool Exchange Portal has hit a major obstacle after failing to negotiate agreement on industry data access and ownership proposals with the Australian Wool Exchange.

The fall-out has led to reportedly angry exchanges between Australian Wool Innovation chief executive officer Stuart McCullough and AWEX members at a meeting in Sydney last Friday.

And Victorian wool grower and WEP working group member Rob Lawrance has accused AWEX of threatening last month to not provide data to the WEP nor allow wool classers to engage with the portal.

AWEX was formed in 1994 to manage and administer the industry’s wool marketing arrangements. Its full members include brokers, exporters, private treaty merchants, processors, growers and associate members, including AWI.

AWEX’s role involves the collection and storage of data on growers’ clips, test and sale results and wool type price trends, market reporting and the registration of wool classers and maintenance of clip preparation standards.

However, in June this year, AWI contracted technology company Levo to build the online portal at a cost $3-$4 million, with its main functions to include a central industry repository of wool test and wool price data and a national wool grower registration system, enabling growers to access their historical data.

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AWEX chairwoman Robyn Chubb

In an AWEX members’ update late last week, chairwoman Robyn Clubb said with respect to the supply of data to the WEP, “‘live’ data is a core asset of the company and critical to our market reporting revenue streams.”

“We have expressed our concerns about the potential of WEP using this data to provide competing services to AWEX members and customers.”

She said AWEX had made an unsuccessful submission to develop the WEP and its proposal for some ownership or an operational role while maintaining majority grower ownership has been rejected. The supply of data on a similar basis as is currently supplied for AWI’s wool-pricing tool WoolCheque was also rejected, she said.

Ms Clubb said AWEX has also raised concerns about the WEP’s proposed duplication and storage of data, duplication and potential confusion over the storage of unverified wool classer data and the duplication of funding effort and resources in producing software to collect in-shed data via the electronic or E-speci in the eBale project.

Ms Clubb said AWEX is respectful of the supply arrangements it had in place.

“It is these ‘in confidence’ arrangements that allow AWEX to conduct the AWEX QA programs and information services.

“The confidence that our data suppliers have in AWEX is critical to our working relationships with them,” she said.

No major issues a month ago – Wilson

WEP working group chairman Will Wilson.

Early last month, WEP working group chairman Will Wilson told Sheep Central no major issues were discovered during the WEP’s recent discovery phase, but it had been decided to work on a digital E-speci for in-shed data collection by wool classers. Mr Wilson said negotiations with AWEX and AWTA on data access were moving ahead.

“They’re not completed, but everyone is on board.”

Mr Wilson said last month Levo advised the WEP working group that the only way wool shed data could be delivered to the portal would be if it developed its own digital or E-speci. He said AWEX’s digital speci would not be developed until early next year, but the WEP “couldn’t be waiting for that.” The WEP working group was discussing how it could work with AWEX on an E-speci, but aimed to deliver the first five functionalities of the portal by August next year, he said.

AWEX concern on WEP on-farm data collection

However, Ms Clubb said in her member’s update that AWEX is concerned about the WEP proposal for on-farm data collection and its proposals to partner, provide some funding and work together on this WEP function have been rejected.

“The AWEX e-Bale project which includes on-farm data collection (app and web-based) will commence in January 2018.

“e-Bale will be using rfid capability on individual bales with information to be collected on farm (speci etc.) to be utilised at the warehouse and dump,” she said.

“Whilst this differs from the WEP proposal, it presents what we believe is a great opportunity where we could work together to demonstrate a positive and unified approach to data collection and traceability through the pipeline.

“The obvious duplication of resources, including funding, is apparent to all.”

Ms Clubb said AWEX wanted to collaborate to see the WEP reach its full potential, “but not to the material detriment of AWEX.”

“We believe the management of WEP by AWEX, post development phase, would be a practical and efficient option, minimising duplication of resources, and aggregating all industry information flows within one platform.

