The first major reform of regulations governing liner collusion in the Asia-Pacific is expected to be completed in the next nine months after a bill to amend New Zealand’s competition rules took another major step toward becoming law.
The Commerce (Cartels and Other Matters) Amendment Bill, if passed in its current form, will introduce criminal sanctions against cartel behavior including rate-making actions by ship lines.
Asian shipper groups hope the proposed changes in New Zealand could encourage other governments to remove antitrust immunity from shipping services and edge closer to more stringent EU and U.S. container shipping regimes.
The bill has passed its first reading in Parliament and has been subjected to detailed analysis by the Commerce Select Committee. It must now complete two more readings and be debated in the House before becoming law by Royal assent.
Greg Steed, chairman of the New Zealand Shippers Council, told The Journal of Commerce that the three “House” stages could be completed in one sitting, although this is unlikely. “We don’t know the timing exactly as it depends on the time slots and priority that the government decides to afford the bill in the House,” he said. “Best estimate is first quarter 2014.”
Liner organizations claim they should remain exempt from the Commerce Act so they can continue to offer reliable services, and deny that price-fixing or supply restriction conferences are currently in place in New Zealand.
Steed said the shippers council did not want the bill to prevent lines and shippers from mutually benefitting from vessel-sharing arrangements and slot sharing and other types of operational agreements.
However, he said NZSC did support bringing rate-making agreements under the governance of the Commerce Act. “New Zealand needs the appropriate legislation in place to enforce penalties, should cartel behavior or similar arise,” he added. “The intention of the bill is to outlaw price-fixing but allow operational agreements such as VSAs.”
Commerce Minister Craig Foss claims the bill will help New Zealand’s businesses more easily access overseas markets. “This will be a welcome change for New Zealand’s export industries,” he added.
“At the same time, the bill takes a strong stance against hard-core cartel conduct like price fixing and bid rigging and introduces criminal sanctions for egregious behavior.”
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