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House of Representatives

Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008

Explanatory Memorandum

Circulated By the Authority of the Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, the Hon Chris Bowen Mp

Glossary

The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation Definition
ACCC Australian Competition and Consumer Commission
ASIC Australian Securities and Investments Commission
ASIC Act Australian Securities and Investments Commission Act 2001
Bill Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008
CDPP Commonwealth Director of Public Prosecutions
CPR Act Competition Policy Reform Act
Criminal Code Criminal Code Act 1995
Dawson Act Trade Practices Legislation Amendment Act (No. 1) 2006
Dawson Review Review of the Competition Provisions of the Trade Practices Act
Federal Court Federal Court of Australia
Federal Court Bill Federal Court of Australia Amendment (Criminal Jurisdiction) Bill 2008
MOU Memorandum of Understanding between the Commonwealth Director of Public Prosecutions and the Australian Competition and Consumer Commission regarding Serious Cartel Conduct
OECD Organisation for Economic Co-operation and Development
POC Act Proceeds of Crime Act 2002
TIA Act Telecommunications (Interception and Access) Act 1979
TP Act Trade Practices Act 1974
Tribunal Australian Competition Tribunal

General outline and financial impact

Criminal penalties for serious cartel conduct

The Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 ('the Bill') amends the Trade Practices Act 1974 ('the TP Act'), the Telecommunications (Interception and Access) Act 1979 ('the TIA Act') and the Proceeds of Crime Act 2002 ('the POC Act') to establish criminal penalties for serious cartel conduct, and to make related amendments.

Date of effect : Cartel criminal offences and parallel civil penalty provisions will commence 28 days after assent, ensuring that those who may be affected by the new provisions and related amendments will have adequate time to consider the provisions prior to their commencement. The remaining amendments made by the Bill (other than the amendments to section 165) commence on the 28th day after the day that the Bill receives Royal Assent. Under transitional arrangements, pre-commencement ACCC authorisations, and pre-commencement collective bargaining notices, that relate to cartels will continue in force.

Proposal announced : On 9 October 2007, the Labor Party made a pre-2007 election commitment to introduce legislation providing criminal sanctions for cartel conduct within 12 months if elected to office.

Financial impact : This Bill has no significant financial impact on Commonwealth expenditure or revenue.

Compliance cost impact : Low. This Bill criminalises conduct that was already prohibited under existing civil prohibitions. There is no ongoing compliance cost impact and a minimal transitional impact on businesses with lawful business arrangements, and the economy more generally.

Summary of regulation impact statement

Regulation impact on business

Impact : Low or no impact. A preliminary assessment has been undertaken and a regulation impact statement is not required, because the regulation impact on business is low.

Main points :

As noted above, this Bill criminalises conduct that was already prohibited under existing civil prohibitions. There is no ongoing compliance cost impact and a minimal transitional impact on businesses with lawful business arrangements, and the economy more generally.

Chapter 1 - What is serious cartel conduct?

Outline of chapter

1.1 The Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 ('the Bill') amends the Trade Practices Act 1974 ('the TP Act'), the Telecommunications (Interception and Access) Act 1979 ('the TIA Act') and the Proceeds of Crime Act 2002 ('the POC Act') to introduce criminal penalties and parallel civil sanctions for serious cartel conduct. This chapter provides an overview of the respective changes to the TP Act, and addresses the threshold question of what is serious cartel conduct. Changes to the POC Act and the TIA Act are discussed in Chapter 5: Investigation Powers.

Context of amendments

1.2 Competition is the primary means of enabling consumers to get the best product or service for the lowest price possible. A cartel is an agreement between competitors not to compete, by manipulating prices, sharing a customer base, restricting supply, or rigging a tender process. Such conduct harms consumers, businesses and the economy by increasing prices (including input prices), reducing choice and distorting innovation processes. The total annual cost of such conduct in Australia is difficult to quantify because its effects are dispersed and often felt indirectly, but it is likely to exceed many millions of dollars. Conservatively, the worldwide cost of cartels exceeds many billions of dollars each year (Organisation for Economic Co-operation and Development, Report on the nature and impact of hard core cartels and sanctions against cartels under national competition laws, 9 April 2002).

1.3 On 25 March 1998, the Organisation for Economic Co-operation and Development ('the OECD') initiated an anti-cartel program with the adoption of the Recommendation of the Council concerning Effective Action Against Hard Core Cartels (25 March 1998 - C(98)35/FINAL) ('the OECD Recommendation'). The OECD Recommendation defined 'hard core' cartel conduct (referred to in this explanatory memorandum as 'serious cartel conduct') as 'an anticompetitive agreement, anticompetitive concerted practice, or anticompetitive arrangement by competitors to fix prices, make rigged bids (collusive tenders), establish output restrictions or quotas, or share or divide markets by allocating customers, suppliers, territories, or lines of commerce'. The OECD Recommendation condemned hard core cartels as the most egregious violations of competition law, and called upon OECD members to ensure that their laws adequately prohibit such cartels and that they provide for effective sanctions, enforcement procedures and investigative tools with which to combat them.

1.4 Serious cartel conduct is already prohibited under existing provisions of the TP Act, although criminal sanctions do not apply. The restrictive trade practices provisions in Part IV of the TP Act currently prohibit competitors from making or giving effect to provisions of contracts, arrangements or understandings between competitors, where those provisions relate to cartel-type conduct.

1.5 However, with the exception of price fixing, the current provisions do not specifically prohibit the behaviour to the extent proposed by the OECD, yet the courts have interpreted the provisions to apply to the conduct found to be so egregious by the OECD.

1.6 The current provisions prohibit a corporation from making or giving effect to a provision in a contract, arrangement or understanding with actual or potential competitors that is an 'exclusionary provision', or that has the purpose, effect or likely effect of substantially lessening competition. The courts have interpreted the 'exclusionary provision' prohibition to prohibit three or the four types of conduct condemned by the OECD (output restrictions, market sharing and bid rigging). In relation to the second type of prohibition, which provides a 'default' competition rule for conduct in Australia, certain types of price fixing behaviour are deemed to be so damaging to economic welfare that they are prohibited 'per se' (that is, without need to demonstrate that they had the purpose, effect or likely effect of substantially lessening competition).

1.7 The four key types of conduct proscribed by the OECD are presently prohibited (although not explicitly) under a civil penalty regime, the object of which is to deter the parties from engaging in the conduct, including via the application of substantial penalties for a party found to have breached the prohibitions.

1.8 On 9 October 2007, the Labor Party committed that, if elected to office in November 2007, it would introduce legislation within the first 12 months of coming to office to give effect to the OECD Recommendation.

1.9 A number of arrangements supplement the criminal and parallel civil prohibitions of serious cartel conduct in this Bill, including:

proposed amendments to the Federal Court of Australia Act 1976 and other legislation to provide for committals, bail, practice and procedure, juries, sentencing and appeal processes within the Federal Court in relation to the indictable offences established by this Bill;
leniency arrangements in respect of serious cartel conduct, to be available for criminal cartel offences (from the Commonwealth Director of Public Prosecutions ('the CDPP')) and the parallel civil prohibitions (from the Australian Competition and Consumer Commission ('the ACCC')); and
that the CDPP and the ACCC will enter into a formal, publicly available Memorandum of Understanding ('the MOU'), which will establish procedures for the investigation of the cartel offences and the circumstances in which the ACCC will refer a case to the CDPP for prosecution.

Summary of new law

1.10 The key amendments in this Bill:

establish criminal penalties for serious cartel conduct, with maximum criminal penalties for individuals, of a 10-year jail term and/or a fine of $220,000 and for corporations, of fines mirroring the existing maximum pecuniary penalties for breaches of the civil penalty provisions (the greater of $10 million, or three times the benefit obtained if this can be determined, or otherwise 10 per cent of annual turnover);
provide parallel civil provisions for serious cartel conduct;
provide exemptions from the criminal and parallel civil prohibitions on cartel conduct, including if a cartel provision in a contract is for the purposes of a joint venture, and the joint venture is for the production and/or supply of goods or services;
enable individuals to be held directly liable for criminal and civil prohibitions in relation to cartel conduct through amendments to the ancillary liability provisions, as well as under mirror offences and civil penalties contained in the Schedule version of Part IV of the TP Act;
incorporate statutory bars in the TP Act to protect against double jeopardy;
modify existing investigatory powers and remedies to apply them to the criminal offences and parallel civil penalty prohibitions;
enable telecommunications interception to be used in addition to other tools to investigate breaches of the cartel offences;
ensure that the relevant Commonwealth, State and Territory courts are given jurisdiction as appropriate under the new arrangements;
provide for the protection of cartel information provided by whistleblowers to the ACCC under the ACCC's leniency and immunity policies; and
make miscellaneous minor and technical amendments to the TP Act.

1.11 Serious cartel conduct will be addressed through both criminal offences and civil sanctions. In consequence, various terms are defined that apply to both the criminal and civil prohibitions, even though the criminal and parallel civil provisions are created under separate subdivisions. The term 'cartel provision' contains various tests that, when met, define the parameters of 'serious cartel conduct' (in combination with the elements of the criminal offences and civil prohibitions).

1.12 For a provision of a contract, arrangement or understanding to be a 'cartel provision', it must satisfy one of two alternative tests (the purpose/effect condition or the purpose condition) as well as threshold requirements regarding the requisite level of competition. These tests reflect existing tests that apply under the current Part IV prohibitions.

Comparison of key features of new law and current law

New law Current law
Part IV of the TP Act contains two Divisions. Division 1 specifically targets cartel conduct. Division 2 contains the existing prohibitions on anticompetitive conduct. Part IV of the TP Act contains prohibitions on anticompetitive conduct. Civil penalties only apply to a corporation found to have breached those provisions.
Division 1 of Part IV includes four subdivisions. Part IV of the TP Act contains a range of prohibited trade practices, which the courts have interpreted as prohibiting parties from engaging in cartel conduct. Civil penalties for a breach of such prohibitions.
Subdivision A contains interpretive provisions that apply to both the criminal offences and civil prohibitions, including the concept of a 'cartel provision'. Interpretive provisions applying to the prohibitions are generally contained in Part IV (or in Part 1 of the TP Act).
Subdivision B contains two criminal offences prohibiting corporations from making or giving effect to a contract, arrangement or understanding containing a cartel provision (discussed in Chapter 2). No direct equivalent, although the criminal offences are based on current civil prohibitions.
Subdivision C contains two parallel civil provisions prohibiting corporations from making or giving effect to a contract, arrangement or understanding containing a cartel provision (discussed in Chapter 3). The parallel civil prohibitions are based on current civil prohibitions.
Subdivision D contains exemptions from the criminal and civil prohibitions (discussed in Chapter 4) Various exemptions and defences are included in the TP Act.
A corporation commits an indictable offence or a civil prohibition if the corporation makes a contract or arrangement, or arrives at an understanding, and the contract, arrangement or understanding contains a cartel provision. A corporation shall not make a contract or arrangement, or arrive at an understanding, if the proposed contract, arrangement or understanding contains an exclusionary provision (an agreement between competitors which has the purpose of excluding or limiting dealings with particular suppliers or customers), or if a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition.
A corporation commits an indictable offence or a civil prohibition if a contract, arrangement or understanding contains a cartel provision, and the corporation gives effect to the cartel provision. A corporation shall not give effect to a provision of a contract, arrangement or understanding, if that provision is an exclusionary provision, or if it has the purpose, or has or is likely to have the effect, of substantially lessening competition.
A provision of a contract, arrangement or understanding is a cartel provision if the purpose/effect condition (in relation to price fixing) or the purpose condition (in relation to output restrictions, market sharing or bid rigging) and the competition condition are satisfied in relation to the provision. The current TP Act provides a test of purpose, effect or likely effect in relation to price fixing, and purpose in relation to exclusionary provisions.
The purpose/effect condition is satisfied if the provision has the purpose, or has or is likely to have the effect, of directly or indirectly doing certain actions that the OECD considered to be hard core cartel conduct (in short, price fixing conduct). A provision of a contract, arrangement or understanding made by competitors which had the purpose or effect of controlling or maintaining prices is deemed to substantially lessen competition. Civil penalties apply.
The purpose condition is satisfied if the provision has the purpose of directly or indirectly doing certain actions that the OECD considered to be hard core cartel conduct (in short, output restricting, market sharing or bid rigging conduct) A corporation is prohibited from entering into a contract, arrangement or understanding with a competitor if a provision of the contract, arrangement or understanding had the purpose of preventing, restricting or limiting the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons (or in particular circumstances or on particular conditions) by all or any of the parties to the contract, arrangement or understanding.
The competition condition is satisfied if at least two of the parties to the contract, arrangement or understanding are or would otherwise be, in competition with each other in relation to the conduct in question. For the purposes of the current exclusionary conduct prohibition, a person is deemed to be competitive with another person if the person (or a related body corporate) is, or is likely to be, or but for the provision of the contract, arrangement or understanding, would be, or would be likely to be, in competition with the other person (or related body corporate) in relation to the supply or acquisition of goods or services the subject of the relevant provision of the contract, arrangement or understanding.
The maximum penalty for breach of the criminal offences is, for corporations, a fine of the greater of $10 million or three times the benefit obtained) and for individuals, a 10-year jail term and/or a fine of $220,000. No criminal penalties apply to Part IV.

Detailed explanation of new law

Revised structure of Part IV of the TP Act

1.13 Part IV of the TP Act contains a series of prohibitions aimed at protecting and enhancing competition. The Bill establishes two separate Divisions within Part IV.

Division 1 is inserted immediately before section 45. This Division includes the criminal and civil prohibitions on serious cartel conduct. [Schedule 1, item 19, sections 44ZZRA to 44ZZRP]
Division 2 includes the existing restrictive trade practices prohibitions, from section 45 to section 51AAA.

1.14 Division 1 of Part IV comprises four subdivisions.

1.15 Subdivision A (Introduction), discussed in Chapter 2, includes:

a simplified outline of the prohibitions on cartel conduct, clarifying that there are parallel criminal and civil prohibitions; [Schedule 1, item 19, section 44ZZRA]
defined terms relevant to both the criminal and parallel civil prohibitions on serious cartel conduct; [Schedule 1, item 19, sections 44ZZRB to 44ZZRD]
a provision that prevents the interpretations of terms used in Division 1 of Part IV from applying to similar terms found elsewhere in the TP Act. [Schedule 1, item 19, section 44ZZRE]

1.16 Subdivision B (Offences etc.), discussed in Chapter 3, includes the two indictable cartel offences, and provisions specific to those offences, such as the powers of a court in a prosecution for a cartel offence. Chapter 3 also discusses provisions contained in the Bill that are relevant to the offences (but that are not necessarily located in Division 1 of Part IV).

1.17 Subdivision C (Civil penalty provisions), discussed in Chapter 4, contains the parallel civil penalty provisions that apply to serious cartel conduct. Chapter 4 also discusses provisions in the Bill relevant to the parallel civil penalty prohibitions.

1.18 Subdivision D (Exceptions), discussed in Chapter 5, creates exceptions to the cartel offences and parallel civil penalty prohibitions.

1.19 A number of terms are defined for the purpose of Division 1 of Part IV, even though some of the terms are also found elsewhere in the TP Act. The Bill specifically provides that in determining a meaning of an expression used or a provision of the TP Act (other than Division 1, subsection 6(2C), paragraph 76(1A)(aa) or subsection 93AB(1A), Division 1 is to be disregarded. In effect, this 'immunises' the remainder of the TP Act from the meaning of terms used in Division 1 of Part IV. [Schedule 1, item 19, section 44ZZRE]

1.20 Chapters 5 to 8 set out other amendments in the Bill, including amendments in relation to remedies, investigation powers, provisions creating a scheme for the protection of cartel information, and miscellaneous minor and technical amendments.

Cartel provision

1.21 As the concept of a cartel provision is central to both the criminal offences and parallel civil penalties, it is defined separately from those prohibitions. [Schedule 1, item 3, subsection 4(1), item 19, section 44ZZRD]

1.22 In order for a provision of a contract, arrangement or understanding to be a cartel provision , the provision must satisfy:

either the purpose/effect condition, or the purpose condition, depending upon the characterisation of the conduct considered in relation to the condition [Schedule 1, item 19, subsections 44ZZRD(2) and (3)]; and
the competition condition [Schedule 1, item 19, subsection 44ZZRD(4)].

1.23 These conditions form the building blocks for determining whether a corporation has committed a criminal offence or breached a civil penalty prohibition. [Schedule 1, item 19, subsection 44ZZRD(1)]

1.24 Provision is relevant to existing sections 4D and 45 of the TP Act (which have been interpreted to currently prohibit the matters condemned by the OECD). However, the TP Act currently provides a definition only in relation to an understanding (to mean any matter forming part of the understanding). In spite of this, the majority judgment in Visy Paper Pty Ltd v ACCC [2003] HCA 59; (2003) 77 ALJR 1893; 201 ALR 414, at paragraphs 7, 32 to 33 (Gleeson CJ, McHugh, Gummow and Hayne JJ) confirmed that its use in the TP Act, and in relation to existing sections 4D and 45, was intended to have a comprehensive meaning. To apply a narrow or technical interpretation would be to unduly restrict the operation of the existing prohibitions on cartel conduct. It is intended that a similar interpretation apply to the criminal offences and civil penalty prohibitions in this Bill.

Purpose/effect condition

Price fixing

1.25 For a suspected breach comprising price fixing activity, the relevant test is that a provision must have had the purpose, effect or likely effect, of directly or indirectly fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the price of goods or services supplied or acquired by any one of the parties to the contract, arrangement or understanding. This will apply both to situations where the price of particular goods or services are directly fixed, as well as where a price is fixed indirectly, for example by reference to some other price or measure. It is not intended to extend to situations where a price is incidentally affected, where the price is otherwise established independently.

Company A, having a shortage of inputs for its manufacture of a good, seeks to source the inputs from Company B, a competitor in the market for the good. B agrees to produce the additional inputs and to provide them to A, at an agreed price.
Provided there is no agreement between A and B regarding the price at which A sells the good concerned, the purpose/effect condition would not be met merely because of the reflection of the input price in the price of the good.

1.26 The wording of the purpose/effect condition largely uses the wording from current section 45A of the TP Act. As a consequence, section 45A (the price fixing prohibition, when combined with section 45) and the related defence in section 76D are deleted. [Schedule 1, items 19, 21 and 29]

Other components of the purpose / effect condition

1.27 Current section 4F of the TP Act provides that a provision of a contract, arrangement or understanding shall be deemed to have had, or to have, a particular purpose if that provision was included in the contract, arrangement or understanding and the purpose was or is a substantial purpose. In News Limited v South Sydney District Rugby League Football Club [2003] HCA 45 the majority judgment of the High Court said that purpose meant the effect which is sought to be achieved or 'the end in view' and agreed that it is the subjective purpose of the parties to the contract, arrangement or understanding that is relevant.

1.28 Consistent with current subsection 45A(6) of the TP Act, a provision of a contract, arrangement or understanding shall not be taken to have the requisite purpose, effect or likely effect of fixing prices simply because the provision recommends, or provides for the recommending of, such a price, if it did not have the purpose, effect or likely effect of fixing a price. [Schedule 1. item 19, subsection 44ZZRD(6)]

1.29 Consistent with current subsections 45(4) and 45A(5) of the TP Act, an aggregation principle applies to demonstrate that a provision of a contract, arrangement or understanding meets the purpose/effect test. That is, a provision may be aggregated with other provisions of a contract, arrangement or understanding, or with provisions of another contract, arrangement or understanding, provided there is at least one common party to both contracts, arrangements or understandings in question. [Schedule 1, item 19, subsection 44ZZRD(8)]

1.30 The criminal offences and parallel civil penalty provisions apply to the substance of a contract, arrangement or understanding or a provision of a contract, arrangement or understanding, regardless of the form or description provided. To that end, a court is prevented from looking solely at the form or description of a provision of a contract, arrangement or understanding or of the contract, arrangement or understanding itself when determining whether or not such a provision breaches the purpose/effect condition [Schedule 1, item 19, subsection 44ZZRD(10)]. This is consistent with current subsection 45A of the TP Act, and the majority of the High Court in Visy Paper Pty Ltd v ACCC [2003] HCA 59; (2003) 77 ALJR 1893; 201 ALR 414.

1.31 While two of the paragraphs of the purpose/effect condition refer to 'persons or classes of persons' that must be identified, the way in which a class of person is to be identified has not been finally settled. In Rural Press Ltd v ACCC [2003] HCA 75, the High Court decided that all that is necessary is to be able to define the class of persons to whom the exclusionary conduct applied. Consequently, where the purpose/effect condition refers to a 'class of person', the Bill clarifies that it is not material to identify the persons falling within the class for the purpose/effect condition to be satisfied. [Schedule 1, item 19, subsection 44ZZRD(5)]

1.32 Further, in determining whether a provision of a contract, arrangement or understanding breaches the purpose/effect condition or the purpose condition, the Bill also clarifies that it is immaterial whether the prohibited activity occurs in particular circumstances or on particular conditions. [Schedule 1, item 19, subsection 44ZZRD(7)]

Purpose condition

1.33 For a suspected breach comprising output restrictions, market sharing or bid rigging activity, a different test applies, adapted from the test that applies under current sections 45 and 4D of the TP Act (which the courts have interpreted as prohibiting such conduct).

1.34 As noted above, current section 4F of the TP Act provides that a provision of a contract, arrangement or understanding shall be deemed to have had, or to have, a particular purpose if that provision was included in the contract, arrangement or understanding and the purpose was or is a substantial purpose. In News Limited v South Sydney District Rugby League Football Club [2003] HCA 45 the majority judgment of the High Court said that purpose meant the effect which is sought to be achieved or 'the end in view' and agreed that it is the subjective purpose of the parties to the contract, arrangement or understanding that is relevant.

