COMPETITION AND CONSUMER AMENDMENT (HORTICULTURAL CODE OF CONDUCT) BILL 2011

i Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No.

, 2011

Contents

1 Short

title

...........................................................................................

2 Commencement

.................................................................................

3 Schedule(s)

........................................................................................

Schedule 1--Amendments

Competition and Consumer Act 2010

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 1

A Bill for an Act to amend the Competition and

Consumer Act 2011 to provide for a code of conduct

for the horticulture industry, and for related

purposes

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Competition and Consumer

Amendment (Horticultural Code of Conduct) Act 2011.

2 Commencement

This Act commences on the day this Act receives the Royal

Assent.

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 3

Schedule 1--Amendments

Competition and Consumer Act 2010

1 Subsection 51ACA(1) (definition of mandatory industry

code)

After "declared by", insert "this Act or".

2 At the end of Part IVB

Add:

Division 7--Horticultural Code of Conduct

51AEB Horticultural Code of Conduct

Declaration of Code

(1) The Horticultural Code of Conduct set out in this Division is

declared to be a mandatory industry code.

Purpose of Code

(2) The purpose of this Code is to regulate the conduct of

Agents/Merchants and Sellers of Horticultural Produce to ensure

contractual clarity and transparency of all transactions and provide

a cost-effective mechanism for fair and equitable dispute

resolution.

51AEC Definitions and interpretation

(1) In this Code:

Agency Relationship means a Trading Relationship under which:

(a) a person or entity acts on a commission basis for a Seller in

relation to the sale of Horticultural Produce to a third party

buyer; and

(b) the Seller retains ownership of the Horticultural Produce until

sold to a third party buyer and the Agent does not at any time

acquire ownership of the Horticultural Produce.

Schedule 1 Amendments

4 Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011

No. , 2011

Agent means any person or entity that acts, or offers to act, for a

Seller in an Agency Relationship.

Agreed Term of Trade has the meaning given in subsection

51AEE(5).

Commencement date means the day on which this Division

commences.

Horticultural Code Management Committee means the committee

appointed by the Minister pursuant to subsection 51AEZA(1).

Horticultural Inspector means a horticultural inspector appointed

by the Horticultural Code Management Committee pursuant to

paragraph 51AEZA(3)(c).

Horticultural Produce means fruit, vegetables, nuts and plants for

human consumption that are fresh and unprocessed or processed

only by cutting and or mixing for sale.

Intent to Despatch Produce Form means a form from a Seller

notifying an Agent/Merchant of an intention to despatch

Horticultural Produce.

Market Authority means any organisation owning, controlling or

administering the centralised markets where produce is bought,

sold and/or traded by Agents/Merchants including, but not limited

to Perth Metropolitan Markets, Brisbane Markets (Brismark),

Sydney Markets Ltd, Melbourne Market Authority.

Merchant means any person or entity that is, or offers to be, in a

Merchant Relationship with a Seller this includes but is not limited

to Wholesalers Exporters, Processors and Retailers.

Merchant/Agent means a Merchant or an Agent.

Merchant Relationship means a Trading Relationship under which

a Merchant acquires ownership of the Horticultural Produce from a

Seller.

Pooling means where prices are averaged over a period of time

agreed to by the growers included in the pooling arrangement.

Producer Fairness Tribunal means the Tribunal appointed by the

Minister pursuant to paragraph 51AEZA(3)(e).

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 5

Seller means any person or entity that sells Horticulture Produce

other than to an end consumer, whether or not the person or entity

is also a Merchant/Agent.

Terms of Trade has the meaning given in subsections 51AEE(1)

and (2).

Trading Relationship means an Agent or Merchant Relationship

with a Seller.

(2) In this Code, unless the context requires otherwise:

(g) the use of the words "include", "including", or similar

expressions, shall not limit the generality of words that may

follow; and

(a) a reference to any communication includes a communication

provided in writing and delivered in person, by post, by

facsimile, by electronic mail or verbally.

51AED Application of the code

(1) This Code applies on and from the commencement date and covers

trading relationship between Sellers, Merchants and Agents.

(2) This Code replaces the existing Horticultural Code of Conduct and

has effect despite any existing individual agreements between

Sellers, Merchants and or Agents.

(3) This Code does not apply to traders and growers trading under a

statutory potato marketing scheme.

51AEE Terms of Trade

(1) A Merchant/Agent must prepare and maintain a document, referred

to as the Terms of Trade, that sets out the terms and conditions on

which they are prepared to trade with Seller.

