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Review of the Tasmanian Poppy

Industry RegulationJuly 2013

Report

John Ramsay & Associates

Contents

TERMS AND ABBREVIATIONS................................................................................................................6

EXECUTIVE SUMMARY...........................................................................................................................7

RECOMMENDATIONS............................................................................................................................9

BACKGROUND & CONTEXT..................................................................................................................14

The Terms of Reference............................................................................................................14

Observations on the Terms of Reference..................................................................................15

Issues Arising in the Review falling outside the Terms of Reference.........................................15

Consultation with Stakeholders and Submissions received.......................................................16

A BRIEF OVERVIEW OF THE TASMANIAN REGULATORY STRUCTURE..................................................17

The Details of the Regulatory system........................................................................................17

The Regulators...........................................................................................................................18

The Minister for Health and Human Services............................................................................18

The Minister’s Delegate.............................................................................................................18

The Poppy Advisory and Control Board.....................................................................................18

Advice on the Regulatory Structure and its Administration......................................................18

Administration...........................................................................................................................19

Compliance with the Regulatory Regime..................................................................................19

WHY REGULATE THE TASMANIAN POPPY INDUSTRY?.........................................................................19

General......................................................................................................................................19

Regulation of the use of Opium Poppies...................................................................................20

Specific Reasons for Tasmania to Regulate...............................................................................21

International Obligations – The Single Convention on Narcotic Drugs 1961.............................21

National Obligations and the Narcotic Drugs Act 1967.............................................................21

Access to the US market – 80/20 Rule.......................................................................................22

The Safety of the Tasmanian Community..................................................................................22

Weed Control............................................................................................................................23

The Reputation of the Tasmanian Industry...............................................................................23

CURRENT REGULATION.......................................................................................................................23

Regulation of Growers...............................................................................................................23

Regulation of Processors...........................................................................................................24

Regulation for Security and Community Safety.........................................................................24

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Regulation for Weed Control.....................................................................................................25

CHANGES IN THE INDUSTRY AFFECTING THE REGULATORY STRUCTURE AND REGULATION..............26

Constant overarching regulatory requirements........................................................................26

A competitive Tasmanian environment.....................................................................................26

REVIEW ISSUES....................................................................................................................................28

The Need for a Regulatory System............................................................................................28

The Need to Licence Processors and Growers...........................................................................28

Licensing Processors..................................................................................................................28

Licensing of Growers.................................................................................................................29

Growers Licence Applications....................................................................................................30

Community Safety.....................................................................................................................32

Warning Signs on Fences...........................................................................................................32

Weed Control............................................................................................................................32

An Independent Regulator – Roles and Responsibilities...........................................................32

The Role of the Board..........................................................................................................................33

Involvement of the Board in Decision Making...........................................................................33

The Board’s General Advisory Functions...................................................................................34

Regulatory and Advisory Role Issues.........................................................................................34

The need for a Board.................................................................................................................35

Liaison with the Commonwealth to fulfil International Obligations..........................................37

Performance of the Board.........................................................................................................38

The Keach Matter......................................................................................................................38

Accessibility and responsiveness of the Board..........................................................................38

Administration and Enforcement..............................................................................................39

Composition of the Board....................................................................................................................40

Current Composition.................................................................................................................40

Possible Industry Representation..............................................................................................41

Chairperson of the Board - Independence................................................................................41

Board Membership – Health, Primary Industry and Police........................................................42

Commonwealth Nominee Membership....................................................................................43

Board Membership – Secretary of the Department of Justice or Nominee..............................43

INDUSTRY, INDUSTRY DEVELOPMENTS AND THE BOARD...................................................................44

Industry Development...............................................................................................................44

Industry Development Issues and the Board...............................................................................46

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R & D Programs...................................................................................................................................46

Processor Research, Scientific Study or Innovation, Sample Products.........................................46

Poppy Straw Processing Waste Products.....................................................................................46

Cultivation of the Poppy Plant Papaver Bracteatum....................................................................47

Industry and Board Engagement..................................................................................................48

Annual Board/Industry Forum.....................................................................................................48

Board Technical or Advisory Committees....................................................................................49

APPENDICES.........................................................................................................................................51

TERMS OF REFERENCE – REVIEW OF THE TASMANIAN POPPY INDUSTRY REGULATION.............51

WRITTEN SUBMISSIONS...............................................................................................................53

CONSULTATIONS..........................................................................................................................54

AN OVERVIEW OF THE REGULATORY REGIME.............................................................................56

GROWERS LICENCE - INFORMATION REQUIREMENTS.................................................................70

GROWING ADDITIONAL CROPS OR CROPS ON A DIFFERENT LOCATION - INFORMATION REQUIREMENTS...........................................................................................................................72

CROP LOCATION - SECURITY ASSESSMENT CRITERIA...................................................................73

GROWERS LICENCES – SPECIFIC REGULATORY CONTROLS..........................................................74

PROCESSORS LICENCES – SPECIFIC REGULATORY CONTROLS......................................................76

CROP INTERFERENCE RECORDS...................................................................................................79

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TERMS AND ABBREVIATIONS

growers – Tasmanian farmers who are licensed to grow poppy crops

growers associations – PGT and TFGA

processors – the three companies who are licensed to process and manufacture products from poppy straw - Tasmanian Alkaloids; GSK; TPI

the Act – the Poisons Act 1971 (Tasmania)

the Convention – the Single Convention on Narcotic Drugs 1961

Board - Poppy Advisory and Control Board

Government – the Tasmanian Government

GSK – Glaxo Smith Klime

Health Department - the Department of Health and Human Services (Tasmania)

INCB – International Narcotics Control Board

Inspectors – field officers appointed by the Department of Justice and authorised under the Act to support the activities of the Board

Opium poppy plant – the plant papaver somniferum

Police – officers of Tasmania Police

PGT – Poppy Growers Tasmania Limited

Tasmanian Alkaloids – Tasmanian Alkaloids Pty Ltd

TFGA – Tasmanian Farmers and Graziers Association

T.P.I – TPI Enterprises Ltd

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EXECUTIVE SUMMARY

The activities conducted and regulated, the sum total of which combine to constitute the Tasmanian poppy industry, are diverse in nature. While the activities are not dissimilar to the growing, processing and sale of other crops, the poppy sector has a series of regulatory controls that are unique and which apply at various stages of the agricultural, manufacturing and sale cycle.

Regulation for security purposes, for the crop in the ground, the harvested raw material, its processing, the product derived and its transportation and the people able to be involved in the industry, is a paramount consideration. Details of the area of the crop sown and the product processed and produced, is also a Tasmanian regulatory requirement.

Tasmania in effect has used co-operative government regulatory activity to achieve the necessary regulatory control. The activities of three government agencies (the Departments of Health, Primary Industry and Agriculture and Police) are co-ordinated through a (now) statutory body, the Poppy Advisory and Control Board, which has a mix of broadly defined advisory and regulatory powers, and supported by a fourth agency (the Justice Department), which has no specific regulatory role save the staff that it employs, provide resources and administrative support to the Board.

The regulatory controls over industry participants are vested in a Minister (the Minister for Health), who delegates those powers to a senior government official in the Health Department. The Board is responsible to a different Minister, the Attorney General.

Tasmania has unified the cultivation, harvesting and processing parts of the industry by making a crop purchase contract with a processor, a prerequisite to a grower obtaining a licence to cultivate a poppy crop. In this way there is effective integration of the different licence obligations of growers and processors, thus achieving a regulatory requirement to identify areas on which crops are grown and to establish the volume of crop harvested and processed and the resultant product.

The above is hardly a textbook regulatory model, but over some 40 years of evolution and operation, it has worked, enabling the Tasmanian industry to enjoy a dominant position in an internationally regulated market.

It light of the above success, one might question why changes need to be considered. However there are a number of factors in play in the current industry that warrant a consideration of changes to the regulation of the industry now and for the future.

The following report recommends some clarification of and changes to the regulatory structures and controls that currently operate in relation to the Tasmanian poppy sector.

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However it is fair to describe the recommended changes as adjustments to aspects of the current system, rather than a significant structural reform. While this view has been formed as a result of a consideration of all the information presented to the review and other available information, it is fair to say that this approach is consistent with almost all of the views that were provided in the review process.

The most significant change is to establish a clearer separation between the industry development and regulatory functions in the system and the role that the Board performs in these matters. Essentially, the Board should become the actual as opposed to defacto regulator of the system and cease being a general advisory body on all aspects of the industry.

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RECOMMENDATIONS

Recommendation 1:

That there continues to be a system of registering the names of the growers of poppy crops and of the location of the properties on which poppies are grown.

Recommendation 2:

That there be a simplification and streamlining of the current long standing annual licensing process for growers. For example:

o Growers who have held a licence for more than three consecutive seasons, and who have not been the subject of serious compliance requirements by the Board should be placed on a standing register of growers

o Any new grower, or a grower who has ceased growing for two or more consecutive seasons, should be required to submit a detailed application to secure registration.

To maintain registration a grower must provide to the Board annually the following information:

o Any changes to the ownership of the property, its management, and the persons who control or manage or who have access to the poppy crop

o The details of the contract with the processor to grow poppieso The indicative area and location of the area to be growno A site suitability self-assessment on proximity to sensitive areas and

roads, meeting the fencing requirements and the placement of warning signs as required.

To enable a grower to undertake a site suitability assessment the Board should publish site suitability guidelines which should include the following:

o sensitive areas in which crops are not be locatedo classification of roads and streets where warning signs are to be

located on fenceso the fencing standards required for classified roads and streetso the criteria to be applied in making an assessment of where to fix

warning signs to fences or gates.

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The licence obligations of both growers and processors should be changed to place the responsibility for advising the Board, on actual areas sown to crop, on the processors with whom a grower has a contract and to remove that responsibility from the growers.

Recommendation 3:

That growers assume the responsibility for affixing and removing the poppy crop warning signs on fences and gates in accordance with criteria established by the Board.

Recommendation 4:

That the Act be amended

to remove the Board’s general advisory functions in relation to any matter relating to the alkaloid poppy industry

to enable the Board at any time, to advise the Attorney General and the Minister, on the need for any changes to the regulatory structure or powers necessary to regulate the industry or the making of specific regulations

to enable the Minister to delegate to the Board the responsibility to determine and issue all poppy industry licences under the Act other than licence applications for new processors to enter the industry or licences for the importation of quantities of poppy straw or other narcotic product for commercial processing.

Recommendation 5:

That the Board’s functions should continue to include liaison with the Commonwealth on fulfilling Australia’s international obligations.

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Recommendation 6:

That the Board review and re-establish effective and responsive administrative practices and procedures

That the Board undertakes a review of its current practices and procedures with a view to publishing appropriate guidelines or codes of practice to inform and assist the industry participants and the general public on how the industry is regulated.

That the Department of Justice, in consultation with the Board, undertake a review of the Board’s business processes and administrative procedures, in particular the activities of the Board Inspectors, with a review to ensuring that the activities undertaken are as cost effective as possible.

That the Board review and make recommendations to the Attorney General on any additional enforcement powers that should be available to the Inspectors to facilitate efficient enforcement of the requirements of licences and any other relevant provisions of the Act.

Recommendation 7:

That the Board continue to be comprised of membership with no association with the industry.

Recommendation 8:

That the Act be amended to specify that the Chairperson of the Board is to be an independent Chairperson.

Recommendation 9:

That the representation from the areas of health, primary industry and police be maintained on Board membership and that the appointees have practical and operational expertise in their discipline area.

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Recommendation 10:

That the Act be amended to:

remove the requirement for Commonwealth membership of the Board provide for formal observer status on the Board for the nominee of the Secretary of

the Commonwealth Department for the grant of licences under the Commonwealth Narcotic Drugs Act , and for that person to be given access to all Board papers, minutes etc.

Recommendation 11:

That the Act be amended to provide for the Secretary of the Department of Justice or nominee to be appointed to membership of the Board.

Recommendation 12:

That the Act be amended to require the Minister to obtain the advice of the Minister for Primary Industry and the Attorney General, prior to making any decision in relation to the granting of a licence for new processors to enter the industry or licences for the importation of quantities of poppy straw or other narcotic product for commercial processing.

That the Act be amended to require the Attorney General to seek the prior advice of the Board on any domestic, Australian or international regulatory issues associated with any processor or import application.

Recommendation 13:

That processors should submit an annual research and development plan to the Board which indicates any regulatory approval that may be required into the future.

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Recommendation 14:

That collaboration between the industry processors and supporting government agencies should take place to ascertain whether the regulatory requirements of the Act can be met to establish beneficial uses, commercial or otherwise, for industry waste products.

Recommendation 15:

That the Board seeks to resolve the future status of the commercial development of papaver bracteatum in Tasmania.

Recommendation 16:

That the Board convene an annual industry Board forum to review developments in the industry on an international, national and local level that impact on the regulation of the Tasmanian industry

That the Board, as appropriate, convene special technical or advisory groups or committees to consider and provide recommendations to the Board relevant to the regulation of the industry.

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BACKGROUND & CONTEXT

The Terms of Reference

The Tasmanian Attorney General is the Minister responsible for the Poisons Act 1971 (the Act) in so far as it relates to the Poppy Advisory and Control Board (the Board). In that capacity the Attorney General commissioned a review of the regulation and oversight of the poppy industry in Tasmania.

Advice was sought on

options for a contemporary regulatory framework that supports and protects the Tasmanian Poppy Industry, provides appropriate safeguards for the community, and meets national and international obligations for the safe and secure growing of poppies.

Further, advice was sought on

the role and functions required into the future for regulation and oversight of the poppy industry in Tasmania, taking account of the views of the relevant stakeholders.

