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JBS Purchase of Huon Aquaculture

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Wednesday, 4 May 2022

Tags: Fish Farms, Environment

Dr WOODRUFF (Franklin) - Mr Speaker, I can indicate that we will be needing a vote.

The Batista brothers have long been butchers and cattle producers in Brazil, but today the Batistas, Joesley and Wesley, and their company, JBS, are Australia and the world's biggest producers of protein.

The takeover of Huon Aquaculture by that JBS meat giant in November last year was a shock to so many Tasmanians. It sent shivers down many people's spines, particularly people of the communities of King Island, and around Longford who themselves have already witnessed firsthand the grim workplace safety and environmental costs of how JBS does business. I o note that it is not just the Liberal Party but it is the Labor Party who have been absolutely silent on these issues when we raised them on behalf of those communities previously. It is truly disturbing to see how concerned they are to be flag wavers for the salmon industry at any cost, including the cost of supporting communities who have suffered grievous workplace safety instances by JBS and also environmental damage.

I want to lay out now, just how JBS is a family empire that is built on corruption and why the Government has to act to protect the workers and our fragile marine environment now before more disaster strikes Tasmania.

I give full credit to Grace Tobin and the producers of Four Corners for their excellent investigative journalism that is the backbone of the material that I will present today. Thank goodness for excellent investigative journalism. It is really at the hallmark of a functioning democracy. It is withering on the vine in Australia under the Liberals in government. There are attacks on the ABC. There are relentless attacks on any independent journalists, and there are many excellent journalists around this country who are doing good work.

I hope and will do everything I can to speed on 21 May so we can vote this federal Government out and vote in a government that will support investigative journalism and support proper funding for the ABC.

Bribery and corruption has fuelled JBS's expansion around the world, including Australia. Fifteen years ago, JBS embarked on a multi-billion-dollar global spending spree. It came right out of the blue. In 2007, it snapped up the American meat food giant, Swift Foods. The deal instantly turned JBS into world's biggest beef company. The takeover of Swift and its subsidiary, Australia Meat Holdings, also made JBS the largest beef processor in Australia. The scale and speed of JBS's acquisition expansion was breathtaking. They bought Tasman Meats and the King Island, Longford and Devonport abattoirs in Tasmania.

There have long been questions about JBS's meteoric rise and where all the money for these acquisitions came from. Their dirty deals started unravelling in 2017 during a major corruption crackdown in Brazil. The Brazilian prosecutors started to come after JBS and the Batistas themselves confessed to a massive bribery scheme; to spending $150 million on more than 1800 Brazilian officials. It is one of the largest corruption schemes ever revealed in the world - probably the largest.

Four Corners reported Joesley Batista confessing to paying kickbacks to the Brazilian finance minister to obtain billions of dollars in cheap financing from that country's public bank, the BNDES. He told prosecutors that JBS's global expansion had been made possible through bribery. A Brazilian federal prosecutor testified that JBS would not be so big if it did not receive so much money from the BNDES and that if it was not for the bribes that allowed these criminal contracts.

The stated purpose for JBS's bribery of public banks and pension funds in Brazil was to obtain capital for its global expansion. The state of Brazil was defrauded on a systemic grand corruption. To settle the charges in Brazil, JBS's parent company agreed to pay one of the biggest fines in global corporate history: US $3.2 billion. Even after that the scandals kept coming, and the brothers were soon arrested and charged with insider trading, for selling down their shares in JBS before entering into their plea deal. They were jailed for six months and banned from running JBS for two years.

This is small fry for two brothers, the Brazilian butchers, who own a company with an annual turnover now of $65 billion. You have to understand that the fall of these two men and the way they run their company is a total take-no-prisoners approach, including themselves. They do not mind if they sit in what I am sure was a very comfortable jail cell for six months. Meanwhile, things keep moving in their big machine.

It was that arrest in Brazil in 2019 that triggered the US Department of Justice to undertake their own investigation. A US congresswoman, Rosa Delauro, was interviewed by Four Corners. She said that the US uncovered fraud, bribery, and other violations of US federal laws. Their entrance into the United States market was illegal. They bribed Brazilian officials to get the loans to amass the capital so they could enter the United States and purchase Swift and other companies.

In 2020, the JBS parent company pleaded guilty to foreign bribery charges in the United States. It was an FBI investigation that found the company paid billions of dollars to corrupt Brazilian officials to obtain financing to buy American companies. They were convicted in the United States of violations against the Foreign Corrupt Practices Act.

