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TRADE PRACTICES AMENDMENT (CARTEL CONDUCT AND OTHER MEASURES) BILL 2008 Explanatory Memorandum

TRADE PRACTICES AMENDMENT (CARTEL CONDUCT AND OTHER MEASURES) BILL 2008


2008




               THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA











                          HOUSE OF REPRESENTATIVES











                  trade practices amendment (cartel conduct
                        and other measures) 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


Glossary         5


General outline and financial impact    7


Chapter 1    What is serious cartel conduct? 9


Chapter 2    Criminal offences    29


Chapter 3    Civil prohibitions   45


Chapter 4    Exceptions      55


Chapter 5    Investigation powers 71


Chapter 6    Remedies  83


Chapter 7    Protected cartel information    91


Chapter 8    Minor and technical amendments  101


Index       111






Do not remove section break.





         The following abbreviations and acronyms are used throughout this
         explanatory memorandum.

|Abbreviation        |Definition                   |
|ACCC                |Australian Competition and   |
|                    |Consumer Commission          |
|ASIC                |Australian Securities and    |
|                    |Investments Commission       |
|ASIC Act            |Australian Securities and    |
|                    |Investments Commission Act   |
|                    |2001                         |
|Bill                |Trade Practices Amendment    |
|                    |(Cartel Conduct and Other    |
|                    |Measures) Bill 2008          |
|CDPP                |Commonwealth Director of     |
|                    |Public Prosecutions          |
|CPR Act             |Competition Policy Reform Act|
|Criminal Code       |Criminal Code Act 1995       |
|Dawson Act          |Trade Practices Legislation  |
|                    |Amendment Act (No. 1) 2006   |
|Dawson Review       |Review of the Competition    |
|                    |Provisions of the Trade      |
|                    |Practices Act                |
|Federal Court       |Federal Court of Australia   |
|Federal Court Bill  |Federal Court of Australia   |
|                    |Amendment (Criminal          |
|                    |Jurisdiction) Bill 2008      |
|MOU                 |Memorandum of Understanding  |
|                    |between the Commonwealth     |
|                    |Director of Public           |
|                    |Prosecutions and the         |
|                    |Australian Competition and   |
|                    |Consumer Commission regarding|
|                    |Serious Cartel Conduct       |
|OECD                |Organisation for Economic    |
|                    |Co-operation and Development |
|POC Act             |Proceeds of Crime Act 2002   |
|TIA Act             |Telecommunications           |
|                    |(Interception and Access) Act|
|                    |1979                         |
|TP Act              |Trade Practices Act 1974     |
|Tribunal            |Australian Competition       |
|                    |Tribunal                     |

General outline and financial impact

Criminal penalties for serious cartel conduct


         The Trade Practices Amendment (Cartel Conduct and Other Measures)
         Bill 2008 ('the Bill') amends the Trade Practices Act 1974 ('the TP
         Act'), the Telecommunications (Interception and Access) Act 1979
         ('the TIA Act') and the Proceeds of Crime Act 2002 ('the POC Act')
         to establish criminal penalties for serious cartel conduct, and to
         make related amendments.


         Date of effect:  Cartel criminal offences and parallel civil
         penalty provisions will commence 28 days after assent, ensuring
         that those who may be affected by the new provisions and related
         amendments will have adequate time to consider the provisions prior
         to their commencement.  The remaining amendments made by the Bill
         (other than the amendments to section 165) commence on the 28th day
         after the day that the Bill receives Royal Assent.  Under
         transitional arrangements, pre-commencement ACCC authorisations,
         and pre-commencement collective bargaining notices, that relate to
         cartels will continue in force.


         Proposal announced:  On 9 October 2007, the Labor Party made a pre-
         2007 election commitment to introduce legislation providing
         criminal sanctions for cartel conduct within 12 months if elected
         to office.


         Financial impact:  This Bill has no significant financial impact on
         Commonwealth expenditure or revenue.


         Compliance cost impact:  Low.  This Bill criminalises conduct that
         was already prohibited under existing civil prohibitions.  There is
         no ongoing compliance cost impact and a minimal transitional impact
         on businesses with lawful business arrangements, and the economy
         more generally.


Summary of regulation impact statement


Regulation impact on business


         Impact:  Low or no impact.  A preliminary assessment has been
         undertaken and a regulation impact statement is not required,
         because the regulation impact on business is low.



         Main points:


                . As noted above, this Bill criminalises conduct that was
                  already prohibited under existing civil prohibitions.
                  There is no ongoing compliance cost impact and a minimal
                  transitional impact on businesses with lawful business
                  arrangements, and the economy more generally.


Do not remove section break.






Outline of chapter


      1. The Trade Practices Amendment (Cartel Conduct and Other Measures)
         Bill 2008 ('the Bill') amends the Trade Practices Act 1974 ('the TP
         Act'), the Telecommunications (Interception and Access) Act 1979
         ('the TIA Act') and the Proceeds of Crime Act 2002 ('the POC Act')
         to introduce criminal penalties and parallel civil sanctions for
         serious cartel conduct.  This chapter provides an overview of the
         respective changes to the TP Act, and addresses the threshold
         question of what is serious cartel conduct.  Changes to the POC Act
         and the TIA Act are discussed in Chapter 5: Investigation Powers.


Context of amendments


      2. Competition is the primary means of enabling consumers to get the
         best product or service for the lowest price possible.  A cartel is
         an agreement between competitors not to compete, by manipulating
         prices, sharing a customer base, restricting supply, or rigging a
         tender process.  Such conduct harms consumers, businesses and the
         economy by increasing prices (including input prices), reducing
         choice and distorting innovation processes.  The total annual cost
         of such conduct in Australia is difficult to quantify because its
         effects are dispersed and often felt indirectly, but it is likely
         to exceed many millions of dollars.  Conservatively, the worldwide
         cost of cartels exceeds many billions of dollars each year
         (Organisation for Economic Co-operation and Development, Report on
         the nature and impact of hard core cartels and sanctions against
         cartels under national competition laws, 9 April 2002).


      3. On 25 March 1998, the Organisation for Economic Co-operation and
         Development ('the OECD') initiated an anti-cartel program with the
         adoption of the Recommendation of the Council concerning Effective
         Action Against Hard Core Cartels (25 March 1998 - C(98)35/FINAL)
         ('the OECD Recommendation').  The OECD Recommendation defined 'hard
         core' cartel conduct (referred to in this explanatory memorandum as
         'serious cartel conduct') as 'an anticompetitive agreement,
         anticompetitive concerted practice, or anticompetitive arrangement
         by competitors to fix prices, make rigged bids (collusive tenders),
         establish output restrictions or quotas, or share or divide markets
         by allocating customers, suppliers, territories, or lines of
         commerce'.  The OECD Recommendation condemned hard core cartels as
         the most egregious violations of competition law, and called upon
         OECD members to ensure that their laws adequately prohibit such
         cartels and that they provide for effective sanctions, enforcement
         procedures and investigative tools with which to combat them.


      4. Serious cartel conduct is already prohibited under existing
         provisions of the TP Act, although criminal sanctions do not apply.
          The restrictive trade practices provisions in Part IV of the TP
         Act currently prohibit competitors from making or giving effect to
         provisions of contracts, arrangements or understandings between
         competitors, where those provisions relate to cartel-type conduct.


      5. However, with the exception of price fixing, the current provisions
         do not specifically prohibit the behaviour to the extent proposed
         by the OECD, yet the courts have interpreted the provisions to
         apply to the conduct found to be so egregious by the OECD.


      6. The current provisions prohibit a corporation from making or giving
         effect to a provision in a contract, arrangement or understanding
         with actual or potential competitors that is an 'exclusionary
         provision', or that has the purpose, effect or likely effect of
         substantially lessening competition.  The courts have interpreted
         the 'exclusionary provision' prohibition to prohibit three or the
         four types of conduct condemned by the OECD (output restrictions,
         market sharing and bid rigging).  In relation to the second type of
         prohibition, which provides a 'default' competition rule for
         conduct in Australia, certain types of price fixing behaviour are
         deemed to be so damaging to economic welfare that they are
         prohibited 'per se' (that is, without need to demonstrate that they
         had the purpose, effect or likely effect of substantially lessening
         competition).


      7. The four key types of conduct proscribed by the OECD are presently
         prohibited (although not explicitly) under a civil penalty regime,
         the object of which is to deter the parties from engaging in the
         conduct, including via the application of substantial penalties for
         a party found to have breached the prohibitions.


      8. On 9 October 2007, the Labor Party committed that, if elected to
         office in November 2007, it would introduce legislation within the
         first 12 months of coming to office to give effect to the OECD
         Recommendation.


      9. A number of arrangements supplement the criminal and parallel civil
         prohibitions of serious cartel conduct in this Bill, including:


                . proposed amendments to the Federal Court of Australia
                  Act 1976 and other legislation to provide for committals,
                  bail, practice and procedure, juries, sentencing and
                  appeal processes within the Federal Court in relation to
                  the indictable offences established by this Bill;


                . leniency arrangements in respect of serious cartel
                  conduct, to be available for criminal cartel offences
                  (from the Commonwealth Director of Public Prosecutions
                  ('the CDPP')) and the parallel civil prohibitions (from
                  the Australian Competition and Consumer Commission ('the
                  ACCC')); and


                . that the CDPP and the ACCC will enter into a formal,
                  publicly available Memorandum of Understanding ('the
                  MOU'), which will establish procedures for the
                  investigation of the cartel offences and the circumstances
                  in which the ACCC will refer a case to the CDPP for
                  prosecution.


Summary of new law


     10. The key amendments in this Bill:


                . establish criminal penalties for serious cartel conduct,
                  with maximum criminal penalties for individuals, of a 10-
                  year jail term and/or a fine of $220,000 and for
                  corporations, of fines mirroring the existing maximum
                  pecuniary penalties for breaches of the civil penalty
                  provisions (the greater of $10 million, or three times the
                  benefit obtained if this can be determined, or otherwise
                  10 per cent of annual turnover);


                . provide parallel civil provisions for serious cartel
                  conduct;


                . provide exemptions from the criminal and parallel civil
                  prohibitions on cartel conduct, including if a cartel
                  provision in a contract is for the purposes of a joint
                  venture, and the joint venture is for the production
                  and/or supply of goods or services;


                . enable individuals to be held directly liable for criminal
                  and civil prohibitions in relation to cartel conduct
                  through amendments to the ancillary liability provisions,
                  as well as under mirror offences and civil penalties
                  contained in the Schedule version of Part IV of the TP
                  Act;


                . incorporate statutory bars in the TP Act to protect
                  against double jeopardy;


                . modify existing investigatory powers and remedies to apply
                  them to the criminal offences and parallel civil penalty
                  prohibitions;


                . enable telecommunications interception to be used in
                  addition to other tools to investigate breaches of the
                  cartel offences;


                . ensure that the relevant Commonwealth, State and Territory
                  courts are given jurisdiction as appropriate under the new
                  arrangements;


                . provide for the protection of cartel information provided
                  by whistleblowers to the ACCC under the ACCC's leniency
                  and immunity policies; and


                . make miscellaneous minor and technical amendments to the
                  TP Act.


     11. Serious cartel conduct will be addressed through both criminal
         offences and civil sanctions.  In consequence, various terms are
         defined that apply to both the criminal and civil prohibitions,
         even though the criminal and parallel civil provisions are created
         under separate subdivisions.  The term 'cartel provision' contains
         various tests that, when met, define the parameters of 'serious
         cartel conduct' (in combination with the elements of the criminal
         offences and civil prohibitions).


     12. For a provision of a contract, arrangement or understanding to be a
         'cartel provision', it must satisfy one of two alternative tests
         (the purpose/effect condition or the purpose condition) as well as
         threshold requirements regarding the requisite level of
         competition.  These tests reflect existing tests that apply under
         the current Part IV prohibitions.


Comparison of key features of new law and current law

|New law                  |Current law              |
|Part IV of the TP Act    |Part IV of the TP Act    |
|contains two Divisions.  |contains prohibitions on |
|Division 1 specifically  |anticompetitive conduct. |
|targets cartel conduct.  |Civil penalties only     |
|Division 2 contains the  |apply to a corporation   |
|existing prohibitions on |found to have breached   |
|anticompetitive conduct. |those provisions.        |
|Division 1 of Part IV    |Part IV of the TP Act    |
|includes four            |contains a range of      |
|subdivisions.            |prohibited trade         |
|                         |practices, which the     |
|                         |courts have interpreted  |
|                         |as prohibiting parties   |
|                         |from engaging in cartel  |
|                         |conduct.  Civil penalties|
|                         |for a breach of such     |
|                         |prohibitions.            |
|Subdivision A contains   |Interpretive provisions  |
|interpretive provisions  |applying to the          |
|that apply to both the   |prohibitions are         |
|criminal offences and    |generally contained in   |
|civil prohibitions,      |Part IV (or in Part 1 of |
|including the concept of |the TP Act).             |
|a 'cartel provision'.    |                         |
|Subdivision B contains   |No direct equivalent,    |
|two criminal offences    |although the criminal    |
|prohibiting corporations |offences are based on    |
|from making or giving    |current civil            |
|effect to a contract,    |prohibitions.            |
|arrangement or           |                         |
|understanding containing |                         |
|a cartel provision       |                         |
|(discussed in Chapter 2).|                         |
|Subdivision C contains   |The parallel civil       |
|two parallel civil       |prohibitions are based on|
|provisions prohibiting   |current civil            |
|corporations from making |prohibitions.            |
|or giving effect to a    |                         |
|contract, arrangement or |                         |
|understanding containing |                         |
|a cartel provision       |                         |
|(discussed in Chapter 3).|                         |
|Subdivision D contains   |Various exemptions and   |
|exemptions from the      |defences are included in |
|criminal and civil       |the TP Act.              |
|prohibitions (discussed  |                         |
|in Chapter 4)            |                         |
|A corporation commits an |A corporation shall not  |
|indictable offence or a  |make a contract or       |
|civil prohibition if the |arrangement, or arrive at|
|corporation makes a      |an understanding, if the |
|contract or arrangement, |proposed contract,       |
|or arrives at an         |arrangement or           |
|understanding, and the   |understanding contains an|
|contract, arrangement or |exclusionary provision   |
|understanding contains a |(an agreement between    |
|cartel provision.        |competitors which has the|
|                         |purpose of excluding or  |
|                         |limiting dealings with   |
|                         |particular suppliers or  |
|                         |customers), or if a      |
|                         |provision of the proposed|
|                         |contract, arrangement or |
|                         |understanding has the    |
|                         |purpose, or would have or|
|                         |be likely to have the    |
|                         |effect, of substantially |
|                         |lessening competition.   |
|A corporation commits an |A corporation shall not  |
|indictable offence or a  |give effect to a         |
|civil prohibition if a   |provision of a contract, |
|contract, arrangement or |arrangement or           |
|understanding contains a |understanding, if that   |
|cartel provision, and the|provision is an          |
|corporation gives effect |exclusionary provision,  |
|to the cartel provision. |or if it has the purpose,|
|                         |or has or is likely to   |
|                         |have the effect, of      |
|                         |substantially lessening  |
|                         |competition.             |
|A provision of a         |The current TP Act       |
|contract, arrangement or |provides a test of       |
|understanding is a cartel|purpose, effect or likely|
|provision if the         |effect in relation to    |
|purpose/effect condition |price fixing, and purpose|
|(in relation to price    |in relation to           |
|fixing) or the purpose   |exclusionary provisions. |
|condition (in relation to|                         |
|output restrictions,     |                         |
|market sharing or bid    |                         |
|rigging) and the         |                         |
|competition condition are|                         |
|satisfied in relation to |                         |
|the provision.           |                         |
|The purpose/effect       |A provision of a         |
|condition is satisfied if|contract, arrangement or |
|the provision has the    |understanding made by    |
|purpose, or has or is    |competitors which had the|
|likely to have the       |purpose or effect of     |
|effect, of directly or   |controlling or           |
|indirectly doing certain |maintaining prices is    |
|actions that the OECD    |deemed to substantially  |
|considered to be hard    |lessen competition.      |
|core cartel conduct (in  |Civil penalties apply.   |
|short, price fixing      |                         |
|conduct).                |                         |
|The purpose condition is |A corporation is         |
|satisfied if the         |prohibited from entering |
|provision has the purpose|into a contract,         |
|of directly or indirectly|arrangement or           |
|doing certain actions    |understanding with a     |
|that the OECD considered |competitor if a provision|
|to be hard core cartel   |of the contract,         |
|conduct (in short, output|arrangement or           |
|restricting, market      |understanding had the    |
|sharing or bid rigging   |purpose of preventing,   |
|conduct)                 |restricting or limiting  |
|                         |the supply of goods or   |
|                         |services to, or the      |
|                         |acquisition of goods or  |
|                         |services from, particular|
|                         |persons or classes of    |
|                         |persons (or in particular|
|                         |circumstances or on      |
|                         |particular conditions) by|
|                         |all or any of the parties|
|                         |to the contract,         |
|                         |arrangement or           |
|                         |understanding.           |
|The competition condition|For the purposes of the  |
|is satisfied if at least |current  exclusionary    |
|two of the parties to the|conduct prohibition, a   |
|contract, arrangement or |person is deemed to be   |
|understanding are or     |competitive with another |
|would otherwise be, in   |person if the person (or |
|competition with each    |a related body corporate)|
|other in relation to the |is, or is likely to be,  |
|conduct in question.     |or but for the provision |
|                         |of the contract,         |
|                         |arrangement or           |
|                         |understanding, would be, |
|                         |or would be likely to be,|
|                         |in competition with the  |
|                         |other person (or related |
|                         |body corporate) in       |
|                         |relation to the supply or|
|                         |acquisition of goods or  |
|                         |services the subject of  |
|                         |the relevant provision of|
|                         |the contract, arrangement|
|                         |or understanding.        |
|The maximum penalty for  |No criminal penalties    |
|breach of the criminal   |apply to Part IV.        |
|offences is, for         |                         |
|corporations, a fine of  |                         |
|the greater of $10       |                         |
|million or three times   |                         |
|the benefit obtained) and|                         |
|for individuals, a       |                         |
|10-year jail term and/or |                         |
|a fine of $220,000.      |                         |


Detailed explanation of new law


Revised structure of Part IV of the TP Act


     13. Part IV of the TP Act contains a series of prohibitions aimed at
         protecting and enhancing competition.  The Bill establishes two
         separate Divisions within Part IV.


                . Division 1 is inserted immediately before section 45.
                  This Division includes the criminal and civil prohibitions
                  on serious cartel conduct.  [Schedule 1, item 19, sections
                  44ZZRA to 44ZZRP]


                . Division 2 includes the existing restrictive trade
                  practices prohibitions, from section 45 to section 51AAA.


     14. Division 1 of Part IV comprises four subdivisions.


     15. Subdivision A (Introduction), discussed in Chapter 2, includes:


                . a simplified outline of the prohibitions on cartel
                  conduct, clarifying that there are parallel criminal and
                  civil prohibitions;  [Schedule 1, item 19, section 44ZZRA]


                . defined terms relevant to both the criminal and parallel
                  civil prohibitions on serious cartel conduct;  [Schedule
                  1, item 19, sections 44ZZRB to 44ZZRD]


                . a provision that prevents the interpretations of terms
                  used in Division 1 of Part IV from applying to similar
                  terms found elsewhere in the TP Act.  [Schedule 1, item
                  19, section 44ZZRE]


     16. Subdivision B (Offences etc.), discussed in Chapter 3, includes the
         two indictable cartel offences, and provisions specific to those
         offences, such as the powers of a court in a prosecution for a
         cartel offence.  Chapter 3 also discusses provisions contained in
         the Bill that are relevant to the offences (but that are not
         necessarily located in Division 1 of Part IV).


     17. Subdivision C (Civil penalty provisions), discussed in Chapter 4,
         contains the parallel civil penalty provisions that apply to
         serious cartel conduct.  Chapter 4 also discusses provisions in the
         Bill relevant to the parallel civil penalty prohibitions.


     18. Subdivision D (Exceptions), discussed in Chapter 5, creates
         exceptions to the cartel offences and parallel civil penalty
         prohibitions.


     19. A number of terms are defined for the purpose of Division 1 of Part
         IV, even though some of the terms are also found elsewhere in the
         TP  Act.  The Bill specifically provides that in determining a
         meaning of an expression used or a provision of the TP Act (other
         than Division 1, subsection 6(2C), paragraph 76(1A)(aa) or
         subsection 93AB(1A), Division 1 is to be disregarded.  In effect,
         this 'immunises' the remainder of the TP Act from the meaning of
         terms used in Division 1 of Part IV.  [Schedule 1, item 19, section
         44ZZRE]


     20. Chapters 5 to 8 set out other amendments in the Bill, including
         amendments in relation to remedies, investigation powers,
         provisions creating a scheme for the protection of cartel
         information, and miscellaneous minor and technical amendments.


Cartel provision


     21. As the concept of a cartel provision is central to both the
         criminal offences and parallel civil penalties, it is defined
         separately from those prohibitions.  [Schedule 1, item 3,
         subsection 4(1), item 19, section 44ZZRD]


     22. In order for a provision of a contract, arrangement or
         understanding to be a cartel provision, the provision must satisfy:


                . either the purpose/effect condition, or the purpose
                  condition, depending upon the characterisation of the
                  conduct considered in relation to the condition [Schedule
                  1, item 19, subsections 44ZZRD(2) and (3)]; and


                . the competition condition [Schedule 1, item 19,
                  subsection 44ZZRD(4)].


     23. These conditions form the building blocks for determining whether a
         corporation has committed a criminal offence or breached a civil
         penalty prohibition.  [Schedule 1, item 19, subsection 44ZZRD(1)]


     24. Provision is relevant to existing sections 4D and 45 of the TP Act
         (which have been interpreted to currently prohibit the matters
         condemned by the OECD).  However, the TP Act currently provides a
         definition only in relation to an understanding (to mean any matter
         forming part of the understanding).  In spite of this, the majority
         judgment in Visy Paper Pty Ltd v ACCC [2003] HCA 59; (2003) 77 ALJR
         1893; 201 ALR 414, at paragraphs 7, 32 to 33 (Gleeson CJ, McHugh,
         Gummow and Hayne JJ) confirmed that its use in the TP Act, and in
         relation to existing sections 4D and 45, was intended to have a
         comprehensive meaning.  To apply a narrow or technical
         interpretation would be to unduly restrict the operation of the
         existing prohibitions on cartel conduct.  It is intended that a
         similar interpretation apply to the criminal offences and civil
         penalty prohibitions in this Bill.


Purpose/effect condition


         Price fixing


     25. For a suspected breach comprising price fixing activity, the
         relevant test is that a provision must have had the purpose, effect
         or likely effect, of directly or indirectly fixing, controlling or
         maintaining or providing for the fixing, controlling or maintaining
         of, the price of goods or services supplied or acquired by any one
         of the parties to the contract, arrangement or understanding.  This
         will apply both to situations where the price of particular goods
         or services are directly fixed, as well as where a price is fixed
         indirectly, for example by reference to some other price or
         measure.  It is not intended to extend to situations where a price
         is incidentally affected, where the price is otherwise established
         independently.


                Company A, having a shortage of inputs for its manufacture
                of a good, seeks to source the inputs from Company B, a
                competitor in the market for the good.  B agrees to produce
                the additional inputs and to provide them to A, at an agreed
                price.


                Provided there is no agreement between A and B regarding the
                price at which A sells the good concerned, the
                purpose/effect condition would not be met merely because of
                the reflection of the input price in the price of the good.


     26. The wording of the purpose/effect condition largely uses the
         wording from current section 45A of the TP Act.  As a consequence,
         section 45A (the price fixing prohibition, when combined with
         section 45) and the related defence in section 76D are deleted.
         [Schedule 1, items 19, 21 and 29]


         Other components of the purpose/effect condition


     27. Current section 4F of the TP Act provides that a provision of a
         contract, arrangement or understanding shall be deemed to have had,
         or to have, a particular purpose if that provision was included in
         the contract, arrangement or understanding and the purpose was or
         is a substantial purpose.  In News Limited v South Sydney District
         Rugby League Football Club [2003] HCA 45 the majority judgment of
         the High Court said that purpose meant the effect which is sought
         to be achieved or 'the end in view' and agreed that it is the
         subjective purpose of the parties to the contract, arrangement or
         understanding that is relevant.


     28. Consistent with current subsection 45A(6) of the TP Act, a
         provision of a contract, arrangement or understanding shall not be
         taken to have the requisite purpose, effect or likely effect of
         fixing prices simply because the provision recommends, or provides
         for the recommending of, such a price, if it did not have the
         purpose, effect or likely effect of fixing a price.  [Schedule 1.
         item 19, subsection 44ZZRD(6)]


     29. Consistent with current subsections 45(4) and 45A(5) of the TP Act,
         an aggregation principle applies to demonstrate that a provision of
         a contract, arrangement or understanding meets the purpose/effect
         test.  That is, a provision may be aggregated with other provisions
         of a contract, arrangement or understanding, or with provisions of
         another contract, arrangement or understanding, provided there is
         at least one common party to both contracts, arrangements or
         understandings in question.  [Schedule 1, item 19, subsection
         44ZZRD(8)]


     30. The criminal offences and parallel civil penalty provisions apply
         to the substance of a contract, arrangement or understanding or a
         provision of a contract, arrangement or understanding, regardless
         of the form or description provided.  To that end, a court is
         prevented from looking solely at the form or description of a
         provision of a contract, arrangement or understanding or of the
         contract, arrangement or understanding itself when determining
         whether or not such a provision breaches the purpose/effect
         condition [Schedule 1, item 19, subsection 44ZZRD(10)].  This is
         consistent with current subsection 45A of the TP Act, and the
         majority of the High Court in Visy Paper Pty Ltd v ACCC [2003] HCA
         59; (2003) 77 ALJR 1893; 201 ALR 414.