Output restrictions

1.35 The relevant test in relation to output restriction activity is that a provision of a contract, arrangement or understanding had the purpose of directly or indirectly preventing, restricting or limiting:

the production or likely production, of goods [Schedule 1, item 19, subparagraph 44ZZRD(3)(a)(i)];
the capacity, or likely capacity, of particular parties to supply services [Schedule 1, item 19, subparagraph 44ZZRD(3)(a)(ii)]; or
the supply, or likely supply, of goods or services to particular persons or classes of persons [Schedule 1, item 19, subparagraph 44ZZRD(3)(a)(iii)].

1.36 Production appears in the purpose condition to the extent that the purpose condition relates to output restrictions. It is defined expansively to incorporate the whole range of processes involved in the production chain. Further, production , as it is used in subsection 6(2C), has the same meaning as in Division 1 of Part IV. [Schedule 1, item 14, subsection 6(2C), item 19, section 44ZZRB]

Allocating customers, suppliers or territories

1.37 The relevant test in relation to allocating customers, suppliers or territories is that a provision of a contract, arrangement or understanding had the purpose of directly or indirectly allocating between any or all of the parties to the contract, arrangement or understanding:

the persons or classes of persons who have acquired, or who are likely to acquire, goods or services from any or all of the parties to the contract, arrangement or understanding [Schedule 1, item 19, paragraph 44ZZRD(3)(b)(i)];
the persons or classes of persons who have supplied, or who are likely to supply, goods or services to any or all of the parties to the contract, arrangement or understanding [Schedule 1, item 19, paragraph 44ZZRD(3)(b)(ii)];
the geographical areas in which goods or services are or are likely to be acquired or supplied (as the case may be) by any or all of the parties to the contract, arrangement or understanding [Schedule 1, item 19, paragraphs 44ZZRD(3)(b)(iii) and (iv)].

1.38 The OECD Recommendation referred to sharing or dividing markets by 'allocating customers, suppliers, territories or lines of commerce'. 'Market' is currently defined term in section 4E, which has been overlaid by an extensive body of case law. As a result, determining the relevant market for the purposes of the TP Act can be a highly technical exercise. The criminal offences and parallel civil prohibitions focus on the allocation of the constituent parts of a market (that is, customers, suppliers or territories) between competitors, rather than on the definition of a market in particular circumstances.

Bid rigging

1.39 The relevant test in relation to bid rigging activity is that a provision of a contract, arrangement or understanding had the purpose of directly or indirectly ensuring that in the event of a request for bids in relation to the supply or acquisition of goods or services, either:

one or more parties bid to the contract, arrangement or understanding bid, but one or more do not [Schedule 1, item 19, subparagraph 44ZZRD(3)(c)(i)];
two or more parties bid, but at least two parties do so on the basis that one of the two bids is more likely to be successful [Schedule 1, item 19, subparagraph 44ZZRD(3)(c)(ii)];
two or more parties bid, but not all of the parties proceed the full way through the bidding process [Schedule 1, item 19, subparagraph 44ZZRD(3)(c)(iii)];
two or more parties bid, but at least two parties do so on the basis that one of the two bids is more likely to be successful [Schedule 1, item 19, subparagraph 44ZZRD(3)(c)(iv)];
two or more parties bid, but a material component of at least one of the bids is worked out in accordance with the contract, arrangement or understanding [Schedule 1, item 19, subparagraph 44ZZRD(3)(c)(v)].

1.40 That is, the test addresses whether the provision has the purpose of seeking a reduction in competition in the bidding process for the supply or acquisition of goods or services.

1.41 To avoid any doubt, bid is defined to include a tender, and the taking, by a potential bidder or tenderer, of a preliminary step in a bidding or tendering process. This enables the prohibitions on cartel conduct to target preliminary activity leading up to the actual or attempted rigging of bids or tenders. [Schedule 1, item 19, section 44ZZRB]

1.42 The bid rigging prohibition is unlikely to apply in the circumstance of 'dummy bidding' by vendors at auctions for real property because such bids generally do not involve an agreement between competitors. The inclusion of anti-overlap, joint venture, and authorisation exceptions (see Chapter 4), as well as the continued application and validity of pre-commencement authorisations (also Chapter 4), will ensure that bidding arrangements that currently comprise legitimate commercial activity can continue to be permitted where appropriate.

In relation to consortium biddings arrangements, the cartel provisions are not intended to catch legitimate joint bids. Joint bid arrangements between competitors that avoid restrictions on an individual participants' ability to compete for business are less likely to raise concerns.
The joint venture exceptions will also, in many cases, facilitate genuine arrangements to jointly supply under a common bid. Authorisation may also be available in appropriate circumstances.

Other components of the purpose condition

1.43 Consistent with current subsection 45(4) of the TP Act, an aggregation principle also applies to the purpose condition. A provision of a contract, arrangement or understanding may be aggregated with other provisions of the same contract, arrangement or understanding, or with provisions of another contract, arrangement or understanding (provided there is at least one common party to both contracts, arrangements or understandings in question), to demonstrate that the purpose test has been satisfied. [Schedule 1, item 19, subsection 44ZZRD(9)]

1.44 The criminal offences and parallel civil penalty provisions apply to the substance of a contract, arrangement or understanding or a provision of a contract, arrangement or understanding, regardless of the form or description provided. To that end, a court is prevented from looking solely at the form or description of a provision, or of a contract, arrangement or understanding itself when determining whether or not such a provision breaches the purpose condition [Schedule 1, item 19, subsection 44ZZRD(11)]. This is consistent with the majority of the High Court in Visy Paper Pty Ltd v ACCC [2003] HCA 59; (2003) 77 ALJR 1893; 201 ALR 414.

1.45 While three of the subparagraphs of the purpose condition refer to 'persons or classes of persons' that must be identified, the way in which a class of person is to be identified has not been finally settled. In Rural Press Ltd v ACCC [2003] HCA 75, the High Court decided that all that is necessary is to be able to define the class of persons to whom the exclusionary conduct applied. Consequently, where the purpose condition refers to a 'class of person' (in subparagraphs 44ZZRD(3)(a)(iii), (b)(i) and (ii)), the Bill clarifies that it is not material to identify the persons falling within the class for the purpose condition to be satisfied. [Schedule 1, item 19, subsection 44ZZRD(5)]

1.46 Further, in determining whether a provision of a contract, arrangement or understanding breaches the purpose/effect condition or the purpose condition, the Bill also clarifies that it is immaterial whether the prohibited activity occurs in particular circumstances or on particular conditions. [Schedule 1, item 19, subsection 44ZZRD(7)]

Competition condition and the definition of a party

1.47 The competition condition restricts the criminal and civil prohibitions to 'horizontal' conduct in relation to the production of the relevant goods or the supply or acquisition of the relevant goods or services. The condition is satisfied if at least two of the parties to the contract, arrangement or understanding are or are likely to be, or but for the collusive conduct, would be or would be likely to be, in competition with each other within the circumstances set out. This performs a similar role to the requirement in subsection 189(1) of the Enterprise Act 2002 (UK), that supply by one party to the proscribed arrangement be 'at a level in the supply chain at which the product or service would at the same time be supplied by [the other party to the agreement]'.

1.48 The term party appears in the purpose/effect condition, the purpose condition and the competition condition. Current subsection 4A(5) defines the circumstances in which bodies corporate are said to be related for the purposes of the TP Act. Further, current subsection 4D(2) of the TP Act deems people to be competitive with each other only if they or related bodies corporate are or are likely to be competitive with each other (or would be or would be likely to be competitive with each other but for the contract, arrangement or understanding) in relation to the supply or acquisition of all or any of the goods or services to which the relevant provision relates. Section 44ZZRC provides an extended meaning of party for the purposes of Division 1 of Part IV, to deem each body corporate that is related to a body corporate that is a party to a contract, arrangement or understanding to also be a party to such a contract, arrangement or understanding [Schedule 1, item 19, sections 44ZZRB and 44ZZRC].

1.49 However, this does not deem a party to have breached the criminal or parallel civil prohibitions regarding making or giving effect to a contract, arrangement or understanding containing a cartel provision.

1.50 Section 23 of the Acts Interpretation Act 1901 provides that, unless the contrary intention appears, words in the singular number include the plural and words in the plural number include the singular. Therefore, unless a provision of the Bill demonstrates a contrary intention, use of the term party includes 'parties', and references to 'parties' include 'a party'.

' Likely'

1.51 The term likely appears in the purpose/effect condition, the purpose condition and the competition condition. It enables a court to look not only at what has been established on the facts, but also to infer, from those facts, the likely consequences of the provision of the contract, arrangement or understanding. The term is also used in other provisions of the Bill in so far as they relate to those conditions. Likely is defined to include a possibility that is not remote, in relation to four fact situations: a supply of goods or services, an acquisition of goods or services, the production of goods, or the capacity to supply services. This clarifies the position following judicial observations made in the case law in relation to the term (for example, in Tillmans Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331, 27 ALR 367, by Bowen CJ at 339 and by Deane J at 346). Further, likely , as it is used in subsection 6(2C), has the same meaning as in Division 1 of Part IV. [Schedule 1, item 14, subsection 6(2C), item 19, section 44ZZRB]

Extraterritoriality

1.52 Current subsection 5(1) provides that various parts of the TP Act extend to the engaging in conduct outside of Australia, provided that the relevant body corporate is incorporated or carries on business within Australia, or the relevant person is an Australian citizen or ordinarily resident within Australia.

1.53 Subsection 5(1) is extended to conduct that occurs outside Australia that contravenes the criminal and/or the civil cartel prohibitions. The amendments clarify that the remaining provisions of the TP Act (to the extent to which they relate to any of the provisions that already have extraterritorial effect, or the new criminal and civil cartel prohibitions) have extraterritorial effect. [Schedule 1, item 4, subsection 5(1)]

1.54 Section 5 also establishes a process for gaining ministerial consent for a person to rely on extraterritorial conduct to establish a claim for orders under subsections 87(1) or (1A). The Bill empowers the Commonwealth Director of Public Prosecutions ('the CDPP') to seek certain orders under section 87 (thereby placing the CDPP on a similar footing with the Australian Competition and Consumer Commission ('the ACCC')) [Schedule 1, items 59 to 62, subsections 87(1), 87(1BA), paragraphs 87(1A)(b) and (ba)]. References in section 5 to the process for gaining ministerial consent are therefore amended to refer to the CDPP [Schedule 1, item 5, subsection 5(4)].

Commonwealth power to make laws applying to individuals and corporations

1.55 Part IV is currently predicated on the assumption that the corporations power in section 51(xx) of the Constitution provides the primary power for the Commonwealth Government to make such laws. However, current subsection 6(2) of the TP Act provides alternative sources of Commonwealth power, should the corporations power be found to provide an insufficient source of power for a particular provision. This is consistent with the view that the Parliament intended the TP Act to have the widest application possible, consistent with the limitations on the Commonwealth's constitutional powers.

1.56 Consequently, the current civil prohibitions in Part IV apply to a 'corporation', presently defined in subsection 4(1) to mean (a) a foreign corporation, (b) a trading corporation formed within the limits of the Commonwealth, (c) a corporation formed in a territory, or (d) a holding company for the three preceding types of corporations listed.

1.57 The 1993 Hilmer Review recommended that competition law apply to all businesses in Australia, rather than limiting the application of the law to those matters that fell within the Commonwealth's constitutional power. On 11 April 1995, the Council of Australian Governments ('COAG') agreed to the principles of competition policy contained in the report of the National Competition Policy Review. This included agreement to achieve and maintain consistent and complementary competition laws and policies that would apply to all businesses in Australia regardless of ownership. This was achieved through various means, including the enactment of a cooperative scheme to enable the competition law (as embodied in Part IV of the TP Act) to apply to all businesses within Australia.

1.58 In brief, the cooperative scheme operates through the creation, in Part XIA of the TP Act, of a Competition Code, and that Code being applied as a law of each State, the Northern Territory and the Australian Capital Territory, through mirror versions of the Competition Policy Reform (New South Wales) Act 1995 ('the CPR Act'). Under section 150C of the TP Act and section 4 of each CPR Act, the Competition Code consists of:

the Schedule version of Part IV of the TP Act;
the remaining provisions of the TP Act in so far as they would relate to the Schedule version if it were substituted for Part IV; and
the regulations under the TP Act in so far as they relate to other components of the Competition Code.

1.59 The Competition Code is applied to all persons in each respective State and Territory and to the Crown in right of the State or Territory.

1.60 Consistent with the 1995 Conduct Code Agreement, the Bill makes provision for the cartel offences and parallel civil prohibitions to apply to corporations and 'persons', because simply applying the offences to corporations may not achieve the desired deterrent effect.

1.61 This occurs in the following ways.

First, corporations can be found guilty of committing a criminal offence or parallel civil prohibition contained in Division 1 of Part IV.
Second, individuals can be an accessory to the commission by a corporation of a Part IV criminal offence (under section 79) or a parallel civil prohibition (under section 76).
Third, individuals and bodies corporate can be held liable for committing a 'mirror' criminal offence or parallel civil penalty in the Schedule of the TP Act. These offences and civil prohibitions apply to a 'person'. The mirror offences form part of the Competition Code and are applied by the CPR Act of each State or Territory as a law of each of those jurisdictions.

1.62 The provisions of the TP Act currently apply:

according to its terms, in reliance upon the Commonwealth's powers to make laws with respect to corporations;
to persons other than corporations while engaged in interstate or overseas trade or commerce, trade or commerce between territories, or with a territory, or in the supply of goods or services to the Commonwealth or an authority or instrumentality of the Commonwealth;
to engaging in conduct to the extent to which the conduct involves use of a postal, telegraphic, telephonic or other like service.

1.63 Reflecting the view that the Parliament intended the TP Act to have the widest application possible subject to Constitutional limitations, amendments provide for alternative Constitutional sources of power in relation to conduct identified in the cartel provision definition in section 44ZZRD and in the offences and civil prohibitions. [Schedule 1, items 6 to 15, section 6].

Consequential amendments

Removal of price fixing specific provisions

1.64 As a result of creating specific provisions targeting cartel conduct, certain existing provisions of the TP Act have been deleted, including section 45A (which provides that certain types of price fixing conduct are to be treated as a per se prohibition) and section 76D (which provides a defence in relation to that per se prohibition). [Schedule 1, items 20, 21 and 29, subsection 45(3), sections 45A and 76D]

Consequential references to Parts X and XIB of the TP Act

1.65 Consequential amendments to Parts X (International liner cargo shipping) and XIB (The telecommunications industry) of the TP Act ensure that those Parts refer to the criminal and civil cartel provisions. [Schedule 1, items 88 to 102, sections 10.01A, paragraphs 10.08(1)(aa) and (ab), subsections 10.08(1), 10.17(1) and (2), 10.17A(1) to (4), 10.19(1) and (2), 10.24(1) and (2), 10.24A(1) to (3), and paragraph 10.45(3)(a), items 103 to 111, section 151AJ and paragraph 151AY(1)(b)]

Chapter 2 - Criminal offences

Outline of chapter

2.1 This chapter outlines the criminal offences that target serious cartel conduct, and related provisions.

Context of amendments

2.2 Introducing indictable criminal offences targeting serious cartel conduct, which include maximum penalties for individuals of a 10-year jail sentence and/or a fine of $220,000, and fines for corporate offenders, will widen the range of regulatory responses available to deal with cartel conduct. This, in turn, should assist to deter individuals and corporations from engaging in such conduct. It will also bring Australia into line with other OECD nations that have legislated such sanctions.

Summary of new law

2.3 The current prohibitions in Part IV of the TP Act rely primarily on the corporations power in subsection 51(xx) of the Constitution for their validity. Consequently, the current Part IV prohibitions apply to a 'corporation', presently defined in subsection 4(1) of the Trade Practices Act 1974 ('the TP Act') to mean (a) a foreign corporation, (b) a trading corporation formed within the limits of the Commonwealth, (c) a corporation formed in a territory, or (d) a holding company for the three preceding types of corporations listed.

2.4 Consistent with the 1995 Conduct Code Agreement, the Bill makes provision for the cartel offences to apply to corporations, bodies corporate (that do not fall within the definition of a corporation in the TP Act) and individuals. This occurs in the following ways:

First, corporations can be found guilty of committing an offence in Division 1 of Part IV, as the offences specifically apply to corporations.
Second, individuals and bodies corporate can be an accessory to the commission of a Part IV offence by a corporation under the accessorial liability framework in section 79 of the TP Act.
Third, individuals and bodies corporate can be held liable for committing an offence in the Schedule of the TP Act. These offences 'mirror' the offences in Division 1 of Part IV with the exception that they apply to a 'person'. The mirror offences form part of the Competition Code and are applied by the CPR Act of each State or Territory as a law of each of those jurisdictions.

2.5 Two new indictable offences in Division 1 of Part IV will prohibit a corporation from making, or giving effect to, a provision of a contract, arrangement or understanding with a competitor that fixes prices, restricts outputs, allocates markets between competitors, or rigs a bidding process.

2.6 The maximum fine for a corporation (under the first dot point above) is consistent with the maximum pecuniary penalty that may be applied to a corporation found to have breached the civil prohibitions.

2.7 The maximum fine for an individual found guilty of being an accessory to the commission of an offence (under the second dot point) is the same as the penalty for committing an offence (under the third dot point above) - that is, a term of imprisonment for 10 years and/or a fine of 2,000 penalty units ($220,000).

2.8 For a body corporate that is not a corporation within the meaning of that term for the purposes of the TP Act, the maximum fine applicable for being an accessory to the commission of an offence in Division 1 of Part IV or the Schedule version offence is the same as the maximum fine that applies to a corporation.

2.9 The ancillary liability framework is amended to apply to the criminal cartel offences.

2.10 Indictable criminal jurisdiction is conferred on the Federal Court of Australia and the Supreme Courts of a State, the Northern Territory and the Australian Capital Territory in relation to the criminal offences. A separate Bill will provide for committals, bail, practice and procedure, juries, sentencing and appeals.

2.11 As the criminal sanctions will be indictable criminal offences, certain principles have been applied in developing those sanctions, bearing in mind that they will be heard before a jury.

2.12 Clarity and simplicity are important. The criminal sanctions (while modelled on the relevant existing civil prohibitions in the TP Act) remove redundant language that was included in the existing civil prohibitions, therefore providing a more targeted set of sanctions in relation to serious cartel conduct. This is an important, because the criminal offences will be indictable offences, to be heard before a jury.

2.13 Second, the courts are likely to take a stricter interpretation of criminal provisions than in relation to similar civil sanctions, and to decide particular issues in favour of the defence in a case of uncertainty (in order to give effect to the principle that a party is innocent until proven guilty). To enhance certainty, the Bill inserts interpretations of terms consistent with existing common law interpretations are inserted.

Comparison of key features of new law and current law

New law Current law
Division 1 of Part IV of the TP Act contains criminal and parallel civil prohibitions specifically targeting cartel conduct. Division 1 comprises four subdivisions. Subdivision A contains interpretive provisions that apply to both the criminal and civil provisions. Part IV of the TP Act contains a range of prohibited trade practices, which the courts have interpreted as prohibiting parties from engaging in cartel conduct. Civil penalties for a breach of such prohibitions.
Subdivision B contains two criminal offences prohibiting corporations from making or giving effect to a contract, arrangement or understanding containing a cartel provision. The criminal offences are based on current civil prohibitions.
A corporation commits an indictable offence if the corporation makes a contract or arrangement, or arrives at an understanding, and the contract, arrangement or understanding contains a cartel provision. The prosecution will be required to prove that the corporation intended to make a contract, arrangement or understanding, and that the corporation knew or believed that the contract, arrangement or understanding contained a cartel provision. A corporation shall not make a contract or arrangement, or arrive at an understanding, if the proposed contract, arrangement or understanding contains an exclusionary provision (an agreement between competitors which excludes or limits dealings with particular suppliers or customers), or if a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition.
A corporation commits an indictable offence if a contract, arrangement or understanding contains a cartel provision, and the corporation gives effect to the cartel provision. The prosecution will be required to prove that the corporation knew or believed that the contract, arrangement or understanding contained a cartel provision, and that the corporation intended to give effect to the cartel provision. A corporation shall not give effect to a provision of a contract, arrangement or understanding, if that provision is an exclusionary provision, or if it has the purpose, or has or is likely to have the effect, of substantially lessening competition.
Chapter 2 of the Criminal Code applies to the criminal offences, with the exception of Part 2.5 (Corporate criminal responsibility). Instead, section 84 will apply to ascribe corporate responsibility for conduct engaged in by individuals operating within the actual or apparent authority of the corporation (ensuring a consistent approach to ascribe corporate responsibility under the civil and criminal prohibitions). Current Part IV does not contain criminal offences and therefore the Criminal Code does not presently apply.
Ancillary liability provisions in section 79 of the TP Act will apply in relation to the criminal offences. Section 79 of the TP Act currently applies in relation to the existing criminal offences (for example, the consumer protection offences in Part VC) in the TP Act and currently has no application to Part IV.
A new ancillary offence of attempt is created. Section 79 does not currently contain an ancillary offence of attempt.
Ancillary liability provisions will have extraterritorial effect under amendments to section 5. Section 5 currently applies in relation to Part IV (but not in relation to Part VI, which establishes the ancillary liability arrangements that apply to Part IV).
Where the alleged offence committed by all defendants falls within the TP Act, the Federal Court will have concurrent jurisdiction with the Supreme Courts of the States, the ACT and the NT. No direct equivalent.
The Federal Court will continue to have exclusive jurisdiction for all civil and criminal matters arising under the Competition Code of the NT and ACT. No direct equivalent.
Where an alleged offence committed by all defendants falls under the provisions of a Competition Code of a State, the relevant State Supreme Court will have jurisdiction. No direct equivalent.

Detailed explanation of new law

Corporate and individual offenders

2.14 The framework for implementing consistent and complementary competition laws and policies that would apply to all businesses in Australia regardless of their structure is discussed in Chapter 1.

