23 June 2004

Productivity Commission to Review Part X of the Trade Practices Act

The Parliamentary Secretary to the Treasurer, the Hon Ross Cameron MP, today announced that the Productivity Commission has been instructed to undertake a review of Part X of the Trade Practices Act (1974) and report within six months.

Mr Cameron noted that Part X of the Trade Practices Act (1974) is the regulatory regime for international liner cargo shipping operations in Australia. It describes the conditions under which international liner cargo shipping operators are permitted to form conferences to provide regular, reliable and lower cost shipping services. In particular, Part X offers conferences limited, conditional exemptions from the general provisions of the Trade Practices Act (1974).

Mr Cameron also noted that the Productivity Commission had conducted a review of Part X in 1999 and recommended that another review be undertaken in 2005. Mr Cameron said that in response to views by the industry concerning the operation of Part X, the Government has decided to undertake this review in 2004, rather than 2005 as previously scheduled.

Mr Cameron said that the Productivity Commission will shortly release an issues paper and invite expressions of interest from parties who would like to contribute to the review.

Mr Cameron encouraged all interested parties to make submissions to the Commission and to attend public hearings.

The Terms of Reference for the review are attached. Further information about the inquiry is available on the Productivity Commission's website, www.pc.gov.au.

23 June 2004




I, ROSS CAMERON, Parliamentary Secretary to the Treasurer, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998 and in accordance with the Government's Legislation Review Schedule, refer Part X of the Trade Practices Act 1974 and associated regulations to the Productivity Commission for inquiry and report within six months of receipt of this reference. The Commission is to hold hearings for the purpose of the inquiry.


  1. Part X of the Trade Practices Act 1974 is the Australian regulatory regime for international liner cargo shipping operations. It describes the conditions under which international liner operators are permitted to form conferences to provide joint liner cargo shipping services for Australian exporters and importers.

Scope of Inquiry

  1. The Commission is to report on the appropriate arrangements for regulation of international liner cargo shipping services, taking into account the following objectives:
    1. legislation/regulation should be retained only if the benefits to the community as a whole outweigh the costs; and if the objectives of the legislation/regulation cannot be achieved more efficiently through other means, including non legislative approaches;
    2. regard should be had to the effects on: the access of Australian exporters and importers to competitively priced international liner cargo shipping services that are of adequate frequency and reliability; public welfare and equity; economic and regional development; consumer interests; the competitiveness of business including small business; and efficient resource allocation; and
    3. the Government's commitment to accelerate and strengthen the micro economic reform process, including through improving the competitiveness of markets, particularly those which provide infrastructure services, in order to improve Australia's economic performance and living standards.
  2. In making assessments in relation to matters in paragraph 3, the Commission is to have regard to the analytical requirements for regulation assessment by the Commonwealth, including those set out in the Competition Principles Agreement, as well as recent technological and institutional changes in the international liner shipping market since the last review of the industry in 1999. The report of the Commission should:
    1. identify the rationale for Part X, quantifying issues as far as reasonably practical;
    2. assess whether Part X currently satisfies the rationale identified in (a);
    3. identify if, and to what extent, Part X restricts competition and, if so, whether this restriction is necessary to achieve the rationale identified in (a);
    4. identify any problems, particularly those involving discussion agreements, experienced with the operation of Part X by those with an interest in international liner cargo shipping, in particular Australian shippers using liner cargo shipping services, and recommend, in light of (a), preferred means of addressing those problems;
    5. identify relevant alternatives to Part X, including the authorisation processes in Part VII of the Trade Practices Act 1974 and non-legislative approaches, and the extent to which these would achieve the rationale identified in (a);
    6. identify the liner cargo shipping regimes of Australia's major trading partners and any recent reviews of these regimes, and determine the compatibility of the alternatives identified in (e);
    7. analyse and as far as reasonably practical, quantify the benefits, costs, impacts (including with respect to predictability of the outcome on the standards of shipping services provided), and cost effectiveness of Part X and the alternatives identified in (e);
    8. identify the different groups likely to be affected by Part X and alternatives in (e);
    9. list the individuals and groups consulted during the review and outline their views;
    10. determine a preferred option for regulation, if any, in light of objectives set out in paragraph (3); and
    11. if it is considered that Part X should be retained as industry specific regulation for international liner cargo shipping, examine possible mechanisms for increasing the overall efficiency.
  3. In undertaking this review, the Commission is to advertise nationally, consult with key interest groups and affected parties, and publish a report.
  4. The Government will consider the Commission's recommendations and its response will be announced as soon as possible after the receipt of the Commission's report.