Commonwealth Numbered Regulations - Explanatory Statements

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COMPETITION AND CONSUMER AMENDMENT REGULATION 2013 (NO. 4) (SLI NO 277 OF 2013)

EXPLANATORY STATEMENT

Select Legislative Instrument No. 277, 2013

Issued by authority of the Minister for Small Business

Competition and Consumer Act 2010

Competition and Consumer Amendment Regulation 2013 (No. 4)

Section 172 of the Competition and Consumer Act 2010 (the Act) relevantly provides that the 'Governor-General may make regulations ... prescribing all matters that are required or permitted by this Act ... to be prescribed or are necessary or convenient to be prescribed for carrying out or giving effect to this Act...'. Section 44ZZR(2) provides that the regulations may make provision about a range of matters, including procedure and evidence, in relation to the functions of the Australian Competition Tribunal (the Tribunal) under a State/Territory energy law or a designated Commonwealth energy law.

The National Energy Law (NEL) and National Gas Law (NGL) are cooperative legislative schemes in the energy sector. The NEL is set out in a schedule to the National Electricity (South Australia) Act 1996 (SA) and the NGL is set out in a schedule to the National Gas (South Australia) Act 2008 (SA). The NEL and NGL are applied as law by legislation (known as 'application Acts') in force in those States and Territories which participate in each scheme, and as Commonwealth law by the Australian Energy Market Act 2004. When applied in this way as a law of a State or Territory, the NEL and NGL constitute a 'State or Territory energy law' for the purposes of the Act and, when applied as a law of the Commonwealth, constitute a 'designated Commonwealth energy law'.

The limited merits review frameworks in the NEL and NGL allow parties affected by certain decisions made under the national Laws, including those of the Australian Energy Regulator (AER), recourse to have the merits of those decisions revisited by the Tribunal.

The Tribunal is a Commonwealth body, established under Part III of the Act and it has a range of functions under various Parts of the Act. The Tribunal may also perform or exercise functions, powers and duties conferred or imposed on it under a 'State/Territory energy law' or a 'designated Commonwealth energy law'.

The limited merits review regimes in the NEL and NGL are undergoing substantial reform, consistent with the intention of the Council of Australian Governments and the policy developed by the Standing Council on Energy and Resources (SCER). The purpose of the Competition and Consumer Amendment Regulation 2013 (No. 4) (the Regulation) is to support this reform of the national Laws by providing for minor amendments to the Competition and Consumer Regulations 2010 (CC Regulations) to reflect SCER's intention that the Tribunal will undertake a less formal and more investigative approach to energy merits review matters and act as speedily as a proper consideration of the matter allows, having regard to the scope of the issues being reviewed.

In particular, the Regulation would amend regulation 7B to apply certain procedural provisions of the CC Regulations, which already apply to the Tribunal when exercising its jurisdiction in other competition matters, to the Tribunal when conducting energy merits review proceedings. Specifically, regulation 7B, as amended by the Regulation, would apply to energy merits review proceedings paragraphs 22(1)(b), 28M(1)(a) and 28M(1)(b) of the CC Regulations which provide, respectively, that the Tribunal:

-- may, in any proceedings before the Tribunal, give directions with respect to the representation in any such proceedings of persons having a common interest in the proceedings;

-- is not bound by technicalities, legal forms or rules of evidence; and

-- must act as speedily as a proper consideration of the dispute allows, having regard to the need to inquire into and investigate, carefully and quickly, the dispute and all matters affecting the merits, and fair settlement of the dispute.

The amendments to the CC Regulations are minor and are consistent with relevant provisions of the Act which already apply to the Tribunal when it performs functions under a State/Territory energy law or a designated Commonwealth energy law, by virtue of section 44ZZR(1). In particular, section 103(1) of the Act already provides that in proceedings before the Tribunal: the procedure of the Tribunal is, subject to the Act and the CC Regulations, within the discretion of the Tribunal; the proceedings shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of the Act and a proper consideration of the matters before the Tribunal permit; and the Tribunal is not bound by rules of evidence.

This Regulation has been publicly consulted on including with: the States and Territories that participate in the NEL and NGL cooperative schemes through SCER; and with electricity and gas industry participants and relevant consumer groups. The Tribunal and the AER, being the Commonwealth bodies which operate under the national cooperative schemes, and relevant Commonwealth Departments have also been consulted.

The Regulation commences on the day after it is registered.

Details of the Regulation are set out at Attachment A.

The Act specifies no conditions that need to be satisfied before the power to make the Regulation may be exercised.

The Regulation would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Statement of Compatibility with Human Rights is set out at Attachment B.

ATTACHMENT A

Details of the Competition and Consumer Amendment Regulation 2013 (No. 4)

Section 1 - Name of Regulation

This clause provides that the title of the Regulation is the Competition and Consumer Amendment Regulation 2013 (No. 4).

Section 2 - Commencement

This clause provides that the Regulation commences on the day after it is registered.

Section 3 - Authority

This clause provides that the Regulation is made under the authority of the Competition and Consumer Act 2010.

Section 4 - Schedule(s)

This clause provides that each instrument that is specified in a Schedule to the Regulation is amended or repealed as set out in the applicable items in the Schedule concerned and that any item in a Schedule to the Regulation has effect according to its terms.

The Regulation has one Schedule - Schedule 1. Schedule 1 specifies the Competition and Consumer Regulations 2010.

