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Sugar Industry Amendment Bill 2005
Sugar Industry Amendment Bill 2005
Explanatory Notes
General Outline
Short title
The short title of the Bill is the Sugar Industry Amendment Bill 2005.
Policy objectives
To amend the Sugar Industry Act 1999 (Sugar Industry Act) to remove
statutory vesting and to provide transitional arrangements to facilitate the
orderly marketing of the Queensland sugar crop.
Reasons for the policy objectives
Since the beginning of 2002, both the State and Federal Governments have
been closely examining the long term viability of the sugar industry in
Queensland. This examination has been prompted, in particular, by the
pressures placed on the industry by its competitive global environment.
In early 2004, the Sugar Industry Reform Act 2004 amended the Sugar
Industry Act 1999 to lessen the regulatory environment on the Queensland
sugar industry by removing the statutory cane production area system and
the statutory bargaining system.
These amendments followed a review of the industry in 2002 which found
that the regulatory structure of the industry (at that time) limited its ability
to respond to the globally competitive forces it was facing.
The 2002 review also identified a further regulatory impediment facing the
industry, namely the compulsory acquisition (`vesting') of raw sugar on the
domestic market. This requires all raw sugar to go through a `single desk'
marketing body (Queensland Sugar Limited).
The Sugar Industry Reform Act 2004 included some limited relaxation of
domestic marketing arrangements.
In March 2004, the Queensland Government and the State's peak sugar
industry representative bodies, the Australian Sugar Milling Council
(ASMC) and the CANEGROWERS organisation committed to a Heads of
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Sugar Industry Amendment Bill 2005
Agreement. Following the Heads of Agreement, the 2004 reforms were
implemented.
A major element in the Heads of Agreement was the establishment of a
working group to "develop voluntary marketing arrangements as soon as
possible. The objective of this working group is to work towards a new
system for marketing of raw sugar prior to the requirement for review in
2006."
To discharge this commitment the report of the working group was
delivered in July 2005 and proposed the introduction from the 2006 season
of a `New Marketing System' for Queensland sugar.
In October 2005, a Memorandum of Understanding (MOU) was executed
between the State Government, ASMC and CANEGROWERS to progress
these new arrangements. This requires amendments to be made to the
Sugar Industry Act 1999.
The MOU recognises that while the Queensland Government intends to
pursue its policy to remove regulatory encumbrances from the sugar
industry, it is committed to support an orderly transition from legislative to
contractually-based marketing arrangements for bulk export sales.
It is recognised that, in moving to a new marketing system, the key to
success is for all parties to work towards delivering greater flexibility and
enhanced outcomes whilst continuing the benefits and synergies of
presenting a coordinated face to Queensland's bulk raw sugar customers.
The peak industry bodies have committed to working with Queensland
Sugar Limited to assist it to remain the preferred marketer.
Following the signing of the MOU in October 2005, the Queensland
Government moved ahead to prepare the necessary legislative amendments
that will enable the introduction of the new sugar arrangements
commencing with the 2006 crop. This will be accomplished by way of
commercially negotiated contractual arrangements between participating
mill owners and Queensland Sugar Limited (QSL) for the export of bulk
raw sugar for an initial period of three years.
The new contract-based arrangements will replace the current compulsory
acquisition or `vesting' of raw sugar under the Sugar Industry Act 1999,
thereby allowing all the provisions of the Act dealing with vesting and
statutory based marketing arrangements to be repealed.
The repeal of the vesting provisions will also mean that the domestic sugar
market will be fully deregulated. It will confirm previous arrangements
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Sugar Industry Amendment Bill 2005
which allowed individual mills to arrange their own `niche market' exports
of speciality sugar in bags and containers.
Apart from repealing the vesting arrangements, the Bill contains necessary
transitional provisions identified by the Department of Primary Industries
and Fisheries and the Office of the Queensland Parliamentary Counsel.
For example, the Bill contains what are called `authorisations' to ensure
that the new sugar marketing arrangements are protected from any
difficulties that might otherwise arise under the Trade Practices Act 1974
(TPA).
The requested authorisations are being provided in recognition of the need
to have a smooth transition to the New Marketing System.
How the policy objectives will be achieved
The most important legislative changes to be progressed via the Sugar
Industry Amendment Bill 2005 will be the repeal of the vesting
arrangements, effective from the date of proclamation of this Bill, with the
aim being for that to occur if possible on 1 January 2006. However, raw
sugar from the 2005 harvest that is vested prior to 31 December 2005 will
continue to be the legal property of QSL. This is because once raw sugar
from the 2005 harvest has been legally vested (ownership transferred)
under the Act as it now stands, it will not subsequently `divest'.