This includes –

the need for independent oversight and regulation the international regulatory framework State and Federal legal requirements security issues supporting and growing the Tasmanian industry keeping the regulatory and cost burden on industry to a minimum and avoiding

unnecessary duplication current industry and farming practices

Recommendations were sought as to:

1. The optimal structure for the regulation of the industry2. A suitable mechanism for future industry engagement with the regulatory body,

while maintaining strict independence of the regulator’s functions and decisions.

The full terms of reference for the review are at Appendix 1, where the list of the relevant stakeholders is also set out.

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Observations on the Terms of Reference

There are several observations about the Terms of Reference.

First, while ‘regulation’ generally means a rule or order for conduct prescribed by authority, ‘oversight’ has a wider meaning, being supervision or watchful care. Thus the Terms of Reference for the review are interpreted to include not simply the strict legal regulatory structure for the Poppy Industry, but also to embrace a wider supervisory approach.

Second, the Terms of Reference include references to supporting, protecting and growing the Tasmanian Poppy Industry. This is understood in terms of a regulatory and supervisory framework to be a framework that ensures the ongoing commercial and agricultural viability of the industry and its access to markets.

Third, the clear indication from the Terms of Reference is that there is a requirement that the regulator and the regulatory structure be independent from the industry. The Terms of Reference lead to this conclusion by phrases such as, “the need for independent oversight and regulation” and “maintaining strict independence of the regulators functions and decisions.” The review has been conducted in the context of these observations.

Issues Arising in the Review falling outside the Terms of Reference

There were two issues at the forefront of the minds of many participants in the sector during the review process. These views emerged in both written submissions and in consultations, and tended to dominate consideration of other regulatory aspects of the review. While both issues are effectively outside the scope of the review in terms of recommendations, their relevance to the review is outlined below.

Industry payment for the activities of the Board

The first issue was the decision of the Tasmanian Government to require the industry to pay a levy to meet the cost of the operation and activities of the Board. There was uncertainty as to the actual cost of the operations of the Board, which it was assumed would be the cost sought to be recovered from the levy. But there was also uncertainty as to whether the payment requirement extended to the cost of the activities of Tasmania Police in relation to their role in regulation of the industry.

The views expressed on this issue essentially centred on what was perceived to be a failure on the part of Government to continue to invest in a regulatory system necessary and appropriate for the industry. It was considered that the industry was not only vital to the prosperity of the Tasmanian rural sector, but important to the economic interests of the

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State, as the benefits from the industry were shared by the wider Tasmanian community (contractors, agribusinesses and suppliers etc.), not just the growers and processors.

However, for some, the likely implementation of the levy decision did result in thought being given to the activities conducted by the Board and its staff. If the industry was going to be required to pay for the Board and its activities, the industry did not wish to pay for unnecessary activities that were part of any regulatory structure.

The importation of commercial quantities of poppy straw

The second issue that was a concern, and invariably a key topic of conversation, was the decision understood to be made by the Tasmanian Government, to allow one of the processors to import poppy straw from Turkey. This decision was regarded by some as a threat to the primacy of Tasmanian growers as a source of supply to the Australian processors. Not only, it was said, did it undermine the international integrity of the Tasmanian industry, and have bio-security implications, the decision (it was alleged) was based on misinformed views about the availability of land in Tasmania to increase the size of the Tasmanian crop and thus meet processor demand. An alternative view was that the importation of poppy straw is already undertaken by other countries to ensure continuity of supply, that any bio-security issues could be addressed by the appropriate regulatory authorities (not the Board) and that the suggested availability of land in Tasmania was not sufficient to meet future world demand for product.

The respective views and the merits of this matter have and are being canvassed in detail before a Tasmanian Parliamentary Inquiry, which is yet to report, but the issue was relevant to this review from two perspectives. First, it produced the strongly held view from growers, that if the Board was to expend any resources on addressing matters of importation of poppy straw in the future, then the cost of that activity should not be borne by the growers. Second, as the advice of the Board on this matter had not been accepted by the Government, it raised the question of the effectiveness and relevance of the role of the Board in such matters, and also the role and authority of Government Ministers in addressing issues about the viability and growth of the Tasmanian processor sector and the interests of the Tasmanian growers.

Consultation with Stakeholders and Submissions received

Requests for submissions were advertised in the Tasmanian daily papers on Saturday 16 February 2013 and a written request for submissions was provided to key stakeholders. The growers associations also advised their members of the request for submissions via their association newsletters and Growers Meetings. Growers meetings were held in five locations around the State.

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Details of the persons and organisations making written submissions are at Appendix 2.

Details of the persons with whom consultations were undertaken are at Appendix 3.

A BRIEF OVERVIEW OF THE TASMANIAN REGULATORY STRUCTURE

The Details of the Regulatory system

It is not possible to easily ascertain the details of the regulatory regime that applies to the Tasmanian poppy industry.

The black letter law of Tasmania’s regulation of the poppy industry is limited. There are several poppy specific provisions in the Poisons Act 1971, and there are provisions in that Act which establish the Board. Power exists to make regulations for certain purposes associated with the industry pursuant to s.59 of the Act. However there are no available regulations, guidelines or codes of practice such as one might find in other regulatory systems.

Generally speaking, the Act contains provisions authorising the growing, possession, and processing of the opium poppy plant and manufacturing of narcotic substances.

Determining production estimates for the contract growing and harvesting of alkaloid poppy material is the overarching regulatory control.

Licensing of industry participants, the growers and processors, to operate within that estimate is the key regulatory mechanism. The detail of the actual regulation and compliance requirements is to be found in the terms of the licences issued.

There is however an external regulatory framework within which the Tasmanian regulatory system operates. That framework starts with the 1961 Single Convention on Narcotic Drugs as implemented in Australian through the Commonwealth Narcotic Drugs Act 1967. A more detailed overview of the relevant provisions in the legal framework that applies to the industry is at Appendix 4.

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The Regulators

The Minister for Health and Human ServicesThe formal regulatory power conferred by the Act to authorise participation in the industry, is vested in the Minister for Health and Human Services.

The Minister’s DelegateIn practice the regulatory functions are delegated by the Minister to an appropriate senior officer in the Department of Health Human Services, the Chief Pharmacist. The Chief Pharmacist has expertise in the administration of the Act and the substances regulated.

The Poppy Advisory and Control BoardThe Poppy Advisory and Control Board is established by the Act. It is a five member Board. The Board has a mix of regulatory and advisory functions. It is responsible for the discharge of its functions to the Attorney-General, not the Minister for Health and Human Services.

While primarily the Board’s functions are advisory in relation to the poppy industry, it does have some functions which are regulatory in effect. These functions are –

determination of production estimates for the growing and harvesting of alkaloid poppy material

ensuring the security of the alkaloid poppy crops destruction of any alkaloid poppies grown without approval under the Act.

Advice on the Regulatory Structure and its Administration

The Board is the principal source of advice to the Ministers on the ongoing administration of the regulatory structure.

The general and advisory functions of the Board are to –

act in any matter related to the industry as may be directed by the Secretary liaise with the Commonwealth in order to fulfil Australia’s obligations under the

Single Convention on Narcotic Drugs collect and collate statistical information on the industry and prepare reports on the

industry advise the Attorney General and the Minister for Health on any matter related to

the industry do anything, and provide such other advice to other Ministers, as may be requested

by those Ministers.

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Administration

The Minister’s Delegate, the Chief Pharmacist assumes the administrative responsibilities of that role in combination with other duties in the Health Department.

The Board is supported in its role by staff who are appointed to the Department of Justice. s.59M of the Act formalises these arrangements. There are currently eight Board staff positions on the Department’s establishment.

Compliance with the Regulatory Regime

Compliance with the current regulatory regime is achieved through the staff of the Departments of Health, Justice and Police.

The majority of the Board staff are appointed as authorised officers under the Act. Essentially the staff are involved in the process of licensing growers and maintaining the security of the poppy crop on farms. The staff are supported by officers of Tasmania Police in the security activities as required.

Staff in the Department of Health and Human Services, also hold appointments under the Act and are principally involved with the licensing of processors, the products they manufacture, the wastes generated, and monitoring and reporting processor activities.

WHY REGULATE THE TASMANIAN POPPY INDUSTRY?

General

In undertaking any regulatory review, the fundamental question to be asked is - why is the particular activity regulated? Why have governments decided to intervene and impose legislative and/or administrative controls?

If there is good reason to regulate, what must be examined is how that regulation is to be undertaken, where will the burden of regulatory compliance fall, and is it reasonable?

Best practice regulatory principles were adopted in Australian by the Council of Australian Governments October 2007. The principles are –

1. establishing a case for action before addressing the problem

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2. a range of feasible policy options must be considered, including self-regulatory, co-regulatory and non-regulatory approaches, and their benefits and costs assessed

3. adopting the option that generates the greatest net benefit to the community

4. in accordance with the Competition Principles Agreement, legislation should not restrict competition unless it can be demonstrated thata. the benefits of the restrictions to the community as a whole outweigh the

costsb. the objectives of the regulation can only be achieved by restricting

competition

5. providing effective guidance to relevant regulators and regulated parties in order to ensure that the policy intent and expected compliance requirements of the regulation are clear

6. ensuring that the regulation remains relevant over time7. consulting effectively with affected key stakeholders at all stages of the regulatory

cycle; and8. government action should be effective and proportional to the issue being

addressed.

These principles are worth bearing in mind when considering the establishment of a regulatory system or when there are proposals for change. However the essential regulatory framework for the Tasmanian opium poppy industry is already established as a result of adoption by the Australian Government of the obligations in the Single Convention on Narcotic Drugs. The matters outlined below in effect address the first four principles.

Regulation of the use of Opium Poppies

History indicates that the opium poppy plant can be utilised to alleviate human suffering or generate human suffering.

The benefits from the usage of the products derived from opium poppies in the provision of human health care are immense (the licit sector). The misery caused for humans by addiction to the products derived from the plants is also immense (the illicit sector). The illicit sector is also characterised by criminal behaviours which produce negative impacts and additional costs on societies.

Humans invariably organise around activities of mutual beneficial interest, and in the case of utilisation of the opium poppy, there are organisations that have established around the respective licit and illicit usage. In both cases, the financial reward for suppliers of product is usually positive.

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It is for the above reasons that the international community has intervened in the use of products derived from the opium poppy plant to regulate those activities, seeking to remove the illicit market and manage the licit market. The Single Convention on Narcotic Drugs establishes this regulatory regime and all the State parties to the Convention have obligations to establish national regulatory regimes to give effect to their international obligations.

There can be no rational argument against market intervention to regulate the growing of, and use of products derived from, the opium poppy.

Some 40 years ago, the Tasmanian Government chose to permit the introduction of the opium poppy plant into Tasmania and to permit the cultivation and processing of the plant for the beneficial use of the products derived. An obligation which continues to accompany this decision, is to maintain and support a regulatory regime that complies with international requirements, but also protects the Tasmanian community and the Tasmanian environment.

Specific Reasons for Tasmania to Regulate

International Obligations – The Single Convention on Narcotic Drugs 1961

The Convention requires all countries that are party to it, to control the growing of opium plants and the processing of narcotic drugs. In the case of the present Tasmanian industry there are two key Convention provisions. The first is Article 25 which relates to the cultivation of the opium poppy to generate poppy straw and the need to ensure that the manufacture of drugs from the poppy straw is adequately controlled. The second is Article 29 which relates to the licensing of manufacturers of drugs and control of their premises and ensuring approvals are in place for the kinds and amounts of drugs to be manufactured.

The International Narcotics Control Board is established by the Convention and the INCB exercises regulatory and managerial powers in relation to the cultivation and supply of narcotic products.

National Obligations and the Narcotic Drugs Act 1967

The Commonwealth has implemented Australia’s international obligations through provisions in the Narcotic Drugs Act 1967. The Act contains a range of provisions including the licensing of manufacturers of drugs and the handling of narcotic substances.

A 1971 agreement between interested Australian states and territories and the Commonwealth determined that Tasmania would be the only location in Australia in which opium poppies would be grown. That agreement has placed Tasmania into what is in effect a co-operative regulatory partnership with the Commonwealth in relation to the industry.

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This partnership has seen Commonwealth participation in the affairs of the Board, and has also enabled Tasmania to participate on the Australian Government delegations that attend the annual INCB meetings and thus participate in international deliberations.

Access to the US market – 80/20 Rule

The USA market is one of the prime world markets for the supply of licit narcotic products. Access to that market is controlled by US regulatory authorities by means of trade agreements and legislation. One of those rules in respect to the poppy industry is that the US must source 80% of its raw narcotic material from Turkey and India, with an alternate 20% to be sourced from elsewhere. This is known as the 80/20 Rule.

In the early stages of development of the industry in Australia sought access to this lucrative market to supply product sourced from Tasmanian morphine poppies. The structure of the regulatory system established in Tasmania was influenced by what would be regarded favourably in securing that US Drug Enforcement Agency approval.

By the Attorney General assuming the responsibility for the principal advisory and control body, the Board (albeit non statutory at that time), and providing the administrative support for the Board through the Attorney Generals Department (as it was then called) this presented a clear and independent regulatory structure for the industry, linked to law enforcement.

It is for this reason that the formal administration of that part of the Act that relates to the Board, is vested in the Attorney General.

While the Board continues to monitor developments in the United States and in recent times the Chair of the Board has participated in relevant US administrative hearings on 80/20 Rule matters, our diversity of product not solely growing morphine based poppies now means that the 80/20 rule is no longer so critically relevant to the success of the Tasmanian industry in the US market.

The Safety of the Tasmanian Community

There are two simply stated, but important community safety considerations that necessitate regulation.

The first relates to accessibility to a dangerous crop from which narcotic substances may be derived for personal drug use or experimentation. Amateur attempts at the processing of the plants can result in toxic substances being produced and consumed. There have been a number of deaths over the years as a result of this activity, the most recent being last November with the tragic death of a teenage boy in Southern Tasmania.

