Shipping Australia is encouraged by the Government’s cautious approach to making changes to shipping competition regulation.
In its omnibus response to the Harper Review yesterday, the Government noted that it remains open to the Harper Review recommendation to replace the existing Part X of the Competition and Consumer Act with a block exemption. This means that implementation will be considered following further review.
Shipping Australia has previously detailed the errors in the Harper Review’s assessment of the shipping industry.
“With such a broad scope for review, the Harper Review Panel just didn’t have the time to properly study and come to understand the shipping sector,” Shipping Australia CEO, Rod Nairn AM said.
“Of course, we would have preferred the Government to dismiss the recommendation and commit to retaining the current legislation, but at least there is recognition that further consultation is required before a final outcome is decided.”
It is good that the ACCC will be given the power to grant block exemptions, but this does not mean that there should be an ungodly rush to remove Part X.
There are many areas where the granting of a block exemption can reduce unnecessary bureaucracy and red tape, but shipping is a business that requires a high level of investment and therefore, the industry requires legislative certainty to justify that investment.
“The retention of Part X is in the greater interest of Australian importers and exporters, it benefits all Australians. It has proven this by underpinning an unprecedented level of competition, providing Australian shippers and producers with internationally competitive freight rates on fast, fuel-efficient, modern vessels to our key export markets.
“Part X provides complete certainty, is light on red tape and encourages competition through the absence of barriers of entry,” he said.
Shipping lines will be reluctant to accept the increased business risk of relying on a self-assessment, as to whether their operations might just fit within the minimum standard features of a block exemption.
Such uncertainty would undoubtedly cause shipping lines to re-evaluate the risk of doing business here. The consequence of that would mean fewer services, less competition and higher shipping rates, this is opposite to the Government’s stated intent.
While no block exemption can provide the certainty of the current Part X legislation, Shipping Australia is committed to working closely with the Government and the ACCC, to develop a comprehensive and workable block exemption that would encourage international shipping companies to continue to trade to and from Australia.
“But let’s not jump to change legislation that is working well.
“We need to work through the full details of any proposed block exemption and any associated registration requirements. We need to have the opportunity to examine just how it can work and where it may fail, before any decision is taken to relinquish Part X,” Rod Nairn said.
Editor’s note:
For additional information contact Rod Nairn, chief executive officer on 0449 902 457.
Shipping Australia is a peak national shipping association comprising 36 member shipping lines and shipping agents that would be involved with over 70 per cent of Australia’s container and car trade, over 60 per cent of our break bulk and bulk trades, and significant cruise ship and tug operations.
