Trade Practices Regulations (Amendment) 1997 No. 86
EXPLANATORY STATEMENT
Statutory Rules 1997 No. 86
Issued by the Authority of the Assistant Treasurer
Trade Practices Act 1974
Trade Practices Regulations (Amendment)
Subsection 172(1) of the Trade Practices Act 1974 (the Principal Act) provides that the Governor-General may make regulations for the purposes of the Principal Act.
Part IIIA of the Principal Act includes provisions whereby third parties can seek access to services provided by essential infrastructure facilities of national significance. These provisions are an important feature of Australia's national competition policy reforms. They promote competitive markets in order to improve efficiency and service delivery.
In the electricity industry, reforms are being implemented by way of a code of conduct developed by industry participants and governments setting out market rules, including rules about access by third parties (such as electricity distributors) to network infrastructure. The code will be provided to the Australian Competition and Consumer Commission (the Commission) for acceptance under Part IIIA. In order to implement the access provisions of the code, it is envisaged that network service providers will offer access undertakings to the Commission under Part IIIA setting out obligations in relation to network access.
Under subsection 44ZZAA(1) of the Principal Act, a code can only be submitted to the Commission by an 'industry body'. Subsection 44ZZAA(8) of the Principal Act defines an 'industry body' as 'a body or association prescribed by the regulations for the purposes of this section'. For the electricity industry, the National Electricity Code Administrator Limited (NECA) will be the 'industry body'.
The regulations prescribe NECA as an 'industry body' for the purposes of subsection 44ZZAA(8) of the Principal Act.
In addition, the Amending Regulations have included in the Principal Regulations certain public interest requirements found in the intergovernmental Competition Principles Agreement (the Agreement) which the Commission is required to take into account when considering access matters.
The Agreement is an inter-governmental agreement setting out principles and processes for micro-economic reform. The Commonwealth, the Australian Capital Territory, the Northern Territory and all of the States are signatories to the Agreement. The principles are concerned with improving transparency and establishing a rigorous cost-benefit analysis in respect of government decisions about legislation. Public interest considerations underpin these decisions. In particular, clause 1(3) of the Agreement provides that governments must consider a non-exhaustive list of public interest requirements where these are relevant to their public interest decisions on particular competition policy issues.
The inclusion of these public interest requirements in the Principal Regulations reflects the Governments view that competition policy is not about maximising competition per se, but about using competition to improve the community's living standards.
Paragraph 44ZZAA(3)(e) of the Principal Act provides that, in deciding whether to accept an access code, the Commission must have regard to "any matters specified in regulations made for the purposes of this subsection".
The list of public interest requirements in clause 1(3) of the Agreement have been included in the Principal Regulations pursuant to subsection 172(1) of the Principal Act for the purposes of paragraph 44ZZAA(3)(e). The Commission is required to consider each these requirements where it is relevant to the acceptance of a particular access code. The following public interest requirements have been included in the Principal Regulations:
(a) government legislation and policies relating to ecologically sustainable development;
(b) social welfare and equity considerations, including community service obligations;
(c) government legislation and policies relating to such matters such as occupational health and safety, industrial relations and access and equity;
(d) economic and regional development including employment and investment growth;
(e) the interests of consumers generally or of a class of consumers;
(f) the competitiveness of Australian businesses; and
(g) the efficient allocation of resources.
The regulations commenced on the date of Gazettal.
Overview
The Trade Practices Regulations (Amendment) 1997 No. 86, issued by the authority of the Assistant Treasurer, is an amendment to the Trade Practices Regulations under the Trade Practices Act 1974. This amendment was enacted to address the implementation of Australia's national competition policy reforms, particularly focusing on ensuring fair access to essential infrastructure facilities of national significance. The regulations aim to facilitate competitive markets and improve service delivery by incorporating provisions that allow third parties to access services provided by such infrastructure, such as in the electricity industry. The policy objective behind these amendments is to enhance efficiency and community living standards through the use of competition, while also ensuring that public interest considerations are factored into the decisions of the Australian Competition and Consumer Commission.