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The second relates to the accessibility of a crop from which, subject to a level of processing, narcotic substances may be derived for criminal purposes.

Weed Control

The opium poppy plant is an introduced plant. While it is a successful commercial crop when managed in accordance with best agricultural practice, it is a plant of some resilience and a weed in the Tasmanian environment that requires control.

The Reputation of the Tasmanian Industry

The current Tasmanian regulatory structure, its institutions and office holders, its administration, its regulatory practice and compliance, and the qualities of industry participants have combined to establish a reputation for excellence.

Anecdotal evidence of views expressed from time to time at the INCB level indicate that the Tasmanian sector is well deserved in achieving that reputation and that the ‘Tasmanian system’ provides a benchmark for other countries to meet in their regulation of the industry.

The extent to which this might be a positive factor in INCB decision making is difficult to assess. Similarly the extent to which it influences other Convention signatory parties on market access for Tasmanian product, or commercial decisions involving Tasmanian processors and product, is difficult to establish. However any beneficial reputation achieved through recognised best practice should not be put at risk and is in itself a reason to maintain a robust regulatory structure that is the foundation of the reputation.

CURRENT REGULATION

As mentioned previously regulatory controls on industry participants are effectively achieved through the issue of licences with detailed conditions.

Regulation of Growers

Licences to grow poppies are issued under s.52 of the Act.

To secure a licence, a grower must lodge an application in which an essential requirement is the existence of an agreement with a processor to grow a crop in an identified area or paddock on a farm. Growers are required to submit detailed personal information, to be

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subject to a criminal history check, to provide information about their property ownership and persons living and working on the property. The details required in an application are at Appendix 5.

Any change in the area to be sown to crop or its location requires the provision of further information. Details of the additional information required are at Appendix 6.

In practice the field officers engaged by the processors, participate with the growers in the lodgement of the growers applications. Given the requirement for an agreement to exist between a processor and a grower as a prerequisite to securing a licence, this close association is understandable.

Growers, and the location of the paddocks in which poppies are to be grown are the subject of a security assessment undertaken by a Board Inspector. Details of the matters considered in a security assessment are at Appendix 7.

The processing of licence applications is undertaken by the Board staff and Inspectors.

Licences are issued by the Minister’s delegate, the Chief Pharmacist.

The licence obligations include reporting on crop details, security and weed control. Details of the licence obligations are at Appendix 8.

Regulation of Processors

Licences to process poppy straw to extract the alkaloid content and to manufacture products are issued under s.16 of the Act, the section that provides for the licencing of manufacturing and wholesale chemists. There are no special provisions in the Act for the regulation of processors, rather the general scheme of the Act which deals with the control and manufacture of substances by chemists applies.

Processors are subject to a range of licence obligations which include comprehensive security requirements for all aspects of the business, the physical premises, visitors who access the premises, the transport of materials, security checks for staff and contractors and the detailed recording and reporting to the Board of all materials harvested and processed, the products made and the waste product, and the retention of those records. Details of the licence obligations are at Appendix 9.

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Regulation for Security and Community Safety

Participation in the industry of persons with criminal convictions, particularly in the area of drugs, is sought to be regulated by requiring growers, manufacturers and their employees and contractors to be subject to a criminal record check.

Access to crops is managed by limiting access to only those persons authorised by licensed growers and processors.

While community prevention of access to crops in the essentially rural locations is difficult, this is addressed by regulatory controls applied to the assessment of the location and security of paddocks on which poppies are to be grown and a requirement standard for fencing.

Field security assessment is undertaken by Board Inspectors and security of fencing is maintained by the growers. In addition, voluntary surveillance is undertaken by growers and processor field officers while formal surveillance is carried out by the Inspectors and as required, by the Police.

Theft or removal of poppies is monitored and reported by growers, processors and the Inspectors, and investigated by the Police and prosecuted as appropriate. Records are kept of crop interference. Details are at Appendix 10.

An additional measure to prevent access to any residual material is the requirement for growers to destroy the remains of the poppy crop within 7 days of harvest. This requirement is contained in the growers licence and is monitored and enforced by Inspectors.

Although not a licence requirement, a further security and community safety measure is the placing of warning signs on fences where there is community visibility of the poppy crop. The signs advise that the paddock in which the crop is grown is a prohibited area, warn of the danger, that illegal use of the crop may cause death and display a prominent “keep out” message. They are affixed and removed at the appropriate times of the growing and harvesting season by the Inspectors.

Regulation for Weed Control

It is a requirement of the grower’s licence to eradicate any rogue poppy plants that have grown from the seed residue of the previous season. Failure to do so can affect the successful cultivation of other rotational crops and the poppy plants can be toxic to grazing stock.

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The process of crop harvesting or the transportation of inadequately covered loads of harvested material from paddocks to processors can cause seed loss and result in poppy plants growing on roadside verges. The industry attempts to prevent this through the cleaning of harvesting equipment and the covering of loads.

Notwithstanding these measures, roadside poppy weed outbreaks have occurred in the past. These outbreaks are subject to the monitoring activities of the Inspectors, and have generated disputes as to responsibility for roadside areas and eradication. Inspectors must sometimes undertake roadside clean-up activities.

CHANGES IN THE INDUSTRY AFFECTING THE REGULATORY STRUCTURE AND REGULATION

Constant overarching regulatory requirements

The international regulatory environment has essentially changed little over the life of the industry in Tasmania. The institutions are the same, and the underlying international market management principles are essentially the same, although the production and supply circumstances necessitate differing decisions from time to time.

Similarly the national regulatory environment has not changed. The 1971 inter-jurisdictional agreement that indicates that Tasmania will be the only State or territory in which poppies are grown, has endured until this time. The Commonwealth in effect, has continued to be satisfied with the regulatory and administrative arrangements that have existed in Tasmania, which complement their regulatory arrangements, and which in turn enable the Commonwealth to meet their international obligations.

Finally the reason for regulation in Tasmania has not changed - the need to comply with international obligations, to comply with US market entry requirements, to promote and secure safety for the Tasmanian community, and to control weeds, all continue to be compelling.

A competitive Tasmanian environment

Within the confines of the international regulatory arrangements there is however an international competitive market for the supply and sale of product. It is understood that international developments concerning demand for raw materials and the consolidation and ownership of the pharmaceutical industry has resulted in increasing global competition in the market.

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For most of the time the industry has existed in Tasmania there has been a processor duopoly. Two multi-national owned companies have interacted effectively with the Minister, the Minister’s Delegate, the Board and the Tasmanian grower community.

The success of the Tasmanian industry is in no small way due to the expertise and efficiency of these two processors who both occupy a significant position in the international market. They have maintained continued research and development programs. Innovation has resulted in the development of different varieties of poppies and improvements to alkaloid extraction methods, both to significant product recovery advantage. These achievements can also be attributed to the skills, husbandry and efficiency of the Tasmanian growers and the general oversight of the Board.

However, this success has encouraged competition within the industry with the entry into the processing sector of a third player. With three Tasmanian processors now competing in the international market, that competition and their relative success in that market has the ability to impact on their local activities in Tasmania.

In real terms, this means the companies are competing within the Tasmanian domestic market for access to the raw material, the poppy straw. As well as competing in relation to price for product, the processors compete for grower contractual commitments through the services and advice they offer to growers, and also in relation to general commercial and business practice relationships.

Their respective successes in this regard obviously have consequences for the manner in which they conduct their business and other industry opportunities that they might or need to seek.

Processor desire to import and process poppy straw from overseas to supplement Tasmanian domestic supply has arisen. While importation of poppy straw is supported by all three processors the reasons have a different foundation. One reason is to meet a suggested shortfall in Tasmanian supply. The other reason is to guarantee security of supply to customers, seen to be at potential risk, because of total reliance on Tasmania’s ability to supply the raw material for product.

A related matter, and a matter of some dispute, is the availability of land in Tasmania to provide sufficient areas to cultivate and produce poppy straw to meet a suggested increase in world demand. The possibility of commercial cultivation of poppies outside Tasmania has thus become an issue. Victoria has that possibility under active consideration. If this were to eventuate, the monopoly grower/processor position that Tasmania has enjoyed in Australia since 1971 would change. Tasmanian based processors may seek to expand their manufacturing capacity with the addition of raw materials sourced from outside Tasmania.

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The changed commercial environment has also resulted in challenges to the regulatory limits of the system, testing its responsiveness and the rationale for some of the regulatory controls.

Factors of economic and political influence are also evident.

There has also been pursuit of different areas of industry innovation and experimentation, including the variety of poppy plants sought to be grown.

Finally the decision of the Government to impose a levy on the industry to meet the cost of industry regulation, in effect by meeting the cost of the regulatory and oversight activities of the Board, has been received negatively and has had a unifying effect particularly on the grower community in opposition to the decision.

In summary the key factors that have changed in the industry include –

a third processor licensed to operate increased competition among processors to contract growers to ensure supply of

raw material crop and product research and experimentation the processor sector’s desirability to import raw material the possibility of the loss of the Tasmanian grower monopoly the potential government imposition on industry bearing the cost of the regulatory

controls under which it operates.

REVIEW ISSUES

The Need for a Regulatory System

The Terms of Reference do not call into question the need for a regulatory system. The evidence supporting the need for regulation is overwhelming and was not questioned in the review. What is at issue is the nature of that regulatory system and how it operates.

Essentially the current Tasmanian arrangements meet or appropriately embrace Principles 1-4 of the COAG best practice regulatory principles. The following issues and comments essentially embrace the rationale of COAG Principles 5-8.

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The Need to Licence Processors and Growers

Licensing ProcessorsThere is no doubt that there is a need for the continued licensing of processors. The processor role in the identification and reporting of the area of crop sown and harvested, and the volumes processed and product recovered is absolutely critical to Australia’s ability to report on activity to the INCB and to meet its Convention obligations.

Similarly the level of personnel security assessment and physical security activities and controls are essential to ensure that narcotic product is not diverted to the illicit market or used for illegal purposes.

It is in the area of processor operations that there is duplication in the system, with the processors having to make manufacturing licence applications to both the Commonwealth and the State to meet the requirements of both the Narcotic Drugs Act and the Poisons Act. The processors also have dual reporting requirements to the Commonwealth and the State.

It appears that the dual processes are an inconvenience rather than a significant regulatory burden for the processors. The information sought by both the Commonwealth and the State are essentially the same, but required to meet the legitimate and reasonable regulatory requirements of both Governments. With only three industry participants, the volume of regulatory requests and responses is hardly overwhelming for the regulators. Provided the Commonwealth and State, continue to liaise on the standardisation of their regulatory information needs there does not appear to be a need to make any changes in relation to the regulation of the processors.

Licensing of GrowersIt was pointed out in the review process that the Convention does not require the licensing of growers for the activities undertaken in Tasmania. The Convention provisions on the establishment of areas on which poppies can be grown and the licensing of growers is to be found in Article 23. However these provisions apply to the cultivation of opium poppy for the production of opium and to opium, which is not the practice in the Tasmanian Industry.

Licensing of growers has been undertaken in Tasmanian for security reasons in relation to the security suitability of growers, to clearly establish areas sown and volumes produced, but also to identify the location of growing areas, to avoid diversion of plants.

Local diversion of plants does occasionally occur and is carefully recorded and monitored. Crop security as a reason for licensing of growers continues to be valid for regulation although consideration of simplification of the grower licensing process is suggested below.

It is clear from comments made during the review that growers take their licence responsibilities extremely seriously and are generally vigilant in their observation of paddocks in relation to suspicious activities and the actual diversion of plants. From a

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security perspective and given the now large areas of the State in which poppies are grown, the availability of, in effect a surveillance resource is of benefit to the regulation of the industry. Not only is the surveillance in effect free, but knowledge of the location under surveillance and identification of “out of the ordinary activities” is comprehensive and unique.

Recommendation 1:

That there continues to be a system of registering the names of the growers of poppy crops and of the location of the properties on which poppies are grown.

Growers Licence Applications

An annual licence application for growers is understandable, given that recommended best agricultural practice is to rotate the growing of poppies in paddocks on at least a 1 in 3 year cycle. Depending on soil qualities the rotation can be longer. Accordingly, the actual location of the crop changes each year. Location and area to be sown to crops, are fundamental to the regulatory security, community safety, cultivation, volume harvesting and processing requirements.

While the processor field officers assist growers with the application process, the necessity to provide the level of detail sought in the licence application on an annual basis should be further reviewed.

No doubt Board and processor records can establish which growers have grown crops on what properties and at which location over many years. The farmer and rural property owner community in Tasmania is relatively stable.

Board records would also indicate those locations in which there have been reported crop diversions, failure to destroy remaining poppy crop material post harvesting and failure to destroy regrowth.

There is merit in considering a system in which growers who have had a licence for more than an agreed number of years (maybe 3 - 5) on the same farm property and who have not been the subject of compliance requests by Inspectors, being provided with registered grower status, that should last for 5 years. A break in continuity of annual growing for more than 2 years, may at the discretion of the Board require a more comprehensive grower application and independent assessment, and any new grower with no industry history of growing would be required to lodge a comprehensive licence application.

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Instead of the detailed information required in the current annual application, it is suggested that the grower should only have to provide advice of the following to maintain registration for the season –

Any changes to the ownership of the property, its management, and the persons who control or manage or who have access to the poppy crop

The details of the contract with the processor to grow The indicative area and location of the area to be grown A site suitability self-assessment on proximity to sensitive areas and roads, meeting

the fencing requirements and the placement of warning signs as required.