I understand that what happened in Brazil feels like a long way away from Tasmania but it is directly linked to that company's expansion and success in mainland Australia and now in Tasmania. Their entry and early expansion here was funded by the cheap financing that was obtained by paying those same bribes in Brazil. The Australian connection to the bribery scheme has been examined during the investigation led by the Brazilian federal prosecutor Ivan Marx. His team investigated how that dirty money was funnelled into international acquisitions, including JBS's purchase into Australia through Swift Foods in 2007. That purchase was bankrolled with funding secured through Joesley Batista's bribery of Brazil's finance minister. Joesley Batista confessed to another bribe that helped underwrite JBS's subsequent purchases of companies in Australia. He gave evidence that said, we - that is JBS - bought four more companies, three in the United States and one in Australia. The words of the Brazilian butcher, Joesley Batista himself.

The Brazilian federal prosecutor has determined that the bribed monies were used for the expansion of JBS into the United States through their purchase of Swift and into Australia through the purchase of the Tasman Group. Certainly, the fact bribes were being paid at the time in Brazil that JBS was expanding into both the US and Australian markets causes a great opportunity for international cooperation between the Australian Federal Police and the FBI. It is obviously beneficial to us as a country to understand the truth of what has happened. As a state, we would not want to have any company here to be involved in criminal activities. If they had been involved in criminal activity we would want to understand what the extent of that was.

According to the testimony on Four Corners, the Brazilian authorities have said explicitly that they are ready to assist any Australian investigations. They are on record saying if there are, 'any interests of the authorities in Australia to investigate anything like this, we are here and we are able to help'. It is important to note that we have form, as a country, in undertaking these sorts of investigations. We have the Australian Federal Police reported just recently by Nick Clark in The Examiner, an excellent piece of investigative journalism. Thank you to him and the other people at The Examiner who continue to provide really important information to Tasmanians about how corruption and bribery has worked in this state, to mean that there have been purchases of properties, purchased by the proceeds of crime.

The investigation here has been looking at the Musselroe Bay property in the north east of Tasmania. It was once earmarked for $185 million ecotourism development but it is now being put on ice. The Australian Federal Police criminal assets confiscation task force has seized a number of properties in Melbourne and has alleged that they were bought by Chinese nationals laundering the proceeds of crime. They have made investigations which allege a connection to the owners of companies that have bought that land in north east Tasmania.

It is incredibly important for us to understand the relationship of dirty money and how it is influencing the trading away of assets in Australia. Not assets, trading away of our land, of our marine environment, of fragile precious waters. The idea that a company like JBS could be expanding its protein empire just to add salmon to its suite of things that it can offer on the table in the marketplace for consumers is frightening. It is repulsive to think that we could handover the keys to our marine environment to those Brazilian butchers who have such terrible form not only for using corruption and bribery as standard modus operandi for commercial transactions, but for a whole range of other crimes that go well beyond corruption.

Four Corners detailed a number of these in that excellent episode, which people can look at on iview, if they choose to do so, it was only a couple of weeks ago. They quote journalist Andrew Wasley, who spent years investigating JBS's environmental track record in the Amazon rainforest. Despite JBS's pledge to protect the Amazon in their cattle-raising, they have been repeatedly accused of buying cattle that has been raised on illegally cleared rainforest land.

It has been linked to deforestation on a grand scale, and the Bureau of Investigative Journalism has obtained receipts that show JBS was exporting large quantities of Brazilian beef farmed on illegally deforested Amazon land, the lungs of the planet. The place of all on the planet that we need to keep moist and carbon rich, JBS has been exporting cattle raised on these clear-felled landscapes, Brazilian beef into Australia.

They are also guilty of price-fixing and food safety breaches and other anti-competitive practices. In the United States, the company has been forced to shell out hundreds of millions of dollars in fines and settlements over price-fixing convictions.

Probably most pertinent in particular for Tasmania is their terrible record of workplace safety negligence. They have the highest rate of serious injuries of all American meat companies. Rosa DeLauro, that quite amazingly strong U.S. congresswoman, was quoted as saying, 'They exploit workers. They have more violations in the workplace than almost any other U.S. corporation. They exploit their workers by creating an environment that is unsafe and puts workers at risk'.

The company's appalling record in the workplace extends to Australia too. Four Corners uncovered serious and repeated failures by JBS to protect its own workers from injury, and even death. John Kiriona-Hodge worked for JBS at its abattoir in Longford, Tasmania five years ago. He was only 17 at the time, and he was working in the gutting room, which was an accident waiting to happen. I just want to let people know that I will be reading the generalities of a particular incident without any of the specifics. We do not need to record the details. People can hear Mr Kiriona-Hodge's personal testimony, and I encourage members, and anyone who is watching, to do that. It is really important to understand the reality of what one young Tasmanian boy suffered at the hands of a cruel, heartless and utterly negligent international meat-making, money-making corporation, here in Tasmania.

