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2008
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL FUELWATCH (EMPOWERING CONSUMERS) BILL 2008
NATIONAL FUELWATCH (EMPOWERING CONSUMERS)
(CONSEQUENTIAL AMENDMENTS) BILL 2008
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Assistant Treasurer
and Minister for Competition Policy and Consumer Affairs,
the Hon Chris Bowen MP)
Table of contents
General outline and financial impact ....................................................... 1
Glossary .................................................................................................. 3
Background Benefits and Costs of the National Fuelwatch
Scheme......................................................................... 5
Chapter 1 Elements of the National Fuelwatch Scheme ............. 11
Chapter 2 Civil penalty regime under the National
Fuelwatch Scheme ..................................................... 19
Chapter 3 Consequential amendments to the Trade
Practices Act 1974 ...................................................... 25
General outline and financial impact
A National Fuelwatch Scheme
The National Fuelwatch (Empowering Consumers) Bill 2008 (the Bill)
establishes a National Fuelwatch Scheme (National Fuelwatch).
The Bill introduces requirements that, under National Fuelwatch:
· specified petrol retailers notify the Australian Competition
and Consumer Commission (ACCC) of their next day's fuel
prices by 2.00 pm each day;
· specified petrol retailers must sell at their notified prices
from 6.00 am the next day and maintain these notified prices
for a 24-hour period;
· failure to notify or maintain the notified prices by petrol
retailers is a civil penalty.
The ACCC is responsible for implementing and administering National
Fuelwatch, as well as investigating and bring civil proceedings for the
breaches of the Bill.
The objectives of National Fuelwatch are to:
· empower consumers to make informed decisions and
purchase fuel at the lowest possible price;
· increase reliability and certainty of fuel price information
available to consumers;
· reduce consumer search costs;
· address consumer anxiety by eliminating intraday price
volatility;
· address the existing information imbalance between petrol
retailers and consumers; and
· promote competition in the retail fuel market.
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National Fuelwatch (Empowering Consumers) Bill 2008
Date of effect: The Bill commences the day after it receives Royal
Assent. The civil penalty for failure to register with the ACCC by petrol
retailers commences on 30 November 2008, and all other breaches
commence on 15 December 2008.
Proposal announced: This measure was announced in a Joint Press
Conference between the Prime Minister and the Assistant Treasurer and
Minister for Competition Policy and Consumer Affairs on 15 April 2008.
Financial impact: The estimated cost to revenue is $20.9 million over
four years from 2008-09 to 2011-12.
Compliance cost impact: The estimated compliance cost for business is
zero.
Summary of regulation impact statement
Impact: The estimated compliance cost for business is zero.
Main points: Refer to Background of this explanatory memorandum.
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National Fuelwatch (Empowering Consumers) Bill 2008
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
98 RON 98 Research Octane Number
ABN Australian Business Number
ACCC Australian Competition and Consumer
Commission
LPG Liquefied petroleum gas
PULP Premium unleaded petrol
National Fuelwatch National Fuelwatch Scheme
The Bill National Fuelwatch (Empowering
Consumers) Bill 2008
The Consequential National Fuelwatch (Empowering
Amendments Bill Consumers)(Consequential
Amendments) Bill 2008
TPA Trade Practices Act 1974
ULP Unleaded petrol
3
Background
Benefits and Costs of the National
Fuelwatch Scheme
Problem
The Australian market for fuel is characterised by a lack of price
transparency between sellers and consumers at the retail level. Current
arrangements allow sellers to react more quickly than consumers to
movements in retail fuel prices. This information imbalance results in
consumer detriment due to the negative effects on competition and
consumers.
In December 2007, the Australian Government (the Government) received
the Australian Competition and Consumer Commission (ACCC), Petrol
Prices and Australian Consumers: Report of the ACCC inquiry into the
price of unleaded petrol, (December 2007) (the ACCC report).
The ACCC report contained a series of recommendations relating to
competition in Australian refining/importing, wholesale and distribution
petrol markets and the Trade Practices Act 1974. It also recommended
that the existing information imbalance between buyers and sellers in the
retail fuel market be addressed.
· The ACCC found that an imbalance in fuel pricing
information between petrol retailers and consumers exists at
the retail level.
· The capacity of consumers to take advantage of the most
competitive, lowest prices in their local area is limited by
intraday fuel price movements (sometimes as often as three
or four times per day) and the amount of effort and search
costs they are willing to incur.
Objectives
The objectives of Government action are to:
· empower consumers to make informed decisions and
purchase fuel at the lowest possible price;
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National Fuelwatch (Empowering Consumers) Bill 2008
· increase reliability and certainty of fuel price information
available to consumers;
· reduce consumer search costs;
· address consumer anxiety by eliminating intraday fuel price
volatility;
· address the existing information imbalance between petrol
retailers and consumers; and
· promote competition in the retail fuel market.