Information on the actual area and location that is sown to crop should be identified and advised to the Board by the processors once the area is actually sown. This would avoid the need for additional documentation on changes of sowing areas, which can occur between the time of the licence application and the sowing of the crop, for a range of farm practice or climatic reasons. A proposal such as the above, was contained in the Ombudsman’s Report in the review of the Keach licence refusal complaint in 2007. The Ombudsman proposed that controlling the area through the processor’s licence would produce a system which is more responsive to the realities of sowing a crop. These proposed changes should be reflected in changes to both growers and processor’s licences.

Recommendation 2:

That there be simplification and streamlining of the current long standing annual licensing process for growers. For example:

o Growers who have held a licence for more than three consecutive seasons, and who have not been the subject of serious compliance requirements by the Board should be placed on a standing register of growers

o Any new grower, or a grower who has ceased growing for two or more consecutive seasons, will be required to submit a detailed application to secure registration

To maintain registration a grower must provide to the Board annually the following information:

o Any changes to the ownership of the property, its management, and the persons who control or manage or who have access to the poppy crop

o The details of the contract with the processor to grow poppieso The indicative area and location of the area to be growno A site suitability self-assessment on proximity to sensitive areas and

roads, meeting the fencing requirements and the placement of warning signs as required

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To enable a grower to undertake a site suitability assessment the Board should publish site suitability guidelines which should include the following:

o sensitive areas in which crops are not be locatedo classification of roads and streets where warning signs are to be

located on fenceso the fencing standards required for classified roads and streetso the criteria to be applied in making an assessment of where to fix

warning signs to fences or gates

The licence obligations of both growers and processors should be changed to place the responsibility for advising the Board, on actual areas sown to crop on the processors with whom a grower has a contract and to remove that responsibility from the growers.

Community Safety

Warning Signs on FencesThe “Danger Prohibited Area Keep Out” etc. signs affixed to fences provide the main message to the Tasmanian community of the dangers of using the poppies for personal drug or other use. These signs are provided by the Poppy Growers Association and installed at the beginning and removed at the end of the season by the Inspectors. Considerable travel time and cost by Inspectors could be avoided if the growers affixed and removed the signs instead of the Inspectors.

There should be clear guidelines approved by the Board as to when signage is required. In addition, this requirement could be made a condition of the growers licence.

Recommendation 3:

That growers assume the responsibility for affixing and removing the poppy crop warning signs on fences and gates in accordance with criteria established by the Board.

Weed Control

While ever the poppy crop is grown in Tasmania, there will continue to be a need to control the spread of the poppy as a weed. The current obligations on growers to destroy remaining crop and remove regrowth plants should remain.

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An Independent Regulator – Roles and Responsibilities

While Tasmania’s hybrid regulatory structure (i.e. various Ministers and Departments) has served the industry well for many years, the recent developments in the industry have called in to question whether the interaction of the key regulatory players is sufficiently clear, robust and responsive to address current and future industry developments and challenges. The hybrid regulatory system that exists does cause confusion for some growers and from information presented to the review, to at least one processor.

While it is clear from a strictly legal perspective that the regulatory licensing power resides with the Minister for Health, the existence of the Board and the fact the word ‘Control’ is in its title suggests to many, that the Board is the principal regulator.

The fact that the Minister delegates some decisions to the Chief Pharmacist and not others is also cause for confusion. Two relatively recent decisions required of the Minister under the Act, the decision as to whether to grant the third processor licence, and a decision as to whether a growers licence application should be approved, were delegated to persons other than the Board, or the Chief Pharmacist.

The recent decision to approve a processor application to import poppy straw from Turkey, contrary to the advice of the Board, which was reported in the media as an announcement by the Minister for Primary Industry, and not the regulatory Minister, also generated uncertainty as to roles, responsibility and decision making.

The Role of the Board

Involvement of the Board in Decision MakingWhile the Minister’s Delegate, the Chief Pharmacist makes the formal decisions under the Act in relation to licence issue and conditions, in practice the Board participates in the policy and operational merits of licence applications and decisions.

While the industry is aware of these arrangements, information was provided to the Review that indicates that on some occasions there has been uncertainty as to which party to approach for advice or decision, the Board, through the Chairperson or General Manager, or the Minister’s Delegate, the Chief Pharmacist. This has caused delays in the receipt of advice, asserted to be to the commercial disadvantage of the party concerned. On occasions, when satisfactory answers have not been achieved through that process, the regulatory Minister or others in Government are approached to achieve a response. Without going into the merits of those matters, it is clear that in the current system there is scope for delay and confusion which should not exist in an efficient regulatory system.

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When the Board seeks to take certain actions for which there is no formal regulatory authority, those actions are being subjected to legal scrutiny. Board views on the international obligations that are required to be met in Tasmania are also questioned.

The lack of written policies and guidelines used by either the Board or the relevant decision maker as delegate in the exercise of the Minister’s discretion does not provide transparency and independence in decision making.

The Board’s view of what is in the best interests of the Tasmanian industry and its view of how domestic activities and decisions might impact on the international reputation and viability of the Tasmanian industry are also questioned.

The Board’s approach to the regulation required for research and development, the growing of alternative crops being an example, is also subject to question.

Key players in the Tasmanian economic development and primary industry government sectors have recently become more actively engaged with industry development matters. This includes senior public servants and their Ministers.

The issue of availability of land in Tasmania to meet the supply of product required by the processors, and the issues associated with processor investment for increased manufacturing capacity, which have focussed on the import of poppy straw, is an example of wider bureaucratic and Ministerial interest. The Board’s views on the importation issue subject have been one of the matters that are the subject of political debate and parliamentary assessment.

The merits of these matters are not the subject of this review. However the issues clearly raise the question of whether the Board is a regulator ensuring that regulatory obligations are met, whether it is the custodian of the Tasmanian industry and its reputation, in effect exercising oversight or supervisory responsibilities, or whether it has wider industry development responsibilities.

The Board’s General Advisory FunctionsThe hybrid regulatory model that currently exists, taken together with the generally worded functions of the Board in the Act, enables the Board to be rightfully involved in all of the above matters. Included in its functions are –

to act in any matter relating to the alkaloid industry as may be directed to liaise with the Commonwealth in order to fulfil Australia’s obligations under the

Convention to advise the Attorney General and the Minister for Health on any matter relating

to the alkaloid poppy industry to do anything, and provide such other advice to other Ministers as may be

requested by those Ministers.

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These general functions, particularly the highlighted dot points give to the Board a wide ranging brief to advise many Ministers on any matter related to the poppy industry. The Board has quite properly exercised it authority to provide advice on matters of industry commercial activities and matters that may require activity by the Board or decision by the Minister or the Minster’s Delegate.

Regulatory and Advisory Role IssuesHowever, the perceived and actual regulatory role of the Board and its wider advisory role on any matter concerning the industry can result in its expressed position on one matter compromising or being perceived to compromise its position on other matters and vice versa. An example is the initial Board position on the entry of a third processor into the market and then under the hybrid regulatory model having responsibility to play a role in the regulation of the activities of that processor. It is clear from information provided to the review that there has on occasions been a difficult ‘regulatory relationship’ between the third processor and the Board. Another example is the recent Board advice on consequences that many follow from the importation of poppy straw. If importation should occur, the Board will have a subsequent role in the regulation of that activity.

The need for a Board

It was pointed out in the Review process, that there is no international convention requirement for there to be a Board. There is a need for national opium agencies to be established under Article 23 of the Convention, but this is for those Convention parties (countries) which cultivate opium poppy for the production of opium.

A range of stakeholder views were expressed in relation to the continued need for the Board.

The views included –

With the possibility of the growing of poppies elsewhere in Australia, it was time to move towards the establishment of a national board so that there were common industry regulatory standards

There is no need for a State Board as the regulatory functions could be undertaken by Commonwealth officials as in effect there is a duplication of roles

The Board should be a one stop shop for the industry Status quo – the Board had served the industry well over the past 40 years and there

was no need for change

On careful consideration none of the stakeholder views are supported.

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The need for change to the establishment of a national board is premature. While additional regulatory activity could be exercised by the Commonwealth, it has shown no inclination to do so, and in any event Tasmania regulates the industry for its own community safety and biodiversity reasons. If the Board is to be an independent regulator it cannot be a one stop shop for the industry on all matters. As discussed below, industry development activities need to be debated and progressed by industry and interested government participants within parameters of the international and domestically agreed regulatory environment.

Industry commercial circumstances, innovation and competition invariably push at the boundaries of regulatory control and unless there is a clearer definition of the Board’s role, future areas of uncertainty and potential disputation will arise.

A decision needs to be made as to whether the Board is a truly independent regulator of the industry, whether it has a somewhat undefined, and wide ranging role of general industry oversight or whether it has responsibility for industry development policy and action.

The circumstances of the Tasmanian industry and the issues before it lead to the conclusion that the time has passed when the Board can be part regulator, part industry custodian and adviser to all Ministers on all matters associated with the industry.

The Board currently and uniquely has knowledge of the international, national and state regulatory requirements for the industry. Regardless of the “legal niceties” of the arrangements that have existed between the Minister, the Chief Pharmacist and the Board, the Board has principally played a regulatory role in relation to the industry in the past. Compliance with international requirements, the 80/20 Rule, security, safety of the Tasmanian community, weed control - the key reasons to regulate - have all been within the purview of the Board. Past experience indicates that participation in the debate on industry initiatives or policy, potentially compromises the Board, in relation to its independent regulatory role. This leads to the conclusion that the role of the Board should be a regulatory role.

In order to establish an unambiguous regulatory role for the Board, it is suggested that the Minister delegate to the Board all those powers that are currently delegated to the Chief Pharmacist in relation to the licensing of growers and processors, save for what might be described as the ‘industry development’ powers. The ‘industry development’ powers are those which enable the granting of a licence to an additional processor and the power to approve the importation of quantities of poppy straw or other narcotic product for commercial processing as opposed to quantities required for research and development. A proposal for the process to be followed in relation to the granting of those licences is detailed later in this report.

Given the stated reasons for regulating the industry in Tasmania, absent a Board, some person or other organisation would need to discharge the regulatory functions. No compelling reason to abandon the Board in favour of another body was advanced in the

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review process. As discussed below, a Board with membership that includes members with knowledge of all aspects of the activities required to be regulated in the industry, presents as a sound option for future regulation.

Recommendation 4:

That the Act be amended

to remove the Board’s general advisory functions in relation to any matter relating to the alkaloid poppy industry

to enable the Board at any time, to advise the Attorney General and the Minister, on the need for any changes to the regulatory structure or powers necessary to regulate the industry or the making of specific regulations

to enable the Minister to delegate to the Board the responsibility to determine and issue all poppy industry licences under the Act other than licence applications for new processors to enter the industry or licences for the processing of the poppy straw or other narcotic materials imported for commercial processing.

Liaison with the Commonwealth to fulfil International Obligations

There are three key reasons why the Board should continue to discharge the function of liaison with the Commonwealth to fulfil Australia’s international obligations under the Single Convention

First, the Commonwealth Government is required to meet the obligations incurred by the Single Convention and the co-operative arrangements in that regard that have pertained over the past 40 years must be maintained to achieve a regulatory system that discharges Australia’s obligations.

Second, the Commonwealth Government as the state party to the Convention, has right and the responsibility to attend and participate in the INCB meetings. The co-operative arrangements mentioned above have seen Tasmania participate on the Australian Government delegation for many years. It has been beneficial to the development of the Tasmanian industry and its regulation to have access to the forum in which the key international decisions are made, and at the same time to gain an understanding of the rationale for those decisions. This opportunity must be maintained.

Third and potentially an emerging issue, is the possibility of the other States or Territories, seeking to grow poppies for poppy straw. Any decision that might be made in this regard will clearly have implications for the Tasmanian industry, in particular the growers. A regulatory Board should not participate in the political considerations surrounding any such decision. However the development of any national industry standards will be of critical interest to the Board, and it should maintain a close association with the Commonwealth in

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relation to any developments in this area, should a change in Tasmania’s monopoly grower status occur. It will also be necessary to ensure that Tasmania’s industry standards continue to be best practice and not put the Tasmanian industry at a disadvantage because of inappropriate or unnecessary regulatory control.

Recommendation 5:

That the Board’s functions should continue to include liaison with the Commonwealth on fulfilling Australia’s international obligations.

Performance of the Board

The Keach MatterThe Review was informed of the case of a grower (Anthony Keach) who it was alleged, grew more than his agreed allocation of poppy crop. This matter was reported to the Board and subsequently resulted in a licence application review, when the grower sought a licence for the 2005/6 season. The Minister appointed a special delegate to hear and determine the matter. The licence application was denied and resulted in the applicant taking unsuccessful legal proceedings before the Supreme Court. Subsequently there was a complaint to the Ombudsman which led to a review of Board procedures and decision making. The Ombudsman is a special report of October 2007 criticised an aspect of the process followed by the Board leading up to the decision of the delegate. The merits of the matter do not need to be revisited in this report. The grower concerned was able to secure a licence for the next season and is a successful industry participant. Of interest however is an observation of the Ombudsman at p. 27 of the 2007 Report that –

“The present arrangements for managing the industry may have been appropriate for a fledgling industry, but are anachronistic for controlling an industry which has achieved such significance to the Tasmanian economy and such significance within the global licit opiate market.”

Accessibility and responsiveness of the Board Information was provided to the review which indicated concern by a processor of delays in the decision making process and a general lack of timely responses to queries and requests.

While the merits of these matters were not specifically reviewed, there does appear to be scope for a clearer delineation of responsibility between the General Manager of the Board and the Chairperson, so that the industry is clear as to whom to approach and when, about which matters, and also the timeline within which responses can be expected.

In relation to the past growing season it was alleged that after considerable delay there was an arbitrary decision made by the Board to prevent the growing of poppies in a particular

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area of the State. The decision was said to be arbitrary because the reasons for the decision were both illogical and unreasonable. The potential grower had also incurred some expense in anticipation of approval to grow.

