ACCC\'s accountablility framework for investigations PDF

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The Australian Competition and Consumer Commission’s accountability framework for investigations

The ACCC’s accountability framework for investigations 1.

INDEPENDENT ACCC, COMMISSION, STAFFING AND STRUCTURE

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TRANSPARENT ARTICULATION OF ORGANISATIONAL PRIORITIES

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IDENTIFYING AND ASSESSING CONDUCT OF TRADERS UNDER THE COMPETITION AND CONSUMER ACT

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CONDUCTING INVESTIGATIONS AND REVIEWS

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COMPLIANCE AND ENFORCEMENT OPTIONS

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CHECKS AND BALANCES

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INFORMATION HANDLING

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PUBLICATION OF COMPLIANCE AND ENFORCEMENT OUTCOMES

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EVALUATION AND REVIEW

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PUBLIC ACCOUNTABILITY

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The ACCC’s accountability framework for investigations Introduction The Australian Competition and Consumer Commission is an independent Commonwealth statutory authority whose role is to enforce the Competition and Consumer Act 2010 and a range of additional legislation, promoting competition and fair trading, protecting consumers and regulating national infrastructure1. The ACCC has offices throughout Australia, and is represented in every state and mainland territory of Australia. The national office is located in Australia’s capital city, Canberra. This document outlines the governance and management structures and the systems and processes that enable the ACCC to exercise its powers as a competition and consumer agency in a transparent and accountable manner. Some of these systems and processes bind all agencies of the Australian Government, such as processes for the selection and appointment of staff, or the use of legal services. Others are particular to the ACCC, such as many of the processes that the ACCC undertakes in exercising its enforcement functions. The full spectrum of these accountability and transparency approaches, spanning from the establishment of the ACCC, the appointment of Commissioners and staff, corporate planning, investigative procedures, and finally public reporting of decisions and outcomes, are discussed in the chapters to follow.

1 The ACCC works closely with another independent statutory authority, the Australian Energy Regulator (AER). The AER is also established under the Competition and Consumer Act. The AER is Australia’s national energy regulator and its functions are set out in national energy market legislation and rules. These functions relate mostly to electricity and gas markets in eastern and southern Australia. While specific functions vary according to the legislated responsibilities that underpin the ACCC and AER, the two bodies share many common objectives, both working to protect, strengthen and supplement competitive market processes. The AER and ACCC also share resources and staffing and some of the ACCC’s operational guidelines and policies are joint ACCC and AER publications. The Australian Competition and Consumer Commission’s accountability framework for investigations

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Background References within this document assume some knowledge of Australia’s competition legislation, as well as its government and legal systems. To assist the reader, a brief explanation of these references is outlined below.

Australia’s competition legislation—the Competition and Consumer Act The Competition and Consumer Act came into force in January 2011, superseding the Trade Practices Act 1974. The object of the Competition and Consumer Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.

Enforcement provisions: detecting, pursuing and stopping anti-competitive conduct Part IV of the Competition and Consumer Act contains the substantive provisions of the Act that protect and enhance competition. It includes provisions against:

Assessing mergers Section 50 of the Competition and Consumer Act, also contained within Part IV of the Act, prohibits anti-competitive mergers or acquisitions. In accordance with this provision, ACCC staff assess completed and proposed mergers and make recommendations to the ACCC about whether the ACCC should take legal action to prevent or undo a merger.

Authorisations and notifications of conduct that may breach the Competition and Consumer Act Parties who engage in anti-competitive conduct in breach of the Competition and Consumer Act risk legal action by the ACCC or private parties. There are significant civil and criminal penalties for breaches of the competition provisions of the Competition and Consumer Act. Conduct which may otherwise be anti-competitive can however provide benefits that may offset or outweigh the detrimental effect of the conduct on competition. Part VII of the Competition and Consumer Act contains provisions that allow parties to these arrangements to apply for protection from legal action for conduct where the public benefits outweigh any public detriment. There are two processes under which legal protection may be obtained—these are known as ‘authorisation’ and ‘notification’. The relevant process will depend on the type of conduct for which legal protection is sought. More information about authorisations and notifications is available in Chapters 3 and 4.

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The Australian Consumer Law In addition to provisions which promote lawful competition, the Competition and Consumer Act contains a national law known as the Australian Consumer Law (ACL), which is designed to protect consumers and ensure fair trading. The ACL, which forms Schedule 2 of the Competition and Consumer Act, is a single national law which ensures that consumers have the same protections, and businesses have the same obligations and responsibilities, across Australia. Each of Australia’s state and territories has implemented the ACL. State and territory consumer affairs agencies administer this legislation within their jurisdiction. As this document is designed to address the ACCC’s exercise of its competition powers, it does not provide commentary on all of the enforcement powers and processes which are available under the ACL.

Australia’s government—federal system Australia has a federal system of government with six states and two territories. Australia’s national government is often referred to as the Commonwealth Government. Each of the states and territories also has their own governments and parliaments. References to ‘whole of government’ legislation refers to legislation that applies to all Australian Government agencies including the ACCC.

