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Economics Legislation Committee
31/05/2017
Estimates
INDUSTRY, INNOVATION AND SCIENCE PORTFOLIO
Anti-Dumping Commission

Anti-Dumping Commission

[18:12]

CHAIR: I welcome Senator the Hon. Arthur Sinodinos AO, Minister for Industry, Innovation and Science and the officers of the department and of the Anti-Dumping Commission. Would you like to make an opening statement?

Senator Sinodinos: I am fine, thank you.

Ms Beauchamp : No thank you, Chair.

CHAIR: We might begin questions with Senator Carr.

Senator KIM CARR: I read a report on 9 March in The Sydney Morning Herald. Jewel Topsfield is claiming that Minister Ciobo had indicated your decision on paper was to be reviewed. Are you familiar with that report, Commissioner?

Mr Seymour : Yes, Senator, I am.

Senator KIM CARR: Have you been able to confirm that the report was accurate?

Mr Seymour : At no time has the Minister for Trade, Tourism and Investment requested me to do anything in relation to any cases I have conducted in the Anti-Dumping Commission.

Senator KIM CARR: You have not sought a clarification from the minister?

Mr Seymour : I did seek clarification through the office of the minister and was reassured that the comments that were made by the minister, as reported in TheSydney Morning Herald did in no way reflect a desire on behalf of the minister to direct me to do anything.

Senator KIM CARR: You said through the office of the minister. Are you talking about the trade minister or are you talking about the industry minister?

Mr Seymour : The trade minister.

Senator KIM CARR: Does the trade minister have the capacity to direct you?

Mr Seymour : Under the legislation, the portfolio minister directs me, which in this case would be Minister Sinodinos or Minister Laundy.

Senator KIM CARR: But not the trade minister?

Mr Seymour : Under the legislation, that is right.

Senator KIM CARR: You raised the matter with the trade minister's office, did you?

Mr Seymour : I raised the matter with my minister's office.

Senator KIM CARR: And you are satisfied with that?

Mr Seymour : I am for the simple reason that at no time have I been asked to do anything.

Senator KIM CARR: There has been no follow-up, so that is a fairly straightforward—

Mr Seymour : There was no request to do anything at any time.

Senator KIM CARR: Fair enough. And you are not anticipating that you will be reviewing the decision that you have made in regard to the investigation that you concluded in April?

Mr Seymour : The article in question was 9 March, as I recall.

Senator KIM CARR: Yes, 9 March.

Mr Seymour : I was travelling overseas at the time. The status of the investigation referred to in that article was at an interesting stage. It was around the time when we were seeking, or would soon be seeking, views of interested parties on the statement of essential facts, which is the penultimate draft before I finalise my views and refer my recommendations to the minister. In a technical sense, language around reviewing something in some ways is reflecting the way the legislation actually operates. There is a review mechanism for—

Senator KIM CARR: But you were doing the review?

Mr Seymour : But it is my review.

Senator KIM CARR: Yes.

Mr Seymour : It is not a review as conducted under division 5 of the act, it is simply: I put my views out publicly for 20 working days and interested parties have 20 working days to tell me whether they think I have got it right or not. In that sense it is a form of review.

Senator KIM CARR: Yes. Perhaps the concern that has been expressed is misplaced?

Mr Seymour : At the time, you also expressed your concerns publicly via a press release—

Senator KIM CARR: You bet I did.

Mr Seymour : which caused me to seek clarification to ensure that everybody was on the same page in relation to the understanding of how the anti-dumping system operates.

Senator KIM CARR: I think a common English reading of those remarks could suggest that you were under pressure?

Mr Seymour : Anybody who knows me knows it takes more than a media article to worry me about processes that I follow independently.

Senator KIM CARR: It is quite clear that Minister Sinodinos has the power to ask you to do that.

Mr Seymour : Actually, in the process that we are referring to not even Minister Sinodinos can tell me how to do it. Nor Minister Laundy, because it is purely me as a statutory officer exercising my powers.

Senator KIM CARR: And that has not happened. That is the evidence you putting to me: there has been no suggestion that the government has asked you to review this decision.

Mr Seymour : At no time in my time as Anti-Dumping Commissioner has any minister of the Crown sought to direct me to arrive at any conclusion in terms of my investigations.

Senator KIM CARR: That is as clear as you are going to get. Thank you very much. In regard to quicklime, you commenced an investigation into the alleged dumping of quicklime products from Malaysia, Thailand and Vietnam in April 2016—is that correct?

Mr Seymour : We are not conducting any investigations into quicklime at the moment. We have in the past undertaken two investigations.

Senator KIM CARR: This is Cockburn Cement.

Mr Seymour : Yes. That has some history. We may have covered these issues once before but, on both occasions, I exercised my statutory powers to terminate investigations.

Senator KIM CARR: And that was terminated in November last year?