In accordance with the Trade Practices Act 1974, the regulations prescribe the National Electricity Code Administrator Limited as an "industry body" for the purposes of submitting a code to the Commission, ensuring that the necessary reforms are implemented effectively. Additionally, the regulations incorporate public interest requirements from the intergovernmental Competition Principles Agreement, which the Commission must consider when reviewing access codes. These requirements include considerations related to ecologically sustainable development, social welfare, economic and regional development, consumer interests, business competitiveness, and resource allocation, reflecting the government's commitment to using competition policy to improve community outcomes.
Scope and Application
The Trade Practices Regulations (Amendment) 1997 No. 86 applies to the electricity industry within Australia, specifically focusing on the implementation of a code of conduct that sets out market rules including third-party access to network infrastructure. The regulations aim to promote competitive markets and improve efficiency and service delivery by ensuring that third parties, such as electricity distributors, have access to network infrastructure. They are made under the authority of the Assistant Treasurer and apply across the Commonwealth, as well as in the states and territories of Australia, in line with the intergovernmental Competition Principles Agreement. The regulations prescribe the National Electricity Code Administrator Limited (NECA) as the 'industry body' authorised to submit a code of conduct to the Australian Competition and Consumer Commission (ACCC) for acceptance under Part IIIA of the Trade Practices Act 1974. Furthermore, the regulations incorporate public interest requirements from the Competition Principles Agreement, which the ACCC must consider when deciding whether to accept an access code. These requirements cover various aspects such as ecologically sustainable development, social welfare and equity, economic and regional development, consumer interests, business competitiveness, and resource allocation. The regulations commenced on the date of their Gazettal.
Key Provisions
The Trade Practices Regulations (Amendment) 1997 No. 86 involves several key provisions that amend the Trade Practices Regulations to align with the national competition policy reforms. Section 1 of the amendment prescribes the National Electricity Code Administrator Limited (NECA) as an 'industry body' under section 44ZZAA(8) of the Trade Practices Act 1974 (the Principal Act). This designation allows NECA to submit a code to the Australian Competition and Consumer Commission (the Commission) for acceptance under Part IIIA of the Principal Act. Section 2 of the amendment includes in the Principal Regulations certain public interest requirements from the intergovernmental Competition Principles Agreement. These requirements include matters such as ecologically sustainable development, social welfare, economic and regional development, consumer interests, competitiveness of Australian businesses, and efficient allocation of resources, which the Commission must consider when assessing access codes.
The obligations imposed by the Trade Practices Regulations (Amendment) 1997 No. 86 primarily pertain to NECA and the Commission. NECA is tasked with the responsibility of developing and submitting an access code for electricity network infrastructure to the Commission, as per section 44ZZAA(1) of the Principal Act. The Commission, in turn, is obligated to consider the public interest requirements outlined in section 2 of the amendment when deciding whether to accept the access code. These requirements are derived from the Competition Principles Agreement, and the Commission must evaluate them to ensure that the acceptance of the code aligns with broader public interest considerations.
The Trade Practices Regulations (Amendment) 1997 No. 86 does not explicitly state offences, penalties, or consequences for non-compliance. However, the overarching Trade Practices Act 1974 does provide for various sanctions. For example, breaches of the Act can result in civil penalties, including fines and orders for compensation. In cases of more serious breaches, criminal penalties may also apply, such as fines and imprisonment. The specific penalties are determined by the nature and severity of the breach and are subject to the provisions of the Trade Practices Act 1974.
The Trade Practices Regulations (Amendment) 1997 No. 86, by prescribing NECA as an 'industry body' and incorporating public interest requirements into the Principal Regulations, ensures that the Commission's assessment of access codes under Part IIIA of the Principal Act is comprehensive and aligned with broader national objectives. These measures aim to foster competitive markets, improve efficiency, and enhance service delivery within the electricity industry, while also safeguarding public interest considerations.