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Focus: National access regime amended

23 July 2010

In brief: Amendments to the national access regime set out in the Trade Practices Act 1974 (Cth), designed to reduce delay, increase certainty for facility owners and access seekers, and streamline administrative processes, commenced on 14 July 2010. The Act also introduces a new option for proposed facilities to be excluded from the regime. Partner Jacqueline Downes (view CV), Senior Associate Verity Quinn and Lawyer Rosannah Healy report.

How does it affect you?

The Trade Practices Amendment (Infrastructure Access) Act 2010 (Cth) (the Act) amends Part IIIA of the Trade Practices Act 1974 (Cth) (the TPA), the national access regime, by:

  • giving parties affected by the regime more certainty around timelines for decisions and potentially minimising delays by imposing 'expected periods' within which decision-makers are required to reach decisions (although the periods can be extended);
  • limiting the scope of merits reviews by the Australian Competition Tribunal (the Tribunal) by restricting the Tribunal to information provided to the original decision-maker (although the Tribunal may request additional information it considers reasonable and appropriate for making its decision);
  • seeking to dissuade strategic use of appeals to the Tribunal by enabling the Tribunal to award costs in review proceedings and giving the Tribunal a discretion whether to stay the Minister's declaration decision when parties seek a review of that decision;
  • enabling service providers to submit an access undertaking to the Australian Competition and Consumer Commission (the ACCC) with 'fixed principles' that will apply beyond the expiry of the undertaking;
  • enabling access undertakings to be revised, rather than requiring new undertakings to be submitted with the process having to start again;
  • creating more certainty around when a State/Territory access regime applies to the exclusion of the national access regime by providing that a State/Territory access regime will only be 'effective' where it has been formally certified by the National Competition Council (the NCC); and
  • enabling owners of new facilities to obtain a ruling that a proposed facility cannot be declared for a particular period of time (at least 20 years).

Key features of the Bill

Allens has previously issued a Focus publication that discusses the key features of the original Infrastructure Access Bill: see Focus: Proposed amendments to the National Access Regime. This Focus does not repeat in detail the amendments included in the Bill but instead addresses the key changes to the Act as passed.

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Background to amendments

The Act was referred to the Senate Standing Committee on Economics – Legislation Committee (the Committee) for inquiry and report. The Committee recommended some 19 amendments, which were primarily designed to address concerns relating to the:

  • introduction of 'limited merits review' for the Tribunal; and
  • proposal that, if a Minister failed to make a declaration decision in time, they would be deemed to have made a decision in accordance with the NCC's recommendation (whether that be to declare or not declare the service).

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Limited merits review

The Act limits the information able to be examined by the Tribunal in reviews to the information submitted to the original decision-maker. Initially, the Bill proposed that the Tribunal would only be able to seek additional information from the parties if the information submitted to the original decision-maker required 'clarification'.

During the Committee's review, concerns were raised about the effect of this restriction on decision-making, including by the President of the Tribunal. The concerns were that, while a limited merits review might prevent delay, limitations that are too strict and do not enable the review body to test assumptions, consider new circumstances and approach the review with flexibility may result in erroneous decision-making.

The Act was ultimately passed with amendments that enable the Tribunal to seek additional information that it considers reasonable and appropriate for the purposes of making its decision.

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Consequences of failure to make decisions within time

The Act introduces 'expected periods' within which the various decision-makers must make decisions. The NCC, the ACCC and the Tribunal must make decisions within 180 days, while the Minister must make decisions within 60 days. Although intended to streamline the decision-making process and create certainty, these timeframes are subject to a number of 'clock stoppers' (except in relation to decisions by the Minister), which can effectively extend the time for the decision to be made. Further, a failure by the NCC or the Tribunal to make a decision within the expected period does not invalidate their decisions and they are both able to extend the period for making decisions on their own initiative.

While the NCC and the Tribunal can extend the time for making their decisions, a failure by the Minister or the ACCC to make a decision within the expected period results in a 'deemed' decision.

In relation to the Minister, it was originally proposed that the Minister would be deemed to have followed whatever declaration recommendation the NCC had made. The Senate objected to this proposal, in response to concerns raised that any procedural assumptions that are set down in legislation should fall in favour of the asset owner, rather than the access seeker.

Accordingly, the position now is that, if the Minister fails to make a decision within the expected period, the Minister will be deemed to have not declared a service, to have revoked a declaration and to have made a decision on the effectiveness of an access regime in line with the NCC's recommendations (as the case may be).

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Further change on the way?

While the changes were intended to reduce delays in decision-making and create greater certainty, there is considerable debate over whether the amendments will actually achieve this. For some, the amendments made by the Senate mean the reforms do not go far enough. For others, any restrictions on the ability of decision-makers to have sufficient time to consider issues and to review all relevant information are seen as detrimental to good decision-making in an area where it is vitally important to Australia's national interest that the right decisions are made. The Act reflects a – potentially uneasy – compromise between these viewpoints.

The Tribunal took the opportunity in its recent decision regarding access to Rio and BHP's railways in the Pilbara1 to flag a number of areas in the national access regime that it considers are in need of further reform.

It suggested Parliament closely investigate:

  • the possibility that the current drafting of the access criteria (in particular, criterion (a)), compels inefficient investment;
  • the desirability, and mechanics, of an expansion power (ie the Tribunal found the ACCC does have the power under s44V(2) to order an expansion of capacity, but raised concerns about the existence and exercise of such a 'dramatic' power); and
  • whether access on a first-come, first-served basis is inequitable.

Further change may therefore be on the way.

Footnote
  1. In the matter of Fortescue Metals Group Limited [2010] ACompT 2.

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