Regardless of the merits of this matter, it would be beneficial if there were readily available guidelines on areas where growing will not be licensed. Similarly if there are areas where growing is not desirable, because of proximity to residential areas or schools or other uses that might be sensitive in the context of access to a dangerous crop, those areas or at least the criteria that apply to preclude growing in those areas should be produced.

Administration and Enforcement As mentioned earlier in this report, it is not easy to find out the details of the regulatory system, on what matters a discretion might be exercised, or to obtain information on guidance on how to participate in the industry.

During the period of the Review, the position of General Manager of the Board has been vacant. This made the gaining of information more challenging as the position of General Manager has clearly been a key position in the regulatory structure in the past.

There is clearly scope for the Board to increase the amount of documentation that is available to industry participants and the public on how the poppy industry is regulated and the considerations that the Board will take into account in decision making. This might be done by way of Board recommendations for the making of regulations, or through codes of practice or guidelines established by the Board. In undertaking this work, the Board should consult closely with the industry participants. The Board should also place more information on its website.

Clearly the Board should be supported by a competent and committed senior official, be it a replacement general manager or similarly titled position. Effective Board operations also require the filling of this position with an appointee who has a sound understanding of the role of a regulatory organisation.

Recommendations elsewhere in this report, indicate changes to the licensing of growers and processors and changes to practices that have in the past, been the responsibility of the Board’s inspectors.

While there is no doubt that there is a need for an independent inspectorate to maintain security checking and surveillance, the independent auditing of activities and to ensure required agricultural clean up practices are performed, the changes recommended in this Report would alter the responsibilities of the inspectors. If the changes are adopted, it is suggested that the effect of the changes be identified and mapped and the current administrative and business processes of the Board reviewed and reorganised. This will

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ensure that the essential regulation that is required to support and protect the interests of the industry is as cost effective as possible.

Consideration should also be given to the means available to the Board and the Board’s Inspectors to ensure that the licence conditions can be easily enforced. Clearly a decision to withdraw a licence for failure to comply with a key licence obligation must only be undertaken in accordance with administrative due process. However failure to comply with some of the growers licence conditions, such as the requirement to destroy poppy material after harvest within 7 days, might be better enforced by enabling the Inspectors to issue infringement notices to growers, rather than have to resort to proceedings associated with potential loss of licences.

In light of any changes to licence conditions and the review of the administrative and business processes of the Board’s Inspectors, a review of the licence enforcement powers available to Inspectors should be undertaken to establish similarly efficient enforcement powers and procedures.

Recommendation 6:

That the Board review and re-establish effective and responsive administrative practices and procedures

That the Board undertakes a review of its current practices and procedures with a view to publishing appropriate guidelines or codes of practice to inform and assist the industry participants and the general public on how the industry is regulated.

That the Department of Justice in consultation with the Board, undertake a review of the Board’s business processes and administrative procedures, in particular the activities of the Board Inspectors, with a review to ensuring that the activities undertaken are as cost effective as possible

That the Board, review and make recommendations to the Attorney General on any additional enforcement powers that should be available to the Inspectors to facilitate efficient enforcement of the requirements of licences and any other relevant provisions of the Act.

Composition of the Board

Current CompositionThe Board currently comprises -

A chairperson appointed by the Minister

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The Secretary of the Department responsible for the Public Health Act 1997 or a nominee of the Secretary

The Commissioner of Police or nominee The Secretary of the Department responsible for the Agricultural and Veterinary

Chemicals (Tasmania) Act 1994 or nominee A person nominated by the Secretary of the Commonwealth Department responsible

for the grant of licences to manufacturer drugs under the Commonwealth Narcotic Drugs Act 1967

The Board for the majority of its existence has had a chairperson with legal qualifications, with all but one of those incumbents having held senior government legal positions.

In practice nominees have been appointed to the Board by the respective Departmental Secretaries and the Commissioner for Police, and the nominees have been senior departmental officials from the respective, health, police and primary industry departments.

Possible Industry RepresentationViews on the continued or future composition of the Board membership were in part driven by the fact that the activities and operations of the Board might in the future have to be paid for by the industry.

This generated a view in one party, that if industry were to pay for the Board and its activities, then industry was entitled to Board membership. That would enable the industry to be informed of and have a say in the regulatory activities that the Board should undertake and the cost of that undertaking, thus ensuring that the financial burden on industry was the least possible.

With the same knowledge about potential industry payment for Board activities, other stakeholders considered that the independence and integrity of the Board would be compromised if it included industry representatives, because the perception of industry interests, acting in their own interests, is difficult to disavow.

It is clear that one of the benefits of the current Board composition is its complete independence from the industry which it is involved in regulating. This is a benefit to the reputation of the Tasmanian industry generally, but also of benefit to the reputation of the Tasmanian processors in the international arena.

Should the policy decision be taken to require industry to pay for the operation and activities of the Board, industry representation on the Board could result in the perception of commercial influence on the regulatory system, which could in turn compromise the integrity of the Tasmanian system.

Recommendation 7:

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That the Board continue to be comprised of membership with no association with the industry.

Chairperson of the Board - IndependenceThere are no experience or qualification requirements specified for appointment to the position of Chairperson. Given the nature of the regulatory regime that is administered, and the importance of the presentation of that independent regulatory regime, the independence could be further strengthened by making provision in the Act for the appointment of an ‘independent’ chairperson.

Independent in this context, would be no past or current affiliation with the industry sector or current affiliation with the State or Australian governments. The chairperson would thus be able to bring an ‘association free’ approach to the regulatory tasks and decisions of the Board. While legal qualifications and experience either in legal practice or as a senior administrator should not be seen as a prerequisite to appointment to the position of chairperson, those skills and that experience can be of benefit in the administration of regulatory systems.

In must be added however, that this is not to suggest that the current incumbent has not acted independently.

Recommendation 8:

That the Act be amended to specify that the Chairperson of the Board is to be an independent Chairperson.

Board Membership – Health, Primary Industry and PoliceBringing a balance of expertise and experience in the areas of health, primary industry and police to the Board’s deliberations has been and continues to be the expertise and experience that is most relevant to the responsibilities and activities of the Board.

The continued representation on the Board of senior and experienced state government officials in these areas is supported. It gives to the Board a broad knowledge and perspective on the different aspects of the industry that need to be regulated, a breadth of knowledge and experience that would almost certainly not be found in a single person regulator.

It is however important that those persons appointed bring operational knowledge and expertise to the Board’s deliberations as opposed to general policy expertise. What the Board must regulate, is practical day to day operations and specialised agricultural and

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manufacturing activities and research and development and a level of expertise that matches that of the sector that the Board regulates is required.

Recommendation 9:

That the representation from the areas of health, primary industry and police be maintained on Board membership and that the appointees have practical and operational expertise in their discipline areas.

Commonwealth Nominee MembershipDuring the course of the Review, it came to light that although the Act enables the appointment of a Commonwealth nominee to the Board, no such appointment has been made by the Secretary of the responsible Department.

Notwithstanding, the practice is that a Commonwealth representative attends the Board meetings, participates in the discussions as appropriate, but does not take part in any decision making. There is no information or suggestion that this has in any way detracted from the Board’s deliberation or has affected the co-operative arrangements that exist between the Board and the relevant Australian Government officials in the regulation of the industry.

It is understood that formal membership of the Board is not sought, as it is not considered appropriate for a Commonwealth official to be subject to the direction of state officials (s.59I(a) of the Act) or need to meet the requests of State Ministers (s.59I(h) of the Act).

Absent a change of position from the Commonwealth, it appears that the ability of the Commonwealth Secretary of the responsible Department to nominate a member of the Board should be removed from the Act.

If that were to occur however, formal provision should be made for a nominee of the Secretary to attend the meetings of the Board as an official Board observer and also to receive all Board papers and briefings. The relationships that exist between the Board and the Commonwealth officials should be maintained given the past success of the collaboration on the international and national regulatory arrangements.

Recommendation 10:

That the Act be amended to

remove the requirement for Commonwealth membership of the Board provide for formal observer status on the Board for the nominee of the Secretary of

the Commonwealth Department for the grant of licences under the Commonwealth

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Narcotic Drugs Act , and for that person to be given access to all Board papers, minutes etc.

Board Membership – Secretary of the Department of Justice or NomineeAs mentioned elsewhere in this report, one of the ways of pursuing and evidencing the independent regulatory role of the Board was and is by placing Ministerial responsibility, and administrative support and accountability for the Board ,with the Department of Justice. As a result there could be no perception that understandable and legitimate industry development interests and objectives of the economic and primary industry Ministers and agencies would compromise the regulatory responsibilities of the Board.

This situation could be strengthened by adding the Secretary of the Department of Justice or nominee to membership of the Board in place of the Commonwealth nominee. The wider systemic role that the Department plays in the independent administration of justice would add further strength to the security and compliance considerations of the Board.

It would also provide a formal link between the Board and the agency that is administratively responsible to support the Board and resource its activities, and importantly to provide agency knowledge of the Board’s issues and activities. This will assist with the day to day management control of the Board staff and their activities.

Recommendation 11:

That the Act be amended to provide for the Secretary of the Department of Justice or nominee to be appointed to membership of the Board.

INDUSTRY, INDUSTRY DEVELOPMENTS AND THE BOARD

Industry Development

The development potential of the industry has been the subject of recent debate, particularly the availability of land for the planting of additional hectares of the crop, potential benefits for the industry flowing from irrigation investments and the more controversial issue of the import of poppy straw for commercial processing.

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It is a matter for the industry and the government agencies that support the industry objectives and its development, to establish a forum or consultative mechanism to discuss industry development activities and how they might be progressed. Indeed it is understood that there have been a number of meetings of the interested parties.

Factored in to these discussions however must be that the industry is and remains one in which the activities are closely regulated and must comply with strict reporting obligations associated with the product it produces or imports and the need to maintain strict security.

As the regulatory body, the Board must have direct input into the development any legislative change and the establishment of any industry regulations and standards. It should be responsible for the development of any industry codes of practice or guidelines.

Consideration needs to be given as to how the Minister who has a particular interest in and responsibility for poppy industry development, the Minister responsible for Primary Industry liaises with the two regulatory Ministers, the Minster for Health and the Attorney General.

It is a matter for the Government to determine those matters in relation to policy development.

However where industry development issues result in considerations that may cause the Minister to consider the exercise of statutory decision making powers, it is desirable to formalise the consultation processes that should take place, so that the Minister is appropriately informed on all the relevant considerations. It is suggested that the Act be amended to require the Minister to seek the advice of the Attorney General and the Minister for Primary Industry on the industry development licensing matters of granting a licence to a new processor, and importation of quantities of poppy straw or other narcotic product for commercial processing. Prior to providing advice, the Attorney General should seek the advice of the Board on any regulatory considerations or implications associated with the matter under consideration. This will enable the Board’s special knowledge of international, national and local regulatory considerations to inform any licencing considerations and decisions to be made by the Minister.

Recommendation 12:

That the Act be amended to require the Minister to obtain the advice of the Minister for Primary Industry and the Attorney General, prior to making any decision in relation to the granting of a licence to an additional processor or the importation of quantities of poppy straw or other narcotic product for commercial processing.

That the Act be amended to require the Attorney General to seek the prior advice of the Board on any domestic, Australian or international regulatory issues associated with any processor or import application.

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Industry Development Issues and the Board

R & D Programs

Processor Research, Scientific Study or Innovation, Sample ProductsOne issue that appears to have been a cause for differences between a processor and the Board or the Minister’s delegate is the use or import of materials for research, scientific study, product innovation or the production of sample products for consideration by potential customers.

Regardless of the activity proposed or the relatively small quantities of product involved, there remains a requirement to identify and document any narcotic product to comply with regulatory requirements. Where what is proposed by a processor is a new initiative, needless to say the regulator must give appropriate consideration to the application of the appropriate regulatory controls and to whether new controls or new licence conditions are required. This is sometimes a lengthy process and the source of some frustration to all parties.

A process whereby the developmental programs of a processor are established in a forward plan and are confidentially submitted to the Board for consideration in advance of desired implementation dates would be advantageous to the Board in the timely discharge of its responsibilities. It would also give knowledge to the processor of timelines for the due consideration of the matters, in advance of commercial issues and pressures arising.

Recommendation 13:

That processors should submit an annual research and development plan to the Board which indicates any regulatory approval that may be required into the future.

Poppy Straw Processing Waste ProductsProcessors generate both solid and liquid waste products as a by-product of their processing of poppy straw. The use of these products is limited because of their alkaloid content. Although the alkaloid content in extremely low, the product still retains measurable alkaloid content and is thus controlled by the Act. Approval can be given by the Tasmanian regulatory authorities for the waste to be utilised by spreading or spraying it on paddocks, if done under the supervision of the processor.

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Any wider use of the product can only occur when the alkaloid content status of the product is such that it meets different requirements in the Act.

If there is a beneficial use for these products, it would appear that co-operation between the supporting state government agencies, the processors and ultimately the regulator should take place to establish whether beneficial waste products that can meet the requirements of the Act can be developed.

Recommendation 14:

That collaboration between the industry processors and supporting government agencies should take place to ascertain whether the regulatory requirements of the Act can be met to establish beneficial uses, commercial or otherwise, for industry waste products.

Cultivation of the Poppy Plant Papaver BracteatumPapaver Bracteatum is a variety of poppy plant controlled under the Poisons Act in Tasmania in the same way as the variety Papaver Somniferum. Its use is prohibited except in accordance with that legislation.

However, it is a variety of poppy for which no control provisions are contained within the 1961 Single Convention on Narcotic Drugs. Whilst approved scientific research is being undertaken both locally and internationally, it is not commercially cultivated. However, the International Narcotics Control Board is carefully monitoring the research by the voluntary reporting of statistics on cultivation and production and has recommended international control once commercial cultivation is commenced.

