Commonwealth Numbered Regulations - Explanatory Statements

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MOOMBA-SYDNEY PIPELINE SYSTEM SALE REGULATIONS 1996 NO. 19

Statutory Rules 1996 No. 19

Issued by Authority of the Assistant Treasurer

Moomba-Sydney Pipeline System Sale Act 1994

Moomba-Sydney Pipeline System Sale Regulations

Subsection 174(1) of the Moomba-Sydney Pipeline System Sale Act 1994 (the Principal Act) provides that the Governor-General may make regulations for the purposes of the Principal Act.

Section 111 of the Principal Act provides that the regulations may make provision in relation to various matters concerning the Australian Competition Tribunal (the Tribunal).

Part 6 of the Principal Act established a regime for third party access to the Moomba-Sydney pipeline system (the Moomba pipeline). It did this by requiring a Moomba pipeline operator (the Moomba operator) to provide access to third parties in certain circumstances (subsection 74(1) of the Principal Act). Where a Moomba operator and a third party seeking access to the Moomba pipeline cannot agree on access, either party may notify the Australian Competition and Consumer Commission (the Commission) that an access dispute exists (subsection 75(1)). The Commission must then proceed to arbitrate the dispute (if the dispute is not settled within 21 days of notification) and make a determination. The determination can be reviewed by the Tribunal upon application by a party to the arbitration.

The Principal Act also requires the Moomba operator to provide certain information in relation to gas haulage. In particular, section 133 of the Principal Act provides that if a Moomba operator enters into a transaction during a financial year that is not an arm's length transaction, the Moomba operator must provide the Commission with a report within the time prescribed by the regulations.

The purpose of the regulations is to set out the procedural aspects of the new Moomba pipeline access regime. For example, the regulations set out the information and fee which must accompany a dispute notification. The regulations also set out the forms and procedural aspects in respect of the review functions of the Tribunal necessary to supplement section 106 of the Principal Act.

In addition, the regulations prescribe a time for the Moomba operator to provide the Commission with the report about non-arm's length transactions.

The regulations commenced on the date of Gazettal.

ATTACHMENT

Regulation 1 - Citation

Regulation 2 - Interpretation

Regulation 3 - Notification of access dispute

As noted, a Moomba operator is required to provide access in certain circumstances (subsection 74(1) of the Principal Act). Where a Moomba operator and a third party seeking access cannot agree on access, either party may notify the Commission that an access dispute exists.

Moreover, where a Moomba operator proposes to enter into a contract in relation to access, it must give a notice under subsection 75(2) of the Principal Act to all parties who have access agreements in respect of the pipeline. The operator must not enter into the agreement unless all the persons given the notice agree, or no person has notified the Commission of an access dispute under subsection 75(6) of the Principal Act within 21 days of being given notice.

The Commission can also vary a determination under section 104 with the agreement of the parties. Where the parties cannot agree on a variation, one of them can notify the Commission of an access dispute under subsection 75(6).

Once it receives the notification, the Commission must give written notice of the access dispute to relevant parties (section 76) and may arbitrate the access dispute after 21 days from notification (sections 80 and 88).

Regulation 3 requires the party notifying the Commission of the existence of an access dispute to provide the Commission with preliminary information relevant to the access dispute. The information required relates to procedural matters and the matters which the Commission must consider in conducting the arbitration. It assists the Commission in commencing its consideration of the relevant issues and allow the Commission to ascertain the persons whom might want to become parties to the arbitration.

The regulations prescribe a notification fee for the dispute. The fee is $15 000, unless the dispute is about varying an existing determination, when the fee is $5 000. When the notification is withdrawn before any arbitration hearing is held in relation to the dispute, the Commission must remit part of the notification fee (ie $12 250, when the notification fee was $15 000, and $2 250, when the notification fee was $5 000).

Regulation 4 - Withdrawal of notification

Under section 77 of the Principal Act, a notification of an access dispute can be withdrawn by the notifier at any time before the Commission makes its determination.

