Commerce Minister Craig Foss has asked the Commerce Select Committee to examine competition regimes for international shipping and international civil aviation, in light of changes recommended in a recent report by the New Zealand Productivity Commission and proposed in the Commerce (Cartels and Other Matters) Amendment Bill currently before the Committee.

The Productivity Commission released its final report into International Freight Transport Services in April this year. The Report recommended a number of changes aimed at increasing competition and efficiency in the international shipping and international civil aviation sectors, including:

  • Changing the current governance and ownership arrangements for council-controlled port companies to encourage a more commercial focus, for example by aligning the statutory objective of these companies with that for State-owned enterprises, and legislating to preclude councillors and council staff from being directors of port and airport companies.
  • Removing current exemptions for shipping companies from the Commerce Act 1986 to outlaw any agreements between shipping lines that fix prices and/or limit capacity, unless the Commerce Commission judges that their public benefits outweigh any anti-competitive detriments.

More information on the Report can be found here. An overview of the Report's key recommendations can be found in this previous edition of Watching Brief.

The Commerce Committee will in particular examine whether it is appropriate that the new pro-competitive and cartel criminalising measures set out in the Commerce (Cartels and Other Matters) Amendment Bill should also be used to regulate competition in the international shipping and international civil aviation sectors.

The Bill is currently before the Commerce Committee and submissions are due by 18 October.