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Tyranny: How to destroy a business with environmental red tape

Posted By Joanne Nova On July 8, 2010 @ 4:33 am In AGW socio-political,Big-Government,Global Warming | Comments Disabled

Updated with Janet’s comments below.

Matt and Janet Thompson are at the end of the rope

Did you know in Australia it’s possible to ruin a business if you don’t like the way it smells? This is a heartbreaking story — that a government could effectively ruin a family by slowly strangling them in red tape, and that they would have apparently no protection from the courts or the ombudsman. It eats away at our sense of justice. Can we speak freely? Are we all treated equally under the law, or are some laws only enforced according to a capricious whim?

This is the price we pay for vague laws where business people can run ventures, do everything to the letter of the law, with best-practice procedures, winning customers and contracts, yet go broke despite all that because of onerous, impossible-to-meet conditions, that are unmeasurable, and change suddenly, with the added bonus of inordinately long delays. At the moment, Janet and Matts farm, Narrogin Beef Producers, lies empty, unstocked, while debts accrue by the minute.

This is also a story of sovereign risk. Investors in Australian industry beware.

Unused equipment that cost hundred of thousands of dollars lies idle.

How can any business survive the need to get two-yearly licenses which take more than 12 months to arrange; where after four years of planning and preparation, capacity can be suddenly halved without warning; where an appeals process can take 18 months and when the original capacity is finally restored, not only are many new stipulations added, but the expiry date is not extended. After 30 months of a grinding process, the farmer is only left with 6 months before the amended license expires and no way to take out loans based on such an uncertain future.

If the government were a private business paid to arrange licenses, and expected to be evidence based and to respond in a reasonable time, then they would have no customers. Indeed, they could be sued.

Matt and Janet were told their license would be a formality, and they took out loans and contracts for water and grain in advance. Their input costs last year added up to around $10 million dollars. When the capacity was halved there was no way under the laws of biology and commerce that they could bring in the cash flow to meet those costs. When they appealed, they was no timeframe, no indication it would take 18 months to be resolved, so they took out loans, bore the costs, the interest, and paid for water they did not use, and grain no cow would eat. Their money was effectively squandered by the unpredictable rulings of the state government.

Bear in mind, the Thompsons have broken no laws. Most of this case boils down to a small number of complaints about odour. I would not wish foul smells on anyone, but the evidence there is suggests the problem is minor, and the level of complaints has no relation to the number of stock on the Thompson’s farm in any case. There is the troubling possibility that if someone took a dislike to another party, or had another vested interest in property nearby, or in a competing business, theoretically they could solicit complaints and exaggerate. How would we know? It’s hard to photograph a smell. It’s an avenue ripe for exploitation. Lets keep things in perspective, Janet and Matt live at their farm, closer than anyone else to any odours and emissions, and their farm is next to a piggery (ferrgoodnesssake) which has been there for more than 20 years.

From 5 km away in the town could anyone tell if a waft of something not-nice was from a cow, or a pig, or the roadkill around the corner?

By last October, the Thompsons were despairing, and tried to auction the business , but who would buy an operation that had no future without an adequate license? They employed 24 full time staff at their peak, and have had to reluctantly ask most to leave on Nov 13, 2009.

Their operations manager, Lindley Boseley, was heavily committed to establishing the farm and highly regarded. The Department of Environment and Conservation (DEC) finally delivered the new license on March 8 this year. The conditions made it impossible to run the business. As Matt and Janet say about Lindley:

He had put his whole heart and soul into building and developing our feedlot, and had done an absolutely astounding job. Lindley was a doer…a problem solver… one of those guys that could turn his hand to anything — with a smile. He also proved himself to be an amazing people manager and he knew more about our place than we did. Depression is an elusive animal, and we can never know everything that was going on inside of him, we know that Lindley felt frustrated that he could not solve this problem.

Lindley committed suicide on March 25 this year. Matt and Janet were distraught.

The Thompsons have appealed to the Ombudsman, and tried the High Court. They’ve sought extensive, expensive legal advice, they’ve paid thousands to have odor tests done.

It’s also a story that desperately needs investigation.

The Thompson’s timeline

Janet and Matt Thompson brought their life savings to Australia to set a business they had an expertise in. In 2002 they applied for permission to run a cattle feedlot (they refer to it as a B&B for cows) for up to almost 15,000 cattle. The locals in Narrogin mostly thought it sounded like a good idea and the feedlot  was placed next to a piggery about 5km south of the town.

They had to wait a whole year for the red tape and the Works Approval to allow them to start, then put in all their life savings to building up the farm.

By 2007 things were running well and they were approved to hold up to 10,000 head, and wanted to expand to the designed capacity. In January that year they applied for an increase in their license which was due to expire in November. You would think that 11 months would be plenty of time for a application…

But in May 2007 Matt spoke at the WA Lot Feeders Association about the National Environmental Protection Measures (NEPM) — which included greenhouse gases. Matt expressed doubts that greenhouse gases should be included (and handed out copies of the Great Global Warming Swindle DVD as background information, which no doubt was not at all fashionable at the time). Naturally, it impossible to say whether this had any bearing, but soon after the meeting the Department of Environment and Conservation (DEC) began to pay a lot of attention to the Narrogin Beef Producer’s application — and correspondence increased dramatically.

The Thompson Family at home

The Thompson Family at home on their farm

One of the most unsettling aspects of the Thompson’s tale is the involvement of the Environmental Defenders Office (EDO). An NGO, but funded by the government, the EDO advised and taught a small group of complainants how to file writs and appeals and target businesses or practices.