Mr Seymour : Yes. I do not have the information in front of me in terms of the actual date. It was about that time.

Senator KIM CARR: Could you give me an update on the case? Have there been any further developments?

Mr Seymour : There has been no further application by any Australian entity.

Senator KIM CARR: Can you tell me why it was terminated?

Mr Seymour : It was terminated, from memory—I do not have the brief in front of me—due to a lack of causation and injury.

Mr Sexton : It was terminated largely on the basis that no dumping was found by most of the exporters. Some exporters were found to be dumping, but, in fact, their prices were not undercutting those of the Australian industry. Therefore, injury and causation were not proved.

Senator KIM CARR: Not undercutting? You are saying that dumping was found but it was not undercutting Australian manufacturing?

Mr Sexton : Correct.

Senator KIM CARR: Is that the proposition?

Mr Sexton : That is correct.

Senator KIM CARR: How can it be that dumping was occurring but not undercutting? How does that follow?

Mr Sexton : The relevant importers who were selling in Australia were not selling at lower than the Australian prices. Therefore, it cannot be argued that they were causing injury to the Australian industry.

Senator KIM CARR: But they were dumped?

Mr Sexton : There were small dumping margins found with respect to a couple.

Senator KIM CARR: Was it an issue about the timing—the period of injury?

Mr Sexton : Not to my knowledge. No, not in this case.

Mr Seymour : We always take a standard approach to the setting of the investigation period and, once that investigation period is set, we do not change it. The applicant and the other respondents to an investigation are required to furnish us information that is relevant to the period and also to the period of potential injury to Australian industry. If the prices were not being seen to be undercutting the Australian operator in the market in Australia, then the injury test essentially fails and I am obliged to terminate the matter.

Senator KIM CARR: I just want to be clear about this. The applicant has to demonstrate that, during the period they are complaining there is an injury. Even if you find that dumping has occurred, if it is a different period to the application, then the effect is negligible. Is that how it works?

Mr Seymour : More or less, that is right. I could spend an hour explaining the intricacies of dumping, injury and causation—

Senator KIM CARR: That could be an interesting exercise.

Mr Seymour : I am sure that you would soon look at me in a strange way, so I will not do that. You will recall that in another matter we found significant dumping of product into Australia and no injury. That was the solar panels matter a few years ago. This is not an uncommon exercise. The legislation requires that there be dumping or subsidisation and that dumping or subsidisation actually caused the injury to Australian industry and not some other causal factor that is not related to the dumped or subsidised product.

Senator KIM CARR: This is important because I think people look at our hearings and draw from them conclusions in terms of the way they operate, both in terms of their applications to you but also in terms of how the antidumping regime works. Are you saying that, with regard to Cockburn Cement, if they had lowered their prices to remain competitive, they would then have been able to assert injury?

Mr Seymour : They are in the market at the price that they believe covers their cost to make and sell and has an element of profit. They are in a very competitive market. There is no doubt that imports of quicklime have increased from other markets, but, as I say, the dumping legislation is very clear—that the causal effect has to be established.

Senator KIM CARR: For that particular period, for the application. That is a critical factor, isn't it?

Mr Seymour : Yes. The investigation period and the period that we assess the relative performance of the Australian applicant. As I think we have discussed before, we essentially do two inquiries. One is: what is the behaviour of the exporter of the product to Australia? Is it at or below normal value—in other words, the cost to make and sell and make a profit in its home market? If it comes in under that price, it may well have been dumped.

We do a similar sort of test in relation to subsidisation cases. And then separately we look at the Australian industry performance. We gather as much data as possible—and we verify all of this data, by the way, onsite—both here and overseas. And we seek to establish accurate information, performance information, of a commercial nature. Most of it is very sensitive, because it relates to prices and margins—very competitive information. And we try to satisfy ourselves that, can the claim be established, the dumping or the subsidy caused the injury directly.

Senator KIM CARR: Two factors: do you have a margin to assess harm? Do you say that beyond a certain margin we can say that there has been harm to an enterprise here?

Mr Seymour : In the legislation it is 'materially injured'. It requires me to be satisfied that there is material injury. It is a little silent on the standards. There are 15 grounds within the legislation—and I can, again, go through them all.

Senator KIM CARR: Do you have a gradation of harm?

Mr Seymour : Well, they are all equal. So, there are 15 tests that I apply in relation to the injury assessment to the Australian industry player.

Senator KIM CARR: And that is specified in the act?

Mr Seymour : Yes. And I have to then go through a very careful examination. I have to gather the facts, apply those facts and then conclude whether that test of materiality and causation is present. If it is not, I terminate. If it is, I recommend to the minister the imposition of measures.

Senator KIM CARR: The other issue that has been put to me relates to the case you mentioned of checking—your verification, particularly internationally. Do you have sufficient staff to verify data internationally? Or do you rely on a desktop audit arrangement?

