TONY JONES, PRESENTER: The Government's new system to regulate live animal exports is under fire tonight with new vision showing cruelty to Australian animals in Kuwait, Jordan and Gaza.

Video filmed by Animals Australia has emerged showing Australian sheep and cattle being crudely slaughtered outside the approved abattoirs.

And a warning: this story contains very disturbing images.

John Stewart reports.

JOHN STEWART, REPORTER: This is not the way Australian livestock are meant to be slaughtered.

In Gaza, Australian cattle are tied to a pole and repeatedly stabbed in the neck. The bull eventually bleeds to death.

Another is slaughtered on the back of a truck, stretched out on a rope.

Animals Australia says these bulls have been identified as Australian by their ear tags.

LYN WHITE, ANIMALS AUSTRALIA CHIEF INVESTIGATOR: In animal welfare terms, it is atrocities and these animals should never have ever been in a position to be subjected to this treatment.

JOHN STEWART: In Kuwait and Jordan, Merino sheep are sold in street markets outside of abattoirs that have been approved for Australian livestock. The sheep are thrown into wheel barrows or dumped into car boots before being taken away and slaughtered.

These images were filmed by Animals Australia earlier this month during the Islamic festival of sacrifice known as Eid al-Adha when animals are slaughtered and meat is given to the poor.

Animals Australia claims the sheep are Australian.

LYN WHITE: They should not have been in that market. We've reported that market for breaches, for vendors and the exporters responsible four times in the last 18 months, and yet once again, we've found Australian animals for sale there in breach of regulations.

JOHN STEWART: Two years ago, the Export Supply Chain Assurance Scheme, known as ESCAS, was set up to stop Australian livestock being slaughtered outside approved abattoirs. ESCAS makes exporters responsible for the way animals are treated and slaughtered overseas.

Animals Australia says the ESCAS system is not working because the Department of Agriculture has failed to take action against live export companies.

LYN WHITE: This has been an ongoing situation that we have reported over the last 18 months, yet we have not seen a single charge being laid, a single prosecution launched against any export company despite the fact that these are ongoing deliberate breaches of Australian regulations.

JOHN STEWART: Animals Australia says the bulls in Gaza had ear tags which traced them to the Jordanian-owned company Livestock Shipping Services based in Perth. The Department of Agriculture is investigating which company sourced the Merino sheep filmed in Kuwait and Jordan.

Lyn White says that ear tags were removed from Merino sheep so their source could not be identified.

LYN WHITE: It's akin to wiping away fingerprints from a crime scene because they know that without being able to identify animals back to a particular exporter, it completely undermines the regulatory system.

JOHN STEWART: Australia currently exports over three million live animals each year, mainly cattle, sheep and goats.

The Agriculture Minister Barnaby Joyce declined to be interviewed, but a spokesman said, "A review of ESCAS is due to be released shortly. In this circumstance, the Minister does not want to pre-empt this report."

The Australian Livestock Exporters' Council declined to be interviewed, but said in a statement:

ALISON PENFOLD, CHIEF EXECUTIVE OFFICER (female voiceover): While ESCAS is at times imperfect, in the main it is working and we are striving to root out those elements that undermine the effectiveness of the system."

JOHN STEWART: Livestock Shipping Services also declined to be interviewed, but denied that its sheep were being sold in street markets in Kuwait or Jordan.

LIVESTOCK SHIPPING SERVICES (male voiceover): In relation to Kuwait, LSS has conducted preliminary investigations into leakage and it cannot link sheep in the market to any LSS shipment ... LSS strongly rejects any allegations of leakage in Jordan.

JOHN STEWART: Livestock Shipping Services said that it was aware of allegations about a possible supply chain breach in Gaza, but said it had been working closely with the Agriculture Department to ensure that all its animals stay within the approved system.

But Animals Australia says it has reported nine alleged supply chain breaches implicating the Livestock Shipping Services company this year.

LYN WHITE: They should not have had an export license and be allowed to place animals - further animals at risk.

JOHN STEWART: A ship owned by Livestock Shipping Services, the Maysora, is currently docked in Adelaide, waiting to be stocked with cattle and sheep bound for the Middle East.

John Stewart, Lateline.

TONY JONES: And we'll be posting the full statements from the Agriculture Department livestock exporters on our website.