In their Senate Hearing Testimony 20th April 2010 Matt and Janet explained a particularly unseemingly conflict of interest that they came across :

In early 2008, we hired attorneys in Perth, as it had become apparent that a positive outcome was not going to be forthcoming with DEC. After getting up to speed on our case, the solicitor and barrister suggested that we meet with Dr Johannes Schoombee, an environmental attorney skilled in these matters. His web page referred to his expertise in property rights among other things so we agreed. Dr Schoombee advised us that our original approval for a 14,940 head feedlot has no legal standing in the law, and that we should apologize to the DEC for our development. He advised that he knew important people in DEC and that we should begin a long series of meetings which he would coordinate for a fee. His fee for this original meeting, which took 40 minutes, was $4000.

Since we had never done anything wrong, and because we could not afford to pay him on an ongoing basis, we declined his further involvement. In 2009 we discovered that Dr Johannes Schoombee was the convenor of EDO. EDO listed the fight against Narrogin Beef Producers as a major accomplishment in 2008, and Dr. Schoombee won lawyer of the year partly for his work with EDO.

He never disclosed to us or even attempted to allude to any such connection.

Matt and Janet’s story Part I


Part II

The Departments Appeal Determination 1-July-2010

Matt and Janet emigrated from the US and have bceome Australian citizens since. They have four young children, and are popular in Narrogin. When the Environmental Defenders Office slowly collected 300 signatures, friends of the Thompsons responded immediately by gathering 900 in support.

Barry Carbon was instrumental in writing the EPA Act of 1986 which is crucial in the Thompson’s case. He was asked to be a part of the Local Community Consultative Committee (LCCC) in Narrogin to look into the situation. He conducted extensive research during 2009 and at the end recommended that the feedlot be allowed to go up to 10,000 head immediately based on that research.

The main problem here is that the vague open ended rules appoint bureaucrats as de facto kingmakers

When I speak to Matt about his hope for the future, at the moment the thing he wants more than anything is to pay back the debts to the other businesses and former employees, who are part of the cascade of people caught by vague unknowable rules, and who are also suffering losses. Right now more than  anything Matt and Janet just want the government to get out of the way and let them get back to work (though it may have gone past the point where this is possible).

One new condition on their license “provides that Narrogin Beef is to ensure that odour emitted from the premises does not unreasonably interfere with the health, welfare, convenience, comfort or amenity of any person who is not on the premises”.

The main problem here is that the vague open ended rules appoint bureaucrats as de facto kingmakers, and the fact that these conditions were not stated from the outset, but added to licenses after-the-capital-expenditure makes investing in WA a minefield. If Matt and Janet had known back in 2001 that they would be subject to such a regime, of course, they would have done things differently.

Back then, everything was so simple. The original Works approval listed them as a Category 68 facility which only needed to be registered, not licensed.

The government has, in effect, broken it’s side of the contract.

This is just the beginning, there is so much more to say, but naturally the devil is in the detail and the details are buried under cubic meters of legalese and bureaucratania. I will be writing more.

This time the bureaucrats have gone too far.

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UPDATE Thanks to Anne-Kit: Relevant ministers might be worth writing to:

Terry Redman – Minister for Agriculture and Food

Donna Faragher – minister for Environment

Terry Waldron – your local member

The Obudsman’s Office

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UPDATE 2 Janet Thompson writes at #73 and more at #75

Here’s #73

Hello, all. Thank you for your interest and your comments. Honest and open discussion is great, and we welcome valid questions and the opportunity to clarify things.

First, Jo Nova, thanks for posting this topic. We are blown away by the interest and support that our videos have generated, and hope that, even if it’s too late for us, we can use our horrendous story to help make society better in future. Australia is a fantastic place to live, and Narrogin is a jewel of a place. We love raising our family here, and have many friends and enjoy life to the max in this lovely country town. The small group of complainants exists everywhere, and we do not see this as a Narrogin problem or as an Australian problem. So please do not get “down” on this awesome country! Just get involved to make a positive difference. :-)

Elaine @63, just to clarify: We obtained a Works Approval (#3600) from the Department of Environment in 2002, and final go-ahead in 2003, after being on hold over a year. That works approval (permission to build) was site-specific. We received permission to construct a 14,940 head beef cattle feedlot in this location. We’ve had 5 licences so far, and had staged our development, so there is a different throughput noted on each one.

We have built to a capacity of 10,000, and operated at that level prior to 2008, when the DEC cut our throughput to 6,000 head max. They knew that we could not cash flow this, because we had already invested the capital to build the infrastructure to 10,000. Even if there were true environmental problems (which there weren’t), surely an established business should be able to effectively operate through those problems. As someone has so rightly pointed out, the piggery was allowed to do so (although the piggery was still very much on the front page when we came to town…the complainants just turned their attention to us; the piggery is a great neighbour, and we have a great life on-site, but you know what? It smells often, and occasionally, it smells horrendously. We would never complain, as we knew they were there before we bought our property, and we are proud that they are producing Australian pork!)

Once again, thank you all for your genuine interest and questions. Truth is an important goal, and we are thankful that the Internet allows us to have such open and honest discussions.

UPDATE 3

I’ve added some empirical data in another post on the Thompsons here, you can see the graph of complaints and cows, and see just how little they correlate. Neither do the smells recorded in town match definitively with cows. The peak smells occurred when cow stocks were lower…

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