Armidale move threatens core capability and change management

By Stephen Easton

Tuesday June 14, 2016

The Australian Pesticides and Veterinary Medicines Authority faces having to rebuild its core capability if it moves to Armidale, New South Wales, right when its CEO was hoping things would “settle” after a series of significant and overlapping reforms that go back several years.

The APVMA’s concerns about its ability to perform its role after a sudden move, because its scientists have almost all said they would not move with it, have been on the record for months.

Chief executive Kareena Arthy reiterated her concerns in May’s Budget Estimates hearing. She also discussed some of the agency’s operational changes, in line with the government’s new lighter-touch approach to regulation. The aim is to “fast-track” applications for approval of certain household and agricultural products and speed up the process for manufacturers, while maintaining community safety with new compliance checks.

She explained that $7.3 million worth of reforms over four years, catalysed by the agricultural competitiveness white paper, would involve developing new standards and new compliance activities, as well as building a new computer platform.

But that’s far from the only reform going on. The APVMA has in fact been in “change mode” due to overlapping reform for several years, since well before Arthy took up the job three years ago, as she told a professional forum for public servants to discuss the new approach to regulation at the end of 2014.

The APVMA has been developing a new risk-based assessment framework with the University of Melbourne’s Centre of Excellence for Biosecurity Risk Analysis, for example, as part of a wider set of reforms. All going to plan, it is due to start using it on July 1 this year.

“We are doing a lot of cutting edge work in transforming our business from being a regulator which was not particularly well regarded by stakeholders to frankly one that I think — once we get through these next two years — I think we will be a beacon, for a lot of people not just in Australia but internationally for a lot of the directions we’ll be taking,” Arthy said at the forum, about 18 months ago. She also commented on the burden it put on the small agency.

“Change is good; I’m a change agent and a change manager and I hate sitting still, but sometimes you just have to let the regulators get on with it,” she said.

At the APVMA, “the same people who are actually doing the work and doing the science and doing the decision-making are the ones implementing regulation, and they’re the ones who need to be able to focus on doing what they do best, to be able to fulfil the ambition of the regulation change,” she added.

“As with most of us, we are doing too many things at once and there does come a point where to achieve real change, things just need to settle for a while and let people just deliver.”

It seems the upheaval of moving to Armidale — for the purposes of regional economic development in the electorate held by Deputy Prime Minister Barnaby Joyce — could create significant new challenges for the regulator as it emerges from this period of change.

Hang the cost-benefit study, it’s Armidale or bust

Joyce confirms the decision to force the move to Armidale is a rock-solid Coalition election promise, regardless of whatever was found by a cost-benefit analysis that was due in early June but has not seen the light of day.

The cost-benefit study consumed “roughly $270,000” of the Department of Agriculture and Water Resources budget, according to first assistant secretary Fran Freeman’s evidence in the Estimates hearing. Secretary Daryl Quinlivan noted it was supposed to inject some facts into the situation, being conducted independently of the department by consultants from Ernst and Young.

It is now clear that its outcome is irrelevant to the government, whose deputy is threatened by the return of independent candidate Tony Windsor in the seat of New England and stands accused of pork-barrelling by the Opposition.

In the hearing, Arthy told an incredulous Senator Doug Cameron the move could be extremely detrimental to the agency, based on a staff survey that showed a large number of scientists did not want to move from Canberra to a regional centre like Armidale:

“I have had no reason to change the advice that I provided last year, which was based on the information at the time about the difficulty in taking the regulatory science component in sufficient numbers, and that I would not be able to fulfil my statutory obligations. I have had no reason to change that view.”

She said it was two years ago when the minister first told her of his plan to move the agency either to Armidale, a regional centre in Joyce’s central New South Wales electorate, or Toowoomba in Queensland, which he has now rejected.

Arthy characterised her view that the APVMA might be unable to do its job following a move to either place as “speculation” but told Cameron she had communicated it because she took her role legislated role very seriously:

“The implications—and this is hypothetical—is that, if we were not able to process applications, it could mean that a number of products would not be available. At the moment we handle about 5,000 applications a year with a significantly reduced staff. Without alternate mechanisms in place to process those, we would not be able to get through as many.”

The task of rebuilding the agency would make it “difficult … to sustain operations for a number of years” based on the staff survey, which showed “only a very small number” of its “highly specialised” scientists were willing to move with it:

“Without that critical mass of regulatory scientists and the inability to quickly bring new people on in an area where there are not regulatory scientists just lying around, that is my main concern in terms of being able to sustain an organisation of our nature.”

Liberal senator Anne Ruston, standing in for Joyce in the hearing, described Arthy’s concerns as “short-term” and said — without being able to talk to Joyce — “her thoughts” were that the cost-benefit analysis should determine if it would be smarter to carry out the move over a long period of time rather than all at once.

This would mean the agency kept a presence in both locations for a transitional period and, as new scientists were recruited, their jobs could be located in Armidale rather than Canberra.

In the same hearing, the outgoing chair of the independent Rural Industries Research and Development Corporation Daniela Stehlik confirmed “the board complied with the request from the minister to relocate” its headquarters from Canberra to Wagga Wagga at a meeting in February and would begin the process on July 1.

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