The Australian Competition and Consumer Commission has issued a draft decision proposing to remove Agsafe's ability to impose trading sanctions on businesses who are not accredited through its industry program, but will provide an 18 month transitional period, ACCC Chairman, Mr Graeme Samuel, said today.
Agsafe is an industry association established by manufacturers of agricultural and veterinary chemicals. Agsafe sought authorisation for its Code of Conduct which requires businesses who trade in agricultural and veterinary chemicals to obtain accreditation through the industry program know as the Guardian Program. The code also allows Agsafe to impose trading sanctions on businesses that are not accredited under the Guardian Program. Agsafe's Code of Conduct had previously been authorised by the ACCC up to July 2007.
"The ACCC considers that the Guardian Program provides a number of benefits to the industry and end users of farm chemicals," Mr Samuel said. "It assists individuals to safely use agricultural and veterinary chemicals and assists businesses to comply with the legislative requirements for the use, storage and handling of such chemicals."
The ACCC proposes to authorise the Guardian Program element of Agsafe's Code of Conduct for another five years.
"However, the ACCC considers that the ability of Agsafe to impose trading sanctions on non-accredited businesses results in a significant public detriment. This detriment arises from the compulsory requirement on businesses which are otherwise legally compliant to be accredited by Agsafe in order to trade in agricultural and veterinary chemicals.
"The ACCC considers that the ability of Agsafe to impose trading sanctions confers a significant power on an industry association, a power which would ordinarily require government oversight or authority.
"The ACCC notes that removing the ability of Agsafe to impose trading sanctions is likely to result in a significant change in the way agricultural and veterinary chemical industry is currently regulated. The ACCC acknowledges that too sudden a change in the regulatory environment may result in a public detriment.
"The ACCC therefore considers that there is some public benefit in the short term, in maintaining the ability of Agsafe to impose trading sanctions. The ACCC proposes to grant authorisation to allow Agsafe to impose trading sanctions for a period of 18 months. During this transitional period government and the industry will have the opportunity to consider other alternative forms of regulation should this be necessary.
"Once the transitional period expires, the ACCC can see no benefit in allowing Agsafe to continue to impose trading sanctions."
The ACCC is seeking submissions from interested parties in relation to its draft determination in this matter. Copies of the draft determination are available on the ACCC's website. Submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, PO Box 1199, Dickson, ACT, 2602. Submissions can also be lodged by email to adjudication@accc.gov.au.