2.15 As the corporations power in subsection 51(xx) of the Constitution provides the principal source of power for the prohibitions in Part IV of the TP Act, the criminal offences in Part IV of the TP Act apply to a corporation. 'Corporation' is presently defined in subsection 4(1) of the TP Act to mean (a) a foreign corporation, (b) a trading corporation formed within the limits of the Commonwealth, (c) a corporation formed in a territory, or (d) a holding company for the three preceding types of corporations listed.

2.16 However, the TP Act enables corporations, bodies corporate that do not qualify as a corporation for the purposes of the TP Act, and individuals to be found guilty of committing a criminal cartel offence.

2.17 The application of criminal cartel offences to corporations applies by way of the creation of two new indictable offences in Division 1 of Part IV that prohibit a corporation from making, or giving effect to, a provision of a contract, arrangement or understanding with a competitor that fixes prices, restricts outputs, allocates markets between competitors, or rigs a bidding process.

2.18 The application of the criminal offences to individuals occurs in two ways.

2.19 First, individuals can be an accessory to the commission of the Part IV offence by a corporation under the accessorial liability framework in section 79 of the TP Act. A definition of cartel offence provision is added to mean section 44ZZRF or 44ZZRG. [Schedule 1, items 32 to 36, subsections 79(1), (1AA), (1AB), (5) and (7)].

2.20 Second, individuals can be held directly liable for committing a mirror version of a Part IV offence. The mirror version offences are contained in the Schedule of the TP Act. While the Schedule version offences 'mirror' the offences in Division 1 of Part IV, they apply to persons generally, because the Schedule version is not reliant upon a Commonwealth head of power for its validity. Instead, the mirror offences form part of the Competition Code and are applied by the CPR Act of each State or Territory as a law of each of those jurisdictions. [Schedule 1, item 126, subsections 44ZZRF(4) and 44ZZRG(4)]

2.21 A body corporate that does not meet the definition of a 'corporation' for the purposes of the TP Act may be found guilty of being an accessory to the commission of the Part IV offence by a corporation under the accessorial liability framework in section 79 of the TP Act, or of committing a Schedule version offence, because those offences apply to persons generally (as the Schedule version is not reliant upon a Commonwealth head of power for its validity). [Schedule 1, item 126, subsections 44ZZRF(4) and 44ZZRG(4)]

Elements of the cartel offences

Criminal Code Act - provisions relevant to the new offences

2.22 Chapter 2 of the Criminal Code applies to the criminal cartel offences because these offences are Commonwealth offences, although Part 2.5 (Corporate criminal responsibility) does not apply [Schedule 1, item 18, subsection 6AA(2)]. As a consequence, various principles of the Criminal Code apply to the new indictable criminal cartel offences that are created in Part IV of the TP Act (but not to the Schedule version of the offences). Some of these principles are set out below.

2.23 Subsection 3.1 of the Criminal Code provides that a criminal offence consists of physical elements and fault elements.

2.24 In relation to the physical elements, subsection 4.1(1) of the Criminal Code provides that a physical element of an offence may be conduct, or a result of conduct, or a circumstance in which conduct, or a result of conduct, occurs. Subsection 4.1(2) defines conduct to mean an act, an omission to perform an act, or a state of affairs.

2.25 In relation to the fault elements, subsection 5.1(1) of the Criminal Code provides that a fault element for a physical element may be intention, knowledge, recklessness or negligence, and subsections 5.2 to 5.5 define how these terms apply to the physical elements identified above.

2.26 Subsection 5.6 indicates the particular fault elements that will apply to specific physical elements if the law creating the offence does not specify a fault element for a physical element (referred to below as 'default fault elements').

Making a contract etc . containing a cartel provision

2.27 A corporation commits an indictable offence if the corporation makes a contract or arrangement, or arrives at an understanding, and the contract, arrangement or understanding contains a cartel provision. [Schedule 1, item 19, subsections 44ZZRF(1), (4)]

2.28 Cartel provision is discussed in Chapter 1 above, but is a provision that effectively fixes prices, restricts outputs in the production or supply chain, allocates customers, suppliers or territories between competitors, or rigs a bidding or tendering process.

2.29 The making of a contract, arrangement or understanding requires conduct by at least two persons. However, each physical element must be framed in terms of the conduct of the offender. The offence therefore comprises two physical elements:

that the corporation makes a contract or arrangement, or arrives at an understanding; and
that the contract, arrangement or understanding contains a cartel provision.

2.30 As the first element does not specify a fault element, subsection 5.6 of the Criminal Code automatically applies a default fault element to the relevant physical element. The physical element refers to the act of 'making a contract or arrangement, or arriving at an understanding'. It would therefore be characterised as an element of conduct within the Criminal Code definition. The default fault element would therefore be intention.

2.31 The second element could be characterised as a circumstance in which conduct, or a result of conduct, occurs. The offence specifies a particular fault element of 'knowledge or belief' in relation to the second physical element (that a contract, arrangement or understanding contains a cartel provision).

Giving effect to a cartel provision

2.32 A corporation also commits an offence if a contract, arrangement or understanding contains a cartel provision, and the corporation gives effect to the cartel provision. [Schedule 1, item 19, subsections 44ZZRG(1), (5)]

2.33 The phrase gives effect to is defined in current subsection 4(1) of the TP Act. In relation to a provision of a contract, arrangement or understanding, it 'includes do an act or thing in pursuance of or in accordance with or enforce or purport to enforce'.

2.34 Consistent with the first offence, this offence also comprises two physical elements:

that the contract, arrangement or understanding contains a cartel provision; and
that the corporation gives effect to the cartel provision.

2.35 The first element could be characterised as a circumstance in which conduct, or a result of conduct, occurs. The offence specifies a particular fault element of 'knowledge or belief' in relation to the first physical element (that a contract, arrangement or understanding contains a cartel provision). [Schedule 1, item 19, subsection 44ZZRG(5)]

2.36 As the second physical element does not specify a fault element, subsection 5.6 of the Criminal Code automatically applies a default fault element to the relevant physical element. The physical element refers to the act of 'giving effect to a cartel provision'. It would therefore be characterised as an element of conduct within the Criminal Code definition. The default fault element would therefore be intention.

Ancillary offences

2.37 The ancillary offences in section 79 of the TP Act apply to the cartel offences in Part IV of the TP Act, rather than the ancillary offences in Part 2.4 of the Criminal Code [Schedule 1, items 31 to 36, section 79]. This ensures consistency between:

the Commonwealth and State ancillary offences which are created by the Bill;
the various ancillary provisions in the TP Act that apply to criminal and civil prohibitions (in sections 75B, 76, 78 and 79); and
the ancillary provisions in the TP Act and related Acts (that is, the mirror consumer protection provisions in the Australian Securities and Investments Commission Act 2001).

2.38 Relying on the ancillary liability provisions in section 79 of the TP Act in relation to the criminal offences ensures that they also apply to contraventions of the Schedule version of Part IV.

2.39 The maximum penalty for a breach of ancillary liability in relation to the cartel criminal offences is, for individuals, a term of imprisonment of ten years and/or a fine of $220,000. [Schedule 1, item 33, paragraph 79(1)(e)]

Attempt

2.40 The ancillary offence of attempting to contravene a cartel offence provision or a Part VC provision is provided. An attempt to contravene a cartel offence provision could be characterised as an offence against subsection 11.1 of the Criminal Code, rather than taking the defendant to have committed a Part IV offence by reason of section 79 of the TP Act. Reliance on subsection 79(1) ensures that the States need not apply the ancillary liability provisions of the Criminal Code to the Schedule version of Part IV. [Schedule 1, item 31, paragraph 79(1)(aa)]

2.41 In order to provide consistency between the operation of this ancillary offence and the equivalent ancillary offence in section 11.1 of the Criminal Code, the interpretive provisions of subsections 11.1(2) to (6) of the Criminal Code are applied to the offence in section 79 in the same way that they apply to the Criminal Code offence of attempt. [Schedule 1, item 34, subsection 79(1AB)]

Conduct by directors, servants or agents

2.42 Current section 84 has the effect that a person may breach certain provisions of the TP Act in consequence of the behaviour of one of their employees, agents, or, in the case of a body corporate, directors.

2.43 Amendments to current section 84:

insert into subsection 84(1) references to the cartel offences and parallel civil penalty provisions, so that in proceedings related to a cartel offence or a cartel civil penalty provision, the state of mind of directors, employees or agents of a corporation can be imputed to the corporation [Schedule 1, item 41, subsection 84(1)];
insert into subsection 84(3) references to the cartel offences and civil penalty provisions, so that in proceedings related to a cartel offence or a cartel civil penalty provision, the state of mind of an employee or agent of a person other than a body corporate can be imputed to that person [Schedule 1, item 43, subsection 84(3)]; and
provide that a person other than a body corporate is not liable to be punished by imprisonment if they are convicted of an offence in circumstances where they would not have been convicted if subsection 84(3) or 84(4) had not been enacted [Schedule 1, item 48, subsection 84(4A)].

2.44 Consistent with modern drafting practice, current section 84 is also amended to remove references to 'servants' and replace those references with the term 'employee'. [Schedule 1, items 41 to 47, subsections 84(1) to (4)]

Maximum fines

Individuals

2.45 The maximum fine for individuals (2,000 penalty units, or $220,000) found guilty of breaching a criminal offence in the Schedule version of Part IV [Schedule 1, item 126, subsections 44ZZRF(4) and 44ZZRG(4)] or under the criminal ancillary liability arrangements [Schedule 1, item 33, paragraph 79(1)(e)] is lower than the $500,000 maximum civil pecuniary penalty. It is, however, consistent with the maximum fine that may be imposed on an individual if he or she is convicted of a consumer protection offence in Part VC of the TP Act, and with other Commonwealth offences. This addresses concerns expressed by the Senate Scrutiny of Bills Committee regarding the need for greater consistency between Commonwealth penalty provisions.

2.46 The discrepancy recognises that the consequences of criminal conviction for an individual can be especially strong.

For example, an individual may be ineligible to hold an office, unable to obtain a licence to undertake certain activities, ineligible to travel to a range of other countries and be deported from Australia if not an Australian citizen.

2.47 This discrepancy also reflects the availability of alternative sanctions that apply in relation to criminal offences.

For example, the proceeds of crime regime will apply to the cartel criminal offences.

2.48 Further, these arrangements are consistent with Commonwealth criminal policy, as set out in A Guide to Framing Commonwealth Civil Penalties and Enforcement Powers, which provides that '[t]he effect of a criminal conviction should be taken into account when considering the relative penalties for an overlapping criminal offence and civil penalty. The appropriate maximum financial penalty under a civil penalty provision will often be higher than the appropriate maximum fine for a criminal offence. ... Setting a civil penalty higher than a fine for a corresponding offence is consistent with Commonwealth practice.'

2.49 Recommendation 26-3 of the Australian Law Reform Commission's Report 95: Principled Regulation was cast in similar terms, recognising that fines (criminal) and pecuniary penalties (civil) serve different purposes.

Corporations

2.50 The cartel offences in Division 1 of Part IV of the TP Act set out a formula for determining the maximum criminal fines for corporations found to have breached those offences [Schedule 1, item 19, subsections 44ZZRF(3) and 44ZZRG(3)]. This formula is equivalent to the formula for determining the maximum penalty that applies to a corporation found to have breached a civil penalty provision in Part IV of the TP Act.

2.51 The terms annual turnover, benefit and obtaining are defined in Division 1 of Part IV [Schedule 1, item 19, section 44ZZRB]. These terms appear in the penalty formula for determining the maximum fine for corporations [Schedule 1, item 19, subsections 44ZZRF(3) and 44ZZRG(3)].

2.52 In relation to annual turnover , the same term appears in current subsection 76(1A) of the TP Act, which sets out a three-part penalty formula applying to corporations found to have breached a civil penalty provision in Part IV of the TP Act. (While the formula contains three parts, it allows for the application of one of two different penalties, with the third part forming an alternative second penalty). While annual turnover forms part of the third limb of the section 76 penalty formula (under which the penalty is 10 per cent of the annual turnover of the body corporate during the 12 months prior to the commission of the prohibited act), the term itself is defined for the purposes of section 76 in subsection 76(5). While the definition of annual turnover in Division 1 of Part IV is consistent with the definition in section 76 [Schedule 1, item 19, section 44ZZRB], this separate definition is necessary because:

the criminal offences in Division 1 of Part IV apply to corporations, whereas section 76 applies to corporations found to have breached the civil penalty prohibitions; and
the Bill specifically provides that in determining a meaning of an expression used or a provision of the TP Act (other than Division 1, subsection 6(2(C)), paragraph 76(1A)(aa) or subsection 93AB(1A)), Division 1 of Part IV is to be disregarded.

2.53 Benefit also appears in the third limb of the fining formulae provided in the criminal offences in Division 1 of Part IV [Schedule 1, item 19, subsections 44ZZRF(3) and 44ZZRG(3)]. It is defined (consistent with the definition in subsection 136.1(9) of the Criminal Code) to include any advantage and is not limited to property [Schedule 1, item 19, section 44ZZRB]. In setting a fine, the Court would therefore be able to consider financial or pecuniary and non-financial or non-pecuniary advantages, such as the maintenance of a particular customer base or market share, or an undefined increase in the profit obtained from the sale of a good or service.

2.54 Obtaining appears in the second limb of the fining formulae provided in the criminal offences in Division 1 of Part IV. It is defined (consistent with the definition in section 130.1 of the Criminal Code) to include obtaining for another person or inducing a third person to do something that results in another person obtaining [Schedule 1, item 19, section 44ZZRB]. The word 'obtained' is used in the fining formulae under the criminal offences in Division 1 of Part IV, in the context of the total value of the benefits that have been obtained by one or more persons and are reasonably attributable to the commission of the offence [Schedule 1, item 19, subparagraphs 44ZZRF(3)(b)(i) and 44ZZRG(3)(b)(i)]. While it appears in a different form than the defined term that applies to Division 1 of Part IV, section 18A of the Acts Interpretation Act 1901 provides that in any Act, unless the contrary intention appears, where a word or phrase is given a particular meaning, other parts of speech and grammatical forms of that word or phrase have corresponding meanings. On that basis, it is considered that there is a consistent meaning applied to the term 'obtaining' and 'obtained'.

Bodies corporate

2.55 A body corporate that does not meet the definition of a corporation for the purposes of the TP Act may also be found guilty of committing a Schedule version offence, because those offences apply to persons generally, as the Schedule version is not reliant upon a Commonwealth head of power for its validity. [Schedule 1, item 126, subsections 44ZZRF(4) and 44ZZRG(4)]

2.56 The cartel offences in the Schedule version also set out a fining formula for determining the maximum criminal fines for bodies corporate found to have breached those offences [Schedule 1, item 126, subsections 44ZZRF(3) and 44ZZRG(3)]. This formula is equivalent to the formula for determining the maximum penalty that applies to a corporation found to have breached a civil penalty provision in Part IV of the TP Act, as well as the formula for a corporation found to have breached a Division 1 cartel offence (with the exception that the formula for the Schedule version offences refers to a 'body corporate' rather than a 'corporation') [Schedule 1, item 17, subsection 6(5A)].

Location of fines

2.57 As the offences in the TP Act apply to corporations, bodies corporate and individuals, the fines for variously committing a criminal offence are found in different locations, including:

for corporations: co-located with the two offences in Division 1 of Part IV [Schedule 1, item 19, subsections 44ZZRF(3) and 44ZZRG(3)];
for individuals and bodies corporate: co-located with the ancillary offences in section 79 [Schedule 1, item 33, paragraph 79(1)(e)], and with the mirror versions of the criminal offences in the Schedule [Schedule 1, item 126, subsections 44ZZRF(4) and 44ZZRG(4)]; and
for individuals and bodies corporate: co-located with the Schedule version of the criminal offences [Schedule 1, item 126, subsections 44ZZRF(3) and 44ZZRG(3)].

2.58 While the location of maximum fines are spread through various provisions of the TP Act, the general principle is that, regardless of location:

the maximum fines for individuals (either for a breach of an ancillary offence, or for a breach of the Schedule version of the Part IV offences) are the same; and
the maximum fines for corporation and for bodies corporate are the same.

Federal indictable jurisdiction

2.59 Current section 163 confers jurisdiction on the Federal Court in prosecutions under the TP Act. However, the current offences in the TP Act (for example, in Part VC) are summary offences, while the cartel offences will be indictable offences. The cartel offences will be the first Commonwealth offences in Australia able to be heard by the Federal Court upon indictment. This necessitates changes to the Federal Court to enable this to occur. Such changes (to provide for committals, bail, practice and procedure, juries, sentencing and appeals) are the subject of amendments contained in the Federal Court of Australia Amendment (Criminal Jurisdiction) Bill.

2.60 Amendments to current section 163 will confer jurisdiction on the Federal Court (with exceptions) where subsection 163(2) of the TP Act has effect as a law of the Commonwealth. [Schedule 1, item 117, subsection 163(2)]

2.61 Current section 86 confers jurisdiction on various courts with respect to matters instituted under the TP Act. Current subsection 86(2) confers jurisdiction on State and Territory courts with respect to civil proceedings instituted under Parts IVA, IVB, and Division 1, 1A or 1AA of Part V by a person other than the Minister or the ACCC. Amendments confer jurisdiction on the Supreme Courts of the States and Territories to grant injunctions and make orders under sections 86C (non-punitive orders), 86D (adverse publicity orders), 86E (disqualification orders) or 87 (general ancillary orders) in relation to cartel matters. [Schedule 1, items 49 to 51, subsections 86(3A), (3B) and (4)]

2.62 Current section 163A confers jurisdiction on the Federal Court to make declarations and orders of prohibition, certiorari or mandamus. Amendments ensure that if a prosecution relating to the criminal cartel offences is commenced in a State or Territory Supreme Court, the Federal Court does not have jurisdiction with respect to declarations and orders in relation to the offence being prosecuted. This vests the Supreme Court with federal jurisdiction to hear collateral challenges. Therefore, where prosecutions are commenced in a Supreme Court, related declarations and orders are to be made in the same court. [Schedule 1, items 122 to 124, section 163A]

2.63 Amendments also vest the State and Territory Supreme Courts with federal jurisdiction with respect to certain declarations and orders if those courts are hearing appeals arising out of prosecutions of the criminal cartel offences. Where there is an appeal arising out of a prosecution of the criminal cartel offences, the Federal Court will not have jurisdiction with respect to certain declarations or orders for certiorari, prohibition or mandamus. [Schedule 1, items 122 to 124, section 163A]

Judge overseeing trial may make related civil orders

2.64 A judge presiding at a trial against a person for contravening the cartel criminal offences may, at any time the judge considers it appropriate, grant certain related civil orders. This is consistent with current section 79(4), which enables a court to make such orders in relation to a contravention of the consumer protection criminal offences in Part VC. This will ensure that a separate civil trial on those matters is not necessary. [Schedule 1, item 19, section 44ZZRI]

2.65 For that purpose, State Supreme Courts are vested with federal jurisdiction in respect to any matter in respect of which a civil proceeding is instituted in that court. Subject to constitutional limitations, a Territory Supreme Court is also vested with jurisdiction in respect to any matter in respect of which a civil proceeding is instituted in that court. The amendments also clarify that this jurisdiction vested on those courts is an exception to the general principle, that the Federal Court has exclusive jurisdiction in relation to all other trade practices matters. [Schedule 1, item 51, paragraph 86(4)(ba)]

Enforcement and recovery of fines

2.66 Fines imposed under the TP Act can be enforced and recovered under section 79A. This provision is applied to the enforcement and recovery of fines imposed for a breach of the cartel offences. [Schedule 1, item 37, subsection 79A(1)]

Application and transitional provisions

2.67 Subsection 163(2) of the TP Act, which provides the Federal Court with exclusive jurisdiction in so far as section 163 has effect as a law of the Commonwealth, is repealed. However, the effect of that subsection is 'saved' in relation to prosecutions instituted before the commencement of the relevant provisions of the Bill. [Schedule 1, item 118, subsection 163(2)]

2.68 The changes to provide the Federal Court with federal indictable jurisdiction, as provided by this Bill, will not apply in relation to any proceeding that is instituted before the commencement of Schedule 1 of the Federal Court of Australia Amendment (Criminal Jurisdiction) Bill. [Schedule 1, item 121, subsection 163(6)]

Chapter 3 - Civil prohibitions

Outline of chapter

3.1 To ensure consistency with international best practice, the definition of a cartel provision, applicable to both the criminal and civil regimes, will reflect the OECD's definition of hard core cartel conduct (referred to in this explanatory memorandum as serious cartel conduct). This creates parallel civil and criminal sanctions. This chapter outlines the parallel civil prohibitions that apply to serious cartel conduct.

Context of amendments

3.2 Providing parallel civil penalties that specifically target serious cartel conduct will widen the range of regulatory responses available to deal with such conduct, enabling enforcement agencies to undertake a targeted regulatory response. This, in turn, should assist to deter individuals and corporations from engaging in serious cartel conduct.

3.3 Various arrangements supplement the criminal and parallel civil prohibitions in relation to cartel conduct contained in this Bill, including:

leniency arrangements in respect of serious cartel conduct, to be available for criminal cartel offences (from the Commonwealth Director of Public Prosecutions ('the CDPP')) and the parallel civil prohibitions (from the Australian Competition and Consumer Commission ('the ACCC')); and
that the CDPP and the ACCC will enter into a formal, publicly available Memorandum of Understanding ('the MOU'), which will establish procedures for the investigation of the cartel offences and the circumstances in which the ACCC will refer a case to the CDPP for prosecution.

Summary of new law

3.4 The current prohibitions in Part IV of the TP Act rely principally on the corporations power in subsection 51(xx) of the Constitution for their Constitutional validity. Consequently, the current Part IV prohibitions apply to a 'corporation', presently defined in subsection 4(1) of the TP Act to mean (a) a foreign corporation, (b) a trading corporation formed within the limits of the Commonwealth, (c) a corporation formed in a territory, or (d) a holding company for the three preceding types of corporations listed.