With these changes, there is no need for the current Ministerial pricing
direction to continue, and it will be revoked administratively with the
amending legislation's commencement.
Alternatives to the Bill
The alternatives are to either make no legislative changes (that is, maintain
the `status quo') or to repeal the vesting arrangements without any
transitional provisions.
The first-mentioned option would mean that a full-scale review of the Act
for the purposes of National Competition Policy (NCP) would then need to
be conducted in 2006-2007 that would subject the statutory arrangements
of the Act (notably vesting) to a Public Benefit Test.
In the interim, under the status quo option, the existing regulated marketing
arrangements for sugar would continue, at least until the NCP review. As it
would be very difficult to justify the continuation of the current regulated
arrangements in an open and transparent NCP review, the most likely
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Sugar Industry Amendment Bill 2005
outcome would be that the current arrangements would have to be
dismantled following the review.
This option does not provide any long-term stability for the industry and is
not supported by the Queensland Government.
In regard to the second-mentioned option, this would result in complete
deregulation without any orderly transitional arrangements. This would
potentially be disruptive to the industry, especially in regard to export
arrangements.
This option does also not provide any long-term stability for the industry
and is not supported by the Queensland Government.
Estimated administrative cost to government for
implementation
There are no specific financial issues for the Queensland Government to
address in regard to the passage of the necessary facilitating legislation.
Consistency with fundamental legislative principles
It is arguable that the following issues in the Bill breach fundamental
legislative principles:
Loss of employment and members of authority going out of office
It is arguable that new sections 278 and 279, which are being inserted into
the Sugar Industry Act 1999 by clause 20 of the Bill, is a departure from
fundamental legislative principles in that they purport to terminate the
appointment of employees and members of the Sugar Authority without
compensation. However, the Office of the Queensland Parliamentary
Counsel has only included the provisions with an abundance of caution. In
fact, the Authority does not currently employ any staff and has only one
member, that being the Sugar Industry Commissioner. The Commissioner's
remuneration will not be affected by the abolition of the Authority.
Accordingly, no positions need to be terminated or compensation considered.
Retrospectivity
Two issues regarding retrospectivity arise. Firstly, proposed new sections 243
to 245 being inserted by clause 17 and new sections 282 and 283 being
inserted by clause 20 provide TPA authorisations for pooled export
contracts and domestic supply contracts made before 30 October 2004.
The retrospective application is beneficial to orderly transition to the new
marketing arrangements. The Australian Sugar Milling Council,
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Sugar Industry Amendment Bill 2005
CANEGROWERS and Queensland Sugar Limited looked to the Government
to provide such limited authorisation arrangements as may be considered
necessary to assist the orderly transition to the new marketing system. The
Public Benefit Test undertaken on the TPA authorisations demonstrates a
significant net public benefit in enacting these provisions.
The second issue relates to new sections 268, 269 and 270 being inserted by
clause 20 of the Bill. Those sections, in part, preserve the operation of
sections 107Q, 107R(5) and 107S(4) of the Act for the period until all
exemption from vesting issues for the 2005 season are finalised. Sections
107Q, 107R(5) and 107S(4) provide that an exemption from vesting is taken
to have no effect if certain breaches occur, in which case the sugar
retrospectively vests in QSL. These provisions are merely being continued
by this Bill for a brief period. Breaches of vesting exemption provisions could
potentially involve large shipments of sugar worth a very significant
amount of money. Re-vesting in QSL is therefore seen as a necessary
financial disincentive to breach of the provisions.
Exempt matter under Freedom of Information
New section 271, being inserted by clause 20 of the Bill, continues the
operation of section 107T of the Act after commencement. Section 107T
provides that a document held by the Authority in connection with an
application for exemption or the granting of exemption, including periodic
estimates and annual returns, is exempt matter under the Freedom of
Information Act 1992 (FOI). Section 107T was included in the Act
because it was regarded as essential that the information is exempt matter
because it will be of a highly commercially sensitive nature, and for
industry to take up new and innovative uses of sugar on the domestic
market, it will need to be confident in the integrity of the system. That will
remain the case after commencement of this Bill.
