Establish an Independent Commission Against Corruption (ICAC) for the Northern Territory that I present the first of an occasional series looking at corruption in the NT. Over the next few months I’ll have a look at past inquiries and scandals and, of course, any of the new matters that the new ICAC examines in due course.

One day in July 1981 a meat inspector at San Diego in California became suspicious of parts of a shipment of Australian beef. On testing it proved to be horsemeat. The next week cartons marked as export grade boneless beef turned out to be kangaroo. Thus started what journalist Peter Grabosky called the great Meat Substitution Scandal of 1981.*

Its a long way from the west coast of the USA to Katherine and Tennant Creek in the NT but the bloody trail followed by the subsequent Royal Commission led straight to the chiller rooms of the small abattoirs in Katherine, Tennant Creek and other small NT towns.

To most Territorians Justice Sir Edward Woodward is known as ‘the father of land rights’, since the Aboriginal Land Rights (Northern Territory) Act of 1976 was almost entirely based on his reports as Commissioner into Aboriginal Land Rights in the NT. However, among other commissions—and a long tenure as a judge of the Federal Court and the Supreme Court of the NT—two months after the meat substitution scandal broke he was appointed to conduct the Royal Commission Into the Australian Meat Industry. In November 1981, the Royal Commission brief was extended to inquire into and report separately on the handling of meat for human consumption in the Northern Territory.

Justice Woodward spoke about the conduct of that inquiry in the fourth Eric Johnston Lecture delivered in November 1989 at Darwin where, in addition to the conduct of the Royal Commission, he traversed his long history in the law and his obvious affection for the NT.

He explained that his commission was to find out:

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… "how it came about that kangaroo meat was reaching the United States disguised as beef … As it turned out, much of this kangaroo meat, which was finding its way illegally into the human food chain, originated in the Northern Territory, where it was killed as pet food under conditions which were appropriate for that use but not for human consumption.

Somewhere between the Top End and Melbourne, this meat suffered an extraordinary transformation into top quality beef suitable for export. It was not easy to trace the route of the meat but it was rather simpler to follow the money chain.

As well as identifying the way in which this phenomenon occurred, the Royal Commission also turned up a number of other instances in which meat inspectors, for a consideration in the form of free meat, cash payments or false overtime claims, had been turning a blind eye to undesirable practices, and unscrupulous operators in the industry had been making some additional money for themselves while putting at risk the whole of the Australian export trade.

We also discovered that, because the Northern Territory laws concerning the documentation and inspection of meat coming from other states were defective, the Territory was on occasions used as a dumping ground for poor quality meat which had once been of better quality but had deteriorated … Meat could leave the Territory in good condition, be rejected on arrival in Sydney, and then sent back for sale in the Territory with nothing to indicate its history"

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Justice Woodward’s report was tabled in the Federal Parliament in September 1982 and in the NT Legislative Assembly a month later. His report was scathing about practices within broad swathes of the Australian meat production and processing industry. Here i want to concentrate on the NT. This passage is from his opening summary from page 7 onwards, concerning Malpractices in the Australian meat industry:

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1.35 "So far as meat for human consumption in Victoria and the Northern Territory is concerned, there is little to suggest that consumers have been cheated when buying fresh meat from their local butcher or supermarket.

1.36 On the other hand it is clear that purchasers of some meat products have not always been eating the meat they expected and have sometimes been eating an unwholesome product. There has been, particularly in the last few years, quite a large quantity of pet meat which has found its way into such products in Victoria and been consumed throughout Australia. I am speaking here of hundreds of tonnes of kangaroo, buffalo, donkey and horse-meat which was not killed or processed in the manner prescribed for human consumption, but which nevertheless found its way into the human food chain"

Further on in that chapter Justice Woodward summarised evidence he describes as

“the most concerning” to emerge from the inquiry, the involvement of government officials in corrupt malpractice and the banality of that corruption:

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1.48 "The most disturbing evidence to emerge from this inquiry has concerned bribery and corruption of a number of DPI [Department of Primary Industry] meat inspectors and some DPI veterinary officers and Australian Federal Police officers. It is impossible to avoid using words such as ‘bribery and corruption’ in this context, although it is important to understand that, with a few exceptions, the value of bribes was not substantial and the corresponding neglect of duty not heinous.

1.49 In many cases the bribe has taken the form of valuable quantities of free meat or very cheap meat not available to employees of the meatworks concerned. In a number of cases cash payments or fraudulent overtime claims have been involved. In each of the cases I have in mind, there has been a regular, valuable benefit on which no tax has been paid.

