BILLS DIGEST NO. 121, 2017–18              18 June 2018

Commerce (Trade Descriptions) Amendment Bill 2018

Jonathan Mills
Law and Bills Digest Section

Date introduced:  28 March 2018

House:  House of Representatives

Portfolio:  Law Enforcement and Cybersecurity

Commencement:  Sections 1 to 3 will commence on Royal Assent. Schedule 1 commences the day after Royal Assent.

Schedule 2 will commence on proclamation or six months after Royal Assent, whichever is sooner.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at June 2018.

Purpose of the Bill

The purpose of the Commerce (Trade Descriptions) Amendment Bill 2018 (the Bill) is to amend the Commerce (Trade Descriptions) Act 1905 (the CTD Act) to introduce into the trade descriptions regime the same protections for certain types of country of origin representations as those that already exist under the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Australian Consumer Law). This will bring the regulation of false trade descriptions relating to country of origin claims for importing goods into line with the regulation of goods under the Australian Consumer Law.

Structure of the Bill

This Bill is divided into two Schedules.

Schedule 1 amends the CTD Act to introduce the exceptions for country of origin representations that are available under the Australian Consumer Law, into the control of trade descriptions under the CTD Act.

Schedule 2 amends the CTD Act to permit information standards made under the Australian Consumer Law, as in force from time to time, to be incorporated into regulations made under the CTD Act.

Background

The CTD Act regulates the trade descriptions applied to goods imported to and exported from Australia. Relevantly to the present Bill, the CTD Act prohibits the importation of goods bearing a false trade description.[1] The current provisions in the CTD Act do not contain the exceptions for certain country of origin claims that are contained in the Australian Consumer Law.

The Australian Consumer Law contains provisions preventing a person from engaging in misleading or deceptive conduct or making false or misleading representations.[2] Part 5-3 of the Australian Consumer Law provides that certain country of origin representations made about goods do not contravene those provisions. This Part of the Australian Consumer Law sets out the tests used to assess whether claims that certain goods are from a particular country of origin are justified.

A broad prohibition against false country of origin representations first appeared on the Australian statute books with the Trade Practices Act 1974 and exceptions or ‘safe harbours’ were introduced by the Trade Practices Amendment (Country of Origin Representations) Act 1998, with the current form of section 255 being introduced into the Australian Consumer Law by the Competition and Consumer Amendment (Country of Origin) Act 2017.[3]

In particular, the first column of the table in subsection 255(1) sets out the specific country of origin representations that will not be considered to contravene the listed provisions of the Australian Consumer Law so long as the requirements specified in the second column are met. The table is extracted below:

Table 1 – Country of origin representations in subsection 255(1) of the Australian Consumer Law

Country of origin representations

Item

Representation

Requirements to be met

1

A representation that goods were grown in a particular country

(a)each significant ingredient or significant component of the goods was grown in that country; and

(b) all, or virtually all, processes involved in the production or manufacture of the goods happened in that country.

2

A representation that goods are the produce of a particular country

(a) the country was the country of origin of each significant ingredient or significant component of the goods; and

(b) all, or virtually all, processes involved in the production or manufacture of the goods happened in that country.

3

A representation that goods were made or manufactured in, or otherwise originate in, a particular country

(a) the goods were last substantially transformed in that country; and

(b) the representation is not a representation to which item 1 or 2 of this table applies.

4

A representation in the form of a mark specified in an information standard relating to country of origin labelling of goods

the requirements under the information standard relating to the use of that mark.[4]

Source: Australian Consumer Law, subsection 255(1).

The remaining subsections of section 255 provide interpretation for the terms used in the table.

Committee consideration

Senate Selection of Bills Committee

The Selection of Bills Committee recommended that the Bill not be referred to a committee for inquiry.[5]

Senate Standing Committee for the Scrutiny of Bills

The Committee had no comment on the Bill.[6]

Policy position of non-government parties/independents

At the time of writing no non-government parties or independents had expressed a position on the Bill.

