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Final Report 170602 CEBRA Report Cover Page Title, ID, & Output # Increasing confidence in pre-border risk management, 170602, Deliverable 4, Final Report Project Type Standard DAFF Project Robyn Martin (at inception Tim DAWR Project Allan Mooney Sponsor Chapman) Leader/s CEBRA Project Susie Hester NZ MPI Collaborator N/A Leader External Collaborator Associate Professor Arthur Campbell, Department of Economics, Monash University Project Objectives The objectives of this two-year project are to investigate: • the current behaviour of Competent Authorities (CAs) in their regulation of exporters for a range of aquatic animal-product pathways, with a view to improving the design of future import requirements; • the complementary role that assurance (industry and international and departmental) schemes may provide on pathways associated with CAs; • the evidence that could be collected (or collated) from post-arrival surveillance that would give insights into the behaviour of import supply-chain participants on these pathways; and • options for the department to design import requirements that would align the objectives of import supply-chain participants with those of the Australian Government. Outputs Year 1 1. Scoping Document that refines and describes the nature of analysis (theory, interviews), pathways of interest and availability of data 2. Interim Report on the investigation into compliance by CAs Year 2 3. Confirmation of plan for stage 2 of project 4.Final Report CEBRA Workplan Year 2017-18 Year 2018-19 Budget $97,000 $107,000 Project Changes None Research Outcomes • Improved confidence in the biosecurity performance of specific imported aquatic animal- (Planned) product pathways; • Strengthened post-arrival surveillance capacity for detection of non-compliant goods that were certified by the CA; • An enhancement of the initiatives already undertaken by the department to better-manage biosecurity risk • Improved relationships with CA partners through communication of information related to performance. • An augmentation of the knowledge base within the department on the importance of considering the incentive properties of inspection rules (e.g. Carrots and Sticks projects) Recommendations 1. That a targeted investigation of finfish pathway be undertaken 2. That non-verifiable rules be identified and replaced with rules that are verifiable and provide equivalent levels of assurance 3. That interviews with offshore CAs be undertaken 4. That CAs be provided with regular feedback reports on certification performance 5. That the impact of feedback reports be measured during the roll-out period. 6. That an incentive-based mechanism for finfish be implemented to correct mis-alignment of incentives 7. That third-party certification schemes be investigated as complements to border inspections. 8. That inconsistencies in data entry be removed to allow for more rapid data analysis Related Documents Scoping Document (December 2017); Interim Report (June 2018); Plan for stage 2 (August 2018) Report Complete Yes, SAC Review comments incorporated. CEBRA Project 170602: Increasing confidence in pre-border risk management Final Report Arthur Campbell1, Fallon Mody2, 3, Allan Mooney4, Jason Whyte2, 5 and Susie Hester2, 6 1. School of Economics, Monash University 2. CEBRA, The University of Melbourne 3. History and Philosophy of Science, Faculty of Arts, The University of Melbourne 4. Aquatics and Marine Pests Unit, Animal Biosecurity, Biosecurity Animal Division, Commonwealth Department of Agriculture,Water and the Environment 5. ACEMS, School of Mathematical Sciences, The University of Melbourne 6. UNE Business School, University of New England January 2021 Centre of Excellence for Biosecurity Risk Analysis Page 2 of 73 Pre-border risk management Acknowledgements This report is a product of the Centre of Excellence for Biosecurity Risk Analysis (CEBRA). In preparing this report, the authors acknowledge the financial and other forms of support provided by the Department of Agriculture,Water and the Environment (DAWE), and the University of Melbourne. The authors are grateful to the following people who generously gave their time to attend a project workshop and/or offer feedback on the Scoping Document: Carol Sheridan, Geoff Grossel, David Kim, Jonathan Taylor, Helen Walker, Murli Baker- Gabb, Tim Brinkley, Andrew Trainor, Nick Medway, Greg Hood, Cameron McDonald, Paul Pheloung, Guy Summers, Sally Grimes, Jessica Mitchell, Linda Jennings, Nathan Reid, Caroline Martin, Amanda Kingston, Shona Hodgetts, Tom Black, Rachelle Ellis-Brownlee (DAWE); Tony Arthur (ABARES); Andrew Robinson (CEBRA). We also acknowledge the assistance and generosity of the importers and customs brokers, and DAWE staff who participated in our stakeholder interviews. We thank TMAD staff for facilitating interviews with overseas DAWE staff. Finally, the authors thank two external reviewers for their insightful comments on an earlier version of the report. Page 3 of 73 Pre-border risk management Table of Contents ACKNOWLEDGEMENTS .................................................................................................... 