Current convention is for exempt matters under the FOI Act to be included
in that Act. However in this case, given that the original FOI provisions
were in the Sugar Industry Act, the Office of the Queensland Parliamentary
Counsel considered that the transitional provisions should also be in the
Sugar Industry Act.
Injunctions
New sections 285 and 286, being inserted by clause 20 of the Bill, deem
undecided injunction applications under section 247 of the Act to have
been withdrawn and provide that injunctions granted under section 247
have no effect after commencement. Section 247 enables injunctions
relating to contraventions of chapters 2 or 3 of the Act. The relevant part of
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Sugar Industry Amendment Bill 2005
chapter 2 relates to supply arrangements until 31 December 2005 only.
Chapter 3 relates to the marketing of sugar under the current vesting
arrangements and is being omitted under this Bill. There would, after
commencement of this Bill, no longer be any useful purpose to be served
by proceeding with injunction provisions following the expiry and repeal of
the provisions breach which could lead to an injunction.
Consultation
Community
CANEGROWERS, ASMC and QSL were consulted.
Government
The following Departments were consulted on the preparation of the Bill:
Premier and Cabinet
Treasury
State Development, Trade & Innovation
Communities
Natural Resources and Mines
Employment and Training
Justice and Attorney General (Crown Law)
Results of Consultation
Community
CANEGROWERS, ASMC and QSL support the legislative changes
needed to underpin the New Marketing System.
A significant number of growers from the Burdekin area and the smaller
Australian Cane Farmers Association have expressed concern over this
proposal.
Government
All Departments consulted supported the Bill.
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Sugar Industry Amendment Bill 2005
Notes on Provisions
Short title
Clause 1 provides that the short title of the Act is the Sugar Industry
Amendment Act 2005.
Commencement
Clause 2 provides that this Act commences on a day to be fixed by
proclamation.
Act Amended
Clause 3 provides that this Act amends the Sugar Industry Act 1999.
Omission of ch 3 (Marketing)
Clause 4 omits Chapter 3 of the Act which deals with the marketing of
sugar. Currently within this Chapter Section 100 of the Act vests all raw
sugar in Queensland Sugar Limited (QSL). Under section 101 QSL
markets this product on both the domestic and the world market on behalf
of the industry. QSL compulsorily acquires the sugar, but must return the
proceeds of the sale to mills. This is commonly known as the "single
desk".
QSL is an industry owned corporation, the privatised successor to
Queensland Sugar Corporation, a statutory authority. Under section 102
the proceeds of the sale of raw sugar are returned to mills, less the
marketing costs of QSL, on the basis of payment schemes negotiated
between QSL and the mills. Section 103 of the Act gives QSL the power to
direct mills to produce certain brands of sugar, although in practice the
kinds of sugar produced are the subject of commercial negotiation between
the parties.
The Chapter is being deleted because a New Marketing System (NMS) for
raw sugar, based on contractual agreement between mills and QSL is to be
implemented, a key feature of which is the abolition of all vesting.
Amendment of s 109 (Reports to the Minister)
Clause 5 amends section 109 of the Act which provides for reports from the
Sugar Authority (the Authority) and the Sugar Industry Commissioner.
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Sugar Industry Amendment Bill 2005
The amendments remove reference to the Sugar Authority. The authority's
main function is to monitor the performance of QSL in the exercise of its
powers and the performance of its functions under the Act. It may also
have the function of the single desk marketer of Queensland grown sugar in
the event that QSL falls out of the control of the Queensland sugar industry.
Because this Bill is removing vesting of sugar in QSL and the regulation of
the marketing of sugar by QSL, the roles of the Sugar Authority have
become redundant. Accordingly this Bill is abolishing the Authority. This
clause is consequential on that abolition.
Amendment of s 110 (Minister's directions)
Clause 6 amends section 110 of the Act which provides for directions by
the Minister to the Sugar Industry Authority and the Sugar Industry
Commissioner. The clause removes references in section 110 to the Sugar
Authority. As detailed above for clause 5, the Bill abolishes the Sugar
Authority, making references to it in this section redundant.
Replacement of s 111 (Minister's directions in entities annual
report)
Clause 7 omits section 111 of the Act which requires that direction made
by the Minister to the Sugar Authority or Sugar Industry Commissioner
must be published in the entities annual report. The clause inserts a new
section 111 that removes references to the Sugar Authority. As outlined
above for clauses 5 and 6 above, this Bill abolishes the Sugar Authority,
thereby making such references redundant.