Mr Seymour : It is very rare. I can knock the last point off first, if you like. It is very rare for me to require a desktop analysis. It has happened in some cases, where it has been unsafe for my people to travel to certain countries. Without going into detail, obviously we are under the guidance of others as to whether we do or we do not, and the secretary is always reminding me of that fact and of my duty of care. But we are verifying somewhere around 75 to 80 per cent of all cases—all main exporters that are caught in an investigation. And that requires our people to go to those countries and to sit down and to interrogate the exporter in relation to their data.

Senator KIM CARR: This is the point I am trying to make: you have people on the ground who go to an enterprise in a foreign country and interrogate that data.

Mr Seymour : Correct. And I put a program in place two years ago with the assistance of the secretary and the department to ensure that I was able to qualify more of my staff to be able to go and lead those investigations overseas. It is a very difficult task to do. It is essentially a forensic accounting exercise. It requires resilience and—

Senator KIM CARR: Language skills, for a start, I would have thought.

Mr Seymour : Well, we have to have interpreters, and we need to be able to—I think we had a photo on one occasion when we were in a certain Asian market, and there would have been 20 government and other officials on one side of the table and two of us on the other side of the table. So, it is by no means a walk in the park. There are now something like 17 or 18 senior verification leaders who have qualified through the program we have developed. That means they can lead verification visits.

Senator KIM CARR: And these are your personnel, not the department's, not Austrade's—

Mr Seymour : No, they are all mine. Well, they are all owned by the secretary. The secretary is their employer, and I am very grateful that she gives me those people to use in the Anti-Dumping Commission.

Senator KIM CARR: I appreciate that. However, I am wanting to know whether or not they are qualified.

Mr Seymour : Well, they are, definitely. They have either an accounting skill, a legal skill, a policy or regulatory skill or an economics skill, and all of those competencies come into play in that space.

Senator KIM CARR: I want to turn now to tomatoes. There has been concern expressed in regard to tomato products. Can you give us an update with regard to the investigation and reviews into 'tomato products, prepared and preserved' as I understand they are headed up on your website?

Mr Seymour : Yes, I think I simply refer to them as tinned tomatoes. As we have discussed a number of times in the past, we have been undertaking a number of investigations. We concluded all those investigations and some reviews of exporters in the system from earlier decisions on tinned tomatoes from Italy. The sum total of all of this now is that there are—and it changes sometimes—some 184 exporters of tinned tomatoes from Italy into Australia who have either exported tomatoes or have expressed a wish to do so and have sought a rate from the commission. If there are 184, then 183 of them are subject to a trade measure, and in some cases significant trade measures. That, in volume terms, captures greater than about 70 to 75 per cent of the current market for imported tinned tomatoes into Australia.

CHAIR: What is the problem with the last one?

Mr Seymour : The last one escaped the measures through a review exercise undertaken by the Anti-Dumping Review Panel.

Senator KIM CARR: What is the name of that company?

Mr Sexton : La Doria.

Senator KIM CARR: It is just that I have noticed quite a number of Italian producers on the shelves at Coles. They still manage to get quite a lot of product in here.

Mr Seymour : Well, the antidumping system is not designed to stop—

Senator KIM CARR: No, I understand that, but I am saying that there is still quite a substantial product coming into the country, is there not?

Mr Seymour : I have not checked the import data in recent months, but I think, anecdotally, there are still plenty of Italian tinned tomatoes available by retailers, yes.

Senator KIM CARR: Has there been a change in the dumping margin as a result of any of the reviews you have undertaken?

Mr Seymour : There certainly has, and of course what this reflects is the dynamic nature of Australia's antidumping system, which means that exporters who are caught in the system through the investigations are able to seek a review 12 months after the imposition of those duties, and if they have not been dumping into the Australian market they can seek a review that might either reduce their margin or eliminate it, and if it is eliminated they may then face the imposition of a floor price, which is set as a safety net to ensure that there is not a free flow of, in this case, tinned tomatoes into Australia. And we have been through quite a number of reviews and the like when it comes to tinned tomatoes.

Senator KIM CARR: So, what has the change been? Are you able to tell me that?

Mr Seymour : It is very detailed. I could take it on notice and give you a detailed summary of all of them, if you like.

Senator KIM CARR: Thank you. So, you have imposed a number of duties in regard to tinned tomatoes.

Mr Seymour : Yes.

Senator KIM CARR: Who collects that money? Is it Customs?

Mr Seymour : It is Customs, yes.

Senator KIM CARR: And what happens if the exporter then reduces the price of the product by the same level at the retail end? Does that mean a change in their retail pricing?

Mr Seymour : Once it goes through the port and it has been released, the retail strategies of the buyer and the seller are a matter for them, within Australia's domestic laws. It has no relevance to me, other than if an Australian player came to me and said there was evidence in the Australian market that aggressively dumped product was the result of some form of circumvention activity, in which case the legislation provides for me to investigate such allegations.

