Trade Practices Regulations (Amendment) 1997 No. 53
EXPLANATORY STATEMENT
Statutory Rules 1997 No. 53
Issued by the Authority of the 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 can make regulations prescribing matters that are required or permitted by the Principal Act to be prescribed.
Background
Schedule 17 of the Workplace Relations and Other Legislation Act 1996, which commenced on 17 January 1997, amends the Principal Act to introduce laws prohibiting certain types of boycotts. In particular, new sections 45D and 45DA of the Principal Act prohibit two persons acting in concert to hinder or prevent a third person trading with a fourth person where:
(a) the purpose and effect (or likely effect) of the conduct is to cause substantial loss or damage to the business of the fourth person (new section 45D); or
(b) the purpose and effect (or likely effect) of the conduct is to cause a substantial lessening of competition in any market in which the fourth person supplies or acquires goods or services (new section 45DA).
New section 45DB prohibits two persons acting in concert where the purpose and effect (or likely effect) of the conduct is to prevent or substantially hinder a third person from engaging in overseas trade or commerce involving the movement of goods.
New section 45E prohibits a person making a contract or arrangement, or arriving at an understanding, with an organisation of employees, if the proposed contract, arrangement or understanding contains a provision included for the purpose of preventing or hindering that person trading with another person. New section 45EA prohibits the giving effect to such a provision, regardless of whether the contract, arrangement or understanding was made before the commencement of the new section.
Persons wanting to engage in conduct which might contravene these new provisions will be able to apply for authorisation. Authorisation is a process administered by the Australian Competition and Consumer Commission (the Commission) whereby the Commission can grant immunity for conduct which would otherwise contravene the Principal Act. The Commission can grant authorisation where the conduct would result, or be likely to result, in such a benefit to the public that it should be allowed to take place.
Purpose
Subsection 89(1) of the Principal Act provides that authorisation applications must be in writing as prescribed by regulation. The purpose of the Trade Practices Regulations (Amendment) was to amend the Trade Practices Regulations to prescribe the application forms for the new boycott provisions. Two forms were prescribed: one dealing with boycotts (new sections 45D, 45DA and 45DB) and the other with boycott agreements (new sections 45E and 45EA).
The Regulations commenced upon publication in the Gazette.
Overview
The Trade Practices Regulations (Amendment) 1997 No. 53 was enacted to amend the Trade Practices Regulations, providing a formalised application process for authorisation under the Trade Practices Act 1974. This amendment was introduced to address the need for clear and prescribed procedures for businesses seeking exemption from the newly introduced prohibitions against certain types of boycotts, which aimed to prevent substantial loss or damage to businesses and substantial lessening of competition. The regulations were made under the authority of the Treasurer and were intended to align with the policy objective of ensuring that the public benefits from any authorised conduct that might otherwise contravene the boycott provisions. The process for authorisation is administered by the Australian Competition and Consumer Commission, which evaluates applications to determine if the proposed conduct provides a significant public benefit warranting exemption from the Act’s prohibitions.
Scope and Application
The Trade Practices Regulations (Amendment) 1997 No. 53 amends the Trade Practices Regulations to introduce new application forms for authorisation concerning the newly introduced boycott provisions under the Trade Practices Act 1974. These provisions, which became effective on 17 January 1997, prohibit various forms of concerted conduct aimed at hindering or preventing a third party's trade, either domestically or internationally, with the intent to cause substantial loss or damage or a substantial lessening of competition. The amended regulations prescribe two forms: one for authorisation applications related to boycotts under new sections 45D, 45DA, and 45DB, and another for authorisation in relation to boycott agreements under new sections 45E and 45EA. Authorisation can be sought from the Australian Competition and Consumer Commission (ACCC) for conduct that might otherwise contravene these new provisions, provided the conduct offers a public benefit justifying its allowance. The new forms streamline the application process as required by the Principal Act, facilitating compliance and enforcement of the amended boycott laws.
Key Provisions
The Trade Practices Regulations (Amendment) 1997 No. 53 (the Amendment) prescribes application forms under the new boycott provisions introduced by the Workplace Relations and Other Legislation Amendment Act 1996 (the Amendment Act). These provisions, included as new sections 45D, 45DA, 45DB, 45E, and 45EA in the Trade Practices Act 1974 (the Principal Act), aim to prohibit certain types of boycotts that could cause substantial harm to businesses or lessen competition. Section 45D prohibits concerted actions that aim to cause substantial loss or damage to a business, while section 45DA targets actions that substantially lessen competition. Section 45DB extends this prohibition to overseas trade. Additionally, sections 45E and 45EA prevent contracts or arrangements that include provisions aimed at hindering trade with another person, with 45EA also prohibiting the enforcement of such provisions.
Entities and individuals subject to the Principal Act must ensure their activities do not contravene the new boycott provisions. Specifically, they must avoid engaging in concerted actions that hinder trade with a third party for the purpose of causing substantial loss, lessening competition, or preventing overseas trade. Furthermore, they must refrain from entering into contracts or arrangements with employee organisations that include provisions intended to hinder trade with another person. Authorisation applications for potentially contravening conduct can be submitted to the Australian Competition and Consumer Commission (the Commission). The Commission has the authority to grant immunity for conduct that would otherwise violate the Principal Act, provided that such conduct would result in a public benefit sufficient to warrant exemption.
Failure to comply with the new boycott provisions can result in significant consequences. Violations of sections 45D, 45DA, 45DB, 45E, and 45EA can lead to civil and criminal penalties. The exact penalties depend on the nature and severity of the breach. For corporations, penalties can include substantial fines, with the maximum penalty under section 45D being up to $10 million for a single contravention and $1.5 million for each subsequent contravention. Individuals responsible for corporate breaches may also face personal penalties, including fines and imprisonment. Civil penalties for contraventions can also be enforced by the Australian Competition and Consumer Commission, which may seek remedies such as injunctions, compensation orders, or public apologies. The seriousness of the breach and the harm caused will influence the penalties imposed.