Monday, May 18, 2015

Former ACCC boss warns iron ore inquiry risks "political theatre" for "vested interests"


The former chairman of the Australian Competition & Consumer Commission says a parliamentary inquiry into iron ore industry could damage Australia's global reputation as a place to invest.

Graeme Samuel, who led the ACCC between 2003 and 2011, believes politicians need to stay away from what could be "political theatre" and leave it to regulators like the ACCC to do a proper investigation.


Mr Samuel is also worried about external perceptions that the Federal Government could be swayed by vested interests such as those being promoted by the Fortescue Metals chairman Andrew Forrest.

"Competition regulators are best served to be able to investigate allegations of market manipulation which is what's been suggested here and they're the ones that should be dealing with it - not parliaments or politicians," Mr Samuel told AM.

"I think the problem with politicians getting involved is that we get into a political theatre with parliamentary inquiries and we tend to get a confusion then between what is in the public interest and what is in a political interest or serving political purposes.

"That's why you have independent competition regulators like the ACCC, like the European Commission, like the US Department of Justice and other major agencies throughout the world."

Mr Samuel was speaking after the Prime Minister Tony Abbott declared he would support an inquiry into the iron ore industry after an intense campaign led my Mr Forrest.

But Mr Samuel says a parliamentary inquiry has the potential to raise questions about Australian business and how international investors might view government regulation fuelled by vested interests.

"Since the 1990s and the Hilmer competition policy reforms, Australia has been able to properly claim itself as being the leader in free markets, the leader in developing free markets in this country and in resisting the pleadings of vested interests to interfere in free markets," Mr Samuel said.

"What we seem to have here is particular vested interest that want government, who want parliament to intervene in what seems to be a free market.

"Fortunately we had successive treasurers in Paul Keating and Peter Costello who saw through these manipulations and said no, the public interest has to prevail.

"And, let's face it, it's served us so well for various international economic crises, including most recently, the global financial crisis."

The ACCC recently cleared Andrew Forrest of suggesting cartel activity in March when he declared that Fortescue should work with BHP Billiton and Rio Tinto to put a cap on iron ore production to keep prices low.

The current ACCC chairman Rod Sims said Mr Forrest's were "off the cuff" and did not constitute cartel behaviour.

But Graeme Samuel says that decision strengthens the role of regulators like the ACCC to investigate concerns about market manipulation in the iron ore industry.

"It's not for me to question how the ACCC or what it did in relation to its investigations. But you do have the chairman of the ACCC, Rod Sims, coming out publicly and saying that on the analysis of the ACCC there was not evidence of predatory pricing or of collusive behaviour.

"If there are still concerns the ACCC has all the powers under its act to subpoena witnesses, to subpoena documentation and to be able to conduct a thorough independent investigation".


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