Senator KIM CARR: Is that happening?

Mr Seymour : Well, if we stay with tinned tomatoes, that has not been the case.

Senator KIM CARR: Sorry—you are confident that it is not happening, or you have not had a complaint?

Mr Seymour : I have not had a complaint, and typically we would rely upon industry intel around circumvention, simply because they are closer to market behaviours than we are.

Senator KIM CARR: Sure. You cannot act independently, though, can you?

Mr Seymour : I can look into the data and do trend analysis and modelling, and the Anti-Dumping Information Service and our market intel capacity has been developed in order for me to build that type of ability. So, certainly we have the genesis of that type of capability. At the moment, because of the maintenance of record levels of demand for our services in the actual dumping and subsidy area around the reviews that go alongside maintaining the dynamic nature of the system, that is where my resources have been allocated.

Senator KIM CARR: I understand that. The point is, though, that you would prefer for industry to take initiative on that.

Mr Seymour : My preference would be that, if people were concerned, they would come to me and give me their market intelligence and I would take it and do a prima-facie examination and recommend a course of action to the minister.

Senator KIM CARR: In fact, there is some strain on your resources at the moment; isn't that the case?

Mr Seymour : It is a wholly demand-driven business, if you like. The business model is designed to be able to quickly respond to the needs of Australian industry when they put their hand up. I am proud of the fact that we do that pretty well now. But, as I think anybody in my position would say, we could always do with more resources.

Senator KIM CARR: More people, that is right. Let me look at some statistics. How many current investigations do you have on your books?

Mr Sexton : We have 92 cases on our books at the moment.

Senator KIM CARR: How does that compare to last year? What sort of increase is that?

Mr Seymour : Last year we had 115 and this year we have had 92 and we have still got two months to go.

Senator KIM CARR: I am told it is about a 20 per cent increase in your workload. Would that be a fair assessment?

Mr Sexton : Over the last 10 months, since the beginning of the year, there has been a 20 per cent increase in our workload.

Senator KIM CARR: In terms of a resources perspective, how are you managing a 20 per cent increase in demand for your services?

Mr Seymour : We have implemented a new investigations model, which has meant that we have been able to bring the average time lines down to the mid-200s—this is, calendar days—for complex investigations, which is a pretty good outcome, given the increasing complexity of these cases, both dumping and subsidy investigations, in a system that is very balanced, fair and progressive to all the parties involved in those investigations. So the core response to your question is: we have reformed the business model and we are focusing our resources entirely into that space of being able to get the investigations done as quickly on an informed basis as possible.

Senator KIM CARR: On notice, can you assist me with a detailed breakdown of the types of investigations currently on your books? Are they new investigations, reviews or duty assessments?

Mr Sexton : That information is up on our website at the present time.

Senator KIM CARR: Are you able to tell me in terms of the industries? Is that on your website as well?

Mr Sexton : There is some information about what sectors are covered by current investigations.

Senator KIM CARR: I am interested to know what percentage of your work is in steel. You have provided information like this before. What is it currently?

Mr Seymour : Currently the vast majority of our cases are steel and aluminium related.

Senator KIM CARR: Steel?

Mr Seymour : Yes.

Senator KIM CARR: Have you got a number?

Mr Seymour : It varies all the time, obviously it is not—

Senator KIM CARR: Give me a range then.

Mr Seymour : It is in the 80 to 90 per cent range if you add the two together.

Mr Sexton : The figure I have here is as at 31 March, the end of the last quarter. The cases on hand by the steel sector is 66 per cent.

Senator KIM CARR: And aluminium?

Mr Sexton : Aluminium is 22 per cent.

Mr Seymour : So 88 per cent.

Senator KIM CARR: And tomatoes?

Mr Sexton : Food, which is where tomatoes sit, is four per cent; paper products is six per cent; and electrical equipment is two per cent.

Senator XENOPHON: I want to go to the issue of transhipment. As I understand it, transhipment involves a scenario whereby products manufactured in a country subject to antidumping measures are exported to a third country not subject to measures and are then re-exported to Australia as goods exported from the third country not subject to measures in order to avoid the payment of dumping and/or countervailing duties.

Mr Sexton : That is correct.

Mr Seymour : That is a fair definition.

Senator XENOPHON: I just wanted all the people out there in internet land to understand that for the next question. So you are aware of the problem of transhipment?

Mr Seymour : It is a global issue.

Senator XENOPHON: Can you tell me what the commission is doing about transhipment?

Mr Seymour : Yes. We have what we refer to as our anticircumvention powers to investigate allegations of transhipment and any other form of circumvention that takes place. The transhipment is one of a number of tests that we would look to to satisfy ourselves that those products have indeed come through that form.

Senator XENOPHON: So there is a way to measure it and test it?

