WoolProducers: Merriman apology delay “might say a lot”

Federal Senators focus in on AWI executives during yesterday's hearing in Canberra.
Federal Senators focus in on AWI executives during yesterday's hearing in Canberra.

WOOLPRODUCERS Australia remains dissatisfied with Australian Wool Innovation (AWI) Chair Wal Merriman’s apologies for his recent indiscretions which have ignited a flood of negative headlines which has threatened the flow of government funding to Research and Development Corporations.

And the national wool grower representative body has also maintained calls for major constitutional changes at AWI, to improve governance and transparency of levy-payer spending.

WoolProducers CEO Jo Hall watched with great interest in anticipation of any hint of remorse from Mr Merriman during the extended and at times heated clash between senior AWI executives and federal Senators, during supplementary budget estimates hearings at Parliament House in Canberra yesterday.

In his opening statement, Mr Merriman apologised for swearing at journalists recently and his role in observing a wool grower focus group session on genetics earlier this year, without the knowledge of participants, from behind a one-way mirror.

He said “I am direct in the way I speak - I am from the bush - unfortunately I need a lot more polish to operate in these surroundings”.

“I am far more comfortable with wool growers out in the paddock than I am here in Senate estimates,” he said.

“I apologise for my passion for the industry and the way it comes across.”

An unusually large number of Senators attended the AWI estimates hearing with up to 10 lined up to ask questions about recent incidents and general governance concerns for the taxpayer and levy-payer funded research, development and marketing agency.

Interest in Mr Merriman’s recent antics also extended to the Canberra press gallery with a large number of television and other media outlets also converging for what would normally be a subdued hearing, to capture the combative exchange, with the AWI boss’ apologies also reported in multiple, mainstream media outlets throughout the day as well as intense coverage in rural media.

Ms Hall said her group acknowledged the Chair’s apology for the one-way-mirror incident - made at the Senate Rural and Regional Affairs and Transport Legislation Committee hearing - but she said it only came four months after that fact.

“However it’s up to those growers who were involved in that focus group to determine if they’re satisfied or not,” she said.

Ms Hall said the Senate hearing also “clearly established” that Mr Merriman’s swearing at a journalist during an industry event in Adelaide about two weeks ago, who was chasing comment on the one-way-mirror issue, had breached AWI’s code of conduct and ethics and would now be dealt with at the next board meeting, where a sanction may be imposed.

“Again Mr Merriman apologised for any offence caused today – we regard that conduct as unprofessional,” she said.

“It’s not up to WoolProducers to determine if apologies are sincere or not – but again, the length of time it took for that apology to come, might say a lot.

“AWI has said they’ll deal with the breach of code of conduct - that’s an operational matter for the board to consider - we will wait to see what they determine.”

The Senate hearing provided an extensive examination of AWI’s governance practices and the use of proxy votes to elect board directors, including Mr Merriman’s large share which he said was 45,000 of 90,000 votes at one election, before correcting his answer to a smaller proportion of the votes cast.

Ms Hall conceded there was no smoking gun produced during the hearing amid the torrid questioning and a lengthy examination of the AWI election processes by Queensland Nationals Senator Barry O’Sullivan.

That sentiment was reflected by other industry sources including some of AWI’s staunchest critics – but regardless the focus will now turn to AWI’s annual general meeting next month and potential constitutional changes.

Ms Hall said WoolProducers have had “long-held concerns” about transparency and accountability measures in relation to some of AWI’s operations.

She said the Senate estimates hearing “revealed that AWI’s constitution enables their Chair to not publicly declare how they will cast their votes including undirected proxies”.

“Wool Producers Australia considers this to be less than transparent and not in line with high governance standards – WoolProducers calls on the board of AWI to reconsider that clause.”

Ms Hall said WoolProducers also believed the wool industry needed arm’s length oversight of its research, development and marketing body (AWI) to ensure additional checks and balances for the accountability and transparency of levy expenditure and to ensure that the levy expenditure aligned with growers’ priorities.

But she conceded during the hearing it was a proposal AWI rejected.

“That goes to the issue of industry structure which WoolProducers have been calling for reforms of,” she said.

“Having an industry owned body, shareholders have a say in the direction of the company but under the current structure it is not agile or flexible enough to deal with issues, when they arise.”

In light of recent events and the increased political pressure, Ms Hall said WoolProducers hadn’t yet considered putting forward any specific calls for changes at the AWI AGM next month or calling for a vote of no confidence in the Chair.

“It’s not listed to be spoken about,” she said.

According to a recent ABARES report, spruiked by Federal Agriculture and Water Resources Minister Barnaby Joyce, AWI received $12.48 million in federal government funding in 2014-15 and $19.36m in levy-payer contributions.

Overall in that time-period, the 15 rural RDCs received $252.72m in government matching contributions, $296.02m in levy contributions and $43.81m in voluntary industry contributions.

The Council of RDCs has refused to comment on Mr Merriman’s actions saying they are for the wool industry to determine.

But National Farmers Federation President Fiona Simson said last week farmers make significant investments, via levies, to facilitate the valuable research and development activities carried out RCDs.

“They have every right to expect that the people responsible for overseeing the management and application of this investment act, at all times, in a professional and respectful, manner,” she said.


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