Schedule 1 - Amendments

Competition and Consumer Regulations 2010

Item 1 - Regulation 7B

This item allows for the insertion of a new subregulation 7B(2) by inserting "(1)" before the words "For subsection" in regulation 7B.

Item 2 - Paragraph 7B(b)

Item 2 repeals existing paragraph 7B(b) and substitutes in its place a reference to "regulation 22". This has the effect of ensuring that the Tribunal has, in merits review proceedings under a State/Territory energy law or a designated Commonwealth energy law, the power to give directions as to certain matters as provided by regulation 22.

Prior to this amendment, only paragraphs 22(1)(a) and (aa), and subreg 22(2) - but not paragraph 22(1)(b) - applied to a merits review conducted by the Tribunal. Paragraph 22(1)(b) empowers the Tribunal to give directions with respect to the representation in any proceedings before the Tribunal of persons having a common interest in the proceedings. This paragraph will now apply to energy merits review matters and will assist the Tribunal to create procedural efficiencies. If paragraph 22(1)(b) were to be applied to a merits review conducted by the Tribunal, the Tribunal could potentially deal with only one legal counsel or create another efficiency having regard to the mutuality of interest of certain parties to proceedings. This may assist the Tribunal to act speedily whilst inquiring into and investigating carefully the matters before it.

Item 3 - Paragraph 7B(c)

This item provides for the repeal of existing paragraph 7B(c) which applied subregulation 22(2) to the Tribunal in merits review proceedings under a State/Territory energy law or a designated Commonwealth energy law. Existing paragraph 7B(c) is no longer necessary given the amendment provided for in item 2 of Schedule 1 to this Regulation which will apply regulation 22, in its entirety, to the Tribunal in such proceedings.

Item 4 - Paragraph 7B(f)

Item 4 repeals existing paragraph 7B(f) and substitutes in its place a reference to "regulation 28M". This has the effect of ensuring that regulation 28M will apply, in its entirety, to the Tribunal in merits review proceedings under a State/Territory energy law or a designated Commonwealth energy law. Regulation 28M provides for the procedure of the Tribunal.

Prior to this amendment, paragraph 28M(1)(c) and subregulations 28M(2), (3) and (4) - but not paragraphs 28M(1)(a) and (b) - applied to a merits review conducted by the Tribunal. Ensuring that paragraphs 28M(1)(a) and (b) apply to the Tribunal in energy merits review proceedings will reinforce the policy intention that the Tribunal should undertake a less formal and more investigative approach in energy merits review matters and act as speedily as a proper consideration of the matters allow.

Item 5 - Paragraph 7B(g)

This item provides for the repeal of existing paragraph 7B(g) which applied subregulations 28M(2), (3) and (4) to the Tribunal in merits review proceedings under a State/Territory energy law or a designated Commonwealth energy law. Existing paragraph 7B(g) is no longer necessary given the amendment provided for in item 4 of Schedule 1 to this Regulation which will apply regulation 28M, in its entirety, to the Tribunal in such proceedings.

Item 6 - At the end of regulation 7B

This item inserts new subregulation 7B(2) at the end of regulation 7B. The purpose of this new subregulation is to clarify how regulation 28M is to be interpreted when applied to a merits review proceeding brought under a State/Territory energy law or a designated Commonwealth energy law by new paragraph 7B(f) of the Competition and Consumer Regulations 2010 (see item 3 of Schedule 1 to this Regulation).

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Competition and Consumer Amendment Regulation 2013 (No. 4)

This Legislative Instrument 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 of Legislative Instrument

-- may, in any proceedings before the Tribunal, give directions with respect to the representation in any such proceedings of persons having a common interest in the proceedings;

-- is not bound by technicalities, legal forms or rules of evidence; and

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Merits review proceedings conducted by the Tribunal under a State/Territory energy law or a designated Commonwealth energy law deal with decisions that, in practice, involve the determination of the rights or obligations of incorporated businesses and not of individuals. For example, under the National Electricity Law, the Tribunal may review the merits of a distribution determination made by the AER that regulates the terms and conditions for the provision of electricity network services that are the subject of economic regulation under the National Electricity Rules, including the prices that may be charged for those services. These distribution determinations apply to network service providers which are, in practice, incorporated business entities.

Similarly, under the National Energy Retail Law, the Tribunal may review information disclosure decisions of the AER. Such decisions are highly unlikely to deal with personal information of individuals. Rather, the information would concern retailer and distribution businesses, which are, in practice, incorporated entities. Accordingly, the Regulation does not engage the right to a fair hearing.

However, even if the Regulation could be seen to engage the right to a fair hearing, it would not limit that right. The Explanatory Statement for the Trade Practices Amendment Regulations 2008 (No. 3) relevantly explained regulation 7B as follows:

The Tribunal is empowered to review regulatory decisions made under the National Gas and Electricity Laws. To allow this to occur the procedural provisions applying to the Tribunal for decisions under the Act need to be replicated for decisions under the National Gas and Electricity Laws.

Amendments to regulation 7B made by this Regulation simply apply to a merits review conducted by the Tribunal under a State/Territory energy law or designated Commonwealth energy law, further procedural provisions which already apply to the Tribunal when exercising its jurisdiction in other competition matters.

This Legislative Instrument does not engage any other human rights.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

Bruce Billson

Minister for Small Business

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