Commission says Coast Line would likely have breached Commerce Act
7 October 1994
The Commerce Commission has concluded that the company proposed by international shipping interests to co-ordinate coastal movement of cargo, Coast Line, would have been likely to breach the Commerce Act.
Commission Chairman Alan Bollard said the Commission has completed its examination of the proposal, and the parties involved would probably have faced Court action by the Commission if they had proceeded as at first planned.
Dr Bollard said the original Coast Line agreement would have been likely to contravene the Commerce Act once the Transport Shipping Reform Bill was passed. The Bill would allow international shipping operators access to coastal shipping. The Commerce Act prohibits competitors agreeing to work together in ways which substantially lessen competition, exclude others from the market, or fix prices.
"The Commission is confident that the proposal will not now proceed in a form which might breach the Act."
The Commission has received written undertakings from the principal of Coast Line, Alex Knowles, and the New Zealand Chamber of International Shipping Operators (NZCISO) that Coast Line will not proceed in any way that might contravene the Act.
While the Commission has completed its examination of Coast Line, it will continue to focus attention on the shipping industry. It will carry out an extensive education programme explaining the requirements of the Commerce Act and will monitor coastal shipping closely.
Dr Bollard said the Commission's aim is to ensure compliance with the Commerce Act. In this case international shippers did not yet have access to coastal trade and the proposal was still at an early draft stage. Had the proposal been likely to proceed in its original form, the Commission would probably have taken court action.
"The point made should be taken by all shipping companies. They will not be exempt from our competition law and the Commission will take action to ensure they comply with the law."
Media contact:Vince Cholewa, Communications Officer
Phone work (04) 471 0180, home (04) 479 1432