'Significant non-compliance': Agency admits to breaching finance laws

The Australian Pesticides and Veterinary Medicines Authority, which has long been accused of being too close to industry, has revealed a "significant non-compliance" by not collecting the funds.

"It has not been the practice of the APVMA to collect levies for leviable disposals (including sales) of chemical products authorised under permits," the agency's 2024-25 annual report said.

This was despite the APVMA - which issues permits to allow unregistered chemicals to be legally sold in some circumstances - being required to collect these levies under the relevant legislation.

"The APVMA has put in place a process to collect these levies for disposals in 2024-25 and all future years moving forward," the annual report said.

"It is also undertaking a review to determine the total value of previously uncollected levies and investigating recovery options consistent with general principles relating to the management of public resources."

The breach was recorded by the Australian National Audit Office, which audited the agency's financial statements, after the agency reported it to the minister.

Greens agriculture spokesperson Peter Whish-Wilson said the revelation showed there remained "serious questions whether the embattled government agency is up to the job of keeping Australians safe."

"The Greens have repeatedly raised concerns about regulatory capture, and that the APVMA is primarily funded by the chemical companies it regulates," Senator Whish-Wilson said.

Pesticides peak body CropLife Australia chief executive Matthew Cossey said previous inquiries had shown the regulator's industry funding had not led to undue influence on its decisions.

But, Mr Cossey said, the Albanese government should properly fund the APVMA - which is largely funded through about $50 million a year worth of fees and levies paid by industry - to "remove any false perceptions."

"CropLife has long called for proper government funding to support the regulator's public good functions in chemical reviews, permits, compliance and enforcement, which industry should not fund," he said.

The federal government, which has promised a new "evidence-based funding framework" it says will limit the risk of industry capture, tipped an extra $5.2 million into the APVMA to keep the regulator afloat in 2024-25.

The APVMA administers a permit scheme that allows for the legal use of agricultural or veterinary chemicals in certain circumstances without having to undergo the costly and time-consuming registration process.

This includes "minor use" permits, which can be issued when no registered product exists for the proposed use and there is not "sufficient economic return to register the product."

The regulator has come under intense scrutiny since 2016, when then Agriculture Minister Barnaby Joyce controversially moved its main office from Canberra to Armidale, a change found to have reduced its capabilities.

Former board chair Carmel Hillyard and chief executive Lisa Croft resigned in 2023 after a review ordered by then Agriculture Minister Murray Watt heard that an employee had urinated on colleagues after a staff Christmas party.

The review found the agency should be moved back to Canberra, but the government rejected this.

A 2016 Senate inquiry into the independence of the agency's regulatory decisions found the move to Armidale had "hampered the regulator's ability to address a number of long-running issues with regard to its performance and funding."

Senator Whish-Wilson said the inquiry had heard "genuine concerns about the independence of the agency's decisions and the ministers who influence them."

"Multiple witnesses pointed to the relationship between political parties and the agricultural chemical sector, singling out the role of both corporate donations to political parties and the influence of lobbyists with high level connections to political elites," he said.

But Mr Cossey said both the Senate inquiry and rapid review had ultimately found "no inappropriate or undue industry influence."

Agriculture Minister Julie Collins said the federal government was working to "clean up" the APVMA with "a clear path forward for agvet chemical regulatory reform, including the development of a sustainable funding model ... providing certainty for the authority and chemical users."

The government is also providing $8.1 million over four years from 2025-26 to extend a grant scheme to support applications for new or expanded chemical uses.

An APVMA spokesperson said the uncollected levies represented a small fraction of those due.

"The APVMA operates independently of industry, government, and advocacy groups," the spokesperson said.

"Our decisions are based on scientific evidence and risk assessments, ensuring that approved products are safe and effective."