Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
COMPETITION AND CONSUMER AMENDMENT (DEREGULATORY AND
OTHER MEASURES) BILL 2015
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Small Business,
the Hon Bruce Billson MP)
Table of contents
Glossary .................................................................................................. 1
General outline and financial impact ....................................................... 3
Chapter 1 Amendments to the Competition and
Consumer Act ................................................................ 5
Index ..................................................................................................... 17
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
ACCC
Australian Competition and Consumer
ACL Commission
Bill
Australian Consumer Law
CC Act
FSANZ Act Competition and Consumer Amendment
(Deregulatory and Other Measures) Bill 2015
TP Act
Competition and Consumer Act 2010 (Cth)
Food Standards Australia New Zealand
Act 1991 (Cth)
Trade Practices Act 1974 (Cth)
1
General outline and financial impact
Amendments to the Competition and Consumer Act
The Competition and Consumer Amendment (Deregulatory and Other
Measures) Bill 2015 (Bill) implements a number of measures to
streamline the administration of the Competition and Consumer Act 2010
(CC Act) in order to reduce compliance burdens for businesses,
individuals and within Government, while preserving the protections
available under the CC Act. The Bill has a particular focus on the
requirements of the Australian Consumer Law (ACL), which is set out in
Schedule 2 of the CC Act.
The Bill:
· removes the requirement for businesses to report serious
injuries, illnesses or deaths associated with food products
under the ACL's product safety law;
· permits private parties to take action for extra-territorial
breaches of the CC Act without seeking Ministerial consent
under section 5 of the CC Act; and
· includes a number of other measures to amend the CC Act
(in particular the ACL) in order to improve its administration
and correct minor drafting errors.
The measures outlined in the Bill have been developed in consultation
with a range of stakeholders, including state and territory consumer
agencies, food regulators and industry, where required.
Measures relating to the ACL were agreed by a majority of states and
territories as required under the Intergovernmental Agreement for the
Australian Consumer Law signed on 2 July 2009 by the Council of
Australian Governments.
Date of effect: This Bill commences on the day after it receives
Royal Assent.
Proposal announced: Consumer Affairs Ministers' agreement to consider
ways to streamline the ACL was announced in a joint communique from
the 13 June 2014 meeting of the Legislative and Governance Forum on
Consumer Affairs.
3
Competition and Consumer Amendment (Deregulatory and Other Measures) Bill 2015
Financial impact: Nil.
Human rights implications: This Bill is compatible with the human rights
and freedoms recognised or declared in Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011. See Statement of Compatibility with
Human Rights -- Chapter 1, paragraphs 1.48 to 1.54.
Compliance cost impact: Treasury has estimated the regulatory saving to
be $0.5 million per annum for businesses.
4
Chapter 1
Amendments to the Competition and
Consumer Act
Outline of chapter
1.1 This chapter outlines the measures contained in the Competition
and Consumer Amendment (Deregulatory and Other Measures) Bill 2015
(Bill) to amend the Competition and Consumer Act 2010 (CC Act).
1.2 All legislative references in this chapter are to the CC Act unless
otherwise specified.
Context of amendments
1.3 Following its meeting on 13 June 2014, the Legislative and
Governance Forum on Consumer Affairs issued a joint communique
announcing its intention to pursue measures to reduce compliance
burdens, as part of the strong red tape reduction agendas across
Commonwealth, state and territory governments, whilst preserving the
important protections under the CC Act.
1.4 The Bill implements a number of measures to give effect to this
decision, with a particular focus on the requirements of the ACL, which is
set out in Schedule 2 of the CC Act.
