Dear Sir/Madam,
RE: Consultation Paper on Cost Recovery under the Environment Protection and Biodiversity
Conservation Act 1999 (EPBC Act)
I was informed by an industry colleague on Saturday 29 October 2011 about the existence of the
above mentioned Consultation Paper (posted on the Department of Sustainability, Environment,
Water, Populations and Communities (SEWPAC) website). As an operator in the crocodile skin
accessories since 1998, I am extremely surprised and disappointed that a company such as ours has
had no communication from your department about your paper. I note that it has been available
for public comment for 6 weeks ended 31 October 2011. I also note in Section 2.2 that you have
been informed by “extensive consultation with stakeholders”. However although our company is a
regular applicant for CITES import and export permits, we were not made aware of any such reform
paper and had no consultation by your department and would request an explanation as to what
was your communication process in order that we are made aware in the future of your initiatives.
We have been aware of the work being done to streamline permit applications but not of this paper.
Can you please respond to this point in writing.
Further, I am advising that Australian Crocodile Products Pty Ltd does not support the introduction
of full cost recovery for the CITES permit system.
I refer to Section 4.6 of your paper “Questions for stakeholders – wildlife trade regulation”
1. Has the team responsible for this consultation paper researched the practice in other
countries in relation to the application for an issuance of CITES permits and the charges for
the permits? Other countries eg Singapore and France have more streamlined systems
which may charge more in AUD than in Australia (eg SGD 60 per single use permit compared
with AUD 30 per single use permit, however the standard delivery time is 24 hours and you
can also request Express Service with delivery in 5 hours for SGD 120 per single use permit).
The USA has an annual charge of USD 110 per US Fish and Wildlife Import Licence for
companies. This allows unlimited numbers of shipments per year. We are wondering what is
the difference between the USA Government’s interpretation of the CITES convention in
relation to Wildlife Trade and the Australian Government’s interpretation.
2. Before looking at the cost recovery issue, we think the interpretation of the CITES
convention in relation to the Multiple Use Import and Export permits should be reviewed.
Because if the Multiple Use import permit system could be reintroduced in its pre 1 July
2010 form, you would reduce the amount of single use permit applications and therefore
reduce costs for both your department and for applicants.
3. If full cost recovery is implemented, Australia will have the highest CITES permit cost in the
world
4. The current partial cost recovery of permit fees already has put pressure onto the cost of
doing business. Our export business is characterised by shipments to individual retail clients.
The growth of internet sales has stimulated a growth in the need for CITES export permits
for small items with a RRP of $20 up to more expensive items.The most common export sale
is for AUD 800 per shipment. Even with the existence of a Multiple use export permit, it
takes at least 45 minutes per shipment regardless of the size of the shipment, to prepare
documents for export. This is our internal cost and at your rate would be $45 cost per
shipment. In addition, there is the cost of the EDN in order to export which can be $30-$40
per shipment. Such costs are not recoverable from our clients, especially with the
strengthening of the AUD making our exports more expensive world wide. If you implement
full recovery costs of the export permit, it will mean we will have to withdraw certain items
from our export sales as clients will not accept the passing on of these costs and we cannot
afford to absorb the costs. This is unworkable and unacceptable in the tight international
business climate. It would also mean most of our export sales will be unviable. We will have
to refuse to sell many items into the export market. Not only would we lose approximately
50% of our sales revenue but we would have to absorb the cost of updating our website to
withdraw lesser value items from export sale. It is not viable to add $300 permit cost to an
item with a RRP of AUD 20 or even AUD 350.
5. Single vs multi use permits
Effective 1 July 2010, we have no longer been able to obtain multiple use import permits
unless the exporter has a number of export permits ready simultaneously, which is
impractical and commercially unrealistic. Bear in mind that in our case, our imports are for
the return of our own Australian Saltwater Crocodile skins either after tanning or after
tanning and manufacture. Instead of being able to use 1 x multiple use import permit for
many shipments, we now have to apply for single use permits for every shipment. Not only
do we have to spend around 1 hour processing the single use permit application (which is
usually a 10 page faxed application per permit), but due to the lead times in Australia for
processing the import permits, we are now incurring ongoing increases in management time
to monitor permit progress, delays in sales and the costs per permit of $30. On average, we
are already incurring a cost per 6 month period of around $200 - $300 in permit costs alone
for the number of shipments we would have been previously importing on the multiple use
import permit + at least $600 of management time for the permit applications. A full cost
recovery of the single use import permits is not financially viable for us due to the size of
each of our shipments. Sometimes in order to be able to realise sales, we need to fill orders
quickly. Those orders may not be very large in dollar value. Already the requirement for
single use import permits is diminishing some sales opportunities. Full cost recovery of single
use permits would have a drastic impact on our sales.
6. Our company would be accepting of an increase in the fees for multiple use import and
export permits to 50% cost recovery provided that the conditions for the multiple use
import permits pre 1 July 2010 were reinstated
7. Personal baggage permits – we issue these with most articles we sell. Over the past 2 years,
the average sale per person has declined due to the reduced budgets of both domestic and
overseas clients. Currently we absorb the cost of the personal baggae permits in our pricing.
I cannot understand from your paper what is the newly proposed price for these permits.
Annual CPI increases to the price of such permits would be acceptable. We need to be able
to give to clients as many countries want to see evidence that the articles the clients have
purchased are from non endangered animals. If the price of these permits increases beyond
this level we will not be able to absorb the permit costs and therefore lose sales or risk
confiscation of clients’ purchases, which is totally unacceptable. It is also unrealistic to
expect clients to pay higher amounts for the permits.
8. Most Australian tax payers have an expectation that Government Departments are in place
to provide business and citizens with the administrative infrastructure in order to run our
economy. It is a commonly held belief that full cost recovery cannot be achieved in
Government.
9. Reforms/streamlining efforts willing to pay more for – we would be willing to pay more for
permits to be delivered in 5 working days from application being received
10. Preferred payment method – credit card
11. Other fees in Australia for wildlife trade import/export – we have to pay Customs charges
(attendance fees) on import if inspections required and Quarantine fees ($60+ per shipment)
on import. For exports, EDN charges to freight forwarders of $30 - $60 for every shipment.
12. Other fees to other Governments for exports to other countries – customs and q’tine import
charges, cites import permit charges
13. Other fees to other Governments for exports to Australia (because we are returning our own
skin or products to Australia) – CITES export permit, COO charges
14. Cost recovery – I would expect for import and export permits, the Singapore standard which
is 24 business hours from application receipt.
The strengthening Australian dollar and the tightening of world demand has put significant pressure
onto our small company particularly in the past 2 years. We cannot sustain increases such as you are
proposing. We need to be competitive in the world market and to be superior to other countries in
our handling of CITES permits. There is an opportunity to increase the efficiency of issuance of CITES
permits with partial cost recovery to enable business expansion (instead of contraction) at an
affordable cost to business.
I look forward to your acknowledgement that this submission will be considered in your review.
Yours faithfully
Heather D Brown
Managing Director
Australian Crocodile Products Pty Ltd
di CROCO Boutique