Our ref: 54114
Contact officer: Michael Eady
Contact phone: 03 9290 1945
Level 35, The Tower
360 Elizabeth Street
Melbourne Central
Melbourne Vic 3000
GPO Box 520
Melbourne Vic 3001
9 September 2014
tel: (03) 9290 1800
fax: (03) 9663 3699
www.accc.gov.au
Dear Stakeholder
Consultation on proposed extension and variation to CBH’s 2011 port terminal
services access undertaking
The ACCC is seeking submissions on Co-operative Bulk Handling Limited’s
application to extend and vary its 2011 Port Terminal Services Access Undertaking
(the Application). The Application was submitted on 8 September 2014.
The Application, together with CBH’s supporting submission, is available on the
ACCC’s website at:
http://www.accc.gov.au/regulated-infrastructure/wheat-export/co-operative-bulkhandling-2011
CBH has withdrawn its Proposed 2014 Undertaking that proposed to introduce long
term agreements for port capacity. Accordingly, the Application is now the only
application in front of the ACCC.
The Application proposes to:

extend the operation of CBH’s 2011 undertaking by one year until 30
September 2015, and

vary the undertaking to include an early expiry clause that would allow it to
expire prior to 30 September 2015 if CBH is no longer required to have an
access undertaking in place upon the commencement of the Code, and

make other amendments consistent with those already consulted on in
relation to the Proposed 2014 Undertaking.
Application to extend and vary
A mandatory code of conduct (the Code) is anticipated to commence on 1 October
2014. If the Code is approved and declared by 30 September 2014, it will trigger the
repeal of the Wheat Export Marketing Act 2008 (Cth) (the WEMA) and remove CBH’s
requirement to have an access undertaking accepted by the ACCC.
The Application seeks to ensure CBH’s compliance with the access test in the
WEMA and provide certainty over access arrangements at its Western Australian
grain ports in the event that the Code does not commence on 1 October 2014. CBH
states that:
in order to be able to provide exporters from Western Australia with certainty of
exporting in the short term, CBH proposes to extend the operation of the current
undertaking. This will allow CBH to conduct an auction in the same fashion as has
been conducted under the current undertaking.1
CBH also notes that the auction to be held for near term capacity under the Proposed
2014 Undertaking was to be conducted on the same principles as an auction under
the current 2011 Undertaking.
The Application also proposes certain amendments to the 2011 undertaking.
Interested parties have previously considered the majority of the changes set out in
the Application during consultation on the Proposed 2014 Undertaking. The changes
are outlined in CBH’s supporting submission and also provided in markup to the
existing 2011 undertaking, available on the ACCC’s website.
Background: CBH’s previous proposed 2014 undertaking including long term
agreements
The Application has been submitted by CBH following consultation on a Proposed
2014 Undertaking which included arrangements for long term agreements (LTAs).
This undertaking was intended to apply from 1 October 2014 to 30 September 2017.
As noted above, CBH has now withdrawn the Proposed 2014 Undertaking.
The ACCC conducted two formal consultation processes in relation to the Proposed
2014 Undertaking, calling for public submissions on an issues paper in April 2014
and a draft decision in June 2014.
Following the ACCC’s draft decision to accept the undertaking subject to some
drafting amendments, CBH performed a long term capacity allocation process to
obtain indications from customers on how they would apply for capacity under the
Proposed 2014 Undertaking. CBH received applications for LTA capacity significantly
in excess of what was available. Negotiation with customers in accordance with the
provisions of the Proposed 2014 Undertaking ultimately failed to reduce demand for
LTA capacity to an amount under the total offered.
On 22 August 2014, CBH provided a submission to the ACCC proposing an
alternative conclusion to the capacity allocation process for long term capacity. In this
submission, CBH proposed an additional clause relating to the LTA application
process that would allow CBH to make proposals to customers that the customer
must either accept or reject. This was a change from the process originally
contemplated in the Proposed 2014 Undertaking, whereby any oversubscribed
months at each port would have reverted to auction.
The ACCC conducted a targeted consultation process in relation to CBH’s proposed
amendment. The ACCC received 14 submissions from interested stakeholders, and
a further submission from CBH. Public submissions are available on the ACCC’s
1
CBH, Submission in support, September 2014, p. 2.
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website. While some stakeholders supported the proposed amendment, other
submissions raised concerns with CBH’s proposal.
CBH withdrew its Proposed 2014 Undertaking on 8 September 2014, stating that:
Whilst CBH continues to consider that the [Proposed 2014 Undertaking] and its
pursuit of Long Term Agreements (LTA) is in the interests of the Western Australian
grain industry, CBH believes it would be confusing and distracting to proceed with the
[Proposed 2014 Undertaking] which mixes an LTA and auction process. In short, it is
simpler and clearer to revert to the existing 2011 Undertaking and the auction
process with which parties are familiar.
Documents in relation to the now withdrawn Proposed 2014 Undertaking are also
available on the ACCC’s website.
Submissions
The ACCC encourages interested parties seeking to make a submission on the
Application to do so as soon as possible and at the latest by 5pm on Tuesday
16 September 2014. In deciding on a targeted one week consultation process, the
ACCC notes that there is limited time left until CBH’s current access undertaking
expires, and that interested parties have previously considered the majority of
changes in the Application during consultation on the proposed 2014 Undertaking. It
is in parties’ interest to make any submissions within this timeframe in order to allow
the ACCC sufficient time to consider their submissions prior to making a decision.
Submissions should be addressed to:
Ms Lyn Camilleri
A/g Deputy General Manager
Infrastructure & Transport – Access & Pricing
Infrastructure Regulation Division
Email: [email protected]
The ACCC prefers that submissions be sent via email in Microsoft Word format
(although other text readable document formats will be accepted).
In deciding whether to consent to a variation of an access undertaking, and whether
to extend the period for which an access undertaking is in operation, the ACCC
considers the matters set out in subsection 44ZZA(3) of the Act. Essentially, the
ACCC may accept the Application if it thinks it appropriate to do so, having regard to
the various matters set out in the Act.
If you have any questions in relation to this consultation letter, please contact Michael
Eady on (03) 9290 1945 or at [email protected].
Yours sincerely
Lyn Camilleri
A/g Deputy General Manager
Infrastructure & Transport – Access & Pricing
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