“In addition, the WEP project team has not given consideration to how WEP might interact and support the various Australian quality assurance programs, standards and traceability programs,” she said.

“These are important immediate and long term issues.

“The directors of AWEX are not only acting in the interests of AWEX and you, our member(s), but also as articulated in AWEX’s Objects, in what we believe will be ‘for the benefit of all wool market participants’.”

AWEX position ‘undermines’ WEP’s future benefits

However, Mr Lawrance believes that AWEX’s WEP position or “management edict” has undermined the future benefits of the WEP to the wool industry and “compromised their (AWEX’s) position as a beneficial steward” to the sector.

“At the most recent meeting (August 2017) of the WEP, AWEX effectively withdrew support and has made future developments difficult.

“AWEX’s policy of restricting “their” woolclassers’ liaison with the WEP — the second point in their No and No edict — is truly baffling, and only now highlights their unwillingness to cooperate in what had been a unanimous “Go” by all members earlier this year,” he said.

Mr Lawrance said during the past two years, the WEP steering committee and then the working group or “build committee” have worked effectively, led by Will Wilson. He said AWEX’s objectives and role included to develop and implement innovations, and to value-add for stakeholders by providing pre and post-sale market information.

It is apparent that the WEP project also aligns with the charter of the AWI to make strategically targeted investments to enhance the profitability, international competitiveness and sustainability of the Australian wool industry, and increase demand and market access for Australian wool, Mr Lawrance said.

Mr Lawrance said after the Wool Selling Systems Review, the WEP committee was established to work specifically on an area of overlap between industry entities, supporting an internationally competitive system for increasing demand and market access for Australian wool.

“This project has followed a systematic consideration and development process, relying on the integrity of key industry parties providing their input, and ideas for the benefit of the industry.

“Naturally this requires all representatives on the committee to contribute in good faith, appropriately, and to make representations of their commitment that they subsequently uphold,” he said.

“Accordingly, AWEX has been involved in the whole WEP process, playing an active role in bringing the project to its current position.

“Without their participation and agreed contribution as partner in the project, the WEP project would have necessarily taken a different route,” Mr Lawrance said.

“It is therefore hard to understand the rationale behind AWEX withdrawing support after they had been part of the group to approve it, after they had agreed to provide data, and after commercial arrangements have been entered into with third parties.

“It should be noted that senior members of AWEX have been active members of the WEP, and therefore are reasonably expected to have represented AWEX during the WEP decision process, ultimately being part of the decision to proceed.”

Mr Lawrance said if any member of a WEP-related committee has not acted in good faith, with reasonable skill and diligence, has misused information or position, and/or has failed to disclose and manage conflicts of interest, there may have been a breach of duty as a committee member and serious action should be considered.

He said the WEP project’s objectives to deliver modern augmentation of the wool market system were consistent with those of AWEX and the AWI.

“However, AWEX now threatens to de-rail innovations developed in partnership with them, and directly aligned with their organisational objectives.

“It must be understood that AWEX was established to support the wool industry, not to support itself to the detriment of the industry,” he said.

“I and the three other wool growers, through the framework of the WEP, look forward to both the AWEX and AWI objectives being achieved in a modern way, with decisions being well-informed and timely, and with key industry players acting with integrity and contributing to the success of the wool industry.”

Watch Sheep Central for more comments from AWI, AWEX, brokers and exporters about the AWEX-AWI WEP rift.

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Reader's Comments


Comment
  • Martin Oppenheimer September 13, 2017

    Whats wrong with AWI at the moment? They seem hell-bent on pissing everyone off. They might need to reconsider the type of ‘disruption’ they want.