We should all watch that testimony but is not for me to speak his words. He was working in the gut room, cleaning out beef stomachs and getting them ready to be washed and turned into tripe. The tripe often became stuck in the machinery after it was rinsed in a tub of scalding water. To dislodge it, John and other workers were required by the company to climb onto the edge of the tub, and one morning, he slipped and fell into the boiling water. In John's words it was, he said, 'rather brutal, it was messed up'. He lost the skin and suffered second and third-degree burns from his feet up to his thighs. John said, 'It took a lot out of me. For the last five years, all I have been doing is recovering, and doing appointments, and just stuff I did not think I would have to do.'

A magistrate found JBS knew there was a safety problem at that Longford abattoir and they failed to fix it. JBS subsequently received a payout of just under half a million dollars. JBS itself was convicted of workplace safety breaches and fined $150 000. Let us just put that in the context again of a company with an annual turnover of $65 billion. It is small change for them.

In February 2014, only three months after John's accident, Warwick Ranclaud was a JBS worker at their Caroona feedlot in New South Wales. He was killed on the job. He was burnt to death during an extreme bushfire situation that was caused because of a JBS manager's negligent behaviour. JBS was convicted in court and fined $300 000. During the court case, we learnt that there had been two previous fires that were started at the same site, also sparked by similar negligence in the months leading up to Warwick's death.

Despite that known and identified risk, JBS management kept no record of those fires and failed to train any of their staff around the dangers of using slashers and other equipment on high bushfire risk days. Most disgusting of all, JBS refused to pay Warwick's mother his funeral expenses and refused to pay her for the ambulance expenses for taking her son in a critically burned and dying condition from Caroona to Tamworth Hospital. His mother testified on Four Corners that she never ever received contact or any condolences from the company.

Here we are in Tasmania. What happened last November? It started in August when JBS launched a $425 million takeover bid for Huon Aquaculture, which is the second largest salmon producer in the country. Why would a global meat giant like JBS be attracted to invest in Tasmania's salmon industry? There are two reasons. The first is the obvious reason is that they are into making money big time. They obviously have a plan to own all protein production on the planet.

Richard Flanagan makes the point in the Four Corners exposé that the salmon industry is seen as the really lucrative end of the protein production business. In Tasmania it is effectively unregulated. Of course, it is unregulated. We have the Liberal and the Labor parties with an identical position of turning away and turning a blind eye to everything that is happening with pollution and damage to the marine environment from salmon farming. Even the excesses of what happened in Macquarie Harbour, even the scandals, the millions of dead fish, the damage to world heritage area values. The potential irreparable damage to the survival of the maugean skate. Even the outrage of people in Norfolk Bay and the other communities, appalled that Huon Aquaculture would dump their sick, diseased fish in that beautiful bay and all the people on Bruny Island who cannot believe how the Government could possibly have created a marine farming planning review panel process which was a rubber stamp for the largest expansion of salmon farming ever in Tasmania, ever in Australia.

No independent scientist was able to speak their mind and be heard on that panel in their bid to raise the issues of the damage. There were serious concerns about the environmental management of Storm Bay: that the three companies, Petuna, Tassal and Huon Aquaculture were threatening the values because of the proposed environmental management and because of the proposed vast volumes of pollution that would go into Storm Bay as a result of the intensive salmon farming that is proposed.

We already have form in Tasmania of both parties doing everything they can, not just to turn a blind eye, but to change laws, to adjust regulations, to dumb down the independent EPA, so it is no longer independent. It cannot be. It cannot do its job when it has a statement of expectations which requires it to put the affluence of businesses and the productivity of businesses ahead of environmental protection.

That is why JBS would feel very comfortable setting up business in Tasmania because they are among friends. I am sure the Batista brothers feel very comfortable in Tasmania. They know how to do business with people like the Labor and the Liberals in Tasmania. They have done it in Brazil, 1800 members of parliament, members of the judiciary, other officials. They grease the palms. They gave them whatever was required. So much money.

People in positions of entitlement and privilege in Tasmania are used to being treated as special people. Obviously, that is enough. Just talk the talk of big business and people go a little bit funny around the eyes if you are in the Labor or the Liberal Party and the money flows. It does not need to flow into individual's pockets. Maybe that is how they do bribery in Brazil, but in Australia, when you have the Liberal and the Labor parties, you just give some donations to the political party.

How would we know that this has happened? We would not. We have such pathetic laws in Tasmania that we could not possibly track that money. What we have is a perfect storm where the world's largest protein producer is on steroids just prowling the planet looking for the last places it can get to control companies.

Ms O'Connor - On the proceeds of crime.

Dr WOODRUFF - On the proceeds of crime.

And, as Richard Flanagan said, from cattle raising point of view, getting into the salmon business is sweet because you do not have to buy land to put your feed lots and sow stores on. You do not have to buy battery hen farms. You can be given the sea to destroy for nothing. You buy the company, but you do not buy sea; you get given it. It is a great racquet to become part of. They can see it. It is just part of the Batistas' global strategy. They want to get into aquaculture globally. They have expanded from beef and chicken and into pork. As Richard Flanagan says, it is probably the last piece of the jigsaw puzzle for them.

