In brief - Review Panel recommends repealing Part X of
Competition and Consumer Act (CCA)
The Competition Policy Review Panel has recommended that the
shipping industry be subject to the normal operation of the CCA and
that the ACCC be given power to grant block exemptions from cartel
Recommendations related to Liner Shipping Exemption
The purpose of this article is to summarise what is set out on
pages 236 to 240 of the draft report, dealing with Liner Shipping
Exemption under Part X of the
Competition and Consumer Act 2010.
Agreements between liner shipping operators registered with
Registrar of Liner Shipping
As explained in the draft report, Part X of the CCA allows liner
shipping operators to enter into agreements amongst themselves in
relation to the freight rates to be charged, and the quantity and
kinds of cargo to be carried, on particular trade routes and to
register those agreements with the Registrar of Liner Shipping.
Such registration confers an exemption from the cartel conduct
prohibitions and section 45 and section 47 of the CCA.
Review Panel recommends that ACCC be given power to grant block
In its recommendations, the Panel has suggested that Part X
should be repealed and the shipping industry should be subject to
the normal operation of the CCA.
However, it is suggested that the Australian Competition &
Consumer Commission (ACCC) should be given power to grant block
exemptions and that in consultation with the shipping industry, the
ACCC should develop a block exemption for conference agreements
that contain a minimum standard of pro-competitive features.
The Panel gave as an example for such block exemption:
...conference agreements which
coordinate scheduling and the exchange of capacity, while allowing
confidential individual service contracts (ISCs) and not involving
a common conference tariff and pooling of revenues and losses could
The Panel went on to suggest that other forms of agreement that
do not meet a minimum standard of pro-competitive features should
be subject to individual authorisation.
Need for transitional arrangements for existing agreements
The Panel acknowledged that transitional arrangements for
existing agreements would be necessary and considered that a two
year transition should be sufficient. It also suggested that if a
block exemption power is not introduced, it would be preferable to
require conference agreements to seek authorisation by the ACCC on
the basis of the normal net public benefit test.
Earlier calls to repeal Part X of Competition and Consumer
In making those recommendations, the Panel noted that in 2005,
the Productivity Commission recommended that Part X be repealed and
replaced with ACCC authorisation for liner shipping agreements. It
also referred to the fact that that recommendation had been
repeated in the 2012 joint Australian - New Zealand Productivity
Commission study Strengthening trans-Tasman economic
Regulation of liner shipping in EU and USA
Reference was also made to the European Union and United States
approaches to the regulation of liner shipping. In relation to the
former, the Panel referred to the block exemption which had been
permissible prior to 2006 but which was removed in that year,
making liner shipping subject to the general provisions of EU
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