     31. While two of the paragraphs of the purpose/effect condition refer
         to 'persons or classes of persons' that must be identified, the way
         in which a class of person is to be identified has not been finally
         settled.  In Rural Press Ltd v ACCC [2003] HCA 75, the High Court
         decided that all that is necessary is to be able to define the
         class of persons to whom the exclusionary conduct applied.
         Consequently, where the purpose/effect condition refers to a 'class
         of person', the Bill clarifies that it is not material to identify
         the persons falling within the class for the purpose/effect
         condition to be satisfied.  [Schedule 1, item 19,
         subsection 44ZZRD(5)]


     32. Further, in determining whether a provision of a contract,
         arrangement or understanding breaches the purpose/effect condition
         or the purpose condition, the Bill also clarifies that it is
         immaterial whether the prohibited activity occurs in particular
         circumstances or on particular conditions.  [Schedule 1, item 19,
         subsection 44ZZRD(7)]


Purpose condition


     33. For a suspected breach comprising output restrictions, market
         sharing or bid rigging activity, a different test applies, adapted
         from the test that applies under current sections 45 and 4D of the
         TP Act (which the courts have interpreted as prohibiting such
         conduct).


     34. As noted above, current section 4F of the TP Act provides that a
         provision of a contract, arrangement or understanding shall be
         deemed to have had, or to have, a particular purpose if that
         provision was included in the contract, arrangement or
         understanding and the purpose was or is a substantial purpose.  In
         News Limited v South Sydney District Rugby League Football Club
         [2003] HCA 45 the majority judgment of the High Court said that
         purpose meant the effect which is sought to be achieved or 'the end
         in view' and agreed that it is the subjective purpose of the
         parties to the contract, arrangement or understanding that is
         relevant.


         Output restrictions


     35. The relevant test in relation to output restriction activity is
         that a provision of a contract, arrangement or understanding had
         the purpose of directly or indirectly preventing, restricting or
         limiting:


                . the production or likely production, of goods [Schedule 1,
                  item 19, subparagraph 44ZZRD(3)(a)(i)];


                . the capacity, or likely capacity, of particular parties to
                  supply services [Schedule 1, item 19, subparagraph
                  44ZZRD(3)(a)(ii)]; or


                . the supply, or likely supply, of goods or services to
                  particular persons or classes of persons [Schedule 1, item
                  19, subparagraph 44ZZRD(3)(a)(iii)].


     36. Production appears in the purpose condition to the extent that the
         purpose condition relates to output restrictions.  It is defined
         expansively to incorporate the whole range of processes involved in
         the production chain.  Further, production, as it is used in
         subsection 6(2C), has the same meaning as in Division 1 of Part IV.
          [Schedule 1, item 14, subsection 6(2C), item 19, section 44ZZRB]


         Allocating customers, suppliers or territories


     37. The relevant test in relation to allocating customers, suppliers or
         territories is that a provision of a contract, arrangement or
         understanding had the purpose of directly or indirectly allocating
         between any or all of the parties to the contract, arrangement or
         understanding:


                . the persons or classes of persons who have acquired, or
                  who are likely to acquire, goods or services from any or
                  all of the parties to the contract, arrangement or
                  understanding [Schedule 1, item 19, paragraph
                  44ZZRD(3)(b)(i)];


                . the persons or classes of persons who have supplied, or
                  who are likely to supply, goods or services to any or all
                  of the parties to the contract, arrangement or
                  understanding [Schedule 1, item 19, paragraph
                  44ZZRD(3)(b)(ii)];


                . the geographical areas in which goods or services are or
                  are likely to be acquired or supplied (as the case may be)
                  by any or all of the parties to the contract, arrangement
                  or understanding [Schedule 1, item 19, paragraphs
                  44ZZRD(3)(b)(iii) and (iv)].


     38. The OECD Recommendation referred to sharing or dividing markets by
         'allocating customers, suppliers, territories or lines of
         commerce'.  'Market' is currently defined term in section 4E, which
         has been overlaid by an extensive body of case law.  As a result,
         determining the relevant market for the purposes of the TP Act can
         be a highly technical exercise.  The criminal offences and parallel
         civil prohibitions focus on the allocation of the constituent parts
         of a market (that is, customers, suppliers or territories) between
         competitors, rather than on the definition of a market in
         particular circumstances.


         Bid rigging


     39. The relevant test in relation to bid rigging activity is that a
         provision of a contract, arrangement or understanding had the
         purpose of directly or indirectly ensuring that in the event of a
         request for bids in relation to the supply or acquisition of goods
         or services, either:


                . one or more parties bid to the contract, arrangement or
                  understanding bid, but one or more do not [Schedule 1,
                  item 19, subparagraph 44ZZRD(3)(c)(i)];


                . two or more parties bid, but at least two parties do so on
                  the basis that one of the two bids is more likely to be
                  successful [Schedule 1, item 19, subparagraph
                  44ZZRD(3)(c)(ii)];


                . two or more parties bid, but not all of the parties
                  proceed the full way through the bidding process [Schedule
                  1, item 19, subparagraph 44ZZRD(3)(c)(iii)];


                . two or more parties bid, but at least two parties do so on
                  the basis that one of the two bids is more likely to be
                  successful [Schedule 1, item 19, subparagraph
                  44ZZRD(3)(c)(iv)];


                . two or more parties bid, but a material component of at
                  least one of the bids is worked out in accordance with the
                  contract, arrangement or understanding [Schedule 1, item
                  19, subparagraph 44ZZRD(3)(c)(v)].


     40. That is, the test addresses whether the provision has the purpose
         of seeking a reduction in competition in the bidding process for
         the supply or acquisition of goods or services.


     41. To avoid any doubt, bid is defined to include a tender, and the
         taking, by a potential bidder or tenderer, of a preliminary step in
         a bidding or tendering process.  This enables the prohibitions on
         cartel conduct to target preliminary activity leading up to the
         actual or attempted rigging of bids or tenders.  [Schedule 1, item
         19, section 44ZZRB]


     42. The bid rigging prohibition is unlikely to apply in the
         circumstance of 'dummy bidding' by vendors at auctions for real
         property because such bids generally do not involve an agreement
         between competitors.  The inclusion of anti-overlap, joint venture,
         and authorisation exceptions (see Chapter 4), as well as the
         continued application and validity of pre-commencement
         authorisations (also Chapter 4), will ensure that bidding
         arrangements that currently comprise legitimate commercial activity
         can continue to be permitted where appropriate.


                In relation to consortium biddings arrangements, the cartel
                provisions are not intended to catch legitimate joint bids.
                Joint bid arrangements between competitors that avoid
                restrictions on an individual participants' ability to
                compete for business are less likely to raise concerns.


                The joint venture exceptions will also, in many cases,
                facilitate genuine arrangements to jointly supply under a
                common bid.  Authorisation may also be available in
                appropriate circumstances.


         Other components of the purpose condition


     43. Consistent with current subsection 45(4) of the TP Act, an
         aggregation principle also applies to the purpose condition.  A
         provision of a contract, arrangement or understanding may be
         aggregated with other provisions of the same contract, arrangement
         or understanding, or with provisions of another contract,
         arrangement or understanding (provided there is at least one common
         party to both contracts, arrangements or understandings in
         question), to demonstrate that the purpose test has been satisfied.
          [Schedule 1, item 19, subsection 44ZZRD(9)]


     44. The criminal offences and parallel civil penalty provisions apply
         to the substance of a contract, arrangement or understanding or a
         provision of a contract, arrangement or understanding, regardless
         of the form or description provided.  To that end, a court is
         prevented from looking solely at the form or description of a
         provision, or of a contract, arrangement or understanding itself
         when determining whether or not such a provision breaches the
         purpose condition [Schedule 1, item 19, subsection 44ZZRD(11)].
         This is consistent with the majority of the High Court in Visy
         Paper Pty Ltd v ACCC [2003] HCA 59; (2003) 77 ALJR 1893; 201 ALR
         414.


     45. While three of the subparagraphs of the purpose condition refer to
         'persons or classes of persons' that must be identified, the way in
         which a class of person is to be identified has not been finally
         settled.  In Rural Press Ltd v ACCC [2003] HCA 75, the High Court
         decided that all that is necessary is to be able to define the
         class of persons to whom the exclusionary conduct applied.
         Consequently, where the purpose condition refers to a 'class of
         person' (in subparagraphs 44ZZRD(3)(a)(iii), (b)(i) and (ii)), the
         Bill clarifies that it is not material to identify the persons
         falling within the class for the purpose condition to be satisfied.
          [Schedule 1, item 19, subsection 44ZZRD(5)]


     46. Further, in determining whether a provision of a contract,
         arrangement or understanding breaches the purpose/effect condition
         or the purpose condition, the Bill also clarifies that it is
         immaterial whether the prohibited activity occurs in particular
         circumstances or on particular conditions.  [Schedule 1, item 19,
         subsection 44ZZRD(7)]


Competition condition and the definition of a party


     47. The competition condition restricts the criminal and civil
         prohibitions to 'horizontal' conduct in relation to the production
         of the relevant goods or the supply or acquisition of the relevant
         goods or services.  The condition is satisfied if at least two of
         the parties to the contract, arrangement or understanding are or
         are likely to be, or but for the collusive conduct, would be or
         would be likely to be, in competition with each other within the
         circumstances set out.  This performs a similar role to the
         requirement in subsection 189(1) of the Enterprise Act 2002 (UK),
         that supply by one party to the proscribed arrangement be 'at a
         level in the supply chain at which the product or service would at
         the same time be supplied by [the other party to the agreement]'.


     48. The term party appears in the purpose/effect condition, the purpose
         condition and the competition condition.  Current subsection 4A(5)
         defines the circumstances in which bodies corporate are said to be
         related for the purposes of the TP Act.  Further, current
         subsection 4D(2) of the TP Act deems people to be competitive with
         each other only if they or related bodies corporate are or are
         likely to be competitive with each other (or would be or would be
         likely to be competitive with each other but for the contract,
         arrangement or understanding) in relation to the supply or
         acquisition of all or any of the goods or services to which the
         relevant provision relates.  Section 44ZZRC provides an extended
         meaning of party for the purposes of Division 1 of Part IV, to deem
         each body corporate that is related to a body corporate that is a
         party to a contract, arrangement or understanding to also be a
         party to such a contract, arrangement or understanding [Schedule 1,
         item 19, sections 44ZZRB and 44ZZRC].


     49. However, this does not deem a party to have breached the criminal
         or parallel civil prohibitions regarding making or giving effect to
         a contract, arrangement or understanding containing a cartel
         provision.


     50. Section 23 of the Acts Interpretation Act 1901 provides that,
         unless the contrary intention appears, words in the singular number
         include the plural and words in the plural number include the
         singular.  Therefore, unless a provision of the Bill demonstrates a
         contrary intention, use of the term party includes 'parties', and
         references to 'parties' include 'a party'.


'Likely'


     51. The term likely appears in the purpose/effect condition, the
         purpose condition and the competition condition.  It enables a
         court to look not only at what has been established on the facts,
         but also to infer, from those facts, the likely consequences of the
         provision of the contract, arrangement or understanding.  The term
         is also used in other provisions of the Bill in so far as they
         relate to those conditions.  Likely is defined to include a
         possibility that is not remote, in relation to four fact
         situations: a supply of goods or services, an acquisition of goods
         or services, the production of goods, or the capacity to supply
         services.  This clarifies the position following judicial
         observations made in the case law in relation to the term (for
         example, in Tillmans Butcheries Pty Ltd v Australasian Meat
         Industry Employees' Union (1979) 42 FLR 331, 27 ALR 367, by Bowen
         CJ at 339 and by Deane J at 346).  Further, likely, as it is used
         in subsection 6(2C), has the same meaning as in Division 1 of Part
         IV.  [Schedule 1, item 14, subsection 6(2C), item 19, section
         44ZZRB]


Extraterritoriality


     52. Current subsection 5(1) provides that various parts of the TP Act
         extend to the engaging in conduct outside of Australia, provided
         that the relevant body corporate is incorporated or carries on
         business within Australia, or the relevant person is an Australian
         citizen or ordinarily resident within Australia.


     53. Subsection 5(1) is extended to conduct that occurs outside
         Australia that contravenes the criminal and/or the civil cartel
         prohibitions.  The amendments clarify that the remaining provisions
         of the TP Act (to the extent to which they relate to any of the
         provisions that already have extraterritorial effect, or the new
         criminal and civil cartel prohibitions) have extraterritorial
         effect.  [Schedule 1, item 4, subsection 5(1)]


     54. Section 5 also establishes a process for gaining ministerial
         consent for a person to rely on extraterritorial conduct to
         establish a claim for orders under subsections 87(1) or (1A).  The
         Bill empowers the Commonwealth Director of Public Prosecutions
         ('the CDPP') to seek certain orders under section 87 (thereby
         placing the CDPP on a similar footing with the Australian
         Competition and Consumer Commission ('the ACCC')) [Schedule 1,
         items 59 to 62, subsections 87(1), 87(1BA), paragraphs 87(1A)(b)
         and (ba)].  References in section 5 to the process for gaining
         ministerial consent are therefore amended to refer to the CDPP
         [Schedule 1, item 5, subsection 5(4)].


Commonwealth power to make laws applying to individuals and corporations


     55. Part IV is currently predicated on the assumption that the
         corporations power in section 51(xx) of the Constitution provides
         the primary power for the Commonwealth Government to make such
         laws.  However, current subsection 6(2) of the TP Act provides
         alternative sources of Commonwealth power, should the corporations
         power be found to provide an insufficient source of power for a
         particular provision.  This is consistent with the view that the
         Parliament intended the TP Act to have the widest application
         possible, consistent with the limitations on the Commonwealth's
         constitutional powers.


     56. Consequently, the current civil prohibitions in Part IV apply to a
         'corporation', presently defined in subsection 4(1) to mean (a) a
         foreign corporation, (b) a trading corporation formed within the
         limits of the Commonwealth, (c) a corporation formed in a
         territory, or (d) a holding company for the three preceding types
         of corporations listed.


     57. The 1993 Hilmer Review recommended that competition law apply to
         all businesses in Australia, rather than limiting the application
         of the law to those matters that fell within the Commonwealth's
         constitutional power.  On 11 April 1995, the Council of Australian
         Governments ('COAG') agreed to the principles of competition policy
         contained in the report of the National Competition Policy Review.
         This included agreement to achieve and maintain consistent and
         complementary competition laws and policies that would apply to all
         businesses in Australia regardless of ownership.  This was achieved
         through various means, including the enactment of a cooperative
         scheme to enable the competition law (as embodied in Part IV of the
         TP Act) to apply to all businesses within Australia.


     58. In brief, the cooperative scheme operates through the creation, in
         Part XIA of the TP Act, of a Competition Code, and that Code being
         applied as a law of each State, the Northern Territory and the
         Australian Capital Territory, through mirror versions of the
         Competition Policy Reform (New South Wales) Act 1995 ('the CPR
         Act').  Under section 150C of the TP Act and section 4 of each CPR
         Act, the Competition Code consists of:


                . the Schedule version of Part IV of the TP Act;


                . the remaining provisions of the TP Act in so far as they
                  would relate to the Schedule version if it were
                  substituted for Part IV; and


                . the regulations under the TP Act in so far as they relate
                  to other components of the Competition Code.


     59. The Competition Code is applied to all persons in each respective
         State and Territory and to the Crown in right of the State or
         Territory.


     60. Consistent with the 1995 Conduct Code Agreement, the Bill makes
         provision for the cartel offences and parallel civil prohibitions
         to apply to corporations and 'persons', because simply applying the
         offences to corporations may not achieve the desired deterrent
         effect.


     61. This occurs in the following ways.


                . First, corporations can be found guilty of committing a
                  criminal offence or parallel civil prohibition contained
                  in Division 1 of Part IV.


                . Second, individuals can be an accessory to the commission
                  by a corporation of a Part IV criminal offence (under
                  section 79) or a parallel civil prohibition (under section
                  76).


                . Third, individuals and bodies corporate can be held liable
                  for committing a 'mirror' criminal offence or parallel
                  civil penalty in the Schedule of the TP Act.  These
                  offences and civil prohibitions apply to a 'person'.  The
                  mirror offences form part of the Competition Code and are
                  applied by the CPR Act of each State or Territory as a law
                  of each of those jurisdictions.


     62. The provisions of the TP Act currently apply:


                . according to its terms, in reliance upon the
                  Commonwealth's powers to make laws with respect to
                  corporations;


                . to persons other than corporations while engaged in
                  interstate or overseas trade or commerce, trade or
                  commerce between territories, or with a territory, or in
                  the supply of goods or services to the Commonwealth or an
                  authority or instrumentality of the Commonwealth;


                . to engaging in conduct to the extent to which the conduct
                  involves use of a postal, telegraphic, telephonic or other
                  like service.


     63. Reflecting the view that the Parliament intended the TP Act to have
         the widest application possible subject to Constitutional
         limitations, amendments provide for alternative Constitutional
         sources of power in relation to conduct identified in the cartel
         provision definition in section 44ZZRD and in the offences and
         civil prohibitions.  [Schedule 1, items 6 to 15, section 6].


Consequential amendments


Removal of price fixing specific provisions


     64. As a result of creating specific provisions targeting cartel
         conduct, certain existing provisions of the TP Act have been
         deleted, including section 45A (which provides that certain types
         of price fixing conduct are to be treated as a per se prohibition)
         and section 76D (which provides a defence in relation to that per
         se prohibition).  [Schedule 1, items 20, 21 and 29, subsection
         45(3), sections 45A and 76D]


Consequential references to Parts X and XIB of the TP Act


     65. Consequential amendments to Parts X (International liner cargo
         shipping) and XIB (The telecommunications industry) of the TP Act
         ensure that those Parts refer to the criminal and civil cartel
         provisions.  [Schedule 1, items 88 to 102, sections 10.01A,
         paragraphs 10.08(1)(aa) and (ab), subsections 10.08(1), 10.17(1)
         and (2), 10.17A(1) to (4), 10.19(1) and (2), 10.24(1) and (2),
         10.24A(1) to (3), and paragraph 10.45(3)(a),  items 103 to 111,
         section 151AJ and paragraph 151AY(1)(b)]



Chapter 2
Criminal offences

Outline of chapter


     66. This chapter outlines the criminal offences that target serious
         cartel conduct, and related provisions.


Context of amendments


     67. Introducing indictable criminal offences targeting serious cartel
         conduct, which include maximum penalties for individuals of a 10-
         year jail sentence and/or a fine of $220,000, and fines for
         corporate offenders, will widen the range of regulatory responses
         available to deal with cartel conduct.  This, in turn, should
         assist to deter individuals and corporations from engaging in such
         conduct.  It will also bring Australia into line with other OECD
         nations that have legislated such sanctions.


Summary of new law


     68. The current prohibitions in Part IV of the TP Act rely primarily on
         the corporations power in subsection 51(xx) of the Constitution for
         their validity.  Consequently, the current Part IV prohibitions
         apply to a 'corporation', presently defined in subsection 4(1) of
         the Trade Practices Act 1974 ('the TP Act') to mean (a) a foreign
         corporation, (b) a trading corporation formed within the limits of
         the Commonwealth, (c) a corporation formed in a territory, or (d) a
         holding company for the three preceding types of corporations
         listed.


     69. Consistent with the 1995 Conduct Code Agreement, the Bill makes
         provision for the cartel offences to apply to corporations, bodies
         corporate (that do not fall within the definition of a corporation
         in the TP Act) and individuals.  This occurs in the following ways:


                . First, corporations can be found guilty of committing an
                  offence in Division 1 of Part IV, as the offences
                  specifically apply to corporations.


                . Second, individuals and bodies corporate can be an
                  accessory to the commission of a Part IV offence by a
                  corporation under the accessorial liability framework in
                  section 79 of the TP Act.


                . Third, individuals and bodies corporate can be held liable
                  for committing an offence in the Schedule of the TP Act.
                  These offences 'mirror' the offences in Division 1 of Part
                  IV with the exception that they apply to a 'person'.  The
                  mirror offences form part of the Competition Code and are
                  applied by the CPR Act of each State or Territory as a law
                  of each of those jurisdictions.


     70. Two new indictable offences in Division 1 of Part IV will prohibit
         a corporation from making, or giving effect to, a provision of a
         contract, arrangement or understanding with a competitor that fixes
         prices, restricts outputs, allocates markets between competitors,
         or rigs a bidding process.


     71. The maximum fine for a corporation (under the first dot point
         above) is consistent with the maximum pecuniary penalty that may be
         applied to a corporation found to have breached the civil
         prohibitions.


     72. The maximum fine for an individual found guilty of being an
         accessory to the commission of an offence (under the second dot
         point) is the same as the penalty for committing an offence (under
         the third dot point above) - that is, a term of imprisonment for 10
         years and/or a fine of 2,000 penalty units ($220,000).


     73. For a body corporate that is not a corporation within the meaning
         of that term for the purposes of the TP Act, the maximum fine
         applicable for being an accessory to the commission of an offence
         in Division 1 of Part IV or the Schedule version offence is the
         same as the maximum fine that applies to a corporation.


     74. The ancillary liability framework is amended to apply to the
         criminal cartel offences.


     75. Indictable criminal jurisdiction is conferred on the Federal Court
         of Australia and the Supreme Courts of a State, the Northern
         Territory and the Australian Capital Territory in relation to the
         criminal offences.  A separate Bill will provide for committals,
         bail, practice and procedure, juries, sentencing and appeals.


     76. As the criminal sanctions will be indictable criminal offences,
         certain principles have been applied in developing those sanctions,
         bearing in mind that they will be heard before a jury.


     77. Clarity and simplicity are important.  The criminal sanctions
         (while modelled on the relevant existing civil prohibitions in the
         TP Act) remove redundant language that was included in the existing
         civil prohibitions, therefore providing a more targeted set of
         sanctions in relation to serious cartel conduct.  This is an
         important, because the criminal offences will be indictable
         offences, to be heard before a jury.


     78. Second, the courts are likely to take a stricter interpretation of
         criminal provisions than in relation to similar civil sanctions,
         and to decide particular issues in favour of the defence in a case
         of uncertainty (in order to give effect to the principle that a
         party is innocent until proven guilty).  To enhance certainty, the
         Bill inserts interpretations of terms consistent with existing
         common law interpretations are inserted.


Comparison of key features of new law and current law

|New law                  |Current law              |
|Division 1 of Part IV of |Part IV of the TP Act    |
|the TP Act contains      |contains a range of      |
|criminal and parallel    |prohibited trade         |
|civil prohibitions       |practices, which the     |
|specifically targeting   |courts have interpreted  |
|cartel conduct.  Division|as prohibiting parties   |
|1 comprises four         |from engaging in cartel  |
|subdivisions.            |conduct.  Civil penalties|
|Subdivision A contains   |for a breach of such     |
|interpretive provisions  |prohibitions.            |
|that apply to both the   |                         |
|criminal and civil       |                         |
|provisions.              |                         |
|Subdivision B contains   |The criminal offences are|
|two criminal offences    |based on current civil   |
|prohibiting corporations |prohibitions.            |
|from making or giving    |                         |
|effect to a contract,    |                         |
|arrangement or           |                         |
|understanding containing |                         |
|a cartel provision.      |                         |
|A corporation commits an |A corporation shall not  |
|indictable offence if the|make a contract or       |
|corporation makes a      |arrangement, or arrive at|
|contract or arrangement, |an understanding, if the |
|or arrives at an         |proposed contract,       |
|understanding, and the   |arrangement or           |
|contract, arrangement or |understanding contains an|
|understanding contains a |exclusionary provision   |
|cartel provision.  The   |(an agreement between    |
|prosecution will be      |competitors which        |
|required to prove that   |excludes or limits       |
|the corporation intended |dealings with particular |
|to make a contract,      |suppliers or customers), |
|arrangement or           |or if a provision of the |
|understanding, and that  |proposed contract,       |
|the corporation knew or  |arrangement or           |
|believed that the        |understanding has the    |
|contract, arrangement or |purpose, or would have or|
|understanding contained a|be likely to have the    |
|cartel provision.        |effect, of substantially |
|                         |lessening competition.   |
|A corporation commits an |A corporation shall not  |
|indictable offence if a  |give effect to a         |
|contract, arrangement or |provision of a contract, |
|understanding contains a |arrangement or           |
|cartel provision, and the|understanding, if that   |
|corporation gives effect |provision is an          |
|to the cartel provision. |exclusionary provision,  |
|The prosecution will be  |or if it has the purpose,|
|required to prove that   |or has or is likely to   |
|the corporation knew or  |have the effect, of      |
|believed that the        |substantially lessening  |
|contract, arrangement or |competition.             |
|understanding contained a|                         |
|cartel provision, and    |                         |
|that the corporation     |                         |
|intended to give effect  |                         |
|to the cartel provision. |                         |
|Chapter 2 of the Criminal|Current Part IV does not |
|Code applies to the      |contain criminal offences|
|criminal offences, with  |and therefore the        |
|the exception of Part 2.5|Criminal Code does not   |
|(Corporate criminal      |presently apply.         |
|responsibility).         |                         |
|Instead, section 84 will |                         |
|apply to ascribe         |                         |
|corporate responsibility |                         |
|for conduct engaged in by|                         |
|individuals operating    |                         |
|within the actual or     |                         |
|apparent authority of the|                         |
|corporation (ensuring a  |                         |
|consistent approach to   |                         |
|ascribe corporate        |                         |
|responsibility under the |                         |
|civil and criminal       |                         |
|prohibitions).           |                         |
|Ancillary liability      |Section 79 of the TP Act |
|provisions in section 79 |currently applies in     |
|of the TP Act will apply |relation to the existing |
|in relation to the       |criminal offences (for   |
|criminal offences.       |example, the consumer    |
|                         |protection offences in   |
|                         |Part VC) in the TP Act   |
|                         |and currently has no     |
|                         |application to Part IV.  |
|A new ancillary offence  |Section 79 does not      |
|of attempt is created.   |currently contain an     |
|                         |ancillary offence of     |
|                         |attempt.                 |
|Ancillary liability      |Section 5 currently      |
|provisions will have     |applies in relation to   |
|extraterritorial effect  |Part IV (but not in      |
|under amendments to      |relation to Part VI,     |
|section 5.               |which establishes the    |
|                         |ancillary liability      |
|                         |arrangements that apply  |
|                         |to Part IV).             |
|Where the alleged offence|No direct equivalent.    |
|committed by all         |                         |
|defendants falls within  |                         |
|the TP Act, the Federal  |                         |
|Court will have          |                         |
|concurrent jurisdiction  |                         |
|with the Supreme Courts  |                         |
|of the States, the ACT   |                         |
|and the NT.              |                         |
|The Federal Court will   |No direct equivalent.    |
|continue to have         |                         |
|exclusive jurisdiction   |                         |
|for all civil and        |                         |
|criminal matters arising |                         |
|under the Competition    |                         |
|Code of the NT and ACT.  |                         |
|Where an alleged offence |No direct equivalent.    |
|committed by all         |                         |
|defendants falls under   |                         |
|the provisions of a      |                         |
|Competition Code of a    |                         |
|State, the relevant State|                         |
|Supreme Court will have  |                         |
|jurisdiction.            |                         |


Detailed explanation of new law


Corporate and individual offenders


     79. The framework for implementing consistent and complementary
         competition laws and policies that would apply to all businesses in
         Australia regardless of their structure is discussed in Chapter 1.


