Sheep being loaded onto a vessel. Photo: The Livestock Collective

LET’S strip back the political rhetoric and activist hype and take a cold, hard look at the live sheep export trade.

In its heyday, in the 1980s and 90s, there were 10-12 large livestock carriers (70,000-110,000 sheep per ship) shuttling back and forth delivering sheep from Australia to the Middle East. The sheep were mostly mature, heavy Merino wethers at the end of their productive life as wool producers.

Live export provided an outlet for surplus sheep at a time when the national sheep flock was steadily declining due to sustained low wool prices, with the Wool Reserve Price Scheme under strain and then collapsing.

After unloading overseas, our sheep were a staple food for the millions of south Asian guest workers employed on construction projects in the Arabian Gulf States. Australian fresh mutton was the cheapest red meat protein available. The live export trade was a win-win for both Australian sheep producers and low-income Middle East consumers.

At the time, a shipboard mortality rate of less than 2 percent, with only an occasional mortality disaster, was considered OK. Animal welfare activism was in its infancy and slaughter procedures varied from basic to downright medieval. How times have changed.

Exporting livestock by sea to the Middle East is an inherently risky business. Over the years Australian governments of both political persuasions have implemented a raft of measures to manage these risks. These changes have provided major animal welfare benefits. Shipboard mortality rates are now consistently very low and there hasn’t been a reportable incident (shipboard mortality more than 1pc) since 2017.

However, the risk management procedures needed to meet community expectations of the trade have come at great commercial cost.

ESCAS

In 2011, Four Corners aired ‘A bloody business’ – an explosive exposé of cruel slaughter practices for Australian cattle in Indonesia. This led to the Exporter Supply Chain Assurance Scheme (ESCAS). ESCAS requires livestock exporters to ensure humane handling and slaughter of Australian feeder and slaughter animals in the importing country. Exporters are expected to be able to trace the location of the sheep they export throughout the supply chain, from unloading overseas to slaughter at an approved abattoir.

ESCAS has enhanced the welfare of Australian sheep after arrival in the Middle East, with the end of backyard killing, facility upgrades and animal welfare training of feedlot and abattoir staff. With no direct regulatory oversight from Australia and a heavy reliance on third-party audits, there is plenty of scope for gaming the system, but the net effect of ESCAS is still clearly animal welfare positive. However, ESCAS is also a significant commercial impediment and cost. Australian sheep can only be exported to an approved holding facility, for slaughter at an approved abattoir – they cannot be exported to or on-sold to local traders. There is an initial cost of getting facilities ESCAS accredited, plus the ongoing costs of data recording, reporting and audits. In some cases there is also a lingering resentment of being told by Australia how a livestock business overseas must be managed.

Australia is the only country in the world with a regulatory system such as ESCAS. Sheep from other countries can be freely sold to whoever the exporter wishes, to be slaughtered wherever the buyer wants, with no traceability or performance requirements, no data collection and no auditing.

Middle East summer blackout

In 2018, Four Corners aired another explosive live export exposé, with whistleblower footage from five voyages on the Awassi Express, including a voyage in August 2017 when about 2,400 sheep died from heat stress. Community outrage followed. In response, the Australian Livestock Exporters’ Council proposed a three-month northern hemisphere summer blackout, when sheep would not be exported to the Middle East. This was a game-changer that allowed the industry to continue when it might otherwise have been closed down. It also produced a quantum improvement in animal welfare. Virtually all the catastrophic mortality events over the years have been a result of heat stress during the Middle East summer.

A Middle East summer blackout has since been locked into live export regulatory requirements, albeit with some tweaking of dates, adjusted stocking density allowances and differentiation between ports in the Arabian Gulf, Arabian Sea and Red Sea.

Whilst the Middle East blackout period has had a beneficial welfare effect, the commercial implications for Australian exporters are little short of disastrous. Imagine a livestock exporter with a big investment in facilities and staff, but not allowed to operate for three months of the year. Or an importer whose sheep supply chain is cut off for three months each year, including in recent years the period of peak demand at Eid-al-Adha. And ship owners cannot simply park their vessels for three months waiting for sheep exports to resume from Australia – they must actively look for other charter opportunities and foster trade arrangements elsewhere.

None of the other countries supplying live sheep to the Middle East has a summer blackout period. They can supply sheep year-round as and when the market demands.