Australia’s legal system Australia has a common law legal system. A key feature of this system is that judges’ decisions in cases are informed by legal precedent, that is, the decisions in previous cases. Australia also has an adversarial court system, whereby two opposing parties present their cases before an impartial judge or jury. Laws are made by the federal and state parliaments, and an independent judiciary interprets and applies them. Australia’s highest court is the High Court of Australia, which interprets and applies the laws of Australia, decides cases of federal significance, and hears appeals from the federal, state and territory courts. Australia has a number of Federal courts, including the Federal Court of Australia. In addition, each state and territory has its own independent court system. Matters dealt with by the ACCC that proceed to litigation are in most cases heard before the Federal Court of Australia. The Federal Court has jurisdiction for most civil matters arising under Australian federal law and some summary criminal matters. The Australian Competition Tribunal, a tribunal administered by the Federal Court, hears applications for review of determinations of the ACCC which grant or revoke authorisations. As noted above, these authorisations permit conduct and arrangements that, because of their anti-competitive effect, would otherwise be prohibited under the Competition and Consumer Act. The Tribunal also hears applications for review of determinations of the Commission which grant or refuse clearances for company mergers and acquisitions.

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Chapter 1: Independent ACCC, Commission, staffing and structure The ACCC structure is established under the Competition and Consumer Act. This structure provides for a clear separation of decision making between the ACCC’s ultimate decision making body, the Commission, and ACCC staff, who have responsibility for the day to day business and investigations of the ACCC.

1.1

ACCC established under statute The ACCC is an independent statutory authority2 whose role is to enforce the Competition and Consumer Act and a range of additional legislation which collectively promote competition, fair trading and regulate national infrastructure. The ACCC’s powers and functions, as well as its governance structure, are drawn from various provisions within the Competition and Consumer Act.

1.2

Appointment of Chairperson and Commissioners through transparent and consultative process The ACCC’s Chairperson and Commissioners are appointed by Australia’s Governor-General for a term of up to five years. These appointments are made following a recommendation by the relevant Minister that the nominated person qualifies for the appointment on the basis of their relevant knowledge or experience, and after all Australian states and territories have been consulted and have confirmed their support for the appointment. The Governor-General may also appoint a Deputy Chair to the Commission, and the Minister may appoint associate Commissioners to the Commission. The Chairperson and Commissioners are expected to adhere to the ACCC’s Code of Conduct for Commission Members and Associated Members 2012. The ACCC’s Commission currently comprises the Chairperson, two Deputy Chairpersons and five full-time Commissioners.

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A government entity established by legislation to administer laws of the Commonwealth of Australia. The Australian Competition and Consumer Commission’s accountability framework for investigations

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1.3

Governance structure—separation of decision making The ACCC’s governance structure is outlined in the Competition and Consumer Act. This structure provides for a separation of the decision making powers of the ACCC. Except when they have delegated to others, the Commissioners, sitting as the Commission, have the ultimate decision making responsibility for decisions made under the Competition and Consumer Act. ACCC management and staff are responsible for conducting investigations and making recommendations to the Commission on matters before the Commission, as well as carrying out other day to day functions of the ACCC as an agency. The separation of this decision making authority is established through the ACCC’s legislative framework, with the ACCC’s and its Chairperson’s powers contained in the Competition and Consumer Act. The ACCC’s staff are employed under different legislation, the Public Service Act 1999. The Chairperson of the ACCC is, however, the head of the ACCC as an agency under the Public Service Act and the Financial Management and Accountability Act 1997. The Chairperson delegates most of his powers as agency head to the Chief Executive Officer of the ACCC. The ACCC’s Commission meets regularly, usually weekly, to make decisions on matters investigated by the ACCC under the Competition and Consumer Act. The meetings are usually chaired by the Chairperson and must include at least two of the full time members of the Commission. The Commission considers and provides direction on matters brought before it by ACCC staff, which may include proposed enforcement action (including whether to institute court proceedings in a matter), reviews of merger cases, authorisation applications and notifications, and decisions about access to infrastructure facilities. In assisting the Commission in its decision making functions, the ACCC has five specialist committees in the areas of compliance and enforcement, mergers, telecommunications, adjudication and regulated access, which consider particular issues arising in these areas and make recommendations about appropriate courses of action to the Commission. These committees include full-time Commission members and as appropriate associate or ex officio Commissioners who have expertise in particular matters. The ACCC’s organisational chart as at September 2012 is below.

