Chinese businessman Xianfeng Lu’s purchase of the Van Diemen’s Land Company (VDL) was approved in 2016
The board staged a mass resignation in 2018 over the direction of the company
A letter obtained by the ABC now reveals animal welfare concerns from senior management
In a letter obtained by ABC Rural from senior managers at Van Diemen’s Land Company (VDL) to their boss, Chinese businessman Xianfeng Lu, the staff said they “cannot deliver safe, quality dairy products” nor “ensure nor endorse [the company’s] animal welfare policies”.
Mr Lu controversially purchased the business for $280 million in 2016 after outbidding Australian competitors at the 11th hour.
The dairy business milks around 18,000 cows over 7,062 hectares and employed 140 people at the time of the purchase.
The deal was approved subject to promises made by Mr Lu to invest heavily in the business and increase local employment.
The revelations of internal dissent come after three of the most senior operations managers left their positions. They were either terminated, resigned, or redeployed to other non-dairy parts of the business.
The letter, signed by over 20 members of senior management, was delivered to Mr Lu this week and raises a range of serious concerns.
“We are seeking indemnity for any animal welfare or workplace health and safety loss or damage until we are provided with basic daily operational repairs and maintenance,” the letter said.
“The welfare of our livestock is important to us as farm managers, and currently we cannot deliver safe, quality dairy products and ensure the future sustainability of our industry without basic operational repairs and maintenance systems being reviewed.”
It goes on to point to what the staff claim is insufficient investment in farm infrastructure and machinery.
“We as farm managers are no longer able to ensure nor endorse animal welfare policies an [sic] procedures due to the condition of laneways and non-compliant repairs and maintenance on farm vehicles and implements.”
Specifically, the staff point to the conditions of laneways — which are used by dairy cows when travelling to the milking sheds — and “non-compliant repairs and maintenance on farm vehicles and implements”.
Mr Lu, who has taken over the day-to-day management of the company and is now CEO and chairman, said there are no concerns.
“In contrast, actually, we do quite a good job on the maintenance,” Mr Lu said through a translator.
“Some laneways need maintenance. Some laneways probably need a rebuild. So we will now get equipment to maintain and rebuild the laneways.”
A tumultuous year
This letter from senior members of staff comes a little over a year since the resignation of the entire board in a dispute over the governance structure and Mr Lu’s reluctance to invest in water infrastructure.
Former deputy chairman David Crean told the ABC he could not comment on the new letter specifically, but said “the board, when it resigned, warned of the consequences of not following proper governance and risk management, particularly in regards to important capital expenditure”.
At the time he stood down, Mr Crean said the board had failed to convince Mr Lu of the need to urgently invest in the business in order to make it sustainable.
He pushed for a $2 million investment commitment to build dams and irrigation, and on-farm capital expenditure of $4 million annually for three years.
The former CEO of VDL farms, Evan Rolley, also left the business in 2018.
The Van Diemen’s Land Company was purchased by Mr Lu’s company Moon Lake in 2016 after it beat out locals bidders for the business.
Then-treasurer and now Prime Minister, Scott Morrison, gave the final sign off on Foreign Investment Review Board (FIRB) approval.
Mr Morrison said at the time that Moon Lake had “committed to undertake a number of investment projects in the VDL farms which will provide additional economic activity to the Tasmanian economy”.
“Based upon Moon Lake’s estimates [it] will result in a near doubling of employment at VDL,” Mr Morrison said.
“This will guarantee more than 140 local jobs, generate an intended additional investment of over $100 million and an expected additional 95 jobs.”
Mr Lu said he had increased the number of employees by 20 to 140 and invested $10 million US dollars and $4 million Australian dollars since taking over the company.
The Prime Minister’s office has been contacted for comment.
With the most recent concerns coming to light, Circular Head Council Mayor Daryl Quilliam would like to see the company sold.
“I’d like to see it sold and I’d like somebody else take it on,” Mr Quilliam said.
“It’s not going to be easy because it’s obviously a big farm and there is a lot of money involved, but that would be the best outcome that I could see at this point in time.”
Moon Lake also outlined a plan in 2016 to transport fresh milk directly from Tasmania to China on weekly flights starting in 2017.
No such direct flights have taken place, although Mr Lu contends that some fresh milk has been transported via Melbourne.
Tasmanian Greens Senator Peter Whish-Wilson said the Prime Minister had serious questions to answer.
“Mr Scott Morrison, our current Prime Minister, has to be held responsible,” he said.
“He knew at the time it was a controversial decision, there was a there was a number of other bidders for this property, he looked at the detail and made the final decision and signed-off on this purchase.
“He stipulated a number of conditions that needed to be met by the foreign purchaser. They should at least be auditing those conditions.
“I think, if a local community’s concerns are validated, they should be bringing that to the attention of the purchaser and actually sitting down and negotiating a contract with him.”