Summary of new law
1.5 This Bill amends the CC Act and the ACL to:
· remove the requirement to report food-related product safety
incidents to the Australian Competition and Consumer
Commission (ACCC) under the ACL (Part 1);
· remove the requirement for private litigants to seek
Ministerial consent to bring action for a breach of the CC Act
that takes place overseas (Part 2);
5
Competition and Consumer Amendment (Deregulatory and Other Measures) Bill 2015
· extend the jurisdiction of state and territory courts to hear
actions under the CC Act for pyramid selling and unsafe
goods liability (Part 3);
· remove the redundant requirement for the ACCC to keep a
register of certain records when they hold conferences for
product safety bans (Part 4);
· permit the disclosure of certain information by the ACCC to
specific agencies where it is reasonably necessary to protect
public safety (Part 5);
· rectify a drafting error so that the offence of conspiracy is
removed from the CC Act, ensuring there is no overlap with
the Criminal Code Act 1995 (Part 6);
· make clear the requirements in the ACL regarding the
cooling off period for unsolicited consumer agreements
(Part 7);
· rectify a drafting error to extend to any person, as a law of
the Commonwealth, the application of the ACL regarding
conduct that is liable to mislead the public as to the nature,
manufacturing process, characteristics, suitability for purpose
or quantity of goods (Part 8); and
· permit the ACCC to seek a court order directing a person to
comply with a notice given under section 155 of the CC Act
(Part 9).
Comparison of key features of new law and current law
New law Current law
The ACL requires businesses to
A supplier does not need to notify the report food-related product safety
ACCC that a food product that they instances to the ACCC.
supplied was involved in a death,
serious injury or illness of any The CC Act requires Ministerial
person, unless it related to the consent to bring action for a breach of
packaging for the food. the CC Act that takes place overseas.
Litigants can bring an action for a
breach of the CC Act that takes place
overseas without seeking Ministerial
consent.
6
Amendments to the Competition and Consumer Act
New law Current law
State and territory courts can hear The CC Act does not extend
actions under the ACL for pyramid jurisdiction of state and territory
selling and unsafe goods liability. courts to hear actions for pyramid
selling and unsafe goods liability.
The ACCC will keep records of While paragraphs 95(1)(h) and (j)
proceedings at certain conferences require the ACCC to maintain certain
and recommendations under the records, these relate to sections of the
product safety requirements of the CC Act that have been repealed and
ACL in accordance with Div 3 of superseded by Div 3 of Part XI of the
Part XI of the CC Act. CC Act.
The ACCC can disclose product Section 132A of the ACL permits the
safety notices it receives from ACCC to provide such information to
suppliers that a consumer good has any other person only in certain
been involved in the death, serious circumstances (such as by the
injury or illness of a person, with Commonwealth Minister in the public
specific agencies where it is interest).
reasonably necessary to protect public
safety and such disclosure would be
otherwise consistent with the law.
The Criminal Code Act 1995 will no Both the CC Act and subsection 11.5
longer apply to the offence of of the Criminal Code Act 1995 would
conspiracy where it overlaps with the apply to a relevant offence against the
CC Act. cartel offence provisions in the
CC Act.
Traders will not be permitted to The current drafting of
supply unsolicited consumer goods or subsection 86(1) of the ACL may
services or accept or require payment inadvertently raise confusion
under an unsolicited consumer regarding whether traders can supply
agreement before the cooling-off unsolicited goods or services and
period commences. accept or require payment after an
unsolicited consumer agreement is
entered into but before the ten
business days commence for the
cooling-off period.
Section 33 of the ACL will apply to Section 131 of the CC Act provides
any person as a law of the that section 33 of the ACL applies to
Commonwealth. the conduct of corporations in trade
or commerce, as a law of the
Commonwealth.
The ACCC can seek a court order Section 155 of the CC Act does not
directing a person to comply with a permit the ACCC to seek a court
notice given under section 155 of the order to compel a person to comply
CC Act. with a notice given under that section.
7
Competition and Consumer Amendment (Deregulatory and Other Measures) Bill 2015
Detailed explanation of new law
Part 1 -- Removal of reporting requirement
1.6 Under subsection 131(1) of the ACL, all participants in the
supply chain of a consumer good associated with a death, serious injury or
illness must report the incident to the ACCC within two days of becoming
aware of such an incident.