Aust ralian Co mpe tit ion a nd Consume r Com mission Chairman Rod Sims Deputy Chairs Michael Schaper Delia Rickard

Members Sarah Court Joe Dimasi Jill Walker Edward Willett

Australian Energy Re gulator

Associate Members Christopher Chapman Andrew Reeves Mark Berry Cristina Cif uentes

Chairman Andrew Reeves

Chief Executive Officer Brian Cassidy

Deputy Chief Executive Officer Competition and Consumer Rayne de Gruchy

Enforcement & Compliance Division Marcus Bezzi Executive General Manager Enforcement Operations Group Scott Gregson Group General Manager

Enforcement Operations—ACT & National Projects Brenton Philp General Manager Enforcement Operations—NSW Geof f Williams General Manager

Enforcement Operations—WA Sam Di Scerni General Manager

Enforcement Operations—NT Derek Farrell Regional Director

Air Cargo Cartel Litigation Mike Kiley General Manager

Enforcement Paul Zawa General Manager Tasmanian Regional office Mark Quinane Regional Director

Enforcement Operations—QLD Alan Ducret General Manager North Queensland Regional office Michael Dowers Director

Compliance, Operations Group Nigel Ridgway Group General Manager Compliance Strategies Branch Kim Parker General Manager

Intelligence, Infocentre & Policy Liaison Branch Bruce Cooper General Manager

Product Safety Branch Ruth Mackay General Manager

Office of the CEO

Mergers & Adjudication Group Rose Webb Executive General Manager Investigations Branch Rami Greiss General Manager Branch Suzie Copley General Manager Adjudication Branch Richard Chadwick General Manager Competition Unit

Corporate Division Jo Schumann Executive General Manager

Legal Group T im Grimwade Executive General Manager

Deputy Chief Executive Officer Regulation Mark Pearson

AER Michelle Groves

Finance & Corporate Services Adrian Brocklehurst General Manager

Wendy Peter General Counsel

Wholesale Markets Branch Tom Leuner General Manager

Human Resources Branch Michelle Patterson General Manager Secretary of the Commission

Peter Toy Deputy General Counsel

Retail Markets Branch Sarah Proudf oot General Manager

Sean King Deputy General Counsel

Network Regulation Branch Warwick Anderson General Manager

Information Management & Technology Services Branch Adrian Walkden Chief Inf ormation

Tanya Dunne Deputy General Counsel

Strategic Communications Branch Kristen Hannah General Manager

Elissa Keen Deputy General Counsel

Peter Renehan Special Counsel

Members Edward Willett Cristina Cif uentes

Regulatory Development Branch Anne Plympton General Manager Fuel, Transport & Prices Oversight Branch Matthew Schroder General Manager Water Branch Sebastian Roberts General Manager

Network Operations & Development Branch Chris Pattas General Manager Communications Group Michael Cosgrave Group General Manager Access Operations Rob Wright General Manager Convergence Clare O’Reilly General Manager

Enforcement Operations—SA George Kamencak Regional Director

Industry Structure Sean Riordan General Manager NBN Engagement Branch Richard Home General Manager

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1.4

ACCC employees employed by the Australian Public Service and covered by the Code of Conduct and other whole of government legislation Staff of the ACCC are members of the Australian Public Service and employed under the Public Service Act 1999. As public servants engaged under this Act, ACCC staff must adhere to the Australian Public Service Code of Conduct and Values ACCC staff must also follow and abide by Australian Government legislation which ensures Australian Government employees act in an accountable and transparent manner and in the public interest. The Financial Management and Accountability Act 1997, for example, sets out the financial management, accountability and audit obligations of agencies that are financially part of the Commonwealth. This Act requires that public resources are managed efficiently, effectively and ethically and that proper accounts and records of receipt are kept in respect of any expenditure of public money. In addition, chief executives of Commonwealth agencies are accountable to the Commonwealth Finance Minister, who is entitled to full and free access to agencies’ accounts and records, subject to any law that prohibits disclosure of particular information. Other Commonwealth legislation outlines standards and requirements in the areas of recording keeping, information sharing, use of legal services and reporting (see Chapters 6, 7 and 10). For the ACCC, the Chairperson is the head of the agency and has ultimate responsibility for carrying out obligations under the Financial Management and Accountability Act and the Public Service Act. In addition, the ACCC’s enterprise agreement, which is negotiated between ACCC staff and management, outlines the terms and conditions of employment at the ACCC and is publicly available on the ACCC’s website.

1.5

ACCC corporate values In addition to upholding the Australian Public Service Values the ACCC has identified additional complementary values which the ACCC considers are unique and meaningful to its work and culture as an organisation. They are:

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Employees recruited under a transparent merit based process Under the Public Service Act 1999, Australian Public Service agency heads (including the ACCC Chairperson) have responsibility for employment decisions, including recruitment and selection decisions, affecting their agency. These decisions must comply with the Public Service Act, the Public Service Regulations 1999 and the Public Service Commissioner’s Directions 1999. The Australian Public Service Values require that all employment decisions in the Australian Public Service are based on merit and that all eligible members of the Australian community have a reasonable opportunity to apply for Australian Public Service employment. Merit-based decisions are required, at a minimum, to be made following an assessment of a person’s work-related qualities and the workrelated qualities required for efficient and effective organisational performance. Decisions relating to engagement and promotion require a competitive assessment of the relative suitability of candidates against the genuine requirements of the duties, focusing on the capacity of candidates to achieve outcomes related to the duties. The Australian Public Service recruitment processes can be found at the following link: www.apsc.gov.au

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1.7

Declaration of conflicts of interest by Commissioners and staff The ACCC Commissioners and staff are required...