Introduction of fuel price transparency and commitment rules
The National Fuelwatch (Empowering Consumers) Bill 2008 (the Bill)
proposes the introduction of retail fuel price transparency and
commitment rules to meet all of the Government's objectives.
The specific benefits and costs associated with the National Fuelwatch
scheme are set out below.
Consumer benefits
The introduction of a National Fuelwatch scheme will provide the
following consumer benefits, in accordance with the Government's
objectives:
· It will empower consumers to make informed decisions and
purchase fuel at the lowest possible price.
· It will increase reliability and certainty of fuel price
information available to consumers.
· It will reduce consumer search costs.
· It will address consumer anxiety by eliminating intraday fuel
price volatility.
· It will address the existing information imbalance between
petrol retailers and consumers.
· It will promote competition in the retail fuel market.
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National Fuelwatch (Empowering Consumers) Bill 2008
These are unquantifiable benefits designed to empower consumers and
allay consumer perceptions and anxiety surrounding intraday fuel price
volatility.
The publication of petrol prices on a national website and the reporting of
prices in the media will serve to increase fuel price transparency for retail
consumers. The National Fuelwatch scheme will allow consumers to
more readily identify when and where to buy fuel at the lowest price.
This is particularly beneficial to consumers when a significant disparity,
sometimes as much as 10 cents to 15 cents per litre, between the lowest
and most expensive fuel price may occur within the course of any given
day.
Econometric analysis undertaken by the ACCC as part of its inquiry
considered relative price levels between Perth and the eastern capitals
before and after the introduction of the Western Australian Fuelwatch
scheme. The ACCC concluded that the average price margin was around
1.9 cents per litre less on average for the period from January 2001 to
June 2007 than for the period from August 1998 to December 2000 for
Perth relative to the eastern metropolitan markets. The Western
Australian FuelWatch scheme was introduced in 2001.
Consumer costs
The National Fuelwatch scheme presents no cost to consumers. Under the
scheme, fuel price information will be made freely available to
consumers. Possible communication channels include the internet,
telephone and messaging services.
Scheme administration costs
The introduction of National Fuelwatch presents upfront capital and
ongoing administrative costs for Government. The Government has
allocated $20.9 million over four years for this purpose. This includes:
· $7.1 million in 2008-09;
· $4.6 million in 2009-10;
· $4.6 million in 2010-11; and
· $4.6 million in 2011-12.
The Bill provides that the ACCC is responsible for the establishment of
National Fuelwatch and the ongoing administration of fuel price
transparency and commitment rules.
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National Fuelwatch (Empowering Consumers) Bill 2008
Enforcement costs
The effectiveness of National Fuelwatch depends upon price commitment
rules. Application of these rules presents a range of compliance and
enforcement activities by the ACCC. Possible breaches of the price
commitment rules will require investigation, civil proceedings and the
imposition of sanctions as needed.
Enforcement costs are a subset of the administrative costs outlined above
and the estimated total enforcement cost from 2008-09 to 2011-12 is
$1.575 million. Establishment of the regulatory framework, and ongoing
compliance activities by the ACCC are estimated as follows:
· $562,500 in 2008-09;
· $375,000 in 2009-10;
· $318,750 in 2010-11; and
· $318,750 in 2011-12.
Business compliance costs
The estimated net compliance cost to petrol retailers associated with the
establishment and ongoing operation of National Fuelwatch is negligible.
The Bill provides that petrol retailers must provide retail fuel price
information to the ACCC by 2.00 pm each day. This information may be
relayed to the ACCC via a toll-free telephone number, email or a file
download/transfer (this is most relevant for larger retail networks where
pricing information is centrally collated). Whilst retail businesses will
need to communicate this pricing information to the ACCC upon a daily
basis, it is anticipated that the degree of effort or time required to
communicate this information will be negligible. Some petrol retailers
may even find a reduction in their overall costs as these activities replace
their existing, and often extensive, price setting activities.
Under the proposed Bill, petrol retailers will incur no compliance costs
associated with record keeping. Once a petrol retailer has provided fuel
price information to the ACCC each day, a receipt will be issued to the
retail business setting out the relevant information. The information set
out on this receipt will allow retail businesses to confirm that the ACCC
has accurately received and recorded the price data.
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National Fuelwatch (Empowering Consumers) Bill 2008
· Retail businesses will need to maintain records in relation to
the actual price charged for fuel that has been sold.