Position of major interest groups

At the time of writing no major interest groups had expressed a position on the Bill.

Financial implications

The Explanatory Memorandum states that there will be no financial impact from this Bill.[7]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is does not engage any of the rights or freedoms.[8]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights considered that the Bill did not raise any human rights concerns.[9]

Key issues and provisions

Schedule 1 amends the control of trade descriptions under the CTD Act to introduce for imported goods, by reference, the same requirements and exceptions for making country of origin representations as are found in the Australian Consumer Law. The country of origin requirements under the Australian Consumer Law are discussed above in the Background section.

Item 4 inserts proposed section 10AA to provide that, for the purposes of sections 9, 9A and 10 of the CTD Act,[10] goods are not taken to have or bear a false trade description if they make a country of origin representation of a kind listed in column 1 of the table in subsection 255(1) of the Australian Consumer Law, provided they meet the corresponding requirements in column 2 of that table.

Proposed subsection 10AA(2) further provides that subsections 255(2), (5), (7), (8) and (9) of the Australian Consumer Law apply to proposed subsection 10AA(1) in a corresponding way to their application to subsection 255(1). These subsections provide further details of the form and application of the country of origin claims.

Item 5 provides that proposed section 10AA applies to goods imported on or after commencement of the item.

Schedule 2 amends the CTD Act to permit information standards made under the Australian Consumer Law as in force from time to time, to be incorporated by reference in regulations made under the CTD Act, specifically the Commerce (Trade Descriptions) Regulation 2016.

Item 1 of Schedule 2 inserts proposed subsection 7(3A) into the CTD Act to provide that, despite subsection 14(2) of the Legislation Act 2003, regulations made under section 7 may apply, adopt or incorporate ‘any matter contained in an information standard as in force or existing from time to time.’

This express provision is necessary to override subsection 14(2) of the Legislation Act 2003, which states:

(2)  Unless the contrary intention appears, the legislative instrument or notifiable instrument may not make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time.

Item 1 also inserts proposed subsection 7(3B) to clarify that, for the purposes of subsection 7(3A), an information standard is one made under section 134 or declared under section 135 of the Australian Consumer Law.

The intent of subsection 14(2) of the Legislation Act is twofold—to avoid uncertainty in the law (as people may have difficulty determining the current version of the incorporated instrument) and to limit the circumstances in which the law can change without parliamentary scrutiny (due to a change in the incorporated instrument).  However, as the instruments to be incorporated are legislative instruments made under Commonwealth legislation,[11] the approach seems to have raised little concern in this instance.

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[1].              Commerce (Trade Descriptions) Act 1905, sections 9-10.

[2].              Competition and Consumer Act 2010, Schedule 2-The Australian Consumer Law (Australian Consumer Law), sections 18, 29(1)(a) and (k) and 151(1)(a) and (k).

[3].              For a history and overview of the country of origin provisions in the Australian Consumer Law, see: P Pyburne, Competition and Consumer Amendment (Country of Origin) Bill 2016, Bills Digest, 9, 2016–17, Parliamentary Library, Canberra, 2016.

[4].              Australian Consumer Law, subsection 255(1).

[5].              Senate Selection of Bills Committee, Report, 5, 2018, The Senate, 10 May 2018, p. 4.

[6].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 5, 2018, The Senate, 9 May 2018, p. 12.

[7].              Explanatory Memorandum, Commerce (Trade Descriptions) Amendment Bill 2018, p. 3.

[8].              The Statement of Compatibility with Human Rights can be found at pages 11 to 13 of the Explanatory Memorandum to the Bill.

[9].              Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 4, 2018, The Senate, 8 May 2018, p. 96.

[10].              These are the sections of the CTD Act that prohibit the importation of goods bearing false trade descriptions.

[11].              See paragraph 131E(1)(i) of the Competition and Consumer Act 2010.