Industry Summit – Melbourne
19 November 2015
Roman Quaedvlieg
Commissioner, Australian Border Force
Welcome address
[The following transcript is an edited and abridged version of the speech delivered]
Good morning colleagues and good morning to the members of industry. It’s a pleasure to be here today.
I was reflecting last night and this morning, as one does, on the theme of the conference. I was reflecting on trade in this country, and a couple of things struck me which I just want to remark on before I go onto my formal comments. Linda recognised the traditional owners of the land, the Wurundjeri people and it reminded me that the Wurundjeri people are actually part of a broader coalition of the Kulin Nation who coalesced right here on this very site upon which we’re meeting today as a result of the colonial settlement across the other side of the river. That was the first manifestation of domestic trade in this country, as the Kulin Nation indigenous peoples were providing fresh meat and fruit to the colonial settlers on the other side of the river.
The other thing that struck me last night as I drove from the airport to our accommodation was that there was a very fierce depression in Australia in 1893, some 122 years ago. That led, particularly the Victorians, to take quite a protectionist view of the world. Their intent at that time was to create a coalition – a commonwealth if you will – to create very high tariff barriers and walls preventing foreign, and particularly British imports, and create a domestic industry. In fact, that sentiment, that protectionist sentiment, led to a meeting in a little border town, Corowa, some 200 kilometres from here on the New South Wales side of the border. What was in discussion at that point in time where two things: obviously the protectionist barrier that I spoke about, but also the coalition of defence forces, which at that time were disaggregated across the states and territories, and the coalition of a single tariff system within the Australian context. Nothing too much emanated out of that particular meeting other than the fact that it was the precursor to the establishment of the constitution – quite a significant thing. One of the attendees of that meeting was a man called John Quick, who ultimately was the architect of our constitution. The choice of the town, though, was interesting in the context of inter–colonial tariffs. So the Murray River – which Corowa is placed upon – at the time was dotted and bespeckled with customs officers. If a trader on the New South Wales side of the river wanted to export a cask of wine or flour – which I think was the predominant industry in Corowa at the time – they had to pay quite a high tariff to get produce to their natural harbour town, which was Melbourne, only 200 kilometres away. Yet, if they exported, or rather transported goods and commerce to Sydney, which is twice the distance away, there was no tariff. It just struck me as I travelled how far we’ve come in terms of our vibrant trade industry and our importation.
Today, of course, is our first general summit under which I appear before industry colleagues as the dual holder of the Australian Border Force Commissioner position and the Comptroller–General of Customs. In the former role, I’m responsible to the Minister for Immigration and Border Protection, the Honourable Peter Dutton MP, for all matters border protection: airport, seaport operations and our maritime security. And more laterally, since 1 July, responsibility for the running of our visa compliance and immigration detention centres. In the role of Comptroller–General, I steward and oversight the operation and the architecture of tariff and trade regulations and rules in this country. They are complementary roles and they are of equal importance.
I wanted to echo the Secretary’s comments and his sentiment in relation to how critical our engagement with industry is. We value it and it is critical to us completing our mission. I want to emphasise that point: we do value our engagement in industry. The reason being that industry can be forgiven for thinking that our interaction with it in the past has not necessarily been consistent with that ethos. As I’ve consulted widely across industry over the last six months in particular, but probably 12 months or so, there is a consistent theme coming to me in relation to how industry perceives the way we interact with it. Descriptions like an ‘over–bureaucratised process’, a ‘reticence in imparting advice and information’, and an ‘inertia in decision making’. The term I’ve used both internally in the Department, and across industry more broadly, is that I believe the interaction, the engagement, the relationship has been characterised by a flavour of adversarialism instead of a collaborative flavour in which it should be. We may ask ourselves, and I have quite often, well ‘why is that?’ Why do we have what appears to be a relationship which is biased towards the adversarial as opposed to the collaborative? As I’ve analysed that, what I’ve come to realise is that the reasons for that are manyfold, varied and certainly interwoven. Some of those reasons are that a great deal of what we do is regulatory in nature, and that requires the interpretation of quite complex laws and policy, including their interplay. There is a need for us to, as a government authority, to record our decision making for posterity, for scrutiny at a later point in time. There is a tendency for us to try and spread out liability of risk by placing decisions into committees as opposed to individuals. Generally – and this is a general comment so please don’t take this as being indicative necessarily of our enterprise – is that across public service there is a general lack of performance management, both at an individual and a systemic level. So they are some of the factors that lead to that characterisation of our relationship with industry that I spoke about. It’s a
mea culpa that I have been speaking about quite publicly. I mentioned it recently at the National Conference of the Customs Brokers and Forwarders Council of Australia in Sydney where I spoke.
