EXPLANATORY STATEMENT
Statutory Rules 1986 No. 255
Issued by the Authority of the Attorney-General
TRADE PRACTICES (PRIMARY PRODUCTS EXEMPTIONS) REGULATIONS (AMENDMENT)
These Regulations, made under section 172 of the Trade Practices Act 1974 (the Act) which provides the Governor-General with a regulation making power, amend the Trade Practices (Primary Products Exemptions) Regulations.
Paragraph 172(2)(a) of the Act provides (inter alia) that the regulations may, either unconditionally or subject to such conditions as are specified in the regulations, exempt from the application of the Act or the provisions of the Act specified in the regulations, conduct engaged in by a specified organization or body that performs functions in relation to the marketing of primary products.
These regulations were made following a decision by the Attorney-General, after consulting the Minister for Primary Industry, on an application from a primary producer marketing body seeking to renew an existing exemption from provisions of the Act. The application was examined in light of guidelines adopted by the Government. A copy of those guidelines is at Attachment A. The proposed regulations also repeal a regulation which is no longer necessary.
Regulation 1
This regulation 1 repeals regulation 5 of the Trade Practices (Primary Products Exemptions) Regulations. Following the Government’s review of the egg industry’s marketing practices, the exemption is no longer necessary. The body which has replaced the Council of Egg Marketing Authorities of Australia, the Australian Egg Marketing Council, does not oppose the regulation’s repeal.
Regulation 2
This regulation repeals regulation 13 of the Trade Practices (Primary Products Exemptions) Regulations and substitutes a new regulation 13.
New regulation 13 differs from the previous regulation 13 in that the exemption no longer extends to arrangements and understandings with respect to prices and the terms and conditions for supply of cotton. The exemption also no longer applies to understandings with respect to the quantities of raw cotton to be exported from Australia by processors.
The exemption now only applies to contracts, arrangements and understandings between processors and spinners in relation to the quantities of raw cotton which are to be supplied by processors to spinners who are members of the Raw Cotton Marketing Committee.
The exemption will operate for 5 years from the day the regulation came into effect.
ATTACHMENT A
Guidelines and Procedures for consideration of Applications by Primary Product Marketing Bodies for Exemption from certain provisions of the Trade Practices Act
Procedures
Procedures for the consideration of applications for the granting or renewal from certain provisions of the Trade Practices Act of exemptions for primary product marketing bodies pursuant to the Trade Practices (Primary Products Exemptions) Regulations:
• applications for exemption to be made to the Attorney-General,
• following consideration of applications, Attorney-General’s Department and the Department of Primary Industry prepare a joint report for the Attorney-General’s consideration,
• in preparing the joint report, the Departments identify parties with a possible interest in the application and seek their views, and
• the applicant has the opportunity to respond to views opposing the granting of the exemption.
Guidelines
The following guidelines will be applied when considering exemption applications by primary product marketing bodies:
• Exemptions must be necessary for promoting stability in the production or marketing of primary products, or for purposes connected with export marketing.
• An exempted scheme must be capable of achieving these purposes and involve the least reduction in competition necessary to achieve those objectives.
• Exemptions would operate for a maximum of five years, but would be capable of renewal, where appropriate, following further examination.
• Exemptions would be limited to sections 45, 45B (both dealing with agreements) and 47 (exclusive dealing) (other than s.47(6), (7), (8)(c) and (9)(d)).
• Exemption would not be considered if proceedings under the Act had been commenced in respect of the conduct sought to be exempted.
Only in exceptional or unforeseen circumstances would exemptions be granted outside these guidelines.
Overview
The Trade Practices (Primary Products Exemptions) Regulations (Amendment) 1997 were enacted to refine and update the regulatory framework governing exemptions for primary product marketing bodies under the Trade Practices Act 1974. This amendment was issued by the Attorney-General under section 172 of the Act, which empowers the Governor-General to create regulations that may exempt certain conduct from the Act’s provisions. These amendments respond to an application by a primary producer marketing body to renew an existing exemption, examined according to the government’s established guidelines for such exemptions. The policy objective is to maintain exemptions that are necessary for promoting stability in the production and marketing of primary products or for purposes related to export marketing, while ensuring the least reduction in competition necessary to achieve these objectives. The amendments include the repeal of certain outdated exemptions and the introduction of new conditions to better align the regulatory framework with current industry practices and needs.
Scope and Application
The Trade Practices (Primary Products Exemptions) Regulations (Amendment) Statutory Rules 1986 No. 255 amends the Trade Practices (Primary Products Exemptions) Regulations under section 172 of the Trade Practices Act 1974. These regulations provide the Attorney-General with the authority to exempt specified organizations or bodies involved in the marketing of primary products from certain provisions of the Act, subject to conditions set out in the regulations. This amendment follows an application from a primary producer marketing body seeking to renew an existing exemption, which was reviewed in accordance with government guidelines. Regulation 1 repeals the exemption for the egg industry, deemed unnecessary following a government review. Regulation 2 modifies the exemption for the cotton industry by restricting its scope to contracts and arrangements between processors and spinners who are members of the Raw Cotton Marketing Committee, excluding price agreements, supply terms, and export quantities. The revised exemption is set to operate for five years from the date the regulation comes into effect.
Key Provisions
The Trade Practices (Primary Products Exemptions) Regulations (Amendment) primarily amend existing regulations concerning exemptions from certain provisions of the Trade Practices Act 1974 (the Act). Regulation 1 repeals regulation 5 of the Trade Practices (Primary Products Exemptions) Regulations, which was previously related to the egg industry's marketing practices. This repeal was deemed unnecessary following a review and is supported by the Australian Egg Marketing Council. Regulation 2, on the other hand, repeals and replaces regulation 13, altering the scope of the exemption concerning cotton. The new regulation 13 now only applies to contracts, arrangements, and understandings between processors and spinners regarding the supply of raw cotton to members of the Raw Cotton Marketing Committee. This exemption is set to operate for a period of five years from the date of the regulation's effect.
The obligations imposed by these regulations primarily concern entities involved in the marketing of primary products, such as the Australian Egg Marketing Council and the Raw Cotton Marketing Committee. For the egg industry, the repeal of regulation 5 removes any previous exemption from certain provisions of the Act, meaning that such marketing practices must now comply with the full scope of the Act's regulations. For the cotton industry, the amendment to regulation 13 requires processors and spinners to adhere to the specific terms outlined in the new regulation, ensuring that only certain types of agreements and understandings related to raw cotton supply are exempt, while others are not.
Breaches of the provisions of the Trade Practices Act 1974 can result in various civil and criminal consequences. Under the Act, individuals or entities found to be in violation of sections 45 (dealing with agreements), 45B, or 47 (dealing with exclusive dealing) may face legal action. Penalties can include substantial fines; for example, under section 82, corporations can be fined up to $1.1 million for each offence, while individuals can face fines up to $220,000. Additionally, sections 87 and 88 allow for the imposition of further penalties for repeat offences or significant harm caused by the breach. These severe penalties underscore the importance of compliance with the Act and the specific regulations governing primary product marketing.