A quick fix?

The Federal Treasury has published a consultation paper (Paper) seeking views on options to change the National Access Regime, including timelines, availability of merits review, the ability to lodge repeat applications and the termination of arbitration proceedings and determinations. You can access the paper here. While the options canvassed may speed up the declaration and arbitration processes, they could also create additional risks by removing important checks on decision makers. Closing date for submissions on the options is 19 April 2021.   

Treasurer tired of lengthy process

The options canvassed in the Paper are targeted at speeding up the declaration and arbitration processes after several prominent cases have taken a number of years to resolve:

• The Pilbara Railways applications took between 2.5 years and 6 years to resolve.
• The Sydney Airport case took almost 4.5 years to resolve. 
• The issue of whether services at the Port of Newcastle should be declared was the subject of recommendations by the National Competition Council to the Minister 3 times in recent years.

Following the most recent attempt to declare the Port of Newcastle, the Treasurer tasked the Department of Treasury with undertaking an examination of whether the length of time that processes under the Regime can take is appropriate and consistent with its objective.

Options for consideration

The Paper requests feedback on 6 potential options.  
 
Option 1: Remove the ability for parties to seek merits review by the Australian Competition Tribunal (Tribunal) of the Minister’s decision on declaration.
 
Option 2: Remove the ability for parties to seek merits review by the Tribunal of ACCC arbitration determinations.
 
Option 3: Impose shorter time limits on merits review processes for declaration and arbitration decisions. 

Option 4: Limit new applications for declaration for infrastructure for which declaration has previously been refused, or where a declaration has been revoked, unless there has been a material change of circumstances, or a specified period of time has passed.

Option 5: Limit requests for revocation to where there has been a material change of circumstances since the decision to declare the services, or a specified period of time has passed.

Option 6: Provide for arbitration proceedings and arbitration determinations under the National Access Regime to terminate if the declaration of the relevant infrastructure service is revoked.

Possible risks

While all five options could potentially speed-up the regime, they also come with potential trade-offs, for example:

• Removing merits reviews for declaration decisions by the Minister and ACCC arbitration determinations will remove a key check on these decision makers. The Tribunal is a specialist review body comprised of members with legal and economic expertise. Past experience shows that the Tribunal has not always agreed with the decision of the original decision maker. While judicial review would still be available, such a review is limited to a judge reviewing whether the decision is contrary to law. Merits review permits the specialist Tribunal to stand in the shoes of the original decision maker and enables a more fulsome review of the facts and law. 
• Disputes under the National Access Regime to date have been immensely complex. Reduced timeframes could create a risk that the decision maker will have insufficient time to fully consider and understand the issues before reaching a decision.
• Without appropriate exceptions, limiting the opportunity to reinstigate the declaration or revocation process could leave businesses vulnerable to changes to circumstances and mean that the regulation (or lack thereof) is no longer fit for purpose. This could be particularly relevant where the declaration decision was a line-ball and subsequent developments in the relevant markets clarify whether the declaration criteria are met for the service.

Any changes that are ultimately made will have significant implications for how access disputes are treated going forward. Care needs to be taken in the design of any changes to ensure that streamlining the regime does not come at the cost of informed and robust decision making and it is important that infrastructure owners and users consider the implications of these changes on their businesses. 

The abolition of merits review is not without precedent. In 2017, the Commonwealth Government abolished the regime for limited merits review of certain decisions of the Australian Energy Regulator under the national gas and electricity laws. 

Key Contacts

Our team has a breadth of experience advising on the National Access Regime, including acting for Fortescue Metals Group in the Pilbara Railways applications, the NCC in the Sydney Airport matter and the ACCC in the Port of Newcastle matter. If you would like assistance preparing a submission in response to the consultation paper or have any questions regarding the potential changes and their implications for your business, please don’t hesitate to contact our team.