Auction variation17 Feb 2012
Under clause 9.5 of its 2011 undertaking, Viterra was required to vary its Port Loading Protocols and/or Standard Terms to introduce an auction system for the allocation of port terminal capacity.
Auction variation notice
Details of Viterra's proposed auction system were set out in its auction variation notice and accompanying submission.
Consultation paper
In considering the proposed auction system the ACCC conducted a public consultation process seeking views from industry and interested stakeholders.
Submissions on the consultation paper
The following submissions were received in response to ACCC's consultation paper.
Viterra's response
Viterra's responses to the submissions and related documents are available below.
Email dated 28 Feb 2012 is noted as being confidential, however Viterra has withdrawn its claim to confidentiality.
ACCC's objection notice
The variation process in the 2011 undertaking gives the ACCC the ability to object to all or any of the proposed variations to introduce an auction system, having regard to a range of matters listed in the undertaking. The ACCC issued an objection notice on 11 April 2012.
Consultation on the variation application
On 20 April 2012 Viterra Operations Ltd made an application to vary its Undertaking under section 44ZZA(7) of the Competition and Consumer Act.
The proposed variation would extend the timeframe by which Viterra must introduce an auction system, provide the ACCC with greater flexibility in its ability to withdraw an Auction Variation Notice, and include arrangements for reopening the shipping stem for the 2012-2013 export season if an auction system had not yet been introduced.
The ACCC invited industry and interested stakeholders to make submissions by 7 May 2012.
Submissions on the variation application
The ACCC commenced public consultation on the proposed variation to Viterra's 2011 Port Terminal Services Access Undertaking on 23 April 2012. Submissions were due by by 7 May 2012.
ACCC's decision to consent
On 9 May 2012 the ACCC made the decision, following consultation with stakeholders, to consent to Viterra’s application to vary its 2011 Port Terminal Services Access Undertaking.
In brief, the proposed variations:
- extended the timeframes in which Viterra must lodge a Revised Variation Notice
- extended the final date by which Viterra must introduce an auction system
- made arrangements for Viterra to open the shipping stem in mid August to all exporters (including its own trading arm) on a first-in, first-served (FIFS) basis to allocate capacity for the period 1 October – 31 January, and for the operation of the FIFS system to be extended further if necessary
- provided increased flexibility—for both Viterra and the ACCC to agree to extend timeframes; and for the ACCC to withdraw its objection notice.
Consultation on revised proposed auction system
The ACCC conducted public consultation on Viterra's revised proposed auction system as part of its informal assessment of Viterra’s revised proposed auction system.
In brief, the proposed changes included:
- changes to the way auction proceeds are rebated to exporters:
- modifications to the rebate formula that allocate a greater proportion of the auction proceeds to lower demanded shipping slots
- an annualised rebate pool
- a separate rebate pool for each port terminal
- limiting the quantity of capacity that an exporter is able to withdraw per round during the auction
- changes to the FIFS system that create uncertainty regarding the ability to acquire capacity through the FIFS system in order to incentivise exporters to participate in the auction.
The draft revised proposal that industry previously commented on during joint ACCC and Viterra consultation is also available below.
Submissions on revised proposed auction system
Revised variation notice
On 24 August 2012, Viterra submitted its revised variation notice pursuant to clause 9.6(f)(ii) of its 2011 Undertaking. A copy of the notice is below.
As the revised variation notice was substantially the same as the revised proposed auction system provided to the ACCC on 12 July 2012, and subject to industry consultation between 20 July 2012 and 3 August 2012, the ACCC did not consult.
ACCC withdraws objection notice
The ACCC decided on 5 September 2012 to withdraw the auction objection notice issued to Viterra on 11 April 2012 in response to its auction variation notice. The reasons for its decision are set out in the ACCC’s decision document.