Omission of s 112 (Review of sugar vesting scheme)
Clause 8 omits section 112 of the Act. Section 112 provides that the
vesting arrangements are subject to a review that must commence before
December 2006.
The reforms implemented by this Bill require the removal of compulsory
vesting and accordingly result in substantive changes to the Act and will
replace the intended 2006-2007 NCP review, currently required by section
112.
Omission of ch 4, pt 3 (Queensland Sugar Limited)
Clause 9 omits chapter 4, part 3 of the Act which relates to Queensland
Sugar Limited. This chapter relates to the establishment of Queensland
Sugar Limited (QSL). QSL is a company under Corporations Law limited
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Sugar Industry Amendment Bill 2005
by guarantee. QSL, which is controlled by the Queensland sugar industry,
took over the statutory single desk marketing of sugar from the Queensland
Sugar Corporation (QSC), and exercises the vesting powers previously
exercised by the QSC.
This part currently contains sections providing:
· that QSL does not represent the State (s. 119)
· for the Application and non-application of certain Acts to QSL
(s.120)
· for certain matters to be contained in QSL's constitution (s. 121)
· conditions on the composition of the QSL board (s. 122)
· for an audit of QSL (s.123)
· power for the Minister to give a sugar price direction to QSL
(s.124). A sugar price direction is currently in force, setting the
price for domestic sugar at import parity price.
Since the vesting of raw sugar is to be abolished by this Bill, the Act no
longer need contain any regulatory controls over Queensland Sugar Limited
(QSL).
Omission of ch 4, pt 4 (The Sugar Authority)
Clause 10 omits chapter 4, part 4 of the Act which relates to the Sugar
Authority. The authority's main function is to monitor the performance of
QSL in the exercise of its powers and the performance of its functions
under the Act. It may also have the function of the single desk marketer of
Queensland grown sugar in the event that QSL falls out of the control of the
Queensland sugar industry.
None of these functions will be relevant once this Bill is enacted. It should be
noted that the Authority does not currently employ any staff and has only one
member, that being the Sugar Industry Commissioner. The Commissioner's
remuneration will not be affected by the abolition of the Authority.
Amendment of s 223 (Functions of the commissioner)
Clause 11 amends section 223 which provides for the functions of the
Sugar Industry Commissioner. Currently those functions are to:
· Grant access rights and to keep the access rights register
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Sugar Industry Amendment Bill 2005
· Accept each intention to contract lodged with the commissioner under
section 20(5)
· To mediate negotiations within the sugar industry in Queensland,
other than in matters in which the commissioner is the decision maker,
if asked by all parties to the mediation
· To be a member of the Sugar Industry Authority
· To receive any assets and liabilities transferred to the commissioner
under chapter 10 and
· To act for the benefit of the sugar industry
A number of the amendments being made by this Bill affect the functions
of the Commissioner set out in this section and accordingly the following
functions are being omitted:
· Acceptance of intention to contract under section 20(5) - this is a
requirement to lodge an intention to contract with the
commissioner. This provision was only relevant for the 2005
crushing season;
· Be a member of the Sugar Authority - the Authority is being
abolished by this Bill;
Amendment of s 223A (Powers of commissioner)
Clause 12 amends section 223A of the Act which sets out the powers of the
commissioner. The amendment reflects a changed chapter number that is
consequential to other amendments made by this Bill.
Amendment of s 227 (Commissioner's independence)
Clause 13 omits section 227(2) of the Act. That section provided that the
commissioner's independence did not prevent QSL providing staff and
other resources to the commissioner to carry out his or her functions. This
section is no longer appropriate now that QSL have no functions under the
Act and the commissioner no longer has a role in vesting or marketing of
sugar.
Amendment of s 228 (Commissioner's budget)
Clause 14 amends section 228(6) which provides for the Commissioner's
budget by reflecting a changed chapter number that is consequential to
other amendments made by this Bill.
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Sugar Industry Amendment Bill 2005
Amendment of s 230 (Commissioner's power to delegate)
Clause 15 amends section 230(1) of the Act which provides the Sugar
Industry Commissioner's power to delegate. Currently the Commissioner
can delegate to:
· an appropriately qualified member of the commissioner's staff
· an entity established under this Act or
· an appropriately qualified member or officer of an entity
established under this Act
Following the amendments made by this Bill, there are no longer any entities
established under the Act to which powers could be delegated. Accordingly
reference to entities established by the Act or staff of such entities is being
omitted.