1.7 The ACCC and Australian food safety regulators consider that
the reporting requirement in subsection 131(1) of the ACL does not
support the food regulation system, is duplicative and places a
disproportionate cost on industry.
1.8 This item removes consumer goods which are foods from the
requirement in subsection 131(1) of the CC Act.
1.9 However, a death, serious injury or illness associated with a
food product would also still need to be reported to the ACCC if it was
due to a use or reasonably foreseeable misuse of the packaging of the food
rather than the food itself. In this context, packaging has its ordinary
meaning and does not include the accuracy or content of any labelling on
the packaging. [Schedule 1, item 2, subsection 131(2) of Chapter 3 of Schedule 2]
Meaning of food
1.10 Food is defined for the purposes of this amendment with
reference to the definition contained in the Food Standards Australia New
Zealand Act 1991 (Cth) (FSANZ Act), to ensure certainty and consistency
regarding the scope of the amendment. This is also consistent with the aim
of this proposal to remove the application of the ACL only insofar as it
duplicates the food safety regulatory framework, which is underpinned by
the FSANZ Act.
1.11 Section 5 of the FSANZ Act defines food as:
· any substance or thing of a kind used, capable of being used,
or represented as being for use, for human consumption;
· an ingredient or additive in a food;
· any substance used to prepare food;
· chewing gum, an ingredient or additive in chewing gum, or a
substance used to prepare chewing gum; and
· any substance or thing declared to be a food under the
FSANZ Act.
[Schedule 1, item 1, subsection 2(1) of Chapter 1 of Schedule 2]
8
Amendments to the Competition and Consumer Act
Application provision
1.12 The amendments made by this item will apply in relation to food
products supplied on or after the day the Bill commences. [Schedule 1,
item 22, section 291, Chapter 6 of Schedule 2]
Part 2 -- Removal of requirements for Ministerial consents
1.13 Section 5 extends certain provisions of the CC Act to conduct
engaged in outside of Australia by businesses incorporated or carrying on
business in Australia and by Australian citizens and residents.
1.14 This Part repeals subsections 5(3), (4) and (5) of the CC Act,
which require that a person may not rely at a hearing or make an
application to a court, with respect to conduct to which the CC Act applies
by virtue of section 5, except with the consent in writing of the Minister.
[Schedule 1, item 3, subsections 5(3), (4) and (5) of Chapter 1 of Schedule 2]
Application provisions
1.15 The repeal of subsection 5(3) of the CC Act will apply to
hearings commencing on or after the day the Bill commences, while the
repeal of subsection 5(4) of the CC Act will apply to applications made on
or after the day the Bill commences.
1.16 This means that Ministerial consent will not be required for
private actions to which the CC Act (or the former TP Act) applies under
section 5 following the day after the Bill receives the Royal Assent.
[Schedule 1, item 4]
Part 3 -- Jurisdiction of state and territory courts
1.17 This Part amends Division 8 of Part XI of the CC Act to correct
an error in the drafting of the CC Act regarding the jurisdiction of state
and territory courts.
1.18 Specifically, it extends jurisdiction to state and territory courts to
hear cases relating to pyramid selling (Division 3 of Part 3-1 of the ACL)
and manufacturer's liability for goods with safety defects (Part 3-5 of the
ACL).
1.19 States and territories were consulted regarding this amendment.
1.20 Subsection 138B(3) of the CC Act also provides that the states
and territories, where they prefer to do so, can limit jurisdiction for their
courts for cases relating to pyramid selling and manufacturer's liability for
goods with safety defects.
