In the May edition of the Competition & Market Regulation Update,1 we foreshadowed a package of proposed reforms designed to streamline regulatory processes and provide infrastructure owners with greater certainty under the National Access Regime in Part IIIA of the Trade Practices Act 1974 (Cth) (TPA) (Access Regime).
The Bill providing for those reforms, the Trade Practices Amendment (Infrastructure Access) Bill 2009 (Bill), was introduced into Parliament on 29 October 2009 and has been referred to the Senate Economics Legislation Committee for inquiry and report by 9 March 2010.
Regulating third party access to significant infrastructure and facilities such as railways and airports is important for effective competition in the associated markets. The Access Regime provides a mechanism for business operators to seek access to privately held infrastructure. Under the Access Regime, a third party can seek to have a service ‘declared’ by the relevant Minister. The party must apply to the National Competition Council (NCC) which makes a recommendation to the Minister, who then makes the ultimate declaration decision. Declaration provides access seekers with a right to binding arbitration if commercial negotiations for access to infrastructure cannot be successfully concluded.
A key complaint about the current Access Regime is delays in decision-making. The reforms proposed by the Bill aim to make decisions and arbitration faster, streamline administrative arrangements and provide infrastructure owners with greater certainty, in line with recommendations made by the Council of Australia Governments in 2008.
If passed in its current form the Bill would, amongst other things:
- Impose time limits – for certain Part IIIA regulatory decisions and recommendations of the NCC, the ACCC and the Australian Competition Tribunal (ACT), these bodies will now be required to do so within an expected period (of generally 180 days). In some cases, there are ‘clock stoppers’ which will extend the time period for the making of such decisions or recommendations. Where the NCC, ACCC or ACT do not make decisions within the relevant time period (as extended by clock stoppers or otherwise), they will be deemed to have made certain decisions.
A designated Minister would also be expected to make an application decision within 60 days of receiving an NCC recommendation. Where the Minister does not make a decision he or she is deemed to have agreed with the NCC’s recommendation.
- Limited merits review – merits reviews by the ACT would be limited to the information submitted to the original decision maker. Currently, reviews of Part IIIA decisions are a complete rehearing of the matter and new information may be submitted to the Tribunal. The Bill provides that where the original information requires clarification, the ACT will be able to seek additional information from the parties for clarification purposes only, or from the ACCC or NCC in their role of assisting the ACT.
- Access holidays – proponents of new infrastructure projects will be able to seek an upfront decision on whether a service to be provided by the proposed facility would satisfy the test for declaration. Such an application would need to be made before construction of the proposed facility commences. The period for which a service is ineligible must be at least 20 years.
- Access undertakings – allow the ACCC to accept access undertakings setting out terms and conditions for access that a service provider is willing to offer or negotiate with access seekers and containing fixed principles to apply to any subsequent undertakings for that service for the duration of the fixed principles.
Finally, the Bill proposes that the ACCC will be able to suggest amendments to access undertakings and that the NCC will be empowered to make decisions on the papers without having to call meetings for unanimous declaration decisions.
The Senate Committee has stated that submissions should be received by 18 December 2009.