However, petrol retailers already record much of this same
information for accounting purposes. No extraordinary or
additional record keeping obligations will be imposed upon
fuel retailers to ensure compliance with the Bill.
The Bill confers compliance and enforcement powers upon the ACCC.
The ACCC will be responsible for administering these powers in
accordance with the Bill and will absorb all costs associated with the
administration of these proposed regulatory powers. The exercise of
these discretionary powers will not impose additional compliance costs
upon petrol retailers as it is proposed that the ACCC will absorb costs
associated with conducting these compliance and enforcement activities.
Conclusion
The Government considered different options canvassed by the ACCC
report including the maintenance of existing arrangements, reducing
opportunities available to petrol retailers to share fuel price information
and increasing fuel price transparency through the expansion of available
fuel price information to consumers.
Other options only partially address the Government's objectives through
the introduction of improved fuel price transparency. The absence of
price commitment rules means that scope for price coordination between
petrol retailers would continue and that consumer anxiety relating to
petrol price volatility would remain unabated as consumers would receive
no further information regarding future fuel price levels or changes.
Importantly, consumers would continue to have no greater certainty or
increased confidence that they have purchased fuel at the lowest possible
price available in their local area.
The National Fuelwatch scheme proposed by the Bill is most suited to
meeting the Government's objectives. The 24-hour price commitment
rules set out in the Bill is an advantageous feature that directly targets
consumer anxieties relating to price volatility and, in particular, the high
level of consumer concern that exists in relation to future changes in fuel
prices.
National Fuelwatch effectively provides for the creation of a new public
good, in the form of fuel price information freely available to all members
of the community. Increased information, especially in relation to the
commencement of new price cycles, will mean that consumers are
empowered to take advantage of the lowest prices available to them from
the most convenient location.
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National Fuelwatch (Empowering Consumers) Bill 2008
Greater transparency and increased predictability, through the
dissemination of fuel price information and the operation of the price
commitment rule are significant, highly valued consumer benefits that will
help to allay consumer concerns regarding fuel prices.
10
Chapter 1
Elements of the National Fuelwatch
Scheme
Outline of chapter
1.1 The Bill establishes a National Fuelwatch Scheme (National
Fuelwatch) to commence operation on the day after it receives Royal
Assent.
1.2 Parts 1 and 2 of the Bill prescribe that under National Fuelwatch:
· petrol retailers in a declared locality prescribed by the
regulations must provide their details to the Australian
Competition and Consumer Commission (ACCC);
· petrol retailers must notify the ACCC of their next day's
standard price for each kind of motor fuel sold at their
service station by 2.00 pm each day;
· the ACCC must publish notified retail prices for each kind of
motor fuel offered for sale by petrol retailers;
· if a petrol retailer does not offer motor fuel for sale at the
notified price, a civil penalty may be imposed; and
· the ACCC must maintain a register that contains details and
copies of notices provided by petrol retailers.
Context of amendments
1.3 On 15 April 2008, the Government announced the introduction
of National Fuelwatch in a joint press conference, and subsequent media
release, by the Prime Minister and the Assistant Treasurer and Minister for
Competition Policy and Consumer Affairs.
1.4 The Government announced that the purpose of National
Fuelwatch is to promote competition and transparency in the fuel market
and that the establishment of the scheme will assist consumers to decide
when to buy the cheapest petrol in their area.
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National Fuelwatch (Empowering Consumers) Bill 2008
1.5 The Government outlined that the key elements of National
Fuelwatch will include the following requirements for petrol retailers to:
· notify the ACCC of their next day's prices by 2.00 pm the
day before; and
· maintain this advised price for a 24-hour period; and
· apply the scheme to unleaded petrol (ULP), premium
unleaded petrol (PULP), liquefied petroleum gas (LPG),
diesel, 98 research octane number (98 RON) and biodiesel
blends.
1.6 The Government announced that National Fuelwatch will cost
$20.9 million over four years and commence operation on
15 December 2008. The Government will review the effectiveness of the
scheme 12 months after its commencement.
Summary of new law
1.7 The Bill provides that petrol retailers in a declared locality must
provide details to the ACCC. A failure to provide details to the ACCC is a
civil penalty provision under this Bill.
1.8 Petrol retailers in a declared locality must notify the ACCC of
their next day's standard price during the fixed price period for each kind
of motor fuel sold at their service station by 2.00 pm each day. A fixed
price period is defined as a period beginning at 6.00 am on a particular day
and ending 24 hours later.
1.9 Failure to notify the ACCC of the next day's standard price
and/or maintain this price for the fixed price period will result in a civil
penalty.
1.10 The ACCC must publish the notified standard price for each kind
of motor fuel offered for sale by petrol retailers on a website to be
maintained by the ACCC, or through other mechanisms approved by the
ACCC in writing, by 4.00 pm each day.