Mr Seymour : Yes. We would undertake an anticircumvention inquiry and we would test to see whether those allegations are real or not.

Senator XENOPHON: How many applications for anticircumvention inquiries have you received for this practice of transhipment?

Mr Seymour : I might have to come back to you on the detail. There has been, surprisingly, a relatively small number of—

Senator XENOPHON: Why do you say 'surprising'—because you think there is more transhipment going on?

Mr Seymour : When the legislation was amended we went to great pains to communicate to our stakeholders that this was a new and powerful aspect to the legislation. We have had six or so cases to date. I will come back with the detail on that. I thought there might be more.

Senator XENOPHON: I might explore that in a moment. Who does the onus of proof lie with in order to initiate an anticircumvention inquiry in respect of transhipment?

Mr Seymour : The minister has wide-ranging powers in relation to initiation, mainly based on my recommendations, and I would like to think that would always be the case. An industry applicant can come to me with that information and can satisfy me through an application and I will initiate in terms of my own powers. There is no issue in the way the legislation has been framed in order to respond to any allegation, but they have the same standard that we would ordinarily apply to any matter. Obviously we need to satisfy ourselves that it is a strong argument.

Senator XENOPHON: Yes, sure. Do you consider or concede that it could be difficult for an Australian manufacturer to find this evidence of dodgy dealing between two or more exporters, from an evidentiary point of view?

Mr Seymour : It is extremely difficult. I have seen a lot of information that relates to this, and you are in the real world where real things occur in terms of how things are made and how businesses operate, and it is a pretty tough market, a pretty tough environment. A lot of anecdotal information comes across my desk that may relate to those types of practices that you refer to. We would need to satisfy ourselves that enough information is available that warrants an investigation.

Senator XENOPHON: But, given the role of the commission and the resources available to you, as a matter of course you would have better information than Australian manufacturers concerning import sources?

Mr Seymour : We have the ability to track trade flows, and one of the key aspects in transhipment is to see, through trade flows, decreases and increases in trade flows.

Senator XENOPHON: Are you tracking trade flows?

Mr Seymour : We do, but I do not have the ability to do that on a wide-ranging basis. Obviously we have to prioritise.

Senator XENOPHON: How much tracking do you do to try to get an idea?

Mr Seymour : We have the Market Intelligence Unit established, and it is doing a range of activities in that space. A lot of it is on my request or the general manager's.

Senator XENOPHON: On notice, can you tell me how much tracking of trade flows you do and what that would be as a proportion of the trade in terms of potential transhipments?

Mr Seymour : Certainly. I would make an additional comment though. When it comes to compliance and the like, we have extremely good working relationships with Australian Border Force. The agencies involved in having a look at this particular aspect of the system are collaborating very strongly, so there is no barrier in that regard.

Senator XENOPHON: This worries me, because I think it is one of the new areas where people try to avoid dumping or countervailing duties. Once measures are imposed, do you actively look for examples of changes in the country of origin? In some cases a country of origin is being nominated that does not even produce the goods. There are examples of steel products exported from Singapore or chemical products from Estonia. Singapore does produce lots of wonderful things, and I am sure Estonia does as well, but if they do not actually have a manufacturing capacity, they do not actually produce those goods, do you have a way of tracking that or monitoring that so we do not get hoodwinked by these transhippers?

Mr Seymour : I rely on many inputs to make judgements about which trade flows I am tracking at a particular time. To be honest with you, I would rather not go into any more detail about what we look at, for the simple reason that it is a rather sensitive area.

Senator XENOPHON: Sure. But that is a pretty obvious one. If a country does not make a particular good, such as steel from Singapore or chemical products from Estonia—

Mr Seymour : Singapore actually does make steel.

Senator XENOPHON: Does it? That is the example I was just given. Well, there were certain steel products from Singapore, but there are particular types of steel products that come here that Singapore does not make—I should clarify that. I do not want to be banned from Singapore as well; it is enough to be banned from Malaysia.

Mr Seymour : Your point is well made, and I understand your point. It would be a desire of mine to improve our market intelligence capability over time.

Senator XENOPHON: I want to go to a few questions on input dumping. My understanding is that exporters of goods from countries subject to measures—just as an example, China—are avoiding duties by supplying inputs to other countries not subject to duties such as, say, Vietnam or Taiwan, and then transforming those inputs into the goods and finally exporting them to Australia without any duty liability. How am I doing? Is that about right?

Mr Seymour : That is pretty good, yes.

Senator XENOPHON: So you are obviously aware of that problem?

Mr Seymour : Absolutely.

Senator XENOPHON: Are there any options for Australian manufacturers experiencing this problem to seek redress from the commission?

Mr Seymour : The reality is that input dumping in its own right is not necessarily something that might find a sanction at this end.

Senator XENOPHON: Hang on—it does not find a sanction—

Mr Seymour : It may not find a sanction.

