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
Except to the extent of the uses permitted under the
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of the Australian Parliament in the course of their official
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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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