Omission of s 234A (Appeal to the District Court - exemption
application)
Clause 16 omits section 234A of the Act which provides for appeals to the
District Court against a decision on an application for an exemption from
vesting under section 107G of the Act. With the abolition of vesting,
exemption applications under section107G will no longer be required.
Replacement of ss 243-246
Clause 17 omits sections 243 to 246 of the Act which provide trade practices
authorisations for payment schemes, brand sugar and directions about
delivery of sugar to QSL. These sections all relate to matters concerned with
the vesting of sugar in QSL and the consequent marketing of sugar by QSL.
The clause also inserts new sections 243 and 244 that provide trade
practices authorisations for pooled export contracts, domestic supply
contracts made before 30 October 2004.
New section 243 - Pooled export contracts
For the future export of raw sugar once vesting ends, QSL will need to
negotiate commercial export contractual arrangements with the milling
companies and co-operatives. To the extent that these arrangements will
involve an agreement between the mills and QSL for collective selling and
uniform (pool) pricing, there could be a potential breach of the
Commonwealth's Trade Practices Act 1974 (TPA).
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Sugar Industry Amendment Bill 2005
In order to avoid any potentially adverse TPA exposure, new clause 243
will provide that authorisation for those activities. Section 51 of the TPA
allows a State to legislate to specifically `authorise and approve' of
activities that would otherwise be in breach of the TPA (the Sugar Industry
Act 1999 already contains a number of specifically worded TPA `section
51' exemptions).
The Government considers that it is appropriate to ensure that QSL's export
arrangements under the NMS are covered to the maximum possible extent
from any TPA exposure. The authorisation will apply until 30
September 2009, or such later gazetted date as dealings under contracts for
the 2008/2009 financial year have been completed. As it is not possible to
precisely identify the completion date for transactions requiring
authorisation for the sale of the 2008 crop, a later date may need to be
prescribed to allow for completion of the three year authorisation. After
that time QSL will need to consult with the Australian Competition and
Consumer Commission (ACCC) about any further authorisations under the
TPA.
New section 244 - Pooled domestic contracts to satisfy refiner supply
contract made before 30 October 2004
New section 244 addresses the need for a TPA authorisation to cover
activities associated with certain `pre-existing' domestic contracts (that is,
between QSL and two of the domestic sugar refiners, that run past 31
December 2005 to expiry on 30 June 2007). The authorisation is not for
the actual contracts, but rather for activities associated with the supply of
sugar from mills to QSL to enable it to meet these contracts, and for the
pricing arrangements for that sugar (including the negotiation of premiums
and other supply incentives). The authorisation will continue until
30 September 2007 to ensure all dealings relating to the 2006/07 crushing
season have been completed.
New section 245 - Pooled Export and domestic contract
New section 245 clarifies that a single contract between QSL and a
customer can be authorised under the TPA Act by virtue of both new
sections 243 and 244 above, that is both export and domestic content in the
same contract is authorised. The new section will apply until
30 September 2009, or such later prescribed date as export dealings under
contracts for the 2008/2009 financial year have been completed. As it is
not possible to precisely identify the completion date for transactions
requiring authorisation for the sale of the 2008 crop, a later date may need
to be gazetted to allow for completion of the three year authorisation. After
that time QSL will need to consult with the Australian Competition and
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Sugar Industry Amendment Bill 2005
Consumer Commission (ACCC) about any further authorisations under the
TPA.
Amendment of s 247 (Injunctions)
Clause 18 amends section 247 which provides for the granting of injunctions
by omitting reference to chapter 3 of the Act (Marketing). This Bill is
omitting that part.
Omission of s 254 (Indemnity)
Clause 19 omits section 254 of the Act which provides for indemnities by
QSL or by bodies under the Act. Following the enactment of this Bill QSL
will no longer be governed by the Act and the other bodies referred to in the
section no longer exist.
Replacement of ch 10 (Transitional provisions)
Clause 20 replaces chapter 10 of the Act which provides for transitional
provisions. The amendment includes new transitional provisions for the
Sugar Industry Amendment Act 2005 and remove previous, now redundant
transitional provisions.
New Chapter 8 - Transitional provisions
for Sugar Industry Amendment Act 2005
Part 1 - Preliminary
New section 258 - Definitions for ch 8
New section 258 provides definitions for the chapter 8.
New section 259 - References to authority
New section 259 provides that for this chapter, references in a provision of
the unamended Act, chapter 3, to the authority is taken to be a reference to
the commissioner. This amendment is being made because this Bill
abolishes the Authority.
