The Australian Competition and Consumer Commission has issued a draft decision proposing to grant conditional authorisation to Australian Amalgamated Terminals Pty Ltd to allow it to operate motor vehicle and general cargo handling facilities, known as terminals, at five ports around Australia.
The first condition would provide a mechanism for stevedores other than AAT's shareholders to seek access to AAT's terminals. Another condition requires that AAT provide end-users of its terminals with a dispute resolution process.
AAT applied for authorisation as part of the July 2009 settlement of court proceedings in which the Federal Court held that former P&O and Patricks stevedoring companies and others entered into anti-competitive agreements in connection with the establishment of AAT, in contravention of the Trade Practices Act 1974.
The authorisation process exposes otherwise anti-competitive conduct to a transparent process where affected parties have the opportunity to provide comments on the costs and benefits of the conduct.
"Given AAT's vertical integration in stevedoring, the ACCC is concerned there is an incentive to deny access to its terminals to new entrants in competition with its shareholders," ACCC chairman, Graeme Samuel, said today. "Since the establishment of AAT, no new entrant stevedore has sought to operate at any of AAT's terminals."
"The first condition is required to ensure there is a transparent and independent process so that stevedoring businesses have a better opportunity to use AAT's terminals and provide competition to AAT's stevedoring shareholders at ports in Brisbane, Port Kembla, Melbourne, Launceston and Adelaide.
"It provides that a stevedore and AAT first try to reach a commercial agreement, with the potential for the ACCC to act as an arbitrator if the parties cannot agree."
Public consultation on AAT's application for authorisation highlighted concerns about the inability for terminal end users to negotiate directly with AAT due to the nature of contractual relationships in the industry. While the price and quality of the terminal services available at a port has a direct impact on the business of importers and exporters, they tend to have no direct contractual relationship with the terminal operator.
The proposed dispute resolution process can be accessed by importers and exporters which use AAT's terminals and provides for mediation and, ultimately, expert determination. The ACCC considers that this may assist terminal end-users to negotiate directly with AAT.
The ACCC is now inviting comments on the draft determination particularly from port corporations, stevedores and terminal end users on whether the proposed conditions will address concerns and how they will support the existing mechanisms provided by some port corporations in their oversight role of AAT. The ACCC's draft determination and information about making a submission will be available from the ACCC website, www.accc.gov.au/AuthorisationsRegister and by following the links to this matter.
Parties wishing to make submissions should do so by 2 November 2009.
Authorisation provides protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.