     80. As the corporations power in subsection 51(xx) of the Constitution
         provides the principal source of power for the prohibitions in Part
         IV of the TP Act, the criminal offences in Part IV of the TP Act
         apply to a corporation.  'Corporation' is presently defined in
         subsection 4(1) of the TP Act to mean (a) a foreign corporation,
         (b) a trading corporation formed within the limits of the
         Commonwealth, (c) a corporation formed in a territory, or (d) a
         holding company for the three preceding types of corporations
         listed.


     81. However, the TP Act enables corporations, bodies corporate that do
         not qualify as a corporation for the purposes of the TP Act, and
         individuals to be found guilty of committing a criminal cartel
         offence.


     82. The application of criminal cartel offences to corporations applies
         by way of the creation of two new indictable offences in Division 1
         of Part IV that prohibit a corporation from making, or giving
         effect to, a provision of a contract, arrangement or understanding
         with a competitor that fixes prices, restricts outputs, allocates
         markets between competitors, or rigs a bidding process.


     83. The application of the criminal offences to individuals occurs in
         two ways.


     84. First, individuals can be an accessory to the commission of the
         Part IV offence by a corporation under the accessorial liability
         framework in section 79 of the TP Act.  A definition of cartel
         offence provision is added to mean section 44ZZRF or 44ZZRG.
         [Schedule 1, items 32 to 36, subsections 79(1), (1AA), (1AB), (5)
         and (7)].


     85. Second, individuals can be held directly liable for committing a
         mirror version of a Part IV offence.  The mirror version offences
         are contained in the Schedule of the TP Act.  While the Schedule
         version offences 'mirror' the offences in Division 1 of Part IV,
         they apply to persons generally, because the Schedule version is
         not reliant upon a Commonwealth head of power for its validity.
         Instead, the mirror offences form part of the Competition Code and
         are applied by the CPR Act of each State or Territory as a law of
         each of those jurisdictions.  [Schedule 1, item 126, subsections
         44ZZRF(4) and  44ZZRG(4)]


     86. A body corporate that does not meet the definition of a
         'corporation' for the purposes of the TP Act may be found guilty of
         being an accessory to the commission of the Part IV offence by a
         corporation under the accessorial liability framework in section 79
         of the TP Act, or of committing a Schedule version offence, because
         those offences apply to persons generally (as the Schedule version
         is not reliant upon a Commonwealth head of power for its validity).
          [Schedule 1, item 126, subsections 44ZZRF(4) and  44ZZRG(4)]


Elements of the cartel offences


         Criminal Code Act - provisions relevant to the new offences


     87. Chapter 2 of the Criminal Code applies to the criminal cartel
         offences because these offences are Commonwealth offences, although
         Part 2.5 (Corporate criminal responsibility) does not apply
         [Schedule 1, item 18, subsection 6AA(2)].  As a consequence,
         various principles of the Criminal Code apply to the new indictable
         criminal cartel offences that are created in Part IV of the TP Act
         (but not to the Schedule version of the offences).  Some of these
         principles are set out below.


     88. Subsection 3.1 of the Criminal Code provides that a criminal
         offence consists of physical elements and fault elements.


     89. In relation to the physical elements, subsection 4.1(1) of the
         Criminal Code provides that a physical element of an offence may be
         conduct, or a result of conduct, or a circumstance in which
         conduct, or a result of conduct, occurs.  Subsection 4.1(2) defines
         conduct to mean an act, an omission to perform an act, or a state
         of affairs.


     90. In relation to the fault elements, subsection 5.1(1) of the
         Criminal Code provides that a fault element for a physical element
         may be intention, knowledge, recklessness or negligence, and
         subsections 5.2 to 5.5 define how these terms apply to the physical
         elements identified above.


     91. Subsection 5.6 indicates the particular fault elements that will
         apply to specific physical elements if the law creating the offence
         does not specify a fault element for a physical element (referred
         to below as 'default fault elements').


         Making a contract etc.  containing a cartel provision


     92. A corporation commits an indictable offence if the corporation
         makes a contract or arrangement, or arrives at an understanding,
         and the contract, arrangement or understanding contains a cartel
         provision.  [Schedule 1, item 19, subsections 44ZZRF(1), (4)]


     93. Cartel provision is discussed in Chapter 1 above, but is a
         provision that effectively fixes prices, restricts outputs in the
         production or supply chain, allocates customers, suppliers or
         territories between competitors, or rigs a bidding or tendering
         process.


     94. The making of a contract, arrangement or understanding requires
         conduct by at least two persons.  However, each physical element
         must be framed in terms of the conduct of the offender.  The
         offence therefore comprises two physical elements:


                . that the corporation makes a contract or arrangement, or
                  arrives at an understanding; and


                . that the contract, arrangement or understanding contains a
                  cartel provision.


     95. As the first element does not specify a fault element,
         subsection 5.6 of the Criminal Code automatically applies a default
         fault element to the relevant physical element.  The physical
         element refers to the act of 'making a contract or arrangement, or
         arriving at an understanding'.  It would therefore be characterised
         as an element of conduct within the Criminal Code definition.  The
         default fault element would therefore be intention.


     96. The second element could be characterised as a circumstance in
         which conduct, or a result of conduct, occurs.  The offence
         specifies a particular fault element of 'knowledge or belief' in
         relation to the second physical element (that a contract,
         arrangement or understanding contains a cartel provision).


         Giving effect to a cartel provision


     97. A corporation also commits an offence if a contract, arrangement or
         understanding contains a cartel provision, and the corporation
         gives effect to the cartel provision.  [Schedule 1, item 19,
         subsections 44ZZRG(1), (5)]


     98. The phrase gives effect to is defined in current subsection 4(1) of
         the TP Act.  In relation to a provision of a contract, arrangement
         or understanding, it 'includes do an act or thing in pursuance of
         or in accordance with or enforce or purport to enforce'.


     99. Consistent with the first offence, this offence also comprises two
         physical elements:


                . that the contract, arrangement or understanding contains a
                  cartel provision; and


                . that the corporation gives effect to the cartel provision.


    100. The first element could be characterised as a circumstance in which
         conduct, or a result of conduct, occurs.  The offence specifies a
         particular fault element of 'knowledge or belief' in relation to
         the first physical element (that a contract, arrangement or
         understanding contains a cartel provision).  [Schedule 1, item 19,
         subsection 44ZZRG(5)]


    101. As the second physical element does not specify a fault element,
         subsection 5.6 of the Criminal Code automatically applies a default
         fault element to the relevant physical element.  The physical
         element refers to the act of 'giving effect to a cartel provision'.
          It would therefore be characterised as an element of conduct
         within the Criminal Code definition.  The default fault element
         would therefore be intention.


Ancillary offences


    102. The ancillary offences in section 79 of the TP Act apply to the
         cartel offences in Part IV of the TP Act, rather than the ancillary
         offences in Part 2.4 of the Criminal Code [Schedule 1, items 31 to
         36, section 79].  This ensures consistency between:


                . the Commonwealth and State ancillary offences which are
                  created by the Bill;


                . the various ancillary provisions in the TP Act that apply
                  to criminal and civil prohibitions (in sections 75B, 76,
                  78 and 79); and


                . the ancillary provisions in the TP Act and related Acts
                  (that is, the mirror consumer protection provisions in the
                  Australian Securities and Investments Commission
                  Act 2001).


    103. Relying on the ancillary liability provisions in section 79 of the
         TP Act in relation to the criminal offences ensures that they also
         apply to contraventions of the Schedule version of Part IV.


    104. The maximum penalty for a breach of ancillary liability in relation
         to the cartel criminal offences is, for individuals, a term of
         imprisonment of ten years and/or a fine of $220,000.  [Schedule 1,
         item 33, paragraph 79(1)(e)]


         Attempt


    105. The ancillary offence of attempting to contravene a cartel offence
         provision or a Part VC provision is provided.  An attempt to
         contravene a cartel offence provision could be characterised as an
         offence against subsection 11.1 of the Criminal Code, rather than
         taking the defendant to have committed a Part IV offence by reason
         of section 79 of the TP Act.  Reliance on subsection 79(1) ensures
         that the States need not apply the ancillary liability provisions
         of the Criminal Code to the Schedule version of Part IV.  [Schedule
         1, item 31, paragraph 79(1)(aa)]


    106. In order to provide consistency between the operation of this
         ancillary offence and the equivalent ancillary offence in section
         11.1 of the Criminal Code, the interpretive provisions of
         subsections 11.1(2) to (6) of the Criminal Code are applied to the
         offence in section 79 in the same way that they apply to the
         Criminal Code offence of attempt.  [Schedule 1, item 34, subsection
         79(1AB)]


Conduct by directors, servants or agents


    107. Current section 84 has the effect that a person may breach certain
         provisions of the TP Act in consequence of the behaviour of one of
         their employees, agents, or, in the case of a body corporate,
         directors.


    108. Amendments to current section 84:


                . insert into subsection 84(1) references to the cartel
                  offences and parallel civil penalty provisions, so that in
                  proceedings related to a cartel offence or a cartel civil
                  penalty provision, the state of mind of directors,
                  employees or agents of a corporation can be imputed to the
                  corporation [Schedule 1, item 41, subsection 84(1)];


                . insert into subsection 84(3) references to the cartel
                  offences and civil penalty provisions, so that in
                  proceedings related to a cartel offence or a cartel civil
                  penalty provision, the state of mind of an employee or
                  agent of a person other than a body corporate can be
                  imputed to that person [Schedule 1, item 43, subsection
                  84(3)]; and


                . provide that a person other than a body corporate is not
                  liable to be punished by imprisonment if they are
                  convicted of an offence in circumstances where they would
                  not have been convicted if subsection 84(3) or 84(4) had
                  not been enacted [Schedule 1, item 48, subsection 84(4A)].


    109. Consistent with modern drafting practice, current section 84 is
         also amended to remove references to 'servants' and replace those
         references with the term 'employee'.  [Schedule 1, items 41 to 47,
         subsections 84(1) to (4)]


Maximum fines


         Individuals


    110. The maximum fine for individuals (2,000 penalty units, or $220,000)
         found guilty of breaching a criminal offence in the Schedule
         version of Part IV [Schedule 1, item 126, subsections 44ZZRF(4) and
         44ZZRG(4)] or under the criminal ancillary liability arrangements
         [Schedule 1, item 33, paragraph 79(1)(e)] is lower than the
         $500,000 maximum civil pecuniary penalty.  It is, however,
         consistent with the maximum fine that may be imposed on an
         individual if he or she is convicted of a consumer protection
         offence in Part VC of the TP Act, and with other Commonwealth
         offences.  This addresses concerns expressed by the Senate Scrutiny
         of Bills Committee regarding the need for greater consistency
         between Commonwealth penalty provisions.


    111. The discrepancy recognises that the consequences of criminal
         conviction for an individual can be especially strong.


                For example, an individual may be ineligible to hold an
                office, unable to obtain a licence to undertake certain
                activities, ineligible to travel to a range of other
                countries and be deported from Australia if not an
                Australian citizen.


    112. This discrepancy also reflects the availability of alternative
         sanctions that apply in relation to criminal offences.


                For example, the proceeds of crime regime will apply to the
                cartel criminal offences.


    113. Further, these arrangements are consistent with Commonwealth
         criminal policy, as set out in A Guide to Framing Commonwealth
         Civil Penalties and Enforcement Powers, which provides that '[t]he
         effect of a criminal conviction should be taken into account when
         considering the relative penalties for an overlapping criminal
         offence and civil penalty.  The appropriate maximum financial
         penalty under a civil penalty provision will often be higher than
         the appropriate maximum fine for a criminal offence.  ... Setting a
         civil penalty higher than a fine for a corresponding offence is
         consistent with Commonwealth practice.'


    114. Recommendation 26-3 of the Australian Law Reform Commission's
         Report 95: Principled Regulation was cast in similar terms,
         recognising that fines (criminal) and pecuniary penalties (civil)
         serve different purposes.


         Corporations


    115. The cartel offences in Division 1 of Part IV of the TP Act set out
         a formula for determining the maximum criminal fines for
         corporations found to have breached those offences [Schedule 1,
         item 19, subsections 44ZZRF(3) and 44ZZRG(3)].  This formula is
         equivalent to the formula for determining the maximum penalty that
         applies to a corporation found to have breached a civil penalty
         provision in Part IV of the TP Act.


    116. The terms annual turnover, benefit and obtaining are defined in
         Division 1 of Part IV [Schedule 1, item 19, section 44ZZRB].  These
         terms appear in the penalty formula for determining the maximum
         fine for corporations [Schedule 1, item 19, subsections 44ZZRF(3)
         and 44ZZRG(3)].


    117. In relation to annual turnover, the same term appears in current
         subsection 76(1A) of the TP Act, which sets out a three-part
         penalty formula applying to corporations found to have breached a
         civil penalty provision in Part IV of the TP Act.  (While the
         formula contains three parts, it allows for the application of one
         of two different penalties, with the third part forming an
         alternative second penalty).  While annual turnover forms part of
         the third limb of the section 76 penalty formula (under which the
         penalty is 10 per cent of the annual turnover of the body corporate
         during the 12 months prior to the commission of the prohibited
         act), the term itself is defined for the purposes of section 76 in
         subsection 76(5).  While the definition of annual turnover in
         Division 1 of Part IV is consistent with the definition in section
         76 [Schedule 1, item 19, section 44ZZRB], this separate definition
         is necessary because:


                . the criminal offences in Division 1 of Part IV apply to
                  corporations, whereas section 76 applies to corporations
                  found to have breached the civil penalty prohibitions; and


                . the Bill specifically provides that in determining a
                  meaning of an expression used or a provision of the TP Act
                  (other than Division 1, subsection 6(2(C)), paragraph
                  76(1A)(aa) or subsection 93AB(1A)), Division 1 of Part IV
                  is to be disregarded.


    118. Benefit also appears in the third limb of the fining formulae
         provided in the criminal offences in Division 1 of Part IV
         [Schedule 1, item 19, subsections 44ZZRF(3) and 44ZZRG(3)].  It is
         defined (consistent with the definition in subsection 136.1(9) of
         the Criminal Code) to include any advantage and is not limited to
         property [Schedule 1, item 19, section 44ZZRB].  In setting a fine,
         the Court would therefore be able to consider financial or
         pecuniary and non-financial or non-pecuniary advantages, such as
         the maintenance of a particular customer base or market share, or
         an undefined increase in the profit obtained from the sale of a
         good or service.


    119. Obtaining appears in the second limb of the fining formulae
         provided in the criminal offences in Division 1 of Part IV.  It is
         defined (consistent with the definition in section 130.1 of the
         Criminal Code) to include obtaining for another person or inducing
         a third person to do something that results in another person
         obtaining [Schedule 1, item 19, section 44ZZRB].  The word
         'obtained' is used in the fining formulae under the criminal
         offences in Division 1 of Part IV, in the context of the total
         value of the benefits that have been obtained by one or more
         persons and are reasonably attributable to the commission of the
         offence [Schedule 1, item 19, subparagraphs 44ZZRF(3)(b)(i) and
         44ZZRG(3)(b)(i)].  While it appears in a different form than the
         defined term that applies to Division 1 of Part IV, section 18A of
         the Acts Interpretation Act 1901 provides that in any Act, unless
         the contrary intention appears, where a word or phrase is given a
         particular meaning, other parts of speech and grammatical forms of
         that word or phrase have corresponding meanings.  On that basis, it
         is considered that there is a consistent meaning applied to the
         term 'obtaining' and 'obtained'.


         Bodies corporate


    120. A body corporate that does not meet the definition of a corporation
         for the purposes of the TP Act may also be found guilty of
         committing a Schedule version offence, because those offences apply
         to persons generally, as the Schedule version is not reliant upon a
         Commonwealth head of power for its validity.  [Schedule 1, item
         126, subsections 44ZZRF(4)and 44ZZRG(4)]


    121. The cartel offences in the Schedule version also set out a fining
         formula for determining the maximum criminal fines for bodies
         corporate found to have breached those offences [Schedule 1, item
         126, subsections 44ZZRF(3) and 44ZZRG(3)].  This formula is
         equivalent to the formula for determining the maximum penalty that
         applies to a corporation found to have breached a civil penalty
         provision in Part IV of the TP Act, as well as the formula for a
         corporation found to have breached a Division 1 cartel offence
         (with the exception that the formula for the Schedule version
         offences refers to a 'body corporate' rather than a 'corporation')
         [Schedule 1, item 17, subsection 6(5A)].


Location of fines


    122. As the offences in the TP Act apply to corporations, bodies
         corporate and individuals, the fines for variously committing a
         criminal offence are found in different locations, including:


                . for corporations: co-located with the two offences in
                  Division 1 of Part IV [Schedule 1, item 19, subsections
                  44ZZRF(3) and 44ZZRG(3)];


                . for individuals and bodies corporate: co-located with the
                  ancillary offences in section 79 [Schedule 1, item 33,
                  paragraph 79(1)(e)], and with the mirror versions of the
                  criminal offences in the Schedule [Schedule 1, item 126,
                  subsections 44ZZRF(4) and 44ZZRG(4)]; and


                . for individuals and bodies corporate: co-located with the
                  Schedule version of the criminal offences [Schedule 1,
                  item 126, subsections 44ZZRF(3) and 44ZZRG(3)].


    123. While the location of maximum fines are spread through various
         provisions of the TP Act, the general principle is that, regardless
         of location:


                . the maximum fines for individuals (either for a breach of
                  an ancillary offence, or for a breach of the Schedule
                  version of the Part IV offences) are the same; and


                . the maximum fines for corporation and for bodies corporate
                  are the same.


Federal indictable jurisdiction


    124. Current section 163 confers jurisdiction on the Federal Court in
         prosecutions under the TP Act.  However, the current offences in
         the TP Act (for example, in Part VC) are summary offences, while
         the cartel offences will be indictable offences.  The cartel
         offences will be the first Commonwealth offences in Australia able
         to be heard by the Federal Court upon indictment.  This
         necessitates changes to the Federal Court to enable this to occur.
         Such changes (to provide for committals, bail, practice and
         procedure, juries, sentencing and appeals) are the subject of
         amendments contained in the Federal Court of Australia Amendment
         (Criminal Jurisdiction) Bill.


    125. Amendments to current section 163 will confer jurisdiction on the
         Federal Court (with exceptions) where subsection 163(2) of the
         TP Act has effect as a law of the Commonwealth.  [Schedule 1, item
         117, subsection 163(2)]


    126. Current section 86 confers jurisdiction on various courts with
         respect to matters instituted under the TP Act.  Current subsection
         86(2) confers jurisdiction on State and Territory courts with
         respect to civil proceedings instituted under Parts IVA, IVB, and
         Division 1, 1A or 1AA of Part V by a person other than the Minister
         or the ACCC.  Amendments confer jurisdiction on the Supreme Courts
         of the States and Territories to grant injunctions and make orders
         under sections 86C (non-punitive orders), 86D (adverse publicity
         orders), 86E (disqualification orders) or 87 (general ancillary
         orders) in relation to cartel matters.  [Schedule 1, items 49 to
         51, subsections 86(3A), (3B) and (4)]


    127. Current section 163A confers jurisdiction on the Federal Court to
         make declarations and orders of prohibition, certiorari or
         mandamus.  Amendments ensure that if a prosecution relating to the
         criminal cartel offences is commenced in a State or Territory
         Supreme Court, the Federal Court does not have jurisdiction with
         respect to declarations and orders in relation to the offence being
         prosecuted.  This vests the Supreme Court with federal jurisdiction
         to hear collateral challenges.  Therefore, where prosecutions are
         commenced in a Supreme Court, related declarations and orders are
         to be made in the same court.  [Schedule 1, items 122 to 124,
         section 163A]


    128. Amendments also vest the State and Territory Supreme Courts with
         federal jurisdiction with respect to certain declarations and
         orders if those courts are hearing appeals arising out of
         prosecutions of the criminal cartel offences.  Where there is an
         appeal arising out of a prosecution of the criminal cartel
         offences, the Federal Court will not have jurisdiction with respect
         to certain declarations or orders for certiorari, prohibition or
         mandamus.  [Schedule 1, items 122 to 124, section 163A]


Judge overseeing trial may make related civil orders


    129. A judge presiding at a trial against a person for contravening the
         cartel criminal offences may, at any time the judge considers it
         appropriate, grant certain related civil orders.  This is
         consistent with current section 79(4), which enables a court to
         make such orders in relation to a contravention of the consumer
         protection criminal offences in Part VC.  This will ensure that a
         separate civil trial on those matters is not necessary.  [Schedule
         1, item 19, section 44ZZRI]


    130. For that purpose, State Supreme Courts are vested with federal
         jurisdiction in respect to any matter in respect of which a civil
         proceeding is instituted in that court.  Subject to constitutional
         limitations, a Territory Supreme Court is also vested with
         jurisdiction in respect to any matter in respect of which a civil
         proceeding is instituted in that court.  The amendments also
         clarify that this jurisdiction vested on those courts is an
         exception to the general principle, that the Federal Court has
         exclusive jurisdiction in relation to all other trade practices
         matters.  [Schedule 1, item 51, paragraph 86(4)(ba)]


Enforcement and recovery of fines


    131. Fines imposed under the TP Act can be enforced and recovered under
         section 79A.  This provision is applied to the enforcement and
         recovery of fines imposed for a breach of the cartel offences.
         [Schedule 1, item 37, subsection 79A(1)]


Application and transitional provisions


    132. Subsection 163(2) of the TP Act, which provides the Federal Court
         with exclusive jurisdiction in so far as section 163 has effect as
         a law of the Commonwealth, is repealed.  However, the effect of
         that subsection is 'saved' in relation to prosecutions instituted
         before the commencement of the relevant provisions of the Bill.
         [Schedule 1, item 118, subsection 163(2)]


    133. The changes to provide the Federal Court with federal indictable
         jurisdiction, as provided by this Bill, will not apply in relation
         to any proceeding that is instituted before the commencement of
         Schedule 1 of the Federal Court of Australia Amendment (Criminal
         Jurisdiction) Bill.  [Schedule 1, item 121, subsection 163(6)]



Chapter 3
Civil prohibitions

Outline of chapter


    134. To ensure consistency with international best practice, the
         definition of a cartel provision, applicable to both the criminal
         and civil regimes, will reflect the OECD's definition of hard core
         cartel conduct (referred to in this explanatory memorandum as
         serious cartel conduct).  This creates parallel civil and criminal
         sanctions.  This chapter outlines the parallel civil prohibitions
         that apply to serious cartel conduct.


Context of amendments


    135. Providing parallel civil penalties that specifically target serious
         cartel conduct will widen the range of regulatory responses
         available to deal with such conduct, enabling enforcement agencies
         to undertake a targeted regulatory response.  This, in turn, should
         assist to deter individuals and corporations from engaging in
         serious cartel conduct.


    136. Various arrangements supplement the criminal and parallel civil
         prohibitions in relation to cartel conduct contained in this Bill,
         including:


                . leniency arrangements in respect of serious cartel
                  conduct, to be available for criminal cartel offences
                  (from the Commonwealth Director of Public Prosecutions
                  ('the CDPP')) and the parallel civil prohibitions (from
                  the Australian Competition and Consumer Commission ('the
                  ACCC')); and


                . that the CDPP and the ACCC will enter into a formal,
                  publicly available Memorandum of Understanding ('the
                  MOU'), which will establish procedures for the
                  investigation of the cartel offences and the circumstances
                  in which the ACCC will refer a case to the CDPP for
                  prosecution.


Summary of new law


    137. The current prohibitions in Part IV of the TP Act rely principally
         on the corporations power in subsection 51(xx) of the Constitution
         for their Constitutional validity.  Consequently, the current Part
         IV prohibitions apply to a 'corporation', presently defined in
         subsection 4(1) of the TP Act to mean (a) a foreign corporation,
         (b) a trading corporation formed within the limits of the
         Commonwealth, (c) a corporation formed in a territory, or (d) a
         holding company for the three preceding types of corporations
         listed.