1.11 The ACCC must maintain a register that contains details, and
copies of notices, which petrol retailers are required to provide under the
Bill.
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National Fuelwatch (Empowering Consumers) Bill 2008
Detailed explanation of new law
Obligation of petrol retailers to give details to the ACCC
1.12 A petrol retailer must not offer motor fuel for retail sale at a
service station in a declared locality unless the petrol retailer, or an agent
of the petrol retailer, provides certain details to the ACCC. [Part 2, section 7]
1.13 The Bill provides that a petrol retailer, or an agent of a petrol
retailer, must give ACCC notice of the following details:
· the name and the Australian Business Number (ABN) of the
petrol retailer;
· the location of the service station;
· the kinds of motor fuel to be offered for retail sale at that
service station; and
· any other prescribed details.
[Part 2, section 7]
1.14 Petrol retailers are required to give notice to the ACCC in the
form, and using the method, approved in writing by the ACCC. [Part 2,
subsection 7(3)]
1.15 The Bill provides that petrol retailers who fail to notify the
ACCC under subsection 8(1) of the Bill will breach the bill and may be
subject to a penalty. [Part 2, subsection 7(2)]
1.16 A petrol retailer is defined as:
· constitutional corporation that offers motor fuel for retail
sale;
· an person who offers motor fuel for retail sale as the agent or
franchisee of a constitutional corporation;
· a person who offers motor fuel for sale that has been
purchased from a constitutional corporation for retail sale; or
· a person who offers motor fuel for retail sale in a Territory.
[Part 1, subsection 5(1)]
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National Fuelwatch (Empowering Consumers) Bill 2008
1.17 A constitutional corporation is a corporation to which
section 51(xx) of the Constitution (the corporations power) applies. The
corporations power provides that the Parliament has the power to make
laws for the peace, order and good government of the Commonwealth with
respect to foreign corporations, and trading or financial corporations
formed within the limits of the Commonwealth. [Part 1, subsection 5(1)]
1.18 A petrol retailer who is not a corporation and who offers motor
fuel for sale that has been purchased from a constitutional corporation, is
only required to give their details to the ACCC for the purpose of this Bill
where the offer of motor fuel for sale, or the sale of motor fuel, affects or
is capable of affecting the activities, functions, relationships or business of
a constitutional corporation. [Part 1, subsection 5(2)]
1.19 The regulations may prescribe localities that are to be declared
localities for the purposes of this Bill on and from 30 November 2008.
[Part 1, subsection 6(1)]
1.20 The Minister has discretion to declare any other locality to be a
declared locality for the purposes of this Bill after its date of
commencement. Similarly, the Minister may also declare that a locality
prescribed in the regulations is no longer to be a declared locality for the
purposes of the Bill. [Part 1, subsection 6(2)]
1.21 The Minister may make a declaration under subsection 6(2) of
the Bill by legislative instrument. In making a declaration, the Minister
must give consideration to the likely benefit to consumers and competition
in the particular locality. As a result, the Minister must have regard to
each of the following factors:
· the size of the locality;
· the population of the locality;
· the number of vehicles registered under the law of the State
or Territory in which the locality is situated, in relation to
which an address in the locality is specified in the
registration;
· the number of service stations in the locality;
· the ownership and operating arrangements for service
stations in the locality; and
· any submissions made by a local government body for an
area wholly or partly within the locality.
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National Fuelwatch (Empowering Consumers) Bill 2008
[Part 1, subsection 6(3)]
1.22 For the purposes of paragraph 6(3)(f), a local government body
is a body established for the purposes of local government by or under a
law applying in a State or Territory. [Part 1, subsection 5(1)]
Notification of next day's retail price
1.23 The effect of National Fuelwatch is to encourage petrol retailers
to nominate their best, most competitive price in advance.
1.24 Under Fuelwatch, petrol retailers in a `declared locality' are
required to notify the ACCC of the standard price during a fixed price
period. Petrol retailers are required to notify the standard price for each
kind of motor fuel they offer for sale at their service station by 2.00 pm on
the immediately preceding day. An agent of the petrol retailer may also
notify the ACCC on the retailer's behalf. [Part 2, subsection 8(1)]
