June 6, 2016

The Australian Competition and Consumer Commission has appealed against the leniency of $17.1 million fine against Cement Australia Pty Ltd and related companies  for breaches of the Trade Practices Act.

The company formerly had the contract to remove flyash from Stanwell’s Tarong and Tarong North power stations, as well as the Millmerran and Swanbank power stations.

The Federal Court on April 29 this year ordered penalties totalling $18.6 million against Cement Australia Pty Ltd and related companies for numerous contraventions of Section 45 of the Trade Practices Act 1974 which prohibits corporations from entering into, and giving effect to, contracts and arrangements that have the purpose or effect of substantially lessening competition.

The Court later set aside, by consent, one order imposing a penalty of $1.5 million, reducing the total penalties imposed to $17.1 million.

However, the ACCC had sought penalties of more than $90 million against Cement Australia , saying this was “appropriate for the purpose of specific and general deterrence, taking into account the serious nature and extent of the conduct, the apparent benefit derived by Cement Australia from the contraventions, and the market harm caused”.

The ACCC originally launched proceedings against Cement Australia and related companies in 2008.

No allegations were made against the power stations.

“The ACCC will argue to the Full Court that the penalties imposed on Cement Australia are manifestly inadequate, and not of appropriate deterrent value,” ACCC Chairman Rod Sims said.

“The penalties imposed in competition cases are hugely important in deterring anti-competitive conduct. The ACCC considers it essential that penalties for anti-competitive conduct in breach of the law are fixed with a view to ensuring that they are not regarded by businesses as being an acceptable cost of doing business.”

“In this case Justice Greenwood found that the conduct deprived the market of engaging with a new entrant who would have provided competition that would compete away inefficient costs and service offerings, with a likely significant effect on prices.”

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