9
Competition and Consumer Amendment (Deregulatory and Other Measures) Bill 2015
1.21 This Part secures greater access to justice for consumers by
allowing them to seek redress in state and territory courts and tribunals for
any breach of the ACL, rather than needing to seek recourse in federal
courts. [Schedule 1, items 5 to 9, subsections 138B(2), 138C(1), 138C(3) and
paragraphs 138D(1)(b) and 138E(1)(b) of Division 8 of Part XI]
Application provision
1.22 The amendments made by this Part apply to matters arising on
or after the day the Bill commences. [Schedule 1, item 10]
Part 4 -- Register of notifications in respect of restrictive trade practices
1.23 This Part amends subsection 95(1) of the CC Act to remove the
requirement for the ACCC to keep a Register containing records of
proceedings at conferences held under section 65J or 65M of the former
TP Act, and recommendations made to the Minister responsible for the
TP Act by the ACCC under sections 65K or 65N of the TP Act.
1.24 The requirements of sections 65J, K, M and N were superseded
by Division 3 of Part XI of the CC Act. Sections 132D and 132G of the
CC Act now secure the objective of subsections 95(1)(h) and (j) in
ensuring transparency and accountability for product safety decisions.
1.25 This amendment will not result in the removal of any
information on a Register of Notifications previously required to be kept
by the ACCC under subsection 95(1) of the CC Act. Such information
will continue to be kept consistent with the requirements of the Archives
Act 1983 (Cth).
1.26 The information previously required to be held in accordance
with subsections 95(1)(h) and (j) will be kept consistent with the
requirements of Division 3 of Part XI of the CC Act in future. [Schedule 1,
items 11 to 12, paragraphs 95(1)(gb), 95(1)(h) and (j) of Division 2 of Part VII]
Part 5 -- Confidentiality of notices
1.27 Under section 131 of the ACL, suppliers of consumer goods of a
particular kind have an obligation to report to the Commonwealth
Minister, within two working days of becoming aware, that the goods
have been associated with the death, serious injury or illness of any
person.
10
Amendments to the Competition and Consumer Act
1.28 Section 132A of the ACL provides for the confidentiality of
notices, unless the person who gave the notice has consented to the ACCC
sharing the information, or in other specific circumstances, such as
disclosure:
· by the Commonwealth Minister to another Consumer Affairs
Minister, the regulator or an associate regulator (for example,
the agency that has responsibility for administering the ACL
as a law of the state or territory);
· by the Commonwealth Minister where he or she considers it
is in the public interest;
· among the ACCC and associate regulators;
· required or authorised by or under law; or
· reasonably necessary for the enforcement of the criminal law
or a law imposing a pecuniary penalty.
1.29 This Part improves the ACCC's ability to share notices it
receives under section 132A of the ACL with specified agencies where it
is reasonably necessary to protect public safety. To the extent that a
particular notice contains personal or confidential information, the
disclosure of such notices to other agencies or bodies will still be required
to comply with the law, including the Privacy Act 1988 (Cth).
1.30 Agencies specified in this Part (and the reasons for their
inclusion) are set out below:
Agency Reason for their inclusion
Any agency within
the meaning of the The ACCC works closely with a range of
Freedom of Commonwealth agencies to ensure the safety of
Information products in Australia for example, the Australian
Act 1982 (Cth) Customs and Border Protection Service, Food
Standards Australia New Zealand, the Department of
Commonwealth Infrastructure and Regional Development and the
Director of Public Therapeutic Goods Administration. It is essential that
Prosecutions the ACCC can provide copies of notices it receives to
relevant Commonwealth agencies where it is
reasonably necessary to protect public safety.
The Director of Public Prosecutions is responsible for
prosecuting breaches of the criminal offences
contained in the ACL, including the product safety
requirements of the ACL.
11
Competition and Consumer Amendment (Deregulatory and Other Measures) Bill 2015
Agency Reason for their inclusion
A state/territory The ACCC works closely with a range of state and
government body territory bodies to ensure the safety of products in
(within the meaning Australia e.g. state and territory consumer agencies,
of section 155AAA food regulators and electricity regulators. It is essential
of the CC Act) that the ACCC can provide copies of notices it receives
to relevant state and territory bodies where it is
A foreign reasonably necessary to protect public safety.
government body
(within the meaning The ACCC works closely with its counterpart
of section 155AAA regulators in other jurisdictions to ensure the safety of
of the CC Act) products in Australia, given the global nature of
product markets. It is essential that the ACCC can
provide copies of notices it receives to its counterparts
overseas where it is reasonably necessary to protect
public safety. As these notices relate to product safety
and are provided by industry, disclosure to a foreign
government agency is not expected to raise national
security concerns.