Single-tier sheep pens

The Australian Maritime Safety Authority (AMSA) is responsible for regulating the operation of ships in Australian waters. AMSA Marine Orders Pt 43 sets out the requirements for livestock vessels. It is widely regarded as the international gold standard for livestock shipping.

AMSA Marine Orders Pt 43 includes a ban on the use of multi-tiered sheep pens. It came into effect on 1 January 2020. It further improved animal welfare, but with major commercial consequences. A ship’s deck that could previously have two tiers of sheep pens is now only allowed a single tier. It is much easier to manage and observe sheep in single tier than double-deck pens. But most importantly, ventilation is much better with air flow across a pen with floor to ceiling head space.

Also, with only half the number of sheep per square meter of deck space, there is only half the amount of body heat to be dispersed – so reduced risk of heat stress. The downside is that the carrying capacity on a ship that would otherwise have had multi-tier pens was greatly reduced. Imagine trucking sheep in double-deck cattle crates rather than four-deck sheep crates.

None of the other countries supplying sheep to the Middle East mandate the use of single tier pens. The fleet of small to medium size livestock ships that ply the Mediterranean, Red Sea and Arabian Gulf are typically configured to load as many sheep as possible, with ship stability the only real constraint.

Vets and Independent Observers on ships

The Australian government requires an Australian vet on all livestock ships to the Middle East. Ships may also be required to have an Australian government observer on board. The costs of employing a vet and government observer for 3-4 weeks, then flying them home are borne by the exporter. No other country supplying live sheep to the Middle East requires a vet or government observer on board, so competing suppliers don’t have this restriction and cost.

Shrinking fleet

A major problem confronting the trade now is a lack of suitable ships. The fleet of ships suitable for the live sheep trade has steadily declined over the last twenty years, with almost no investment in new shipping. Ship owners have seen the writing on the wall and have not been willing to invest the tens of millions of dollars required for a new ship to service a dying trade.

Since 1 January 2020, changes to the fleet of livestock ships suitable for the trade and accredited to load in Australia include:

• Four large livestock ships have relocated to the Atlantic, to see out their later years sailing from South America to the Middle East and Turkey. These vessels will not return to Australia, as the ship owners have not been willing to do the structural upgrades and maintenance required for the vessel to maintain AMSA accreditation.
• Two medium size livestock ships have been scrapped.
• The Gulf Livestock 1 sank off Japan.
• Two medium size livestock ships are owned by Israeli interests and are not likely to return to Australia until threats to Israeli shipping in the Red Sea and Mediterranean settle down.

During the same time no new livestock ships suitable for the Middle East sheep trade have come online. There is a long lead time to construct a new livestock ship to Australian standards. I am not aware of any such vessels under construction.

There are currently two medium size livestock carriers on the Australia – Middle East run. They can carry about 20,000 sheep each. Given the fixed costs involved, it is difficult to see how such a small cargo of slaughter sheep could be commercially sustainable on a long-haul voyage to the Middle East.

A large livestock carrier that is engaged in the Atlantic but still has AMSA accreditation might return to Australia in early 2025. Another large livestock carrier has been in China for several months for repairs and maintenance and will likely return to load in Australia in the New Year. It is a very old ship (44 years old) and already on borrowed time. At best, it could be expected to hang in until May 2028.

The current fleet is a shadow of what it used to be.

What does the future hold?

The live sheep trade has been sailing into a commercial headwind for many years – the tyranny of distance from market, inability to supply year-round, animal welfare pressures, regulatory constraints and costs, regional hostilities and now also a shortage of shipping.

Legislative change is required to overturn the live sheep export ban. It’s possible but will require a future government to get majority support in both houses of parliament – a big ask.

Winding back the animal welfare measures that have significantly reduced shipboard mortalities and improved animal welfare overseas but placed Australian exporters at great commercial disadvantage – is a bigger hill to climb.

Convincing ship owners to invest the hundreds of millions of dollars required to build a new fleet of large livestock vessels that meet AMSA standards, to service an industry in its death throws – well, good luck with that one.

No amount of political posturing or farming community advocacy is going to change these fundamentals. There is no realistic prospect of a viable live sheep export trade after 1 May 2028. Time to move on.

• Author Tony Brightling is an Australian veterinarian who has worked with the live export trade for more than 30 years as an industry representative resident in the Middle East, livestock exporter, veterinarian and industry consultant.