Regulation 4 provides that a withdrawal of a notification of an access dispute must be in writing and contain the name of the person withdrawing the notification and a short description of the matter to which the notification relates.

Further, subregulation 4(2) provides that the person withdrawing a notification of an access dispute must give a copy of the withdrawal notice to the other party(ies) to the access dispute at the same time as it is given to the Commission.

Regulation 5 - Summonses to witness-access arbitration

Under subsection 98(2) of the Principal Act, the Commission can issue a summons requiring a person to appear at a Commission access arbitration to give evidence and produce the documents (if any) referred to in the summons.

New regulation 5 provides that the form of the summons must be in accordance with Form 1.

Regulation 6 - Application for review

Regulation 6 sets out the form to be used for applications to the Tribunal for the review under section 105 of the Principal Act of a determination by the Commission under section 80 of that Act.

Regulation 7 - Notice about participation in a review

This regulation requires a party to the arbitration, who wishes to participate in the review, to file a notice with the Tribunal Registrar within 7 days of service of the review application. The notice must set out the facts and contentions on which the party intends to rely and the issues as the party sees them.

Regulation 8 - Constitution of a Division of the Tribunal for a review

The Tribunal is constituted under section 83 of the Principal Act by virtue of section 106 of that Act. This regulation provides that the Tribunal, as constituted under those provisions, sits as a Division of the Tribunal.

Regulation 9 - Member of Tribunal presiding

Regulation 9 provides that one of the members of the Tribunal is to preside over the Division at a review. Where a presidential member (ie the President or Deputy President) sits in relation to a particular review, the presiding member will be the presidential member. If a presidential member is not a member of the Division, the President must nominate a member of the Division to be the presiding member.

Regulation 10 - Reconstitution of Tribunal

Regulation 10 provides that if a member of the Division that constitutes the Tribunal for the purposes of a particular review ceases to be available, then the President can add another member to the Division or direct that the Division continue with the remaining member or members.

Regulation 11 - Determination of question

Regulation 11 provides that if the Tribunal is constituted by a Division of 2 or more members of the Tribunal, any question before the Tribunal is to be decided according to the opinion of the majority of those members; where the members are evenly divided on a question, the presiding member makes the decision.

Regulation 12 - Disclosure of interests by members of Tribunal

Regulation 12 deals with potential conflicts of interest which may arise in respect of members' pecuniary interests. Where such a potential conflict arises, the member must disclose the interest to the President. The member must not take part, or continue to take part, in the review if:

(a)       the President gives a direction to the member that he or she considers that the member should not take part, or should not continue to take part, in the review; or

(b)       any party objects to the member taking part in the review.

Regulation 13 - Summons to witness-review hearing

Under subsection 98(2) and section 106 of the Principal Act, the Tribunal can issue a summons requiring a person to appear at a review to give evidence and produce the documents (if any) referred to in the summons.

Regulation 13 provides that the form of the summons must be in accordance with Form 3.

Regulation 14 - Taking of evidence by a single member

Regulation 14 provides that the Tribunal can authorise the member presiding at a review to take evidence on its behalf.

Regulation 15 - Application of provisions of the Trade Practices Regulations

Regulation 15 provides that regulations 18, 19 and 21 of the Trade Practices Regulations apply to a review, as they apply to proceedings before the Tribunal under the Trade Practices Act 1974.

Regulations 18 and 19 of the Trade Practices Regulations deal with the filing of documents with the Tribunal Registrar. Regulation 21 of those regulations requires persons participating in the review to file an address for service (within Australia) with the Registrar.

Regulation 16 - Reports etc. to be given to ACCC under section 133 of the Act-prescribed time

Regulation 16 provides that, in accordance with section 133 of the Principal Act, a Moomba operator that enters a transaction that is not an arm's length transaction must provide the Commission with a report containing specified information within 7 days after the day on which the financial statements and reports (for the financial year in which the transaction occurred) are laid before the annual general meeting of the operator.

Schedule

The Schedule inserts the forms described above.