3.5 Two new parallel civil penalties in Division 1 of Part IV will prohibit a corporation from making, or giving effect to, a provision of a contract, arrangement or understanding with a competitor that fixes prices, restricts outputs, allocates markets between competitors, or rigs a bidding process. The principles of clarity and simplicity of drafting that are applied to the criminal offences are also applied to the parallel civil penalty prohibitions on serious cartel conduct.

3.6 Consistent with the 1995 Conduct Code Agreement, the Bill makes provision for the civil prohibitions to apply to corporations, bodies corporate (that do not fall within the definition of a corporation in the TP Act) and individuals. This occurs in the following ways:

First, corporations can be found to have breached a civil penalty provision in Division 1 of Part IV, as the provisions specifically apply to corporations.
Second, individuals can be an accessory to the commission of a Part IV civil penalty provision under the accessorial liability framework in section 76 of the TP Act.
Third, individuals and bodies corporate can be held liable for breaching a civil penalty in the Schedule of the TP Act. These provisions 'mirror' the civil penalties in Division 1 of Part IV with the exception that they apply to a 'person'. The mirror civil penalties form part of the Competition Code and are applied by the CPR Act of each State or Territory as a law of each of those jurisdictions.

3.7 The maximum pecuniary penalty for an individual found to have breached a civil penalty prohibition under the second and third dot points above is the same - that is, $500,000.

3.8 The maximum pecuniary penalty for a corporation (under the first dot point above) is consistent with the maximum fine that may be applied to a corporation found to have breached a cartel criminal offence.

3.9 For a body corporate that does not meet the definition of a corporation for the purposes of the TP Act, the maximum penalty applicable for a breach of the Schedule version civil penalty is the same as the maximum penalty that applies to a corporation.

3.10 As the introduction of parallel criminal and civil prohibitions addressing similar conduct could give rise to concerns regarding double jeopardy, statutory bars to proceedings are applied.

Comparison of key features of new law and current law

New law Current law
Division 1 contains criminal and parallel civil prohibitions specifically targeting cartel conduct. Division 1 comprises four subdivisions. Subdivision A contains interpretive provisions that apply to both the criminal and civil provisions. Part IV of the TP Act contains a range of prohibited trade practices, which the courts have interpreted as prohibiting parties from engaging in cartel conduct. Civil penalties for a breach of such prohibitions.
Subdivision C contains two parallel civil penalty provisions prohibiting corporations from making or giving effect to a contract, arrangement or understanding containing a cartel provision. The parallel civil penalty provisions are based on current civil prohibitions.
A corporation commits a civil penalty if the corporation makes a contract or arrangement, or arrives at an understanding, and the contract, arrangement or understanding contains a cartel provision. A corporation shall not make a contract or arrangement, or arrive at an understanding, if the proposed contract, arrangement or understanding contains an exclusionary provision (an agreement between competitors which prohibits or limits dealings with particular suppliers or customers), or if a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition.
A corporation commits a civil penalty prohibition if a contract, arrangement or understanding contains a cartel provision, and the corporation gives effect to the cartel provision. A corporation shall not give effect to a provision of a contract, arrangement or understanding, if that provision is an exclusionary provision, or if it has the purpose, or has or is likely to have the effect, of substantially lessening competition.
Section 84 will apply to ascribe corporate responsibility for conduct engaged in by individuals operating within the actual or apparent authority of the corporation (ensuring a consistent approach to ascribe corporate responsibility under the civil and criminal prohibitions). Section 84 currently applies to ascribe corporate responsibility for conduct engaged in by individuals operating within the actual or apparent authority of the corporation (ensuring a consistent approach to ascribe corporate responsibility under the civil and criminal prohibitions).
The Federal Court will continue to have exclusive jurisdiction for all civil and criminal matters arising under the Competition Code of the NT and ACT. No direct equivalent.
Ancillary liability provisions will have extraterritorial effect under proposed amendments to section 5. Section 5 currently applies in relation to Part IV (not the provisions of Part VI, which establish the ancillary liability arrangements that apply to Part IV).

Detailed explanation of new law

Application of civil penalties to corporations and individuals

3.11 The framework for implementing consistent and complementary competition laws and policies that would apply to all businesses in Australia regardless of ownership is discussed in Chapter 1.

3.12 As the corporations power in subsection 51(xx) of the Constitution provides the principal source of power for the prohibitions in Part IV of the TP Act, the parallel civil prohibitions in Part IV of the TP Act apply to a corporation. 'Corporation' is presently defined in subsection 4(1) of the TP Act to mean (a) a foreign corporation, (b) a trading corporation formed within the limits of the Commonwealth, (c) a corporation formed in a territory, or (d) a holding company for the three preceding types of corporations listed.

3.13 However, the TP Act enables corporations, bodies corporate that do not qualify as a corporation for the purposes of the TP Act, and individuals to be found to have breached a civil penalty prohibition. The application of the civil penalties to individuals occurs in two ways.

3.14 First, individuals can be an accessory to the commission of the Part IV civil penalty provision by a corporation under the accessorial liability framework in section 76 of the TP Act. [Schedule 1, item 22, subparagraph 76(1)(a)(i)].

3.15 Second, individuals can be held directly liable for committing a mirror version of the Part IV civil penalties, which are contained in the Schedule of the TP Act. While the Schedule version civil penalties 'mirror' the civil penalties in Division 1 of Part IV, they apply to persons generally, because the Schedule version is not reliant upon a Commonwealth head of power for its validity. Instead, the mirror civil penalties form part of the Competition Code and are applied by the CPR Act of each State or Territory as a law of each of those jurisdictions. [Schedule 1, item 126, sections 44ZZRJ and 44ZZRK]

Details of civil penalty provisions

Making a contract etc . containing a cartel provision

3.16 A corporation breaches a civil penalty provision if the corporation makes a contract or arrangement, or arrives at an understanding, and the contract, arrangement or understanding contains a cartel provision. [Schedule 1, item 19, section 44ZZRJ]

3.17 Cartel provision is discussed in Chapter 1 above, but is a provision that effectively fixes prices, restricts outputs in the production or supply chain, allocates customers, suppliers or territories between competitors, or rigs a bidding or tendering process.

3.18 The phrase 'contract, arrangement or understanding' is used in current section 45 of the TP Act. 'Contract' means a common law contract. An 'arrangement or understanding' is a form of either verbal or written agreement that falls short of a common law contract. However, the courts have found that for an 'arrangement or understanding' to come within section 45 of the TP Act, it must involve a 'meeting of the minds' of the parties to it, and there must be a consensus as to what is to be done as a result of the arrangement or understanding, rather than a mere hope that something will be done. Parallel conduct may provide circumstantial evidence supporting the existence of an arrangement or understanding, but is not, in itself, sufficient to amount to an arrangement or understanding for the purposes of the TP Act.

Giving effect to a cartel provision

3.19 A corporation also breaches a civil penalty provision if a contract, arrangement or understanding contains a cartel provision, and the corporation gives effect to the cartel provision. [Schedule 1, item 19, section 44ZZRK]

3.20 Cartel provision is discussed in Chapter 1 above, and is a provision that effectively fixes prices, restricts outputs in the production or supply chain, allocates customers, suppliers or territories between competitors, or rigs a bidding or tendering process.

3.21 The term 'gives effect to' is defined in current subsections 4(1) and (2) of the TP Act. In relation to a provision of a contract, arrangement or understanding, the phrase 'includes do an act or thing in pursuance of or in accordance with or enforce or purport to enforce'.

3.22 As noted above, the phrase 'contract, arrangement or understanding' is used in current section 45 of the TP Act. An 'arrangement or understanding' has been interpreted as requiring a 'meeting of the minds' of the parties to it, and there must be a consensus as to what is to be done as a result of the arrangement or understanding, rather than a mere hope that something will be done.

Maximum civil penalties

Individuals

3.23 The maximum penalty for individuals found to have breached a civil penalty in the Schedule version of Part IV [Schedule 1, item 126, subsections 44ZZRJ and 44ZZRK)] or under civil ancillary liability arrangements for a breach of a Part IV prohibition [Schedule 1, item 33, subparagraph 76(1)(a)(i)] is determined by the penalty arrangements in current section 76. The maximum pecuniary penalty payable by a person other than a body corporate in relation to those civil penalty provisions is $500,000 [Schedule 1, item 22, subparagraph 76(1)(a)(i)]. This is higher than the $220,000 maximum criminal fine for individuals. The rationale for this is discussed in Chapter 2.

Corporations

3.24 Current section 76 sets out arrangements for determining the maximum pecuniary penalty for a body corporate found to have breached certain provisions of the TP Act. That is:

paragraph 76(1A)(a) sets a maximum penalty for a breach of the secondary boycott provisions;
paragraph 76(1A)(b) provides a formula for a breach of the remaining provisions of Part IV; and
paragraphs 76(1A)(c) and (d) set out maximum penalties for a breach by a corporation of section 95AZN and 'each other act or omission to which this section applies', respectively.

3.25 Section 76 is amended to set out a formula for the breach by a body corporate of the civil cartel prohibitions. This formula is similar to, although not identical to, the formula in paragraph 76(1A)(b) for a breach of the remaining provisions of Part IV. [Schedule 1, item 23, paragraph 76(1A)(aa)]

Setting penalties

3.26 Although proceedings may be instituted against a person for breaches of more than one provision of Part IV, a court cannot impose more than one penalty in respect of the same conduct. This principle (the 'totality principle') is embodied in current subsection 76(3). Amendments clarify that the totality principle applies in respect of the provisions of Part IV, with the exception of the criminal offences. [Schedule 1, item 24, subsection 76(3)]

Jurisdiction

3.27 Federal indictable jurisdiction is discussed in Chapter 2.

3.28 The power of a judge overseeing a criminal trial to make related civil orders is also discussed in Chapter 2.

Parallel criminal and civil prohibitions

3.29 Section 4C of the Crimes Act 1914 provides some protection against double jeopardy where an act or omission constitutes an offence under two or more laws of the Commonwealth or under both a law of the Commonwealth and at common law. However, this protection does not extend to liability for civil penalties. To address concerns regarding parallel criminal and civil schemes, most federal legislation containing such schemes provides for statutory bars to proceedings. As a scheme of statutory bars is already present in section 76B (but only applicable to sections 75AYA or 95AZN), the protection in section 76B is extended to address concerns arising from parallel criminal and civil cartel prohibitions. [Schedule 1, items 26 to 28, section 76B]

3.30 Current section 76B of the TP Act provides that where substantially the same conduct is a civil contravention and an offence, the Court will be prevented from making a pecuniary penalty if the person has already been convicted of an offence. This is extended to apply in relation to the criminal and civil cartel prohibitions, including the criminal cartel offences in Part IV and the mirror versions of those offences in the Schedule. [Schedule 1, items 26 and 27, subsections 76B(1) and (2)]

3.31 Further, proceedings for a pecuniary penalty order against a person for a Part IV contravention are stayed if criminal proceedings are started or have already been started for an offence, and the offence is constituted by conduct that is substantially the same as the conduct alleged to constitute the contravention. The pecuniary penalty proceedings will be able to be resumed if the person is not convicted of the offence. [Schedule 1, item 27, subsection 76B(3)]

3.32 Criminal proceedings may be started against a person for conduct that is substantially the same as a Part IV contravention regardless of whether a pecuniary penalty order has been made against the person in respect of the contravention. [Schedule 1, item 27, subsection 76B(4)]

3.33 Evidence of information given or of documents produced will not be admissible in criminal proceedings against the individual if the individual gave the evidence or produced the documents in proceedings for a pecuniary penalty order against the individual for a contravention of Part IV and the conduct constituting the criminal and Part IV pecuniary penalty contravention is substantially the same. This does not apply to a criminal proceeding in respect of the falsity of the evidence given by the individual in the proceedings for the pecuniary penalty order. [Schedule 1, item 27, subsection 76B(5)]

3.34 Permitting criminal proceedings to be undertaken after civil proceedings ensures that civil remedies do not preclude later criminal penalties from being imposed, and it is usual to stay the civil proceedings until the criminal proceedings are completed after which time, if the defendant is convicted of the criminal offence, the civil proceedings are terminated. This is the status under the Corporations Act 2001.

3.35 The fact that civil proceedings have commenced and run is one matter that the CDPP will consider under its Prosecution Policy in deciding whether it would be appropriate to commence criminal proceedings for the same conduct. Further, the ACCC is unlikely to make a referral to the CDPP for criminal prosecution if it has already decided to commence a civil case, including for the reasons outlined above.

3.36 Section 76B was inserted into the TP Act in 2000 to introduce safeguards against potential parallel civil and criminal prosecutions for a misrepresentation of the effect of the GST changes on the introduction of A New Tax System. While criminal or civil proceedings in relation to a misrepresentation of the effect of the GST changes was likely only to occur within Australia, a civil or criminal prosecution in relation to substantially the same cartel conduct may take place in Australia and overseas. Section 76B currently contains no nexus to Australia, opening the possibility for defence counsel to use overseas criminal proceedings or convictions in relation to substantially the same conduct to prevent the Federal Court from making an order for the payment of a pecuniary penalty, and/or obtain a stay of civil proceedings if the ACCC is seeking a pecuniary penalty in those proceedings. In contrast, section 9 of the Corporations Act (which contains a substantially similar regime to section 76B) defines an 'offence' to mean an offence against a law of the Commonwealth, a State or a Territory. Including a similar definition of offence in section 76B will remove the possibility of this occurring. [Schedule 1, item 28, subsection 76B(6)]

Consequential amendments

3.37 As price fixing is addressed by definition of a cartel provision (in section 44ZZRD) and the criminal and civil prohibitions, current section 45A of the TP Act (and the related defence in section 76D) will be repealed. [Schedule 1, items 20, 21 and 29, subsection 45(3), sections 45A and 76D, items 127 and 128, subsections 45(3) and 45A of the Schedule]

Chapter 4 - Exceptions

Outline of chapter

4.1 This chapter outlines the exceptions to the cartel criminal offences and cartel civil penalty provisions.

Context of amendments

4.2 Immunity may presently be granted on a case-by-case basis to conduct or contracts, arrangements or understandings otherwise prohibited by Part IV of the Trade Practices Act 1974 ('the TP Act') through the authorisation or notification processes in Part VII. Immunity is granted or allowed to continue under these provisions either because the Australian Competition and Consumer Commission ('the ACCC') considers that the public benefits of the proposed conduct or contract, arrangement or understanding outweigh any detriment flowing from a lessening of competition or because the conduct or arrangement would result in such benefits to the public that immunity should be granted or allowed to continue.

4.3 Currently Part IV prevents specific conduct from being considered under the section 45 'per se' prohibitions if that conduct falls under other Part IV prohibitions subject to a substantial lessening of competition test, namely:

covenants under section 45B;
resale price maintenance under section 48;
exclusive dealing under section 47;
dual listed companies under section 49; and
acquisition of shares in the capital of a body corporate or the assets of a person under section 50.

4.4 These provisions are colloquially referred to as 'anti-overlap provisions'.

4.5 Further, subsection 45A(1) (which deems certain price fixing arrangements to be illegal per se) does not apply to a provision of a contract, arrangement or understanding:

in relation to the price for goods or services to be collectively acquired (such as through buying co-operatives); and
for the joint advertising of the price for the re-supply of goods or services collectively acquired.

4.6 Cases falling within this exemption from subsection 45A(1) may still be prohibited by the TP Act if they have the purpose, effect or likely effect of substantially lessening competition.

4.7 Further, section 51 of the TP Act exempts anything specifically authorised by Commonwealth, State or Territory legislation or regulations. The existing prohibitions on making or giving effect to anticompetitive provisions in contracts, arrangements and understandings in sections 45 and 45A also contain exemptions.

For example, the prohibitions do not apply to contracts, arrangements and understandings between related entities and some joint venture arrangements.

4.8 Exceptions are included in the Bill to ensure that the prohibitions do not prohibit legitimate business activities that are beneficial to the economy or in the public interest. The exceptions reflect current 'anti-overlap provisions' contained in particular provisions of section 45, as well as exemptions for certain price fixing behaviour.

Summary of new law

4.9 Subdivision D of Division 1 covers a number of exceptions to the cartel civil penalty provisions and criminal offences:

conduct notified;
contracts subject to the grant of an authorisation that contain cartel provisions;
contracts, arrangements or understandings between related bodies corporate; and
joint ventures;
providing anti-overlap provisions; and
for provisions in relation to the price for goods or services to be collectively acquired, or for the joint advertising of the price for the re-supply of goods or services collectively acquired.

4.10 Even though the exceptions in many ways reflect existing exceptions in the TP Act, the principles of clarity and simplicity of drafting that are applied to the criminal offences and parallel civil penalty prohibitions are also applied to the exceptions.

Comparison of key features of new law and current law

New law Current law
A corporation may lodge a collective bargaining notice setting out particulars of a contract or proposed contract that contains a provision relating to price fixing, restricting outputs or allocating customers, suppliers or territories (but not in relation to bid rigging). Section 93AB enables a corporation to lodge a collective bargaining notice with the ACCC, where the corporation has made or proposes to make a contract that contains an exclusionary provision, a price fixing provision, or a provision that may substantially lessen competition.
An exception to a contravention of the cartel offence and civil penalty provisions applies where a corporation has given the ACCC a collective bargaining notice in relation to a contract, arrangement or understanding containing a cartel provision that satisfies the purpose/effect condition or the purpose condition, and the notice is in force. Subsection 45(8A) provides that section 45 does not apply to conduct covered by a collective bargaining notification for so long as the notification is in force.
The ACCC may authorise a corporation to make a contract, arrangement or understanding, or to give effect to a contract, arrangement or understanding, where the contract, arrangement or understanding contains a cartel provision. Section 88 enables the ACCC to authorise a corporation to engage in conduct that would otherwise be considered to breach the prohibitions in Part IV, other than those relating to misuse of market power.
The ACCC must not authorise a corporation to make a contract or arrangement, or arrive at an understanding, or to give effect to a provision of a contract, arrangement or understanding, if a provision of the proposed contract, arrangement or understanding would or might be a cartel provision, unless it is satisfied that the provision would result in, or be likely to result in, a net public benefit. Section 90 sets out the tests that are to be applied by the ACCC in determining whether to authorise a corporation to engage in conduct that the would otherwise be considered to breach a Part IV prohibition.
An exception applies to the civil prohibition and criminal offence of making a contract containing a cartel provision applies where the contract is subject to a condition that the provision will not come into force unless and until the corporation is granted an authorisation to give effect to the provision. Further, the corporation must apply for a grant of authorisation within 14 days after the contract is made. No direct equivalent.
An exception applies to a contravention of the cartel offence and civil penalty provisions if the only parties to the contract, arrangement or understanding are bodies corporate that are related to each other. Current subsection 45(8) provides that section 45 does not apply to or in relation to a contract, arrangement or understanding, or a proposed contract, arrangement or understanding, the only parties to which are or would be bodies corporate that are related to each other. Current subsection 4A(5) of defines the circumstances in which corporations will be deemed to be related.
An exception for joint ventures applies in a prosecution for a breach of the cartel criminal offence provisions in relation to a contract containing a cartel provision, where the cartel provision is for the purposes of a joint venture; the joint venture is for the production and/or supply of goods or services; and the joint venture is carried on jointly by the parties to the contract, or by means of joint ownership or control of a body corporate formed by the parties to carry on the activity of the joint venture. Prior notification requirements apply. No direct equivalent.
An exception for joint ventures applies in a proceedings for a breach of the cartel civil penalty prohibitions in relation to a contract containing a cartel provision, where the cartel provision is for the purposes of a joint venture; the joint venture is for the production and/or supply of goods or services; and the joint venture is carried on jointly by the parties to the contract, or by means of joint ownership or control of a body corporate formed by the parties to carry on the activity of the joint venture. No direct equivalent.
With the introduction of notification and authorisation procedures for the cartel criminal offences and civil penalty provisions, application, savings and transitional provisions apply to the current notification and authorisation provisions, and to the deleted joint venture defence in relation to price fixing (section 76D) No direct equivalent.
Exceptions apply the cartel criminal offences and civil penalty provisions to reflect current subsections 45(5) to (7). Current subsections 45(5) to (7) prevent overlaps between conduct that may be captured under section 45 and certain other prohibitions in Part IV of the TP Act.
Exceptions apply to the criminal offences and civil penalty provisions to reflect current subsection 45A(4) (as section 45A is deleted by the Bill). Current subsection 45A(4) provides that current subsection 45A(1) does not apply to a provision of a contract, arrangement or understanding in relation to the price for goods or services to be collectively acquired, or for the joint advertising of the price for the re-supply of goods or services collectively acquired.

Detailed explanation of new law

Conduct notified ( collective bargaining )

4.11 Current section 93AB enables a corporation to lodge a collective bargaining notice with the ACCC, where the corporation has made or proposes to make a contract that contains an exclusionary provision, a price fixing provision, or a provision that may substantially lessen competition. The Bill enables a corporation to lodge a collective bargaining notice setting out particulars of a contract or proposed contract that contains a provision relating to price fixing, restricting outputs or allocating customers, suppliers or territories. A collective bargaining notification may not be lodged in relation to bid rigging. [Schedule 1, item 71, subsection 93AB(1A)]

4.12 The creation of this entitlement means that there will be two collective bargaining notification frameworks in section 93AB - one that applies to the cartel criminal offences and civil provisions (referred to as the per se provisions), and one that applies to the current provisions in Part IV (referred to as the competition provisions). However, the requirements of current subsections 93AB(2), (3) and (4) are common to both sets of provisions [Schedule 1, items 71 and 72, subsections 93AB(1A) and (1)]. The heading to subsection 93AB(1) is amended to reflect this change [Schedule 1, item 72, subsection 93AB(1)]. Notes are also inserted [Schedule 1, item 71, subsection 93AB(1A)] to assist the reader to locate the requirements in the TP Act relating to:

the form required for a collective bargaining notice to be a valid notice; and
when a collective bargaining notice comes into force.

