Port of Newcastle: ACCC Appeals Decision on User Funding

The Australian Competition and Consumer Commission (ACCC) has applied to the Federal Court for a review of the Australian Competition Tribunal’s recent decision on the terms of access by Glencore Coal Assets Australia Pty Ltd to certain services at the Port of Newcastle.

The Tribunal re-arbitrated an access dispute between Glencore and Port of Newcastle Operations Pty Ltd (PNO), which was primarily about the charge for ships entering the port to export Glencore’s coal. The ACCC was the original arbitrator.

“While the Tribunal took the same approach as the ACCC on a number of issues, the ACCC is seeking review of the Tribunal’s treatment of user funding at the port,” ACCC Chair Rod Sims said.

A significant part of the dispute is about whether the costs that PNO is allowed to recover should include the costs for dredging the shipping channel that were historically funded by various users of the port.

The ACCC excluded these user funded amounts in its original arbitration and determined an access charge of $0.61 per gross tonne as at 1 January 2018, while the Tribunal included these amounts and determined an access charge $1.01 per gross tonne. The Tribunal’s decision allows PNO to recover the user funded amounts in its access charge.

“The ACCC does not consider it to be economically efficient for a service provider to be allowed to charge any user for costs of assets that have already been funded by users,” Mr Sims said.

“Our appeal will focus on what we will argue are errors in the way the Tribunal has approached the principles of user funding, which could have implications for other regulatory matters.”

Background

In 2018 the ACCC arbitrated a dispute relating to Glencore’s terms of access to the shipping channel and related services for exporting coal from the port. Both parties then applied to the Tribunal for a re-arbitration of the dispute. The Tribunal handed down its decision on 30 October 2019.

The ACCC has a role in arbitrating access disputes for services which have been ‘declared’ under Part IIIA of the Competition and Consumer Act 2010.

The shipping channel service at the port, defined as ‘the provision of the right to access and use the shipping channels (including berths next to wharves as part of the channels) at the Port, by virtue of which vessels may enter a Port precinct and load and unload at relevant terminals located within the Port precinct and then depart the Port precinct’, was declared under Part IIIA by the Tribunal on 16 June 2016.

The declaration has since been revoked and the arbitration determination remains in force until 2031.