But that characterisation of us as a government body – when I look introspectively within the Department – is also compounded by our lack of renewal. Let me give you some examples of that. So, Linda and I have been working over the last little while in relation to how we can better run a committee. It’s a committee inside our organisation which considers applications from airport operators to operate outside of the normal designated schedules and arrangements. So the ability for the Government to regulate where international flights land in Australia is a very important tool. It’s a tool that allows organisations, like ours, to deploy the right resources at the right time to ensure that passengers and cargo coming and going upon that particular plane comply with trade and visa rules. We set up the committee to deal with those extraordinary applications. Because we recognised, at the time when we set this committee up, that there is a commercial driver in aviation – from time to time airlines and airports – who want to operate from a different location where there’s no internationally designated authority. Or, occasionally, there will be an operator who will want to bring an ad hoc flight in where there is no authority to do so. When we set that committee up it was relatively successful. But what we found, over time, was in the absence of renewal – or at least in the absence of that committee being able to modify its operations, its underlying architecture, its foundational premises, to change as industry changes – it started to flag in its performance. If we fast forward to today and we look at the aviation industry, we can see it’s dynamic. Its profits are wafer thin. It’s trying to maintain pace with the growing volume of passenger movements. We now have integrated travel services and there are mushrooming effects of airlines as they try and respond to the ebb and flow of markets and submarkets. So whereas previously that committee had the luxury, at least in temporal terms, of being able to decide on an application for a permanent shift of operations at a location, or a modality, or a particular set of aircraft schedules, now they’re dealing with applications which are much more temporary and much more transient. It’s more likely that that committee today will be considering an application for an airline wanting to operate part week for a six to 12 month trial somewhere on a coastal port where there’s limited infrastructure and limited resources in situ to deal with that. If you take the foundational premises of what I described and you apply it to that application, the bias is always towards no, because it’s very difficult to do. The architecture of the decision making is not set up to deal with those types of applications. What then happens – compounding the adversarial character that I explained – is airport operators and airlines, rightly, then entreat executive decision–makers, or ministerial representatives, which then override the committee decision for a whole range of reasons. That just then exacerbates the adversarial nature of the engagement.
Another example is what I’ve described as our stale engagement strategy. We have over time developed a framework of engagement with industry across the entirety of industry’s interests. They are aggregated in the format of a peak meeting every year on the various industries and sub–industries. There is some sort of ad–hoc engagement; there are some sub–level, some subordinate engagements. But they have over time become quite stale. They have become quite stale in terms of their representation because of their decreasing value to the entities who attend. The delegates become increasingly subordinate, and therefore, their plenipotentiary power to make decisions on behalf of their entities becomes less and less. So the value of the entire mechanism then decreases over time. The process of setting the agenda is very transactional and there’s no strong intercourse and no strong exchange of ideas. Here is the thing that bemuses me: as I’ve consulted broadly across industry and within our own Department, I’m impressed by the solidarity and the unity of view that everyone thinks is a ‘tick in a box’ exercise. No–one thinks there’s any particular value in it. Yet we maintain this rhythm and stale constructs and we repeat it transactionally. Really, it’s an edifice of a past paradigm.