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Sugar Industry Amendment Bill 2005
New section 260 - References to unamended Act
New section 260 provides that if this chapter states that a provision of the
unamended Act continues to apply, the provision applies as if the amending
Act has not been enacted.
Part 2 -Sugar vested in QSL
New section 261 - Payments by QSL to mill owners
New section 261 ensures that, if QSL has not, before the commencement of
this Bill, made any payments to mill owners for sugar that has vested in
QSL, the obligation on QSL to make the payment continues.
New section 262 - Payment schemes
New section 262 removes any doubt that the repeal of section 105 (Sugar
Quality Standards) of the Act by this Bill does not, after the
commencement of this Bill, prevent QSL giving effect to a sugar quality
standard.
New section 263 - Obligations of mill owners
New section 263 will ensure that the operation of section 107 of the Act is
preserved after the commencement of this Bill. Section 107 currently
enables a mill to retain local consumption exempt sugar for local
consumption. The obligations in section 107 that a mill owner must give
written notice to QSL of the amount of local consumption sugar sold and
maintain records of the sales is preserved by this new section.
Part 3 - Exemptions
New section 264 - Definitions for pt 3
New section 264 provides definitions for the new part 3.
New section 265 - Late exemption applications
New section 265 will ensure that any late applications for exemption from
vesting during the 2005 crushing season continue to be dealt with
following the repeal of those exemption provisions by this Bill. Currently
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Sugar Industry Amendment Bill 2005
section 107E of the Act requires that an application for exemption from
vesting must be made to the Sugar Authority by 16 September in the
crushing season to which the application relates. An application for a "late
exemption" can be made after that date.
New section 266 - Decision made after commencement on late
exemption application
New section 266 will ensure that a decision is made on any late
applications for exemption from vesting during the 2005 crushing season
following the repeal of those exemption provisions by this Bill. The new
section preserves the application of sections 107H to 107L and 107O of the
Act as if the amending Act had not been enacted and a reference to the
Authority was a reference to the Commissioner.
Details of the preserved sections are:
Section 107H currently requires the Sugar Authority to make a decision on
an exemption application within 7 days of receipt or, if further information
is sought, within 7 days of receiving that information.
Section 107I currently requires the Sugar Authority to grant an exemption
application if satisfied--
· the applicant is the owner of the relevant sugar source; and
· the proposed use of the sugar to be exempted under the
application is an exempt use.
Section 107J currently enables the Authority, in granting a late exemption
application, to impose conditions on the exemption the authority considers
necessary or desirable to ensure the exempt sugar under the application is
used only for an exempt use. The power to impose conditions only applies
to late exemption because the Authority will have sufficient details with
those applications (including a copy of a contract, agreement or
understanding) to devise meaningful conditions. Insufficient details will be
required with an exemption application other than for a late exemption to
allow meaningful conditions to be imposed.
Section 107O currently requires the Authority to provide an applicant with
a notice of refusal of exemption application as soon as practicable after it
makes a decision to refuse the application.
New section 267 - Application for amendment of exemption
New section 267 enables a supplier to apply, after the commencement of
this Bill, to the Sugar Industry Commissioner for an amendment to the
supplier's exemption from vesting for the 2005 season. The new section
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Sugar Industry Amendment Bill 2005
preserves the operation of section 107P the Act as if the amending Act had
not been enacted and a reference to the Authority was a reference to the
Commissioner. Section 107P currently enables a person to apply for a
variation of that person's exemption. If an Applicant is granted an
Exemption, and for some reason they can no longer use the sugar for the
Exempted Use or, in the case of a late exemption the On-User has changed,
the Applicant must apply to the Sugar Authority for a variation of the
Exemption. The Authority may grant a variation to the Exempted Use on
sighting appropriate evidence of the new proposed use. The Authority may
recover its costs of considering a variation.
New section 268 - Improper use of exempt sugar after commencement
New section 268 continues the offence of improper use of sugar from the
2005 season that applies where sugar has been used other than in
accordance with the exemption from vesting granted.
The current section 107Q sets out the ways in which exempt sugar can be
used. The holder of an Exemption or the On-User may only use the sugar
referred to in that exemption in the following ways:
1. for the Exempt Use specified in the Exemption Certificate;
2. for a Variation on the Exempt Use approved by the Authority; or
3. in a contract with Queensland Sugar Limited.