  • Simon Wells September 13, 2017

    AWEX’s Clubb says “it presents what we believe is a great opportunity, where we could work together, to demonstrate a positive and unified approach to data collection.” Well, surely Clubb has just trashed this “positive and unified approach” and has walked away from
    this “great opportunity”. The notion “where we could work together” Clubb has, by her very act, made this difficult to accept at face value.
    So what was the point these statements? From my viewpoint they appear empty. Possibly there’s a parallel universe out there, inhabited by hugely overpaid clowns, with absolutely no idea of the 25 years of hell that wool growers endured after the wool crash.

  • Simon Wells September 13, 2017

    Furthermore, Clubb made these statements ‘of working together with a unified approach’ after ditching the commitment to WEP. How gullible does the Clubb think we are? Farmers are notoriously twice shy after being once bitten.

  • Peter Small September 13, 2017

    This makes me so angry. For years I have railed against wool growers’ statutory wool taxes, their hard-earnt income, often gained through some bloody difficult times, being literally pissed up against the wall- and here we go again.
    Anyone who has watched this wool portal idea since the Wool Selling System Review (WSSR) was first mooted, knows it for what it is; a hallucinatory adventure at the wool growers’ expense by AWI.
    I have been involved in the WSSR since day one and I smelt a cultural rat about to emerge. Others turned their noses in different directions, and why not, the cost wasn’t coming out of their pockets. However, the most common comment I heard around the traps was “just let it run, it will finally run out of steam”, or words to that effect.
    Where are the leaders of our industry? Where are the people with the courage and the conviction to stand up and call these shenanigans for what they are? Where are the wool grower organisations? Are they interested in how AWI
    spends their members’ funds or do they have their fingers in the honey pot too?
    This project, this wool portal, if it had merit would have been done, using commercial capital in response to the needs of the market. To spend $9million of growers statutory taxes in this way it just another disgrace and humiliation to hard working woolgrowers and their families.
    In conclusion may I say I support 100% AWEX’s position and its time every one else told AWI to piss off too

  • Maxine Blyton September 14, 2017

    Well done Peter Small – here! here! AWI p… off.

  • Don Hamblin September 14, 2017

    Peter, this makes me so angry as well. We saw previously the millions of grower funds wasted on developing CALM, and millions of dollars more propping it up, waiting for it to be self-funding.
    We see that the latest offering of wool on the internet, last week, they traded just 36 bales. Once levy-funded organisations start thinking that they are a “real company” and start wanting to “own” things, it will all end up in tears.
    Look how long it has taken to finalise the old IWS/AWC owned assets. Grower shareholders still have not got all their money back – 17 or so years after it all collapsed. If growers ever want to vote 0 percent, and wind up AWI, we do not want them owning things.
    AWI have not liked AWEX because it is an industry body and not just a grower organisation. The wool trade and overseas wool importers value AWEX, as being not wholly representative of just one section of the wool trade.

  • Laurence Modiano September 14, 2017

    The WEP is a bone that AWI have tossed to the growers in compensation for years of wasted levy. It is a distraction from their own incompetence. The growers don’t care for it, and the wool buyers and brokers certainly don’t. As for processors such as ourselves, we see it as a threat to our insistence on viewing the wool we buy.
    AWI would have been much better using their resources to promote and market wool, rather than interfere in a commercial arrangement between buyers and sellers.

  • Edward Wymer September 14, 2017

    Laurence is spot on; wool should be prepared better without trying so many short cuts. AWI should stop trying to reinvent the wheel.

  • Simon Wells September 14, 2017

    Plenty of snouts at the trough this evening.

  • Tony Benson September 15, 2017

    Do we know what data is in dispute?

    I can see a case for the privacy of wool classer and grower’s info, but catalogue and sale data? I can walk into a sale room and collect it, log into the EDI network and download it. The brokers also have it. It’s a question of who owns it, which should be the wool growers, they paid for it.

    Technically, duplication of data is actually a good thing and is a moot point from AWEX. More importantly, how the duplicating occurs and ownership is the scary bit.

    I wonder if this spat is about company A who sees a payday for their ‘treasure trove’ of data and company B, who doesn’t want to cough up a single dime for it.

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