    138. Two new parallel civil penalties in Division 1 of Part IV will
         prohibit a corporation from making, or giving effect to, a
         provision of a contract, arrangement or understanding with a
         competitor that fixes prices, restricts outputs, allocates markets
         between competitors, or rigs a bidding process.  The principles of
         clarity and simplicity of drafting that are applied to the criminal
         offences are also applied to the parallel civil penalty
         prohibitions on serious cartel conduct.


    139. Consistent with the 1995 Conduct Code Agreement, the Bill makes
         provision for the civil prohibitions to apply to corporations,
         bodies corporate (that do not fall within the definition of a
         corporation in the TP Act) and individuals.  This occurs in the
         following ways:


                . First, corporations can be found to have breached a civil
                  penalty provision in Division 1 of Part IV, as the
                  provisions specifically apply to corporations.


                . Second, individuals can be an accessory to the commission
                  of a Part IV civil penalty provision under the accessorial
                  liability framework in section 76 of the TP Act.


                . Third, individuals and bodies corporate can be held liable
                  for breaching a civil penalty in the Schedule of the TP
                  Act.  These provisions 'mirror' the civil penalties in
                  Division 1 of Part IV with the exception that they apply
                  to a 'person'.  The mirror civil penalties form part of
                  the Competition Code and are applied by the CPR Act of
                  each State or Territory as a law of each of those
                  jurisdictions.


    140. The maximum pecuniary penalty for an individual found to have
         breached a civil penalty prohibition under the second and third dot
         points above is the same - that is, $500,000.


    141. The maximum pecuniary penalty for a corporation (under the first
         dot point above) is consistent with the maximum fine that may be
         applied to a corporation found to have breached a cartel criminal
         offence.


    142. For a body corporate that does not meet the definition of a
         corporation for the purposes of the TP Act, the maximum penalty
         applicable for a breach of the Schedule version civil penalty is
         the same as the maximum penalty that applies to a corporation.


    143. As the introduction of parallel criminal and civil prohibitions
         addressing similar conduct could give rise to concerns regarding
         double jeopardy, statutory bars to proceedings are applied.


Comparison of key features of new law and current law

|New law                  |Current law              |
|Division 1 contains      |Part IV of the TP Act    |
|criminal and parallel    |contains a range of      |
|civil prohibitions       |prohibited trade         |
|specifically targeting   |practices, which the     |
|cartel conduct.  Division|courts have interpreted  |
|1 comprises four         |as prohibiting parties   |
|subdivisions.            |from engaging in cartel  |
|Subdivision A contains   |conduct.  Civil penalties|
|interpretive provisions  |for a breach of such     |
|that apply to both the   |prohibitions.            |
|criminal and civil       |                         |
|provisions.              |                         |
|Subdivision C contains   |The parallel civil       |
|two parallel civil       |penalty provisions are   |
|penalty provisions       |based on current civil   |
|prohibiting corporations |prohibitions.            |
|from making or giving    |                         |
|effect to a contract,    |                         |
|arrangement or           |                         |
|understanding containing |                         |
|a cartel provision.      |                         |
|A corporation commits a  |A corporation shall not  |
|civil penalty if the     |make a contract or       |
|corporation makes a      |arrangement, or arrive at|
|contract or arrangement, |an understanding, if the |
|or arrives at an         |proposed contract,       |
|understanding, and the   |arrangement or           |
|contract, arrangement or |understanding contains an|
|understanding contains a |exclusionary provision   |
|cartel provision.        |(an agreement between    |
|                         |competitors which        |
|                         |prohibits or limits      |
|                         |dealings with particular |
|                         |suppliers or customers), |
|                         |or if a provision of the |
|                         |proposed contract,       |
|                         |arrangement or           |
|                         |understanding has the    |
|                         |purpose, or would have or|
|                         |be likely to have the    |
|                         |effect, of substantially |
|                         |lessening competition.   |
|A corporation commits a  |A corporation shall not  |
|civil penalty prohibition|give effect to a         |
|if a contract,           |provision of a contract, |
|arrangement or           |arrangement or           |
|understanding contains a |understanding, if that   |
|cartel provision, and the|provision is an          |
|corporation gives effect |exclusionary provision,  |
|to the cartel provision. |or if it has the purpose,|
|                         |or has or is likely to   |
|                         |have the effect, of      |
|                         |substantially lessening  |
|                         |competition.             |
|Section 84 will apply to |Section 84 currently     |
|ascribe corporate        |applies to ascribe       |
|responsibility for       |corporate responsibility |
|conduct engaged in by    |for conduct engaged in by|
|individuals operating    |individuals operating    |
|within the actual or     |within the actual or     |
|apparent authority of the|apparent authority of the|
|corporation (ensuring a  |corporation (ensuring a  |
|consistent approach to   |consistent approach to   |
|ascribe corporate        |ascribe corporate        |
|responsibility under the |responsibility under the |
|civil and criminal       |civil and criminal       |
|prohibitions).           |prohibitions).           |
|The Federal Court will   |No direct equivalent.    |
|continue to have         |                         |
|exclusive jurisdiction   |                         |
|for all civil and        |                         |
|criminal matters arising |                         |
|under the Competition    |                         |
|Code of the NT and ACT.  |                         |
|Ancillary liability      |Section 5 currently      |
|provisions will have     |applies in relation to   |
|extraterritorial effect  |Part IV (not the         |
|under proposed amendments|provisions of Part VI,   |
|to section 5.            |which establish the      |
|                         |ancillary liability      |
|                         |arrangements that apply  |
|                         |to Part IV).             |


Detailed explanation of new law


Application of civil penalties to corporations and individuals


    144. The framework for implementing consistent and complementary
         competition laws and policies that would apply to all businesses in
         Australia regardless of ownership is discussed in Chapter 1.


    145. As the corporations power in subsection 51(xx) of the Constitution
         provides the principal source of power for the prohibitions in Part
         IV of the TP Act, the parallel civil prohibitions in Part IV of the
         TP Act apply to a corporation.  'Corporation' is presently defined
         in subsection 4(1) of the TP Act to mean (a) a foreign corporation,
         (b) a trading corporation formed within the limits of the
         Commonwealth, (c) a corporation formed in a territory, or (d) a
         holding company for the three preceding types of corporations
         listed.


    146. However, the TP Act enables corporations, bodies corporate that do
         not qualify as a corporation for the purposes of the TP Act, and
         individuals to be found to have breached a civil penalty
         prohibition.  The application of the civil penalties to individuals
         occurs in two ways.


    147. First, individuals can be an accessory to the commission of the
         Part IV civil penalty provision by a corporation under the
         accessorial liability framework in section 76 of the TP Act.
         [Schedule 1, item 22, subparagraph 76(1)(a)(i)].


    148. Second, individuals can be held directly liable for committing a
         mirror version of the Part IV civil penalties, which are contained
         in the Schedule of the TP Act.  While the Schedule version civil
         penalties 'mirror' the civil penalties in Division 1 of Part IV,
         they apply to persons generally, because the Schedule version is
         not reliant upon a Commonwealth head of power for its validity.
         Instead, the mirror civil penalties form part of the Competition
         Code and are applied by the CPR Act of each State or Territory as a
         law of each of those jurisdictions.  [Schedule 1, item 126,
         sections 44ZZRJ and 44ZZRK]


Details of civil penalty provisions


         Making a contract etc.  containing a cartel provision


    149. A corporation breaches a civil penalty provision if the corporation
         makes a contract or arrangement, or arrives at an understanding,
         and the contract, arrangement or understanding contains a cartel
         provision.  [Schedule 1, item 19, section 44ZZRJ]


    150. Cartel provision is discussed in Chapter 1 above, but is a
         provision that effectively fixes prices, restricts outputs in the
         production or supply chain, allocates customers, suppliers or
         territories between competitors, or rigs a bidding or tendering
         process.


    151. The phrase 'contract, arrangement or understanding' is used in
         current section 45 of the TP Act.  'Contract' means a common law
         contract.  An 'arrangement or understanding' is a form of either
         verbal or written agreement that falls short of a common law
         contract.  However, the courts have found that for an 'arrangement
         or understanding' to come within section 45 of the TP Act, it must
         involve a 'meeting of the minds' of the parties to it, and there
         must be a consensus as to what is to be done as a result of the
         arrangement or understanding, rather than a mere hope that
         something will be done.  Parallel conduct may provide
         circumstantial evidence supporting the existence of an arrangement
         or understanding, but is not, in itself, sufficient to amount to an
         arrangement or understanding for the purposes of the TP Act.


         Giving effect to a cartel provision


    152. A corporation also breaches a civil penalty provision if a
         contract, arrangement or understanding contains a cartel provision,
         and the corporation gives effect to the cartel provision.
         [Schedule 1, item 19, section 44ZZRK]


    153. Cartel provision is discussed in Chapter 1 above, and is a
         provision that effectively fixes prices, restricts outputs in the
         production or supply chain, allocates customers, suppliers or
         territories between competitors, or rigs a bidding or tendering
         process.


    154. The term 'gives effect to' is defined in current subsections 4(1)
         and (2) of the TP Act.  In relation to a provision of a contract,
         arrangement or understanding, the phrase 'includes do an act or
         thing in pursuance of or in accordance with or enforce or purport
         to enforce'.


    155. As noted above, the phrase 'contract, arrangement or understanding'
         is used in current section 45 of the TP Act.  An 'arrangement or
         understanding' has been interpreted as requiring a 'meeting of the
         minds' of the parties to it, and there must be a consensus as to
         what is to be done as a result of the arrangement or understanding,
         rather than a mere hope that something will be done.


Maximum civil penalties


         Individuals


    156. The maximum penalty for individuals found to have breached a civil
         penalty in the Schedule version of Part IV [Schedule 1, item 126,
         subsections 44ZZRJ and 44ZZRK)] or under civil ancillary liability
         arrangements for a breach of a Part IV prohibition [Schedule 1,
         item 33, subparagraph 76(1)(a)(i)] is determined by the penalty
         arrangements in current section 76.  The maximum pecuniary penalty
         payable by a person other than a body corporate in relation to
         those civil penalty provisions is $500,000 [Schedule 1, item 22,
         subparagraph 76(1)(a)(i)].  This is higher than the $220,000
         maximum criminal fine for individuals.  The rationale for this is
         discussed in Chapter 2.


         Corporations


    157. Current section 76 sets out arrangements for determining the
         maximum pecuniary penalty for a body corporate found to have
         breached certain provisions of the TP Act.  That is:


                . paragraph 76(1A)(a) sets a maximum penalty for a breach of
                  the secondary boycott provisions;


                . paragraph 76(1A)(b) provides a formula for a breach of the
                  remaining provisions of Part IV; and


                . paragraphs 76(1A)(c) and (d) set out maximum penalties for
                  a breach by a corporation of section 95AZN and 'each other
                  act or omission to which this section applies',
                  respectively.


    158. Section 76 is amended to set out a formula for the breach by a body
         corporate of the civil cartel prohibitions.  This formula is
         similar to, although not identical to, the formula in paragraph
         76(1A)(b) for a breach of the remaining provisions of Part IV.
         [Schedule 1, item 23, paragraph 76(1A)(aa)]


Setting penalties


    159. Although proceedings may be instituted against a person for
         breaches of more than one provision of Part IV, a court cannot
         impose more than one penalty in respect of the same conduct.  This
         principle (the 'totality principle') is embodied in current
         subsection 76(3).  Amendments clarify that the totality principle
         applies in respect of the provisions of Part IV, with the exception
         of the criminal offences.  [Schedule 1, item 24, subsection 76(3)]


Jurisdiction


    160. Federal indictable jurisdiction is discussed in Chapter 2.


    161. The power of a judge overseeing a criminal trial to make related
         civil orders is also discussed in Chapter 2.


Parallel criminal and civil prohibitions


    162. Section 4C of the Crimes Act 1914 provides some protection against
         double jeopardy where an act or omission constitutes an offence
         under two or more laws of the Commonwealth or under both a law of
         the Commonwealth and at common law.  However, this protection does
         not extend to liability for civil penalties.  To address concerns
         regarding parallel criminal and civil schemes, most federal
         legislation containing such schemes provides for statutory bars to
         proceedings.  As a scheme of statutory bars is already present in
         section 76B (but only applicable to sections 75AYA or 95AZN), the
         protection in section 76B is extended to address concerns arising
         from parallel criminal and civil cartel prohibitions.  [Schedule 1,
         items 26 to 28, section 76B]


    163. Current section 76B of the TP Act provides that where substantially
         the same conduct is a civil contravention and an offence, the Court
         will be prevented from making a pecuniary penalty if the person has
         already been convicted of an offence.  This is extended to apply in
         relation to the criminal and civil cartel prohibitions, including
         the criminal cartel offences in Part IV and the mirror versions of
         those offences in the Schedule.  [Schedule 1, items 26 and 27,
         subsections 76B(1) and (2)]


    164. Further, proceedings for a pecuniary penalty order against a person
         for a Part IV contravention are stayed if criminal proceedings are
         started or have already been started for an offence, and the
         offence is constituted by conduct that is substantially the same as
         the conduct alleged to constitute the contravention.  The pecuniary
         penalty proceedings will be able to be resumed if the person is not
         convicted of the offence.  [Schedule 1, item 27, subsection 76B(3)]


    165. Criminal proceedings may be started against a person for conduct
         that is substantially the same as a Part IV contravention
         regardless of whether a pecuniary penalty order has been made
         against the person in respect of the contravention.  [Schedule 1,
         item 27, subsection 76B(4)]


    166. Evidence of information given or of documents produced will not be
         admissible in criminal proceedings against the individual if the
         individual gave the evidence or produced the documents in
         proceedings for a pecuniary penalty order against the individual
         for a contravention of Part IV and the conduct constituting the
         criminal and Part IV pecuniary penalty contravention is
         substantially the same.  This does not apply to a criminal
         proceeding in respect of the falsity of the evidence given by the
         individual in the proceedings for the pecuniary penalty order.
         [Schedule 1, item 27, subsection 76B(5)]


    167. Permitting criminal proceedings to be undertaken after civil
         proceedings ensures that civil remedies do not preclude later
         criminal penalties from being imposed, and it is usual to stay the
         civil proceedings until the criminal proceedings are completed
         after which time, if the defendant is convicted of the criminal
         offence, the civil proceedings are terminated.  This is the status
         under the Corporations Act 2001.


    168. The fact that civil proceedings have commenced and run is one
         matter that the CDPP will consider under its Prosecution Policy in
         deciding whether it would be appropriate to commence criminal
         proceedings for the same conduct.  Further, the ACCC is unlikely to
         make a referral to the CDPP for criminal prosecution if it has
         already decided to commence a civil case, including for the reasons
         outlined above.


    169. Section 76B was inserted into the TP Act in 2000 to introduce
         safeguards against potential parallel civil and criminal
         prosecutions for a misrepresentation of the effect of the GST
         changes on the introduction of A New Tax System.  While criminal or
         civil proceedings in relation to a misrepresentation of the effect
         of the GST changes was likely only to occur within Australia, a
         civil or criminal prosecution in relation to substantially the same
         cartel conduct may take place in Australia and overseas.  Section
         76B currently contains no nexus to Australia, opening the
         possibility for defence counsel to use overseas criminal
         proceedings or convictions in relation to substantially the same
         conduct to prevent the Federal Court from making an order for the
         payment of a pecuniary penalty, and/or obtain a stay of civil
         proceedings if the ACCC is seeking a pecuniary penalty in those
         proceedings.  In contrast, section 9 of the Corporations Act (which
         contains a substantially similar regime to section 76B) defines an
         'offence' to mean an offence against a law of the Commonwealth, a
         State or a Territory.  Including a similar definition of offence in
         section 76B will remove the possibility of this occurring.
         [Schedule 1, item 28, subsection 76B(6)]


Consequential amendments


    170. As price fixing is addressed by definition of a cartel provision
         (in section 44ZZRD) and the criminal and civil prohibitions,
         current section 45A of the TP Act (and the related defence in
         section 76D) will be repealed.  [Schedule 1, items 20, 21 and 29,
         subsection 45(3), sections 45A and 76D, items 127 and 128,
         subsections 45(3) and 45A of the Schedule]



Chapter 4
Exceptions

Outline of chapter


    171. This chapter outlines the exceptions to the cartel criminal
         offences and cartel civil penalty provisions.


Context of amendments


    172. Immunity may presently be granted on a case-by-case basis to
         conduct or contracts, arrangements or understandings otherwise
         prohibited by Part IV of the Trade Practices Act 1974 ('the TP
         Act') through the authorisation or notification processes in
         Part VII.  Immunity is granted or allowed to continue under these
         provisions either because the Australian Competition and Consumer
         Commission ('the ACCC') considers that the public benefits of the
         proposed conduct or contract, arrangement or understanding outweigh
         any detriment flowing from a lessening of competition or because
         the conduct or arrangement would result in such benefits to the
         public that immunity should be granted or allowed to continue.


    173. Currently Part IV prevents specific conduct from being considered
         under the section 45 'per se' prohibitions if that conduct falls
         under other Part IV prohibitions subject to a substantial lessening
         of competition test, namely:


                . covenants under section 45B;


                . resale price maintenance under section 48;


                . exclusive dealing under section 47;


                . dual listed companies under section 49; and


                . acquisition of shares in the capital of a body corporate
                  or the assets of a person under section 50.


    174. These provisions are colloquially referred to as 'anti-overlap
         provisions'.


    175. Further, subsection 45A(1) (which deems certain price fixing
         arrangements to be illegal per se) does not apply to a provision of
         a contract, arrangement or understanding:


                . in relation to the price for goods or services to be
                  collectively acquired (such as through buying co-
                  operatives); and


                . for the joint advertising of the price for the re-supply
                  of goods or services collectively acquired.


    176. Cases falling within this exemption from subsection 45A(1) may
         still be prohibited by the TP Act if they have the purpose, effect
         or likely effect of substantially lessening competition.


    177. Further, section 51 of the TP Act exempts anything specifically
         authorised by Commonwealth, State or Territory legislation or
         regulations.  The existing prohibitions on making or giving effect
         to anticompetitive provisions in contracts, arrangements and
         understandings in sections 45 and 45A also contain exemptions.


                For example, the prohibitions do not apply to contracts,
                arrangements and understandings between related entities and
                some joint venture arrangements.


    178. Exceptions are included in the Bill to ensure that the prohibitions
         do not prohibit legitimate business activities that are beneficial
         to the economy or in the public interest.  The exceptions reflect
         current 'anti-overlap provisions' contained in particular
         provisions of section 45, as well as exemptions for certain price
         fixing behaviour.


Summary of new law


    179. Subdivision D of Division 1 covers a number of exceptions to the
         cartel civil penalty provisions and criminal offences:


                . conduct notified;


                . contracts subject to the grant of an authorisation that
                  contain cartel provisions;


                . contracts, arrangements or understandings between related
                  bodies corporate; and


                . joint ventures;


                . providing anti-overlap provisions; and


                . for provisions in relation to the price for goods or
                  services to be collectively acquired, or for the joint
                  advertising of the price for the re-supply of goods or
                  services collectively acquired.


    180. Even though the exceptions in many ways reflect existing exceptions
         in the TP Act, the principles of clarity and simplicity of drafting
         that are applied to the criminal offences and parallel civil
         penalty prohibitions are also applied to the exceptions.


Comparison of key features of new law and current law

|New law                  |Current law              |
|A corporation may lodge a|Section 93AB enables a   |
|collective bargaining    |corporation to lodge a   |
|notice setting out       |collective bargaining    |
|particulars of a contract|notice with the ACCC,    |
|or proposed contract that|where the corporation has|
|contains a provision     |made or proposes to make |
|relating to price fixing,|a contract that contains |
|restricting outputs or   |an exclusionary          |
|allocating customers,    |provision, a price fixing|
|suppliers or territories |provision, or a provision|
|(but not in relation to  |that may substantially   |
|bid rigging).            |lessen competition.      |
|An exception to a        |Subsection 45(8A)        |
|contravention of the     |provides that section 45 |
|cartel offence and civil |does not apply to conduct|
|penalty provisions       |covered by a collective  |
|applies where a          |bargaining notification  |
|corporation has given the|for so long as the       |
|ACCC a collective        |notification is in force.|
|bargaining notice in     |                         |
|relation to a contract,  |                         |
|arrangement or           |                         |
|understanding containing |                         |
|a cartel provision that  |                         |
|satisfies the            |                         |
|purpose/effect condition |                         |
|or the purpose condition,|                         |
|and the notice is in     |                         |
|force.                   |                         |
|The ACCC may authorise a |Section 88 enables the   |
|corporation to make a    |ACCC to authorise a      |
|contract, arrangement or |corporation to engage in |
|understanding, or to give|conduct that would       |
|effect to a contract,    |otherwise be considered  |
|arrangement or           |to breach the            |
|understanding, where the |prohibitions in Part IV, |
|contract, arrangement or |other than those relating|
|understanding contains a |to misuse of market      |
|cartel provision.        |power.                   |
|The ACCC must not        |Section 90 sets out the  |
|authorise a corporation  |tests that are to be     |
|to make a contract or    |applied by the ACCC in   |
|arrangement, or arrive at|determining whether to   |
|an understanding, or to  |authorise a corporation  |
|give effect to a         |to engage in conduct that|
|provision of a contract, |the would otherwise be   |
|arrangement or           |considered to breach a   |
|understanding, if a      |Part IV prohibition.     |
|provision of the proposed|                         |
|contract, arrangement or |                         |
|understanding would or   |                         |
|might be a cartel        |                         |
|provision, unless it is  |                         |
|satisfied that the       |                         |
|provision would result   |                         |
|in, or be likely to      |                         |
|result in, a net public  |                         |
|benefit.                 |                         |
|An exception applies to  |No direct equivalent.    |
|the civil prohibition and|                         |
|criminal offence of      |                         |
|making a contract        |                         |
|containing a cartel      |                         |
|provision applies where  |                         |
|the contract is subject  |                         |
|to a condition that the  |                         |
|provision will not come  |                         |
|into force unless and    |                         |
|until the corporation is |                         |
|granted an authorisation |                         |
|to give effect to the    |                         |
|provision.  Further, the |                         |
|corporation must apply   |                         |
|for a grant of           |                         |
|authorisation within     |                         |
|14 days after the        |                         |
|contract is made.        |                         |
|An exception applies to a|Current subsection 45(8) |
|contravention of the     |provides that section 45 |
|cartel offence and civil |does not apply to or in  |
|penalty provisions if the|relation to a contract,  |
|only parties to the      |arrangement or           |
|contract, arrangement or |understanding, or a      |
|understanding are bodies |proposed contract,       |
|corporate that are       |arrangement or           |
|related to each other.   |understanding, the only  |
|                         |parties to which are or  |
|                         |would be bodies corporate|
|                         |that are related to each |
|                         |other.  Current          |
|                         |subsection 4A(5) of      |
|                         |defines the circumstances|
|                         |in which corporations    |
|                         |will be deemed to be     |
|                         |related.                 |
|An exception for joint   |No direct equivalent.    |
|ventures applies in a    |                         |
|prosecution for a breach |                         |
|of the cartel criminal   |                         |
|offence provisions in    |                         |
|relation to a contract   |                         |
|containing a cartel      |                         |
|provision, where the     |                         |
|cartel provision is for  |                         |
|the purposes of a joint  |                         |
|venture; the joint       |                         |
|venture is for the       |                         |
|production and/or supply |                         |
|of goods or services; and|                         |
|the joint venture is     |                         |
|carried on jointly by the|                         |
|parties to the contract, |                         |
|or by means of joint     |                         |
|ownership or control of a|                         |
|body corporate formed by |                         |
|the parties to carry on  |                         |
|the activity of the joint|                         |
|venture.  Prior          |                         |
|notification requirements|                         |
|apply.                   |                         |
|An exception for joint   |No direct equivalent.    |
|ventures applies in a    |                         |
|proceedings for a breach |                         |
|of the cartel civil      |                         |
|penalty prohibitions in  |                         |
|relation to a contract   |                         |
|containing a cartel      |                         |
|provision, where the     |                         |
|cartel provision is for  |                         |
|the purposes of a joint  |                         |
|venture; the joint       |                         |
|venture is for the       |                         |
|production and/or supply |                         |
|of goods or services; and|                         |
|the joint venture is     |                         |
|carried on jointly by the|                         |
|parties to the contract, |                         |
|or by means of joint     |                         |
|ownership or control of a|                         |
|body corporate formed by |                         |
|the parties to carry on  |                         |
|the activity of the joint|                         |
|venture.                 |                         |
|With the introduction of |No direct equivalent.    |
|notification and         |                         |
|authorisation procedures |                         |
|for the cartel criminal  |                         |
|offences and civil       |                         |
|penalty provisions,      |                         |
|application, savings and |                         |
|transitional provisions  |                         |
|apply to the current     |                         |
|notification and         |                         |
|authorisation provisions,|                         |
|and to the deleted joint |                         |
|venture defence in       |                         |
|relation to price fixing |                         |
|(section 76D)            |                         |
|Exceptions apply the     |Current subsections 45(5)|
|cartel criminal offences |to (7) prevent overlaps  |
|and civil penalty        |between conduct that may |
|provisions to reflect    |be captured under section|
|current subsections 45(5)|45 and certain other     |
|to (7).                  |prohibitions in Part IV  |
|                         |of the TP Act.           |
|Exceptions apply to the  |Current subsection 45A(4)|
|criminal offences and    |provides that current    |
|civil penalty provisions |subsection 45A(1) does   |
|to reflect current       |not apply to a provision |
|subsection 45A(4) (as    |of a contract,           |
|section 45A is deleted by|arrangement or           |
|the Bill).               |understanding in relation|
|                         |to the price for goods or|
|                         |services to be           |
|                         |collectively acquired, or|
|                         |for the joint advertising|
|                         |of the price for the     |
|                         |re-supply of goods or    |
|                         |services collectively    |
|                         |acquired.                |


Detailed explanation of new law


         Conduct notified (collective bargaining)


    181. Current section 93AB enables a corporation to lodge a collective
         bargaining notice with the ACCC, where the corporation has made or
         proposes to make a contract that contains an exclusionary
         provision, a price fixing provision, or a provision that may
         substantially lessen competition.  The Bill enables a corporation
         to lodge a collective bargaining notice setting out particulars of
         a contract or proposed contract that contains a provision relating
         to price fixing, restricting outputs or allocating customers,
         suppliers or territories.  A collective bargaining notification may
         not be lodged in relation to bid rigging.  [Schedule 1, item 71,
         subsection 93AB(1A)]


    182. The creation of this entitlement means that there will be two
         collective bargaining notification frameworks in section 93AB - one
         that applies to the cartel criminal offences and civil provisions
         (referred to as the per se provisions), and one that applies to the
         current provisions in Part IV (referred to as the competition
         provisions).  However, the requirements of current subsections
         93AB(2), (3) and (4) are common to both sets of provisions
         [Schedule 1, items 71 and 72, subsections 93AB(1A) and (1)].  The
         heading to subsection 93AB(1) is amended to reflect this change
         [Schedule 1, item 72, subsection 93AB(1)].  Notes are also inserted
         [Schedule 1, item 71, subsection 93AB(1A)] to assist the reader to
         locate the requirements in the TP Act relating to:


                . the form required for a collective bargaining notice to be
                  a valid notice; and


                . when a collective bargaining notice comes into force.


