The need for clearer information and better disclosure for people beginning, or involved in, business relationships is the focus of the Australian Competition and Consumer Commission's submission to the House of Representatives Standing Committee on Industry, Science and Technology Inquiry into Fair Trading.
Acting ACCC Chairman, Mr Allan Asher, said today that many of the small business complaints to the ACCC, and other bodies, had their origin in inadequate, unclear, or misleading disclosure.
"The ACCC believes that many problems involving small businesses could be prevented by the use of codes of conduct which set down minimum disclosure requirements and, if and when disputes arise, there is a quick, cheap, informal and market sensitive way of settling these disputes," Mr Asher said. "The ACCC recommends code rules should follow agreed benchmarks for information disclosure and that the codes of conduct should also follow benchmarks for alternative dispute settlement.
"While there are existing codes of conduct or regulations covering disclosure in the oil and retailing industries and the franchise sector which covers small businesses involving franchising or leasing relationships with a larger and stronger party, there needs to be a review of these codes to ensure that they meet these benchmarks suggested by the ACCC."
Consistent with the Commonwealth Governments policy of promoting small business, the ACCC has introduced a small business program covering education, media, liaison and enforcement. The media, liaison and education part of the program is designed to increase small businesses awareness of both their rights and obligations under the Trade Practices Act.
The submission sets out the ACCC's enforcement activities where small businesses have been hurt by the unreasonable exploitation of small businesses. However, the submission argues for further legislative reform to increase access to remedies for small businesses and to form the basis of a culture of compliance for large firms involved in a relationship with small businesses. Included in the recommended legislative reform is the suggestion for a new provision to be included in the Trade Practices Act which requires compliance with a code of conduct. Such a provision may be used where voluntary codes have resulted in inadequate coverage of large businesses.
Acting ACCC Chairman, Mr Allan Asher, said today that many of the small business complaints to the ACCC, and other bodies, had their origin in inadequate, unclear, or misleading disclosure.
"The ACCC believes that many problems involving small businesses could be prevented by the use of codes of conduct which set down minimum disclosure requirements and, if and when disputes arise, there is a quick, cheap, informal and market sensitive way of settling these disputes," Mr Asher said. "The ACCC recommends code rules should follow agreed benchmarks for information disclosure and that the codes of conduct should also follow benchmarks for alternative dispute settlement.
"While there are existing codes of conduct or regulations covering disclosure in the oil and retailing industries and the franchise sector which covers small businesses involving franchising or leasing relationships with a larger and stronger party, there needs to be a review of these codes to ensure that they meet these benchmarks suggested by the ACCC."
Consistent with the Commonwealth Governments policy of promoting small business, the ACCC has introduced a small business program covering education, media, liaison and enforcement. The media, liaison and education part of the program is designed to increase small businesses awareness of both their rights and obligations under the Trade Practices Act.
The submission sets out the ACCC's enforcement activities where small businesses have been hurt by the unreasonable exploitation of small businesses. However, the submission argues for further legislative reform to increase access to remedies for small businesses and to form the basis of a culture of compliance for large firms involved in a relationship with small businesses. Included in the recommended legislative reform is the suggestion for a new provision to be included in the Trade Practices Act which requires compliance with a code of conduct. Such a provision may be used where voluntary codes have resulted in inadequate coverage of large businesses.