(2)

The

Terms of Trade must:

(a) be consistent with the requirements of this Code; and

(b) identify the type or types of trading relationship under which

they are prepared to trade and the terms and conditions

applying for each such type of trading relationship; and

specified--identify a default type Trading Relationship.

Schedule 1 Amendments

6 Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011

No. , 2011

Requirement to provide Merchant/Agent Terms of Trade

(3) A Merchant/Agent must provide their Terms of Trade to any Seller

they choose to deal with.

(4) If a Merchant/Agent amends their Terms of Trade they must

provide a copy of the amended Terms of Trade to any Seller they

choose to deal with.

Agreed Terms of Trade

(5) A Merchant/Agent and a Seller may agree to trade under any type

of Trading Relationship and under terms and conditions (the

Agreed Terms of Trade) that differ from the Merchant/Agent

Terms of Trade, provided that the Agreed Terms of Trade are

consistent with the requirements of this Code.

(6) In an established relationship, should a Seller send or deliver a

consignment of Horticultural Produce to a Merchant/Agent that is

accepted and where the type of Trading Relationship for that

particular consignment has not been arranged, the Trading

Relationship for the most recent previous consignment will apply.

Transaction splitting

(7) In the event that a Merchant/Agent and a Seller agree in advance

that a consignment of Horticultural Produce will be split, with

different parts sold under differing Types of Trading Relationship

and terms and conditions, each part will be treated as a separate

transaction with a separate Trading Relationship and Agreed Terms

of Trade.

Application of minimum terms of trade for all Trading

Relationships

(8) The provisions of sections 51AEF to 51AEK inclusive shall apply

to all types of Trading Relationships between a Merchant/Agent,

and a Seller.

51AEF Grower intent to dispatch Produce Notification

(1) A Seller must not dispatch a consignment of Horticultural Produce

without first notifying the Merchant/Agent of details of quantities

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 7

and grades. Notification can be made by telephone, but must be

followed by a written summary of the consignment sent by

facsimile or electronically at the time of dispatch.

(2) The Merchant/Agent Terms of Trade and Agreed Terms of Trade

may include a pro forma Intent to Dispatch Produce Form, which

includes information to be provided about the quantity and quality

of Horticultural Produce to be delivered and the agreed type of

Trading Relationship.

(3) Where the Agreed Terms of Trade include a pro forma Intent to

Dispatch Produce Form a notification made under this subsection

must use the pro forma Intent to Dispatch Produce Form or any

agreed form of notification.

51AEG Seller failure to give Intent to Dispatch Produce Notification

(1) If a Seller dispatches a consignment of Horticultural Produce to a

Merchant/Agent without first providing a notification as required

under section 51AEF the Merchant/Agent must notify the Seller:

(a) of the receipt of the consignment of Horticultural Produce

within 8 (eight) hours of the consignment being received; and

(b) whether they will accept or reject the consignment.

(2) All reasonable efforts must be made to ensure this notification is

brought to the attention of the Seller.

(3) If the consignment is rejected, the Seller must, within 8 (eight)

hours of receiving a notification under subsection (1), notify the

Merchant/Agent if they wish to have the consignment of

Horticultural Produce destroyed, or delivered to a nominated third

party, or returned to the Seller.

(4) If the Seller does not notify the Merchant/Agent in accordance with

subsection (3):

(a) the Seller is deemed to have elected to have the consignment

dealt with at the Merchant/Agent's discretion; and

(b) the Seller must reimburse the Merchant/Agent for any

reasonable costs incurred by them in dealing with the

consignment in accordance with this section.

Schedule 1 Amendments

8 Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011

No. , 2011

51AEH Merchant/Agent's obligation to respond to a Seller's Intent

to Dispatch Produce Notification

(1) If a Merchant/Agent receives an Intent to Dispatch Produce

notification from a Seller in accordance with section 51AEF, they

must respond in an agreed way to the Seller within the maximum

number of hours specified in the Agreed Terms of Trade which

must not exceed 12 (twelve) hours indicating whether or not they

will receive the consignment, subject to the consignment's

compliance with the Agreed Terms of Trade.

(2) All reasonable efforts must be made to ensure this notification is

brought to the attention of the Merchant/Agent and if the

Merchant/Agent does not respond in the permitted time frame they

will be deemed to have agreed to accept the consignment, subject

to the consignment's compliance with the Agreed Terms of Trade.

