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Thursday, 16 August 2012
Page: 5612

Senator KIM CARR (VictoriaMinister for Human Services) (16:12): I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Customs Amendment (Anti-dumping Improvements) Bill (No. 3) 2012


Twelve months ago, the Government announced 'Streamlining Australia's anti-dumping system'—a policy document setting out the most significant reforms to Australia's anti-dumping system in over a decade.

I am pleased today to present the Customs Amendment (Anti-dumping Improvements) Bill (No. 3) 2012—the fourth and final tranche of legislation to implement the reforms in the Streamlining policy.

As I foreshadowed in March, when I introduced the third tranche of legislation, this fourth bill implements reforms across three broad areas.

First, it will better align Australia's anti-dumping and countervailing system with those of our WTO counterparts.

Second, it introduces provisions designed to address the circumvention of trade measures. These important amendments establish, for the first time, a mechanism for Australian industry to apply to the Australian Customs and Border Protection Service for an inquiry into business practices which are designed to avoid the payment of dumping or countervailing duties.

Third, it strengthens our system's ability to address parties' non-cooperation during the investigation process.

It also makes a number of minor corrections to Part XVB of the Customs Act 1901 (Customs Act).

I will now step through each of these in more detail.

Aligning subsidies provisions with the World Trade Organization Agreement on Subsidies and Countervailing Measures

First, the bill amends the provisions dealing with countervailable subsidies to more accurately reflect the World Trade Organization Agreement on Subsidies and Countervailing Measures. In particular, this bill:

amends the definition of subsidy to more accurately reflect the language of Article 1 of the WTO agreement, clarifying that a financial contribution or income or price support is a subsidy even if it only indirectly confers a benefit in relation to the goods exported to Australia;

repeals the section of the Customs Act dealing with 'calculating whether a benefit has been conferred and the amount of the subsidy' and replaces it with a simplified section more in line with the approach of the WTO agreement;

introduces a new provision which clarifies that the amount of the countervailable subsidy is an amount determined by the Minister in writing and that the amount of countervailable subsidy should be worked out by reference to the units of those goods;

amends provisions relating to material injury to more effectively reflect the WTO agreement. In particular, this relates to requiring that material injury determinations be made based on facts and not allegations, conjecture or remote possibilities. It also ensures that consideration is given to the cumulative effects of those exportations in light of the competition of imported and like domestic goods; and

amends the provision relating to the termination of an investigation where subsidisation causes negligible injury. This will clarify that a countervailing duty investigation can immediately be terminated where the authorities determine that injury is negligible without having to prove that subsidisation is received.

Anti-circumvention inquiries

Second, this bill introduces a new division in Part XVB of the Customs Act, Division 5A—Anti-circumvention inquiries. This division will allow Australian industry, or the Minister, to initiate an anti-circumvention inquiry.

Circumvention is a trade strategy used by the exporters and importers of products to avoid the full payment of dumping or countervailing duties. Circumvention activities take various forms and exploit different aspects of the anti-dumping and countervailing system. For example:

an exporter of goods subject to dumping duty may make an arrangement to export its goods through a second exporter, who is not subject to dumping duty, in order to avoid the dumping duty imposed;

an importer of goods subject to dumping duty may import those goods in parts from the manufacturer and then assemble them in Australia in order to avoid the dumping duty imposed, because "parts" of the goods are ordinarily not subject to dumping duty; or

an importer of goods subject to dumping duty may import those goods via a third country, which is not subject to dumping duty, in order to have them considered as imports from that third country and avoid the dumping duty imposed.

Division 5A empowers the Chief Executive Officer of the Australian Customs and Border Protection Service to inquire into those circumvention activities and provide me with a report recommending whether the original notice should be altered or remain the same. As a result of these amendments, I will be able to extend the original notice imposing the anti-dumping measures to cover the circumvention activities of exporters or importers if I am satisfied that, as a result of the prescribed circumvention activity, the duties which would have otherwise been paid on imported goods have not been paid.

Stronger provisions to address non-cooperative parties

Third, this bill strengthens the provisions that deal with non-cooperation in sampling exercises in investigations, continuation inquiries or reviews under Division 5 of Part XVB of the Customs Act.

Sampling exercises are undertaken where the number of exporters who provide information is so large as to make a determination for each individual exporter impracticable. The Australian Customs and Border Protection Service will be able to limit the examination either to a reasonable number of exporters which are a statistically valid sample, or to the exporters who are responsible for the largest percentage of the volume of the exporters from the country in question which can reasonably be investigated.

Currently, an exporter of goods which are the subject of an investigation must have been either a selected exporter or a residual exporter. A residual exporter would generally receive a duty equal to the weighted average of the examined selected exporters' duty rate imposed by the measures. This would normally be more than the rate for an exporter who failed to cooperate in the investigation.