1.25 Petrol retailers must notify the ACCC in the approved form.
Failure to notify the ACCC by petrol retailers of their standard fuel prices
during a fixed price period is a breach of the bill to which a civil penalty
attaches [Part 2, subsections 8(3), (4) and (5)]
1.26 However, petrol retailers are not required to notify the ACCC of
the standard price at which motor fuel of a particular kind is to be offered
for sale at their station during the fixed price period if the standard price
has not changed from the standard price from the previous day. [Part 2,
subsection 8(6)]
1.27 A fixed price period is a period beginning at 6.00 am (by legal
time in a declared locality) on a particular day and retailers are required to
maintain the standard price for a 24-hour period. [Part 2, subsection 8(2)]
1.28 In relation to the retail sale by a petrol retailer of a kind of motor
fuel, the standard price is the price at which the petrol retailer offers the
kind of motor fuel for retail sale. The standard price does not include any
shopper docket arrangements retailers have in place, or any other discounts
offered by retailers. [Part 1, subsection 5(1)]
1.29 A service station is a place at which motor fuel is offered for
retail sale and retail sale refers to the sale by petrol retailers to another
person for that person's use. [Part 1, subsection 5(1)]
1.30 Motor fuel is defined as fuel that is suitable for use in an internal
combustion engine (excluding aviation gas). Motor fuel may include ULP,
PULP, LPG, diesel, 98 RON, and biodiesel blends. [Part 1, subsection 5(1)]
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National Fuelwatch (Empowering Consumers) Bill 2008
Publication of retail fuel prices and register of fuel price notifications
1.31 The ACCC is responsible for establishing and administering
National Fuelwatch. As the administrator of the scheme, the ACCC must:
· publish daily fuel price information once it has been received
from petrol retailers; and
· maintain a register containing details of petrol retailers under
subsection 7(1) and copies of petrol prices notified by petrol
retailers.
Publication of next day's retail price
1.32 Where petrol retailers have notified the ACCC of their standard
fuel prices, the ACCC must publish the standard price for each kind of
motor fuel that is to be offered for sale at those service stations during the
fixed period beginning on that day. The ACCC must publish the
information by 4.00 pm (by legal time in the declared locality) on the day
on which the ACCC receives notice from fuel retailers. [Part 2,
subsections 9(1) and (3)]
1.33 The ACCC must publish this fuel price information on a
dedicated National Fuelwatch website that is to be maintained by the
ACCC. The ACCC also has discretion to approve, in writing, other
methods which can be used to communicate fuel price information to
consumers. Other mechanisms may include, for example, sending an
email or SMS text message to consumers who wish to subscribe to those
services. [Part 2, subsection 9(2)]
1.34 Timely collection, publication and dissemination of price
information across participating retail sites by the ACCC serves to increase
price transparency for retail consumers, and allays previous consumer
concerns regarding petrol price volatility.
1.35 The Bill allows consumers to make an informed decision about
where to buy the cheapest petrol in their area, and as a result, consumers
are able to plan their fuel purchases in advance. Consumers may bring
forward their purchase if they are aware that the next day's fuel price is
more expensive, and delay their purchase if the next day's petrol price is
cheaper.
1.36 Media sources (particularly radio and television) may also play a
role in the provision of information to consumers and complement pricing
information available via the internet and email notifications.
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National Fuelwatch (Empowering Consumers) Bill 2008
Register of fuel price notifications
1.37 The ACCC must maintain a register that contains details
provided by petrol retailers, or their agent, of the name and ABN of the
retailer, the location of the service station, and the kinds of motor fuel
offered by retailers for the purposes of this Bill. [Part 2, paragraph 11(a)]
1.38 The ACCC is also required to keep copies of all the notices given
to it by retailers of their next day's standard prices, and any other details as
prescribed, on the same register. [Part 2, paragraph 11(b) and (c)]
Regulations
1.39 The Bill enables the Governor-General to prescribe regulations,
not inconsistent with the Bill, all matters required or permitted by the Bill
to be prescribed or are necessary or convenient to be prescribed for
carrying out or giving effect to the Bill. [Part 5, section 28]
17
Chapter 2
Civil penalty regime under the National
Fuelwatch Scheme
Outline of chapter
2.1 Part 2 of the Bill introduces civil penalties relating to a breach of
the obligation on petrol retailers to give details to the ACCC, the
obligation on petrol retailers to notify the ACCC of their retail price for
the next day, and the selling of motor fuel at other than the notified retail
price.
2.2 Part 3 of the Bill provides the ACCC with the ability to give a
person an infringement notice.
Summary of new civil penalty regime
2.3 The Fuelwatch scheme provides for civil penalties relating to: the
obligation on petrol retailers to give details to the ACCC, the obligation
on petrol retailers to notify the ACCC of their retail price for the next day,
and the selling of motor fuel at other than the notified retail price. [Part 2]
2.4 The structure of the penalty regime is designed to allow a variety
of enforcement responses, ranging from responses to minor breaches
through to serious flagrant contraventions of the Fuelwatch scheme by
larger petrol retailers.
