Glencore Coal's application for declaration of berthing
and wharfage services at the Port of Newcastle could be followed by
similar applications. We consider the key implications for access
seekers, port operators and port privatisations.
Glencore Coal applied for declaration1 of berthing
and wharfage services at the Port of Newcastle on 13 May 2015.
Glencore's application followed a proposed price hike of nearly
60% in the navigation service charges applied to coal shippers.
Glencore's application follows a reported application by DP
World in relation to landside services at the Port of Melbourne
following the Port's proposal that these charges be increased
by nearly 800% as part of the regular rent review mechanism in DP
A declaration application, if successful, enables the ACCC to
have regulatory oversight of terms and conditions of access to the
declared services, including price.
IMPLICATIONS FOR ACCESS SEEKERS
The threat of declaration as a tool to constrain the ability of
infrastructure owners to set key terms and conditions has often
been overlooked due to:
A perception that declaration is just about obtaining access,
not lowering access prices; and
The tendency for declaration processes to take a long
The recent history of judicial challenges to what is, at heart,
an administrative and executive process, has given rise to a
perception that it is unsuited to resolving commercial
However, some access seekers have limited options when faced
with price hikes by incumbent operators of natural monopoly
Importantly, declaration is not merely about obtaining access.
It may also be used to optimise terms and conditions of access.
Access seekers to declared services have ACCC arbitration to
fall back on should commercial negotiations fail. This was
illustrated most clearly by the declaration of the airside service
at Sydney Airport and the resulting access dispute between Virgin
Blue and the airport. That dispute concerned the charges for the
airside service, not the provision of access itself.
While declaration potentially 'opens the door' to access
by third parties, existing user's rights and reasonably
anticipated needs are protected.
Unless a potential access seeker can fund a capacity expansion,
declaration is unlikely to facilitate new entry where the
underlying infrastructure is capacity constrained.
RISKS FOR INFRASTRUCTURE OPERATORS
Infrastructure operators now face increasing awareness amongst
access seekers of the usefulness of seeking declaration – not
only for the potential pay off in negotiations but also for the
opportunity to profile the issues in dispute.
It remains to be seen whether any will take advantage of the
opportunity to give an access undertaking under the same regime to
seize the regulatory initiative and obtain a greater degree of
regulatory certainty (particularly around pricing).
Undertakings have been successfully used in the
telecommunications industry and may increasingly come into
IMPACT ON FUTURE PORT DISPOSALS
Interested buyers in port assets will be watching these
developments closely. Potential port operators face a higher risk
of sophisticated access seekers using declaration to constrain
rises in port charges and increased sensitivity by Government
vendors to the perception that privatisation can lead to higher
This may lead Governments to seek increased certainty about
terms and conditions of access post sale and may lead to
applications for certification of State based regimes under the
National Access Regime.
POTENTIAL REGIME CHANGE
Although the recent Harper Review of Competition Policy is still
firmly in the realm of policy, it may lend some impetus to
declaration applications by advocating retention of the access
regime with some (relatively minor) modifications.
CONCLUSION: IN SEARCH OF CERTAINTY
Access seekers and infrastructure operators alike may be
concerned by this increasing uncertainty. For access seekers, this
is likely to lead to an increased focus on the merits of applying
for declaration; while for infrastructure operators, their focus is
likely to be on obtaining regulatory certainty for the future.
The authors would like to thank Sophie Morton
(Graduate at law) for her assistance in preparing this
1 Under Part IIIA of the Competition and
Consumer Act 2010 (Cth) (the National Access
2 As at 19 May 2015, the National Competition
Council has not published any application in relation to the Port
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Most awarded firm and Australian deal of
Australasian Legal Business Awards
Employer of Choice for
Equal Opportunity for Women
in the Workplace (EOWA)
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In response to growing interest in the commercial use of drones or RPAs in Australia, CASA has developed new regulations.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).