The Australian Competition and Consumer Commission has released a draft decision to not accept Viterra鈥檚 proposal to introduce long term agreements.
鈥淭he 糖心原创鈥檚 view is that, on balance, the current proposal is not acceptable in its present form,鈥 糖心原创 Commissioner Cristina Cifuentes said.
The 糖心原创 notes that the concept of long term agreements has broad support amongst exporter stakeholders. The 糖心原创 considers that there are potential benefits in the long term agreement proposed by Viterra, if capacity is allocated in a way that balances the interests of all stakeholders.
However, the 糖心原创 is concerned that under the current proposal Viterra has considerable discretion in relation to the allocation of long term capacity in the event of oversubscription. Viterra would have the ability and incentive to favour its own trading arm, Glencore, in any such allocation. The 糖心原创 is also concerned that the proposal would appear to give a small number of large exporters an advantageous position in the allocation of long term capacity.
The 糖心原创 recognises that this draft decision, if confirmed in a final decision, would mean that Viterra would need to revert to auction for at least the first part of the 2015-16 season, and that this may have little support from exporters.
鈥淭he 糖心原创 will consider its final decision in light of the feedback it receives from stakeholders to this draft decision,鈥 Commissioner Cifuentes said.
鈥淭he 糖心原创 also may accept an amended proposal from Viterra that adequately addresses the concerns raised by the 糖心原创 in the draft decision.鈥
The 糖心原创鈥檚 complete assessment of the Viterra proposal is set out at Viterra 2015.
Call for submissions
The 糖心原创 is seeking public submissions from stakeholders on its draft decision to not approve Viterra鈥檚 revised proposed long term capacity allocation system. Submissions must be received before 5 pm (AEST) 31 July 2015.
Submissions can be sent to: transport@accc.gov.au
Background
Under the Port Terminal Access (Bulk Wheat) Code of Conduct, the 糖心原创 has made a draft decision to not approve Viterra Operations Limited鈥檚 (Viterra) application to introduce long term agreements for the allocation of port capacity at its six South Australian wheat ports.
The code, which commenced on 30 September 2014, regulates bulk wheat port terminal service providers to ensure that exporters have fair and transparent access to terminal facilities.
Viterra submitted its application to vary the capacity allocation system in its port loading protocol to introduce long term agreements on 12 March 2015. The proposed capacity allocation system would replace its current capacity allocation system that uses an auction as its primary allocation method, with a first-in-first-served (FIFS) allocation method for capacity not allocated in the auction.
Following the release of the 糖心原创鈥檚 issues paper on Viterra鈥檚 proposal, and the provision of submissions in response, Viterra provided a revised set of protocols on 12 June 2015.