Annual Report | 2018–2019 Contents About Dairy Food Safety Victoria 3 Dashboard — industry and DFSV statistics 4 Chair’s foreword 6 Chief Executive Officer’s report 7 Performance report 8 Regulation objective 8 Management of food safety incidents objective 12 Reputation objective 14 Advice and support objectives 16 Participation objective 17 Finance objective 19 Governance and business systems objective 21 People objective 23 Governance and organisational structure 25 Workforce data 29 Other disclosures 30 Financial statements 34 Independent auditors report 71 Disclosure index 73 In accordance with the Financial Management Act 1994, I am pleased to present Dairy Food Safety Victoria’s Annual Report for the year ending 30 June 2019. Dr Anne Astin Chair 27 August 2019 Published by Dairy Food Safety Victoria Copyright State of Victoria 2019 ISSN: 2204-0641 2 Annual Report 2018–2019 | Dairy Food Safety Victoria About Dairy Food Safety Victoria Dairy Food Safety Victoria (DFSV) is the statutory authority Charter and purpose responsible for regulating the Victorian dairy industry to DFSV is a statutory authority established by the Victorian safeguard public health — implementing a robust regulatory Parliament under the Dairy Act 2000. DFSV reports through framework that underpins market access and the growth of its Board to the Victorian Minister for Agriculture. the dairy industry. Ministers for Agriculture, the Hon. Jaala Pulford MP and the As a statutory authority DFSV is accountable to the Victorian Hon. Jaclyn Symes MP were the responsible ministers from Government, through the Minister for Agriculture, for fulfilling 1 July 2018 to 30 June 2019. its statutory responsibilities in line with government policy and The objectives, functions and powers of DFSV are prescribed within an appropriate governance framework. It licences all under Part 2, Sections 5–7 of the Act. dairy businesses operating in Victoria, approving and auditing compliance with food safety programs to ensure state Objectives of the Authority legislation and nationally agreed standards are maintained. The objectives of the Authority are to (a) ensure that standards which safeguard public health are maintained in the Victorian dairy industry (b) ensure that it performs its functions and exercises its Dairy is Australia’s fourth largest and Victoria’s second powers efficiently and effectively. largest export. Victoria dominates the industry in Australia, with most Australian dairy farms located in Functions of the Authority Victoria, producing more than 63 per cent of Australia’s The functions of the Authority are to milk and accounting for most of its dairy exports. DFSV (a) establish, maintain and improve has more than 3,900 licensees and over the course (i) the food safety standards of dairy food of a year conducts two audits of each manufacturing (ii) the standards of construction and hygiene of plant business, covering food safety requirements for both and equipment in dairy manufacturing premises domestic and export markets. Through arrangements (iii) the standards of maintenance, cleanliness and with contract auditors, more than 1,300 farms are also hygiene of dairy transport vehicles audited each year. (b) monitor and review the standards specified in paragraph (a) (c) approve and monitor the implementation of food safety programs (d) administer the licensing system under Part 3 Vision (e) ensure that appropriately qualified persons are appointed Product safety and integrity locally and globally for Victoria’s as authorised officers dairy industry. (f) fix and charge eesf in respect of the carrying out of its functions or the exercise of its power Mission (g) in consultation with the Secretary to the Department of To independently regulate dairy food safety. Health or a municipal council, protect public health (h) advise the Minister on matters relating to the Values administration of this Act Respect (i) carry out any other function that is conferred on the We recognise, value and capitalise on diversity. Authority by this or any other Act. Collaboration Powers of the Authority We work actively and positively as a team and with (1) Subject to the Dairy Act, the Authority has all the powers stakeholders in the spirit of partnership and mutual regard. necessary to enable it to perform its functions. Service (2) Without limiting its other powers, the Authority may – We will exceed expectations by always providing high (a) enter into agreements or arrangements with third quality services. parties for the provision of services to the Authority or for the provision of services by the Authority Excellence (b) fix and charge eesf for carrying out its functions, and We will consistently seek to improve what we do and how for the provision of its services including the services we do it. of its authorised officers Integrity and fairness (c) expend its funds in carrying out its functions and We will be honest, open and transparent and act consistently powers or in paying remuneration and allowances and without favouritism. to its members. Dairy Food Safety Victoria | Annual