Monday, October 19, 2009

ACCC learning on the job

This is a little bit heavy for my normal rant, but I think it is important because it demonstrates how serious the Australian Competition and Consumer Commission (ACC) is serious about ensuring an equitable regime for wheat exporters. This year they were caught in a Mexican standoff and it is fair to say neither side was totally satisfied with the outcome or process. I have heard complaints from various staff and directors of bulk handling companies as well as the heads of global grain trading organizations - competitive tension never hurts anyone I say.

Under the Wheat Export Marketing Act 2008, accredited wheat exporters that own or operate bulk grain export facilities were required to have an approved port access undertaking in place before October 1.

So a week or so prior to the deadline, the ACCC finally approved the proposed port access arrangements of grain handlers CBH, GrainCorp and ABB Grain subsidiary AusBulk. Essentially the terms of the new access arrangements include the prohibition of any port operator engaged in anti-competitive discrimination for the benefit of its own business.

The ACCC had previously rejected access arrangements proposed by port operators CBH, ABB and GrainCorp, saying the arrangements needed greater clarity and transparency for wheat exporters.

The port access terms approved by ACCC include:
  • Clear and transparent port loading protocols that port operators are obliged to follow in managing demand shipping slot allocations.

  • Obligations on port operators to negotiate in good faith on price and non-price offers of access to port terminal services• If negotiation fails, the ability of wheat exporters to seek mediation or binding arbitration on port terminal services

  • A set of clear and certain minimum non-price terms and conditions of access to port terminal services for wheat exporters who opt for a standard offer• Obligation on each port operator to publish its standard prices for port terminal services at least one month before commencement of each new wheat exporting season.

  • Obligations on each port operator to publish certain port terminal information to provide greater transparency over its operations.

While not to everyone’s liking, particularly the bulk handlers, at least now we have clarified what the undertakings cover and there is a standard set of rules in place to provide greater transparency and a formal process to handle disputes. The application of these access undertakings may be tested in a formal arbitration process. This will help the ACCC learn about the actual application of these undertakings and, if so, allow them to alter or tighten them where necessary.

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