Tony Zappia (Makin, Australian Labor Party) Share this | Hansard source

It is very difficult to take one’s mind off the events in Victoria after listening to the previous speakers, but I accept that the business of this House must go on. I rise to speak in support of the Federal Court of Australia Amendment (Criminal Jurisdiction) Bill 2008. I welcome the introduction of this bill, which I am sure will also be welcomed by most Australians. This bill is related to the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008, which amends the Trade Practices Act 1974 and which introduces new offences for serious cartel conduct. These amendments in turn give the Federal Court jurisdiction to deal with those new offences and set up the necessary framework. Equally welcome is that, for the first time, serious cartel conduct will be criminalised and there will be uniform procedures across Australia, including a trial by jury. Serious breaches would carry a maximum penalty of 10 years imprisonment and a $220,000 fine. This is consistent with international penalties. Other provisions in the bill relate to the procedures of the court, which are matters that I will leave to my colleagues with legal expertise to pass comment on.

The bill is long overdue. It is long overdue that serious cartel conduct should be criminalised, and the Trade Practices Act amendment bill will do exactly that. However if the amendment is to be effective then the laws and processes relating to such prosecutions must also be in place. That is what this bill does. For years the difficulty of successfully prosecuting serious cartel conduct has been a cause of frustration for both the government and the wider community. Furthermore, the penalties relating to such conduct have been inadequate to act as a deterrent. Criminal cartel conduct is a matter which crosses state and national jurisdictions and is therefore quite rightly a matter over which the Federal Court should have jurisdiction. Furthermore, the ACCC, which has been empowered to conduct the necessary investigations and launch prosecutions, is also a national body.

The Federal Court of Australia, which began exercising its jurisdiction in 1977, already deals with a number of corporate matters, including the Australian Competition Tribunal. I note that the draft legislation has been the subject of widespread public consultation and that a number of submissions have been made, particularly by the legal fraternity. Given that any prosecutions under the legislation will undoubtedly be costly, drawn-out cases, every attempt should be made to close possible loopholes and minimise any ambiguity within the legislation. I note from the submission from the International Bar Association, a group which represents some 30,000 individual lawyers from across the world, that 15 jurisdictions worldwide already have criminal sanctions for cartel conduct. Of those, 11 jurisdictions may impose a term of imprisonment for cartel conduct, with the terms ranging from one to 10 years.

Under the legislation, if the Federal Court and a state or territory supreme court both have jurisdiction to hear a trial on indictment and a magistrate makes a committal order then the magistrate will have to determine which court should be named in the order. The magistrate will, however, be required to consult with the Director of Public Prosecutions and ultimately the Director of Public Prosecutions will make the final decision on which court an indictment should be filed in. The legislation creates criminal offences for making or giving effect to a contract, arrangement or understanding that contains a cartel provision with the intention of dishonestly obtaining a benefit.

Consistent with international best practice, the definition of a cartel provision applicable to both the criminal and civil regimes will reflect the OECD’s definition of hardcore cartel conduct. The OECD recommendation defines hardcore cartel conduct as an anticompetitive agreement, anticompetitive concerted practice or anticompetitive arrangement by competitors to fix prices, make rigged bids—which is otherwise known as collusive tenders—establish output restrictions or quotas, or share or divide markets by allocating customers, suppliers, territories or lines of commerce. This is a very broad range of activities that are generally very difficult to prove. In that respect I welcome the provisions in the related bill relating to the protection of witnesses and to telephone interception.

I note that this bill has been referred to the Senate Standing Committee on Legal and Constitutional Affairs for inquiry and report by 20 February 2009. I expect that the Senate committee will want to have a close look at the six submissions that were received as part of their inquiry, all of which came from the legal profession. Within those submissions, several matters were raised, including whether the Federal Court is the most appropriate jurisdiction to hear cartel conduct cases; whether the Federal Court is properly resourced to handle the workload; and matters relating to the presumption of bail, defence disclosure and jury selection. These are matters which I expect the minister is aware of and which the minister will respond to if specific recommendations arise from the Senate committee report. I note that the bill has the support of opposition members and I commend the bill to the House.

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