1.31 Before disclosing this information, the ACCC must satisfy itself
that the disclosure is reasonably necessary to protect public safety.
[Schedule 1, item 13, section 132A of Chapter 3 of Schedule 2]
Application provisions
1.32 The amendments made by this Part in relation to section 132A
only apply to disclosures relating to notices made on or after the day the
Bill commences. [Schedule 1, item 22, section 292 of Chapter 6 of Schedule 2]
Part 6 -- Cartel offences
1.33 Section 79 of the CC Act provides for ancillary offences in
relation to criminal cartels and seeks to remove the application of the
equivalent requirements of the Criminal Code, which is set out in a
Schedule to the Criminal Code Act 1995 (Cth), where the CC Act applies.
1.34 The section, however, mistakenly omits to remove the parallel
application of the offence of conspiracy found in subsection 11.5 of the
Criminal Code. This Part removes this overlap between the CC Act and
the Criminal Code. [Schedule 1, item 14, subsection 79(5) of Part VI]
Application provision
1.35 The amendments made by this Part apply in relation to
contraventions arising on or after the day the Bill commences. [Schedule 1,
item 15]
12
Amendments to the Competition and Consumer Act
Part 7 -- Prohibition on supplies
1.36 This Part amends subsection 86(1) of the ACL to clarify the
operation of the cooling-off period for unsolicited consumer agreements.
1.37 Subsection 86(1) provides that a supplier under an unsolicited
consumer agreement must not supply unsolicited goods or services, or
accept or require payment under an unsolicited consumer agreement, for
ten business days commencing on the first business day after such an
agreement was made in person, or if it was made by telephone,
commencing at the start of the business day after the consumer is given a
copy of the agreement.
1.38 The current drafting of this provision may inadvertently permit
traders to supply unsolicited goods or services and accept or require
payment after an unsolicited consumer agreement has been entered into,
but before the ten business days commence (that is, on the day the
contract is agreed).
1.39 This amendment clarifies the responsibilities for traders and the
rights of consumers regarding the supply and acceptance of payment for
unsolicited goods or services and the commencement of the cooling-off
period. In particular, it now makes it clear that traders are not permitted to
supply unsolicited goods or services and accept or require payment under
an unsolicited consumer agreement before the cooling-off period
commences. [Schedule 1, items 16 and 17, subsections 86(1) and (2) of Chapter 3 of
Schedule 2]
Application provision
1.40 The amendments made by this Part apply in relation to
unsolicited consumer agreements made on or after the day the Bill
commences. [Schedule 1, item 22, section 293 of Chapter 6 of Schedule 2]
Part 8 -- Misleading conduct as to the nature etc. of goods
1.41 This Part corrects a drafting error by amending
subsection 131(2) of the CC Act to extend the application of section 33 of
the ACL, as a law of the Commonwealth, to the conduct of any person.
1.42 The equivalent section under the TP Act (section 55) had
applied to the conduct of any person and section 33 of the CC Act
currently applies to the conduct of any person as a law of a state or
territory.
13
Competition and Consumer Amendment (Deregulatory and Other Measures) Bill 2015
1.43 Section 33 of the ACL implements Australia's obligations under
the Paris Convention for the Protection of Industrial Property. [Schedule 1,
item 18, subsection 131(2) of Division 2 of Part XI]
Application provision
1.44 The amendment made by this Part applies to conduct occurring
on or after the day the Bill commences. [Schedule 1, item 19]
Part 9 -- Power to obtain information, documents and evidence
1.45 Section 155 of the CC Act sets out the ACCC's powers to
obtain information, documents and evidence. Currently, the ACCC may
seek a fine of up to 20 penalty units or a term of imprisonment of up to
12 months for a failure to comply with such a notice.
