AUSTRALIAN Wool Innovation will co-fund the Federal Government’s so-called independent review into the levy-funded body’s performance and governance, raising new concerns about the inquiry’s independence and intent.

Since the governance and performance review was announced Minister for Agriculture and Water Resources David Littleproud and AWI on February 27, the minister has faced increasing questions about the review’s independence.

Sheep Central has learned that AWI will share the cost of the review with the Federal Government, but Mr Littleproud has so far not responded to a request for more details.

WoolProducers Australia’s chief executive officer Jo Hall believes the independence of the review has been compromised. The review arrangement between AWI, the minister and his department and the Senate Rural and Regional Affairs and Transport Committee appeared “close”.

She highlighted the joint department-AWI announcement of the review, and confirmation by AWI chairman and Agriculture and Water Resources department secretary Daryl Quinlivan and AWI chairman Wal Merriman that AWI had signed off on the terms of reference.

“It is now up to the department to come out and demonstrate that this review is truly independent.

“So far it is not looking overly independent,” Ms Hall said.

Agriculture and Water Resources department secretary Daryl Quinlivan said during AWI recent Senates Estimates appearance: “The department has developed a terms of reference, which has been agreed with by Minister Littleproud and has been also agreed with by the board of AWI now.”

Mr Merriman said: “I can also report that our triennial review of performance, which is something that we have every three years, has been moved forward, and the board has agreed to the terms of reference submitted by the government.”

Ms Hall said the review had been negotiated between AWI, the federal government and senators, but WoolProducers had no detail on what impact the review’s funding arrangement might have on the outcome.

“WoolProducers expects that for this review is to have any validity, there must be far more objectivity and transparency in this process than what has so far been demonstrated.”

“We anticipate that the review will be conducted in a manner that provides WoolProducers and levy payers in general with confidence that any issues around the governance of AWI can and will be addressed,” she said.

“We hope that there will be further details of the process methodology when the reviewer has been announced.”

WoolProducers not consulted on review terms of reference

Despite being the peak wool grower body in Australia, WoolProducers was not given an opportunity to have input into the review’s terms of reference, nor shown a copy before they were finalised or released publicly.

“WoolProducers have previously called for more independence in AWI’s review of performance process, so we welcome this announcement; however, we strongly believe that we are best placed to have offered independent industry input into the development of the TORs,” Ms Hall said.

She urged that the review be conducted “in a completely impartial manner in order to enable an arm’s length critique of their (AWI’s) operations.”

“However, we do have initial concerns over the independence of this review given that the AWI board were offered the opportunity to sign off on the terms of reference, coupled with the optics of AWI featuring in the minister’s press release announcing this review.”

Ms Hall confirmed that the review did not represent a “moving forward” of AWI’s triennial review of performance.

“AWI was already preparing for this last year.”

The only differences to AWI’s normal review process were that government is picking the “independent” reviewer and paying half the cost, and the Senate Rural and Regional Affairs and Transport Committee has added additional items to the terms of reference, she said.

Review terms of reference not shaped by AWI

A statement from Mr Littleproud said the review’s terms of reference were written by the Department of Agriculture and Water Resources based on input from the Senate committee.

“The views and ideas of grower groups are extremely important and grower groups will get to have their say during the review process.”

Mr Littleproud said a copy of the TOR was provided to the AWI board as a courtesy.

“Any suggestion AWI “shaped” the TOR is misleading,” he said.

Mr Littleproud ambiguously said “AWI did not write or shape the TOR”, but he has not yet specified whether AWI had any input into the terms of reference or made suggestions that were included.

“It is normal practice for a review subject to be made aware that they will undergo a review.

“The review was initiated by government, not AWI,” Mr Littleproud said.

ANAO audits don’t cover governance or cultural issues

The AWI review’s announcement quashed Senate committee speculation that AWI might be referred to scrutiny by the Australian National Audit Office.

Mr Littleproud said the AWI Performance Review 2018 will cover the topics which the ANAO would have covered “and more”.

“The ANAO may well not have reviewed AWI regardless of a request from a senator and any ANAO report would likely not have been finished before Woolpoll; ANAO audits often take quite some time.

“ANAO reports are relatively narrow and follow only financial issues,” he said.

“They do not cover governance and cultural issues.”

Mr Littleproud said implementation of the review’s findings will depend on the recommendations themselves.

“We can’t pre-empt what the review will say or where it will go in terms of topics.

“The government has no role in choosing the leaders of the wool industry, nor the direction of the industry or the way it chooses to be represented – that’s for industry itself to do.”

WoolProducers wants real reform

WoolProducers Australia believes it should have been consulted before the Federal Government finalised the terms of reference of the AWI review.

“WoolProducers hopes that this review offers a genuine opportunity to improve the governance, transparency and accountability of AWI, whilst also ensuring that AWI start working effectively and collaboratively with stakeholders,” Mr Hall said.

“WoolProducers have an action list that we would like to be addressed regarding the operations of AWI, which in some cases will require constitutional change and in others will just require the board to improve their current performance,” she said.

“WoolProducers wants reform leading to transparency and genuine independence in the following areas: the conduct of WoolPoll; the entire voting and election process, including the (AWI) board nomination committee, proxy allocation and declaration and shareholder access; the operations of the Industry Consultative Committee and the three-yearly review of performance.”

Sheep Central has received no response to questions to Mr Littleproud on whether AWI would be able to review the draft review report before it is released or if all review submissions would be made public.

Mr Littleproud was also asked whether the review was instituted to merely “clear the air” around AWI’s performance and governance and absolve the Federal Government of taking any other action against the AWI board in relation to alleged AWI code and Statutory Funding Agreement breaches, ceding the responsibility for further action to wool growers via the WoolPoll or future AWI director elections.

The Australian rural reporter Sue Neales quoted Mr Littleproud as saying – “The independent AWI inquiry gives government the chance to clear the air on AWI’s performance and governance; it will investigate AWI’s corporate governance framework, company constitution, and the election of directors.”

The minister has said details regarding how stakeholders can participate in the review will be made available shortly and the review findings will be made available ahead of WoolPoll 2018.