The Australian Customs and Border Protection Service's view has been that residual exporters only exist in cases where the sampling provisions were applied. In a recent Trade Measures Review Officer decision a loophole was identified which could lead to a counterproductive outcome that benefits non-cooperating exporters, that is, they may receive a more favourable rate than the rate provided under the current approach.

This amendment will prevent potential manipulation of this provision by creating three categories of exporters: cooperative, residual and uncooperative.

As a result, I will be able to determine:

individual rates of duty for all cooperative exporters and any uncooperative exporters for whom an individual export price and normal value were calculated. These exporters will be named in the notice;

a single rate of duty for all residual exporters. These are the cooperative exporters which were not examined; and

a single rate of duty for all other exporters not named in the notice. This will include non-cooperative exporters which are not covered by an individual rate, and new exporters.

This approach is consistent with the approach taken in a number of other jurisdictions.

This reform will ensure that Australia's anti-dumping system effectively deals with parties that do not cooperate with investigations. This ensures that I have the power to impose tougher dumping margins for parties that refuse to provide necessary information within a reasonable period.


This bill completes the implementation of the legislative reforms outlined in the Government's Streamlining Australia's anti-dumping system.

The Streamlining reforms represent the most extensive improvements to the anti-dumping system in a decade and address long-standing systemic issues such as those identified in the Productivity Commission Inquiry Report No.48, Australia's Anti-dumping and Countervailing System.

But more can be done to ensure that the system can respond to new and emerging trends.

During consultations on the implementation of these reforms, the International Trade Remedies Forum highlighted a number of areas that need further improvement. These include:

establishing a Subsidies Working Group to examine possible improvements to Australia's countervailing provisions, and a Compliance Working Group to explore ways to ensure stronger compliance with the trade measures that are imposed;

closer examination of the WTO rules for using experts in exceptional circumstances for exporter visits; and

addressing sales at a loss that are aimed at avoiding the effect of our anti-dumping system.

I am looking at all of these areas and where legislative reform is required—we will bring forward further legislation for the Parliament's consideration.

There is still more to do. This bill is an important step—and I commend it to the House.

Customs Tariff Amendment (2012 Measures No. 1) Bill 2012

The Customs Tariff Amendment (2012 Measures No. 1) Bill 2012 contains several amendments to the Customs Tariff Act 1995 (the Customs Tariff).

Items 1 and 2 of the Schedule to the Bill provide for the listing of Serbia as a Developing Country for the purposes of the Australian System of Tariff Preferences, with effect from 1 March 2012.

This listing accords Serbia a reduction in customs duty on a defined range of goods imported into Australia.

This action is consistent with Australia's approach to other states which were formerly part of Yugoslavia.

Item 7 of the Schedule to the Bill re-inserts subheading 5308.10.00, applicable to coir yarn, in the Customs Tariff. This subheading was incorrectly omitted from the Customs Tariff in the Customs Tariff Amendment (2012 Harmonized System Changes) Act 2011.

Those amendments were previously given effect through the tabling of Customs Tariff Proposal (No. 1) 2012 in the House of Representatives on 16 February 2012.

The remaining amendments in the Bill correct a number of technical errors that have occurred in the Customs Tariff.

These corrections maintain the quality of the text of the Customs Tariff and ensure that Australia's Customs Tariff is correctly aligned with the International Convention on the Harmonized Commodity Description and Coding System that forms the basis of the Customs Tariff.

These corrections do not affect the classification of goods or customs duty payable.

Maritime Legislation Amendment Bill 2012

In the past month the Government has introduced into this Parliament a suite of bills that represents the most significant overhaul of Australia's maritime industry since its establishment in 1912.

We have introduced the National Law Bill to establish a single National Marine Safety Regulator in Australia and the Navigation Bill that modernises the 100 year old Navigation Act.

I also had the great pleasure to introduce the Government's Stronger Shipping for a Stronger Economy legislative reforms.

These reforms became law last Thursday and from 1 July commence the vital work of revitalising Australia's shipping industry.

This Government has also amassed a substantial body of work in the protecting Australia's precious marine environment.

In this Parliament alone, we have increased penalties for the discharge of oil or oil residues by ships in Australian waters from $220,000 to $11 million; banned the carriage or use of heavy grade oils on ships in the Antarctic Area, legislated practices for ship to ship transfers of oil carried as cargo and implemented incremental changes to the maximum sulphur level of marine fuel oil.

This bill continues the Government's commitment to our marine environments.

The Maritime Legislation Amendment Bill 2012 amends the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 to strengthen Australia's comprehensive marine pollution prevention regime.

As a Government, it is our duty to ensure that our laws for prevention of marine pollution are adequate, up to date and consistent with international law.

The International Maritime Organization has adopted a number of Conventions which are intended to reduce pollution by ships.

The most important of these Conventions is the International Convention for the Prevention of Pollution from Ships which is generally referred to as MARPOL.

MARPOL has six technical Annexes which deal with different aspects of marine pollution.