Senator XENOPHON: So there is some ambiguity there?

Mr Seymour : Not from a World Trade Organization perspective.

Senator XENOPHON: No, I am interested in here in Australia: is there some ambiguity in the regulatory framework?

Mr Seymour : No. It is really just how I read the facts.

Senator XENOPHON: I am confused now. Are you saying that you do not have the full measure of powers to deal with this?

Mr Seymour : With input dumping you could have a product that is subsidised in a far northern European country that finds its way to an Asian market. The Asian market sits it in its inventory, it may recharacterise it somewhat and then it shifts it over to another market. That does not necessarily mean that the input dumping has had a material effect on the price into Australia. It is not a simple test. So all I am saying is—

Senator XENOPHON: But the pub test would be that they are doing something dodgy.

Mr Seymour : It is like many things in the antidumping system. It does not excite too many people, but it might excite a few people in the pub test.

Senator XENOPHON: Senator Carr is excited; I am sure there are others in the room!

Mr Seymour : At the end of the day I am only interested in the facts and whether those facts are tested against the law.

Senator XENOPHON: But input dumping can be very damaging to Australian industry, can it not?

Mr Seymour : Possibly, yes.

Senator XENOPHON: Possibly?

Mr Seymour : Yes.

Senator XENOPHON: It can be?

Mr Seymour : Yes, I am agreeing with you.

Senator XENOPHON: Yes, sure. So how many applications involving input dumping has the commission received?

Mr Seymour : In my time there have been some questions that might relate to input dumping but no applications, as far as I know. If you like I could take that on notice and bring you back an answer.

Senator XENOPHON: Yes. Can I just give you an example, which I understand might be a live case. I think BlueScope's galvanised steel case concerning India, Malaysia and Vietnam involved the export of dumped and subsidised Chinese steel slab to Vietnam, where it was transformed into steel coil and then exported to Australia free of dumping and countervailing duties. Had the steel coil been exported to Australia directly from China, it would have been subject to duties of six to 9.8 per cent.

Mr Seymour : Yes, I am well aware of the matter. I published my statement today on that matter. The parties now have 20 working days to come back to say whether I have got that right or not.

Senator XENOPHON: Today?

Mr Seymour : Today. I thought that you must have checked my website—

Senator XENOPHON: I am always checking your website.

Mr Sexton : It would have been this afternoon that it was published.

Senator XENOPHON: Sometimes I surprise myself with how current my information is!

Mr Seymour : You do. And you are very well informed. That is exactly the issue and that is being treated in that particular manner, and the parties now have 20 working days to come back and tell me what they think.

Senator XENOPHON: So maybe my questions have not kept up to date with your website. In terms of the proposed recommendations—is this the recently published Statement of essential facts No. 370?

Mr Seymour : It is the one from today, yes.

Senator XENOPHON: What were the recommendations—that you are going to take action on input dumping?

Mr Seymour : We found—I do not have it in front of me—dumping in the majority of cases, and so, subject to the views of the parties, I may change my view if new evidence is provided to me through this statement of central facts phase. But, if all things are equal and no-one convinces me otherwise, I will go forward with a recommendation along those lines.

Senator XENOPHON: My final question to you in relation to import dumping and transshipment is that it can be pretty tricky from an evidentiary point of view—correct?

Mr Seymour : Certainly.

Senator XENOPHON: And that involves some significant resources to—I am just trying to get you some more money here, Mr Seymour—try and track this down.

Mr Seymour : It is a complicated matter and it is resource intensive.

Mr Sexton : Can I add: transshipment is almost not an anti-dumping matter but actually a fraud or a compliance matter. What you are actually saying is that to work effectively certificates of origin documentation have to be fabricated to indicate that goods are coming from country B when it should be coming from country A.

Senator XENOPHON: But you work together with Border Force.

Mr Sexton : We are working with Border Force on a number of issues-

Senator XENOPHON: Can you estimate—

Mr Seymour : including a number of what they would refer to as fraud matters.

Senator XENOPHON: What sorts of goods are we talking about—hundreds of millions of dollars worth of goods coming to this country through transshipment? You don't know.

Mr Seymour : I would not speculate.

Senator XENOPHON: Could it be hundreds of millions of dollars?

Mr Seymour : I would rather not—

Senator XENOPHON: Could it be billions of dollars worth of goods coming into this country?

Mr Seymour : In the American system, there are some $3 billion outstanding in dumping duties, and the interesting question there is: how do they collect them? A lot of it relates to the sorts of fraud activities that Paul Sexton is referring to? It is a massive system that we are part of here that—

Senator XENOPHON: Just to wrap up now: do you have people on the ground—investigators or agents—in Asia, in Europe, who actively investigate this or do we do it from here?

