Cracking cartels—warning signs during the procurement process
The ACCC has produced an information package to raise awareness of the signs of possible cartel behaviour affecting government procurement. Launched on 4 July 2005, the package forms one of the initiatives announced by Graeme Samuel, ACCC Chairman, during the international Cracking cartels conference in Sydney in November 2004. Other initiatives included the review of the ACCC leniency policy and the establishment of a dedicated ACCC cartels team.
Experience domestically and abroad has shown that government procurement is susceptible to cartel conduct. The International section of this edition of ejournal reports on cartel conduct detected in steel bridge construction projects ordered by the Japanese Government.
‘The ACCC seeks to work with government agencies at all levels which are involved in the procurement process to raise awareness of possible cartel conduct and increase the likelihood that it will be detected’, Mr Samuel said at the launch of the package. ‘Cartels have a significant effect on the economy. They damage the public as consumers and taxpayers. Any increase in prices paid for a good or service by the government arising from a cartel results in less gain for the public dollar which, in turn, can result in less public services or a tax rise to meet the need for government services’.
The package is designed to assist government agencies to identify suspect tender practices and to report them to the ACCC. In particular, it provides information about:
behaviour that constitutes a cartel
warning signs in the procurement process
what to do if the agency suspects a cartel
the penalties attached to cartel conduct.
The package is part of the ACCC's focus on cracking cartel behaviour and is preparatory to changes to the Trade Practices Act which will lead to higher civil penalties and criminal sanctions, including the possibility of jail terms for company executives.
In September 2004 the ACCC and four of its current and former officers were served with a damages claim filed in the Supreme Court of Queensland by IMB Group Pty Ltd (in liquidation), Logan Lions Limited (in liquidation) and others [collectively referred to as the IMB Group] alleging misconduct by the ACCC and its officers arising from proceedings against the IMB Group in the Federal Court for alleged breaches of s. 52 and 47 of the Trade Practices Act. In the Federal Court proceedings the ACCC was partially successful at first instance, but not on appeal. The Supreme Court claim was filed in 1999 and renewed at six-monthly intervals until September 2004, when the Registrar refused any further renewal.
In December 2004 the individual defendants filed a notice of motion seeking, by alternative means, summary termination of the IMB Group's claim against them. The ACCC was not a party to this application. On 27 May 2005 Justice Holmes of the Supreme Court of Queensland set aside the decision of the Registrar of 2 February 2004 to renew the IMB Group's claim as against each of the four individuals and declined to grant any renewal of the claim, not having been satisfied that there is or has been in the more recent past good reason to renew the claim. The action against the individuals was dismissed and the IMB Group ordered to pay costs, leaving outstanding the claim against the ACCC. On 24 June 2005 the IMB Group filed a Notice of Appeal against the decision of Justice Holmes. A timetable has been set down by the Court of Appeal.