3 TABLE OF CONTENTS ........................................................................................................ 4 TABLE OF DEFINITIONS ..................................................................................................... 6 1. EXECUTIVE SUMMARY ......................................................................................... 9 1.1 PROJECT OUTCOMES AND RECOMMENDATIONS ............................................................ 9 2. INTRODUCTION ................................................................................................. 12 2.1 OBJECTIVES ........................................................................................................ 13 2.2 PATHWAY INFORMATION ....................................................................................... 13 2.3 METHODOLOGY ................................................................................................... 16 2.3.1 ECONOMIC THEORY ....................................................................................... 16 2.3.2 INTERVIEWS WITH STAKEHOLDERS ..................................................................... 16 2.3.3 DATA ANALYSIS ............................................................................................. 17 3. INSIGHTS FROM ECONOMIC THEORY .................................................................. 18 3.1 THE THEORY OF DELEGATION .................................................................................. 18 3.2 EQUIVALENCE AND CREDIBILITY OF THIRD-PARTY CERTIFICATION IN AQUACULTURE ............ 19 3.2.1 CERTIFICATION.............................................................................................. 19 3.2.2 EVALUATING CREDIBILITY OF THIRD PARTY CERTIFICATION SCHEMES. ........................ 20 3.2.3 THIRD-PARTY CERTIFICATION SCHEMES IN AQUACULTURE ...................................... 21 4. INTERVIEWS WITH STAKEHOLDERS ..................................................................... 24 4.1 INSIGHTS FROM STAKEHOLDER INTERVIEWS ............................................................... 25 5. DATA ANALYSIS ................................................................................................. 34 5.1 FINFISH .............................................................................................................. 34 5.2 ORNAMENTAL FISH ............................................................................................... 34 5.2.1 RESULTS ...................................................................................................... 35 5.3 USING TARGETED INVESTIGATIONS TO INFORM POLICY ................................................. 37 5.3.1 DISCUSSION OF DATA FROM PAST TARGETED INVESTIGATIONS ................................ 38 6. DISCUSSION AND RECOMMENDATIONS ............................................................. 42 6.1 UNDERTAKE A TARGETED INVESTIGATION OF FINFISH PATHWAY ..................................... 42 6.1.1 REPLACEMENT OF NON-VERIFIABLE RULES .......................................................... 42 6.2 STAKEHOLDER INTERVIEWS .................................................................................... 43 6.3 IMPLEMENTATION AND EVALUATION OF FEEDBACK REPORTS ......................................... 44 6.3.1 EVALUATING THE PERFORMANCE OF FEEDBACK REPORTS ....................................... 45 6.4 EXPLICIT INCENTIVE MECHANISMS .......................................................................... 46 6.4.1 CHOOSING AN APPROPRIATE INCENTIVE-BASED MECHANISM FOR FINFISH ................. 47 6.5 BIOSECURITY EQUIVALENCE OF THIRD-PARTY CERTIFICATION SCHEMES ............................ 48 6.6 INCONSISTENCIES IN DATA ENTRY ............................................................................ 49 7. REFERENCES ...................................................................................................... 50 8. LIST OF FIGURES ................................................................................................. 53 9. LIST OF TABLES .................................................................................................. 53 Page 4 of 73 Pre-border risk management 10. APPENDIX A: PROCESS FOR CA APPROVAL .......................................................... 54 11. APPENDIX B: THIRD-PARTY CERTIFICATION SCHEMES IN AQUACULTURE ............. 55 11.1 AQUACULTURE STEWARDSHIP COUNCIL
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