1.50 Sometimes such benefits have been extracted from unwilling operators by the abuse of inspectors’ powers.

1.51 Most often the meat has been given, or the payments made, to ensure that the meatworks will not be subject to unusually vigorous supervision by inspectors – that it will be treated at least as leniently as its competitors.

1.52 However in some cases payments were made to ensure that a blind eye was turned to clearly improper practices. In the case of police officers, and a senior meat inspector, meat was given and payments were made respectively in order to secure advance warning of troublesome inquiries.

1.53 The really disturbing feature of these revelations was that the people concerned were not evil – many of them would have been regarded as reliable and effective officers. They were ordinary Australians, in positions of some responsibility, who were either demanding, or at least accepting, clearly improper payments which could only have the effect of compromising them in the performance of their duties. The surprisingly widespread nature of these abuses suggests the need to watch all areas of government licensing and control where the decision of an inspector on the job, or similarly placed official, can make a significant commercial impact on persons in business"

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Later in his report Justice Woodward reflects upon the insidious nature and effects of malpractice and corruption, particularly within the cohort of professionals—meat inspectors and veterinary officers—responsible for administration of meat processing.

Meat Inspectors

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7.107 One of the difficulties inherent in any attempt to describe this problem is that it takes almost as many different forms as there are meat establishments. And the coloration of the various practices ranges from white through shades of grey to a distinct black.

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7.108 At the lighter end of the range no meat is available at all – in service abattoirs, for example – or inspectors are only able to buy meat from the meatworks at wholesale prices which are also available to all employees and perhaps to the general public. There can be no harm in that.

7.109 The shades of grey begin to emerge when only salaried employees of the works share the meat inspectors’ privileges, and where the prices charged are below wholesale levels.

7.110 When meat is free and available only to meat inspectors, there is something seriously wrong; although the situation will cause less concern if the quantities are small and the meat is consumed at meal-breaks on the premises.

7.111 Even more disturbing are those cases, of which a number have come to light, where management has knowingly signed false overtime claims. These claims have ultimately had to be paid by the company and so they amounted to a concealed bribe – as to which nothing had to be said and no direct payment was involved.

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7.113 The most serious cases of all are those in which inspectors have received regular cash payments from management. The Commission has discovered widespread payments in the Northern Territory and a number of instances involving independent boning-rooms in Victoria. There was also an isolated case in western Australia"

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Justice Woodward was even more scathing of the involvement of veterinary officers—who, unlike meat inspectors—were members of a professional class, observing that “There can be little, if any, excuse for well-paid professional officers accepting gifts from the industry they are supposed to regulate.”

In terms of recommendations for further action, Justice Woodward noted that (at p. 47 of his Report) that:

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2.121 "Each of the allegations investigated is dealt with in appropriate detail in Appendix H to this report. The lessons to be learned from these cases have been incorporated in the findings and recommendations in the body of the report. In my view Appendix H to the report should not be published until any criminal or quasi-criminal proceedings against persons referred to in it have been finalized. I might add that I had determined upon this method of presentation and this recommendation before the High Court gave its decision in the case referred to above (paras 2.66-82). That decision makes it essential that this course be followed"

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Jack Waterford, dogged Editor-at-large at the Canberra Times, lodged a Freedom of Information request soon after the release of Justice Woodward’s report. As Ewa Kretowicz noted in her piece How they fed us donkey burgers in the Canberra Times in November 2012:

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The details of the scandal have only come to light as the result of the country’s longest-running freedom of information battle by Canberra Times Editor-at-large Jack Waterford. Waterford first requested the documents in December 1982 on the day the Freedom of Information Act came into existence. After the decades-long battle he was finally given access to “appendix h” of the 1980 Royal Commission into meat substitution last week … This weeks release of “appendix h” comes more than 30 years after the main document was made available to the public. While many of the companies named faced sanctions and had export certificate It is perhaps fitting that on the day that the Northern Territory Legislative Assembly passed legislation toion cancelled effectively closing down operations, some of the persons named in the appendix are still involved in the meat industry.

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And, while Appendix H should have been released much earlier—particularly as any “criminal or quasi-criminal proceedings” would have been finalised long before 2012—the material in Appendix H is explosive and informative, particularly in relation to the involvement of companies and individuals involved in the Northern Territory meat industry at the time.

One of those reports note that, after an industrial dispute at the Katherine Meatworks, “the place was filthy and maggots were very much in evidence.”

But a closer examination of that material will have to wait for another day.

If you have any thoughts or experiences with the meat industry in the NT back in the day or any other more recent matter you think I might be interested in … drop me a line by commenting below or at bgosford@gmail.com.

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* See Stains on a White Collar, Fourteen Studies in Corporate Crime or Corporate Harm. Edited by Adam Sutton and Peter Grabosky, Federation Press.