Emanuel Exports stocked Awassi Express, on which 2,400 sheep died en route to Middle East in 2017

The federal government has suspended the licence of the company at the centre of shocking footage of live sheep exports that sparked calls to ban the trade in the northern summer.

The Department of Agriculture and Water Resources announced on Friday that it has suspended the live export licence of Emanuel Exports pending a full review of the company’s response to a show cause notice.

The decision to suspend Emanuel – the company that stocked the Awassi Express, which lost 2,400 sheep due to heat stress in 2017 – effectively knocks out 50% of the live sheep export industry, pending the review into a separate incident.

RSPCA Australia senior policy officer, Jed Goodfellow, told Guardian Australia the Al Shuwaikh livestock carrier was due to arrive in Fremantle to pick up another load of sheep from Emanuel which will now not be able to export them.

The move follows the decision by Livestock Shipping Services to suspend its live sheep export trade, following proposed new rules reducing stocking density by 28% to improve animal welfare.

Shocking live export conditions not uncommon, animal rights groups say Read more

Emanuel is under criminal investigation, and two departmental investigations, into the company and the Awassi voyage after allegations of overstocking, failing to have sufficient food and water available, animal injury and illness not being treated, and accredited vets and stockmen leaving vessels prior to unloading.

In a statement the department said the laws that regulate the export of livestock include strict requirements to ensure the health and welfare of animals.

“It is the responsibility of each exporter to ensure it meets those obligations,” it said.

“The department takes those responsibilities very seriously.”

The Emanuel Exports director Nicholas Daws said it would “cooperate fully with the department in its review”.

“It is not appropriate to provide any further public comment until the Department has completed its review,” he said.

Goodfellow said the suspension was evidence that if laws are enforced live exports would become impossible.

“This is another step toward the inevitable end of cruel long-haul live sheep exports,” Goodfellow said.

“Now is the time for government to put the best interests of Australian sheep producers and animals first, to provide certainty for the future, and legislate for an orderly phase-out.”

In May the Turnbull government decided against a ban on live exports in favour of tougher penalties for directors who breach licence conditions and improved animal welfare measures.

Liberal MP Sussan Ley, with backing from colleagues Sarah Henderson and Jason Wood, introduced a private members bill to ban live sheep exports in the northern summer from next year, and, in five years, totally ban the transport of sheep and lambs to the Middle East or to any routes through the Persian Gulf or Red Sea.

The private members bill forced the Turnbull government to pull its bill to improve standards from the notice paper, because Labor intended to amend it to help Ley introduce a ban.