If sugar is used in any other way apart from above, for example it sells the
sugar to someone other than QSL without an exemption certificate, the
exemption certificate is void and the sugar should be taken to have vested
in QSL on manufacture.
Current section 107V makes it an offence to use exempt sugar improperly.
The penalty is 3000 penalty units.
The amendment preserves the operation of sections 107Q and 107V as if
this amending Act had not been enacted.
New section 269 - Annual returns given after the commencement
New section 269 continues the obligation on suppliers granted an
exemption from vesting for the 2005 season to lodge an annual return
detailing the use made by the supplier of the sugar the subject of the
exemption.
Current section 107R requires a person who has been granted an
exemption, other than a late exemption, to lodge an annual return by no
later than 31 January in the year following its grant. The annual return will
require the applicant to account for how the sugar the subject of the
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Sugar Industry Amendment Bill 2005
exemption was used. This requirement is a consequence of not requiring
applicants to provide details of on-users at the time the exemption is
granted. Significant penalties have been provided for failure to provide a
return by the set date.
Current section 107S enables the Authority to seek further information or
documents to clarify the annual return. The Authority may also require an
applicant to verify the correctness of a document by requiring a statutory
declaration. The notice seeking further information can only be issued
within 15 sitting days of the 31 January deadline for the lodging of annual
returns.
Current section 107W makes it an offence to give the authority a periodic
estimate or annual return containing information the person knows is false
or misleading in a material particular. The penalty is 3000 penalty units.
The amendment preserves the operation of sections 107R, 107S and 107W
as if this amending Act had not been enacted and references to the
Authority were to the Commissioner.
New section 270 - Further documents or information for annual
return
New section 270 preserves the right to seek further information regarding
annual returns lodged by a supplier for the 2005 season detailing the use
made by the supplier of the sugar the subject of the exemption. This power
formerly resided in the Sugar Authority but because this Bill is abolishing
the Authority, the power is being transferred to the Sugar Industry
Commissioner.
Current section 107S enables the Authority to seek further information or
documents to clarify the annual return. The Authority may also require an
applicant to verify the correctness of a document by requiring a statutory
declaration. The notice seeking further information can only be issued
within 15 sitting days of the 31 January deadline for the lodging of annual
returns.
The amendment preserves the operation of section 107S as if this amending
Act had not been enacted and references to the Authority were to the
Commissioner.
New section 271 - Exempt matter after commencement
New section 271 will continue the exemption from the application of the
Freedom of Information Act 1992 of documents relating to use of sugar the
subject of exemptions from vesting during the 2005 season.
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Sugar Industry Amendment Bill 2005
Current section 107T provides that a document held by the Authority in
connection with an application for exemption or the granting of exemption,
including periodic estimates and annual returns, is exempt matter under the
Freedom of Information Act 1992. It is essential that the information is
exempt matter because it will be of a highly commercially sensitive nature
and for industry to take up new and innovative uses of sugar on the
domestic market it will need to be confident in the integrity of the system.
The amendment preserves the operation of section 107T as if this
amending Act had not been enacted and references to the Authority were to
the Commissioner.
New section 272 - False or misleading application for amendment of
exemption made after commencement
New section 272 preserves the offence for a person making an application
for an exemption for vesting or an amendment to an application for vesting
during the 2005 season after the commencement of this Bill.
Current section 107U makes it an offence to include false or misleading
information in an exempt sugar application or an application to vary an
exemption. The penalty for the offence is 3000 penalty units.
The amendment preserves the operation of section 107U as if this
amending Act had not been enacted.
New section 273 - Executive officers of corporation
New section 273 preserves the offence of executive officers failing to
ensure that a corporation complies with the requirements for exemption for
vesting during the 2005 season.
Current section 107X provides for personal liability of executive officers of
corporations that fail to comply with the exempt sugar provisions.
The amendment preserves the operation of section 107X as if this
amending Act had not been enacted.
New Part 4 - Queensland Sugar Limited
New section 274 - QSL's audited financial statements for 2005/2006
financial year
New section 274 requires the Authority to provide the Minister with a final
audited financial statement regarding vesting for the 2005/2006 financial
year.
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Sugar Industry Amendment Bill 2005
New Part 5 - Dissolution of Sugar Authority
New section 275 - Definitions for pt 5
New section 275 inserts definitions for the new part 5 of chapter 10 of the
Act. The new part 5 provides transitional provisions relating to the
dissolution of the Sugar Authority.
