Increasing confidence in pre-border risk management

Abstract

International trade in aquatic animal products is governed by the World Trade Organisation’s SPS Agreement to which Australia is a signatory. The trade typically relies on certification undertaken by ‘Competent Authorities’ (CAs) to certify a product meets the importing requirements of a given country, including freedom from certain pests and diseases of concern to the importing country. For aquatic animals and aquatic animal goods, like ornamental finfish, salmon and prawns, DAWR will only accept trade from countries with a CA it has recognises and has approved. DAWR grants the more rigorous approved status to a CA once an evaluation occurs on the capacity for the agency to comply with Australia’s import requirements.<br/>The evaluation of a prospective CA by the department occurs only once, prior to establishment of the approval. There is currently no requirement for random or routine auditing of CA procedures by Australia once the initial agreement has been established. Non-compliance with certification requirements may be discovered during document assessments, or through routine physical inspections at the Australian border. In some cases, however, there is no requirement for a physical inspection of CA-certified goods – goods will be released from biosecurity control based only on an assessment of the documentation.<br/>In using CAs to manage its risk off-shore, the department is delegating certification authority to a third party. Economic theory on incentives, in particular delegation theory, suggest the scope and effectiveness of this delegation would usually be governed by how well-aligned the interests of the department and CA are. Theory also suggests the implementation of monitoring by the department is needed to ensure the actual decisions being taken by a CA fall within the rules and guidelines that have been prescribed.<br/>This project focuses on investigating the behaviour of CAs in undertaking their certification role and provides guidance on whether Australian border inspection policies should be modified in response. The analysis involves interviews with stakeholders, analysis of import inspection data and insights from economic theory. Two aquatic-animal pathways are used in the analysis, but methodology and findings are likely apply across a range of other pathways.