As the Secretary and I in the months leading up to the looming merger on 1 July this year thought about our industry engagement and how we might renew that, he and I reflected quite positively on the industry engagement summit that we had under the Customs umbrella last year. The positive tone, the hope and the promise that we derived out of that. We had plenty of feedback from industry in terms of that being reflected back at us. We both reflected on the broad consultation that we had engaged upon with industry entities and we remarked how similar the themes were that we had arrived at. We commissioned a body of work through our policy group, and through Linda’s division – the Traveller, Customs and Industry Policy division in particular – to come up with a new engagement strategy, which matched the vibrancy of the industry that we were currently dealing with. If I think about the shackles that are about to be let of just the trade industry under some of the free trade architecture that we have globally in this country – some of the bilateral free trade instruments such as the China–Australia Free Trade Agreement, the multi–lateral trade instruments that are in the nascent points of negotiation, and establishment of Trans–Pacific Partnership – trade is going to explode in this country over the next 10 to 20 years. If we, as a Department, don’t have an interactive, meaningful and responsive engagement strategy with industry, we’re going to compound all of that adversarialism that I described earlier.
I don’t want to preview too much of the summit’s work other than to indicate, as the Secretary did, that we are essentially engaged on two paths in terms of our industry engagement. One is the
Trade, Customs and Traveller, and the other is
Migration and Mobility. Those titles are fairly self–evident. As you attend the four streams over the next day and a half or so, you’ll learn a lot more about that.
What I do want to do, however, is just touch upon a few highlights. One of the crown jewels of the trade crown at least is the Australian Trusted Trader Programme. Many of you will know about it; we’ve spoken about it. It’s well into a pilot phase. Humble beginnings. Earlier this year, in July, we launched the programme here in Melbourne. We started with four participants. That’s now grown to 12. We will finish the pilot phase somewhere mid–year with 40 or 50 participants, give or take. That’s very exciting. Over the course of the next couple of years we hope to land at a final cohort of in the hundreds. Admittedly, that’s quite modest numerically in terms of the size of our trade industry. But we hope that those several hundred will be at the top tier of industry, both in terms of volume and quality; that our Trusted Trader Programme will, over time, throw an umbrella over the large majority of trade in this country – 80 per cent or more. That, of course, has dual benefits as we’ve talked about often – in terms of contribution to trade and prosperity, but it also has the complementary objective of improving our national security. It allows me to deploy my scarce resources to that sector of trade and industry which poses the highest risk – the non–trusted entities.
Excitingly, over this summit, they’ll be an opportunity for us to explore in companionship whether we can extend the Trusted Trader modality to services. Currently, most Trusted Trader or Authorised Economic Operator programmes across the world exclusively focus on deliberation and the free trade of goods. We’re interested in whether we might be able to extend that to services – something we’re happy to have a conversation with you about, and we hope that you will contribute productively to that discussion.
We are having an active conversation around single windows. Essentially, for those of you who are not part of the trade industry, this is a very important mechanism. One of the frustrations of industry is the requirement to submit multiple applications containing the same information – in fact, in most cases, identical information – to a number of government authorities. Our hope is to create a single portal – a single point of submission for industry for a one–off lodgement of information. We’re now talking to our New Zealand counterparts that have recently implemented a single window. It’s an achievable reality. It’s something that we want to learn about further from our cousins across the Tasman. But even more excitingly, what we discussed with our New Zealand counterparts just under a fortnight ago, is how we may be able to create a single trans–Tasman window, leveraging off our familiarity with each other’s systems. Again, this is a very exciting concept which I’m inviting industry participants to engage in.
Intermodal terminals are a phenomena which are proliferating globally. They are starting to become a topic of much discourse within our own trade industry. Of course, there are the benefits of easing congestion in our cities in terms of traffic on our roads and also congestion in our sea ports, which are doing a marvellous job in expansion. In fact, Melbourne sea port, where we currently stand, has got some very prospective and promising expansion projects. Be that as it may, intermodal terminals will at some point in the future – five, 10, 15, 20, 35 years – be a significant part of the constellation of our trade and goods clearances. That poses challenges not just for industry but for us in terms of how we ensure security of cargo until we can clear them in the intermodal terminals for distribution of the commodities. The Moorebank Terminal project in Sydney is anticipated to take 3000 trucks off the road and to reduce the cost of imports and exports by somewhere between 20 and 25 per cent. South Dandenong, Altona here in Melbourne, have got great concepts in mode and is something that we’re excited to be part of in terms of the conversation.