51AEI If a Merchant/Agent does not accept an Intent to Dispatch

Produce Notification

(1) If a Merchant/Agent responds in the agreed way and in accordance

with section 51AEH, indicating that they will not accept the

consignment of Horticultural Produce, the Seller must not dispatch

the consignment to them.

(2) Section 15AEG applies to any consignment of Horticultural

Produce the Seller delivers to the Merchant/Agent in breach of this

requirement.

51AEJ If a Merchant or Agent does accept an Intent to Deliver

Produce Notification

(1) If a Merchant/Agent responds in accordance with section 15AEH

indicating that they will accept the consignment of Horticultural

Produce (or is deemed to have done so), they must accept the

consignment of Horticultural Produce when delivered, unless:

(a) the consignment does not meet the quality or quantity

requirements specified in the Intent to Despatch Produce

Notification and the Agreed Terms of Trade; or

(b) the Merchant/Agent advises the Seller of the rejection of the

consignment within the time specified in the Agreed Terms

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 9

of Trade (which must not exceed 8 (eight) hours after the

time of delivery).

(2) Sellers can appeal to the Producer Fairness Tribunal if they deem

produce has been arbitrarily rejected.

51AEK Merchant/Agent/Seller Dispute Contact Details

A Merchant/Agent must specify in their Terms of Trade contact

details of the Producer Fairness Tribunal whom a Seller may

contact in the event of a dispute with the Merchant/Agent.

51AEL Agent Relationship

Sections 51AEL to 51AES inclusive shall apply only where an

Agent and a Seller are in an Agent Relationship and shall apply in

addition to the requirements of sections 51AEF to 51AER.

51AEM Transfer of Ownership of Horticultural Produce (Agency

Transaction)

Ownership of Horticultural Produce remains with the Seller until

sold by the Agent to a third party. At this time ownership passes

immediately to the third party purchaser.

51AEN Payment of proceeds of sale

(1) All monies received by the Agent for a consignment of

Horticultural Produce must be deposited in the relevant Market

Authorities Trust Account to be distributed to the Seller less the

Agents commission (see section 51AEO).

(2) Distribution of funds from relevant Market Authorities Trust

Account to the Seller and Agent should take place within seven (7)

days of the funds being deposited in the Trust Account.

(3) Monies include all proceeds from the sale of the produce less:

(a) any commissions permitted under section 51AEO; and

(b) any extra costs permitted under section 51AEP.

Schedule 1 Amendments

10 Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011

No. , 2011

51AEO Commissions

(1) An Agent may only charge commissions on the basis set out in the

Agreed Terms of Trade.

(2) The rate of commission is negotiable in the Agents Terms of

Trade.

(3) In the event of no agreeable commission rate between the Seller

and the Agent, the default Agent's commission rate will be 12.5%.

(4) The relevant Market Authorities managing the Trust Account

should receive 2.5% commission (non-negotiable) for this service.

51AEP Extra Costs

An Agent may only seek reimbursement for extra costs it incurs to

the extent provided for, and on the basis set out, in the Agreed

Terms of Trade.

51AEQ Evidence of Sale

(1) An Agent must provide the Seller with a duplicate copy of their

invoice/statement of sale that was provided to their purchaser for

each consignment of Horticultural Produce sold by them on behalf

of the Seller, showing:

(a) the total proceeds of sale of the consignment; and

(b) the date or dates of the sale; and

sold; and

(d) the price received for each grade of Horticultural Produce

sold; and

(e) the details of the buyer of the Horticultural Produce; and

(f) the name of the purchaser.

(2) The statement or invoice must be provided within the period

specified in the Agreed Terms of Trade or within 28 (twenty eight)

days of the completion by the Agent of the sale of the

consignment, whichever is the earlier.

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 11

51AER Due care and skill

While the Horticultural Produce is under the Agent's management:

(a) they must exercise due care and skill in handling and storing

the Horticultural Produce; and

(b) disputes regarding due care and skill in handling can be

referred to the Producers Fairness Tribunal in the event of the

dispute.

51AES Trust Account

(1) The relevant Market Authority must maintain a trust account that

complies with the following:

(a) the trust account must be in the name of the relevant Market

Authority (whether individual, firm or corporation);

(b) the trust account name must start with the name of the

relevant Market Authority, and include the words "Trust

Account";

on the trust account;

(e) monies may be paid out of the trust account only by cheque

or direct deposit;

(f) the relevant Market Authority should receive 2.5%

commission to manage the Trust Account.

(2) All monies received from a third party for Horticultural Produce by

an Agent must be placed in the relevant Market Authority's trust

account.