2.5 For example, in the case of a breach of subsection 8(1), the
maximum civil penalty payable by a body corporate is five times the
penalty provided for under the subsection 8(4) (200 penalty units or
$22,000), specifically 1,000 penalty units ($110,000), for bodies
corporate.
2.6 The ACCC is also able to serve infringement notices on retailers
in relation to non compliance with aspects of the scheme, enhancing the
effectiveness of the enforcement regime. However, infringement notices
attract a lesser penalty than those available under the civil penalty regime.
[Part 3]
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National Fuelwatch (Empowering Consumers) Bill 2008
2.7 Civil penalties don't require proof of a fault element. The
imposition of civil penalties without the need for a proof of fault element
is justifiable in circumstances where the majority of offenders will be
corporations. Further, it is reasonable to expect petrol retailers to take
steps to guard against any inadvertent contraventions.
2.8 The Bill provides a specific defence in relation to breaching of
the obligation to notify the ACCC of the next day's retail price for fuel
offered. [Part 2, subsection 8(5)]
Detailed explanation of new civil penalty regime
Obligation on petrol retailers to give details
2.9 The Bill provides that petrol retailers must provide the ACCC
with a notice specifying: their name and ABN; the location of the service
station; the kinds of motor fuel to be offered for retail sale at that service
station; and any other details as prescribed by the regulations, in the form
and using the method approval by the ACCC. [Part 2, subsection 7(1)]
2.10 A petrol retailer who fails to comply with this obligation
breaches the bill and is subject to a penalty of up to 200 penalty units (or
1,000 penalty units for a body corporate). [Part 2, subsection 7(2)]
2.11 A breach of the obligation can be the subject of an infringement
notice issued by the ACCC. [Part 3, subsection 12(1)]
2.12 The penalty that may be imposed by the ACCC under an
infringement notice for a breach of section 7 is one fifth of the maximum
penalty for the offence:
· 5 penalty units ($550) for individuals, and
· 25 penalty units ($2,750) for a body corporate.
[Part 3, sections 12 and 14]
Obligation to notify of next day's retail price
2.13 The Bill provides that petrol retailers must give the ACCC notice
of the standard price at which the motor fuel will be offered, by 2.00 pm
on the preceding day. [Part 2, subsection 8(1)]
2.14 The notification of the next day's standard price applies to retail
sales offered during the period beginning at 6.00 am on a particular day
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National Fuelwatch (Empowering Consumers) Bill 2008
and ending 24 hours later, and must be given in the form and using the
method approved in writing by the ACCC. [Part 2, subsections 8(2) and 8(4)]
2.15 A petrol retailer who fails to comply with the requirement under
subsection 8(1) breaches the bill and is subject to a maximum penalty of
200 penalty units or $22,000 (1,000 penalty units or $110,000 for a body
corporate). [Part 2, subsection 8(3)]
2.16 The penalty that may be imposed by the ACCC under an
infringement notice for a breach of section 8:
· 5 penalty units ($550) for individuals, and
· 25 penalty units ($2,750) for a body corporate.
[Part 3, sections 12 and 14]
2.17 A petrol retailer will not be subject to the civil penalty provisions
if it is not possible for the petrol retailer to comply with the requirement to
notify the ACCC of the standard price at which the motor fuel will be
offered, by reason of a failure in computing or telecommunications
systems used by the ACCC or by the petrol retailer (in circumstances
where the failure is beyond the control of the petrol retailer). [Part 2,
subsection 8(5)]
2.18 The Bill also provides that, if the standard price at which motor
fuel is offered by a petrol retailer does not differ from the standard price on
the immediately preceding day, the retailer is taken to have given notice
under subsection 8(1). As a result, where a retailer maintains the same
price for their fuel, there is no obligation to notify the ACCC. It follows
that, should the retailer charge a different price to this, they are in breach
of section 10 of the Bill. [Part 2, subsection 8(6)]
Obligation to selling motor fuel at the notified retail price
2.19 Section 10 requires petrol retailers to sell the motor fuel they
offer for sale at the price they have notified to the ACCC. Failure to do so
constitutes a breach of the provisions of section 10.
2.20 A petrol retailer who breaches subsection 10(1) will be subject to
a maximum penalty of 200 penalty units or $22,000 (1,000 penalty units or
$110,000 for a body corporate). [Part 2, subsection 10(1)]
2.21 A breach of section 10 can also be the subject of an infringement
notice issued by the ACCC. The penalty that may be imposed by the
ACCC under an infringement notice is:
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National Fuelwatch (Empowering Consumers) Bill 2008
· 5 penalty units ($550) for individuals, and
· 25 penalty units ($2,750) for a body corporate.