New section 276 - Transfer and dissolution
New section 276 provides that on commencement the assets and liabilities
of the Sugar Authority transfer to and become the assets and liabilities of
the Sugar Industry Commissioner.
New section 277 - Continuity of proceedings and matters
New section 277 enables proceedings against the Sugar Authority
commenced before the commencement of this Bill to be continued against
the Sugar Industry Commissioner. The new section also provides that all
matters started by the Authority before the commencement may be
completed by the Sugar Industry Commissioner.
New section 278 - Employees
New section 278 terminates the employment of employees of the
Authority. The rights of the persons may be exercised against the Sugar
Industry Commissioner. This provision has been included for abundant
caution but in fact there are no employees of the Authority.
New section 279 - Members cease holding office
New section 279 terminates the appointment of members of the Authority
without compensation. This provision has been included for abundant
caution but in fact the only member of the Authority is the Sugar Industry
Commissioner. The Commissioner's remuneration will not be affected by
the abolition of the Authority.
New Part 6 - Appeals
New section 280 - Appeal to District Court against authority's
decision.
New section 280 preserves the right of an applicant mentioned in the
current section 107H to appeal to the District Court or to continue an action
commenced against the decision of the authority.
The current section 107H requires the Sugar Authority to make a decision
on an exemption application within 7 days of receipt or, if further
information is sought, within 7 days of receiving that information.
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Sugar Industry Amendment Bill 2005
Current section 234A enables appeals to the District Court from decisions
of the Sugar Industry Authority regarding matters associated with the
granting of exemptions from the vesting of sugar.
New Part 7 - Competition policy legislation
New section 281 - Definitions for pt 7
New section 281 provides definitions for division 6 of the new chapter 8,
part 7 of the Act. The new part 7 provides transitional provisions relating
to competition policy legislation.
New section 282 - Pooled export contracts made before commencement
New section 282 authorises contracts for the pooled export of sugar made
under the Act before the commencement of these amendments for the
purposes of the Trade Practices Act 1974 (Cth) (TPA). This section is
necessary because transactions that are, before the commencement of these
amendments, part of the sugar single desk such as:
· the creation of pools for sugar
· the setting of a common price for export sugar and
· incentives schemes of premiums and discounts and allowances
may, after the commencement of these amendments be in breach
of the TPA
New section 283 - Export contracts made before commencement
New section 283 authorises contracts made for the export of sugar made
under the Act before the commencement of these amendments for the
purposes of the TPA. This section is necessary because transactions that
are, before the commencement of these amendments, part of the sugar
single desk such as:
· supply of sugar by mill owners to QSL
· payment of a price for sugar by QSL to the mill owners under the
contract
· the receipt of a price for sugar by the mill owners from QSL
under the contract
· the calculation of the prices to be paid by QSL to each mill owner
by applying a formula apportioning some or all of the sale
proceeds and costs from the sugar sold in export markets
between some or all of the mill owners who have entered into the
contract
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Sugar Industry Amendment Bill 2005
· a financial incentive scheme of premiums, discounts and
allowances relating to the quality of sugar supplies by the mill
owners and
· the export by QSL of sugar acquired under the contract may, after
the commencement of these amendments be in breach of the
TPA.
New Part 8 - Injunctions
New section 284 - Definitions for pt 8
New section 284 provides definitions for Part 8 of the new chapter 8 of the
Act. The new Part 8 provides transitional provisions relating to
injunctions.
New section 285 - Undecided applications taken to have been
withdrawn
New section 285 provides that if an interested entity applied, before the
commencement of these amendments, under section 247 of the Act, to the
Supreme Court for an injunction to restrain conduct under provisions being
repealed by these amendments, those proceedings are taken to have lapsed.
New section 286 - Injunctions of no effect after commencement
New section 286 provides that if the Supreme Court has, on the application
of an interested entity, granted an injunction under section 247 of the
unamended Act, the injunction is of no effect after the commencement.
New section 287 - Non-application of ss 285 and 286 in relation to
improper use of exempt sugar
New section 287 provides that new sections 285 and 286 above do not
apply if the interested entity is the commissioner and the repealed provision
is the unamended Act section 107V. 107V makes it an offence to use
exempt sugar improperly. The penalty is 3000 penalty units.
Amendment of schedule (Dictionary)
Clause 21 amends the dictionary to delete definitions that are no longer
relevant following passage of this Bill and include appropriate new
definitions.
© State of Queensland 2005