Barnaby Joyce's APVMA relocation from Canberra to Armidale condemned in new report

In turn, Barnaby Joyce, the former minister behind the relocation of the Australian Pesticides and Veterinary Medicines Authority (APVMA) to Armidale in his northern NSW seat, has hit back questioning the "magic of Canberra" while Nationals leader David Littleproud has accused Labor of "rank hypocrisy".

The APVMA's chair and CEO have resigned in the wake of the report by Clayton Utz which was ordered by Agriculture Minister Murray Watt after allegations surfaced last November that a senior public servant had urinated on his colleagues following a staff Christmas party.

Senator Watt has pinpointed the 2016 decision, highlighted in the report, to move the APVMA to Armidale in 2019 as being behind the demise of good governance.

Mr Joyce, who is now the opposition's veteran's affairs spokesman, said he was not surprised that the Albanese government wants to move everything to Canberra.

"What magical things are going to happen moving it back to Canberra? What is the magic that resides in the atmosphere of Canberra that would resolve this?" the Member for New England told ACM.

"Unless someone can tell me something about the atmospherics of Canberra, that there's something in the air that makes Canberra a decidedly different place to Armidale, then of course it should stay there.

"Labor says they believe in regional Australia ... but straight away they attack the APVMA even as a small, small example of decentralisation, they demand that they follow the edicts that have been laid down to them that everything reside in Canberra."

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Labor, in opposition, maintained the move to Armidale was "blatant pork-barrelling".

The minister highlighted the report's findings that the decision to move the regulator to Armidale resulted in a loss of corporate knowledge, loss of corporate culture and a loss of experience and knowledge of public sector values.

"Unfortunately this saga is just another in what has become a long line of examples of incompetence and maladministration under the former Coalition government," Senator Watt told reporters in Brisbane.

"This happened on their watch but I'm determined to clean up their mess."

The allegations about urinating on colleagues were referred to relevant authorities, including police, for further investigation.

Former senior public servant Ken Matthews will now conduct a rapid evaluation of APVMA's structure and governance. Mr Matthews was the first CEO and chair of the National Water Commission.

In 2018, accounting group EY found the forced move to Armidale would rip more than $157 million a year from the capital's economy as well as costing the ACT region 365 jobs.

Senator Watt said on Friday no decision had been made to reverse Mr Joyce's decision.

"I expect all of those kinds of things will be issues that Ken Matthews considers in his report regarding the structure and governance of the APVMA," he said.

The Clayton Utz report found the regulator prioritised speed over accuracy, was too close to the industry, was too soft on enforcement, took decades to review chemicals, and had an unacceptable level of staff turnover and employee complaints.

There were 21 complaints about inappropriate behaviour. Further complaints were made about conflicts of interest in recruitment, unauthorised publication of official information on social media and excessive work demands.

"There were clearly cultural issues with the organisation given that on average there was a formal complaint about once every 4 to 6 weeks for 5 years," the report stated.

The APVMA has an extremely high level of staff turnover, which is the result of the workplace culture, unreasonable expectation to meet 100 per cent of time-frames and the 2019 relocation from Canberra to Armidale.

The regulator is alarmingly close to the industry, with the APVMA prioritising industry engagement, while drastically reducing compliance and enforcement activities, adopting a "low-risk profile approach".

"The APVMA appears reticent to take compliance and enforcement action against industry," the report stated.

The majority of APVMA's ongoing chemical reviews have been in progress for nearly two decades. Of the 10 ongoing chemical reviews, eight have been in progress for over 15 years or more, with seven ongoing for nearly 20 years.

"There are concerns that this has resulted in some chemicals remaining in products in Australia where they have been banned in other jurisdictions," the report stated.

Senator Watt was so concerned Australia could be using chemicals that were banned in other countries, he gave the APVMA a ministerial directive finalising the reviews of eight chemicals.

Nationals leader David Littleproud accused Labor of "rank hypocrisy", given it - including the now minister - opposed the Coalition's bill to establish an APVMA governance board for two years. The bill to establish a board was put to the Senate at the end of 2019, but a stalemate meant it wasn't established until April 2022.

"For Labor to sit there and say this is all our fault, when they wouldn't support legislation that would have had a governance board, just speaks volumes about the politics this mob's prepared to play," Mr Littleproud said.

"Now there is a governance board, the foundations are there. They can strengthen its role, there is no need to uproot the agency and bring it back to Canberra."