Infringement notice regime
2.22 The Bill provides the ACCC with the ability to give a person an
infringement notice, if it has reasonable grounds to believe the person has
contravened subsection 7(3), 8(5) or 10(2). The infringement notice must
be given within 12 months of the alleged contravention. [Part 3,
subsections 12(1) and 12(2)]
2.23 The inclusion of the infringement notice regime provides the
ACCC with sufficient flexibility to make a proportionate response in
relation to breaches of the Bill, in relation to the range of petrol retailers to
which the Bill applies.
2.24 Section 13 specifies the information that must be included in the
infringement notice. Because of the possibility that infringement notices
could be issued in relation to a continuing breach, the notice must include
the date of the alleged contravention. [Part 3, section 13]
2.25 The penalty applicable for a breach of subsections 7(3), 8(5) or
10(2) is a pecuniary penalty of 5 penalty units or $550 (25 penalty units or
$2,750 for a body corporate). The level of the infringement penalty
balances the need for it to be an adequate deterrent and not simply a cost
of doing business, with the competing consideration that an infringement
penalty set too high would provide no incentive to a guilty defendant not
to take the matter to court. [Part 3, section 14]
2.26 An infringement notice can be withdrawn by the ACCC within
28 days of being issued. Where the penalty specified in the notice has
already been paid, the ACCC is liable to refund that penalty in relation to
a withdrawn infringement notice. [Part 3, section 15]
2.27 Once paid, any liability of the person for the alleged
contravention for which the infringement notice was issued is discharged,
and further civil penalty proceedings may not be brought against the
person in respect of the alleged contravention. [Part 3, section 16]
2.28 Nothing in Part 3 of the Bill requires an infringement notice to be
issued by the ACCC in relation to an alleged contravention, nor does it
affect the liability of a person to have civil penalty proceedings brought
against them for an alleged contravention. The court's discretion to
determine the amount of the penalty imposed for a breach of the civil
penalty provisions under the Bill is similarly not affected. [Part 3, section
17]
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National Fuelwatch (Empowering Consumers) Bill 2008
Civil penalty regime
2.29 Civil penalties may be enforced under Part 4 of the Bill. The
maximum penalty that can be imposed is 1,000 penalty units for a
corporation and 200 penalty units for persons other than a body corporate.
The burden of proof in proceedings for a civil penalty is on the balance of
probabilities and there is no requirement to prove any fault elements in
relation to the offending conduct.
2.30 A person must not:
(a) attempt to contravene a civil penalty clause;
(b) aid, abet, counsel or procure a contravention of a civil penalty clause;
(c) induce, whether by threats or promises or otherwise, a contravention of
a civil penalty clause;
(d) is in any way, directly or indirectly knowingly concerned in or party
to, a contravention of a civil penalty clause; or
(e) conspire with others to effect a contravention of a civil penalty clause.
[Part 4, section 18]
2.31 The Federal Court may order a person to pay a pecuniary penalty
to the Commonwealth where it is satisfied that a person has contravened
civil penalty provision. Federal Court must take into account the matters
set out in paragraphs 19(3)(a) to (g) in determining the amount of the
pecuniary penalty.
[Part 4, section 19]
2.32 The maximum penalty for a body corporate is 1,000 penalty
units, and the maximum penalty for any other person is 200 penalty units.
[Part 4, subsections 19(4) and 19(5)] The value for a penalty unit is prescribed
by section 4AA of the Crimes Act 1914. One penalty unit currently equals
$110. [Part 1, section 5]
2.33 If a person's conduct contravenes more than one civil penalty
clause and proceedings are instituted in relation to contravention of more
than one clause, then the person cannot be subject to more than one
pecuniary penalty in relation to the same conduct. [Part 4, subsection 19(6)]
2.34 Pecuniary penalties are civil debts owing to the Commonwealth
and may be enforced as if they were a judgment debt. [Part 4, subsection
19(7)]
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National Fuelwatch (Empowering Consumers) Bill 2008
2.35 Only the ACCC may apply for a civil penalty order. [Part 4,
section 20]
2.36 The Federal Court can direct that two or more proceedings for a
civil penalty order may be heard together. [Part 4, section 21]
2.37 Proceedings for a civil penalty order may not be commenced
more than 6 years after the alleged contravention. [Part 4, section 22]
2.38 The Federal Court is required to apply the rules of evidence and
procedure for civil matters in proceedings for a civil penalty order. This
means that the civil standard of proof, namely the balance of probabilities,
will apply. [Part 4, section 23]
2.39 The Federal Court must not make a civil penalty order against a
person where the person has been convicted of a criminal offence for
substantially the same conduct. [Part 4, section 24]
2.40 Where proceedings for a civil penalty order and criminal
proceedings are started against a person for substantially the same conduct
the civil proceedings will be stayed. The civil proceedings will be
dismissed if the person is convicted of the offence but may be resumed if
the person is not convicted of the offence. [Part 4, section 25]
2.41 The fact that a civil penalty order has been made against a person
does not prevent criminal proceedings being started against the person for
substantially the same conduct. [Part 4, section 26]
2.42 Where criminal proceedings are commenced against a person
who has already given evidence or produced documents in civil penalty
proceedings arising from substantially the same conduct, that evidence
inadmissible in the criminal proceedings. This does not apply to criminal
proceedings relating to the falsity of the evidence in the civil proceedings.
