Supplementary Order Paper No 343

Explanatory note

This Supplementary Order Paper amends the Commerce (Cartels and Other Matters) Amendment Bill (the Bill). It replaces, and largely restates, those amendments to the Bill contained in Supplementary Order Papers 68, 148, and 407. Those amendments include—

  • repealing section 4(3) of the Commerce Act 1986 (the Act), which extends the prohibition of certain acquisitions that lessen competition to acquisitions made outside New Zealand (see clause 5(3)). Overseas acquisitions that lessen competition in New Zealand will instead be dealt with by new section 47A (see clause 8):

  • changing the definition of controlling interest in new section 47A to include the holding of assets (see clause 8):

  • deleting clause 18 of the Bill to remove criminal sanctions for cartel behaviour:

  • amending the regulation-making power in section 108 of the Act so that refunds can be given for fees paid in relation to clearances (see clause 22A):

  • inserting transitional provisions to provide that certain proceedings relating to cartel provisions cannot be brought in relation to conduct during the 9-month period following the commencement of new section 30. However, during this 9-month period, certain proceedings may be commenced as if sections 30 to 33 of the Act, which relate to price fixing and are repealed by clause 7 of the Bill, were still in force (see Schedule 2, new Schedule 1AA, Part 1, clause 2).

The Supplementary Order Paper also makes further changes to the Bill. It provides, for certain persons co-operating to supply an international liner shipping service, exceptions from—

  • the prohibition, under section 27 of the Act, of provisions substantially lessening competition; and

  • the prohibition of cartel provisions inserted by clause 7 of the Bill (see clause 7B).

The exceptions for persons supplying international liner shipping services come into force 2 years after the date on which the Bill receives the Royal assent. This aligns with the date on which the Bill repeals the general exception for international shipping contained in section 44(2) of the Act.

The further changes also include amendments to—

  • enable the High Court, if acquisition by an overseas person of a controlling interest in a New Zealand body corporate has the effect or likely effect of lessening competition, to make orders in respect of any other New Zealand bodies corporate in which that overseas person has an interest (see clause 8):

  • enable a person to give effect to a cartel provision that is a restraint of trade where that provision relates to an earlier collaborative activity (see clause 7, new section 31(1B)):

  • correct minor errors and improve clarity:

  • reflect current drafting practice for transitional and savings provisions.

Departmental disclosure statement

The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Supplementary Order Paper. It provides access to information about any material policy changes to the Bill and identifies any new significant or unusual legislative features of the Bill as amended.

Regulatory impact statement

The Ministry of Business, Innovation, and Employment produced a regulatory impact statement on 3 November 2016 to help inform the new policy decisions taken by the Government relating to the contents of this SOP.

The Honourable Jacqui Dean, in Committee, to propose the amendments shown in the following document.