    183. As discussed in Chapter 1, separate tests apply to conduct within
         the scope of the definition of a cartel provision depending upon
         the characterisation of the conduct.  Provisions of a contract,
         arrangement or understanding relating to price fixing are subject
         to a purpose/effect test [Schedule 1, item 19, subsection
         44ZZRD(2)], while provisions relating to output restrictions or the
         allocation of customers, suppliers or territories is subject to a
         purpose test [Schedule 1, item 19, subsection 44ZZRD(3)].  As the
         purpose or effect of the relevant provision is fundamental to the
         entitlement to lodge a collective bargaining notice in
         subsection 93AB(1A), the provision setting out that entitlement
         reflects the two different tests that apply [Schedule 1, item 71,
         paragraphs 93AB(1A)(a) to (d)].


    184. Interpretive provisions that apply to the purpose/effect condition
         and the purpose condition (contained in the definition of a cartel
         provision in section 44ZZRD) apply in the same way to the cartel
         collective bargaining notification provisions in subsection
         93AB(1A).  [Schedule 1, item 71, subsections 93AB(10B) and (10C)]


    185. An exception to a contravention of the cartel offence and civil
         penalty provisions applies where a corporation has given the ACCC a
         collective bargaining notice under subsection 93AB(1A) in relation
         to a contract, arrangement or understanding containing a cartel
         provision that satisfies the purpose/effect condition in subsection
         44ZZRD(2) or the purpose condition in subsection 44ZZRD(3) (other
         than paragraph (c) of that subsection), and the notice is in force
         under section 93AD.  [Schedule 1, item 19, subsection 44ZZRL(1)]


    186. A note clarifies that, consistent with subsection 13.3 of the
         Criminal Code, a defendant (in relation to the cartel offence
         provisions) bears an evidential burden in relation to establishing
         the exception.  [Schedule 1, item 19, subsection 44ZZRL(1)]


    187. A person wishing to rely on the exception in relation to a
         contravention of the cartel civil penalty provisions bears an
         evidential burden in relation to the matter [Schedule 1, item 19,
         subsection 44ZZRL(2)].  Section 22 of the Acts Interpretation Act
         1901 clarifies that, subject to a contrary intention, use of the
         term 'person' includes a body corporate as well as an individual.


         Contracts containing cartel provision subject to grant of
         authorisation


    188. Current section 88 of the TP Act enables the ACCC to authorise a
         corporation to engage in conduct that would otherwise be considered
         to breach the prohibitions in Part IV, other than those relating to
         misuse of market power.  The effect of the authorisation is to
         provide a corporation with immunity from action under the relevant
         provision.


    189. The Bill enables the ACCC to authorise a corporation to make a
         contract, arrangement or understanding, or to give effect to a
         contract, arrangement or understanding, where it contains a cartel
         provision.  A contract, arrangement or understanding can therefore
         lawfully be made between competitors that contains a provision to
         fix prices, restrict output, allocate customers, suppliers or
         territories or rig bids, so long as the parties to the contract,
         arrangement or understanding have demonstrated through the
         authorisation process in Division 1 of Part VII of the TP Act that
         it will generate a net public benefit, consistent with the tests
         applied by the ACCC in current section 90 of the TP Act.
         [Schedule 1, item 62, subsection 88(1A)]


    190. Current subsection 88(10) provides that an authorisation may be
         granted to cover those who subsequently become parties to a
         contract, arrangement or understanding.  This provision is extended
         to include the power to authorise conduct introduced by subsection
         88(1A).  [Schedule 1, item 65, subsection 88(10)]


    191. Current section 90 sets out the operative provisions that apply to
         the power to authorise conduct.  It includes, for example, the
         tests to be applied in determining whether or not to authorise
         conduct and grant immunity on a case by case basis.  The power to
         authorise sets out separate arrangements according to whether the
         contract, arrangement or understanding is on foot or proposed.  The
         exception (discussed below) in relation to the prohibition on
         making a contract containing a cartel provision is linked directly
         to these provisions.  The application of that exception is
         contingent on the inclusion in the contract of a condition that the
         contract will not commence until authorisation is obtained.


    192. The ACCC must not authorise a corporation to make a contract or
         arrangement, or arrive at an understanding, if a provision of the
         proposed contract, arrangement or understanding would or might be a
         cartel provision, unless it is satisfied that the provision would
         result in, or be likely to result in, a net public benefit.  That
         is, the benefit must outweigh any detriment to the public
         constituted by any lessening of competition that would result, or
         be likely to result, if the conduct occurred.  [Schedule 1,
         item 66, subsection 90(5A)]


    193. Further, the ACCC must not authorise a corporation to give effect
         to a provision of an existing contract, arrangement or
         understanding that is or may be a cartel provision, unless it is
         satisfied that the provision has resulted in, or is likely to
         result in, a net public benefit.  Again, the benefit must outweigh
         any detriment to the public constituted by any lessening of
         competition that would result, or be likely to result, if the
         conduct occurred.  [Schedule 1, item 66, subsection 90(5B)]


    194. As noted above, an exception in relation to the civil prohibition
         and criminal offence of making a contract containing a cartel
         provision applies where the contract is subject to a condition that
         the provision will not come into force unless and until the
         corporation is granted an authorisation to give effect to the
         provision.  Further, the exception is not available unless the
         corporation applies for a grant of authorisation within 14 days
         after the contract is made.  [Schedule 1, item 19, subsection
         44ZZRM(1)]


    195. Consistent with subsection 13.3 of the Criminal Code, a defendant
         bears an evidential burden of establishing this exception in a
         criminal prosecution [Schedule 1, item 19, subsection 44ZZRM(1)].
         A person wishing to rely on the exception in relation to a
         contravention of the cartel civil penalty provision relating to
         making a contract also bears an evidential burden of establishing
         the exception.  Section 22 of the Acts Interpretation Act 1901
         clarifies that, subject to a contrary intention, use of the term
         'person' includes a body corporate as well as an individual.
         [Schedule 1, item 19, subsection 44ZZRM(2)]


         Contracts, arrangements or understandings between related bodies
         corporate


    196. An exception applies in relation to a contravention of the cartel
         offence provisions and the civil penalty provisions if the only
         parties to the contract, arrangement or understanding are bodies
         corporate that are related to each other.  This provision is based
         on current subsection 45(8), which provides that current section 45
         does not apply to or in relation to a contract, arrangement or
         understanding, or a proposed contract, arrangement or
         understanding, the only parties to which are or would be bodies
         corporate that are related to each other.  [Schedule 1, item 19,
         subsection 44ZZRN(1)]


    197. Current subsection 4A(5) of the TP Act defines the circumstances in
         which corporations will be deemed to be related - where the body
         corporate is a holding company or a subsidiary of the other, or
         where two bodies are both subsidiaries of the same holding company.


    198. Consistent with subsection 13.3 of the Criminal Code, a defendant
         bears an evidential burden in relation to establishing this
         exception in a criminal prosecution [Schedule 1, item 19,
         subsection 44ZZRN(1)]  A person wishing to rely on the exception in
         relation to a contravention of the cartel civil penalty provisions
         also bears an evidential burden of establishing the exception.
         Section 22 of the Acts Interpretation Act 1901 clarifies that,
         subject to a contrary intention, use of the term 'person' includes
         a body corporate as well as an individual.  [Schedule 1, item 19,
         subsection 44ZZRN(2)]


         Joint venture - prosecution


    199. An exception for joint ventures applies in a prosecution for a
         breach of the cartel criminal offence provisions in relation to a
         contract containing a cartel provision.  [Schedule 1, item 19,
         subsection 44ZZRO(1)]


    200. The exception comprises the following elements:


                . the cartel provision is contained in a contract;


                . the cartel provision is for the purposes of a joint
                  venture;


                . the joint venture is for the production and/or supply of
                  goods or services; and


                . the joint venture is carried on jointly by the parties to
                  the contract, or by means of joint ownership or control of
                  a body corporate formed by the parties to carry on the
                  activity of the joint venture.


    201. The defendant bears an evidential burden of proof of establishing
         the elements of this exception.  [Schedule 1, item 19,
         subsection 44ZZRO(1)]


    202. The exception is limited to circumstances involving contractual
         relations.  'Contract' has its ordinary meaning of an agreement
         binding or enforceable at law.  It can apply to a range of
         agreements, both written and oral, provided they meet the common
         law criteria for a contract.  In the context of the TP Act, the
         term refers to agreements that are distinct from those covered by
         'arrangements' or 'understandings', which apply to agreements that
         may not give rise to legally enforceable rights.


    203. A person is not entitled to rely on the exception unless they have
         provided the prosecutor with certain information within 28 days
         after the day on which the person is committed for trial.
         Specifically, the person must provide a written notice of the facts
         on which the person proposes to rely, the names and address of any
         witnesses to be called, and certified copies of any documents which
         the person proposes to use, for the purpose of discharging the
         evidential burden in relation to the elements in subsection (1).
         [Schedule 1, item 19, subsection 44ZZRO(2)]


    204. A court may either exempt the person from compliance with these
         requirements, or extend the time within which they are required to
         comply.  This ensures that there is no interference with normal
         judicial processes.  [Schedule 1, item 19, subsection 44ZZRO(3)]


         Joint ventures - civil penalty proceedings


    205. An exception for joint ventures applies in a proceeding for a
         contravention of the cartel civil penalty provisions in relation to
         a contract containing a cartel provision.  [Schedule 1, item 19,
         subsection 44ZZRP(1)]


    206. The exception comprises the following elements:


                .  the cartel provision is contained in a contract;


                . the cartel provision is for the purposes of a joint
                  venture;


                . the joint venture is for the production and/or supply of
                  goods or services; and


                . the joint venture is carried on jointly by the parties to
                  the contract, or by means of joint ownership or control of
                  a body corporate formed by the parties to carry on the
                  activity of the joint venture.


    207. A person wishing to rely on the exception bears an evidential
         burden of proof of establishing the elements of this exception.
         [Schedule 1, item 19, subsection 44ZZRP(2)]


    208. The exception is limited to circumstances involving contractual
         relations.  'Contract' has its ordinary meaning of an agreement
         binding or enforceable at law (see paragraph 4.32, above).


    209. Prior to this Bill, price fixing was a per se breach of the TP Act
         unless an authorisation was granted under section 88.  Section 76D
         of the TP Act provided a defence if the respondent established that
         the price fixing agreement is for the purposes of a joint venture
         and that it does not have the purpose, effect or likely effect of
         substantially lessening competition in any market.  With the
         inclusion of the joint venture exceptions in sections 44ZZRO and
         44ZZRP, section 76D is repealed.  [Schedule 1, item 29]


         Anti-overlap provisions


    210. Current subsections 45(5) to (7) prevent overlaps between conduct
         that may be captured under section 45 and certain other
         prohibitions in Part IV of the TP Act.  These provisions are
         colloquially referred to as 'anti-overlap' provisions.


    211. Exceptions apply to the cartel criminal offences and civil penalty
         prohibitions to reflect the existing anti-overlap provisions
         [Schedule 1, item 19, sections 44ZZRQ to 44ZZRU].  As
         section 44ZZRE, in effect, quarantines expressions used in Division
         1 of Part IV from applying to the rest of the TP Act, the language
         used in the exceptions has been simplified to the extent possible.




                For example, current subsection 45(7) provides that section
                45 'does not apply to or in relation to a contract,
                arrangement or understanding in so far as the contract,
                arrangement or understanding provides, or to or in relation
                to a proposed contract, arrangement or understanding in so
                far as the proposed contract, arrangement or understanding
                would provide, directly or indirectly for the acquisition of
                any shares in the capital of a body corporate or assets of a
                person.


                By comparison, the comparable exception in subsection 44ZZRU
                removes references to proposed contracts, arrangements or
                understandings, as well as other redundant language, and
                inserts paragraphs to enhance clarity.


    212. Where the anti-overlap provisions apply as exceptions to the
         criminal offences, the provisions insert notes specifying that a
         defendant bears an evidential burden of proof of establishing the
         matters contained in the exceptions.  [Schedule 1, item 19,
         subsections 44ZZRQ(1), 44ZZRR(1), 44ZZRS(1), 44ZZRT(1), 44ZZRU(2)]


    213. Where the anti-overlap provisions apply as exceptions to the civil
         prohibitions, the provisions include subsections specifying that a
         person wishing to rely on the exception in relation to a
         contravention bears an evidential burden of proof of establishing
         the matters contained in the exception.  [Schedule 1, item 19,
         subsections 44ZZRQ(2), 44ZZRR(2), 44ZZRS(3), 44ZZRT(1) and (2) and
         44ZZRU(1)]


    214. Similar exceptions are also included in the Schedule version.
         These exceptions do not refer to the evidential burden on the
         defence in relation to criminal prosecutions, because the Schedule
         version operates independently of the Criminal Code.  [Schedule 1,
         item 126, sections 44ZZRQ to 44ZZRW]


         Price of goods or services collectively acquired; or joint
         advertising of price for re-supply of goods or services
         collectively acquired


    215. Current subsection 45A(4) provides that current subsection 45A(1)
         does not apply to a provision of a contract, arrangement or
         understanding in relation to the price for goods or services to be
         collectively acquired, or for the joint advertising of the price
         for the re-supply of goods or services collectively acquired.  In
         each case, if a relevant is exempted from subsection 45A(1), it may
         still be prohibited by the TP Act if the provision has the purpose,
         effect or likely effect of substantially lessening competition.


    216. As noted earlier in this explanatory memorandum, section 45A is
         deleted by the Bill.  [Schedule 1, item 21]


    217. Exceptions apply to the cartel criminal offences and civil penalty
         prohibitions to reflect the existing exemption in current
         subsection 45A(4) [Schedule 1, item 19, section 44ZZRV].  As
         section 44ZZRE, in effect, quarantines expressions used in Division
         1 of Part IV from applying to the rest of the TP Act, the language
         used in the exception has been simplified to the extent possible.


    218. The exception applies in relation to a contract, arrangement or
         understanding containing a cartel provision if the cartel provision
         meets the purpose/effect test, and the cartel provision relates to
         the price for goods or services to be collectively acquired,
         whether directly or indirectly, by the parties to the contract,
         arrangement or understanding, or the cartel provision is for the
         joint advertising of the price for the re-supply of goods or
         services collectively acquired.


    219. Where the exception applies to the criminal offences, a note is
         inserted specifying that a defendant bears an evidential burden of
         proof of establishing the matters contained in the exception.
         [Schedule 1, item 19, subsection 44ZZRV(1)]


    220. Where the exception applies to the civil prohibitions, a subsection
         specifies that a person wishing to rely on the exception in
         relation to a contravention bears an evidential burden of proof of
         establishing the matters contained in the exception.  [Schedule 1,
         item 19, subsection 44ZZRV(2)]


    221. Similar exceptions are also included in the Schedule version.
         These exceptions do not refer to the evidential burden on the
         defence in relation to criminal prosecutions, because the Schedule
         version operates independently of the Criminal Code.  [Schedule 1,
         item 126, section 44ZZRV]


Application and transitional provisions


         Conduct notified (collective bargaining)


    222. Application, savings and transitional provisions operate in
         relation to the notification provisions in the TP Act.
         Paragraphs 93AB(1A)(c) and (d) apply to a contract or arrangement
         made, or an understanding arrived at, before, at or after the
         commencement time.  Paragraphs 93AB(1A)(c) and (d) enable a
         corporation to lodge a collective bargaining notice with the ACCC,
         where the corporation proposes to give effect to a provision of a
         contract containing a cartel provision.  [Schedule 1, item 125,
         section 175]


    223. Commencement time means the commencement of Division 1 of Part IV.
         [Schedule 1, item 125, section 174]


    224. Any existing notifications granted by the ACCC to corporations to
         engage in relevant conduct that were in force immediately before
         the commencement time are preserved.  Section 178 also gives effect
         to any such administrative decisions made prior to the commencement
         of the relevant provisions of this Bill.  [Schedule 1, item 125,
         section 178]


         Contracts containing cartel provision subject to grant of
         authorisation


    225. Application, savings and transitional provisions operate in
         relation to the authorisation provisions in the TP Act.  An
         application provision provides that paragraph 88(1A)(b) applies to
         a contract made, or an understanding arrived at, before, at or
         after the commencement time.  Paragraph 88(1A)(b) provides that the
         ACCC may authorise a corporation to make a contract, arrangement or
         understanding, or to give effect to a contract, arrangement or
         understanding, where the contract, arrangement or understanding
         contains a cartel provision.  [Schedule 1, item 125, section 175]


    226. Any pre-commencement authorisations granted by the ACCC to
         corporations to engage in relevant conduct that were in force
         immediately before the commencement time are preserved.  Section
         177 also gives effect to any such administrative decisions made
         prior to the commencement of the relevant provisions of this Bill.
         [Schedule 1, item 125, section 177]


         Joint ventures


    227. The joint venture defence in current section 76D of the TP Act
         continues to apply in relation to proceedings against a person in
         relation to a contravention of subparagraphs 45(2)(a)(ii) or
         (b)(ii) in relation to a provision of the kind referred to in
         subsection 45A(1) of the TP Act, whether or not the proceedings
         were instituted before or after the commencement time, as if
         section 76D had not been repealed.  [Schedule 1, item 125, section
         176]


Consequential amendments


    228. Various amendments are required as a consequence of extending the
         ACCC's power to authorise inclusion in an existing or proposed
         contract, arrangement or understanding a cartel provision.  The
         effect of these consequential amendments is to insert into various
         provisions references to subsections 90(5A) and (5B).  [Schedule 1,
         items 67, 68, 69, 86 and 87, subsections 91A(4), 91B(5), 91C(7),
         101(1A), 101(2)]


    229. Currently collective bargaining notice mean a notice under
         subsection 93AB(1).  Consequential to item 71, the definition is
         amended to mean a notice under subsection 93AB(1A) or (1).
         [Schedule 1, item 70, section 93AA]


    230. With the extension of the collective bargaining regime in the
         TP Act to contracts that include cartel provisions, consequential
         amendments enable a corporation to lodge two different types of
         collective bargaining notices - those containing a cartel
         provision, and those containing an exclusionary provision or a
         provision that may substantially lessen competition.  [Schedule 1,
         items 74, 75, 76 and 77, subsection 93AC(1)]


    231. Current subsection 93AC(2) of the TP Act is amended to clarify that
         the ACCC's powers to issue an objection notice under this
         subsection relates to a collective bargaining notice under
         subsection 93AB(1).  [Schedule 1, items 79 and 80]


    232. As the Bill repeals section 45A, various provisions that refer to
         price fixing or section 45A are also repealed.  This includes
         paragraph 93AC(1)(b) and subsection 93AC(6).  [Schedule 1, items 78
         and 81]


    233. Current section 93AF prevents the repeated lodgment of a collective
         bargaining notice in particular circumstances.  A similar provision
         is inserted to prevent the repeated lodgment of collective
         bargaining notices containing a cartel provision, where the notice
         has been withdrawn or the ACCC has objected to it.  The provision
         applies to 'any person' in relation to the same contract or
         proposed contract or in relation to a contract or proposed contract
         to the like effect.  [Schedule 1, item 82, section 93AEA]


    234. Current section 93AF is amended to clarify that those provisions
         apply to the collective bargaining notification process established
         under current subsection 93AB(1).  [Schedule 1, items 83 and 84,
         section 93AF]


    235. Section 93A sets out the procedure applying to pre-decision
         conferences in notification matters.  The ACCC may currently treat
         two or more collective bargaining notices as if they constituted a
         single notice, and to issue one draft notice and hold one
         conference on that draft notice, if certain conditions are met.
         Amendments clarify that this power extends to a collective
         bargaining notice relating to a contract, arrangement or
         understanding that contains a cartel provision.  [Schedule 1, item
         85, subsection 93A(12)]



Chapter 5
Investigation powers

Outline of chapter


    236. This chapter outlines amendments to the Telecommunications
         (Interception and Access) Act 1979 ('the TIA Act') and the Proceeds
         of Crime Act 2002 ('the POC Act').  It also outlines amendments to
         the search and seizure provisions of Part XID of the Trade
         Practices Act 1974 ('the TP Act').


Context of amendments


         Telecommunications (Interception and Access) Act 1979


    237. Cartels pose particular problems for enforcement agencies because
         they often involve multiple parties who generally know that what
         they are doing is illegal, and therefore operate in secret with
         limited documentary evidence and enhanced reliance on oral
         communication.  In these circumstances the discovery and proof of a
         cartel is difficult, with regulators often taking on proceedings
         without the benefit of direct evidence of cartel conduct.


    238. In these circumstances, the use of telecommunications interception
         powers can be a means of finding evidence of the 'directing mind'
         of corporate criminal behaviour.  Accordingly, the Bill amends the
         TIA Act to provide access to telephone interception in an
         investigation of the cartel offences.  As a matter of practice,
         this could occur via joint investigations between an interception
         agency and the Australian Competition and Consumer Commission ('the
         ACCC').


         Proceeds of Crime Act 2002


    239. Currently, a breach of the proposed cartel offences by a natural
         person would be covered by the definition of serious offence under
         section 338 of the POC Act.  However, this definition does not
         capture corporations that breach the proposed cartel offence
         provisions.  Accordingly, the various powers in the POC Act could
         not be applied to corporate offenders.


    240. In light of this, the Bill extends the current definition of a
         serious offence to ensure that a corporation in breach of the
         cartel criminal offences is able to be dealt with under the POC
         Act.


         Part XID of the Trade Practices Act 1974


    241. The Trade Practices Legislation Amendment Act (No. 1) 2006 provided
         search and seizure powers in relation to potential contraventions
         of the TP Act.  The Bill amends the TP Act to better align the
         current search and seizure provisions with the search and
         information-gathering provisions under the Crimes Act 1914.


    242. In addition, the search and seizure provisions of the TP Act do not
         currently provide an executing officer with the power to seize
         evidence for a breach of the related obstruction offences under
         sections 137.1, 137.2 and 149.1 of the Criminal Code.  To ensure
         effective prosecution and enforcement of these provisions, the Bill
         provides executing and assisting officers with the power to seize
         evidence in relation to the obstruction offences under the Criminal
         Code.


Summary of new law


    243. The Bill amends the TIA Act to list the proposed cartel offences
         and related offences as a serious offence under section 5D of the
         TIA Act.  This amendment (to a threshold provision of the TIA Act)
         directly ensures that criminal cartel conduct (including related
         accessorial offences) is capable of being subject to telephone
         interception.


    244. The Bill also amends the POC Act to extend the definition of
         serious offence to expressly refer to the proposed cartel offences,
         ensuring application to both corporations and individuals.


    245. In addition to amending the TIA Act and the POC Act, the Bill:


                . expands the scope for which the ACCC may currently obtain
                  a search warrant under Part XID of the TP Act;


                . facilitates the execution of a search warrant by providing
                  for temporary absences; access, transfer and removal of
                  data which might constitute evidential material; removal
                  of items from premises for inspection; transfer of
                  inspectors; video recording; and requiring a person with
                  computer knowledge to assist;


                . provides for a more effective and efficient prosecution of
                  the false or misleading information and obstruction
                  offences under the Criminal Code and ancillary offences
                  under the TP Act, by allowing a search warrant to be
                  issued and evidence to be seized in relation to those
                  offences; and


                . strengthens the penalty for failing to provide evidence or
                  answer questions under Part XID of the TP Act.


    246. The amendments above are aimed at better reflecting the search and
         information gathering powers under the Part IAA of the Crimes Act.


