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Commission under fire

THE Australian Institute of Company Directors has recommended a complete overhaul of the Australian Competition and Consumer Com-mission (ACCC) along corporate lines, including the development of a protocol for media and public comment, and the disqualification of company officers found guilty of serious anti-competitive conduct.

The recommendation was made in the institute’s submission to the Dawson Inquiry, which is reviewing the operations and administration of the Trade Practices Act

The review has been inundated with submissions from business groups, which are critical not only of the work of the ACCC, but also of the wording of the 25-year-old Trade Practices Act. Business groups such as the Australian Chamber of Commerce and the Business Council believe the review is well overdue.

However, the industry groups are conscious of what effect changes to the act would have in shifting the balance in the business environment.

The Australian Chamber of Commerce said it had difficulty formulating a submission that was in the interests of all its members, from both small and big businesses.

The act is designed to favour smaller businesses by restricting what the Government views as unfavourable anti-competitive behaviour by big businesses.

AICD CEO John Hall hopes a restructure will enhance the transparency and accountability of the government body.

“A board overseeing the ACCC and constituted by an independent chairman, a chief executive commissioner, executive commissioners and a majority of non-executive commissioners would bring far better transparency and accountability than the current process of tabling the ACCC’s annual report in parliament and occasional appearances before parliamentary committees,” Mr Hall said.

He said excessive use of the media could often harm businesses and give the perception of guilt before due process had occurred.

However, ACCC chairman Allan Fels defended the role the media must play in conveying information in the public interest.

The AICD rejected ACCC’s proposal for imprisonment for breaches of competition provisions of the act.

“The existing penalties are substantial and to our knowledge have neither been imposed to their maximum level nor have the courts suggested that they are inadequate,” Mr Hall said.

“If further penalties are required, we suggest that guilty directors or executives be disqualified from holding positions as directors or senior managers.”

Business Council of Australia president John Schubert said the review was important for Australia.

“It’s almost a decade since the Trade Practices Act underwent its last comprehensive review. In that time, ongoing trade liberalisation, technological advances and globalisation have fundamentally changed markets and competition,” he said.

“It is therefore timely the act and its administration are reviewed to ensure they act in Australia’s best interests, promoting lower prices, greater convenience, more choice and a strong, competitive business community.”

Dr Schubert called for the introduction of a charter of competition regulation and a board of competition and inspector general of competition.

“In a global environment, Australia’s future depends on achieving world-class performance and competitiveness,” he said.

“We should not be distracted. This is all about the big issues that really matter for the future of competition policy in Australia.”

In its executive summary of the submission, the Australian Chamber of Commerce and Industry said it believed the Trade Practices Act was working well, however the introduction of the unconscionable conduct provisions into the act had caused tensions between its members.

“There are obvious tensions between small business and large,” the summary says.

“But when the issues were considered by the general council of the Australian Chamber of Commerce and Industry, the conclusion reached was that the concerns with increased regulation of business through granting additional legislative authority to the ACCC were greater than any apparent advantage that might be gained by adding to the ACCC’s powers,” the summary says.

“Moreover, it was the agreed position of the ACCI general council that there needed to be additional restraints placed on the actions of the ACCC.”

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