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1998-1999-2000
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
SUPPLEMENTARY EXPLANATORY
MEMORANDUM
Amendments Moved on Behalf of the
Government
(Circulated by authority of the
Minister for Transport and Regional Services,
the Honourable John Anderson,
MP)
ISBN: 0642 451745
GOVERNMENT AMENDMENTS TO THE TRADE PRACTICES AMENDMENT (INTERNATIONAL LINER CARGO SHIPPING) BILL 2000
The Trade Practices Amendment (International Liner Cargo Shipping) Bill 2000 (the Bill), which was introduced into the House of Representatives on 28 June 2000, amends Part X of the Trade Practices Act 1974 (TPA). The Bill implements the changes agreed by the Government following its consideration of the Productivity Commission’s 1999 Review of Part X.
Part X regulates the market conduct of international liner cargo shipping companies that collaborate as conferences to coordinate joint services, share capacity and agree on freight rates. Liner shipping comprises scheduled services for non-bulk cargo, most of which is carried in containers.
The Australian Government Solicitor has advised that there is a possibility that a court could take the view that sections 10.17A and 10.18A of Part X allow parties to a shipping conference to agree on freight rates without having a registered conference agreement. These sections were added to Part X in 1991.
The powers to remove the exemptions (from the competition rules in sections 45 and 47 of the TPA) provided by Part X are given effect through the Minister’s powers to deregister a conference agreement, if a conference fails to comply with the conditions applying to the exemptions. Therefore, it is important to amend Part X as soon as possible to make it clear that shipping conferences are not permitted to collectively set freight rates, unless they have a registered conference agreement to which those same collectively agreed freight rates apply.
The second reading speech and explanatory memorandum tabled with the 1991
amendments indicate clearly that the intention of the amendments was to remove a
requirement for shipping conferences to include freight rate details in
conference agreements submitted for registration, or to register an agreement
each time freight rates are varied. Such a requirement would be very costly to
administer and serve no useful purpose, particularly as representatives of
exporters, designated as such under Part X, already have a legislated right to
require shipping conferences to notify them of freight rate charges and to
provide justification for such charges, when reasonably requested to do
so.
Accordingly, the Government amendments to the Bill will clarify the
requirement that liner shipping companies must have a conference agreement
registered under Part X, before the Part X exemptions relating to
agreements on freight rate charges come into effect. The Government amendments
retain the provisions of the 1991 amendments to Part X, which removed the
requirement for shipping conferences to include freight rate details (or
variations to those rates) in their registered conference agreements.
GOVERNMENT AMENDMENT TO THE TRADE PRACTICES AMENDMENT (INTERNATIONAL LINER CARGO SHIPPING) BILL 2000 (the Bill)
NOTES ON AMENDMENTS
Amendment (1) Subsection 10.02(1) – Interpretation of Part
X
This amendment adds a new definition to cover the use of the term
freight rate agreement. The term, which is used in the new
sections 10.17A and 10.18A referred to in amendments (5) and (6) below, means a
conference agreement that consists of or includes freight rate charges.
Amendments (2) and (3) Section 10.15 Freight rate charges
These
amendments add a cross-reference in section 10.15 to the new sections 10.17A and
10.18A. This has the effect of clarifying the intention that, while freight
rate details do not have to be included in a registered conference agreement,
parties to a conference agreement are not permitted to collectively agree on
freight rate charges, or implement such agreed charges, unless this is
done under the Part X exemptions (from the competition rules in sections 45 and
47 of the Trade Practices Act 1974) provided to parties to a finally
registered conference agreement.
Amendment (4) Section 10.16 Freight rate charges
These amendments
have the same effect as those referred to under (1) and (2) above, except that
they refer to section 10.16.
Amendments (5) and (6) Sections 10.17A and 10.18A
These amendments
repeal the existing sections 10.17A and 10.18A and replace them with new
sections 10.17A and 10.18A. These new sections make it clear that the
Part X exemptions (from the competition rules in sections 45 and 47 of the Trade Practices Act 1974), apply to the making of freight rate charges only if:
- the parties to the agreement under which such freight rates were made (the freight rate agreement), are the same as the parties to a registered outwards or inwards conference agreement (or a varying outwards or inwards registered conference agreement) to which those freight rates apply.