Comparison of key features of new law and current law

|New law                  |Current law              |
|Telecommunication        |Telecommunication        |
|interception is able to  |interception cannot be   |
|be used as a tool to     |used as a tool in the    |
|investigate breaches of  |investigation of a breach|
|cartel offences under the|of the TP Act.           |
|TIA Act.                 |                         |
|The POC Act would capture|No direct equivalent.    |
|both corporations and    |                         |
|individuals that breach  |                         |
|the proposed cartel      |                         |
|offence provisions.      |                         |
|The ACCC can obtain      |No direct equivalent.    |
|information, documents   |                         |
|and evidence or obtain a |                         |
|search warrant and seize |                         |
|evidential material in   |                         |
|relation to ancillary    |                         |
|liability offences.      |                         |
|The ACCC can obtain a    |No direct equivalent.    |
|search warrant and seize |                         |
|evidential material in   |                         |
|relation to the provision|                         |
|of false or misleading   |                         |
|information or documents |                         |
|and obstruction offences |                         |
|under the Criminal Code. |                         |
|The ACCC can temporarily |No direct equivalent.    |
|remove things from       |                         |
|premises where a search  |                         |
|warrant has been issued  |                         |
|to conduct an examination|                         |
|and determine whether the|                         |
|things may be seized     |                         |
|under the search warrant.|                         |
|The ACCC can: put data   |An inspector or an       |
|which might constitute   |assistant may operate    |
|evidential material      |equipment or other       |
|accessed by operating    |facilities at the        |
|electronic equipment at  |premises to put          |
|the premises into        |evidential material in   |
|documentary form;        |documentary form and     |
|transfer such data to a  |remove documents         |
|disk, tape or storage    |produced, or transfer    |
|device brought to the    |evidential material into |
|premises or at the       |a disk, tape or other    |
|premises (with the       |storage device.  However,|
|occupier's consent); and |the existing provisions  |
|remove the data in       |do not refer to          |
|documentary form or on a |accessing, transferring  |
|disk, tape or storage    |and removing data which  |
|device.                  |might constitute         |
|                         |evidential material and  |
|                         |thus it is not clear     |
|                         |whether the ACCC is      |
|                         |authorized to do this.   |
|The Australian Federal   |No direct equivalent.    |
|Police ('the AFP')       |                         |
|officer has authority to |                         |
|assist an ACCC officer   |                         |
|who is executing a search|                         |
|warrant, including by    |                         |
|using reasonable and     |                         |
|necessary force against  |                         |
|persons or property.     |                         |
|The penalty for failing  |The penalty for failing  |
|to answer questions or   |to answer questions or   |
|produce evidence during  |produce evidence during  |
|the execution of a       |the execution of a       |
|warrant is 30 penalty    |warrant is 30 penalty    |
|units or imprisonment for|units.  It does not      |
|12 months, or both.      |specify a term of        |
|                         |imprisonment.            |
|Answers provided under   |Answers provided under   |
|section 154R (answers    |section 154R cannot be   |
|provided during an       |used in criminal         |
|execution of a search    |proceedings, or any      |
|warrant) cannot be used  |proceedings that would   |
|in criminal proceedings  |expose the person to a   |
|against individuals      |civil penalty (other than|
|(other than in           |in proceedings for       |
|proceedings for          |contravention of         |
|contravention of         |subsection 154R(2) or an |
|subsection 154R(2) or an |offence under subsections|
|offence under subsections|137.1 or 137.2 of the    |
|137.1 or 137.2 of the    |Criminal Code).          |
|Criminal Code) but can be|                         |
|used in relation to civil|                         |
|proceedings.             |                         |
|The ACCC can seek an     |No direct equivalent.    |
|order from a magistrate  |                         |
|requiring a person with  |                         |
|computer knowledge to    |                         |
|provide reasonable and   |                         |
|necessary information or |                         |
|assistance to the ACCC   |                         |
|during the execution of a|                         |
|search warrant.          |                         |
|The maximum period of    |The maximum period of    |
|time for which the ACCC  |time for which the ACCC  |
|is able to retain things |is able to retain things |
|seized under a search    |seized under a search    |
|warrant is 120 days.     |warrant is 60 days.      |
|The inspector may        |No direct equivalent.    |
|transfer his or her role |                         |
|as executing officer to  |                         |
|another inspector.       |                         |
|An executing officer may |No direct equivalent.    |
|take photographs or make |                         |
|video recordings of the  |                         |
|premises or anything at  |                         |
|the premises.            |                         |
|If the warrant is still  |No direct equivalent.    |
|in force, the executing  |                         |
|officer and those        |                         |
|assisting may complete   |                         |
|the execution of the     |                         |
|warrant after all of them|                         |
|temporarily cease its    |                         |
|execution and leave the  |                         |
|premises for not more    |                         |
|than one hour, or for a  |                         |
|longer period if the     |                         |
|occupier of the premises |                         |
|consents in writing.     |                         |


Detailed explanation of new law


Telecommunications (Interception and Access) Act 1979


    247. The TIA Act regulates the use of intercepted material in
         investigations.  Subsection 7(1) of the TIA Act prohibits the
         interception of communications in their passage over a
         telecommunications system.  An exception applies if the
         interception of communications is carried out pursuant to a warrant
         issued under the TIA Act (interception warrant).


    248. An interception warrant may only be issued with respect to a
         serious offence.  The two indictable cartel offences (in sections
         44ZZRG and 44ZZRF, as well as the mirror offences in the Schedule
         version of Part IV and the related ancillary offences) are listed
         as a serious offence under section 5D of the TIA Act.  This
         approach provides certainty of application.  [Schedule 1, item 2,
         subsection 5D(5A)].


Proceeds of Crime Act 2002


    249. While a breach of the proposed cartel offences by a natural person
         would be covered by the definition of serious offence under the POC
         Act, the current definition does not appear to capture corporations
         that breach the proposed cartel offence provisions.  This means
         that the various powers in the POC Act could not be applied to
         corporate offenders.  To ensure that a corporation in breach of the
         new offences is captured under the POC Act, amendments extend the
         definition of serious offence to expressly include the proposed
         cartel offences.  [Schedule 1, item 1, paragraph 338(ed)]


Amendments to the ACCC's search and seizure powers


    250. A series of amendments to the ACCC's search and seizure regime,
         based on the search and information gathering provisions under Part
         IAA of the Crimes Act:


                . expand the scope for which the ACCC may currently obtain a
                  search warrant;


                . facilitate the execution of a search warrant;


                . provide for a more effective and efficient prosecution of
                  the obstruction offences under the Criminal Code; and


                . strengthen the penalty for failing to provide evidence or
                  answer questions under Part XID of the TP Act.


         Ancillary liability offences


    251. The Bill enables the ACCC to obtain a search warrant and seize
         evidential material in relation to the specified forms of ancillary
         liability offences.  This is to ensure that both the primary cartel
         offences can effectively and efficiently be enforced.  A definition
         of the term contravention therefore refers to the ancillary
         liability offences (of attempt, incitement and conspiracy) provided
         in the Criminal Code.  [Schedule 2, item 7, section 154A]


         Search and seizure of data


    252. The Cybercrime Act 2001 (Cybercrime Act) amended section 3L of the
         Crimes Act to enable an executing officer to operate electronic
         equipment to access data if he or she believes on reasonable
         grounds that the data might constitute evidential material.  Part
         XID of the TP Act does not contain an analogous provision.


    253. Currently, Part XID permits a magistrate to issue a warrant to the
         ACCC enabling the search for, and seizure of, evidential material,
         subject to certain conditions.  However, it is unclear whether the
         ACCC is currently able to seize, transfer, copy or otherwise handle
         data.


    254. The provisions under Part XID of the TP Act are inconsistent with
         Part IAA of the Crimes Act and do not capture the policy intent of
         the Cybercrime Act.  Given the legislative history of the Crimes
         Act, there is a risk that a court would conclude that a provision
         equivalent to subsection 3L(1) was deliberately omitted from the TP
         Act.


    255. Accordingly, amendments enable the ACCC to put data accessed by
         electronic equipment into documentary form; and transfer data to a
         disk, tape or storage device brought to the premises.  [Schedule 2,
         items 13 and 20, subsections 154F(1) and 154H(1)]


    256. Given that the above amendments introduce the term data, this term
         along with other related terms (data held in computer and data
         storage device) are defined, ensuring consistency between the Part
         XID of the TP Act and Part IAA of the Crimes Act.  [Schedule 2,
         items 8 to 10, section 154A]


         Removal of items from premises


    257. There may be some instances where the ACCC is not able to
         practicably examine and process data or things at the occupier's
         premises to determine whether they may be seized (for example, the
         process of cracking passwords may take a significant period of
         time).  This was an issue in relation to the Crimes Act.  To
         address this, the Cybercrime Act amended section 3L of the Crimes
         Act to allow an executing officer to temporarily remove things from
         premises to conduct an examination and determine whether the things
         may be seized under the search warrant.


    258. Part XID of the TP Act does not contain an analogous provision.  To
         ensure that Part XID of the TP Act is consistent with Part IAA of
         the Crimes Act, amendments enable the ACCC to examine items or
         process data outside the occupier's premises, where there are
         reasonable grounds to believe that the item or data contains
         evidential material.  [Schedule 2, item 19, section 154GA]


         Person with computer knowledge to assist


    259. The ACCC is currently not able to seek an order from a magistrate
         requiring a person with computer knowledge to provide assistance to
         the ACCC during the execution of a search warrant.  This is
         inconsistent to section 3L of the Crimes Act, which enables a
         magistrate to order a person with computer knowledge to assist an
         executing officer.  Accordingly, amendments enable an executing
         officer to apply to a magistrate for an order requiring a person to
         provide reasonable and necessary assistance to allow the officer to
         access, transfer and convert data.  Amendments also specify the
         circumstances in which a magistrate may grant an order and provide
         a penalty of 6 months imprisonment for a breach of the court order.
          [Schedule 2, item 32, section 154RA]


         False or misleading information


    260. Part XID does not currently provide the executing officer or an
         officer assisting with the power to seize evidence of a breach of
         sections 137.1 (false or misleading information), 137.2 (false or
         misleading document) or 149.1 (obstruction of a Commonwealth public
         official) of the Criminal Code whilst executing a warrant.  To
         ensure effective and efficient prosecution of the obstruction
         offences, amendments enable an executing officer and any officer
         assisting to seize evidence relating to breaches of sections 137.1,
         137.2 and 149.1 of the Criminal Code.  [Schedule 2, item 18,
         paragraph 154G(2)(a)]


         Video recordings


    261. Currently, Part XID does not expressly provide for officers
         executing a search warrant to take photographs or make video
         recordings of anything at the premises.  Providing an express basis
         for this will allow the ACCC to record evidence that will assist in
         showing contraventions of the cartel offences (such as a video
         recording showing where secret records of a cartel were hidden) or
         a breach of offences relevant to the execution of the warrant (such
         as photographs providing evidence that the occupier failed to
         provide reasonable facilities and assistance in breach of section
         154Q).


    262. Further, expressly enabling the ACCC to photograph or make video
         recordings of the premises or things at the premises provides the
         Government with evidence to defend unwarranted claims for
         compensation under section 154ZC (compensation for damage done to
         electronic equipment), and assists the ACCC to ensure the proper
         handling and cataloguing of evidential material seized.  [Schedule
         2, item 17, subsection 154G(1A)].


         Substitution of inspector named as investigating officer


    263. Part XID of the TP Act does not allow the substitution of an
         investigating officer by virtue of the current definition of an
         executing officer.  The execution of a search warrant may extend
         over a number of days.  To ensure that an executing officer is able
         to transfer his or her responsibilities to another officer for
         personal, work or other reasons, and to ensure consistency with
         Part IAA of the Crimes Act, the amendment enables the transfer of
         an executing officer's role from one inspector to another.
         [Schedule 2, item 12, section 154A]


         Temporary absences


    264. Many search warrants involve lengthy and complex executions over a
         number of days, given that evidence of cartel conduct is usually
         difficult to find and spread over a large number of documents.
         Currently, executing officers or assisting officers are not able to
         temporarily leave the premises for breaks or other reasons.  To
         ensure that they are able to do so, amendments enable an executing
         officer and officers assisting, if the warrant is still in force,
         to complete the execution of the warrant after all of them
         temporarily cease their execution and leave the premises for not
         more than one hour (or for a longer period if the occupier of the
         premises consents in writing).  [Schedule 2, item 17, subsection
         154G(1B)]


         Australian Federal Police to assist in search warrant


    265. A person may obstruct the execution of a search warrant by, for
         example, obstructing an executing officer of the ACCC.  In such
         circumstances, it is necessary for a member of the AFP to be
         authorised to assist.  Actions which the AFP may undertake include
         arresting a person for obstruction in breach of section 149.1 of
         the Criminal Code or using reasonable force against a person or an
         object.  Accordingly, amendments provide the AFP with the authority
         to assist an ACCC officer executing a search warrant, including by
         using reasonable and necessary force against any persons or
         property.  [Schedule 2, item 28, paragraph 154L(ba)]


         Penalty for failing to answer questions or produce evidence


    266. The current penalty for failing to answer questions or produce
         evidence during an execution of a search warrant is inadequate
         because it does not specify a maximum term of imprisonment.  It is
         also inconsistent with the maximum penalties imposed for breaching
         other similar provisions, such as subsection 155(6A) of the TP Act
         and section 149.1 of the Criminal Code.


    267. To address this, the existing penalty for failing to answer
         evidence or producing evidence during an execution of a search
         warrant (30 penalty units) is removed and substituted by a new
         penalty (30 penalty units or imprisonment for 12 months, or both).
         [Schedule 2, item 29, subsection 154R(2)]


         Privilege against self incrimination or exposure to a penalty


    268. Currently, subsection 154R(4) provides that an answer given during
         an execution of a search warrant is not admissible in evidence
         against the individual in any criminal proceedings, or any
         proceedings that would expose the person to a penalty.  The
         amendment removes this immunity in relation to civil proceedings,
         consistent with the Guide to Framing Commonwealth Offences, Civil
         Penalties and Enforcement Powers.  This allows the privilege
         against self-incrimination to be abrogated for individuals and
         corporations, but a 'use' immunity to be available to individuals
         in criminal prosecutions.


    269. Accordingly, the amendments allow answers provided under section
         154R (answers provided during an execution of a search warrant) to
         be used in any proceedings that would expose a person to a civil
         penalty.  However, answers given cannot be used in any proceedings
         that would expose the person to criminal proceedings other than in
         proceedings for a contravention of subsection 154R(2) or an offence
         under subsections 137.1 or 137.2 of the Criminal Code.  [Schedule
         2, item 30, subsection 154R(4)]


         Time period for ACCC to retain items seized under warrant


    270. To reflect the difficulty in accessing some electronic documents,
         the volume of documents seized and the ACCC's regular use of
         specialist consultant economists to assist in analysing such
         documents, the period of time in which the ACCC is able to retain
         things seized under a search warrant is extended from 60 days to
         120 days.  [Schedule 2, items 35 and 36, subsections 154U(1) and
         (2) and paragraph 154V(1)(a)]


    271. Inspectors retaining items in relation to suspected breaches of the
         obstruction provisions of the Criminal Code may also need
         additional time to examine an item.  To reflect this, amendments
         enable an inspector to apply to a magistrate for an order extending
         the time period for which he or she may retain a thing in relation
         to a suspected breach of the obstruction offences under the
         Criminal Code.  [Schedule 2, item 41, paragraph 154V(2)(d)]


         Magistrate may issue a warrant for any premises in Australia


    272. Although it is clear that Part XID only applies to premises in
         Australia, it is currently not clear whether section 154X (issue of
         warrants) allows a magistrate to issue search warrants in respect
         of other States or Territories other than its own.  To address
         this, amendments clarify that section 154X does not limit a
         magistrate to issuing a warrant in respect of his or her own State
         or Territory.  [Schedule 2, item 42, subsection 154X(2)]


Application and transitional provisions


    273. To avoid doubt as to the application of the amendments to search
         warrants, the amendment ensures that the amendments to Division 4
         of Part XID and section 154A apply to all warrants issued after the
         commencement of the item.  [Schedule 2, item 52]


Consequential amendments


         Data


    274. To reflect the amendments enabling the ACCC to access data,
         consequential amendments remove references to 'evidential material'
         and inserts references to 'data.'  [Schedule 2, items 14 to 16, 21,
         24 and 26, subsections 154F(2) and (3), 154H(3) and (4), and
         paragraph 154H(5)(a)]


         Removal of items


    275. The Bill makes consequential amendments to the proposed provisions
         allowing the ACCC to move or seize evidence by inserting words
         'moved' or 'from premises' in certain provisions.  [Schedule 2,
         items 22, 33 and 34, subsections 154H(3), 154T(1) and (2)]


         Person with computer knowledge to assist


    276. Consequential amendments to the provisions relating to the
         operation of electronic equipment insert a note referring to the
         proposed provisions requiring a person with computer knowledge to
         provide assistance.  [Schedule 2, item 23, subsection 154H(3)]


         References to the Criminal Code


    277. The Bill makes consequential amendments to include the false,
         misleading and obstruction offences under the Criminal Code under
         the definition of evidential material.  [Schedule 2, item 11,
         section 154A]


         Time period for ACCC to retain items seized under warrant


    278. As a consequence of the inclusion of a reference to the Criminal
         Code, the words 'in contravention of' are inserted in various
         provisions.  [Schedule 2, items 37 to 41, subsections 154V(1) and
         (2)]


         Removal of items from premises


    279. The Bill makes consequential amendments to various provisions by
         referring to the words 'moved' and 'premises' to reflect the
         proposed ability of the ACCC to temporarily remove items from
         premises.  [Schedule 2, items 22, 33 and 34, subsections 154H(3),
         154T(1) and (2)]


         AFP assisting


    280. Consequential amendments insert references to 'a member of the
         Australian Federal Police' reflect that they will be empowered to
         assist the ACCC in the execution of a search warrant.  [Schedule 2,
         item 27, section 154K]



Chapter 6
Remedies

Outline of chapter


    281. This chapter outlines amendments to the remedies and enforcement
         provisions under the Trade Practices Act 1974 ('the TP Act').


Context of amendments


    282. As Part IV does not currently contain criminal offences, many of
         the remedial provisions in Part VI of the TP Act require amendments
         so that they will apply effectively to the cartel regime.


    283. The Commonwealth Director of Public Prosecutions ('the CDPP') (with
         responsibility for prosecuting Commonwealth criminal offences) is
         not able to seek the orders that the Australian Competition and
         Consumer Commission ('the ACCC') (with responsibility for
         prosecuting civil prohibitions) may currently seek, such as non-
         punitive, disqualification and adverse publicity orders.


    284. If the CDPP were not given the same powers as the ACCC in relation
         to remedies and enforcement, its role in the prosecution of cartel
         offences would be limited.  To address this, the Bill amends the TP
         Act to put the CDPP in the same position as the ACCC in relation to
         orders it is able to seek from a court in criminal cartel
         proceedings.


Summary of new law


    285. The Bill amends the enforcement and remedies provisions of Part VI
         of the TP Act to place the CDPP in the same position as the ACCC in
         relation to the orders it may seek from a court in criminal cartel
         proceedings, such as disqualification orders, non-punitive orders
         and other orders.  The Bill also places the CDPP in the same
         position as the ACCC in relation to applications for injunctions
         and undertakings as to damages.  In addition, the Bill enables the
         CDPP to take representative actions on behalf of those who have
         suffered loss as a result of a breach of the proposed criminal
         offence provisions.


    286. The Bill also extends the enforcement and remedy provisions in Part
         VI to apply to the prohibitions on serious cartel conduct,
         including:


                . the statutory bars (under section 76B) to apply to Part IV
                  of the TP Act, including the cartel offences;


                . the compensation for victims provisions (under section
                  79B) so that if a defendant has insufficient financial
                  resources to pay both a pecuniary penalty and compensation
                  to a victim, the Court may give preference to the latter;


                . the enforcement and recovery of fines provisions (under
                  section 79A) so that the methods for enforcing and
                  recovering fines under the TP Act also apply to the cartel
                  offences; and


                . the evidence provisions (under section 83) so that
                  findings of fact made against a respondent in earlier
                  proceedings will be prima facie evidence of those facts in
                  later proceedings by any affected person for damages or
                  compensation orders.


Comparison of key features of new law and current law

|New law                  |Current law              |
|The statutory bars in    |Section 76B only applies |
|section 76B apply to the |to sections 75AYA        |
|cartel criminal offences.|(misrepresenting the     |
|                         |effect of the new tax    |
|                         |system changes) and 95AZN|
|                         |(providing false and     |
|                         |misleading information   |
|                         |regarding merger         |
|                         |clearances and           |
|                         |authorisations).         |
|Evidence or information  |Evidence or information  |
|given by an individual   |given by an individual   |
|for the purposes of civil|for the purposes of civil|
|proceedings against that |proceedings against that |
|person under Part VI     |person under sections    |
|cannot be admissible in  |75AYA and 95AZN cannot be|
|criminal proceedings for |admissible in criminal   |
|substantially the same   |proceedings for          |
|conduct (except in       |substantially the same   |
|relation to falsity of   |conduct (except in       |
|evidence).               |relation to falsity of   |
|                         |evidence).               |
|The Court may give       |The Court may give       |
|preference to            |preference to            |
|compensation for victims |compensation for victims |
|of cartel conduct where  |in relation to pecuniary |
|the defendant has        |penalty orders made under|
|insufficient financial   |section 76 or fines given|
|resources to pay both the|under the consumer       |
|pecuniary penalty and    |protection offence       |
|compensation.            |provisions of Part VC.   |
|The CDPP is able to: seek|The ACCC is able to seek |
|orders for injunctions   |orders for injunctions   |
|without the need to      |without the need to      |
|provide undertakings as  |provide undertakings as  |
|to damages; non-punitive |to damages; non-punitive |
|orders; adverse publicity|orders; adverse publicity|
|orders; disqualification |orders; disqualification |
|orders; other remedial   |orders; other remedial   |
|orders; and take         |orders; and take         |
|representative actions in|representative actions in|
|relation to cartel       |relation to cartel       |
|offences.                |offences.                |
|The findings of fact made|The findings of fact made|
|against a respondent in  |against a respondent in  |
|earlier cartel           |earlier cartel           |
|proceedings will be prima|proceedings will be prima|
|facie evidence of those  |facie evidence of those  |
|facts in later           |facts in later           |
|proceedings for damages  |proceedings for damages  |
|under section 83, in     |under section 83 only    |
|addition to the          |apply to findings of fact|
|provisions that currently|under sections 77, 80,   |
|apply.                   |81, 86C, or 86D, or an   |
|                         |offence under Part VC.   |


Detailed explanation of new law


         Statutory bars


    287. Current subsection 76B(2) prevents a pecuniary penalty from being
         imposed against a person for a contravention if the person has been
         convicted of an offence for substantially the same conduct.  Under
         subsection 76B(3), pecuniary penalty proceedings are stayed if
         criminal proceedings are started in relation to substantially the
         same conduct.  Pecuniary penalty proceedings may only be resumed if
         the criminal proceedings do not result in a conviction.  At
         present, subsections 76B(2) and (3) only apply to a contravention
         of sections 75AYA (misrepresenting the effect of the new tax system
         changes) and 95AZN (providing false and misleading information in
         relation to merger clearances and authorisations).


    288. Consistent with recommendations 11.2 of the Australian Law Reform
         Commission's report, Principled Regulation: Federal Civil and
         Administrative Penalties in Australia and sections 1317M and 1317N
         of the Corporations Act 2001, the Bill extends the statutory bars
         in section 76B to apply to Part IV of the TP Act, including the
         criminal cartel offences.  [Schedule 1, item 27, subsections 76B(2)
         to (4)]


    289. Cartels often operate across national borders, although the
         introduction of cartel criminal offences in Australia will assist
         to deter such conduct.  As defence counsel could seek to rely on a
         prosecution for an offence in another jurisdiction to engage the
         application of the statutory bars, the Bill defines an offence to
         refer to an offence against a law of the Commonwealth, a State or a
         Territory.  This reflects analogous provisions in the Corporations
         Act 2001.  [Schedule 1, item 28, subsection 76B(6)]


    290. Current subsection 76B(5) also stipulates that evidence or
         information given by an individual for the purposes of civil
         proceedings against that person for a pecuniary penalty will be
         inadmissible in criminal proceedings against that individual (under
         sections 75AYA and 95AZN) if the criminal offence is based on
         substantially the same conduct as the claimed civil contravention.
         The only exception to this is in relation to falsity of evidence.
         Amendments applying subsection 76B(5) to Part IV, including the
         criminal cartel proceedings, are necessary to ensure that fairness
         is maintained.  [Schedule 1, item 27, subsection 76B(5)]


         Compensation for victims


    291. Current section 79B enables the Court to give preference to
         compensation for victims of cartel conduct where the defendant has
         insufficient financial resources to pay both a pecuniary penalty
         (under section 76 for cartel conduct) or a fine (under the consumer
         protection offences in Part VC) as well as compensation.  This
         provision is amended to extend the principle to the cartel criminal
         offences.  [Schedule 1, item 38, subparagraph 79B(a)(ii)]


         Orders which can be sought by the CDPP


    292. Various existing powers are amended to enable the CDPP to seek
         similar orders to those able to be sought by the ACCC.


         Undertakings


    293. An injunction under section 80 may be sought for a contravention of
         the cartel offences or civil prohibitions by virtue of subparagraph
         80(1)(a)(i).  The CDPP will be able to seek an injunction under
         subsection 80(1) because an application may be made by any person.
         However, if the CDPP were to seek an interim injunction pursuant to
         this section, the CDPP (unlike the ACCC) would currently be
         required to make an undertaking as to damages.  This would create a
         significant financial disincentive for the CDPP to seek an interim
         injunction that is in the public interest.  Consequently, an
         amendment is made so that the CDPP is not required to make an
         undertaking as to damages.  [Schedule 1, item 39, subsection 80(9)]


         Non-punitive orders


    294. The ACCC may currently apply for non-punitive orders under section
         86C of the TP Act.  The purpose of section 86C is to enable the
         Court to make orders to redress, or prevent the repeat of, a
         contravention of certain provisions of the TP Act by making: a
         community service order; a probation order; an order directing a
         person to establish a compliance program; a training program; or an
         order to publish information or an advertisement.