RESPONSE TO LIVE EXPORT STORY

MEDIA RELEASE

2 October 2014

LSS SUPPORTS A STRONG SUPPLY CHAIN IN JORDAN

Livestock Shipping Services (LSS) has spent several months preparing key markets across the Middle East and North Africa to ensure the integrity of their supply chain and to deliver best-practice animal welfare training in the lead up to the Islamic religious festival, Eid al-Adha.

LSS has routinely over the last year recorded, investigated and reported on low levels of livestock leakage existing in the Jordan market confirming the source of identified leakage as not having been related to the LSS supply chain. LSS has more recently become aware of reports of a large number of Australian sheep outside of known supply chain facilities in livestock markets around Jordan. Managing Director of LSS, Mr Ahmad Ghosheh, strongly refutes any assertion that the current allegations of leakage in Jordan relate to the LSS supply chain.

LSS has conducted a thorough investigation around its supply chain in Jordan over the past fortnight. LSS is confident that the current leakage does not relate to the LSS HGG supply chain and is isolated to other supply chains operating in the Jordan region.

In the lead up to this years Eid al-Adha Festival, LSS and our importer in Jordan have put in place robust measures to protect the integrity of our Australian sheep supply chain. These measures ensure that not just the basic principles of the ESCAS framework of animal welfare, independent auditing, accountability and traceability are met, but that standards over and above those are strived for through infrastructure improvements, structured training programs and consistent support and advice on achieving positive animal welfare outcomes, Mr Ghosheh said.

Throughout 2014 LSS has predominantly operated only one closed loop facility in the Jordan supply chain. This facility is located in an area controlled by a Ministry of Agriculture Custom Directorate Free Zone Authority, and is a highly regulated environment where stock movements are accurately recorded and tightly controlled.

LSS has developed a comprehensive supply chain management program for the Jordan market in order to meet the standards of best-practice live export management. The program involves comprehensive sheep identification processes, compiling detailed stock records, including reconciliation and physical counts, and regular independent auditing in the lead up to Eid Festival.

LSS actively monitors the Jordan livestock market for any appearance of Australian sheep. Throughout 2014 LSS has identified and been able to eliminate a number of alleged leakage situations as not having originated from the LSS supply chain.

Mr Ghosheh stated that the current leakage allegations relating to the Jordan market were extremely disappointing and concerning for LSS.

Any threat to the credibility of Australian supply chains in Jordan as a whole through non-compliance is a threat to the long term sustainability and viability of the Australian sheep market in Jordan, to Australian livestock producers, and the substantial company investment by LSS in the region. LSS is currently operating in 6 countries that participate in the Festival. A significant amount of time, resources, and management has gone into preparing the region for the Festival and all efforts have been made at both a management and operational level to ensure compliance with the principles of ESCAS are maintained. LSS has been working directly with its key stakeholders over the past fortnight to deliver a best-practice animal welfare workshop covering training and handling techniques, humane slaughter practices, and meat quality assurance processes. In addition to the workshop, LSS has provided additional representatives to support their Middle East and North African teams on the ground throughout the Festival to assist with any issues that may arise. LSS is committed to supporting the ESCAS principles as a framework within which it can work closely with both the Department of Agriculture and other participants in the live export industry to continue to improve the way Australian livestock are transported and handled around the world.

MEDIA RELEASE

20 October 2014

MEDIA STATEMENT

SUPPLY CHAIN IN GAZA

[From Mr Ahmad Ghosheh, Managing Director, Livestock Shipping Services]

Livestock Shipping Services (LSS) is aware of allegations around a possible supply chain breach in Gaza during the recent Islamic religious festival, Eid al-Adha.

LSS takes these allegations very seriously and does not tolerate the mistreatment of animals in any way. LSS is focused on the welfare of all livestock that it exports and is committed to supporting the ESCAS principles as a framework within which it can work closely with importers, customers and the industry to make improvements to the way livestock are transported and handled around the world.

LSS has been working closely with the Department of Agricultures (DoA) over the past 11 months to identify and resolve issues within the LSS supply chain in Gaza. LSS formally advised DoA on 5 November 2013 that the company had concerns relating to the supply chain in Gaza. Following this, the company immediately took a number of steps to deal with the possible issues. This included:

Self-reporting of the problems within the supply chain in Gaza to DoA;

Immediate voluntary suspension of exports to specific facilities;

Commencement of a detailed internal investigation into the supply chain in Gaza;

Ongoing efforts to manage and reconcile the livestock numbers remaining on hand in the supply chain;

Commencement of remedial work at the Gaza abattoir and review of the restraint box and processes to improve slaughter outcomes;

Instruction to the importer that no cattle were to be slaughtered at the Gaza municipal abattoir until remedial works were complete and approval by DoA was obtained to proceed and per DoA advice the importer was notified that no cattle supplied by LSS were to cross the border from Israel to Gaza; and

Deployment of additional consultants and staff to the region by LSS to monitor compliance at ESCAS approved facilities.