[Part 4, section 27]
24
Chapter 3
Consequential amendments to the Trade
Practices Act 1974
Outline of chapter
3.1 The National Fuelwatch (Empowering Consumers)
(Consequential Amendments) Bill 2008 (the Consequential Amendments
Bill) amends Part XID and sections 155 and 155A of the Trade Practices
Act 1974 (the TPA) to refer specifically to the Bill.
Detailed explanation of new law
3.2 The Consequential Amendments Bill makes amendments to the
TPA that assist in the efficient and effective operation and enforcement of
the National Fuelwatch regime, provided for under the National
Fuelwatch (Empowering Consumers) Bill 2008.
3.3 The amendments provide for: an ability for the ACCC to
delegate any of its powers under the Bill; the ability of the Minister to
direct the ACCC in relation to its functions or powers under the Bill; the
application of the ACCC's search and seizure powers to its enforcement
of the Bill; the application of the ACCC's powers to obtain information,
documents and evidence to suspected contraventions of the Bill; and
applying the protections provided for information obtained by the ACCC
through its search and seizure or information gathering powers to the Bill.
Ability for the ACCC to delegate
3.4 Section 25 of the TPA provides that the ACCC may resolve to
delegate to a member of the ACCC any of its powers under a range of
legislation. The delegation is revokable at will and does not prevent the
exercise of a power by the ACCC.
3.5 The Consequential Amendments Bill amends subsection 25(1) of
the TPA to include reference to the Bill. [Schedule 1, item 1]
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National Fuelwatch (Empowering Consumers) Bill 2008
Ability of the Minister to direct the ACCC
3.6 Section 29 of the TPA enables the Minister to give a direction to
the ACCC connected with the performance of its functions or the exercise
of its powers.
3.7 The Consequential Amendments Bill amends subsection 29(1) of
the TPA to include reference to the Bill. [Schedule 1, item 2]
Application of the ACCC's search and seizure powers
3.8 Part XID of the TPA provides for an enforcement regime that
enables the ACCC to exercise search and seizure powers in relation to
contraventions of the TPA and related legislation. Under the
Consequential Amendments Bill, the ACCC's powers and duties under
Part XID of the TPA are amended to enable the ACCC to seek and
execute a search warrant in relation to suspected contraventions of the
Bill. [Schedule 1, item 3]
3.9 The regime is applied to the National Fuelwatch scheme by
amending the definition of evidentiary material in section 154A of the
TPA to include reference to the Bill. [Schedule 1, item 4]
3.10 The Consequential Amendments Bill also amends the TPA to
make reference to the Bill in relation to the ability of a magistrate to order
that an inspector may retain something for the purposes of an
investigation into an alleged contravention of the Bill. [Schedule 1, item 5]
Application of the ACCC's powers to gather information
3.11 Section 155 of the TPA enables the ACCC to require a person to
provide information, produce documents, or appear before the ACCC in
relation to a suspected contravention of the TPA.
3.12 The Consequential Amendments Bill provides that section 155 of
the TPA applies specifically to the National Fuelwatch scheme, by
including a specific reference to the Bill in subsection 155(1). [Schedule 1,
item 6]
3.13 This would enable the ACCC to require a person to provide
information or documents, or answer any question put to the person; it has
reason to believe they are capable of providing in relation to a
contravention of the Bill.
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National Fuelwatch (Empowering Consumers) Bill 2008
Protections provided for information obtained by the ACCC
3.14 Section 155AAA of the TPA provides for the protection of
information obtained by the ACCC. An ACCC official must not disclose
any protected information to any person outside the performance of their
duties and functions, unless they are required or permitted to do so by a
law of the Commonwealth, State or Territory.
3.15 The Consequential Amendments Bill amends section 155AAA of
the TPA to specifically refer to the Bill, thereby protecting information
gathered by the ACCC in the course of administering and enforcing the
Bill against unauthorised disclosure. [Schedule 1, item 7]
27
29
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