    295. As the cartel offences and civil prohibitions are inserted in
         Part IV, section 86C will apply by virtue of the definition of
         'contravening conduct' in subsection 86C(4).  However, as currently
         drafted, the CDPP would not be able to seek an order under section
         86C in proceedings against a person for contravention of the cartel
         offences.  Consequently, amendments give the CDPP this ability.
         [Schedule 1, item 52, subsection 86C(1A)]


         Adverse publicity orders


    296. Current section 86D enables the Court, on the application of the
         ACCC, to order that a person who has contravened the specific
         provisions of the TP Act to publicise that fact, either generally,
         or to specific persons.  Section 86D will apply to the cartel civil
         prohibitions by virtue of paragraph 86D(1)(a).


    297. However, as currently drafted, the CDPP would not be able to seek
         an order under section 86D in proceedings against a person for
         contravention of the cartel offences.  Consequently, amendments
         give the CDPP this ability.  [Schedule 1, items 53 and 54,
         paragraph 86D(1)(b) and subsection 86D(1A)]


         Disqualification orders


    298. Current section 86E enables the Court to disqualify individuals
         from managing a corporation where they are involved in a
         contravention of Part IV of the TP Act.  As the cartel offences and
         civil prohibitions will be inserted in Part IV, section 86E will
         apply by virtue of the wording of paragraph 86E(1)(a).


    299. However, as currently drafted, the CDPP would not be able to seek
         an order under section 86E in proceedings against a person for
         contravention of the cartel offences.  To address this, amendments
         give the CDPP this ability.  [Schedule 1, item 53, subsection
         86E(1A)]


    300. In addition, current subsection 86E(3) provides that the ACCC must
         notify ASIC if the Court makes a disqualification order on
         application of the ACCC.  This is to ensure that ASIC is aware of
         any disqualification orders made against a person so that it is
         able to update its register of disqualified persons (as required
         under section 1274AA of the Corporations Act 2001).  Accordingly,
         amendments are made so that if the Court makes a disqualification
         on the application of the CDPP, the CDPP is required to notify ASIC
         of this fact.  [Schedule 1, item 58, subsection 86E(3A)]


         Other orders


    301. Current subsection 87(1) enables the Court to make orders it thinks
         appropriate against a person who has engaged in a contravention of
         a provision of Part IV or an offence against Part VC.  As currently
         worded, subsection 87(1) would not apply in relation to a cartel
         offence proceeding.  This is because such a proceeding would not be
         a proceeding under Part VI of the TP Act.  Consequently, amendments
         specifically refer to the cartel offences in the same way as the
         subsection refers to offences against Part VC.  [Schedule 1, item
         59, subsection 87(1)]


         Representative actions


    302. Current subsection 87(1B) enables the ACCC to take representative
         actions in relation to Parts IV (other than section 45D or 45E),
         IVA, IVB, V or VC.  However, as currently drafted, the CDPP is not
         able to take representative actions in relation to cartel offences.
          The amendments give the CDPP the ability to take actions on behalf
         of persons who have suffered loss.  [Schedule 1, items 61 and 62,
         paragraph 87(1A)(ba) and subsection 87(1BA)]


         Findings in proceedings to be evidence


    303. Current section 83 provides that findings of fact made against a
         respondent in earlier proceedings will be prima facie evidence of
         those facts in later proceedings by any affected person for damages
         or compensation orders.  Section 83 is designed to make it easier
         for individual applicants to prove their case against a respondent
         to which whom the ACCC or some other party has successfully brought
         proceedings.  Section 83 is amended to specifically refer to the
         cartel offences and civil prohibitions.  [Schedule 1, item 40,
         section 83]


         Reference to cartel offences to exempt cartel offences from section
         78


    304. Current section 78 provides that criminal proceedings are not to be
         brought for contraventions of Part IV or V.  Amendments exempt the
         cartel criminal offences from section 78.  [Schedule 1, item 30,
         subparagraphs 78(a)(i) and (ia)]


Consequential amendments


         Statutory bars


    305. Consequential amendments reflect the proposed application of the
         statutory bars to Part IV of the TP Act.  [Schedule 1, item 26,
         subsection 76B(1)]


         References to new disqualification order provisions


    306. Consequential amendments provide specific reference to the proposed
         provisions regarding disqualification orders.  [Schedule 1, items
         56 and 57, subsections 86E(2) and (3)]


         Representative actions


    307. Consequential amendments in relation to the representative action
         amendments insert the word 'or'.  [Schedule 1, item 60,
         paragraph 87(1A)(b)]


    308. To reflect the proposed ability for the CDPP to take representative
         actions, the Bill makes consequential amendments to expand the
         definition of a plaintiff to include the CDPP.  [Schedule 1,
         item 63, paragraph 87D(aa)]



Chapter 7
Protected cartel information

Outline of chapter


    309. The Bill enhances the protection afforded to information given in
         confidence to the Australian Competition and Consumer Commission
         ('the ACCC') which relates to a breach, or possible breach, of a
         cartel prohibition.  This chapter outlines provisions that provide
         that, in appropriate circumstances, such information is protected
         from disclosure to:


                . a person under section 157 of the Trade Practices Act 1974
                  ('the TP Act');


                . a court or tribunal;


                . a party to a court proceeding to which the ACCC is not a
                  party; and


                . a person who is considering instituting proceedings before
                  a court.


Context of amendments


    310. The ACCC has expressed concerns that its ability to obtain
         confidential information regarding cartel conduct has been
         significantly hindered by concerns that it may be required to
         disclose that information to third parties in certain
         circumstances.


    311. The ability of the ACCC to obtain confidential information from
         informants is of particular importance to the detection of cartel
         conduct.  Cartel conduct by its nature is often engaged in
         covertly.  As a result, information from cartel participants or
         those closely connected to a cartel participant is often required
         to reveal the conduct.


    312. However, given the relationship of such informants to the cartel,
         they may be discouraged from providing the relevant information if
         concerns or uncertainty exist as to the circumstances in which the
         information may be disclosed to others.


                For example, if appropriate protection was not afforded
                informants may be reluctant to cooperate with the ACCC due
                to concerns such as reprisals or liability to third parties.


    313. For the TP Act to meet its objectives it is essential that the ACCC
         is able to obtain the information necessary to effectively enforce
         it.  If the protection provided to confidential cartel information
         is not clarified, the ACCC's ability to obtain the information
         necessary to enforce the cartel provisions of the TP Act may be
         frustrated.


Summary of new law


    314. The Bill promotes competition by enhancing the protection afforded
         to protected cartel information, that is, information given to the
         ACCC in confidence which relates to a breach, or possible breach,
         of a cartel prohibition.  The protection of such information is
         enhanced by amending the TP Act to provide that:


                . the ACCC may refuse a request for documents under
                  subsection 157(1) if the request relates to a document
                  containing protected cartel information;


                . the Commission or a Commission official is not to be
                  required to produce to a court or tribunal a document
                  containing protected cartel information, or to disclose
                  protected cartel information to a court or tribunal,
                  except by leave of the court or tribunal;


                . the Commission or a Commission official, in connection
                  with proceedings before a court to which it is not a
                  party, is not to be required to make discovery, or
                  produce, to a person a document containing protected
                  cartel information; and


                . the Commission or a Commission official is not required,
                  in connection with prospective proceedings, to make
                  discovery (however described), or to produce, to a person
                  a document containing protected cartel information where
                  that person is considering instituting proceedings before
                  a court and the proceedings have not yet been instituted.


Comparison of key features of new law and current law

|New law                  |Current law              |
|The ACCC may refuse a    |Subsection 157(1)        |
|request for documents    |provides that the ACCC   |
|under subsection 157(1)  |must, at the request of a|
|if the request relates to|person and upon payment  |
|a document containing    |of any prescribed fee,   |
|protected cartel         |furnish to the person    |
|information.  If a       |documents connected with |
|request is refused, the  |matters to which certain |
|Court is not required    |notices, proceedings, or |
|under subsection 157(2)  |applications relate and  |
|to order the ACCC to     |which tend to establish  |
|comply with the request. |the case of the person.  |
|                         |Subsection 157(2)        |
|                         |provides that if the ACCC|
|                         |does not comply with a   |
|                         |request under            |
|                         |subsection 157(1), the   |
|                         |Court must order it to do|
|                         |so unless it considers   |
|                         |the disclosure           |
|                         |inappropriate.           |
|The Commission or a      |No direct equivalent.    |
|Commission official is   |                         |
|not to be required to    |                         |
|produce to a court or    |                         |
|tribunal a document      |                         |
|containing protected     |                         |
|cartel information, or to|                         |
|disclose protected cartel|                         |
|information to a court or|                         |
|tribunal, except by leave|                         |
|of the court or tribunal.|                         |
|The Commission or a      |No direct equivalent.    |
|Commission official, in  |                         |
|connection with          |                         |
|proceedings before a     |                         |
|court to which it is not |                         |
|a party, is not to be    |                         |
|required to make         |                         |
|discovery, or produce, to|                         |
|a person a document      |                         |
|containing protected     |                         |
|cartel information.      |                         |
|The Commission or a      |No direct equivalent.    |
|Commission official is   |                         |
|not required, in         |                         |
|connection with          |                         |
|prospective proceedings, |                         |
|to make discovery        |                         |
|(however described), or  |                         |
|to produce, to a person a|                         |
|document containing      |                         |
|protected cartel         |                         |
|information where that   |                         |
|person is considering    |                         |
|instituting proceedings  |                         |
|before a court and the   |                         |
|proceedings have not yet |                         |
|been instituted.         |                         |


Detailed explanation of new law


Amendments relating to the disclosure of documents by the ACCC


    315. Current section 157 of the TP Act provides a right of access regime
         for certain documents obtained by the ACCC.  The Bill limits the
         ACCC's requirement to furnish documents requested under subsection
         157(1) of the TP Act if the request relates to a document
         containing protected cartel information.  [Schedule 1, items 112
         and 113, subsections 157(1), (1A) and (1B)]


    316. Subsection 157(1) currently provides that the ACCC must, at the
         request of a person and upon payment of any prescribed fee, furnish
         to the person documents connected with matters to which certain
         notices, proceedings, or applications relate and which tend to
         establish the case of the person.


    317. As a result, the Bill amends section 157 to provide that the ACCC
         may refuse to comply with a request under subsection 157(1) where
         the request relates to a document containing protected cartel
         information.


    318. To ensure that this power is exercised appropriately, amendments
         require the ACCC to have regard to specific factors when exercising
         this power.  These factors are:


                . the fact that the protected cartel information was given
                  to the ACCC in confidence;


                . Australia's relations with other countries;


                . the need to avoid disruption to national and international
                  efforts relating to law enforcement, criminal intelligence
                  and criminal investigation;


                . in a case where the protected cartel information was given
                  by an informant:


                  - the protection or safety of the informant or of persons
                    associated with the informant; and


                  - the fact that the production of a document containing
                    protected cartel information, or the disclosure of
                    protected cartel information, may discourage informants
                    from giving protected cartel information to the ACCC in
                    the future;


                . the legitimate interests of the corporation which, or the
                  person who, made the request under subsection 157(1); and


                . such other matters (if any) as the ACCC considers
                  relevant.


    319. Subsection 157(2) and (3) currently provide that if the ACCC does
         not comply with a request under subsection 157(1), the Court must
         order it to do so unless it considers the disclosure inappropriate.
          To prevent a person using subsection 157(2) to circumvent the
         intention behind the amendments detailed above, amendments provide
         that if a request under subsection 157(1) is refused, the Court is
         not able to order the ACCC to comply with it under
         subsection 157(2).  [Schedule 1, item 114, subsection 157(2)]


    320. In order to ensure a consistent meaning throughout Part XII,
         protected cartel information is defined for the purposes of section
         157 to have the same meaning as in section 157B.  [Schedule 1, item
         115, subsection 157(6)]


Disclosure of protected cartel information


    321. The Bill protects in appropriate cases information given to the
         ACCC in confidence that relates to a breach, or a possible breach,
         of the cartel prohibitions from being subject to a subpoena, non-
         party discovery, pre-trial discovery, or like orders.  The
         protections are in addition to existing exemptions and immunities
         which may operate to protect such information from inappropriate
         disclosure, including but not limited to public interest immunity.


         Disclosure of protected information to a court or tribunal


         Commission or a Commission official not required to disclose
         protected cartel information


    322. Protected cartel information is protected from inappropriate
         disclosure to a court or tribunal.  [Schedule 1, item 116, section
         157B]


    323. The Commission or a Commission official is not to be required to
         produce to a court or tribunal a document containing protected
         cartel information, or to disclose protected cartel information to
         a court or tribunal, except by leave of the court or tribunal.  To
         ensure that leave is only granted in appropriate cases, the Bill
         provides an exclusive list of factors to which a court or tribunal
         must have regard when exercising its power to grant leave under
         subsection 157B(1).  These factors are:


                . the fact that the protected cartel information was given
                  to the ACCC in confidence;


                . Australia's relations with other countries;


                . the need to avoid disruption to national and international
                  efforts relating to law enforcement, criminal intelligence
                  and criminal investigation;


                . in a case where the protected cartel information was given
                  by an informant:


                  - the protection or safety of the informant or of persons
                    associated with the informant; and


                  - the fact that the production of a document containing
                    protected cartel information, or the disclosure of
                    protected cartel information, may discourage informants
                    from giving protected cartel information in the future;


                . in the case of a court-the interests of the administration
                  of justice;


                . in the case of a tribunal-the interests of securing the
                  effective performance of the tribunal's functions.
                  [Schedule 1, item 116, subsection 157B(2)]


    324. If a document containing protected cartel information is produced,
         or protected cartel information is disclosed, to a court or
         tribunal in relation to particular proceedings pursuant to
         subsection 157B(1), then the document or information must not be
         adduced in other proceedings before the court or tribunal except:
         in accordance with leave granted under subsection 157B(1) in
         relation to the other proceedings; or as a result of an exercise of
         power by the Commission or a Commission official under subsection
         157B(4) in relation to the other proceedings.  This overrides the
         operation of court rules such as Order 33 Rule 5 of the Federal
         Court Rules, which provides the Federal Court with discretion to
         grant leave to a party, in certain circumstances, to read evidence
         taken, or an affidavit filed, in other proceedings.  [Schedule 1,
         item 116, subsection 157B(3)]


         Commission or a Commission official may disclose protected cartel
         information


    325. The Commission or a Commission official may produce to a court or
         tribunal a document containing protected cartel information, or
         disclose protected cartel information to the court or tribunal
         [Schedule 1, item 116, subsection 157B(4)].  To ensure that this
         power is exercised appropriately, the Commission or a Commission
         official must have regard to an exclusive list of factors when
         exercising its power [Schedule 1, item 116, subsection 157B(5)].
         These factors are the same as those outlined above to which a court
         or tribunal must have regard when granting leave under subsection
         157B(1).


    326. If a document containing cartel information is produced, or
         protected cartel information is disclosed, to a court or tribunal
         in relation to particular proceedings pursuant to subsection
         157B(4) then the document or information must not be adduced in
         other proceedings before the court or tribunal except in accordance
         with the leave granted under subsection 157B(1) in relation to the
         other proceedings, or as a result of an exercise of power under
         subsection 157B(4) in relation to the other proceedings.  Similarly
         to subsection 157B(3), this overrides the operation of court rules
         which may otherwise permit protected cartel information which has
         been produced or disclosed by the ACCC for use in particular
         proceedings being adduced in another proceeding.  [Schedule 1, item
         116, subsection 157B7)]


         Definitions


    327. For the purposes of the provisions relating to protected cartel
         information, a number of terms are defined.  [Schedule 1, item 116,
         subsection 157B(7)]


                . Commission official means a member, or associate member of
                  the Commission; a person referred to in subsection 27(1);
                  or a person engaged under section 27A.  The definition
                  extends to the staff engaged under the Public Service Act
                  1999 to assist the Commission, and persons engaged by the
                  Commission to give advice to, and perform services for,
                  the Commission.


                . Disclose means divulge or communicate.


                . Protected cartel information means information that was
                  given to the ACCC in confidence; and relates to a breach,
                  or a possible breach, of the cartel criminal offences and
                  civil prohibitions.


         Disclosure of protected cartel information to a party


         Commission or Commission official not required to make discovery of
         documents containing protected cartel information etc.


    328. The Commission or a Commission official, in connection with
         proceedings before a court to which it is not a party, is not
         required to make discovery (however described), or produce, to a
         person a document containing protected cartel information [Schedule
         1, item 116, subsection 157C(1)].  Similarly, the Commission or a
         Commission official is not required, in connection with prospective
         proceedings, from making discovery (however described), or from
         producing, to a person a document containing protected cartel
         information where that person is considering instituting
         proceedings before a court and the proceedings have not yet been
         instituted.  [Schedule 1, item 116, subsection 157C(2)]


    329. This prevents the ACCC from being required to make non-party and
         pre-trial discovery of, or from otherwise being required to
         produce, a document containing protected cartel information.  The
         prohibition applies in connection with proceedings before any
         court, including a State or Territory court, and with respect to
         any cause of action, including causes of actions originating under
         State or Territory law.


         Commission or Commission official may disclose protected cartel
         information


    330. The Commission or a Commission official may provide a copy of a
         document protected in appropriate circumstances.


    331. If a person is a party to proceedings before a court and the ACCC
         is not a party to the proceedings, the Commission or a Commission
         official may, on application by the person, make a copy of a
         document containing protected cartel information and give the copy
         to the person.  [Schedule 1, item 116, subsection 157C(3)]


    332. In the case of pre-trial discovery, if a person is considering
         instituting proceedings before a court and those proceedings have
         not yet been instituted, the Commission or a Commission official
         may, on application by a person, make a copy of a document
         containing protected cartel information, and give the copy to the
         person.  [Schedule 1, item 116, subsection 157C(4)]


    333. The Commission or a Commission official must have regard to an
         exclusive list of factors to ensure that the ACCC exercises its
         discretion appropriately.  These factors are:


                . the fact that the protected cartel information was given
                  to the ACCC in confidence;


                . Australia's relations with other countries;


                . the need to avoid disruption to national and international
                  efforts relating to law enforcement, criminal intelligence
                  and criminal investigation;


                . in a case where the protected cartel information was given
                  by an informant:


                  - the protection or safety of the informant or of persons
                    associated with the informant; and


                  - the fact that the production of a document containing
                    protected cartel information, or the disclosure of
                    protected cartel information, may discourage informants
                    from giving protected cartel information in the future;


                . the interests of the administration of justice.  [Schedule
                  1, item 116, subsection 157C(5)]


    334. If a copy of a document is given to a party, or prospective party,
         to proceedings before a court as a result of an exercise of power
         under subsections 157C(3) or (4), the copy must not be adduced in
         other proceedings before a court or tribunal except as provided for
         by subsections 157B(1) or (4) or subsections 157C(3) or (4).
         [Schedule 1, item 116, subsection 157C(6)]


    335. Commission official and protected cartel information are defined
         for the purposes of section 157C, and given the same meaning as
         they are given in section 157B.  [Schedule 1, item 116, subsection
         157C(7)]


         General powers of a court


    336. Certain powers of a court are not affected by sections 157B or
         157C.  [Schedule 1, item 116, section 157D]


    337. The power of a court to control the conduct of a criminal or civil
         proceeding, in particular with respect to abuse of process, is not
         affected by section 157B or 157C, except so far as that section
         expressly or impliedly provides.  [Schedule 1, item 116, subsection
         157D(1)]


    338. A refusal by a court to grant leave under subsection 157B(1) does
         not prevent the court from later ordering that a criminal
         proceeding be stayed on the ground that the refusal would have a
         substantial adverse effect on a defendant's right to receive a fair
         hearing.  [Schedule 1, item 116, subsection 157D(2)]


    339. A refusal by a court to grant leave under subsection 157B(1) does
         not prevent the court from later ordering that a civil proceeding
         be stayed on the ground that the refusal would have a substantial
         adverse effect on the hearing in the proceeding.  In deciding
         whether to order a stay of the civil proceeding, the court must
         consider:


                . the extent of any financial loss that a party would suffer
                  as a result of the proceeding being stayed;


                . whether a party has reasonable prospects of obtaining a
                  remedy in the proceedings; and


                . any other matter the court considers relevant.  [Schedule
                  1, item 116, subsections 157D(3) and (4)]


Do not remove section break.






Outline of chapter


    340. This chapter outlines provisions in the Bill that are not directly
         related to the proposal to implement criminal sanctions for serious
         cartel conduct and to provide parallel civil sanctions.
         Nonetheless, the amendments discussed in this chapter facilitate
         more effective investigation and enforcement provisions in the
         Trade Practices Act 1974 ('the TP Act').


Context of amendments


    341. The Bill includes a number of minor or technical amendments to
         various provisions of Part IV and related provisions.


Summary of new law


    342. The amendments referred to in this chapter:


                . correct references in the TP Act to provisions in the
                  Crimes Act 1914;


                . amend existing provisions of the TP Act to insert
                  references to section 86E;


                . amend inconsistencies that arise in relation to the
                  information-gathering powers of the Australian Competition
                  and Consumer Commission ('the ACCC');


                . provide for the inspection, and copying, of documents
                  contained in registers established by the Trade Practices
                  Legislation Amendment Act (No. 1) 2006 ('the Dawson Act');
                  and


                . make minor amendments to Part XIB (The telecommunications
                  industry) of the TP Act insofar as those provisions
                  interface with Part IV of the TP Act.


Comparison of key features of new law and current law

|New law                  |Current law              |
|As the contents of       |Current subsection 79A(5)|
|section 18A of the Crimes|refers to section 18A of |
|Act have moved to        |the Crimes Act.          |
|section 15A of the Crimes|Subsection 79A(10) also  |
|Act, subsection 79A(5) is|refers to section 18A of |
|amended, and subsection  |the Crimes Act.          |
|79A(10) is deleted.      |                         |
|Findings of fact made    |Current section 83       |
|against a person in      |provides that findings of|
|earlier proceedings      |fact made against a      |
|under sections 77, 80,   |person in earlier        |
|81, 86C, 86D or 86E are  |proceedings under        |
|prima facie evidence of  |sections 77, 80, 81, 86C |
|those facts in later     |or 86D are prima facie   |
|proceedings under Part   |evidence of those facts  |
|IV, IVA, IVB, V or VC.   |in later proceedings     |
|                         |under Part IV, IVA, IVB, |
|                         |V or VC (that is, the    |
|                         |section does not extend  |
|                         |to proceedings under     |
|                         |section 86E).            |
|Subsection 87(1) is      |Current subsection 87(1) |
|amended to confer broad  |confers broad powers on  |
|powers on the Court to   |the Court to make        |
|make remedial orders, in |remedial orders, in      |
|addition to other orders |addition to other orders |
|that it may make under   |that it may make under   |
|section 82 (Actions for  |section 82 (Actions for  |
|damages), 86C            |damages), 86C            |
|(Non-punitive orders),   |(Non-punitive orders) or |
|86D (Punitive orders -   |86D (Punitive orders -   |
|adverse publicity) or 86E|adverse publicity) (that |
|(Order disqualifying a   |is, the section does not |
|person from managing a   |empower the Court to make|
|corporation).            |remedial orders, in      |
|                         |addition to orders under |
|                         |section 86E.             |
|Documents produced to the|An individual is not     |
|ACCC by an individual    |excused from furnishing  |
|pursuant to paragraph    |information or producing |
|155(1)(b) can be used    |a document pursuant to   |
|against that individual  |paragraphs 155(1)(a) or  |
|in criminal proceedings. |(b) of the TP Act on the |
|On a practical level, if |basis that it may        |
|the material already     |incriminate them.        |
|exists, it can be used   |However, their answer to |
|against the individual in|any question asked, or   |
|criminal proceedings.    |document produced        |
|Subsection 155(7) is     |pursuant to such notice, |
|amended to prevent       |can only be used against |
|answers given (but not   |that person in criminal  |
|documents produced) by an|proceedings under        |
|individual under         |section 155 (for example,|
|subsection 155(1) from   |providing false or       |
|being used in evidence   |misleading evidence - an |
|against the individual in|offence under subsection |
|any criminal proceeding  |155(5)).                 |
|other than proceedings   |                         |
|for an offence under     |                         |
|section 155 or Criminal  |                         |
|Code sections 137.1      |                         |
|(false or misleading     |                         |
|information), 137.2      |                         |
|(false or misleading     |                         |
|documents) or 149.1      |                         |
|(obstructions of         |                         |
|Commonwealth public      |                         |
|official) that relates to|                         |
|the information provided |                         |
|under subsection 155(1). |                         |
|Evidence given by an     |Current subsection 159(2)|
|individual before the    |also provides that       |
|ACCC (pursuant to        |evidence given by a      |
|paragraph 155(1)(c)) is  |person before the ACCC is|
|not admissible against   |not admissible against   |
|the individual in any    |him or her in any        |
|criminal proceedings     |criminal proceedings     |
|other than for an offence|other than proceedings   |
|against Part XII or      |for offences against     |
|Criminal Code sections   |Part XII.                |
|137.1 (false or          |                         |
|misleading information), |                         |
|137.2 (false or          |                         |
|misleading documents) or |                         |
|149.1 (obstructions of   |                         |
|Commonwealth public      |                         |
|official).               |                         |
|Amendments to subsection |Current paragraph        |
|155(7) align that        |155(7)(b) prohibits      |
|provision with the common|information obtained     |
|law and the Evidence Act,|under section 155 from   |
|so that any evidentiary  |being used in proceedings|
|material obtained from a |under the Criminal Code, |
|corporation under        |whereas under the common |
|subsection 155(1) can be |law and section 187 of   |
|used against the         |the Evidence Act, the    |
|corporation in any       |information can be used  |
|proceeding.              |in such proceedings.     |
|Amendments will permit a |Current section 165      |
|person, on application in|regulates the inspection |
|accordance with          |and copying of documents |
|regulations and on       |that are required to be  |
|payment of the prescribed|kept under other         |
|fee, to inspect documents|provisions of the TP Act,|
|in the merger            |but the relevant         |
|authorisation register   |provisions do not refer  |
|kept by the ACCC under   |to registers that are    |
|section 95AH, and to     |required to be kept under|
|inspect documents in the |sections 95AH and 95AZ   |
|merger authorisation     |(both of which were      |
|register kept by the     |inserted by the Dawson   |
|Australian Competition   |Act), nor is the         |
|Tribunal under section   |inspection of these      |
|95AZ, and to obtain a    |registers otherwise      |
|copy of such a document. |provided for under the TP|
|                         |Act.                     |
|Amendments to section    |Current subsection       |
|151AJ ensure that a      |151AJ(4) provides that,  |
|carrier or carriage      |for the purposes of      |
|service provider does not|applying subsection      |
|act anticompetitively in |151AJ(3) to a carrier or |
|certain circumstances    |carriage service provider|
|where they have made an  |that is not a corporation|
|application to the ACCC  |to determine whether a   |
|for an authorisation with|contravention of certain |
|respect to certain       |provisions occurred of   |
|conduct.                 |Part IV occurred, it is  |
|                         |to be assumed that each  |
|                         |reference to a           |
|                         |corporation included a   |
|                         |reference to a carrier or|
|                         |carriage service provider|
|                         |that is not a            |
|                         |corporation.             |


Detailed explanation of new law


Enforcement and recovery of fines


    343. In addition to the amendments to current section 79A referred to in
         Chapter 2 (which applies the power to enforce and recover certain
         fines imposed), an amendment to current subsection 79A(5) removes a
         reference to section 18A of the Crimes Act and substitutes with a
         reference to section 15A of the Crimes Act.  [Schedule 2, item 1,
         subsection 79A(5)]


References to section 86E inserted into other provisions


    344. Current section 86E enables the Court to make an order
         disqualifying a person from managing a corporation if certain pre-
         conditions are met.  The section was inserted into the TP Act by
         the Dawson Act in 2006.  Two provisions of the TP Act are amended
         to insert references to section 86E.  The two amendments discussed
         below are in addition to the amendments made to sections 83 and 87
         discussed in Chapter 6: Remedies.