The takeover bid was the first test for JBS Australia since the US corruption scandal. You would think that our Australian Government would be looking at the details of that. They were there for everybody to see. Our friends in the US had certainly confronted this. It was all over the papers. The Greens found that information quite easily. There was no doubt it was writ large: the crimes, the corruption, the fraud, the bribery of the Batista brothers and JBS.

But, the company needed to win the approval of the federal treasurer and his advisors at the Foreign Investment Review Board in order to pass the test to get into Australia. Their role is supposed to be to assess the character for Australia's national interest. But it is totally, notoriously opaque. From the outset, JBS appeared very confident in its media interviews about its likelihood of success.

They have been smoozing Australian politicians for years. In 2013, Tony Abbot was recorded visiting and chatting to JBS Australia. We have had Labor's Anastasia Palaszczuk, in Queensland, sweening all over them in 2017. The former Nationals' director, Scott Mitchell, who is a powerful lobbyist in Canberra, is not surprisingly letting everybody know why JBS's expansion needs to have the support of the federal coalition in Canberra, as well as the Liberal Government in Tasmania. On ABC radio last September we had Senator Jonathon Duniam very positive about what he said was their previous experience with the FIRB. He expects that we will see JBS as a business entity on this island.

Well, he was right. What a surprise that Josh Frydenberg, Liberal Treasurer, signed off on that takeover of Huon Aquaculture late last year. Along the way we also had Peter Gutwein, remember, the former premier of Tasmania, who was a strong flag waver for JBS. He argued to the Legislative Council last September that it is 'in the national interest' for JBS to be allowed to purchase Huon because they have a strong footprint in this state and across the country. A strong footprint, regardless of what that footprint stands for or where the launching pad for that has come from, is good enough for a Tasmanian Liberal politician and it seems like nothing has changed.

Despite JBS being under investigation with serious questions about criminal activities, despite the environmental and worker safety harm, they have been encouraged and supported. It seems like there is no powerful person in this country who is prepared to say anything against them. Given JBS's track record with videotaped police confessions by the Batistas of gross systemic bribery of officials; given the jail time that they have served for fraud and bribery; given the company's extreme workplace safety negligence record, which has caused death and grievous harm to Tasmanians and other Australians; given the Batista brothers' confessions in Brazil of their use of the proceeds of crime to finance the purchases of companies in the United States and Australia, and given the investigations by the US Department of Justice that resulted in the convictions of JBS for the proceeds of crime in that country, would you not you expect the Government would want to refer the purchase of Huon Aquaculture by JBS to the Australian Federal Police for investigation?

You certainly would if you were listening to this and read the catalogue of the crimes that they have committed. Why would we not want, why would we not expect our Attorney-General, on behalf of the Government, to do everything she could to confirm that there has been no dark money used to finance the purchase or operations of Huon Aquaculture by the Brazilian butchers? If money from loans were obtained illegally because of bribes that were used to fund ventures in Australia, which has been already confirmed, then the proceeds of those ventures are the proceeds of crime. As Rosa DeLauro, from the United State Congress said, JBS have demonstrated their willingness for corruption, pollution and illegal activity that puts the public at risk at so many levels.

She warned Australia to beware of JBS. The Huon Aquaculture connection to the bribery scheme certainly warrants greater scrutiny. It is the Government's responsibility to refer the sale to the AFP, Australian Federal Police, for investigation. It is our responsibility, as a parliament, to send a very strong signal not just to JBS, but to every other company that trades like this, with corruption and bribery, workplace safety negligence, gross environmental damage and deforestation of rainforests that we need to keep this planet healthy and with a safe climate, that puts the beautiful marine environment that we treasure and is the source of so much biodiversity that we all benefit from. It is not the salmon industry's right to pollute. The wealth of our waters should remain with us for everybody's enjoyment, for us to use the great richness that is there with an eye to protecting, to improving this biodiversity and to keeping the multiplicity of species there into the future.


I implore the Government, the Premier, the Attorney-General, to take this matter as seriously as it is. It is critical for the future of Tasmania that we have - we cannot possibly do business and exact any stringent laws when you have a $65 billion company and a tiny little state of Tasmania. We already have a terrible track record in that area. If this Government wants to reset, now is the time, now is the time to refer to the Australian Federal Police. There are plenty of other people who will happily take over the purchase of Huon Aquaculture. They are not the only people on the planet who are interested in farming salmon. We need to have people who we know have not got into that place through crime, and through workplace safety breaches and environmental damage.

Ms O'Connor - Hear hear.