By international resolution 1982/13, the UN Economic and Social Council appealed to Governments to refrain from commercial cultivation of Papaver Bracteatum. Pursuant to that resolution, no Government is yet to allow commercial cultivation of this variety.

Whilst the reasoning behind this “prohibition” in the 1980s centred around control and supply of raw narcotic material and the extraction of alkaloid content (particularly thebaine), the now preferred papaver somniferum variety of opium poppy rich in thebaine has proved to be more commercially viable.

Given the ongoing investment in Tasmania of papaver bracteatum trials and related research activities by one processor, it would appear desirable that the future status of the commercial development of this plant in Tasmania be established by the regulatory authorities at a state and national level. If it is decided to support the development of this poppy variety then any international obligations or restrictions need to be resolved.

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Recommendation 15:

That the Board seeks to resolve the future status of the commercial development of papaver bracteatum in Tasmania.

Industry and Board Engagement

There is a need for the Board and/or its officers as appropriate to the matters at hand, to be accessible for advice, direction and decision making in accordance with the usual business arrangements that one would expect from a regulator engaging with the individual stakeholders in its sector. Board staff must be responsive in their communications with stakeholders, have the capacity to efficiently escalate matters to the Board Chairperson as required and for the Chairperson to escalate matters to the Board level. This may necessitate more Board meetings than have taken place in the past.

To efficiently and effectively regulate the industry, the Board must obviously be fully appraised of developments in the industry at an international level and at the domestic level.

Participation as part of the Australian delegation to the annual INCB meetings enables the Board to be well informed on international developments, including industry developments.

The Board also needs a regular and structured approach to both informing and being informed about developments in the local industry that are relevant to the Board’s regulatory functions.

Two approaches are suggested -

an annual Board/industry forum establishment of Board technical or advisory committees

Annual Board/Industry ForumThe Board should be accessible to the local industry through an annual meeting with representatives of the processors and representatives of the growers and any growers who wish to attend. This would provide a regular forum for the industry, relevant Tasmanian Government officials and the Board, to engage on matters of mutual interest and give the industry certainty of access and input into the Board’s deliberations and business schedule.

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The business for this meeting will obviously vary from time to time, but matters of annual relevance would appear to be -

any international or Australian developments which are impacting on the local industry in relation to the Tasmanian regulatory structure, including INCB developments

regulatory controls in relation to research, innovation or trials any potential or industry suggested changes to the Tasmanian regulatory structure the efficiency and effectiveness of the Board and its operations and of Board staff.

Board Technical or Advisory CommitteesThe Board could effectively engage with the industry and government officials through the establishment of special advisory committees to consider policy issues associated with matters that go to informing regulatory structures or decision making. If the business warranted it, the Board could establish standing committees, but it is more likely that such committees would be task focussed and time limited.

Recommendation 16:

That the Board convene an annual industry Board forum to review developments in the industry on an international, national and local level that impact on the regulation of the Tasmanian industry

That the Board, as appropriate, convene special technical or advisory groups or committees to consider and provide recommendations to the Board relevant to the regulation of the industry.

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APPENDICES

Appendix 1

TERMS OF REFERENCE – REVIEW OF THE TASMANIAN POPPY INDUSTRY REGULATION

To undertake a review of the regulation and oversight of the poppy industry in Tasmania, and provide the Attorney-General with a report providing advice on:

1. Option for a contemporary regulatory framework that support and protects the Tasmanian Poppy Industry, provides appropriate safeguards for the community, and meets national and international obligations for the safe and secure growing of poppies.

2. The role and functions required into the future for regulation and oversight of the poppy industry in Tasmania taking into account the views of all the relevant stakeholders, including:

1. Poppy farmers2. Manufacturers3. Relevant agencies of The Commonwealth of Australia including the

Department of Health and Aging, and Customs.4. The Department of Health and Human Services5. The Tasmanian Department of Justice6. The Tasmanian Department of Primary Industries, Parks, Water and

Environment7. Tasmania Police8. Current members of the Poppy Advisory and Control Board

1. And having regard to:9. The need for independent oversight and regulation10. International regulatory frameworks11. State and Federal legal requirements12. Security Issues13. Supporting and growing the Tasmanian Poppy Industry14. Keeping the regulatory and cost burden on industry to a minimum, and

avoiding unnecessary duplication 15. Current industry an farming practices

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Appendix 1

3. Recommendations as to:

1. The optimal structure for the regulation of the industry.2. A suitable mechanism for the future industry engagement with the regulatory

body, while maintaining strict independence of the regulator’s functions and decisions.

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Appendix 2

WRITTEN SUBMISSIONS

Written submissions were received from -

Chris Broad (Concerned Citizen)

Lyndley Chopping (Immediate Past President PGT Inc.)

Australian Customs and Border Protection Service

Department of Economic Development, Tourism and the Arts

Department of Health and Ageing (Commonwealth)

Department of Health and Human Services

Department of Police and Emergency Management

Department of Primary Industries, Parks, Water & Environment

GlaxoSmithKline

Michael Hart (PACB Board Member)

Poppy Growers Tasmania Inc

V. G. Spencer and Son

Tasmanian Alkaloids Pty. Ltd

Tasmanian Farmers and Graziers Association

TPI Enterprises Ltd.

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Appendix 3

CONSULTATIONS

Meeting and Telephone Consultations

David Cullen (PACB Field Officer)

Jan Davis (TFGA)

Mike Doyle (GSK)

David Gatenby (TFGA)

Patrick Grant (GSK)

Cathy Griggs (Potential Grower)

David Hingston (TFGA)

Michael Hart (PACB Board Member)

Darren Jones (Department of Health of Ageing)

Tony and Rebecca Keach (Growers)

Rohan Kile (GSK)

Peter Patmore (PACB Chairperson)

Keith Rice (PGT)

Jarrod Ritchie (TPI)

Tol Sereda (Tasmanian Alkaloids)

Mary Sharpe (Chief Pharmacist and PACB Board Member)

Nick Steel (TFGA)

Frank Webb (PACB Senior Field Officer)

Growers Meetings

Oatlands – 4 March - 7 Attendees

Longford – 5 March – 4 Attendees

East Devonport – 6 March 2013 – 7 attendees

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Appendix 3

Rocky Cape – 7 March 2013 – 3 attendees

Scottsdale – 20 March 2013 – 5 attendees

A Note on the Grower Meetings

While five grower meetings were held around the State, given the many hundreds of growers state-wide, the attendance at the meetings was very low. This is possibly explained by three factors.

First, the overwhelming majority of growers are represented by their association, Poppy Growers Tasmania Inc. The Association is knowledgeable about the sector and active in promoting the industry generally, as well as representing the interests of growers. In this regard the association informed its members by special newsletter of the forthcoming meetings and of key issues that needed to be considered in the Review. In light of this advice to its members, the members may well have concluded that their issues and interests were already being effectively advanced by their association.

Second, and perhaps the most compelling reason, is that contrary to the impression that the licence application and licence requirements might convey, the regulatory system has limited impact on growers. The way the system now effectively operates, is that apart from having to secure a criminal history check on their suitability to be a grower, it is the processors and their staff who spend the most time interacting with the regulatory system rather than the growers.

The need for a grower to hold a contract with a processor to grow a crop, as a prerequisite to gaining a licence, results in the processor field staff in effect organising the necessary paper work for growers to sign. The warning signage on fences is supplied by the growers association and affixed by the Inspectors. After that, the cultivation of the crop is undertaken with the advice of the processors field staff and the harvesting and transport of the crop, is undertaken by contractors engaged by the processors. Growers need to be vigilant to ensure that there is not unauthorised intrusion on to their property where the crop is growing, and that there is no interference with their crop. But all growers are ordinarily vigilant about any intrusion on to their property. Thus the actual regulatory compliance burden on farmers is limited.

Finally, and although the meetings were scheduled at the end of the poppy harvesting season, and in the early evening, growers, who are invariably farmers with numerous other primary industry pursuits besides the growing of poppies for part of a year, have many demands on their time, and attending a consultation meeting simply may not have been a high priority in light of the above two matters.

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Appendix 4

AN OVERVIEW OF THE REGULATORY REGIME

What is the current regulatory scheme that governs the growing and manufacturing of poppies in Tasmania?

The opium poppy papaver somniferum is grown commercially in Tasmania. At different stages, this plant can produce raw opium, poppy seeds and poppy straw. Manufacturing processes are able to extract opiates and alkaloids from each of these substances and ultimately produce narcotics.

The preferred Tasmanian method of cultivation is the production of poppy straw.

Because of the potential for this plant in both its raw and processed form to be misused, the growth, manufacture and possession thereof is regulated on an international, national and local state level.

What are our International Obligations?

Australia is a signatory to the United Nations Single Convention on Narcotic Drugs 1961.1 Parties to the Convention undertake to limit the production, manufacture, export, import, distribution and stocks of, trade in and use and possession of the controlled drugs so that they are used exclusively for medical and scientific purposes.

The production and distribution of controlled substances must be licensed and supervised, and Governments must provide estimates and statistical returns to the International Narcotics Control Board (INCB) on the quantities of drugs required, manufactured and utilized and the quantities seized by police and customs officers.2

The INCB is established under the Convention and is an independent, quasi-judicial body mandated to promote and monitor Government compliance with the international drug control conventions.

The INCB Annual Report reviews the status of implementation of the drug control treaties, highlights ongoing challenges in drug control, and makes recommendations to Governments and international and regional organizations.

1 Australia ratified the amending Protocol to the International Single Convention on Narcotics Drugs 1961 on 22 November 1972.2 http://www.incb.org/incb/en/narcotic-drugs/index.html

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http://www.incb.org/incb/en/narcotic-drugs/index.html

http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=VI-18&chapter=6&lang=en

Appendix 4

Under the Convention, control is exercised over 119 narcotic drugs3, mainly natural products, such as opium and its derivatives, morphine, codeine and heroin, but also synthetic drugs, such as methadone and pethidine, as well as cannabis and coca leaf.

The Convention establishes strict controls on the cultivation of opium poppy and its products which in the Convention are described as “narcotic drugs”.

The term “drug” is defined as any of the substances in Schedules I and II of the Convention. “Opium” is a Schedule I drug and defined as the coagulated juice of the opium poppy. “Opium poppy” means the plant of the species Papaver Somniferum. 4

“Concentrate of Poppy Straw” is also a Schedule 1 drug in the Convention and defined as: the material arising when poppy straw has entered into a process for the concentration of its alkaloids when such material is made available in trade, (“Poppy straw”: all parts (except the seeds) of the opium poppy, after mowing).

The Schedules are regularly updated and comprised in the List of Narcotic Drugs under International Control (the Yellow List) currently in its 50th edition, published in December 2011.5

Under the Convention, “manufacture”, means all processes, other than production, by which drugs may be obtained and includes refining as well as the transformation into other drugs.6

“Cultivation” means the cultivation of the opium poppy.7

Article 23 of the Convention provides that a Party that permits the cultivation of the opium poppy for the production of opium must establish and maintain a government agency to carry out the Convention obligations.

That Article further sets out the requirements for the cultivation of the opium poppy for the production of opium. Namely, the designation of land where cultivation will be permitted; the requirement for cultivators to be licensed; the licence to specify the extent of the land; the requirement for the Agency to take delivery of and purchase all crops; and the exclusive right of the Agency to import, export, trade and maintain those stocks.

Tasmania does not cultivate the opium poppy for the production of opium, but rather for poppy straw.

3 NO 001 8008-60-4 OPIUM* the coagulated juice of the opium poppy (plant species Papaver somniferum L.)4 Single Convention on Narcotic Drugs 1961, Article 15 http://www.incb.org/documents/Narcotic-Drugs/Yellow_List/NAR_2011_YellowList_50edition_EN.pdf6 Single Convention on Narcotic Drugs 1961, Article 17 Single Convention on Narcotic Drugs 1961, Article 1

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http://www.incb.org/documents/Narcotic-Drugs/Yellow_List/NAR_2011_YellowList_50edition_EN.pdf

Appendix 4

Article 25 of the Convention deals exclusively with poppy straw and provides that a Party that permits the cultivation of the opium poppy for purposes other than the production of opium is to ensure by appropriate measures that opium is not produced and that the manufacturer of drugs from poppy straw is adequately controlled.

Import certificates and export authorisations are still required as well as the requirement to furnish statistical information on the import and export of poppy straw.

Article 29 deals exclusively with the manufacture of drugs requiring that Parties must require manufacturers to be licensed. In addition, the Parties must: control all persons and enterprises carrying on or engaged in the manufacture of drugs; must control under licence the manufacturing establishments and premises; and require the licensed manufacturers of drugs to obtain periodical permits specifying the kinds and amounts of drugs which they shall be entitled to manufacture. There is a further requirement that Parties shall prevent the accumulation in the possession of drug manufacturers of quantities of drugs and poppy straw in excess of those required for the normal conduct of business.

The time during which the opium crop is in the hands of the individual farmer is the most critical period from the view point of narcotics control. It is during this period that diversion of legally harvested opium into illicit channels usually takes place. It is often quite impossible to estimate with exactitude the amount of opium actually harvested by the farmers, who are often very poor and are attracted by the relatively high prices offer by illicit traffickers. For this reason it is important that the time between the harvest and the delivery of the crop should be as short as possible.8

How are our International Obligations Implemented into Australian Law?

Australia ratified the amending Protocol to the International Single Convention on Narcotics Drugs 1961 on 22 November 1972. The Single Convention was implemented into Australian law by virtue of the enactment of the Narcotics Drugs Act 1967 (Cth).9 This Act and hence the Convention obligations are jointly administered by the Chief Executive Officer of Customs under the Commonwealth Attorney General’s Department and the Commonwealth Minister for Health and Ageing.10

The Act regulates the manufacture of, and makes other provision with respect to, narcotic drugs in accordance with the Convention.

