Trade Practices Act 1974 - Instrument of Declaration of Inland Terminals (20/11/2008)

Overview

The Trade Practices Amendment (International Liner Cargo Shipping) Act 2000 introduced amendments to Part X of the Trade Practices Act 1974, which governs international liner shipping. These amendments aimed to refine the exemption of shipping conferences from competition rules, allowing them to coordinate joint services, share capacity, and agree on freight rates, but only on a terminal-to-terminal basis instead of door-to-door. The Trade Practices Amendment (International Liner Cargo Shipping) Act 2000 was enacted by the Australian Parliament to address the need for streamlined shipping practices that could better accommodate the logistics of international trade while ensuring fair competition. The Act provides the Minister for Infrastructure, Transport, Regional Development, and Local Government with the authority to declare inland terminals, facilitating the extension of Part X exemptions from port terminals to selected inland terminals to improve the efficiency of container movement and alleviate congestion at major ports. The determination to declare specific facilities as inland terminals is made under the authority granted by Section 10.02A of the Trade Practices Act 1974.

Scope and Application

The Trade Practices Act 1974, administered by the Minister for Infrastructure, Transport, Regional Development and Local Government, includes Part X which offers limited exemptions from the Act's competition rules to facilitate the coordination of services, capacity sharing, and freight rate agreements among international liner shipping companies. These companies can operate as conferences, subject to registration under Part X. This part applies to international liner shipping companies involved in scheduled services for non-bulk cargo, primarily carried in containers. The Minister may declare certain facilities as inland terminals under section 10.02A of the Act, provided they are located within Australia but outside a designated port area. This allows shipping lines under registered liner shipping conference agreements to extend their exemptions from port terminals to selected inland terminals, aiming to alleviate congestion at major ports by improving the movement of containers to inland distribution centres. The Instrument of Declaration of Inland Terminals under Section 10.02A (1) of the Trade Practices Act 1974 - Instrument No. Part X 10.02A 1/2008, which revokes a previous instrument and declares specific facilities as inland terminals, came into effect the day after its registration with the Federal Register of Legislative Instruments. The list of inland terminals was determined after consultations with a peak shipping industry body representing international liner shipping firms on Australian trade routes, as well as with two peak shipper bodies representing the customers of shipping lines and the Australian Competition and Consumer Commission (ACCC). The determination has negligible effect on Commonwealth revenue and a low impact on industry.

Key Provisions

The key sections of the Trade Practices Act 1974 that are relevant to this determination are section 10.02A(1) and Part X, particularly sections 45 and 47. Section 10.02A(1) allows the Minister to declare a facility as an inland terminal, while Part X outlines the exemptions from competition rules for international liner shipping companies. The Act’s primary purpose is to enable shipping lines operating under registered liner shipping “conference” agreements to extend their Part X exemptions from port terminals to selected inland terminals, thereby facilitating the movement of containers away from congested ports to inland distribution centres. The obligations imposed by this determination on the relevant parties primarily involve ensuring compliance with the Act’s conditions and requirements. For shipping companies, this means adhering to the specified terms of their conference agreements and operating within the confines of the exemptions provided by Part X. The Minister is responsible for ensuring that the facilities listed as inland terminals meet the criteria set out in the Act. The shipping companies must also ensure that their operations at these inland terminals do not contravene the competition rules outlined in sections 45 and 47 of the Act. In terms of potential consequences for non-compliance, the Trade Practices Act includes provisions for both civil and criminal penalties. For example, breaches of the competition provisions in sections 45 and 47 could lead to substantial fines. Under section 12GA, the maximum penalty for corporations found guilty of anti-competitive practices can reach up to 10,000 penalty units, which equates to approximately AUD 1.7 million as of 2023. Additionally, individuals involved in such breaches can face penalties of up to 2,000 penalty units, or about AUD 340,000. For administrative convenience, the Act also provides for the imposition of infringement notices for certain offences, with penalties set at lower levels but still significant enough to deter non-compliance.