(3) Costs refundable to the Agent are specified in sections 51AEO and

51AEP.

(3) The remainder of the proceeds of each sale are to be distributed to

the Seller.

(4) The relevant Market Authority must pay all fees, taxes and charges

in relation to the Trust Account.

(5) The relevant Market Authority must:

(a) keep all records relating to the Trust account for five years;

and

Schedule 1 Amendments

12 Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011

No. , 2011

(b) have the account independently audited in each financial

year.

(6) The Producer Fairness Tribunal may require an audit report and

relevant records to be made available to it for inspection.

51AET Merchant Relationship

Sections 51AEU to 51AEW (31) inclusive shall apply to all

transactions by a Merchant and a Seller in a Merchant Relationship

in addition to the requirements of sections 51AEF to 51AER.

51AEU Transfer of Ownership of Horticultural Produce (Merchant

Transaction)

(1) Ownership of Horticultural Produce passes from the Seller to the

Merchant:

(a) if the price for the Horticultural Produce has been agreed by

the Merchant and the Seller prior to delivery--immediately

to the Merchant upon receipt of the produce; or

(b) the price for the produce has not been agreed between the

Merchant and the Seller prior to delivery--immediately at

the time the Merchant and the Seller agree on a price for the

produce, which can be no later than 24 hours after receipt of

produce by the Merchant.

(2) If an agreement has not been made within the time specified in

paragraph (1)(b), then the Merchant is deemed to be an Agent. In

this event the maximum commission rate should be Agent 12.5%

and the relevant Market Authority 2.5%.

(3) If both parties agree in writing the time frame in paragraph (1)(b)

may be extended.

51AEV Payment of Horticulture Produce

(1) The Merchant must pay the Seller for a consignment of

Horticultural Produce the price agreed in accordance with the

schedule of prices agreed to within the period specified in the

Agreed Terms of Trade.

(2) The period specified may not exceed 28 (twenty eight) days from

the date the produce is received by the Merchant.

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 13

51AEW Summary price information

(1) A Merchant must provide a Seller with a statement for each

consignment of Horticultural Produce accepted by them showing

the quantity and grades of the Horticultural Produce bought and the

price paid. Statements containing only average prices are not

acceptable.

(2) The statement must be provided within the period specified in the

Agreed Terms of Trade or within 14 (fourteen) days of the

consignment being bought by the Merchant. The time specified

may not exceed 28 (twenty eight) days.

(3) The only pooling permissible under the code is:

(a)

growers;

and

(b) only where the pooling body is totally owned and controlled

by the growers involved.

(4) Pooling regulations must be given to each grower in writing.

(5) Growers must agree in writing to be part of the pooling

arrangement.

(6) All other terms of trade within the Code apply to all transactions

carried out by the pooling body.

(7) Pooling by Merchants, Agents or Processors is not permissible.

51AEX Dispute Resolution

(1) For the purposes of this section and section 51AEX:

Complainant means the person or entity that initiates the

procedure under subsection (33) or appoints a Horticultural

Inspector under subsection (35).

Parties mean the Complainant and the Respondent in a dispute.

Respondent means the person or entity with which the

Complainant has a dispute.

Schedule 1 Amendments

14 Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011

No. , 2011

Initiating a dispute

(2) A Merchant/Agent or Seller may initiate a dispute against any

participant covered by the code in relation to a Trading

Relationship by contacting in writing the other party and notifying

them of:

(a) the nature of the dispute; and

(b) the outcome the Complainant seeks; and

Resolving a dispute

(3) If a dispute is notified under subsection (2) the Parties must

negotiate in good faith to resolve the dispute.

(4) If the Parties cannot resolve the dispute within three weeks of

notification of the dispute, either party may seek a referral for

mediation under section 51AEZ.

51AEY Horticultural Inspectors

(1) A Seller or a Merchant/Agent may at any time, and irrespective of

whether a dispute has been notified under section 51AEZ or a

mediator has been appointed under that section, appoint a

Horticultural Inspector to provide a report on:

(a) whether amounts paid by a Merchant/Agent to a Seller either

directly or through the relevant Market authorities Trust Fund

were calculated in accordance with the requirements of this

Code and the Agreed Terms of Trade; and

(b) any other matter in relation to which a dispute has been

notified under section 51AEX.

