Full Federal Court orders $20.6million penalties against Cement Australia companies

5 October 2017

The Full Court of the Federal Court has upheld an ACCC appeal, and dismissed a cross appeal by Cement Australia, against the penalties imposed on Cement Australia Pty Ltd and its related companies for making and giving effect to anti-competitive agreements.

The trial judge had imposed penalties of $17.1 million against the Cement Australia companies.  The Full Court has now ordered these companies to pay increased penalties totalling $20.6 million for breaching the anti-competitive provisions of the Act.  This is the third highest total penalty imposed for an ACCC case. 

The penalties imposed on each Cement Australia company were:

  • $2.93 million against Pozzolanic Enterprises Pty Ltd
  • $10.28 million against Cement Australia (Queensland Pty Ltd) (formerly QCL
  • $7.29 million against Cement Australia Pty Ltd
  • $100,000 against Pozzolanic Industries.

“The penalties imposed in competition cases are hugely important in deterring anti-competitive conduct, which is why we appealed the original penalties given to Cement Australia,” ACCC Chairman Rod Sims said.

“The ACCC will continue to make submissions to the courts for higher penalties to be imposed for anti-competitive conduct. The ACCC needs to ensure that penalties act as an effective deterrent for the business concerned and are not simply viewed by large corporations as a cost of doing business,” Mr Sims said.

The Full Court upheld the ACCC’s ground of appeal that related to the imposition of a single penalty, jointly and severally, on two respondent companies involved in one contravention.  In upholding this ground, the Full Court confirmed that “[d]eterrence is the primary objective for the imposition of civil penalties”, and considered “that the imposition of a joint and several penalty would risk undermining this objective”.

Background

The ACCC first brought the proceedings in 2008 against Cement Australia Pty Ltd (currently 50/50 owned by Holcim and Heidelberg Cement subsidiary, Hanson), Cement Australia Holdings Pty Ltd, Cement Australia Queensland Pty Ltd (formerly Queensland Cement Ltd), Pozzolanic Enterprises Pty Ltd and Pozzolanic Industries Pty Ltd.

In 2014, the Court found numerous contraventions of s45 of the Act by all companies but Cement Australia Holdings Pty Ltd.

Media release: https://www.accc.gov.au/media-release/federal-court-declares-anticompetitive-conduct-by-cement-australia 

In April 2016, the Federal Court published orders imposing penalties totalling $18.6 million on Cement Australia. The Court has since set aside, by consent, one order imposing a penalty of $1.5 million, thereby reducing the total penalties imposed to $17.1 million.

Media release: https://www.accc.gov.au/media-release/186-million-penalties-ordered-against-cement-australia-companies-for-anti-competitive-flyash-agreements 

The ACCC appealed the Court’s penalty decision against the corporate respondents in June 2016. Cement Australia filed a notice of cross appeal on 1 July 2016.

Media release: https://www.accc.gov.au/media-release/accc-appeals-cement-australia-level-of-penalties 

The Full Court of the Federal Court heard the appeal and cross-appeal as to penalty on 20-22 February 2017.

Release number: 
MR 166/17
ACCC Infocentre: 

Use this form to make a general enquiry.

Media enquiries: 
Media team - 1300 138 917

Tags

Audience