Bills Digest 13 1996-97
Trade Practices Amendment (Industry Access Codes) Bill 1996
WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments.
This Digest was available from 2 August 1996.
CONTENTS
Trade Practices Amendment (Industry Access Codes) Bill 1996
Date Introduced: 27 June 1996
House: Senate
Portfolio: Treasurer
Commencement: Royal Assent
To streamline the formal procedures for granting access to third parties
(under the national competition policy reforms) to infrastructure facilities
and networks of national significance. The Bill amends the Trade Practices
Act 1974.
On 29 March 1995, the Competition Policy Reform Bill 1995 was introduced
into Parliament for debate. The Bill implemented the then Government's
response to the Hilmer proposals for national competition reform. That
Bill was passed and received the Royal Assent on 20 July 1995. Essentially,
the Competition Policy Reform Act 1995 brings all business activity
in Australia under the same rules of competition that apply to restrictive
trade practices (Part IV of the Trade Practices Act 1974).
Another aspect of the Competition Policy Reform Act 1995 was
to open-up, by way of third party access, competition with major business
enterprises of national significance, such as electricity suppliers and
gas pipeline operators. These large-scale enterprises have natural monopoly
characteristics which involve both positive or negative aspects for consumers.
Positive in the sense that they can deliver services more efficiently
but negative in that consumers can become captive to one single supplier.
These aspects apply whether the monopoly is private or public. National
competition policy promotes competition in a free market to the benefit
of consumers and business users. When competition requires access to networks,
it is necessary to allow third parties access to existing large scale
infrastructure, such as electricity grids, pipelines and rail lines on
fair terms and conditions. As an example, electricity users are able to
benefit if they can purchase electricity, via the existing grid, from
innovative low cost generators. This process is referred to in the Trade
Practices Act 1974 as Access to Services (new Part 111A of
the Trade Practices Act 1974).
This new access regime operates in a way that will allow significant
services to be 'declared' by the relevant Minister (see further comment,
below) after recommendations from the National Competition Council. The
declaration of a service means that it is considered that it will promote
competition if third parties have access. Additional factors which must
be considered in relation to a declaration include that a parallel infrastructure
would be uneconomical to establish, that third party access will not cause
undue risk to health or safety and that access is not against the public
interest. If the significant service is a State or Territory owned enterprise,
the relevant Minister is the State or Territory Minister.
Once a service is declared, parties are free to negotiate their own
terms and conditions of access. If there is a dispute, the matter can
be referred to the Australian Competition and Consumer Commission (ACCC)
for determination. An alternative is for the service operator to first
approach the ACCC and establish, by way of an access undertaking,
the terms and conditions it would require of a third party applicant.
If the ACCC accepts the undertaking then Ministerial declaration is avoided.
Under the present legislation, the ACCC is required to consult publicly
on each of the voluntary access undertakings lodged by an operator of
a significant service. In some cases, the access undertaking may be similar
to other major players in the industry e.g. the various State electricity
grids. The Bill proposes that the procedure for access undertakings be
streamlined so that there is one round of public consultation to establish
a single industry-wide access code. Any subsequent access undertakings
are then measured against the single industry-wide access code without
the need for another round of public consultations and submissions to
the ACCC.
Apart from avoiding duplication this proposal provides a more coherent
approach in assessing the key terms and conditions in any access undertaking,
thus enhancing the access regime as a whole.
The Bill implements the proposed amendments by way of a Schedule to
the Bill. This means that the Main Provisions will be referred
to as items in the Schedule rather than clauses in the Bill.
Item 3 provides an exemption for the ACCC from the existing obligation
under section 44ZZA(4) of the Trade Practices Act 1974 to engage
in a round of public consultation. This exemption is only available when
an access undertaking complies with the accepted industry-wide access
code. This exemption is expressed as a proposed new subsection 44ZZA(4A).
Item 4 inserts a proposed new section 44ZZAA into the Trade
Practices Act 1974. This section provides the procedures for the acceptance
of an industry-wide access code by the ACCC. The ACCC is obliged to engage
in public consultation before it accepts a particular industry-wide access
code.
Item 5 establishes a public register of access undertakings and
access codes. The public register is maintained by the ACCC.
Brendan Bailey Ph. 06 277 2434
1 August 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
PRS staff are available to discuss the paper's contents with Senators
and Members and their staff but not with members of the public.
ISSN 1323-9032
Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1996.
This page was prepared by the Parliamentary
Library, Commonwealth of Australia
Last updated: 5 August 1996
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