Wednesday, 4 March 2015
Regulations and Determinations
Competition and Consumer (Industry Code — Port Terminal Access (Bulk Wheat)) Regulation 2014; Disallowance
The government opposes the disallowance motion. Australia's $6.8 billion wheat export industry is a reliable supplier of high-quality products. The coalition government released a mandatory port access code of conduct for bulk wheat exports on 19 September 2014. The code is made under the Competition and Consumer Act 2010, and penalties from that act apply to breaches of the code. The code applies to all port terminal service providers.
The code limits red tape by exempting port terminal operators that meet certain conditions from having to comply with certain code requirements at particular ports. Exemption significantly reduces the regulatory burden. However, exempt port terminals still have to comply with parts 1 and 2 of the code, including transparency and fair-dealing obligations, as well as our requirement to have standard terms and prices. There are two pathways to exemption: a competitive analysis by the Australian Competition and Consumer Commission, the ACCC, or by satisfying criteria relevant to cooperatives, as decided by the Minister for Agriculture. Exemptions are made on a port-by-port basis.
Cooperatives follow significantly different business models, which work to benefit members who are growers rather than shareholders. In recognition of this, subclause 5(1) provides for grower owned cooperatives to have their regulatory burden and associated costs reduced and, therefore, maximise returns to growers. The exemption only applies to cooperatives with sound governance arrangements and whose members account for more than two-thirds of all growers in the relevant grain catchment area. This power rests with the Minister for Agriculture, as it is not appropriate for the ACCC, which has specialised skills in undertaking competition assessments, to fulfil this role. The Minister for Agriculture needs to be satisfied that these conditions are met before approving the exemption. The Minister for Agriculture made a determination on 17 November 2014 to exempt all four of CBH Limited's ports in Western Australia. The code includes safeguards that enable the minister to revoke a determination made under subclause 5(1).
Under subclause 5(5), exemptions can be revoked by the Minister for Agriculture if the circumstances for granting the exemption no longer apply, or if the minister is satisfied that the continuation of the exemption is not in the interests of relevant grain producers. Subclause 5(4) provides for grain producers, or groups of grain producers, to write to the minister if they are concerned about the impact of an exemption. I advise the Senate that, since the minister's determination on 17 November 2014 to exempt CBH Limited, no grain producers have raised concerns with the minister.