4.13 As discussed in Chapter 1, separate tests apply to conduct within the scope of the definition of a cartel provision depending upon the characterisation of the conduct. Provisions of a contract, arrangement or understanding relating to price fixing are subject to a purpose/effect test [Schedule 1, item 19, subsection 44ZZRD(2)], while provisions relating to output restrictions or the allocation of customers, suppliers or territories is subject to a purpose test [Schedule 1, item 19, subsection 44ZZRD(3)]. As the purpose or effect of the relevant provision is fundamental to the entitlement to lodge a collective bargaining notice in subsection 93AB(1A), the provision setting out that entitlement reflects the two different tests that apply [Schedule 1, item 71, paragraphs 93AB(1A)(a) to (d)].

4.14 Interpretive provisions that apply to the purpose/effect condition and the purpose condition (contained in the definition of a cartel provision in section 44ZZRD) apply in the same way to the cartel collective bargaining notification provisions in subsection 93AB(1A). [Schedule 1, item 71, subsections 93AB(10B) and (10C)]

4.15 An exception to a contravention of the cartel offence and civil penalty provisions applies where a corporation has given the ACCC a collective bargaining notice under subsection 93AB(1A) in relation to a contract, arrangement or understanding containing a cartel provision that satisfies the purpose/effect condition in subsection 44ZZRD(2) or the purpose condition in subsection 44ZZRD(3) (other than paragraph (c) of that subsection), and the notice is in force under section 93AD. [Schedule 1, item 19, subsection 44ZZRL(1)]

4.16 A note clarifies that, consistent with subsection 13.3 of the Criminal Code, a defendant (in relation to the cartel offence provisions) bears an evidential burden in relation to establishing the exception. [Schedule 1, item 19, subsection 44ZZRL(1)]

4.17 A person wishing to rely on the exception in relation to a contravention of the cartel civil penalty provisions bears an evidential burden in relation to the matter [Schedule 1, item 19, subsection 44ZZRL(2)]. Section 22 of the Acts Interpretation Act 1901 clarifies that, subject to a contrary intention, use of the term 'person' includes a body corporate as well as an individual.

Contracts containing cartel provision subject to grant of authorisation

4.18 Current section 88 of the TP Act enables the ACCC to authorise a corporation to engage in conduct that would otherwise be considered to breach the prohibitions in Part IV, other than those relating to misuse of market power. The effect of the authorisation is to provide a corporation with immunity from action under the relevant provision.

4.19 The Bill enables the ACCC to authorise a corporation to make a contract, arrangement or understanding, or to give effect to a contract, arrangement or understanding, where it contains a cartel provision. A contract, arrangement or understanding can therefore lawfully be made between competitors that contains a provision to fix prices, restrict output, allocate customers, suppliers or territories or rig bids, so long as the parties to the contract, arrangement or understanding have demonstrated through the authorisation process in Division 1 of Part VII of the TP Act that it will generate a net public benefit, consistent with the tests applied by the ACCC in current section 90 of the TP Act. [Schedule 1, item 62, subsection 88(1A)]

4.20 Current subsection 88(10) provides that an authorisation may be granted to cover those who subsequently become parties to a contract, arrangement or understanding. This provision is extended to include the power to authorise conduct introduced by subsection 88(1A). [Schedule 1, item 65, subsection 88(10)]

4.21 Current section 90 sets out the operative provisions that apply to the power to authorise conduct. It includes, for example, the tests to be applied in determining whether or not to authorise conduct and grant immunity on a case by case basis. The power to authorise sets out separate arrangements according to whether the contract, arrangement or understanding is on foot or proposed. The exception (discussed below) in relation to the prohibition on making a contract containing a cartel provision is linked directly to these provisions. The application of that exception is contingent on the inclusion in the contract of a condition that the contract will not commence until authorisation is obtained.

4.22 The ACCC must not authorise a corporation to make a contract or arrangement, or arrive at an understanding, if a provision of the proposed contract, arrangement or understanding would or might be a cartel provision, unless it is satisfied that the provision would result in, or be likely to result in, a net public benefit. That is, the benefit must outweigh any detriment to the public constituted by any lessening of competition that would result, or be likely to result, if the conduct occurred. [Schedule 1, item 66, subsection 90(5A)]

4.23 Further, the ACCC must not authorise a corporation to give effect to a provision of an existing contract, arrangement or understanding that is or may be a cartel provision, unless it is satisfied that the provision has resulted in, or is likely to result in, a net public benefit. Again, the benefit must outweigh any detriment to the public constituted by any lessening of competition that would result, or be likely to result, if the conduct occurred. [Schedule 1, item 66, subsection 90(5B)]

4.24 As noted above, an exception in relation to the civil prohibition and criminal offence of making a contract containing a cartel provision applies where the contract is subject to a condition that the provision will not come into force unless and until the corporation is granted an authorisation to give effect to the provision. Further, the exception is not available unless the corporation applies for a grant of authorisation within 14 days after the contract is made. [Schedule 1, item 19, subsection 44ZZRM(1)]

4.25 Consistent with subsection 13.3 of the Criminal Code, a defendant bears an evidential burden of establishing this exception in a criminal prosecution [Schedule 1, item 19, subsection 44ZZRM(1)]. A person wishing to rely on the exception in relation to a contravention of the cartel civil penalty provision relating to making a contract also bears an evidential burden of establishing the exception. Section 22 of the Acts Interpretation Act 1901 clarifies that, subject to a contrary intention, use of the term 'person' includes a body corporate as well as an individual. [Schedule 1, item 19, subsection 44ZZRM(2)]

Contracts, arrangements or understandings between related bodies corporate

4.26 An exception applies in relation to a contravention of the cartel offence provisions and the civil penalty provisions if the only parties to the contract, arrangement or understanding are bodies corporate that are related to each other. This provision is based on current subsection 45(8), which provides that current section 45 does not apply to or in relation to a contract, arrangement or understanding, or a proposed contract, arrangement or understanding, the only parties to which are or would be bodies corporate that are related to each other. [Schedule 1, item 19, subsection 44ZZRN(1)]

4.27 Current subsection 4A(5) of the TP Act defines the circumstances in which corporations will be deemed to be related - where the body corporate is a holding company or a subsidiary of the other, or where two bodies are both subsidiaries of the same holding company.

4.28 Consistent with subsection 13.3 of the Criminal Code, a defendant bears an evidential burden in relation to establishing this exception in a criminal prosecution [Schedule 1, item 19, subsection 44ZZRN(1)] A person wishing to rely on the exception in relation to a contravention of the cartel civil penalty provisions also bears an evidential burden of establishing the exception. Section 22 of the Acts Interpretation Act 1901 clarifies that, subject to a contrary intention, use of the term 'person' includes a body corporate as well as an individual. [Schedule 1, item 19, subsection 44ZZRN(2)]

Joint venture - prosecution

4.29 An exception for joint ventures applies in a prosecution for a breach of the cartel criminal offence provisions in relation to a contract containing a cartel provision. [Schedule 1, item 19, subsection 44ZZRO(1)]

4.30 The exception comprises the following elements:

the cartel provision is contained in a contract;
the cartel provision is for the purposes of a joint venture;
the joint venture is for the production and/or supply of goods or services; and
the joint venture is carried on jointly by the parties to the contract, or by means of joint ownership or control of a body corporate formed by the parties to carry on the activity of the joint venture.

4.31 The defendant bears an evidential burden of proof of establishing the elements of this exception. [Schedule 1, item 19, subsection 44ZZRO(1)]

4.32 The exception is limited to circumstances involving contractual relations. 'Contract' has its ordinary meaning of an agreement binding or enforceable at law. It can apply to a range of agreements, both written and oral, provided they meet the common law criteria for a contract. In the context of the TP Act, the term refers to agreements that are distinct from those covered by 'arrangements' or 'understandings', which apply to agreements that may not give rise to legally enforceable rights.

4.33 A person is not entitled to rely on the exception unless they have provided the prosecutor with certain information within 28 days after the day on which the person is committed for trial. Specifically, the person must provide a written notice of the facts on which the person proposes to rely, the names and address of any witnesses to be called, and certified copies of any documents which the person proposes to use, for the purpose of discharging the evidential burden in relation to the elements in subsection (1). [Schedule 1, item 19, subsection 44ZZRO(2)]

4.34 A court may either exempt the person from compliance with these requirements, or extend the time within which they are required to comply. This ensures that there is no interference with normal judicial processes. [Schedule 1, item 19, subsection 44ZZRO(3)]

Joint ventures - civil penalty proceedings

4.35 An exception for joint ventures applies in a proceeding for a contravention of the cartel civil penalty provisions in relation to a contract containing a cartel provision. [Schedule 1, item 19, subsection 44ZZRP(1)]

4.36 The exception comprises the following elements:

the cartel provision is contained in a contract;
the cartel provision is for the purposes of a joint venture;
the joint venture is for the production and/or supply of goods or services; and
the joint venture is carried on jointly by the parties to the contract, or by means of joint ownership or control of a body corporate formed by the parties to carry on the activity of the joint venture.

4.37 A person wishing to rely on the exception bears an evidential burden of proof of establishing the elements of this exception. [Schedule 1, item 19, subsection 44ZZRP(2)]

4.38 The exception is limited to circumstances involving contractual relations. 'Contract' has its ordinary meaning of an agreement binding or enforceable at law (see paragraph 4.32, above).

4.39 Prior to this Bill, price fixing was a per se breach of the TP Act unless an authorisation was granted under section 88. Section 76D of the TP Act provided a defence if the respondent established that the price fixing agreement is for the purposes of a joint venture and that it does not have the purpose, effect or likely effect of substantially lessening competition in any market. With the inclusion of the joint venture exceptions in sections 44ZZRO and 44ZZRP, section 76D is repealed. [Schedule 1, item 29]

Anti - overlap provisions

4.40 Current subsections 45(5) to (7) prevent overlaps between conduct that may be captured under section 45 and certain other prohibitions in Part IV of the TP Act. These provisions are colloquially referred to as 'anti-overlap' provisions.

4.41 Exceptions apply to the cartel criminal offences and civil penalty prohibitions to reflect the existing anti-overlap provisions [Schedule 1, item 19, sections 44ZZRQ to 44ZZRU]. As section 44ZZRE, in effect, quarantines expressions used in Division 1 of Part IV from applying to the rest of the TP Act, the language used in the exceptions has been simplified to the extent possible.

For example, current subsection 45(7) provides that section 45 'does not apply to or in relation to a contract, arrangement or understanding in so far as the contract, arrangement or understanding provides, or to or in relation to a proposed contract, arrangement or understanding in so far as the proposed contract, arrangement or understanding would provide, directly or indirectly for the acquisition of any shares in the capital of a body corporate or assets of a person.
By comparison, the comparable exception in subsection 44ZZRU removes references to proposed contracts, arrangements or understandings, as well as other redundant language, and inserts paragraphs to enhance clarity.

4.42 Where the anti-overlap provisions apply as exceptions to the criminal offences, the provisions insert notes specifying that a defendant bears an evidential burden of proof of establishing the matters contained in the exceptions. [Schedule 1, item 19, subsections 44ZZRQ(1), 44ZZRR(1), 44ZZRS(1), 44ZZRT(1), 44ZZRU(2)]

4.43 Where the anti-overlap provisions apply as exceptions to the civil prohibitions, the provisions include subsections specifying that a person wishing to rely on the exception in relation to a contravention bears an evidential burden of proof of establishing the matters contained in the exception. [Schedule 1, item 19, subsections 44ZZRQ(2), 44ZZRR(2), 44ZZRS(3), 44ZZRT(1) and (2) and 44ZZRU(1)]

4.44 Similar exceptions are also included in the Schedule version. These exceptions do not refer to the evidential burden on the defence in relation to criminal prosecutions, because the Schedule version operates independently of the Criminal Code. [Schedule 1, item 126, sections 44ZZRQ to 44ZZRW]

Price of goods or services collectively acquired ; or joint advertising of price for re - supply of goods or services collectively acquired

4.45 Current subsection 45A(4) provides that current subsection 45A(1) does not apply to a provision of a contract, arrangement or understanding in relation to the price for goods or services to be collectively acquired, or for the joint advertising of the price for the re-supply of goods or services collectively acquired. In each case, if a relevant is exempted from subsection 45A(1), it may still be prohibited by the TP Act if the provision has the purpose, effect or likely effect of substantially lessening competition.

4.46 As noted earlier in this explanatory memorandum, section 45A is deleted by the Bill. [Schedule 1, item 21]

4.47 Exceptions apply to the cartel criminal offences and civil penalty prohibitions to reflect the existing exemption in current subsection 45A(4) [Schedule 1, item 19, section 44ZZRV]. As section 44ZZRE, in effect, quarantines expressions used in Division 1 of Part IV from applying to the rest of the TP Act, the language used in the exception has been simplified to the extent possible.

4.48 The exception applies in relation to a contract, arrangement or understanding containing a cartel provision if the cartel provision meets the purpose/effect test, and the cartel provision relates to the price for goods or services to be collectively acquired, whether directly or indirectly, by the parties to the contract, arrangement or understanding, or the cartel provision is for the joint advertising of the price for the re-supply of goods or services collectively acquired.

4.49 Where the exception applies to the criminal offences, a note is inserted specifying that a defendant bears an evidential burden of proof of establishing the matters contained in the exception. [Schedule 1, item 19, subsection 44ZZRV(1)]

4.50 Where the exception applies to the civil prohibitions, a subsection specifies that a person wishing to rely on the exception in relation to a contravention bears an evidential burden of proof of establishing the matters contained in the exception. [Schedule 1, item 19, subsection 44ZZRV(2)]

4.51 Similar exceptions are also included in the Schedule version. These exceptions do not refer to the evidential burden on the defence in relation to criminal prosecutions, because the Schedule version operates independently of the Criminal Code. [Schedule 1, item 126, section 44ZZRV]

Application and transitional provisions

Conduct notified ( collective bargaining )

4.52 Application, savings and transitional provisions operate in relation to the notification provisions in the TP Act. Paragraphs 93AB(1A)(c) and (d) apply to a contract or arrangement made, or an understanding arrived at, before, at or after the commencement time. Paragraphs 93AB(1A)(c) and (d) enable a corporation to lodge a collective bargaining notice with the ACCC, where the corporation proposes to give effect to a provision of a contract containing a cartel provision. [Schedule 1, item 125, section 175]

4.53 Commencement time means the commencement of Division 1 of Part IV. [Schedule 1, item 125, section 174]

4.54 Any existing notifications granted by the ACCC to corporations to engage in relevant conduct that were in force immediately before the commencement time are preserved. Section 178 also gives effect to any such administrative decisions made prior to the commencement of the relevant provisions of this Bill. [Schedule 1, item 125, section 178]

Contracts containing cartel provision subject to grant of authorisation

4.55 Application, savings and transitional provisions operate in relation to the authorisation provisions in the TP Act. An application provision provides that paragraph 88(1A)(b) applies to a contract made, or an understanding arrived at, before, at or after the commencement time. Paragraph 88(1A)(b) provides that the ACCC may authorise a corporation to make a contract, arrangement or understanding, or to give effect to a contract, arrangement or understanding, where the contract, arrangement or understanding contains a cartel provision. [Schedule 1, item 125, section 175]

4.56 Any pre-commencement authorisations granted by the ACCC to corporations to engage in relevant conduct that were in force immediately before the commencement time are preserved. Section 177 also gives effect to any such administrative decisions made prior to the commencement of the relevant provisions of this Bill. [Schedule 1, item 125, section 177]

Joint ventures

4.57 The joint venture defence in current section 76D of the TP Act continues to apply in relation to proceedings against a person in relation to a contravention of subparagraphs 45(2)(a)(ii) or (b)(ii) in relation to a provision of the kind referred to in subsection 45A(1) of the TP Act, whether or not the proceedings were instituted before or after the commencement time, as if section 76D had not been repealed. [Schedule 1, item 125, section 176]

Consequential amendments

4.58 Various amendments are required as a consequence of extending the ACCC's power to authorise inclusion in an existing or proposed contract, arrangement or understanding a cartel provision. The effect of these consequential amendments is to insert into various provisions references to subsections 90(5A) and (5B). [Schedule 1, items 67, 68, 69, 86 and 87, subsections 91A(4), 91B(5), 91C(7), 101(1A), 101(2)]

4.59 Currently collective bargaining notice mean a notice under subsection 93AB(1). Consequential to item 71, the definition is amended to mean a notice under subsection 93AB(1A) or (1). [Schedule 1, item 70, section 93AA]

4.60 With the extension of the collective bargaining regime in the TP Act to contracts that include cartel provisions, consequential amendments enable a corporation to lodge two different types of collective bargaining notices - those containing a cartel provision, and those containing an exclusionary provision or a provision that may substantially lessen competition. [Schedule 1, items 74, 75, 76 and 77, subsection 93AC(1)]

4.61 Current subsection 93AC(2) of the TP Act is amended to clarify that the ACCC's powers to issue an objection notice under this subsection relates to a collective bargaining notice under subsection 93AB(1). [Schedule 1, items 79 and 80]

4.62 As the Bill repeals section 45A, various provisions that refer to price fixing or section 45A are also repealed. This includes paragraph 93AC(1)(b) and subsection 93AC(6). [Schedule 1, items 78 and 81]

4.63 Current section 93AF prevents the repeated lodgment of a collective bargaining notice in particular circumstances. A similar provision is inserted to prevent the repeated lodgment of collective bargaining notices containing a cartel provision, where the notice has been withdrawn or the ACCC has objected to it. The provision applies to 'any person' in relation to the same contract or proposed contract or in relation to a contract or proposed contract to the like effect. [Schedule 1, item 82, section 93AEA]

4.64 Current section 93AF is amended to clarify that those provisions apply to the collective bargaining notification process established under current subsection 93AB(1). [Schedule 1, items 83 and 84, section 93AF]

4.65 Section 93A sets out the procedure applying to pre-decision conferences in notification matters. The ACCC may currently treat two or more collective bargaining notices as if they constituted a single notice, and to issue one draft notice and hold one conference on that draft notice, if certain conditions are met. Amendments clarify that this power extends to a collective bargaining notice relating to a contract, arrangement or understanding that contains a cartel provision. [Schedule 1, item 85, subsection 93A(12)]

Chapter 5 - Investigation powers

Outline of chapter

5.1 This chapter outlines amendments to the Telecommunications (Interception and Access) Act 1979 ('the TIA Act') and the Proceeds of Crime Act 2002 ('the POC Act'). It also outlines amendments to the search and seizure provisions of Part XID of the Trade Practices Act 1974 ('the TP Act').

Context of amendments

Telecommunications ( Interception and Access ) Act 1979

5.2 Cartels pose particular problems for enforcement agencies because they often involve multiple parties who generally know that what they are doing is illegal, and therefore operate in secret with limited documentary evidence and enhanced reliance on oral communication. In these circumstances the discovery and proof of a cartel is difficult, with regulators often taking on proceedings without the benefit of direct evidence of cartel conduct.

5.3 In these circumstances, the use of telecommunications interception powers can be a means of finding evidence of the 'directing mind' of corporate criminal behaviour. Accordingly, the Bill amends the TIA Act to provide access to telephone interception in an investigation of the cartel offences. As a matter of practice, this could occur via joint investigations between an interception agency and the Australian Competition and Consumer Commission ('the ACCC').

Proceeds of Crime Act 2002

5.4 Currently, a breach of the proposed cartel offences by a natural person would be covered by the definition of serious offence under section 338 of the POC Act. However, this definition does not capture corporations that breach the proposed cartel offence provisions. Accordingly, the various powers in the POC Act could not be applied to corporate offenders.

5.5 In light of this, the Bill extends the current definition of a serious offence to ensure that a corporation in breach of the cartel criminal offences is able to be dealt with under the POC Act.

Part XID of the Trade Practices Act 1974

5.6 The Trade Practices Legislation Amendment Act (No. 1) 2006 provided search and seizure powers in relation to potential contraventions of the TP Act. The Bill amends the TP Act to better align the current search and seizure provisions with the search and information-gathering provisions under the Crimes Act 1914.

5.7 In addition, the search and seizure provisions of the TP Act do not currently provide an executing officer with the power to seize evidence for a breach of the related obstruction offences under sections 137.1, 137.2 and 149.1 of the Criminal Code. To ensure effective prosecution and enforcement of these provisions, the Bill provides executing and assisting officers with the power to seize evidence in relation to the obstruction offences under the Criminal Code.

Summary of new law

5.8 The Bill amends the TIA Act to list the proposed cartel offences and related offences as a serious offence under section 5D of the TIA Act. This amendment (to a threshold provision of the TIA Act) directly ensures that criminal cartel conduct (including related accessorial offences) is capable of being subject to telephone interception.

5.9 The Bill also amends the POC Act to extend the definition of serious offence to expressly refer to the proposed cartel offences, ensuring application to both corporations and individuals.

5.10 In addition to amending the TIA Act and the POC Act, the Bill:

expands the scope for which the ACCC may currently obtain a search warrant under Part XID of the TP Act;
facilitates the execution of a search warrant by providing for temporary absences; access, transfer and removal of data which might constitute evidential material; removal of items from premises for inspection; transfer of inspectors; video recording; and requiring a person with computer knowledge to assist;
provides for a more effective and efficient prosecution of the false or misleading information and obstruction offences under the Criminal Code and ancillary offences under the TP Act, by allowing a search warrant to be issued and evidence to be seized in relation to those offences; and
strengthens the penalty for failing to provide evidence or answer questions under Part XID of the TP Act.

5.11 The amendments above are aimed at better reflecting the search and information gathering powers under the Part IAA of the Crimes Act.