Mr Seymour : I most certainly do not have agents who are not members of the Anti-Dumping Commission doing it—that is for sure; I could never do that. But, in relation to on the ground in Australia, we have a market intelligence unit. I have analysts who work in that unit now who are looking at trade flows as we discussed and looking to see whether there are predictive behaviours that might indicate the sorts of behaviours you are referring to.

Senator XENOPHON: Do you get cooperation from other countries in relation to this, or do you find them sometimes recalcitrant?

Mr Seymour : If I am doing an investigation, I will always go and ask the question. Whether they choose to answer it is really up to them.

Senator XENOPHON: If they do not answer it, do you think there is scope from a policy point of view that there ought to be a reverse onus or certain weight given to the lack of cooperation from others—

Mr Seymour : I do not require any additional power in the legislation. If they fail to cooperate with me, then I will take my best available information, draw my conclusion and make my recommendation to the minister. Reversing the onus is not really relevant in that sense. If they do not cooperate, then they know what happens.

Senator XENOPHON: It is almost like a reverse onus.

Mr Seymour : It is consistent with the WTO agreement, so it is a straightforward approach.

Senator XENOPHON: Thank you very much.

Senator CHISHOLM: Thanks, Commissioner. I was just interested in whether you are aware of the ABS statistics around the imports of aluminium from China into Australia and how that has been growing.

Mr Seymour : Yes. We have access to that information, and that is relevant to cases that we undertake in relation to that product.

Senator CHISHOLM: Is that something that is currently under investigation?

Mr Seymour : I might just ask Paul Sexton to give us an update on current cases that relate to aluminium extrusions.

Mr Sexton : We have got a number of cases in relation to aluminium extrusions—and I assume you are talking about aluminium extrusions, not aluminium ingot?

Senator CHISHOLM: Yes.

Mr Sexton : Aluminium is one of the higher-level products that we conduct investigations into, along with steel. At the moment, we have just concluded a particular aluminium extrusion investigation, which is currently with the minister for decision, and there are a number of reviews out there where exporters have sought some sort of change in the measures that they are currently subject to.

Senator CHISHOLM: Minister, is there anything you wanted to add to as there is a report on your desk apparently about this.

Senator Sinodinos: These matters are handled by the assistant minister, Mr Laundy. My practice is not to get involved. There is a clear line of responsibility, and my predisposition always in these matters, to the extent I have a view, is to take the advice of the relevant officials.

Senator CHISHOLM: Are you aware that in the Central Queensland town of Gladstone that one of the big factories that produce aluminium has laid off a number of staff in recent months?

Senator Sinodinos: Which factory are you talking about?

Senator CHISHOLM: Gladstone Alumina.

Senator Sinodinos: I think that is in relation to—

Mr Sexton : You would be referring to a smelter.

Senator Sinodinos: which is an energy issue.

Senator CHISHOLM: You will find that is an issue, but there is also the issue about the increased imports coming from China in recent years.

Mr Seymour : As Mr Sexton indicated, there are a large number of measures currently in place against aluminium extrusions from many countries. The question of how effective they are is really a matter for the relevant aluminium manufacturers, and we hold them in place for a period of five years. Parties who are affected by the current measures on aluminium extrusions have the ability to seek reviews, as Mr Sexton indicated, after 12 months. That is part of the system that is, as I say, quite dynamic and alive, and all parties in the system have that open to them if their performance changes and, if they are not dumping, they can make an application to me to have that matter reviewed and their rates reviewed. That is a dynamic part of the system.

Senator KIM CARR: When is the review due for Gladstone?

Mr Seymour : I do not know that there is one; there is no application from Gladstone alumina.

Mr Sexton : My concern is that we are talking about aluminium ingot, which I know is produced in Gladstone. Australia is a net exporter of aluminium ingot—Alcoa being the major manufacturer in Australia, along with Rio. There are no measures on aluminium ingot.

Senator CHISHOLM: How long do investigations normally last?

Mr Sexton : The legislation provides for 155 calendar days for dumping or a subsidy investigation. There are other categories of reviews that we also do but they are the main ones. I think I am on the record as saying that it is very difficult to conclude a complex investigation in 155 calendar days. We are currently running at an average of around 250 calendar days, which is a 20-odd per cent performance increase on what it was in the previous financial year. So we have improved our performance outcomes by about 20 per cent. I would like to think that our new investigation model will bring that down closer to the 155 days, but I am also on the record as saying that I doubt that we will ever deliver a complex case in 155 days, which is silly because the number of players involved. If we took the Australian paper application on A4 copy paper as an example, there were over 150 submissions from interested parties—four countries, many exporters—and it makes for a very complicated investigation. To get all of that wrapped up, concluded and recommended to Assistant Minister Laundy on calendar day 156—we are counting weekends in that, as I always point out—is a significant challenge for any investigating authority.

Senator CHISHOLM: My understanding is that some other jurisdictions like the USA have the ability to impose interim duties. Is that something the commission has looked at?

