Authorisation granted to iron ore producers to collectively negotiate with infrastructure owners
The Australian Competition and Consumer Commission has issued a determination granting conditional authorisation to a group of small iron ore producers to engage in collective negotiations for rail haulage services and rail track access in the Pilbara region of Western Australia.
Authorisation is sought by the North West Iron Ore Alliance (NWIOA) on behalf of its shareholders Atlas Iron Limited, Brockman Resources Limited and FerrAus Limited.
The proposed arrangement allows the NWIOA and other producers that approach the NWIOA (who do not own or operate rail infrastructure) to collectively negotiate on the terms and conditions, including price.
The NWIOA seeks to engage in collective negotiations with BHP Billiton, Rio Tinto, Fortescue Metals Group and any similar provider in future (the service providers).
Participation in the collective negotiations is voluntary for both iron ore producers and the service providers.
To enable the ACCC to assess the ongoing competitive impact of the proposed arrangements, authorisation has been granted subject to conditions that ensure the ACCC is kept informed of changes to the parties involved in the proposed collective negotiations.
Collective bargaining refers to competitors collectively negotiating terms and conditions with a supplier or customer. Without authorisation, it can raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