Comparison of key features of new law and current law

New law Current law
Telecommunication interception is able to be used as a tool to investigate breaches of cartel offences under the TIA Act. Telecommunication interception cannot be used as a tool in the investigation of a breach of the TP Act.
The POC Act would capture both corporations and individuals that breach the proposed cartel offence provisions. No direct equivalent.
The ACCC can obtain information, documents and evidence or obtain a search warrant and seize evidential material in relation to ancillary liability offences. No direct equivalent.
The ACCC can obtain a search warrant and seize evidential material in relation to the provision of false or misleading information or documents and obstruction offences under the Criminal Code. No direct equivalent.
The ACCC can temporarily remove things from premises where a search warrant has been issued to conduct an examination and determine whether the things may be seized under the search warrant. No direct equivalent.
The ACCC can: put data which might constitute evidential material accessed by operating electronic equipment at the premises into documentary form; transfer such data to a disk, tape or storage device brought to the premises or at the premises (with the occupier's consent); and remove the data in documentary form or on a disk, tape or storage device. An inspector or an assistant may operate equipment or other facilities at the premises to put evidential material in documentary form and remove documents produced, or transfer evidential material into a disk, tape or other storage device. However, the existing provisions do not refer to accessing, transferring and removing data which might constitute evidential material and thus it is not clear whether the ACCC is authorized to do this.
The Australian Federal Police ('the AFP') officer has authority to assist an ACCC officer who is executing a search warrant, including by using reasonable and necessary force against persons or property. No direct equivalent.
The penalty for failing to answer questions or produce evidence during the execution of a warrant is 30 penalty units or imprisonment for 12 months, or both. The penalty for failing to answer questions or produce evidence during the execution of a warrant is 30 penalty units. It does not specify a term of imprisonment.
Answers provided under section 154R (answers provided during an execution of a search warrant) cannot be used in criminal proceedings against individuals (other than in proceedings for contravention of subsection 154R(2) or an offence under subsections 137.1 or 137.2 of the Criminal Code) but can be used in relation to civil proceedings. Answers provided under section 154R cannot be used in criminal proceedings, or any proceedings that would expose the person to a civil penalty (other than in proceedings for contravention of subsection 154R(2) or an offence under subsections 137.1 or 137.2 of the Criminal Code).
The ACCC can seek an order from a magistrate requiring a person with computer knowledge to provide reasonable and necessary information or assistance to the ACCC during the execution of a search warrant. No direct equivalent.
The maximum period of time for which the ACCC is able to retain things seized under a search warrant is 120 days. The maximum period of time for which the ACCC is able to retain things seized under a search warrant is 60 days.
The inspector may transfer his or her role as executing officer to another inspector. No direct equivalent.
An executing officer may take photographs or make video recordings of the premises or anything at the premises. No direct equivalent.
If the warrant is still in force, the executing officer and those assisting may complete the execution of the warrant after all of them temporarily cease its execution and leave the premises for not more than one hour, or for a longer period if the occupier of the premises consents in writing. No direct equivalent.

Detailed explanation of new law

Telecommunications ( Interception and Access ) Act 1979

5.12 The TIA Act regulates the use of intercepted material in investigations. Subsection 7(1) of the TIA Act prohibits the interception of communications in their passage over a telecommunications system. An exception applies if the interception of communications is carried out pursuant to a warrant issued under the TIA Act (interception warrant).

5.13 An interception warrant may only be issued with respect to a serious offence . The two indictable cartel offences (in sections 44ZZRG and 44ZZRF, as well as the mirror offences in the Schedule version of Part IV and the related ancillary offences) are listed as a serious offence under section 5D of the TIA Act. This approach provides certainty of application. [Schedule 1, item 2, subsection 5D(5A)].

Proceeds of Crime Act 2002

5.14 While a breach of the proposed cartel offences by a natural person would be covered by the definition of serious offence under the POC Act, the current definition does not appear to capture corporations that breach the proposed cartel offence provisions. This means that the various powers in the POC Act could not be applied to corporate offenders. To ensure that a corporation in breach of the new offences is captured under the POC Act, amendments extend the definition of serious offence to expressly include the proposed cartel offences. [Schedule 1, item 1, paragraph 338(ed)]

Amendments to the ACCC's search and seizure powers

5.15 A series of amendments to the ACCC's search and seizure regime, based on the search and information gathering provisions under Part IAA of the Crimes Act:

expand the scope for which the ACCC may currently obtain a search warrant;
facilitate the execution of a search warrant;
provide for a more effective and efficient prosecution of the obstruction offences under the Criminal Code; and
strengthen the penalty for failing to provide evidence or answer questions under Part XID of the TP Act.

Ancillary liability offences

5.16 The Bill enables the ACCC to obtain a search warrant and seize evidential material in relation to the specified forms of ancillary liability offences. This is to ensure that both the primary cartel offences can effectively and efficiently be enforced. A definition of the term contravention therefore refers to the ancillary liability offences (of attempt, incitement and conspiracy) provided in the Criminal Code. [Schedule 2, item 7, section 154A]

Search and seizure of data

5.17 The Cybercrime Act 2001 (Cybercrime Act) amended section 3L of the Crimes Act to enable an executing officer to operate electronic equipment to access data if he or she believes on reasonable grounds that the data might constitute evidential material. Part XID of the TP Act does not contain an analogous provision.

5.18 Currently, Part XID permits a magistrate to issue a warrant to the ACCC enabling the search for, and seizure of, evidential material, subject to certain conditions. However, it is unclear whether the ACCC is currently able to seize, transfer, copy or otherwise handle data.

5.19 The provisions under Part XID of the TP Act are inconsistent with Part IAA of the Crimes Act and do not capture the policy intent of the Cybercrime Act. Given the legislative history of the Crimes Act, there is a risk that a court would conclude that a provision equivalent to subsection 3L(1) was deliberately omitted from the TP Act.

5.20 Accordingly, amendments enable the ACCC to put data accessed by electronic equipment into documentary form; and transfer data to a disk, tape or storage device brought to the premises. [Schedule 2, items 13 and 20, subsections 154F(1) and 154H(1)]

5.21 Given that the above amendments introduce the term data , this term along with other related terms (data held in computer and data storage device) are defined, ensuring consistency between the Part XID of the TP Act and Part IAA of the Crimes Act. [Schedule 2, items 8 to 10, section 154A]

Removal of items from premises

5.22 There may be some instances where the ACCC is not able to practicably examine and process data or things at the occupier's premises to determine whether they may be seized (for example, the process of cracking passwords may take a significant period of time). This was an issue in relation to the Crimes Act. To address this, the Cybercrime Act amended section 3L of the Crimes Act to allow an executing officer to temporarily remove things from premises to conduct an examination and determine whether the things may be seized under the search warrant.

5.23 Part XID of the TP Act does not contain an analogous provision. To ensure that Part XID of the TP Act is consistent with Part IAA of the Crimes Act, amendments enable the ACCC to examine items or process data outside the occupier's premises, where there are reasonable grounds to believe that the item or data contains evidential material. [Schedule 2, item 19, section 154GA]

Person with computer knowledge to assist

5.24 The ACCC is currently not able to seek an order from a magistrate requiring a person with computer knowledge to provide assistance to the ACCC during the execution of a search warrant. This is inconsistent to section 3L of the Crimes Act, which enables a magistrate to order a person with computer knowledge to assist an executing officer. Accordingly, amendments enable an executing officer to apply to a magistrate for an order requiring a person to provide reasonable and necessary assistance to allow the officer to access, transfer and convert data. Amendments also specify the circumstances in which a magistrate may grant an order and provide a penalty of 6 months imprisonment for a breach of the court order. [Schedule 2, item 32, section 154RA]

False or misleading information

5.25 Part XID does not currently provide the executing officer or an officer assisting with the power to seize evidence of a breach of sections 137.1 (false or misleading information), 137.2 (false or misleading document) or 149.1 (obstruction of a Commonwealth public official) of the Criminal Code whilst executing a warrant. To ensure effective and efficient prosecution of the obstruction offences, amendments enable an executing officer and any officer assisting to seize evidence relating to breaches of sections 137.1, 137.2 and 149.1 of the Criminal Code. [Schedule 2, item 18, paragraph 154G(2)(a)]

Video recordings

5.26 Currently, Part XID does not expressly provide for officers executing a search warrant to take photographs or make video recordings of anything at the premises. Providing an express basis for this will allow the ACCC to record evidence that will assist in showing contraventions of the cartel offences (such as a video recording showing where secret records of a cartel were hidden) or a breach of offences relevant to the execution of the warrant (such as photographs providing evidence that the occupier failed to provide reasonable facilities and assistance in breach of section 154Q).

5.27 Further, expressly enabling the ACCC to photograph or make video recordings of the premises or things at the premises provides the Government with evidence to defend unwarranted claims for compensation under section 154ZC (compensation for damage done to electronic equipment), and assists the ACCC to ensure the proper handling and cataloguing of evidential material seized. [Schedule 2, item 17, subsection 154G(1A)].

Substitution of inspector named as investigating officer

5.28 Part XID of the TP Act does not allow the substitution of an investigating officer by virtue of the current definition of an executing officer . The execution of a search warrant may extend over a number of days. To ensure that an executing officer is able to transfer his or her responsibilities to another officer for personal, work or other reasons, and to ensure consistency with Part IAA of the Crimes Act, the amendment enables the transfer of an executing officer's role from one inspector to another. [Schedule 2, item 12, section 154A]

Temporary absences

5.29 Many search warrants involve lengthy and complex executions over a number of days, given that evidence of cartel conduct is usually difficult to find and spread over a large number of documents. Currently, executing officers or assisting officers are not able to temporarily leave the premises for breaks or other reasons. To ensure that they are able to do so, amendments enable an executing officer and officers assisting, if the warrant is still in force, to complete the execution of the warrant after all of them temporarily cease their execution and leave the premises for not more than one hour (or for a longer period if the occupier of the premises consents in writing). [Schedule 2, item 17, subsection 154G(1B)]

Australian Federal Police to assist in search warrant

5.30 A person may obstruct the execution of a search warrant by, for example, obstructing an executing officer of the ACCC. In such circumstances, it is necessary for a member of the AFP to be authorised to assist. Actions which the AFP may undertake include arresting a person for obstruction in breach of section 149.1 of the Criminal Code or using reasonable force against a person or an object. Accordingly, amendments provide the AFP with the authority to assist an ACCC officer executing a search warrant, including by using reasonable and necessary force against any persons or property. [Schedule 2, item 28, paragraph 154L(ba)]

Penalty for failing to answer questions or produce evidence

5.31 The current penalty for failing to answer questions or produce evidence during an execution of a search warrant is inadequate because it does not specify a maximum term of imprisonment. It is also inconsistent with the maximum penalties imposed for breaching other similar provisions, such as subsection 155(6A) of the TP Act and section 149.1 of the Criminal Code.

5.32 To address this, the existing penalty for failing to answer evidence or producing evidence during an execution of a search warrant (30 penalty units) is removed and substituted by a new penalty (30 penalty units or imprisonment for 12 months, or both). [Schedule 2, item 29, subsection 154R(2)]

Privilege against self incrimination or exposure to a penalty

5.33 Currently, subsection 154R(4) provides that an answer given during an execution of a search warrant is not admissible in evidence against the individual in any criminal proceedings, or any proceedings that would expose the person to a penalty. The amendment removes this immunity in relation to civil proceedings, consistent with the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers. This allows the privilege against self-incrimination to be abrogated for individuals and corporations, but a 'use' immunity to be available to individuals in criminal prosecutions.

5.34 Accordingly, the amendments allow answers provided under section 154R (answers provided during an execution of a search warrant) to be used in any proceedings that would expose a person to a civil penalty. However, answers given cannot be used in any proceedings that would expose the person to criminal proceedings other than in proceedings for a contravention of subsection 154R(2) or an offence under subsections 137.1 or 137.2 of the Criminal Code. [Schedule 2, item 30, subsection 154R(4)]

Time period for ACCC to retain items seized under warrant

5.35 To reflect the difficulty in accessing some electronic documents, the volume of documents seized and the ACCC's regular use of specialist consultant economists to assist in analysing such documents, the period of time in which the ACCC is able to retain things seized under a search warrant is extended from 60 days to 120 days. [Schedule 2, items 35 and 36, subsections 154U(1) and (2) and paragraph 154V(1)(a)]

5.36 Inspectors retaining items in relation to suspected breaches of the obstruction provisions of the Criminal Code may also need additional time to examine an item. To reflect this, amendments enable an inspector to apply to a magistrate for an order extending the time period for which he or she may retain a thing in relation to a suspected breach of the obstruction offences under the Criminal Code. [Schedule 2, item 41, paragraph 154V(2)(d)]

Magistrate may issue a warrant for any premises in Australia

5.37 Although it is clear that Part XID only applies to premises in Australia, it is currently not clear whether section 154X (issue of warrants) allows a magistrate to issue search warrants in respect of other States or Territories other than its own. To address this, amendments clarify that section 154X does not limit a magistrate to issuing a warrant in respect of his or her own State or Territory. [Schedule 2, item 42, subsection 154X(2)]

Application and transitional provisions

5.38 To avoid doubt as to the application of the amendments to search warrants, the amendment ensures that the amendments to Division 4 of Part XID and section 154A apply to all warrants issued after the commencement of the item. [Schedule 2, item 52]

Consequential amendments

Data

5.39 To reflect the amendments enabling the ACCC to access data, consequential amendments remove references to 'evidential material' and inserts references to 'data.' [Schedule 2, items 14 to 16, 21, 24 and 26, subsections 154F(2) and (3), 154H(3) and (4), and paragraph 154H(5)(a)]

Removal of items

5.40 The Bill makes consequential amendments to the proposed provisions allowing the ACCC to move or seize evidence by inserting words 'moved' or 'from premises' in certain provisions. [Schedule 2, items 22, 33 and 34, subsections 154H(3), 154T(1) and (2)]

Person with computer knowledge to assist

5.41 Consequential amendments to the provisions relating to the operation of electronic equipment insert a note referring to the proposed provisions requiring a person with computer knowledge to provide assistance. [Schedule 2, item 23, subsection 154H(3)]

References to the Criminal Code

5.42 The Bill makes consequential amendments to include the false, misleading and obstruction offences under the Criminal Code under the definition of evidential material . [Schedule 2, item 11, section 154A]

Time period for ACCC to retain items seized under warrant

5.43 As a consequence of the inclusion of a reference to the Criminal Code, the words 'in contravention of' are inserted in various provisions. [Schedule 2, items 37 to 41, subsections 154V(1) and (2)]

Removal of items from premises

5.44 The Bill makes consequential amendments to various provisions by referring to the words 'moved' and 'premises' to reflect the proposed ability of the ACCC to temporarily remove items from premises. [Schedule 2, items 22, 33 and 34, subsections 154H(3), 154T(1) and (2)]

AFP assisting

5.45 Consequential amendments insert references to 'a member of the Australian Federal Police' reflect that they will be empowered to assist the ACCC in the execution of a search warrant. [Schedule 2, item 27, section 154K]

Chapter 6 - Remedies

Outline of chapter

6.1 This chapter outlines amendments to the remedies and enforcement provisions under the Trade Practices Act 1974 ('the TP Act').

Context of amendments

6.2 As Part IV does not currently contain criminal offences, many of the remedial provisions in Part VI of the TP Act require amendments so that they will apply effectively to the cartel regime.

6.3 The Commonwealth Director of Public Prosecutions ('the CDPP') (with responsibility for prosecuting Commonwealth criminal offences) is not able to seek the orders that the Australian Competition and Consumer Commission ('the ACCC') (with responsibility for prosecuting civil prohibitions) may currently seek, such as non-punitive, disqualification and adverse publicity orders.

6.4 If the CDPP were not given the same powers as the ACCC in relation to remedies and enforcement, its role in the prosecution of cartel offences would be limited. To address this, the Bill amends the TP Act to put the CDPP in the same position as the ACCC in relation to orders it is able to seek from a court in criminal cartel proceedings.

Summary of new law

6.5 The Bill amends the enforcement and remedies provisions of Part VI of the TP Act to place the CDPP in the same position as the ACCC in relation to the orders it may seek from a court in criminal cartel proceedings, such as disqualification orders, non-punitive orders and other orders. The Bill also places the CDPP in the same position as the ACCC in relation to applications for injunctions and undertakings as to damages. In addition, the Bill enables the CDPP to take representative actions on behalf of those who have suffered loss as a result of a breach of the proposed criminal offence provisions.

6.6 The Bill also extends the enforcement and remedy provisions in Part VI to apply to the prohibitions on serious cartel conduct, including:

the statutory bars (under section 76B) to apply to Part IV of the TP Act, including the cartel offences;
the compensation for victims provisions (under section 79B) so that if a defendant has insufficient financial resources to pay both a pecuniary penalty and compensation to a victim, the Court may give preference to the latter;
the enforcement and recovery of fines provisions (under section 79A) so that the methods for enforcing and recovering fines under the TP Act also apply to the cartel offences; and
the evidence provisions (under section 83) so that findings of fact made against a respondent in earlier proceedings will be prima facie evidence of those facts in later proceedings by any affected person for damages or compensation orders.

Comparison of key features of new law and current law

New law Current law
The statutory bars in section 76B apply to the cartel criminal offences. Section 76B only applies to sections 75AYA (misrepresenting the effect of the new tax system changes) and 95AZN (providing false and misleading information regarding merger clearances and authorisations).
Evidence or information given by an individual for the purposes of civil proceedings against that person under Part VI cannot be admissible in criminal proceedings for substantially the same conduct (except in relation to falsity of evidence). Evidence or information given by an individual for the purposes of civil proceedings against that person under sections 75AYA and 95AZN cannot be admissible in criminal proceedings for substantially the same conduct (except in relation to falsity of evidence).
The Court may give preference to compensation for victims of cartel conduct where the defendant has insufficient financial resources to pay both the pecuniary penalty and compensation. The Court may give preference to compensation for victims in relation to pecuniary penalty orders made under section 76 or fines given under the consumer protection offence provisions of Part VC.
The CDPP is able to: seek orders for injunctions without the need to provide undertakings as to damages; non-punitive orders; adverse publicity orders; disqualification orders; other remedial orders; and take representative actions in relation to cartel offences. The ACCC is able to seek orders for injunctions without the need to provide undertakings as to damages; non-punitive orders; adverse publicity orders; disqualification orders; other remedial orders; and take representative actions in relation to cartel offences.
The findings of fact made against a respondent in earlier cartel proceedings will be prima facie evidence of those facts in later proceedings for damages under section 83, in addition to the provisions that currently apply. The findings of fact made against a respondent in earlier cartel proceedings will be prima facie evidence of those facts in later proceedings for damages under section 83 only apply to findings of fact under sections 77, 80, 81, 86C, or 86D, or an offence under Part VC.

Detailed explanation of new law

Statutory bars

6.7 Current subsection 76B(2) prevents a pecuniary penalty from being imposed against a person for a contravention if the person has been convicted of an offence for substantially the same conduct. Under subsection 76B(3), pecuniary penalty proceedings are stayed if criminal proceedings are started in relation to substantially the same conduct. Pecuniary penalty proceedings may only be resumed if the criminal proceedings do not result in a conviction. At present, subsections 76B(2) and (3) only apply to a contravention of sections 75AYA (misrepresenting the effect of the new tax system changes) and 95AZN (providing false and misleading information in relation to merger clearances and authorisations).

6.8 Consistent with recommendations 11.2 of the Australian Law Reform Commission's report, Principled Regulation: Federal Civil and Administrative Penalties in Australia and sections 1317M and 1317N of the Corporations Act 2001, the Bill extends the statutory bars in section 76B to apply to Part IV of the TP Act, including the criminal cartel offences. [Schedule 1, item 27, subsections 76B(2) to (4)]

6.9 Cartels often operate across national borders, although the introduction of cartel criminal offences in Australia will assist to deter such conduct. As defence counsel could seek to rely on a prosecution for an offence in another jurisdiction to engage the application of the statutory bars, the Bill defines an offence to refer to an offence against a law of the Commonwealth, a State or a Territory. This reflects analogous provisions in the Corporations Act 2001. [Schedule 1, item 28, subsection 76B(6)]

6.10 Current subsection 76B(5) also stipulates that evidence or information given by an individual for the purposes of civil proceedings against that person for a pecuniary penalty will be inadmissible in criminal proceedings against that individual (under sections 75AYA and 95AZN) if the criminal offence is based on substantially the same conduct as the claimed civil contravention. The only exception to this is in relation to falsity of evidence. Amendments applying subsection 76B(5) to Part IV, including the criminal cartel proceedings, are necessary to ensure that fairness is maintained. [Schedule 1, item 27, subsection 76B(5)]

Compensation for victims

6.11 Current section 79B enables the Court to give preference to compensation for victims of cartel conduct where the defendant has insufficient financial resources to pay both a pecuniary penalty (under section 76 for cartel conduct) or a fine (under the consumer protection offences in Part VC) as well as compensation. This provision is amended to extend the principle to the cartel criminal offences. [Schedule 1, item 38, subparagraph 79B(a)(ii)]

Orders which can be sought by the CDPP

6.12 Various existing powers are amended to enable the CDPP to seek similar orders to those able to be sought by the ACCC.

Undertakings

6.13 An injunction under section 80 may be sought for a contravention of the cartel offences or civil prohibitions by virtue of subparagraph 80(1)(a)(i). The CDPP will be able to seek an injunction under subsection 80(1) because an application may be made by any person. However, if the CDPP were to seek an interim injunction pursuant to this section, the CDPP (unlike the ACCC) would currently be required to make an undertaking as to damages. This would create a significant financial disincentive for the CDPP to seek an interim injunction that is in the public interest. Consequently, an amendment is made so that the CDPP is not required to make an undertaking as to damages. [Schedule 1, item 39, subsection 80(9)]

Non-punitive orders

6.14 The ACCC may currently apply for non-punitive orders under section 86C of the TP Act. The purpose of section 86C is to enable the Court to make orders to redress, or prevent the repeat of, a contravention of certain provisions of the TP Act by making: a community service order; a probation order; an order directing a person to establish a compliance program; a training program; or an order to publish information or an advertisement.