Report 2018–2019 3 4 Annual Report 2018–2019 | Dairy Food Safety Victoria Dairy Food Safety Victoria | Annual Report 2018–2019 5 Chair’s foreword In the May 2019 Budget, the Victorian Government allocated funding to implement our Dairy RegTech 2022 initiative. Dairy RegTech will help the dairy industry provide a higher level of food safety assurance at a lower cost. It will use digital methods to reduce the regulatory burden for industry and introduce real-time data collection and analytics. It will also enable more timely monitoring of the food safety performance of dairy businesses, demonstrate compliance with food safety Dr Anne Astin regulations, and deliver education and incentives to promote a positive food safety culture. As Chair of the Board of DFSV, I am proud to present Dairy A new source of data is information from measures that Food Safety Victoria’s Annual Report for 2018–2019. The report support and sustain food safety standards. A focus on shows that throughout the year the Authority successfully behaviours that strengthen food safety will generally prevent delivered on its 2015–2020 strategic plan. The plan reflects our problems arising, but if they do occur, they will be dealt with understanding that the industry’s food safety record directly faster and more effectively. Building on this, DFSV has also affects its growth and access to domestic and international worked with industry to develop and validate an Australian markets. Dairy Food Safety Culture model, which measures behaviours In October 2018 Michele Allan, Julie Johnson, Joanna Wriedt and promotes latest practice in food safety culture. and Noel Campbell were appointed to the Board and Peter It is important to make sure that we continue our core Moloney and Julie Simons were re-appointed. I acknowledge business as the Victorian dairy regulator while also planning the great work of our retired Board members Peter Bailey, for the future. The strategic review that started in July 2018 Mick Blake and Helen Dornom who contributed a wealth is exploring DFSV’s role as a future leader in dairy regulation. of knowledge and experience and strongly supported me DFSV is working with farmers and manufacturers to develop as Chair. I believe the current Board has the same energy, the 2020–25 Corporate Plan which will support and add enthusiasm and expertise for change and we will keep value to Victoria’s dairy industry. working hard with the dairy industry, government agencies and others to develop even better programs and services. In looking to the future and acknowledging current industry challenges, the Authority recognises the great importance Climatic and financial conditions continue to challenge our of innovative approaches to providing assurance to health- operating environment. As DFSV’s core responsibility is to conscious consumers who want greater levels of transparency ensure the safety of dairy products produced in Victoria our when it comes to the origin, integrity and safety of their food Regulatory Operations Strategy 2018–2022 is underpinned supply. The success of Victoria’s world class dairy industry has by two key principles. First, licensees are responsible for been its ability to rapidly respond to ever-changing consumer understanding and complying fully with relevant legislative preferences and market needs. DFSV must also be agile in requirements. Second, the strategy takes a risk-based, responding to industry innovations as they emerge. graduated and proportionate approach to its regulated activities. We have fulfilled this responsibility with minimal This year I was delighted to be reappointed by the Minister for regulatory burden and costs, which includes keeping dairy Agriculture, the Hon. Jaclyn Symes, MP. As Chair for the next industry licence fees at the 2017–18 level. three years, I look forward to continuing to develop and maintain DFSV’s excellent reputation as a food safety regulator New technologies are changing the nature of the food system and to support the dairy industry as a vital contributor to in ways that may dramatically affect the traditional models Victoria’s economy. I would like to thank the Board for its for ensuring compliance with food regulation. Regulators will support and staff for their ongoing commitment, dedication need more reliable and faster assurance methods while still and professionalism. reaching high standards of public health for consumers and strong market access for industry. Achieving this is further challenged by industry demands for reduced government resource requirements and less compliance costs. Maintaining consumer confidence in the face of increasing pressures on food safety controls requires up-to-date communication and Dr Anne Astin information that is independently verified and authoritative. Chair 6 Annual Report 2018–2019 | Dairy Food Safety Victoria Chief executive officer’s report The existing audit-based compliance model has served the industry and consumers well. However, at the moment audits only measure a point in time, and do not measure safety performance of businesses across the year.