8 United Nations Commentary on the Single Convention on Narcotic Drugs 1961, published 19739 See generally “Treaty Making Process” http://www.dfat.gov.au/treaties/making/ 10 Commonwealth Administrative Arrangements Order - 09/02/2012

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http://www.dfat.gov.au/treaties/making/

Appendix 4

“Drug” means any substance that is a drug for the purposes of the Convention. This includes Schedule I drugs “opium”, “opium poppy” and “concentrate of poppy straw” which definitions are the same as those in the Convention.11

The manufacturing of a drug “consists of the carrying out of any process by which the drug may be obtained, and includes the refining of a drug and the transformation of one drug into another drug” but does not include the separation of opium from the plant from which it is obtained.12

Commonwealth Licensing

The Commonwealth fulfils its Convention obligations by a legislative system of licensing and permits.

A person or organisation who wishes to manufacture a drug must apply to the Minister of Health and Ageing for a licence to do so.13 In addition, that licensed manufacturer must also obtain a permit to manufacture drugs in regulated quantities.14 The granting of a permit is discretionary.

Further legislative controls give power to the Chief Executive Officer of Customs to direct manufacturers to control and regulate the entry and departure of persons and vehicles from licensed premises.15 Additionally, manufacturers and wholesale dealers are required to keep records and furnish reports to the Government16 and make their premises available for inspection by Government officers.17

Part II deals with licensing of manufacturers. Sections 9 through 14A.

9 Licence to manufacture(1) A person who manufactures, or proposes to manufacture, a drug at any premises may apply to the Minister for a licence to manufacture that drug at those premises.(2) The Minister may require a person who applies for a licence under this section to furnish to the Minister, or to another person specified by the Minister, such information as the Minister considers necessary.(3) Where a person applies for a licence under this section, the Minister shall grant the licence to him or her unless:(a) the applicant has failed to furnish any information that he or she has been required to furnish under the last preceding subsection;

11 S.4(1) Narcotic Drugs Act 1967 (Cth)12 S.4(2) Narcotic Drugs Act 1967 (Cth)13 S.9 Narcotic Drugs Act 1967 (Cth)14 S.11 Narcotic Drugs Act 1967 (Cth)15 S.12 Narcotic Drugs Act 1967 (Cth)16 S.23 Narcotic Drugs Act 1967 (Cth)17 S.24 Narcotic Drugs Act 1967 (Cth)

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Appendix 4

(b) the Minister is not satisfied that the applicant manufactures, or proposes to manufacture, the drug specified in the application at the premises so specified; or

(c) the Minister is of the opinion that the grant of the licence would not be consistent with the obligations of the Commonwealth under the Convention.

(4) The Minister may specify in the licence such conditions applicable to the licence as he or she determines.(5) In this section, Minister means the Health Minister.

10 Revocation of licences

(1) The Minister may revoke a manufacturer’s licence if:(a) the holder of the licence does not commence to manufacture, or ceases to manufacture, the drug specified in the licence at the premises so specified;(b) the holder of the licence has failed to comply with a condition specified in the licence;(c) the holder of the licence has been convicted of an offence against this Act;(d) the Minister is of the opinion that it would be inconsistent with the obligations of the Commonwealth under the Convention for the licence to continue in force; or(e) the holder of the licence requests the Minister to revoke the licence.(2) In this section, Minister means the Health Minister.

11 Permits to manufacture

(1) The Secretary may from time to time grant to the holder of a manufacturer’s licence a permit to manufacture the drug to which the licence relates during such period as is specified in the permit.(2) The Secretary may specify in a permit:(a) the maximum quantity of the drug to which the permit relates that may be manufactured by the licensed manufacturer at the premises to which the permit relates during the period to which the permit relates; and(b) the maximum quantity of the drug to which the permit relates that, in the opinion of the Secretary, having regard to the prevailing market conditions, it is necessary for the licensed manufacturer to have in his or her possession at any time during the period to which the permit relates for the normal conduct of business.

12 Directions with respect to security of premises and handling of narcotic materials

(1) The CEO may, by notice in writing served on a licensed manufacturer:

(a) direct him or her to take specified measures for regulating and controlling:(i) the entry of persons or vehicles into, or the departure of persons or vehicles from, the licensed premises or a specified part of the licensed premises; or(ii) the entry of persons or vehicles into, or the departure of persons or vehicles from, a specified part of the licensed premises from or into another part of the licensed premises;

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Appendix 4

(b) direct him or her to take specified measures for preventing:(i) the entry of persons or vehicles into, or the departure of persons or vehicles from, the licensed premises; or

(ii) the entry of persons or vehicles into, or the departure of persons or vehicles from, a specified part of the licensed premises from or into another part of the licensed premises;otherwise than at specified places; or(c) give directions to him or her with respect to the handling, otherwise than upon the licensed premises, of narcotic materials in his or her possession or control.

(2) A direction under this section in relation to the handling of narcotic materials may be given in respect of narcotic materials generally, in respect of a narcotic material of a kind specified in the direction or in respect of such particular narcotic materials as are specified in the direction.

(3) In this section:licensed premises, in relation to a licensed manufacturer, means the premises at which the licensed manufacturer is, under this Act, licensed to manufacture a drug.narcotic material means a drug, a narcotic preparation or a substance, whether natural or synthetic, that is used in the manufacture of a drug.

13 Directions with respect to manufacturing and labelling of drugs

(1) The Secretary may, by notice in writing served on a licensed manufacturer, give directions to him or her with respect to:(a) operations connected with the manufacturing of drugs; or(b) the labelling of drugs manufactured by him or her.(2) A direction under this section may be given in respect of the labelling of drugs generally or in respect of a drug of a kind specified in the direction.(3) In this section, drug includes narcotic preparation.

14 Directions inconsistent with condition of licence

Where a direction given to a licensed manufacturer under either of the last two preceding sections is inconsistent with a condition specified in his or her licence, the condition is, to the extent of the inconsistency, of no effect.

14A Review of certain decisions by Administrative Appeals Tribunal(1) Application may be made to the Administrative Appeals Tribunal for review of:(a) a refusal by the Health Minister to grant a licence to manufacture a particular drug at particular premises to a person who made application under section 9 for such a licence;(b) a specification by the Health Minister, under section 9, of particular conditions in a licence granted under that section;

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Appendix 4

(c) a revocation by the Health Minister, under section 10, of a licence granted under section 9;(d) a direction given by the CEO under section 12; or

(e) a direction given by the Secretary under section 13.

Standardisation of Scheduled Drugs

The Poisons Standard, or SUSMP18, is a Commonwealth Legislative Instrument which classifies medicines and poisons into Schedules for inclusion in the relevant legislation of the States and Territories. The Poisons Standard promotes uniform scheduling of substances throughout Australia.

The SUSMP is made with reference to INCB Yellow List.

Schedule 8 contains specified controlled drugs.19 The opium poppy and its derivatives are controlled drugs.

Part 4 (containing the nine Schedules) and Appendix C (substances, other than those included in Schedule 9, of such danger to health as to warrant prohibition of sale, supply and use)of the Uniform Standard or SUSMP is adopted as the Tasmanian Poisons List for the purposes of the Poisons Act 1971 (Tas). 20

Poppy straw was a Schedule 8 Narcotic Substance21 of the Poisons List Order 2001 (Tas) as amended. That List22 had effect for the purposes of the Poisons Act 1971 (Tas) until 24 June 2012 when the Poisons (Adoption of Uniform Standard) Order 2012 came into effect adopting the Uniform Standard.

Appendix 418 The Standard for the Uniform Scheduling of Medicines and Poisons (the Standard), or SUSMP, is established under section 52D of the Commonwealth Therapeutic Goods Act 1989. The current edition is SUSMP No.3 formally known as Commonwealth Poisons Standard 2012.19 Commonwealth Poisons Standard 2012: controlled drugs - substances which should be available for use but require restriction of manufacture, supply, distribution, possession and use to reduce abuse, misuse and physical or psychological dependence.20 Poisons Act 1971 (Tas) s.14; Poisons (Adoption of Uniform Standard) Order 2012 (S.R. 2012, No. 55)21 8053 Opium, except the alkaloids –

(a) noscapine in Schedule 2; and(b) papeverine when included in Schedule 2 or 4.

8065 Poppy Straw, concentrate of, being the material arising when poppy straw has entered into a process for concentration on its alkaloids.

22 Made pursuant to section 15 of the Poisons Act 1971, that section repealed by No 7 of 2012 applied 1 July 2012.

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Schedule 8 substances are those substances which should be available for use but require restriction of manufacture, supply, distribution, possession and use to reduce abuse, misuse and physical or psychological dependence.

Concentrate of Poppy Straw (the material arising when poppy straw has entered into a process for concentration of its alkaloids) is a Schedule 8 substance.State

Responsibility for legislating the regulation, control, and prohibition of the importation, making, refining, preparation, sale, supply, use, possession, and prescription of certain substances and plants lies with the state. In Tasmania, this legislative power is found within the Poisons Act 1971 (Tas).

The possession of prohibited plants, such as the opium poppy, is prohibited except under licence.23

Similarly, the possession of narcotic substances is prohibited except under licence or authorisation.24 A narcotic substance is one that is specified in Schedule 8 of the Poisons List.

Licences to grow are granted at the discretion of the state Health Minister under section 52 of the Poisons Act 1971 (Tas). Licences to manufacture are granted by the Commonwealth under the Narcotics Act 1967 but also by the state under the Poisons Act 1971 (Tas). Additionally, there is duplication at both the Commonwealth and state level in the added requirement for manufacturing permits as to quantity and type of drugs that may be produced.

Commonwealth legislation only regulates the manufacturer of a narcotic drugs, not the grower.

Poppy Advisory and Control Board

The Poppy Advisory and Control Board (PACB) is established under section 59H(1) of the Poisons Act 1971 (Tas.). It is administered by the Minister of Justice/Attorney General under the Tasmanian Department of Justice.25

Interestingly, the PACB was only established as a statutory body in 2008.26 Up until this time, the Board appeared to have existed as a group of people known as the Poppy Advisory Control Board ("the Board"):

23 Poisons Act 1971 (Tas) s.4924 Poisons Act 1971 (Tas) s.4825 Schedule I, Part 3, Administrative Arrangements Order 2012 (Tas) made under the Administrative Arrangements Act 1990 (Tas).26 Poisons Amendment (Poppy Advisory and Control Board) Act 2008 (No. 39 of 2008). Its creation appears to be as a result of a Judicial Review application challenging a decision to not grant a licence to grow poppies under section 52 of the Act: Keach v Minister for Health and Human Services [2006] TASSC 28. The challenge was unsuccessful.

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http://www.austlii.edu.au/au/cases/tas/TASSC/2006/28.html

Appendix 4

"The [Board] is simply an administrative arm of Government. It has no statutory existence, nor any formal role in the issue of licences under the

Poisons Act 1971, but it oversees for practical purposes the development and control of Tasmania's poppy industry." 27

Section 24 of the Act empowered (and still empowers) the Minister to delegate his or her powers duties and functions under the Act to the Secretary or a State Service officer or State Service employee. In this way, prior to 2008, the discretion to grant a licence under section 53 was delegated to a State Service employee.

Membership of PACB

Subsection 59H(2) provides that the Board consist of the following members:(a) a person appointed by the Minister who is to be the chairperson of the Board;

(b) the Secretary of the Department of Health and Human Services in relation to the Public Health Act 1997 or a person nominated by that Secretary;

(c) the Commissioner of Police or a person nominated by the Commissioner;

(d) the Secretary of the Department of Primary Industries Parks Wildlife and Environment in relation to the Agricultural and Veterinary Chemicals (Tasmania) Act 1994 or a person nominated by that Secretary;

(e) a person nominated by the Secretary of the responsible Commonwealth department in relation to the grant of licences to manufacture drugs under Part II of the Narcotic Drugs Act 1967 of the Commonwealth.

Subsection 59H(3) provides that a nomination referred to above –(a) may be for an indefinite period or a period specified in writing by the Secretary; and(b) may be in respect of all matters relating to the Board or any specified matters; and(c) is revocable at will.

Subsection 59H(4) provides: A person nominated under subsection (2), while acting as a nominee and in accordance with the terms of his or her appointment, is taken to be a member of the Board with all the powers, rights and functions of such a member.

Appendix 4

S.59H(5) Schedule 1 has effect with respect to membership of the Board.27 Keach at para 4

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http://www.austlii.edu.au/au/legis/tas/consol_act/pa1971121/

S.59H(6) Schedule 2has effect with respect to meetings of the Board.

Clause 3(1) of Schedule 2 provides that the quorum at any duly convened meeting of the Board is 3 members.Clause 5 makes provision for disclosures of interest28

Functions of the PACB

The functions of the Board are defined within section 59I as follows:(a) to act in any matter relating to the alkaloid poppy industry as may be directed by the Secretary of the Department of Justice;

(b) to receive, consider and determine production estimates for the contract growing and harvesting of alkaloid poppy material;

(c) to liaise with the Commonwealth in order to fulfil Australia’s obligations under the Convention;

(d) to ensure the security of Tasmanian alkaloid poppy crops;

(e) to collect and collate statistical information relating to the alkaloid poppy industry and prepare reports on the industry;

(f) to facilitate the destruction of any alkaloid poppies grown without the authority of a licence or other authority issued or granted under this Act;

(g) to advise the Health Minister and the Justice Minister on any matter relating to the alkaloid poppy industry;

(h) to do anything, and provide such other advice to other Ministers, as may be requested by those Ministers.