6.15 As the cartel offences and civil prohibitions are inserted in Part IV, section 86C will apply by virtue of the definition of 'contravening conduct' in subsection 86C(4). However, as currently drafted, the CDPP would not be able to seek an order under section 86C in proceedings against a person for contravention of the cartel offences. Consequently, amendments give the CDPP this ability. [Schedule 1, item 52, subsection 86C(1A)]

Adverse publicity orders

6.16 Current section 86D enables the Court, on the application of the ACCC, to order that a person who has contravened the specific provisions of the TP Act to publicise that fact, either generally, or to specific persons. Section 86D will apply to the cartel civil prohibitions by virtue of paragraph 86D(1)(a).

6.17 However, as currently drafted, the CDPP would not be able to seek an order under section 86D in proceedings against a person for contravention of the cartel offences. Consequently, amendments give the CDPP this ability. [Schedule 1, items 53 and 54, paragraph 86D(1)(b) and subsection 86D(1A)]

Disqualification orders

6.18 Current section 86E enables the Court to disqualify individuals from managing a corporation where they are involved in a contravention of Part IV of the TP Act. As the cartel offences and civil prohibitions will be inserted in Part IV, section 86E will apply by virtue of the wording of paragraph 86E(1)(a).

6.19 However, as currently drafted, the CDPP would not be able to seek an order under section 86E in proceedings against a person for contravention of the cartel offences. To address this, amendments give the CDPP this ability. [Schedule 1, item 53, subsection 86E(1A)]

6.20 In addition, current subsection 86E(3) provides that the ACCC must notify ASIC if the Court makes a disqualification order on application of the ACCC. This is to ensure that ASIC is aware of any disqualification orders made against a person so that it is able to update its register of disqualified persons (as required under section 1274AA of the Corporations Act 2001). Accordingly, amendments are made so that if the Court makes a disqualification on the application of the CDPP, the CDPP is required to notify ASIC of this fact. [Schedule 1, item 58, subsection 86E(3A)]

Other orders

6.21 Current subsection 87(1) enables the Court to make orders it thinks appropriate against a person who has engaged in a contravention of a provision of Part IV or an offence against Part VC. As currently worded, subsection 87(1) would not apply in relation to a cartel offence proceeding. This is because such a proceeding would not be a proceeding under Part VI of the TP Act. Consequently, amendments specifically refer to the cartel offences in the same way as the subsection refers to offences against Part VC. [Schedule 1, item 59, subsection 87(1)]

Representative actions

6.22 Current subsection 87(1B) enables the ACCC to take representative actions in relation to Parts IV (other than section 45D or 45E), IVA, IVB, V or VC. However, as currently drafted, the CDPP is not able to take representative actions in relation to cartel offences. The amendments give the CDPP the ability to take actions on behalf of persons who have suffered loss. [Schedule 1, items 61 and 62, paragraph 87(1A)(ba) and subsection 87(1BA)]

Findings in proceedings to be evidence

6.23 Current section 83 provides that findings of fact made against a respondent in earlier proceedings will be prima facie evidence of those facts in later proceedings by any affected person for damages or compensation orders. Section 83 is designed to make it easier for individual applicants to prove their case against a respondent to which whom the ACCC or some other party has successfully brought proceedings. Section 83 is amended to specifically refer to the cartel offences and civil prohibitions. [Schedule 1, item 40, section 83]

Reference to cartel offences to exempt cartel offences from section 78

6.24 Current section 78 provides that criminal proceedings are not to be brought for contraventions of Part IV or V. Amendments exempt the cartel criminal offences from section 78. [Schedule 1, item 30, subparagraphs 78(a)(i) and (ia)]

Consequential amendments

Statutory bars

6.25 Consequential amendments reflect the proposed application of the statutory bars to Part IV of the TP Act. [Schedule 1, item 26, subsection 76B(1)]

References to new disqualification order provisions

6.26 Consequential amendments provide specific reference to the proposed provisions regarding disqualification orders. [Schedule 1, items 56 and 57, subsections 86E(2) and (3)]

Representative actions

6.27 Consequential amendments in relation to the representative action amendments insert the word 'or'. [Schedule 1, item 60, paragraph 87(1A)(b)]

6.28 To reflect the proposed ability for the CDPP to take representative actions, the Bill makes consequential amendments to expand the definition of a plaintiff to include the CDPP. [Schedule 1, item 63, paragraph 87D(aa)]

Chapter 7 - Protected cartel information

Outline of chapter

7.1 The Bill enhances the protection afforded to information given in confidence to the Australian Competition and Consumer Commission ('the ACCC') which relates to a breach, or possible breach, of a cartel prohibition. This chapter outlines provisions that provide that, in appropriate circumstances, such information is protected from disclosure to:

a person under section 157 of the Trade Practices Act 1974 ('the TP Act');
a court or tribunal;
a party to a court proceeding to which the ACCC is not a party; and
a person who is considering instituting proceedings before a court.

Context of amendments

7.2 The ACCC has expressed concerns that its ability to obtain confidential information regarding cartel conduct has been significantly hindered by concerns that it may be required to disclose that information to third parties in certain circumstances.

7.3 The ability of the ACCC to obtain confidential information from informants is of particular importance to the detection of cartel conduct. Cartel conduct by its nature is often engaged in covertly. As a result, information from cartel participants or those closely connected to a cartel participant is often required to reveal the conduct.

7.4 However, given the relationship of such informants to the cartel, they may be discouraged from providing the relevant information if concerns or uncertainty exist as to the circumstances in which the information may be disclosed to others.

For example, if appropriate protection was not afforded informants may be reluctant to cooperate with the ACCC due to concerns such as reprisals or liability to third parties.

7.5 For the TP Act to meet its objectives it is essential that the ACCC is able to obtain the information necessary to effectively enforce it. If the protection provided to confidential cartel information is not clarified, the ACCC's ability to obtain the information necessary to enforce the cartel provisions of the TP Act may be frustrated.

Summary of new law

7.6 The Bill promotes competition by enhancing the protection afforded to protected cartel information, that is, information given to the ACCC in confidence which relates to a breach, or possible breach, of a cartel prohibition. The protection of such information is enhanced by amending the TP Act to provide that:

the ACCC may refuse a request for documents under subsection 157(1) if the request relates to a document containing protected cartel information;
the Commission or a Commission official is not to be required to produce to a court or tribunal a document containing protected cartel information, or to disclose protected cartel information to a court or tribunal, except by leave of the court or tribunal;
the Commission or a Commission official, in connection with proceedings before a court to which it is not a party, is not to be required to make discovery, or produce, to a person a document containing protected cartel information; and
the Commission or a Commission official is not required, in connection with prospective proceedings, to make discovery (however described), or to produce, to a person a document containing protected cartel information where that person is considering instituting proceedings before a court and the proceedings have not yet been instituted.

Comparison of key features of new law and current law

New law Current law
The ACCC may refuse a request for documents under subsection 157(1) if the request relates to a document containing protected cartel information. If a request is refused, the Court is not required under subsection 157(2) to order the ACCC to comply with the request. Subsection 157(1) provides that the ACCC must, at the request of a person and upon payment of any prescribed fee, furnish to the person documents connected with matters to which certain notices, proceedings, or applications relate and which tend to establish the case of the person.
Subsection 157(2) provides that if the ACCC does not comply with a request under subsection 157(1), the Court must order it to do so unless it considers the disclosure inappropriate.
The Commission or a Commission official is not to be required to produce to a court or tribunal a document containing protected cartel information, or to disclose protected cartel information to a court or tribunal, except by leave of the court or tribunal. No direct equivalent.
The Commission or a Commission official, in connection with proceedings before a court to which it is not a party, is not to be required to make discovery, or produce, to a person a document containing protected cartel information. No direct equivalent.
The Commission or a Commission official is not required, in connection with prospective proceedings, to make discovery (however described), or to produce, to a person a document containing protected cartel information where that person is considering instituting proceedings before a court and the proceedings have not yet been instituted. No direct equivalent.

Detailed explanation of new law

Amendments relating to the disclosure of documents by the ACCC

7.7 Current section 157 of the TP Act provides a right of access regime for certain documents obtained by the ACCC. The Bill limits the ACCC's requirement to furnish documents requested under subsection 157(1) of the TP Act if the request relates to a document containing protected cartel information. [Schedule 1, items 112 and 113, subsections 157(1), (1A) and (1B)]

7.8 Subsection 157(1) currently provides that the ACCC must, at the request of a person and upon payment of any prescribed fee, furnish to the person documents connected with matters to which certain notices, proceedings, or applications relate and which tend to establish the case of the person.

7.9 As a result, the Bill amends section 157 to provide that the ACCC may refuse to comply with a request under subsection 157(1) where the request relates to a document containing protected cartel information.

7.10 To ensure that this power is exercised appropriately, amendments require the ACCC to have regard to specific factors when exercising this power. These factors are:

the fact that the protected cartel information was given to the ACCC in confidence;
Australia's relations with other countries;
the need to avoid disruption to national and international efforts relating to law enforcement, criminal intelligence and criminal investigation;
in a case where the protected cartel information was given by an informant:

-
the protection or safety of the informant or of persons associated with the informant; and
-
the fact that the production of a document containing protected cartel information, or the disclosure of protected cartel information, may discourage informants from giving protected cartel information to the ACCC in the future;

the legitimate interests of the corporation which, or the person who, made the request under subsection 157(1); and
such other matters (if any) as the ACCC considers relevant.

7.11 Subsection 157(2) and (3) currently provide that if the ACCC does not comply with a request under subsection 157(1), the Court must order it to do so unless it considers the disclosure inappropriate. To prevent a person using subsection 157(2) to circumvent the intention behind the amendments detailed above, amendments provide that if a request under subsection 157(1) is refused, the Court is not able to order the ACCC to comply with it under subsection 157(2). [Schedule 1, item 114, subsection 157(2)]

7.12 In order to ensure a consistent meaning throughout Part XII, protected cartel information is defined for the purposes of section 157 to have the same meaning as in section 157B. [Schedule 1, item 115, subsection 157(6)]

Disclosure of protected cartel information

7.13 The Bill protects in appropriate cases information given to the ACCC in confidence that relates to a breach, or a possible breach, of the cartel prohibitions from being subject to a subpoena, non-party discovery, pre-trial discovery, or like orders. The protections are in addition to existing exemptions and immunities which may operate to protect such information from inappropriate disclosure, including but not limited to public interest immunity.

Disclosure of protected information to a court or tribunal

Commission or a Commission official not required to disclose protected cartel information

7.14 Protected cartel information is protected from inappropriate disclosure to a court or tribunal. [Schedule 1, item 116, section 157B]

7.15 The Commission or a Commission official is not to be required to produce to a court or tribunal a document containing protected cartel information, or to disclose protected cartel information to a court or tribunal, except by leave of the court or tribunal. To ensure that leave is only granted in appropriate cases, the Bill provides an exclusive list of factors to which a court or tribunal must have regard when exercising its power to grant leave under subsection 157B(1). These factors are:

the fact that the protected cartel information was given to the ACCC in confidence;
Australia's relations with other countries;
the need to avoid disruption to national and international efforts relating to law enforcement, criminal intelligence and criminal investigation;
in a case where the protected cartel information was given by an informant:

-
the protection or safety of the informant or of persons associated with the informant; and
-
the fact that the production of a document containing protected cartel information, or the disclosure of protected cartel information, may discourage informants from giving protected cartel information in the future;

in the case of a court-the interests of the administration of justice;
in the case of a tribunal-the interests of securing the effective performance of the tribunal's functions. [Schedule 1, item 116, subsection 157B(2)]

7.16 If a document containing protected cartel information is produced, or protected cartel information is disclosed, to a court or tribunal in relation to particular proceedings pursuant to subsection 157B(1), then the document or information must not be adduced in other proceedings before the court or tribunal except: in accordance with leave granted under subsection 157B(1) in relation to the other proceedings; or as a result of an exercise of power by the Commission or a Commission official under subsection 157B(4) in relation to the other proceedings. This overrides the operation of court rules such as Order 33 Rule 5 of the Federal Court Rules, which provides the Federal Court with discretion to grant leave to a party, in certain circumstances, to read evidence taken, or an affidavit filed, in other proceedings. [Schedule 1, item 116, subsection 157B(3)]

Commission or a Commission official may disclose protected cartel information

7.17 The Commission or a Commission official may produce to a court or tribunal a document containing protected cartel information, or disclose protected cartel information to the court or tribunal [Schedule 1, item 116, subsection 157B(4)]. To ensure that this power is exercised appropriately, the Commission or a Commission official must have regard to an exclusive list of factors when exercising its power [Schedule 1, item 116, subsection 157B(5)]. These factors are the same as those outlined above to which a court or tribunal must have regard when granting leave under subsection 157B(1).

7.18 If a document containing cartel information is produced, or protected cartel information is disclosed, to a court or tribunal in relation to particular proceedings pursuant to subsection 157B(4) then the document or information must not be adduced in other proceedings before the court or tribunal except in accordance with the leave granted under subsection 157B(1) in relation to the other proceedings, or as a result of an exercise of power under subsection 157B(4) in relation to the other proceedings. Similarly to subsection 157B(3), this overrides the operation of court rules which may otherwise permit protected cartel information which has been produced or disclosed by the ACCC for use in particular proceedings being adduced in another proceeding. [Schedule 1, item 116, subsection 157B7)]

Definitions

7.19 For the purposes of the provisions relating to protected cartel information, a number of terms are defined. [Schedule 1, item 116, subsection 157B(7)]

Commission official means a member, or associate member of the Commission; a person referred to in subsection 27(1); or a person engaged under section 27A. The definition extends to the staff engaged under the Public Service Act 1999 to assist the Commission, and persons engaged by the Commission to give advice to, and perform services for, the Commission.
Disclose means divulge or communicate.
Protected cartel information means information that was given to the ACCC in confidence; and relates to a breach, or a possible breach, of the cartel criminal offences and civil prohibitions.

Disclosure of protected cartel information to a party

Commission or Commission official not required to make discovery of documents containing protected cartel information etc.

7.20 The Commission or a Commission official, in connection with proceedings before a court to which it is not a party, is not required to make discovery (however described), or produce, to a person a document containing protected cartel information [Schedule 1, item 116, subsection 157C(1)]. Similarly, the Commission or a Commission official is not required, in connection with prospective proceedings, from making discovery (however described), or from producing, to a person a document containing protected cartel information where that person is considering instituting proceedings before a court and the proceedings have not yet been instituted. [Schedule 1, item 116, subsection 157C(2)]

7.21 This prevents the ACCC from being required to make non-party and pre-trial discovery of, or from otherwise being required to produce, a document containing protected cartel information. The prohibition applies in connection with proceedings before any court, including a State or Territory court, and with respect to any cause of action, including causes of actions originating under State or Territory law.

Commission or Commission official may disclose protected cartel information

7.22 The Commission or a Commission official may provide a copy of a document protected in appropriate circumstances.

7.23 If a person is a party to proceedings before a court and the ACCC is not a party to the proceedings, the Commission or a Commission official may, on application by the person, make a copy of a document containing protected cartel information and give the copy to the person. [Schedule 1, item 116, subsection 157C(3)]

7.24 In the case of pre-trial discovery, if a person is considering instituting proceedings before a court and those proceedings have not yet been instituted, the Commission or a Commission official may, on application by a person, make a copy of a document containing protected cartel information, and give the copy to the person. [Schedule 1, item 116, subsection 157C(4)]

7.25 The Commission or a Commission official must have regard to an exclusive list of factors to ensure that the ACCC exercises its discretion appropriately. These factors are:

the fact that the protected cartel information was given to the ACCC in confidence;
Australia's relations with other countries;
the need to avoid disruption to national and international efforts relating to law enforcement, criminal intelligence and criminal investigation;
in a case where the protected cartel information was given by an informant:

-
the protection or safety of the informant or of persons associated with the informant; and
-
the fact that the production of a document containing protected cartel information, or the disclosure of protected cartel information, may discourage informants from giving protected cartel information in the future;

the interests of the administration of justice. [Schedule 1, item 116, subsection 157C(5)]

7.26 If a copy of a document is given to a party, or prospective party, to proceedings before a court as a result of an exercise of power under subsections 157C(3) or (4), the copy must not be adduced in other proceedings before a court or tribunal except as provided for by subsections 157B(1) or (4) or subsections 157C(3) or (4). [Schedule 1, item 116, subsection 157C(6)]

7.27 Commission official and protected cartel information are defined for the purposes of section 157C, and given the same meaning as they are given in section 157B. [Schedule 1, item 116, subsection 157C(7)]

General powers of a court

7.28 Certain powers of a court are not affected by sections 157B or 157C. [Schedule 1, item 116, section 157D]

7.29 The power of a court to control the conduct of a criminal or civil proceeding, in particular with respect to abuse of process, is not affected by section 157B or 157C, except so far as that section expressly or impliedly provides. [Schedule 1, item 116, subsection 157D(1)]

7.30 A refusal by a court to grant leave under subsection 157B(1) does not prevent the court from later ordering that a criminal proceeding be stayed on the ground that the refusal would have a substantial adverse effect on a defendant's right to receive a fair hearing. [Schedule 1, item 116, subsection 157D(2)]

7.31 A refusal by a court to grant leave under subsection 157B(1) does not prevent the court from later ordering that a civil proceeding be stayed on the ground that the refusal would have a substantial adverse effect on the hearing in the proceeding. In deciding whether to order a stay of the civil proceeding, the court must consider:

the extent of any financial loss that a party would suffer as a result of the proceeding being stayed;
whether a party has reasonable prospects of obtaining a remedy in the proceedings; and
any other matter the court considers relevant. [Schedule 1, item 116, subsections 157D(3) and (4)]

Chapter 8 - Minor and technical amendments

Outline of chapter

8.1 This chapter outlines provisions in the Bill that are not directly related to the proposal to implement criminal sanctions for serious cartel conduct and to provide parallel civil sanctions. Nonetheless, the amendments discussed in this chapter facilitate more effective investigation and enforcement provisions in the Trade Practices Act 1974 ('the TP Act').

Context of amendments

8.2 The Bill includes a number of minor or technical amendments to various provisions of Part IV and related provisions.

Summary of new law

8.3 The amendments referred to in this chapter:

correct references in the TP Act to provisions in the Crimes Act 1914;
amend existing provisions of the TP Act to insert references to section 86E;
amend inconsistencies that arise in relation to the information-gathering powers of the Australian Competition and Consumer Commission ('the ACCC');
provide for the inspection, and copying, of documents contained in registers established by the Trade Practices Legislation Amendment Act (No. 1) 2006 ('the Dawson Act'); and
make minor amendments to Part XIB (The telecommunications industry) of the TP Act insofar as those provisions interface with Part IV of the TP Act.

Comparison of key features of new law and current law

New law Current law
As the contents of section 18A of the Crimes Act have moved to section 15A of the Crimes Act, subsection 79A(5) is amended, and subsection 79A(10) is deleted. Current subsection 79A(5) refers to section 18A of the Crimes Act. Subsection 79A(10) also refers to section 18A of the Crimes Act.
Findings of fact made against a person in earlier proceedings under sections 77, 80, 81, 86C, 86D or 86E are prima facie evidence of those facts in later proceedings under Part IV, IVA, IVB, V or VC. Current section 83 provides that findings of fact made against a person in earlier proceedings under sections 77, 80, 81, 86C or 86D are prima facie evidence of those facts in later proceedings under Part IV, IVA, IVB, V or VC (that is, the section does not extend to proceedings under section 86E).
Subsection 87(1) is amended to confer broad powers on the Court to make remedial orders, in addition to other orders that it may make under section 82 (Actions for damages), 86C (Non-punitive orders), 86D (Punitive orders - adverse publicity) or 86E (Order disqualifying a person from managing a corporation). Current subsection 87(1) confers broad powers on the Court to make remedial orders, in addition to other orders that it may make under section 82 (Actions for damages), 86C (Non-punitive orders) or 86D (Punitive orders - adverse publicity) (that is, the section does not empower the Court to make remedial orders, in addition to orders under section 86E.
Documents produced to the ACCC by an individual pursuant to paragraph 155(1)(b) can be used against that individual in criminal proceedings. On a practical level, if the material already exists, it can be used against the individual in criminal proceedings.
Subsection 155(7) is amended to prevent answers given (but not documents produced) by an individual under subsection 155(1) from being used in evidence against the individual in any criminal proceeding other than proceedings for an offence under section 155 or Criminal Code sections 137.1 (false or misleading information), 137.2 (false or misleading documents) or 149.1 (obstructions of Commonwealth public official) that relates to the information provided under subsection 155(1).
An individual is not excused from furnishing information or producing a document pursuant to paragraphs 155(1)(a) or (b) of the TP Act on the basis that it may incriminate them. However, their answer to any question asked, or document produced pursuant to such notice, can only be used against that person in criminal proceedings under section 155 (for example, providing false or misleading evidence - an offence under subsection 155(5)).
Evidence given by an individual before the ACCC (pursuant to paragraph 155(1)(c)) is not admissible against the individual in any criminal proceedings other than for an offence against Part XII or Criminal Code sections 137.1 (false or misleading information), 137.2 (false or misleading documents) or 149.1 (obstructions of Commonwealth public official). Current subsection 159(2) also provides that evidence given by a person before the ACCC is not admissible against him or her in any criminal proceedings other than proceedings for offences against Part XII.
Amendments to subsection 155(7) align that provision with the common law and the Evidence Act, so that any evidentiary material obtained from a corporation under subsection 155(1) can be used against the corporation in any proceeding. Current paragraph 155(7)(b) prohibits information obtained under section 155 from being used in proceedings under the Criminal Code, whereas under the common law and section 187 of the Evidence Act, the information can be used in such proceedings.
Amendments will permit a person, on application in accordance with regulations and on payment of the prescribed fee, to inspect documents in the merger authorisation register kept by the ACCC under section 95AH, and to inspect documents in the merger authorisation register kept by the Australian Competition Tribunal under section 95AZ, and to obtain a copy of such a document. Current section 165 regulates the inspection and copying of documents that are required to be kept under other provisions of the TP Act, but the relevant provisions do not refer to registers that are required to be kept under sections 95AH and 95AZ (both of which were inserted by the Dawson Act), nor is the inspection of these registers otherwise provided for under the TP Act.
Amendments to section 151AJ ensure that a carrier or carriage service provider does not act anticompetitively in certain circumstances where they have made an application to the ACCC for an authorisation with respect to certain conduct. Current subsection 151AJ(4) provides that, for the purposes of applying subsection 151AJ(3) to a carrier or carriage service provider that is not a corporation to determine whether a contravention of certain provisions occurred of Part IV occurred, it is to be assumed that each reference to a corporation included a reference to a carrier or carriage service provider that is not a corporation.