1.46 This Part improves the efficacy of section 155 of the CC Act by
permitting the ACCC to seek a court order directing a person to comply
with a notice given under section 155. [Schedule 1, item 20, subsection 155(8) of
Part XII]
Application provision
1.47 The amendment made by this Part to section 155 applies in
relation to a refusal or failure to comply with a notice given on or after the
day the Bill commences. [Schedule 1, item 21]
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Competition and Consumer Amendment (Deregulatory and Other
Measures) Bill 2015
1.48 This Bill is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3
of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
1.49 The Bill implements a number of measures to streamline the
administration of the Competition and Consumer Act 2010 (CC Act) to
14
Amendments to the Competition and Consumer Act
reduce compliance burdens for business, individuals and within
Government, while preserving the protections available under the CC Act.
The Bill has a particular focus on the requirements of the ACL, which is
set out in Schedule 2 of the CC Act.
Human rights implications
1.50 This Bill does not engage any of the applicable rights or
freedoms.
1.51 On its face, Part 1 of the Bill appears to engage the right to
health under Article 12 of the International Covenant on Economic,
Social and Cultural Rights, as it removes an existing public health
reporting obligation. However, the ACCC and Australian food safety
regulators consider that the reporting requirement in subsection 131(1) of
the ACL does not support the food regulation system, is duplicative and
places a disproportionate cost on industry. On this basis, it is not
considered that this Part creates a limit on the right to health.
1.52 Part 5 of the Bill improves the ACCC's ability to share notices it
receives under section 132A of the ACL with specified agencies where it
is reasonably necessary to protect public safety. To the extent that a
particular notice contains personal information, its disclosure may appear
to engage the right to privacy under Article 17 of the International
Covenant on Civil and Political Rights. However, to the extent that a
particular notice contains personal or confidential information, the
disclosure of such notices to other agencies or bodies following the
implementation of Part 5 of the Bill will still be required to comply with
the law, including the Privacy Act 1988 (Cth).
1.53 Part 8 of the Bill extends the application of section 33 of the
ACL, as a law of the Commonwealth, to the conduct of any person. While
this would mean that natural persons would be subject to a civil penalty
for a breach of this requirement under the ACL as a law of the
Commonwealth, section 33 of the CC Act currently already applies to the
conduct of any person as a law of a state or territory. As a result, a natural
person who breached section 33 of the CC Act would already be subject
to such a penalty.
Conclusion
1.54 This Bill is compatible with human rights as it does not raise any
human rights issues.
15
Index
Schedule 1: Amendments
Bill reference Paragraph number
1.11
Item 1, subsection 2(1) of Chapter 1 of Schedule 2 1.9
Item 2, subsection 131(2) of Chapter 3 of Schedule 2 1.14
Item 3, subsections 5(3), (4) and (5) of Chapter 1 of Schedule 2 1.16
Item 4 1.21
Items 5 to 9, subsections 138B(2), 138C(1), 138C(3) and
paragraphs 138D(1)(b) and 138E(1)(b) of Division 8 of Part XI 1.22
Item 10 1.26
Items 11 to 12, paragraphs 95(1)(gb), 95(1)(h) and (j) of Division 2
of Part VII 1.31
Item 13, section 132A of Chapter 3 of Schedule 2 1.34
Item 14, subsection 79(5) of Part VI 1.35
Item 15 1.39
Items 16 and 17, subsections 86(1) and (2) of Chapter 3 of
Schedule 2 1.43
Item 18, subsection 131(2) of Division 2 of Part XI 1.44
Item 19 1.46
Item 20, subsection 155(8) of Part XII 1.47
Item 21 1.12
Item 22, section 291, Chapter 6 of Schedule 2 1.32
Item 22, section 292 of Chapter 6 of Schedule 2 1.40
Item 22, section 293 of Chapter 6 of Schedule 2
17