Assistance to Horticultural Inspectors

(2) If a Horticultural Inspector is appointed pursuant to this section,

the relevant party must:

(a) permit the Horticultural Inspector to inspect any Horticultural

Produce supplied by the Seller in possession of the

Merchant/Agent; and

(b) in the case of an Agent--permit the Horticultural Inspector to

inspect the financial and other records of the Agent that relate

to the Seller or Horticultural Produce supplied by the Seller.

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 15

Horticultural Inspector's report

(3) A Horticultural Inspector appointed pursuant to this section must

prepare a report within 48 (forty eight) hours of appointment and

provide a copy of that report to both Parties.

(4) The Horticultural Inspector's report:

(a) must not include information that a Party to the dispute is not

entitled to obtain under the Agreed Terms of Trade; and

(b) will not be legally binding on the Parties but is intended to

provide objective evidence to facilitate the dispute being

resolved by good faith negotiation, by mediation, or through

legal proceedings.

Costs of Horticultural Inspector

(5) A Horticultural Inspector will be initially paid by the party

requesting the inspection.

(6) If a mediator as part of mediation appoints an inspector/assessor,

each party must pay half the costs.

(7) Reimbursement of these costs, or a portion of these costs, may be

subsequently agreed by the parties or directed by the Producer

Fairness Tribunal or a court.

51AEZ Mediation

(1) Either party may by notice to the other request a dispute notified

under section 51AEX to be referred for mediation.

(2) When a party seeks referral for mediation:

(a) the dispute will be referred in the first instance to the

Producer Fairness Tribunal accredited pursuant to paragraph

51AEZA(3)(e); and

(b) if the other party agrees to the mediation--the Producer

Fairness Tribunal will be the official mediator.

(3) In mediating disputes, the Producer Fairness Tribunal has the

following powers:

(i) to delegate the mediation to the Tribunal office, or

another mediator appointed by the Producer Fairness

Tribunal;

Schedule 1 Amendments

16 Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011

No. , 2011

(ii) to make decisions (whether made by the Producer

Fairness Tribunal, the Tribunal office or any appointed

mediator); and

(iii) to award costs in respect of the mediation.

(4) Within seven days of acceptance or delegation of the mediation,

the mediator must:

(a) decide the time of mediation (provided it is within 14

(fourteen) days of the acceptance or delegation of the

mediation) and a place of mediation (provided it is in

Australia); and

(b) notify the parties of the time and place of mediation.

(5) If both parties agree the mediation can be conducted via

teleconferencing or videoconferencing.

(6) Unless agreement is reached or directed otherwise, each party must

pay their own costs of the representations at the mediation and half

of any other mediation costs.

(7) The parties are bound by a decision of the mediator unless, on

application by one or more of the parties to a court of competent

jurisdiction, the court makes a different decision.

Resolution of disputes

(8) There will be no termination of a dispute without settlement either

by agreement negotiated between the Parties or by the Parties and

the mediator during the process of mediation.

51AEZA Oversight by the Horticultural Code Management

Committee

Establishment of the Committee

(1) A Horticultural Code Management Committee will be appointed

by the Minister and will comprise:

(a) an independent chairperson; and

(b) 3 members who are Sellers; and

(d) 2 independent members.

Amendments Schedule 1

Competition and Consumer Amendment (Horticultural Code of Conduct) Bill 2011 No. ,

2011 17

(2) The Horticultural Code Management Committee will be assisted

by a secretariat appointed by the Minister.

Role of the Committee

(3) The Horticultural Code Management Committee will:

(a) facilitate the introduction of the Code, including raising

awareness of the Code and ensuring appropriate industry

training and understanding; and

(b) establish guidelines and procedures for the accreditation of

independent, impartial and appropriately skilled Horticultural

Inspectors; and

a sufficient number operating within the wholesale market,

taking into consideration the geographical location of

Horticultural Inspectors, the relative dispersal of skills of the

Horticultural Inspectors and other criteria to be determined

by the Committee; and

(d) ensure that Horticultural Inspectors are not based within

wholesale markets but operate as independent contract

consultants located outside the markets; and

(e) establish guidelines for the accreditation of an independent,

impartial and appropriately skilled Producer Fairness

Tribunal to be appointed by the Minister and to be known as

the Horticultural Code Producer Fairness Tribunal whose

responsibilities shall include those described in

section 51AEZ and to report at least twice a year on the

operation of the Code and any proposed modification

required to the Code; and

(f) provide a report to the Minister each year detailing the work

of the Committee in the preceding 12 (twelve) month period.

Commonwealth of Australia Bills

COMPETITION AND CONSUMER AMENDMENT (HORTICULTURAL CODE OF CONDUCT) BILL 2011