Appendix 4

59J. Powers of Board

28 (1) A member who has a direct or indirect pecuniary interest in a matter being considered or about to be considered by the Board must, as soon as practicable after the relevant facts come to the knowledge of the member, disclose the nature of that interest at a meeting of the Board.(2) A disclosure under subclause (1) is to be recorded in the minutes and the member must not, unless the Board exclusive of that member determines otherwise –(a) be present during any deliberations of the Board in relation to that matter; or(b) take part in any decision of the Board in relation to that matter.

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The Board may do all things necessary or convenient to be done for or in connection with, or incidental to, the performance of its functions under this or any other Act.

59K. Delegation

The Board may delegate any of its functions and powers, other than this power of delegation, to a specified person or the holder of a specified office.

59L. Annual report(1) The Board, not later than 31 August after the end of each financial year, is to give the Minister a report on its operations for that financial year. (2) The Minister may, in writing, direct the Board to prepare the report in a particular way or to include particular information in the report. (3) The report may be appended to the annual report of the Department.(4) If the Board's report is not appended to the annual report of the Department, the Minister is to cause the report to be laid before each House of Parliament by not later than 31 October after the end of the financial year to which it relates.

59M. Secretarial and administrative support(1) Subject to and in accordance with the State Service Act 2000, persons may be appointed or employed for the purpose of enabling the functions of the Board under this Part to be carried out.(2) The Board may make arrangements with the Secretary of the Department for such State Service officers and State Service employees employed in the Department as may be considered necessary to be made available to enable the Board to perform the functions of office under this or any other Act and those officers and employees, in conjunction with State Service employment, are to serve the Board in any capacity.

59G. InterpretationIn this Part VB, unless the contrary intention appears –alkaloid poppy means a plant of the species Papaver somniferum or Papaver bracteatum;

alkaloid poppy material means a part or product of an alkaloid poppy;

Board means the Poppy Advisory and Control Board established under section 59H(1);

Convention means the 1961 Single Convention on Narcotic Drugs published by the United Nations, as amended from time to time;

cultivate includes harvest;

Department means the responsible Department in relation to this Part [Justice];

Appendix 4

manufacture includes refine and process and anything done for the purpose of refining or processing;

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meeting means a meeting of the Board;

member means a member of the Board;

Minister means the Minister having the administration of this Part [Justice];

process means to treat by mechanical, chemical or other artificial means but does not include harvesting.

Licence to grow or cultivate a prohibited plant in TasmaniaThe opium poppy is a prohibited plant.

A person shall not grow or cultivate a prohibited plant, except under and in accordance with a licence granted or deemed to have been granted by the Health Minister under Part V of the Poisons Act 1971 (Tas) and in accordance with the conditions and restrictions specified in the licence.29

Sale and supply of narcotic substances and prohibited plantsA person shall not sell or supply a prohibited plant to another person except where that person holds a section 52 licence and sells or supplies to a licensed manufacturer.30

Minister's discretion to grant or refuse licences

The grant or refusal of a licence lies in the discretion of the Health Minister.31 In practice, it would appear that such licence applications are referred to the PACB under authority of the Minister as a function of the Board.

There is no apparent right of appeal or review of the refusal of a licence or the imposition of conditions. However, such a decision is administrative in nature and reviewable under the Judicial Review Act 2000 (Tas).

Licensing of manufacturing chemistsThe Health Minister has a discretionary power to grant a licence to carry on business as a manufacturing chemist.32 Such a licence may be subject to conditions and restrictions as determined by the Minister and as are specified in the licence or notified to the licence holder.33

Appendix 4

The licence application requires the following information:- Full name of the applicant (or the responsible officer of a company)29 Poisons Act 1971 (Tas) s.52 Criminal penalties apply for contravention.30 Poisons Act 1971 (Tas) s. 47(3) and (4)31 Poisons Act 1971 (Tas) s.5332 Poisons Act 1971 (Tas) s.16(1)(a)33 Poisons Act 1971 (Tas) s.16(2)(b)

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- Place at which he proposes to carry on business

The licence is remains in force for a period of 12 months but may be renewed annually upon application. A fee is payable for the licence.

Refusal of licences and renewals thereofThe Minister has a discretion to refuse an application for a manufacturer’s licence or a renewal of a licence granted under section 16 if that person has been or is convicted of an offence against the Poisons Act 1971 of such a nature that having regard to all the of the circumstances of the case it would be contrary to the public interest if that person were granted such a licence or such licence granted to him were to continue in force.34

Licence to manufacture narcotic substances

A person shall not make, refine, or prepare a narcotic substance unless he is, or is acting as the servant and under the orders of, a person who is the holder of a licence to manufacture such a substance granted under this Part and, if so required under the Narcotic Drugs Act 1967 of the Commonwealth, is also the holder of a licence under that Act.35

Section 9 of the Narcotic Drugs Act also provides for the application of a licence to manufacture a drug. Such application is made to the Commonwealth Minister of Health and Ageing.

Under section 11 of that Act, the Secretary of the Department of Health and Ageing may grant the holder of a manufacturing licence a permit to manufacture drugs in regulated quantities.

Licence to import raw narcotic or narcotic substance into Tasmania

A person must not import or bring into the State a raw narcotic or narcotic substance unless the person is the holder of a licence granted by the Health Minister under Part V the Poisons Act 1971 (Tas), acting in accordance with the terms of that licence. Criminal penalties for contravention.36

Appendix 4

Summary

34 Poisons Act 1971 (Tas) s.1735 Poisons Act 1971 (Tas) s.4636 Poisons Act 1971 (Tas) s.45

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Tasmania does not produce opium as defined by Article 23 of the Convention but produces poppy straw which is dealt with in Article 25.

The Commonwealth and the state have legislative powers with respect to the manufacture of narcotics. The Commonwealth has implemented the Convention obligations by legislation.

However, as a result of a 1971 agreement between the Commonwealth and Tasmania it was agreed that Tasmania would be the only location in Australia where poppy straw would be grown. Other than legislating as to manufacturing and import/export matters, the Commonwealth effectively left any specifics up to the state to legislate. Tasmania enacted the Poisons Act 1971.

Tasmanian growers do not grow opium poppies to produce opium. They grow the poppies to produce poppy straw from which alkaloids are extracted for the manufacture of narcotics.

The manufacturers are engaged with the growers before the plant is put in the ground as to how much is grown. Whilst there are no international convention obligation to do so, Tasmania chooses to licence the growers under a tight legislative regime in order to prevent diversion into the illicit market, and to limit access to the crop and to warn the community of its dangers to prevent harm.

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Appendix 5

GROWERS LICENCE - INFORMATION REQUIREMENTS

There is a licence application form for growers titled ‘Application for Licence to Grow Papaver Somniferum. The form is headed ‘Poisons Act (1971).

The information required is comprehensive. In terms of the person involved, it requires information as follows –

Processor Company Name Region of the State Agreement (with the Processor) number Trading name of the business ABN Type of operation (sole trader, share farmer, partnership, family trust, company) If company, registered name and address Details of applicant for licence (usual name and address details and contact number)

including date of birth and positions in the business eg Director or partner etc Details of the person responsible for managing the proposed crop (similar to that

required of the applicant) if a person different to the applicant Details of other interested parties with the main interest identified including

Company Member, Partner, Share Farmer, Employee working with the crop, receiving a financial return and any other specified.

In terms of the crop details, the information required is –

A farm plan showing the location of the proposed poppy paddocks The proposed area to be sown in hectares Details of the processor company field officer The details the property name, address, town, the property owner, the paddock

name, whether the crop is a roadside crop, the map reference number, GPS map reference and the area in hectares of each paddock.

The application form also –

Requires a signed and witnessed declaration by the applicant, that to their best knowledge and belief, the information in the application is true and correct in every particular

Contains a warning that under s.56(1)(c) of the Act there can be a fine or imprisonment or both for making a false or misleading statement

Appendix 5

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Notes that a check may be made of any court convictions, particularly in respect of drug related matters, of all persons who are identified on the form.

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Appendix 6

GROWING ADDITIONAL CROPS OR CROPS ON A DIFFERENT LOCATION - INFORMATION REQUIREMENTS

An application form, headed Poisons Act (1971) Tasmania, exists if a grower wishes to grow additional hectares or seeks to use replacement paddocks.

The application form contains the following –

Current licence details – the number, agreement number and processor name Licensee trading name Paddock details as per the application form with identification of replacement

paddocks or additional hectares to be grown on existing paddocks Additional hectare details – the current number of licensed hectares, the number of

additional hectares, new total licensed hectares (presumably applied for) and the crop type.

If there are additional hectares sought by the application, a witnessed declaration the same as for the application form is required. But the form indicates that ‘Replacement paddocks with no change to licensed hectares do not require a signature’. This presumably means that the form doesn’t need to be signed, which is somewhat unusual. Perhaps the intention is that there is not the need for a witnessed declaration if there is no change to the existing licensed hectares.

The form contains the same false and misleading statement warning and the possible court convictions check for all persons identified on the original application form.

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Appendix 7

CROP LOCATION - SECURITY ASSESSMENT CRITERIA

In addition to the usual grower identification and contact details, a crop location security assessment includes the following considerations –

names of persons living on the property satisfactory farm plan check paddock name map reference main boundary – internal block or highway crop boundary – internal block, vehicular track, minor road, secondary road or

highway distance to residences obstacles to accessing the crop fence quality level of security risk

The security assessment also includes a record of any previous interference with a crop.

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Appendix 8

GROWERS LICENCES – SPECIFIC REGULATORY CONTROLS

Growers licences contain the following obligations.

written agreement with a processor to take possession of crop immediately on harvest required, and copy provided to the Board

specification of the plant that can be grown

requirement that the plant grown must be from seed supplied by the processor

crops grown on properties or in paddocks are to be fenced to an acceptable standard (Minister determines standard)

specification of the period in which growing can take place (Minister may determine other dates)

specification of the last delivery date of the crop to the processor (Minister may extend)

after harvest, poppy material on the land to be destroyed within 7 days and specification of the manner of destruction by burning slashing or cultivating (or other ways specified by the Minister)

requirement to destroy the crop if the processor decides not to harvest it, (by a date and in a manner specified by the Minister)

obligation to notify the Board Chairman and Tasmania Police of any loss or damage to the crop however and whenever occurring

requirement to allow right of entry to inspectors authorised under the Act at any time to land on which the crop is grown and harvested to conduct examinations tests etc

regrowth of poppies from seed from any previous years is to be destroyed by spraying or cultivating (or in such other manner as the Minister directs)

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Appendix 8

need to take reasonable steps to ensure livestock not exposed to plants, stubble or crop regrowth and if it occurs to withhold stock from sale for a minimum of 3 weeks

taking reasonable steps to ensure that the processor notifies the Minister of the following –

place where seeds are planted and number of acres or hectares planted within 14 days of planting

all the crop has been harvested and the date of completion within 21 days

date of the delivery of the crop to the processor weight of the crop delivered.

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Appendix 9

PROCESSORS LICENCES – SPECIFIC REGULATORY CONTROLS

Processor licences contain the following obligations.

specification of the substances that can be made and refined for sale on the premises (substances with are controlled under the Act)

list of authorised activities (possession of poppy straw, manufacture of narcotic substances, sale and supply of substances, undertaking experimental activities)

specification of the maximum quantities (in kilograms) of narcotic substances able to manufactured and possessed at any time

participation in growing and cultivation of poppies (includes specification of the plant to be grown) and purchase of materials subject to –

contract or cultivation area does not exceed an area approved by the Board weekly report to the Board of area sown for each contracted grower reports on the quantities harvested on behalf of each grower as soon as

practicable but no later than 14 days after harvest report on the loss or failure of a crop within one week of the decision that

there is a loss or failure and why advice on increases of agreed original areas licensed to grow prior to sowing

the area

specification of who to be involved in management

advice to the Chair of the Board on proposed changes of senior management or independent contractors, who at the discretion of the Chair, may require a criminal history check

requirement for security system that prevents removal of substances from licensed premises

requirement for a security audit every 3 years

requirement for a physical security barrier that prevents entry to the licensed premises

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Appendix 9

requirement that persons admitted the premises are not a security risk

maintenance of records of all visitors to the premises by persons who are not officers or employees (including their address and organisation details)

issue of identity passes and the areas of the premises able to be accessed

the need to accompany non security cleared persons while on the premises

requirement for identity checks for potential employees and contractors and criminal history checks and other relevant personal information, including statutory declarations on no drug use, or current or past drug use

issue of identification instruments to staff members including areas able to be accessed in the premises

a program of searches of employees and visitors, establishment of an alcohol and drug policy for the workplace, and undertaking a program of random drug screens

requirement for a completed statutory declaration by potential employees on current or past drug use

requirement that employees do not have narcotic substances in their possession except in the course of their duties

requirement to ensure comprehensive and detailed records and registers on all narcotic and prohibited plants and substances including at raw material, intermediate material, waste and by-product stages

requirement that records be made within 24 hours and retained for 7 years from the date of last entry, to be produced on demand to inspectors

obligation to ensure no loss of material during transport to or from licenced premises

independent transport contractors who are to transport narcotic materials are to be subject to a security clearance

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Appendix 9

obligation to immediately notify Tasmania Police, the Chief Pharmacist and the Board in writing of any theft or loss or narcotic materials

prohibition on destroying unwanted narcotic materials unless under supervision of an inspector

requirement to obtain approval for disposal of poppy straw residues.

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Appendix 10

CROP INTERFERENCE RECORDS

Interferences with crops are recorded in considerable detail. In addition to date and estimated time when the interference took place or was recorded, and the detail of the property of the owner, details are recorded on –

the actual location of the crop be it an internal paddock, a paddock on a secondary road or a major road

the number of interferences in the crop the number of capsules stolen the stage of maturity of the crop, be it green, dry or semi dry the interference details

PACB Inspectors co-operate closely with Tasmania Police to undertake security assessments and to enable the investigation of the theft of poppy products.

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