Detailed explanation of new law

Enforcement and recovery of fines

8.4 In addition to the amendments to current section 79A referred to in Chapter 2 (which applies the power to enforce and recover certain fines imposed), an amendment to current subsection 79A(5) removes a reference to section 18A of the Crimes Act and substitutes with a reference to section 15A of the Crimes Act. [Schedule 2, item 1, subsection 79A(5)]

References to section 86E inserted into other provisions

8.5 Current section 86E enables the Court to make an order disqualifying a person from managing a corporation if certain pre-conditions are met. The section was inserted into the TP Act by the Dawson Act in 2006. Two provisions of the TP Act are amended to insert references to section 86E. The two amendments discussed below are in addition to the amendments made to sections 83 and 87 discussed in Chapter 6: Remedies.

Findings made in earlier proceedings can be evidence in later proceedings

8.6 Current section 83 provides that findings of fact made against a person in earlier proceedings under sections 77, 80, 81, 86C or 86D are prima facie evidence of those facts in later proceedings under Part IV, IVA, IVB, V or VC. An amendment adds section 86E as a section under which findings of fact can be made in earlier proceedings. Therefore, in proceedings to seek a disqualification order under section 86E, a finding against a person is prima facie evidence of a contravention of Parts IV, IVA, IVB, V or VC. [Schedule 2, item 3, section 83]

Remedial orders

8.7 Current subsection 87(1) confers broad powers on the Court to make remedial orders, in addition to other orders that it may make under section 82 (Actions for damages), 86C (Non-punitive orders) or 86D (Punitive orders - adverse publicity). An amendment adds section 86E to this list. The effect is that the Court can make remedial orders, in addition to its power to disqualify a person from managing a corporation. [Schedule 2, item 6, subsection 87(1)]

Amendments to ACCC's information-gathering powers

8.8 In addition to the search and seizure provisions in Part XID (introduced by the Dawson Act), the ACCC has the power to require the production of documents, furnishing of information or giving of evidence under current section 155 of the TP Act. Subsection 155(5) makes it an offence to fail to comply with a section 155 notice issued by the ACCC. Various anomalies arise in relation to section 155, and amendments address these anomalies.

Privilege against self incrimination for individuals

8.9 Current paragraph 155(7)(a) provides that information obtained under a section 155 notice cannot be used in criminal proceedings against individuals other than proceedings for non-compliance with section 155.

8.10 Information obtained under section 155 cannot be used in similar proceedings against individuals under the Criminal Code.

Documents obtained under section 155 can be used in criminal proceedings against an individual for an offence under subsection 155(5), such as giving false or misleading evidence, but cannot be used in similar proceedings against the individual under the Criminal Code, such as providing false or misleading documents under subsection 137.2.

8.11 The provision is amended to prevent answers given (but not documents produced) by an individual under subsection 155(1) of the TP Act from being used in evidence against the individual in any criminal proceeding other than proceedings for an offence under section 155 or sections 137.1 (false or misleading information), 137.2 (false or misleading documents) or 149.1 (obstructions of Commonwealth public official) of the Criminal Code that relates to the information provided under subsection 155(1). [Schedule 2, items 44 to 47, subsection 155(7)]

8.12 Current subsection 159(2) also provides that evidence given by a person before the ACCC is not admissible against him or her in any criminal proceedings other than proceedings for offences against Part XII. Amendments repeal current subsection 159(2) and insert a subsection that provides that evidence given by an individual before the ACCC is not admissible against the individual in any criminal proceedings other than for an offence against Part XII or sections 137.1 (false or misleading information), 137.2 (false or misleading documents) or 149.1 (obstructions of Commonwealth public official) of the Criminal Code. [Schedule 2, item 49, subsection 159(2)]

Privilege against self incrimination or exposure to a penalty

8.13 Subsection 155(7) presently abrogates the privilege against self incrimination for persons required to provide information, documents or evidence pursuant to a notice issued under subsection 155(1). The proposed changes to subsection 155(7) abrogate both the privilege against self incrimination and the privilege against exposure to a penalty for individuals required to furnish information, produce information or give evidence under subsection 155(1). [Schedule 2, items 43 to 46, subsection 155(7)]

8.14 A similar amendment is made to subsection 159(1). Presently, that subsection provides that a person appearing before the ACCC to give evidence or produce documents is not excused from answering a question, or producing a document, on the ground that the answer to the question, or the document, may tend to incriminate them. The amendment will extend subsection 159(1) so that it also abrogates the privilege against exposure to a penalty in the same circumstances. [Schedule 2, item 48, subsection 159(1)]

8.15 These amendments align current sections 155 and 159 with Commonwealth policy relating to other corporate enforcement agencies (such as the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority), and with current section 154R in the TP Act (answering of questions or producing evidential material).

Use of evidentiary material obtained from a corporation

8.16 Under current paragraph 155(7)(b), information obtained under a section 155 notice cannot be used in criminal proceedings against corporations other than proceedings under the TP Act and certain proceedings under the Radiocommunications Act 1992.

8.17 However, case law and section 187 of the Evidence Act 1995 abolish the privilege against self incrimination and the imposition of a penalty for corporations.

8.18 Existing paragraph 155(7)(b) would prohibit information obtained under section 155 from being used in proceedings under the Criminal Code, whereas under the common law and section 187 of the Evidence Act, the information can be used in such proceedings. Amendments to subsection 155(7) align that provision with the common law and the Evidence Act, so that any evidentiary material obtained from a corporation under subsection 155(1) can be used against the corporation in any proceeding. [Schedule 2, item 47, subsection 155(7)]

Inspection, and copying, of documents contained in merger registers

8.19 Current section 165 regulates the inspection and copying of documents that are required to be kept under other provisions of the TP Act. Paragraph 165(1)(a) provides that a person may apply to inspect any document contained in a register that is kept pursuant to subsection 89(3) or 95(1). However, section 165 does not include references to the registers that are required to be kept under sections 95AH and 95AZ (both of which were inserted by the Dawson Act), nor is the inspection of these registers otherwise provided for under the TP Act.

8.20 Amendments will permit a person, on application in accordance with regulations and on payment of the prescribed fee to inspect documents in the merger authorisation register kept by the ACCC under section 95AH. [Schedule 2, item 50, paragraph 165(1)(a)]

8.21 Amendments will also permit a person, on application in accordance with regulations and on payment of the prescribed fee to inspect documents in the merger authorisation register kept by the Australian Competition Tribunal under section 95AZ, and to obtain a copy of such a document. [Schedule 2, item 51, subsection 165(3A)]

Amendments to Part XIB - The telecommunications industry

8.22 Current subsection 151AJ(3) provides that a carrier or carriage service provider engages in anticompetitive conduct if the carrier or carriage service provider engages in conduct that breaches particular provisions of Part IV of the TP Act, and the conduct relates to a telecommunications market.

The particular provisions of Part IV are section 45 (contracts, arrangements or understandings that restrict dealings or affect competition), 45B (Covenants affecting competition), 46 (Misuse of market power), 47 (Exclusive dealing) and 48 (Resale price maintenance).

8.23 Current subsection 151AJ(4) provides that, for the purposes of applying that provision to a carrier or carriage service provider that is not a corporation to determine whether a contravention of those provisions occurred, it is to be assumed that each reference to a corporation included a reference to a carrier or carriage service provider that is not a corporation.

8.24 Amendments provide that it is assumed when determining the application of subsection 151AJ(3) that subsections 45(8) and 47(12) had not been enacted.

Subsection 45(8) and 47(12) limit the operation of sections 45 and 47 in certain circumstances involving bodies corporate which are related to each other.

8.25 This will ensure that a carrier, or a carriage service provider, that is not a corporation, cannot rely on subsections 45(8) and 47(12).

8.26 Amendments to section 151AJ(7) also provide that a carrier or carriage service provider does not engage in anticompetitive conduct if that conduct does not constitute a contravention of section 45 or 45B because of the operation of subsection 45(9) or 45B(8). This ensures that a carrier or carriage service provider does not act anticompetitively in certain circumstances where they have made an application to the ACCC for an authorisation with respect to certain conduct. [Schedule 1, items 105, 107 and 109, subsection 151AJ(7)]

Application and transitional provisions

8.27 Application provisions clarify that amendments to subsection 155(7) of the TP Act apply to notices under section 155 served after the commencement of the application provision. [Schedule 2, item 53]

8.28 Further, amendments to section 159 of the TP Act apply to requirements to give evidence and produce documents imposed after the commencement of the application provision. [Schedule 2, item 53]

Consequential amendments

8.29 Subsection 79A(10) of the TP Act is repealed, as it refers to section 18A of the Crimes Act. [Schedule 2, item 2, subsection 79A(10)]

Index

Schedule 1 :

Bill reference Paragraph number
Item 1, paragraph 338(ed) 5.14
Item 2, subsection 5D(5A) 5.13
Item 3, subsection 4(1), item 19, section 44ZZRD 1.21
Item 4, subsection 5(1) 1.53
Item 5, subsection 5(4) 1.54
Items 6 to 15, section 6 1.63
Item 14, subsection 6(2C), item 19, section 44ZZRB 1.36, 1.51
Item 17, subsection 6(5A) 2.56
Item 18, subsection 6AA(2) 2.22
Item 19, subsection 44ZZRD(8) 1.29
Item 19, subsection 44ZZRD(10) 1.30
Item 19, subsection 44ZZRD(5) 1.31
Item 19, subsection 44ZZRD(7) 1.32, 1.46
Item 19, subparagraph 44ZZRD(3)(a)(i) 1.35
Item 19, subparagraph 44ZZRD(3)(a)(ii) 1.35
Item 19, subparagraph 44ZZRD(3)(a)(iii) 1.35
Item 19, section 44ZZRA 1.15
Item 19, paragraph 44ZZRD(3)(b)(i) 1.37
Item 19, paragraph 44ZZRD(3)(b)(ii) 1.37
Item 19, paragraphs 44ZZRD(3)(b)(iii) and (iv) 1.37
Item 19, subparagraph 44ZZRD(3)(c)(i) 1.39
Item 19, subparagraph 44ZZRD(3)(c)(ii) 1.39
Item 19, subparagraph 44ZZRD(3)(c)(iii) 1.39
Item 19, subparagraph 44ZZRD(3)(c)(iv) 1.39
Item 19, subparagraph 44ZZRD(3)(c)(v) 1.39
Item 19, section 44ZZRB 1.41, 2.51, 2.52, 2.53
Item 19, subsection 44ZZRD(9) 1.43
Item 19, subsection 44ZZRD(11) 1.44
Item 19, subsection 44ZZRD(5) 1.45
Item 19, sections 44ZZRB and 44ZZRC 1.48
Item 19, sections 44ZZRB to 44ZZRD 1.15
Item 19, section 44ZZRE 1.15, 1.19
Item 19, sections 44ZZRA to 44ZZRP 1.13
Item 19, subsections 44ZZRD(2) and (3) 1.22
Item 19, subsections 44ZZRF(1), (4) 2.27
Item 19, subsections 44ZZRG(1), (5) 2.32
Item 19, subsection 44ZZRG(5) 2.35
Item 19, subsections 44ZZRF(3) and 44ZZRG(3) 2.50
Item 19, subsections 44ZZRF(3) and 44ZZRG(3) 2.51, 2.53, 2.57
Item 19, section 44ZZRB 2.54
Item 19, subparagraphs 44ZZRF(3)(b)(i) and 44ZZRG(3)(b)(i) 2.54
Item 19, subsection 44ZZRD(4) 1.22
Item 19, section 44ZZRI 2.64
Item 19, section 44ZZRJ 3.16
Item 19, section 44ZZRK 3.19
Item 19, subsection 44ZZRD(2) 4.13
Item 19, subsection 44ZZRD(3) 4.13
Item 19, subsection 44ZZRL(1) 4.15, 4.16
Item 19, subsection 44ZZRL(2) 4.17
Item 19, subsection 44ZZRM(1) 4.24, 4.25
Item 19, subsection 44ZZRM(2) 4.25
Item 19, subsection 44ZZRN(1) 4.26, 4.28
Item 19, subsection 44ZZRN(2) 4.28
Item 19, subsection 44ZZRO(1) 4.29
Item 19, subsection 44ZZRO(1) 4.31
Item 19, subsection 44ZZRO(2) 4.33
Item 19, subsection 44ZZRO(3) 4.34
Item 19, subsection 44ZZRP(1) 4.35
Item 19, subsection 44ZZRP(2) 4.37
Item 19, sections 44ZZRQ to 44ZZRU 4.41
Item 19, subsections 44ZZRQ(1), 44ZZRR(1), 44ZZRS(1), 44ZZRT(1), 44ZZRU(2) 4.42
Item 19, subsections 44ZZRQ(2), 44ZZRR(2), 44ZZRS(3), 44ZZRT(1) and (2) and 44ZZRU(1) 4.43
Item 19, section 44ZZRV 4.47
Item 19, subsection 44ZZRV(1) 4.49
Item 19, subsection 44ZZRV(2) 4.50
Item 19, subsection 44ZZRD(1) 1.23
Items 19, 21 and 29 1.26
Items 20, 21 and 29, subsection 45(3), sections 45A and 76D 1.64
Items 20, 21 and 29, subsection 45(3), sections 45A and 76D, items 127 and 128, subsections 45(3) and 45A of the Schedule 3.37
Item 21 4.46
Item 22, subparagraph 76(1)(a)(i) 3.14, 3.23
Item 23, paragraph 76(1A)(aa) 3.25
Item 24, subsection 76(3) 3.26
Items 26 to 28, section 76B 3.29
Items 26 and 27, subsections 76B(1) and (2) 3.30
Item 26, subsection 76B(1) 6.25
Item 27, subsection 76B(4) 3.32
Item 27, subsection 76B(5) 3.33, 6.10
Item 27, subsections 76B(2) to (4) 6.8
Item 27, subsection 76B(3) 3.31
Item 28, subsection 76B(6) 6.9
Item 28, subsection 76B(6) 3.36
Item 29 4.39
Item 30, subparagraphs 78(a)(i) and (ia) 6.24
Items 31 to 36, section 79 2.37
Item 31, paragraph 79(1)(aa) 2.40
Items 32 to 36, subsections 79(1), (1AA), (1AB), (5) and (7) 2.19
Item 33, paragraph 79(1)(e) 2.57
Item 33, subparagraph 76(1)(a)(i) 3.23
Item 33, paragraph 79(1)(e) 2.39, 2.45
Item 34, subsection 79(1AB) 2.41
Item 37, subsection 79A(1) 2.66
Item 38, subparagraph 79B(a)(ii) 6.11
Item 39, subsection 80(9) 6.13
Item 40, section 83 6.23
Item 41, subsection 84(1) 2.43
Items 41 to 47, subsections 84(1) to (4) 2.44
Item 43, subsection 84(3) 2.43
Item 48, subsection 84(4A) 2.43
Items 49 to 51, subsections 86(3A), (3B) and (4) 2.61
Item 51, paragraph 86(4)(ba) 2.65
Item 52, subsection 86C(1A) 6.15
Item 53, subsection 86E(1A) 6.19
Items 53 and 54, paragraph 86D(1)(b) and subsection 86D(1A) 6.17
Items 56 and 57, subsections 86E(2) and (3) 6.26
Item 58, subsection 86E(3A) 6.20
Items 59 to 62, subsections 87(1), 87(1BA), paragraphs 87(1A)(b) and (ba) 1.54
Item 59, subsection 87(1) 6.21
Item 60, paragraph 87(1A)(b) 6.27
Items 61 and 62, paragraph 87(1A)(ba) and subsection 87(1BA) 6.22
Item 62, subsection 88(1A) 4.19
Item 63, paragraph 87D(aa) 6.28
Item 65, subsection 88(10) 4.20
Item 66, subsection 90(5A) 4.22
Item 66, subsection 90(5B) 4.23
Items 67, 68, 69, 86 and 87, subsections 91A(4), 91B(5), 91C(7), 101(1A), 101(2) 4.58
Item 70, section 93AA 4.59
Item 71, subsection 93AB(1A) 4.11, 4.12
Items 71 and 72, subsections 93AB(1A) and (1) 4.12
Item 71, paragraphs 93AB(1A)(a) to (d) 4.13
Item 71, subsections 93AB(10B) and (10C) 4.14
Item 72, subsection 93AB(1) 4.12
Items 74, 75, 76 and 77, subsection 93AC(1) 4.60
Items 78 and 81 4.62
Items 79 and 80 4.61
Item 82, section 93AEA 4.63
Items 83 and 84, section 93AF 4.64
Item 85, subsection 93A(12) 4.65
Items 88 to 102, sections 10.01A, paragraphs 10.08(1)(aa) and (ab), subsections 10.08(1), 10.17(1) and (2), 10.17A(1) to (4), 10.19(1) and (2), 10.24(1) and (2), 10.24A(1) to (3), and paragraph 10.45(3)(a), items 103 to 111, section 151AJ and paragraph 151AY(1)(b) 1.65
Items 105, 107 and 109, subsection 151AJ(7) 8.26
Items 112 and 113, subsections 157(1), (1A) and (1B) 7.7
Item 114, subsection 157(2) 7.11
Item 115, subsection 157(6) 7.12
Item 116, subsection 157B(2) 7.15
Item 116, subsection 157B(3) 7.16
Item 116, subsection 157B(4) 7.17
Item 116, subsection 157B(5) 7.17
Item 116, subsection 157B7) 7.18
Item 116, subsection 157B(7) 7.19
Item 116, subsection 157C(1) 7.20
Item 116, subsection 157C(2) 7.20
Item 116, subsection 157C(3) 7.23
Item 116, subsection 157C(4) 7.24
Item 116, subsection 157C(5) 7.25
Item 116, subsection 157C(6) 7.26
Item 116, subsection 157C(7) 7.27
Item 116, section 157D 7.28
Item 116, subsection 157D(1) 7.29
Item 116, subsection 157D(2) 7.30
Item 116, subsections 157D(3) and (4) 7.31
Item 116, section 157B 7.14
Item 117, subsection 163(2) 2.60
Item 118, subsection 163(2) 2.67
Item 121, subsection 163(6) 2.68
Items 122 to 124, section 163A 2.62
Items 122 to 124, section 163A 2.63
Item 125, section 176 4.57
Item 125, section 175 4.52
Item 125, section 174 4.53
Item 125, section 178 4.54
Item 125, section 175 4.55
Item 125, section 177 4.56
Item 126, sections 44ZZRJ and 44ZZRK 3.15
Item 126, sections 44ZZRQ to 44ZZRW 4.44
Item 126, subsections 44ZZRF(4) and 44ZZRG(4) 2.57
Item 126, subsections 44ZZRF(3) and 44ZZRG(3) 2.57
Item 126, subsections 44ZZRJ and 44ZZRK) 3.23
Item 126, subsections 44ZZRF(4) and 44ZZRG(4) 2.55
Item 126, sections 44ZZRV 4.51
Item 126, subsections 44ZZRF(3) and 44ZZRG(3) 2.56
Item 126, subsections 44ZZRF(4) and 44ZZRG(4) 2.20, 2.21
Item 126, subsections 44ZZRF(4) and 44ZZRG(4) 2.45
Subsection 44ZZRD(6) 1.28

Schedule 2 :

Bill reference Paragraph number
Item 1, subsection 79A(5) 8.4
Item 2, subsection 79A(10) 8.29
Item 3, section 83 8.6
Item 6, subsection 87(1) 8.7
Item 7, section 154A 5.16
Items 8 to 10, section 154A 5.21
Item 11, section 154A 5.42
Item 12, section 154A 5.28
Items 13 and 20, subsections 154F(1) and 154H(1) 5.20
Items 14 to 16, 21, 24 and 26, subsections 154F(2) and (3), 154H(3) and (4), and paragraph 154H(5)(a) 5.39
Item 17, subsection 154G(1B) 5.29
Item 17, subsection 154G(1A) 5.27
Item 18, paragraph 154G(2)(a) 5.25
Item 19, section 154GA 5.23
Items 22, 33 and 34, subsections 154H(3), 154T(1) and (2) 5.40, 5.44
Item 23, subsection 154H(3) 5.41
Item 27, section 154K 5.45
Item 28, paragraph 154L(ba) 5.30
Item 29, subsection 154R(2) 5.32
Item 30, subsection 154R(4) 5.34
Item 32, section 154RA 5.24
Items 35 and 36, subsections 154U(1) and (2) and paragraph 154V(1)(a) 5.35
Items 37 to 41, subsections 154V(1) and (2) 5.43
Item 41, paragraph 154V(2)(d) 5.36
Item 42, subsection 154X(2) 5.37
Items 43 to 46, subsection 155(7) 8.13
Items 44 to 47, subsection 155(7) 8.11
Item 47, subsection 155(7) 8.18
Item 48, subsection 159(1) 8.14
Item 49, subsection 159(2) 8.12
Item 50, paragraph 165(1)(a) 8.20
Item 51, subsection 165(3A) 8.21
Item 52 5.38
Item 53 8.27, 8.28


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