         Findings made in earlier proceedings can be evidence in later
         proceedings


    345. Current section 83 provides that findings of fact made against a
         person in earlier proceedings under sections 77, 80, 81, 86C or 86D
         are prima facie evidence of those facts in later proceedings under
         Part IV, IVA, IVB, V or VC.  An amendment adds section 86E as a
         section under which findings of fact can be made in earlier
         proceedings.  Therefore, in proceedings to seek a disqualification
         order under section 86E, a finding against a person is prima facie
         evidence of a contravention of Parts IV, IVA, IVB, V or VC.
         [Schedule 2, item 3, section 83]


         Remedial orders


    346. Current subsection 87(1) confers broad powers on the Court to make
         remedial orders, in addition to other orders that it may make under
         section 82 (Actions for damages), 86C (Non-punitive orders) or 86D
         (Punitive orders - adverse publicity).  An amendment adds section
         86E to this list.  The effect is that the Court can make remedial
         orders, in addition to its power to disqualify a person from
         managing a corporation.  [Schedule 2, item 6, subsection 87(1)]


Amendments to ACCC's information-gathering powers


    347. In addition to the search and seizure provisions in Part XID
         (introduced by the Dawson Act), the ACCC has the power to require
         the production of documents, furnishing of information or giving of
         evidence under current section 155 of the TP Act.  Subsection
         155(5) makes it an offence to fail to comply with a section 155
         notice issued by the ACCC.  Various anomalies arise in relation to
         section 155, and amendments address these anomalies.


         Privilege against self incrimination for individuals


    348. Current paragraph 155(7)(a) provides that information obtained
         under a section 155 notice cannot be used in criminal proceedings
         against individuals other than proceedings for non-compliance with
         section 155.


    349. Information obtained under section 155 cannot be used in similar
         proceedings against individuals under the Criminal Code.


                . Documents obtained under section 155 can be used in
                  criminal proceedings against an individual for an offence
                  under subsection 155(5), such as giving false or
                  misleading evidence, but cannot be used in similar
                  proceedings against the individual under the Criminal
                  Code, such as providing false or misleading documents
                  under subsection 137.2.


    350. The provision is amended to prevent answers given (but not
         documents produced) by an individual under subsection 155(1) of the
         TP Act from being used in evidence against the individual in any
         criminal proceeding other than proceedings for an offence under
         section 155 or sections 137.1 (false or misleading information),
         137.2 (false or misleading documents) or 149.1 (obstructions of
         Commonwealth public official) of the Criminal Code that relates to
         the information provided under subsection 155(1).  [Schedule 2,
         items 44 to 47, subsection 155(7)]


    351. Current subsection 159(2) also provides that evidence given by a
         person before the ACCC is not admissible against him or her in any
         criminal proceedings other than proceedings for offences against
         Part XII.  Amendments repeal current subsection 159(2) and insert a
         subsection that provides that evidence given by an individual
         before the ACCC is not admissible against the individual in any
         criminal proceedings other than for an offence against Part XII or
         sections 137.1 (false or misleading information), 137.2 (false or
         misleading documents) or 149.1 (obstructions of Commonwealth public
         official) of the Criminal Code.  [Schedule 2, item 49, subsection
         159(2)]


         Privilege against self incrimination or exposure to a penalty


    352. Subsection 155(7) presently abrogates the privilege against self
         incrimination for persons required to provide information,
         documents or evidence pursuant to a notice issued under subsection
         155(1).  The proposed changes to subsection 155(7) abrogate both
         the privilege against self incrimination and the privilege against
         exposure to a penalty for individuals required to furnish
         information, produce information or give evidence under subsection
         155(1).  [Schedule 2, items 43 to 46, subsection 155(7)]


    353. A similar amendment is made to subsection 159(1).  Presently, that
         subsection provides that a person appearing before the ACCC to give
         evidence or produce documents is not excused from answering a
         question, or producing a document, on the ground that the answer to
         the question, or the document, may tend to incriminate them.  The
         amendment will extend subsection 159(1) so that it also abrogates
         the privilege against exposure to a penalty in the same
         circumstances.  [Schedule 2, item 48, subsection 159(1)]


    354. These amendments align current sections 155 and 159 with
         Commonwealth policy relating to other corporate enforcement
         agencies (such as the Australian Securities and Investments
         Commission and the Australian Prudential Regulation Authority), and
         with current section 154R in the TP Act (answering of questions or
         producing evidential material).


         Use of evidentiary material obtained from a corporation


    355. Under current paragraph 155(7)(b), information obtained under a
         section 155 notice cannot be used in criminal proceedings against
         corporations other than proceedings under the TP Act and certain
         proceedings under the Radiocommunications Act 1992.


    356. However, case law and section 187 of the Evidence Act 1995 abolish
         the privilege against self incrimination and the imposition of a
         penalty for corporations.


    357. Existing paragraph 155(7)(b) would prohibit information obtained
         under section 155 from being used in proceedings under the Criminal
         Code, whereas under the common law and section 187 of the Evidence
         Act, the information can be used in such proceedings.  Amendments
         to subsection 155(7) align that provision with the common law and
         the Evidence Act, so that any evidentiary material obtained from a
         corporation under subsection 155(1) can be used against the
         corporation in any proceeding.  [Schedule 2, item 47, subsection
         155(7)]


Inspection, and copying, of documents contained in merger registers


    358. Current section 165 regulates the inspection and copying of
         documents that are required to be kept under other provisions of
         the TP Act.  Paragraph 165(1)(a) provides that a person may apply
         to inspect any document contained in a register that is kept
         pursuant to subsection 89(3) or 95(1).  However, section 165 does
         not include references to the registers that are required to be
         kept under sections 95AH and 95AZ (both of which were inserted by
         the Dawson Act), nor is the inspection of these registers otherwise
         provided for under the TP Act.


    359. Amendments will permit a person, on application in accordance with
         regulations and on payment of the prescribed fee to inspect
         documents in the merger authorisation register kept by the ACCC
         under section 95AH.  [Schedule 2, item 50, paragraph 165(1)(a)]


    360. Amendments will also permit a person, on application in accordance
         with regulations and on payment of the prescribed fee to inspect
         documents in the merger authorisation register kept by the
         Australian Competition Tribunal under section 95AZ, and to obtain a
         copy of such a document.  [Schedule 2, item 51, subsection 165(3A)]


Amendments to Part XIB - The telecommunications industry


    361. Current subsection 151AJ(3) provides that a carrier or carriage
         service provider engages in anticompetitive conduct if the carrier
         or carriage service provider engages in conduct that breaches
         particular provisions of Part IV of the TP Act, and the conduct
         relates to a telecommunications market.


                . The particular provisions of Part IV are section 45
                  (contracts, arrangements or understandings that restrict
                  dealings or affect competition), 45B (Covenants affecting
                  competition), 46 (Misuse of market power), 47 (Exclusive
                  dealing) and 48 (Resale price maintenance).


    362. Current subsection 151AJ(4) provides that, for the purposes of
         applying that provision to a carrier or carriage service provider
         that is not a corporation to determine whether a contravention of
         those provisions occurred, it is to be assumed that each reference
         to a corporation included a reference to a carrier or carriage
         service provider that is not a corporation.


    363. Amendments provide that it is assumed when determining the
         application of subsection 151AJ(3) that subsections 45(8) and
         47(12) had not been enacted.


                . Subsection 45(8) and 47(12) limit the operation of
                  sections 45 and 47 in certain circumstances involving
                  bodies corporate which are related to each other.


    364. This will ensure that a carrier, or a carriage service provider,
         that is not a corporation, cannot rely on subsections 45(8) and
         47(12).


    365. Amendments to section 151AJ(7) also provide that a carrier or
         carriage service provider does not engage in anticompetitive
         conduct if that conduct does not constitute a contravention of
         section 45 or 45B because of the operation of subsection 45(9) or
         45B(8).  This ensures that a carrier or carriage service provider
         does not act anticompetitively in certain circumstances where they
         have made an application to the ACCC for an authorisation with
         respect to certain conduct.  [Schedule 1, items 105, 107 and 109,
         subsection 151AJ(7)]


Application and transitional provisions


    366. Application provisions clarify that amendments to subsection 155(7)
         of the TP Act apply to notices under section 155 served after the
         commencement of the application provision.  [Schedule 2, item 53]


    367. Further, amendments to section 159 of the TP Act apply to
         requirements to give evidence and produce documents imposed after
         the commencement of the application provision.  [Schedule 2, item
         53]


Consequential amendments


           368. Subsection 79A(10) of the TP Act is repealed, as it refers
                to section 18A of the Crimes Act.  [Schedule 2, item 2,
                subsection 79A(10)]



Index

Schedule 1:

|Bill reference                              |Paragraph     |
|                                            |number        |
|Item 1, paragraph 338(ed)                   |5.14          |
|Item 2, subsection 5D(5A)                   |5.13          |
|Item 3, subsection 4(1), item 19, section   |1.21          |
|44ZZRD                                      |              |
|Item 4, subsection 5(1)                     |1.53          |
|Item 5, subsection 5(4)                     |1.54          |
|Items 6 to 15, section 6                    |1.63          |
|Item 14, subsection 6(2C), item 19, section |1.36, 1.51    |
|44ZZRB                                      |              |
|Item 17, subsection 6(5A)                   |2.56          |
|Item 18, subsection 6AA(2)                  |2.22          |
|Item 19, subsection 44ZZRD(8)               |1.29          |
|Item 19, subsection 44ZZRD(10)              |1.30          |
|Item 19, subsection 44ZZRD(5)               |1.31          |
|Item 19, subsection 44ZZRD(7)               |1.32, 1.46    |
|Item 19, subparagraph 44ZZRD(3)(a)(i)       |1.35          |
|Item 19, subparagraph 44ZZRD(3)(a)(ii)      |1.35          |
|Item 19, subparagraph 44ZZRD(3)(a)(iii)     |1.35          |
|Item 19, section 44ZZRA                     |1.15          |
|Item 19, paragraph 44ZZRD(3)(b)(i)          |1.37          |
|Item 19, paragraph 44ZZRD(3)(b)(ii)         |1.37          |
|Item 19, paragraphs 44ZZRD(3)(b)(iii) and   |1.37          |
|(iv)                                        |              |
|Item 19, subparagraph 44ZZRD(3)(c)(i)       |1.39          |
|Item 19, subparagraph 44ZZRD(3)(c)(ii)      |1.39          |
|Item 19, subparagraph 44ZZRD(3)(c)(iii)     |1.39          |
|Item 19, subparagraph 44ZZRD(3)(c)(iv)      |1.39          |
|Item 19, subparagraph 44ZZRD(3)(c)(v)       |1.39          |
|Item 19, section 44ZZRB                     |1.41, 2.51,   |
|                                            |2.52, 2.53    |
|Item 19, subsection 44ZZRD(9)               |1.43          |
|Item 19, subsection 44ZZRD(11)              |1.44          |
|Item 19, subsection 44ZZRD(5)               |1.45          |
|Item 19, sections 44ZZRB and 44ZZRC         |1.48          |
|Item 19, sections 44ZZRB to 44ZZRD          |1.15          |
|Item 19, section 44ZZRE                     |1.15, 1.19    |
|Item 19, sections 44ZZRA to 44ZZRP          |1.13          |
|Item 19, subsections 44ZZRD(2) and (3)      |1.22          |
|Item 19, subsections 44ZZRF(1), (4)         |2.27          |
|Item 19, subsections 44ZZRG(1), (5)         |2.32          |
|Item 19, subsection 44ZZRG(5)               |2.35          |
|Item 19, subsections 44ZZRF(3) and 44ZZRG(3)|2.50          |
|Item 19, subsections 44ZZRF(3) and 44ZZRG(3)|2.51, 2.53,   |
|                                            |2.57          |
|Item 19, section 44ZZRB                     |2.54          |
|Item 19, subparagraphs 44ZZRF(3)(b)(i) and  |2.54          |
|44ZZRG(3)(b)(i)                             |              |
|Item 19, subsection 44ZZRD(4)               |1.22          |
|Item 19, section 44ZZRI                     |2.64          |
|Item 19, section 44ZZRJ                     |3.16          |
|Item 19, section 44ZZRK                     |3.19          |
|Item 19, subsection 44ZZRD(2)               |4.13          |
|Item 19, subsection 44ZZRD(3)               |4.13          |
|Item 19, subsection 44ZZRL(1)               |4.15, 4.16    |
|Item 19, subsection 44ZZRL(2)               |4.17          |
|Item 19, subsection 44ZZRM(1)               |4.24, 4.25    |
|Item 19, subsection 44ZZRM(2)               |4.25          |
|Item 19, subsection 44ZZRN(1)               |4.26, 4.28    |
|Item 19, subsection 44ZZRN(2)               |4.28          |
|Item 19, subsection 44ZZRO(1)               |4.29          |
|Item 19, subsection 44ZZRO(1)               |4.31          |
|Item 19, subsection 44ZZRO(2)               |4.33          |
|Item 19, subsection 44ZZRO(3)               |4.34          |
|Item 19, subsection 44ZZRP(1)               |4.35          |
|Item 19, subsection 44ZZRP(2)               |4.37          |
|Item 19, sections 44ZZRQ to 44ZZRU          |4.41          |
|Item 19, subsections 44ZZRQ(1), 44ZZRR(1),  |4.42          |
|44ZZRS(1), 44ZZRT(1), 44ZZRU(2)             |              |
|Item 19, subsections 44ZZRQ(2), 44ZZRR(2),  |4.43          |
|44ZZRS(3), 44ZZRT(1) and (2) and  44ZZRU(1) |              |
|Item 19, section 44ZZRV                     |4.47          |
|Item 19, subsection 44ZZRV(1)               |4.49          |
|Item 19, subsection 44ZZRV(2)               |4.50          |
|Item 19, subsection 44ZZRD(1)               |1.23          |
|Items 19, 21 and 29                         |1.26          |
|Items 20, 21 and 29, subsection 45(3),      |1.64          |
|sections 45A and 76D                        |              |
|Items 20, 21 and 29, subsection 45(3),      |3.37          |
|sections 45A and 76D, items 127 and 128,    |              |
|subsections 45(3) and 45A of the Schedule   |              |
|Item 21                                     |4.46          |
|Item 22, subparagraph 76(1)(a)(i)           |3.14, 3.23    |
|Item 23, paragraph 76(1A)(aa)               |3.25          |
|Item 24, subsection 76(3)                   |3.26          |
|Items 26 to 28, section 76B                 |3.29          |
|Items 26 and 27, subsections 76B(1) and (2) |3.30          |
|Item 26, subsection 76B(1)                  |6.25          |
|Item 27, subsection 76B(4)                  |3.32          |
|Item 27, subsection 76B(5)                  |3.33, 6.10    |
|Item 27, subsections 76B(2) to (4)          |6.8           |
|Item 27, subsection 76B(3)                  |3.31          |
|Item 28, subsection 76B(6)                  |6.9           |
|Item 28, subsection 76B(6)                  |3.36          |
|Item 29                                     |4.39          |
|Item 30, subparagraphs 78(a)(i) and (ia)    |6.24          |
|Items 31 to 36, section 79                  |2.37          |
|Item 31, paragraph 79(1)(aa)                |2.40          |
|Items 32 to 36, subsections 79(1), (1AA),   |2.19          |
|(1AB), (5) and (7)                          |              |
|Item 33, paragraph 79(1)(e)                 |2.57          |
|Item 33, subparagraph 76(1)(a)(i)           |3.23          |
|Item 33, paragraph 79(1)(e)                 |2.39, 2.45    |
|Item 34, subsection 79(1AB)                 |2.41          |
|Item 37, subsection 79A(1)                  |2.66          |
|Item 38, subparagraph 79B(a)(ii)            |6.11          |
|Item 39, subsection 80(9)                   |6.13          |
|Item 40, section 83                         |6.23          |
|Item 41, subsection 84(1)                   |2.43          |
|Items 41 to 47, subsections 84(1) to (4)    |2.44          |
|Item 43, subsection 84(3)                   |2.43          |
|Item 48, subsection 84(4A)                  |2.43          |
|Items 49 to 51, subsections 86(3A), (3B) and|2.61          |
|(4)                                         |              |
|Item 51, paragraph 86(4)(ba)                |2.65          |
|Item 52, subsection 86C(1A)                 |6.15          |
|Item 53, subsection 86E(1A)                 |6.19          |
|Items 53 and 54, paragraph 86D(1)(b) and    |6.17          |
|subsection 86D(1A)                          |              |
|Items 56 and 57, subsections 86E(2) and (3) |6.26          |
|Item 58, subsection 86E(3A)                 |6.20          |
|Items 59 to 62, subsections 87(1), 87(1BA), |1.54          |
|paragraphs 87(1A)(b) and (ba)               |              |
|Item 59, subsection 87(1)                   |6.21          |
|Item 60, paragraph 87(1A)(b)                |6.27          |
|Items 61 and 62, paragraph 87(1A)(ba) and   |6.22          |
|subsection 87(1BA)                          |              |
|Item 62, subsection 88(1A)                  |4.19          |
|Item 63, paragraph 87D(aa)                  |6.28          |
|Item 65, subsection 88(10)                  |4.20          |
|Item 66, subsection 90(5A)                  |4.22          |
|Item 66, subsection 90(5B)                  |4.23          |
|Items 67, 68, 69, 86 and 87, subsections    |4.58          |
|91A(4), 91B(5), 91C(7), 101(1A), 101(2)     |              |
|Item 70, section 93AA                       |4.59          |
|Item 71, subsection 93AB(1A)                |4.11, 4.12    |
|Items 71 and 72, subsections 93AB(1A) and   |4.12          |
|(1)                                         |              |
|Item 71, paragraphs 93AB(1A)(a) to (d)      |4.13          |
|Item 71, subsections 93AB(10B) and (10C)    |4.14          |
|Item 72, subsection 93AB(1)                 |4.12          |
|Items 74, 75, 76 and 77, subsection 93AC(1) |4.60          |
|Items 78 and 81                             |4.62          |
|Items 79 and 80                             |4.61          |
|Item 82, section 93AEA                      |4.63          |
|Items 83 and 84, section 93AF               |4.64          |
|Item 85, subsection 93A(12)                 |4.65          |
|Items 88 to 102, sections 10.01A, paragraphs|1.65          |
|10.08(1)(aa) and (ab), subsections 10.08(1),|              |
|10.17(1) and (2), 10.17A(1) to (4), 10.19(1)|              |
|and (2), 10.24(1) and (2), 10.24A(1) to (3),|              |
|and paragraph 10.45(3)(a),  items 103 to    |              |
|111, section 151AJ and paragraph 151AY(1)(b)|              |
|Items 105, 107 and 109, subsection 151AJ(7) |8.26          |
|Items 112 and 113, subsections 157(1), (1A) |7.7           |
|and (1B)                                    |              |
|Item 114, subsection 157(2)                 |7.11          |
|Item 115, subsection 157(6)                 |7.12          |
|Item 116, subsection 157B(2)                |7.15          |
|Item 116, subsection 157B(3)                |7.16          |
|Item 116, subsection 157B(4)                |7.17          |
|Item 116, subsection 157B(5)                |7.17          |
|Item 116, subsection 157B7)                 |7.18          |
|Item 116, subsection 157B(7)                |7.19          |
|Item 116, subsection 157C(1)                |7.20          |
|Item 116, subsection 157C(2)                |7.20          |
|Item 116, subsection 157C(3)                |7.23          |
|Item 116, subsection 157C(4)                |7.24          |
|Item 116, subsection 157C(5)                |7.25          |
|Item 116, subsection 157C(6)                |7.26          |
|Item 116, subsection 157C(7)                |7.27          |
|Item 116, section 157D                      |7.28          |
|Item 116, subsection 157D(1)                |7.29          |
|Item 116, subsection 157D(2)                |7.30          |
|Item 116, subsections 157D(3) and (4)       |7.31          |
|Item 116, section 157B                      |7.14          |
|Item 117, subsection 163(2)                 |2.60          |
|Item 118, subsection 163(2)                 |2.67          |
|Item 121, subsection 163(6)                 |2.68          |
|Items 122 to 124, section 163A              |2.62          |
|Items 122 to 124, section 163A              |2.63          |
|Item 125, section 176                       |4.57          |
|Item 125, section 175                       |4.52          |
|Item 125, section 174                       |4.53          |
|Item 125, section 178                       |4.54          |
|Item 125, section 175                       |4.55          |
|Item 125, section 177                       |4.56          |
|Item 126, sections 44ZZRJ and 44ZZRK        |3.15          |
|Item 126, sections 44ZZRQ to 44ZZRW         |4.44          |
|Item 126, subsections 44ZZRF(4) and         |2.57          |
|44ZZRG(4)                                   |              |
|Item 126, subsections 44ZZRF(3) and         |2.57          |
|44ZZRG(3)                                   |              |
|Item 126, subsections 44ZZRJ and 44ZZRK)    |3.23          |
|Item 126, subsections 44ZZRF(4)and 44ZZRG(4)|2.55          |
|Item 126, sections 44ZZRV                   |4.51          |
|Item 126, subsections 44ZZRF(3) and         |2.56          |
|44ZZRG(3)                                   |              |
|Item 126, subsections 44ZZRF(4) and         |2.20, 2.21    |
|44ZZRG(4)                                   |              |
|Item 126, subsections 44ZZRF(4) and         |2.45          |
|44ZZRG(4)                                   |              |
|Subsection 44ZZRD(6)                        |1.28          |


Schedule 2:

|Bill reference                              |Paragraph     |
|                                            |number        |
|Item 1, subsection 79A(5)                   |8.4           |
|Item 2, subsection 79A(10)                  |8.29          |
|Item 3, section 83                          |8.6           |
|Item 6, subsection 87(1)                    |8.7           |
|Item 7, section 154A                        |5.16          |
|Items 8 to 10, section 154A                 |5.21          |
|Item 11, section 154A                       |5.42          |
|Item 12, section 154A                       |5.28          |
|Items 13 and 20, subsections 154F(1) and    |5.20          |
|154H(1)                                     |              |
|Items 14 to 16, 21, 24 and 26,              |5.39          |
|subsections 154F(2) and (3), 154H(3) and    |              |
|(4), and paragraph 154H(5)(a)               |              |
|Item 17, subsection 154G(1B)                |5.29          |
|Item 17, subsection 154G(1A)                |5.27          |
|Item 18, paragraph 154G(2)(a)               |5.25          |
|Item 19, section 154GA                      |5.23          |
|Items 22, 33 and 34, subsections 154H(3),   |5.40, 5.44    |
|154T(1) and (2)                             |              |
|Item 23, subsection 154H(3)                 |5.41          |
|Item 27, section 154K                       |5.45          |
|Item 28, paragraph 154L(ba)                 |5.30          |
|Item 29, subsection 154R(2)                 |5.32          |
|Item 30, subsection 154R(4)                 |5.34          |
|Item 32, section 154RA                      |5.24          |
|Items 35 and 36, subsections 154U(1) and (2)|5.35          |
|and paragraph 154V(1)(a)                    |              |
|Items 37 to 41, subsections 154V(1) and (2) |5.43          |
|Item 41, paragraph 154V(2)(d)               |5.36          |
|Item 42, subsection 154X(2)                 |5.37          |
|Items 43 to 46, subsection 155(7)           |8.13          |
|Items 44 to 47, subsection 155(7)           |8.11          |
|Item 47, subsection 155(7)                  |8.18          |
|Item 48, subsection 159(1)                  |8.14          |
|Item 49, subsection 159(2)                  |8.12          |
|Item 50, paragraph 165(1)(a)                |8.20          |
|Item 51, subsection 165(3A)                 |8.21          |
|Item 52                                     |5.38          |
|Item 53                                     |8.27, 8.28    |