These are pollution by oil, noxious liquid substances in bulk, harmful substances carried by sea in packaged form, sewage, garbage and air pollution.

About 150 countries have adopted at least some of these Annexes.

Australia has adopted all six.

In July 2011 the Marine Environment Protection Committee of the International Maritime Organization adopted amendments to Annex IV, V and VI of MARPOL.

The main purpose of this bill is to implement those amendments in Australia.

The amendments to MARPOL, which will enter into force internationally on 1 January 2013, will:

restrict the discharge of sewage from passenger ships in special areas;

revise requirements relating to the disposal of garbage at sea; and

make mandatory the Energy Efficiency Design Index for new ships of 400 gross tonnage and above built on or after 1 January 2013 for international trade, and

make mandatory the Ship Energy Efficiency Management Plan from that date for all ships of 400 gross tonnage and above that are engaged in international trade.

This bill will also clarify the application of roll back provisions in Australia's territorial sea to clarify application of offences committed outside the three nautical mile limit.

In addition, the bill will repeal the Stevedoring Levy (Imposition) Act 1998 and the Stevedoring Levy (Collection) Act 1998 which relate to the former stevedoring levy.

Payment of the stevedoring levy in accordance with the two Acts ceased in May 2006 and the two Acts are no longer of any effect.

Since coming to power in 2007 this Government has significantly improved the protection of Australia's marine environment.

This bill continues that work.

Transport Safety Investigation Amendment Bill 2012

The Gillard Government is driving historic reforms in infrastructure and transport in Australia.

From 2013, maritime safety, rail safety and heavy vehicles will, for the first time, have nationally consistent laws.

This will cut the number of transport regulators operating across Australia from 23 to 3.

This reform will improve safety, simplify the compliance task for transport operators and boost national income.

The Transport Safety Investigation Amendment Bill 2012 supports the creation of a National Rail Safety Regulator by empowering the Australian Transport Safety Bureau (ATSB) to conduct investigations in all jurisdictions; including, importantly, extending its rail investigation function to metropolitan railway lines.

This bill and the Rail Safety National Law passed by the South Australian Parliament in May this year, replaces seven separate regulatory authorities, 46 pieces of State/Territory and Commonwealth legislation including seven rail safety Acts, nine occupational health and safety Acts, and seven dangerous goods Acts.

In 2009 the Council of Australian Governments (COAG) agreed to a national approach in regulating the safety of rail.

Three years of hard work, by all jurisdictions and industry stakeholders has delivered this historic reform.

By 1 January 2013 the National Rail Safety Regulator will be in place, established through complementary State and Territory legislation, and the ATSB's existing investigation coverage will extend to match that of the regulator.

Rail reform fixes the history of inconsistent regulatory and investigation practices between the states and territories that has constrained productivity in rail transport across jurisdictional borders.

Since 2003 the ATSB has had rail safety investigation functions and powers under the Transport Safety Investigation Act 2003.

However, until now the ATSB has been confined to investigating occurrences involving interstate rail travel.

The ATSB has limited the use of its powers on an understanding reached with the States.

This bill changes that.

For the first time, the ATSB will have responsibility for investigations on the critical metropolitan passenger and freight rail networks.

There will be more investigations across a greater range of safety matters.

In carrying out its function, the ATSB's statutory independence from the regulator and industry will be preserved.

The ATSB's focus will continue to be on improving safety rather than on apportioning blame or providing the means to determine liability.

No amendments are required to the Transport Safety Investigation Act to broaden the ATSB's role.

However, the bill will clarify the Act's reliance on the territories power in the Constitution for the purpose of the ATSB conducting investigations within the territories.

The bill also contains an amendment to enable state and territory Ministers with a responsibility for rail transport to request the ATSB to conduct an investigation in their jurisdiction.

This recognises that the states and territories are significant stakeholders in rail safety.

COAG has agreed criteria for the ATSB automatically commencing an investigation, including where there has been a death or significant mainline derailment or collision.

Further, through assessing data available from all accident and incident notifications, the ATSB will determine whether other occurrences require investigation in order to address emerging hazards and risks.

With the ATSB to assume a national jurisdiction for rail safety investigations, the ATSB will be better positioned to examine other emerging safety trends of importance to the entire industry.

The final amendment in the bill clarifies that some information the ATSB obtains and generates may be disclosed in accordance with regulations made under the Act.

While this amendment will have effect with respect to the ATSB's general investigation functions and powers, it will have immediate importance for the establishment of a confidential reporting scheme.

The scheme will cover the aviation, maritime and rail industries.

For rail it will mean the industry will, for the first time, have a national confidential reporting scheme.

This will be another important component of the national rail safety system.

This bill, along with the broader reforms being undertaken by this Government and the states and territories assures the public and all parts of the Australian rail industry, that the safety of rail operations in this country is an absolute priority.

Debate adjourned.

Ordered that the bills be listed on the Notice Paper as separate orders of the day.