Mr Seymour : We have absolutely the same ability and on day 60 I am able to impose, through a preliminary affirmative determination or PAD, securities against those products and that then provides a financial obligation against those exporters who are named in the case and are subject to the final conclusion of the investigation. If the dumping recommendation from me that the minister requires a margin to be set, then that obligation taken as the security is therefore payable. It sends a very effective price signal into the market—not before day 60 of an investigation—to the players that if we think there is dumping we have taken early steps to send that signal back to the players.

Senator CHISHOLM: How often do you do that? Do you have any figures on how likely that would be?

Mr Seymour : If you like, I can take on notice the actual number of PADs that have been made. There was a significant push by the government 18 months ago to require that I either make a decision to impose a PAD security on day 60 or publish through an antidumping notice my reason for not making that decision on day 60. That means I am very focused from day zero to day 60 on ensuring that my commission investigators are gathering data sufficient to enable me to make that determination. If I cannot I say why I cannot, which is normally because I have not been able to get the data. I might make it on day 75 or day 80 in some cases, but the onus is on me to act on day 60 unless there is a good reason not to. It is quite an effective measure.

Senator CHISHOLM: How do the penalties put in place not only in the interim but the long term compare to, say, the USA and Canada?

Mr Seymour : Each jurisdiction has its own domestic laws. Developed economies are all signatories, as are many developing countries, to the World Trade Organization agreements. They are therefore required to maintain consistency with those international treaties, if you like, but the domestic laws do differ and that then produces sometimes different outcomes in terms of rates for similar products, depending on the nature of the domestic laws. You often see variation in the rates, and that normally relates back to the investigation period and the performance of those exporters in that investigation period and the way the law is applied in those countries—which, as I say, sometimes differs somewhat.

Senator CHISHOLM: Does that tend to make some countries more of a target than others as a result?

Mr Seymour : It is an interesting question—there is a whole narrative around whether a decision in country A generates behaviours by exporters who are then facing dumping rates into that country so they then choose to shift their focus to other markets and then put pressure on manufacturers in other markets. It is a very interesting narrative. There is probably some truth to it. The majority of the products we are dealing with are commodities; in other words, they are highly traded, they are traded globally and it is a very competitive market. Often those products are marginally costed—the profit margin is tight—and they are looking at their volume businesses. It is a very active global market, particularly in steel and aluminium, glass and other products like that, including paper—A4 copy paper is a classic example of that. There is a lot of activity in that space.

Senator CHISHOLM: Is the commission aware of clinker being dumped in Australia—a product that goes into cement?

Mr Seymour : To the best of my knowledge we have not had any inquiries on clinker at this stage.

Senator KIM CARR: I understand you are developing another tranche of reform initiatives, is that the case?

Mr Seymour : From an operational reform perspective I have been implementing operational reforms for a number of years, which I have referred to a couple of times.

Senator KIM CARR: Are you consulting about a range of administrative changes that actually require legislation?

Ms Beauchamp : Through the International Trade Remedies Forum three subgroups have been set up looking at what Mr Seymour was saying—not just the operational issues but where there were other areas for improvement, particularly focused on compliance and anticircumvention, looking at access for small and medium enterprises and working out subsidy rates and the like. There has been a fair bit of review and consultation going on through the Trade Remedies Forum.

Senator KIM CARR: Are we able to get a look at the recommendations?

Mr Seymour : The three subcommittees produce papers. They have been made available and I am happy to share those—they are drafts.

Senator KIM CARR: What is the process? Are you suggesting that there needs to be further legislative change?

Mr Seymour : As the secretary said, the ITRF is but one input into the government's consideration of further policy changes. I am pleased that the ITRF, which I preside over as the chair, has done its job properly.

Senator KIM CARR: I am glad it has survived, frankly. As you know, it was a tussle for that to happen. Is it doing a good job, do you think?

Mr Seymour : Maybe I am getting a little bit in front of myself, but I thought the last meeting was the best meeting we had had, and the stakeholders told me that that was the case, so I am very pleased with the way it is performing.

Senator KIM CARR: Is it constructive?

Mr Seymour : It is tripartite—the registered unions that are represented around the table are very active. As the chair, I let a thousand flowers bloom in relation to the discussion, so—

Senator KIM CARR: But can I come back to this point: what is the process for getting further changes to the anti-dumping regime?

Senator Sinodinos: It will have to come to government.

Senator KIM CARR: So I ask you, Minister: is it proposed that there be further legislative change?

Senator Sinodinos: Let me see what comes forward and we will make up our mind.

Senator KIM CARR: You have not made a decision on that?

Senator Sinodinos: No. And I would consult Assistant Minister Laundy, because, in a day-to-day sense, he administers all of this.

Senator KIM CARR: Thank you. I will put the rest of my questions on notice.

CHAIR: I thank the staff of the Anti-Dumping Commission.

Proceedings suspended from 19:06 to 20:00