The last shipment of livestock directly to Gaza was in mid-October 2013 and LSS cattle continued to be legitimately transferred from Israel to Gaza until a direction by DoA was issued to suspend further transfer of cattle on 6 March 2014. Consequently, a significant number of cattle have remained in the supply chain since this time. LSS has been advised by its importer that as of 10 October 2014 there are no remaining LSS cattle in the Gaza supply chain facilities. It has been a priority of LSS to humanely process the remaining Australian (LSS) cattle in the supply chain in Gaza and it has made every effort to facilitate this. However, the extremely volatile and dangerous working environment, coupled with the difficulties around entry into Gaza has made this extremely challenging. In addition to this, further challenges have included the partial destruction of livestock facilities during the recent conflict with Israel, and a black market campaign to reuse Australian cattle ear tags in order to improve market value of non-Australian livestock. Until these issues are resolved and the supply chain can be assured, LSS will continue its voluntary suspension of exports to Gaza. LSS is committed to supporting the ESCAS principles and will continue to work with the Department of Agriculture around investigations relating to a breakdown in the supply chain in Gaza and improving animal welfare outcomes for its livestock in its destination markets. LSS is committed to supporting the ESCAS principles and will continue to work with the Department of Agriculture around investigations relating to a breakdown in the supply chain in Gaza and improving animal welfare outcomes for its livestock in its destination markets.

Statement from Alison Penfold

Chief Executive Officer

Australian Livestock Exporters Council

Leakage from approved supply chains remains the greatest challenge for industry in meeting its responsibilities for exported livestock. It has largely stemmed from the strong demand for healthy Australian livestock that have been reduced in number due to the imposition of the Exporter Supply Chain Assurance System (ESCAS). While ESCAS has significantly assisted in improving welfare of Australian exported livestock it has come with consequences, including the denial of supply of Australian livestock to many legitimate small local businesses in destination markets particularly in the middle east - that had previously relied on trading Australian livestock for their living. Such action has in some instances created a black market for Australian livestock which we are actively working to curb.

Exporters have not sanctioned or approved leakage from supply chains but under ESCAS are responsible for such non-compliances. Where non-compliances are found the Department of Agriculture has taken action against exporters including adding additional conditions to shipments and curtailing supply chains. Exporters themselves have removed facilities from supply chains that have failed to meet the exacting standards of ESCAS this includes failing to secure livestock within approved facilities.

While the relative number of livestock that have leaked from supply chains is relatively small against the millions of animals that have been exported into approved supply chains where handling and slaughter is done by trained personnel with appropriate knowledge and oversight of humane handling and slaughter procedures, it is the outcome of the leakage from outcome approved systems that is often most severe and upsetting and reminds us why Australia has moved to establish welfare assurance along supply chains in overseas markets. In the absence of oversight and the training and support that comes with approved supply chains, livestock will most likely face poor treatment, handling and slaughter by people unskilled and untrained to undertake the task. In this regard, the manner in which some people treat livestock so cruelly and cause unnecessary pain and suffering, regardless of the origin of the animals, remains inexcusable, even in the absence of proper training and knowledge of appropriate handling. Such brutal treatment has no place in the livestock trade and is perpetrated by individuals outside of Australian supply chains that are not approved to handle or slaughter Australian livestock. It remains shocking for all to see and necessitates urgent action by local authorities and the OIE to immediately improve the welfare of livestock globally. Industry recognises that the leakage of Australian livestock from approved supply chains which leads to poor handling and reflects poorly on our industry and cause members of the public to question our commitment to animal welfare. We still remain the only live export country with a welfare assurance system that places the exporter as responsible for livestock through to the point of slaughter. While ESCAS is at times imperfect, in the main it is working and we are striving to root out those elements that undermine the effectiveness of the system.

Regards

Alison Penfold

Chief Executive Officer

Australian Livestock Exporters Council