Australia's largest dairy farming business is facing fresh questions over its farm standards, after it was issued with environment protection notices and had an operating licence suspended because of overflowing effluent systems.
Officers from the Tasmanian Dairy Industry Authority (TDIA) visited all Van Dairy Group farms between February 22 and 26 this year to assess whether the Farm Dairy Effluent Management Code of Practice was being complied with.
In a report sent to Van Dairy's Chinese owner, Xianfeng Lu, TDIA manager Carolyn Harris said of the 23 farms audited 83 per cent failed to meet the requirements of the code.
Forty-three per cent of the farms that failed the audit had issues that were regarded as "critical" (requiring immediate action) or "major" (likely that the failure, if left unchecked over winter, would negatively impact the environment).
The audit found several recurring issues, including:
- increases to herd size with no upgrade to the effluent system
- failure to maintain and clean out systems
- lack of infrastructure such as irrigation equipment, or failure to replace or repair broken equipment
- unqualified people undertaking work on the systems, resulting in a damaged or compromised effluent system
In the report, Ms Harris said the TDIA "does not have confidence in the management of Van Dairy Group Pty Ltd to ensure the effluent systems on farm are designed or operated effectively at this time".
The report stated:
"The current operations manager at Van Dairy Group Pty Ltd does not have appropriate skills and knowledge in dairy farming to assist farm managers, and there appears to be no effective oversight of farm operations to ensure systems are maintained and equipment is provided and/or repaired as necessary."
She also noted that previous requests for corrective action had not been addressed in a timely manner, that many of the effluent systems had changed since their original design or were not built in accordance with plans.
"Some changes made to effluent systems have been undertaken by unqualified in house personnel, and this has in some cases resulted in damaged systems."
The report said the TDIA had applied "corrective action" to all farms, and required a documented plan from Van Dairy management to describe how the farms would be managed going forward to ensure compliance with regulatory requirements.
"Failure to comply with the corrective action requests may result in escalation of actions against Van Dairy Group Pty Ltd, including applying licence conditions to each farm to limit cow numbers able to be milked."
"TDIA Officers will be monitoring the farms closely over the coming weeks and months to ensure actions are being addressed as required and to support management in their quest to get operations back on track."
In a statement, the TDIA said:
"The most critical items listed as due by 31 March 2021 or earlier have been dealt with. The TDIA will provide continued regulatory oversight, including following up those actions which are not fully completed, and monitoring for any other issues."
In a statement, Mr Lu said the TDIA had suspended the operation licence of one Van Dairy Farm due to overflowing from an effluent pond.
He said the licence had been reinstated and the 280 cows on this farm were now being milked on a licensed farm.
"There is no risk to the welfare of these animals," he said.
Mr Lu revealed the local council had also issued Environmental Protection Notices between December 2020 and March 2021 because of issues with effluent ponds overflowing and pumps on several farms.
"VDL is undertaking repairs to the effluent ponds and pumping systems identified in council notices," he said.
"Most of the urgent repair work will be completed within the next two weeks. More intensive works that will provide a permanent solution will be completed by the end of April 2021."
'How did it get to this?'
The Foreign Investment Review Board approved the sale of Van Diemen's Land Company (VDL) to Mr Lu's Moon Lake Investments in 2016, with then Treasurer Scott Morrison saying he had considered the impact on local jobs.
Moon Lake Investments later changed its name to Van Dairy Limited.
Five of the company's non-executive directors quit the board in 2018 over a difference of opinion about the future management of the company, including concerns about inadequate irrigation infrastructure on the farms.
Greens Senator Peter Whish-Wilson said he had previously raised concerns with the Tasmanian and federal governments about Van Dairy's farms.
"How did it get to this? How did it get to this where we are actually, by the government's own reports, seeing catastrophic failure on the largest dairy farm in the country, one of our most iconic businesses?" Senator Whish-Wilson said.
"It should never have been allowed to get to this point."
Senator Whish-Wilson said there had been failures in regulation, as well as by Van Dairy.
"We have failed to regulate this company properly, and this business," he said.
Van Dairy owns 27 farms at Smithton in north-west Tasmania.
One of Van Dairy's biggest customers is Fonterra.
In a statement, Matt Watt, Fonterra's general manager farm source, said since becoming aware of the issues Fonterra had been working with VDL and its management, the industry and regulators to ensure VDL remedied them.
"We have worked with VDL to ensure a comprehensive plan is put in place, which includes initiatives to manage and resolve the on-farm issues and help them comply with industry standards," Mr Watt said.
"While progress is being made, it will take some time to see the material improvements from these initiatives.
"Dairy farms are complex businesses, with cows needing to be fed and milked daily - so we can't just stop picking up milk, particularly at farms of this size."