Our initial angst was how we ensure that input of goods are appropriately cleared through the customs functions, and how do we ensure there are no prohibited goods that may impact community safety and may not harm the community. But when we look at technology and its evolution, it’s actually part of the solution. We see in other countries around the world – and Holland is a great example – that technology enables us to take high resolution, real time digital images as sea cargo is transported on rail tracks at speeds up to 60 kilometres an hour. If you conceptualise that – you land a container ship; they’re automatically transported on to rails; we run them out to an intermodal terminal; they leave the Port of Melbourne; photographs are taken; the photos are sent in real time to our Melbourne offices; and we clear them through technology – we only intervene on those particular containers that cause us some concern. Technology is a real solution. Yet, having said all that, it will continue to challenge us. Our expectation and hope is that you, as experts in the freight industry, will assist us in terms of effecting and designing a solution.
On travellers – just taking us out of the trade industry for a moment – we are working very closely and intimately with the aviation industry more broadly to try to deal with the congestion here and now created by large volumes of passengers. We’re having some successes, notwithstanding that we are still challenged from time to time with peaks. But our recognition is this – and it’s a joint recognition between ourselves and our aviation partners – that incremental changes will not solve the fundamental problem of very large projections of growth up to 25 per cent just over the next three or four years of incoming passengers. I was recently in Shanghai and it reinforced for me that there is a burgeoning independent, wealthy middle class arising in China. Moreover, there has been the aggregate effect of Australia renegotiating its air services agreement with China, which means more Chinese airlines embarking from more Chinese provincial cities to more Australian capital cities. Consider also our reforms around entitlements to visit this country through our visa programme, both in terms of accessibility and flexibility. When you think of these three factors in combination, we are going to achieve near exponential growth over the next five or 10 years from China alone.
What does that mean in terms of the pressures that are put on our ability to clear passengers at the airport? Well, they’re significant. Many of you in the aviation industry will have seen our automation intent. It’s not just an empty concept or a rhetorical flourish. We are actually currently, as we speak, heavily engaged in investing in our automation intent. We’re expanding our inbound SmartGates. We are installing, as we speak, outbound departure gates in our major capital cities. Yet, our vision of something which is beyond that – what I’ve often described as the Airbus scenario: where an Airbus of 400 passengers touches down at Sydney or Melbourne Airport; it decants its human cargo into the terminal; and all 400 passengers – except for a handful who we want to talk to who we have identified in advance through analytics and intelligence analysis – stream through a near corridor where cameras and biometric technology allows for facial recognition and matches their check–in data; they pick up their baggage from the carousels; and they clear the primary and secondary lines with no human intervention. That’s our vision. We’ve got serious plans in place to achieve that, but we won’t achieve it without partnership with industry. Not just in terms of setting up the infrastructure, but in terms of the ideas, the concepts and the engineering of that ecosystem. We’re asking for your help in that respect.
Let me close. Today is not the culmination of our industry engagement strategy, rather, today is another step in that journey. We are hoping to elicit many views, ideas and proposals that we can take away, ingest, analyse and use in our engagement. So, I would extend to you an invitation to be frank, to be open, to engage productively. Not just in the streams that we’ve set across the programme, but to leverage off the networks, the relationships that you will make and engage with us through the many mechanisms and the channels that we are going to provide for you in our new refreshed engagement strategies. I like to think that many of you in the room would appreciate that the sentiment that’s been expressed by the Secretary and I this morning is not just empty rhetoric. We understand we’re on a journey of re–engagement, refreshment and renewal, but we hope that you have seen over the last six months – as we’re progressing to this end state – a change in attitude, a willingness on our part to deal with intractable issues, a greater level of responsiveness to your concerns, problems and challenges, and a greater willingness to engage in a conversation of equality and partnership.
Can I leave that thought there, but before I move off, I do also want to reinforce the Secretary’s comments in relation to thanking Linda and her team in the design and the coordination of this event. As delegates we often tend to forget how much work is invested in setting up these in a logistical and an engagement sense. I would ask everyone together to join me in a round of applause of thanks.
