GREISS, Mr Rami, Executive General Manager, Enforcement Division, Australian Competition and Consumer Commission

HEYS, Mr Nicholas, Deputy General Manager, Enforcement Coordination, Australian Competition and Consumer Commission

[16:00]

ACTING CHAIR ( Senator Van ): Welcome. I understand that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers are reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for that claim. I now invite you to make a short opening statement.

Mr Greiss : I might just make a brief one, noting of course that the committee has our submission, so I won't repeat most of the matters contained there. As we did set out, the ACCC is a whole-of-economy regulator, and as such has a very wide remit with respect to its enforcement and compliance responsibilities and priorities. Having said that, we do consider conduct that impacts on Indigenous consumers to be an extremely important priority, and in fact one that we consider an enduring priority in our priority-setting framework.

I might take the opportunity to outline some of the work that we've done with respect to conduct impacting on Indigenous Australians. There's the enforcement action, which no doubt the committee is well aware of. The most recent case we've taken is the Birubi case, but we've taken cases over the past few years in a similar vein. We have a number of investigations underway with respect to quite egregious conduct impacting on Indigenous Australians—conduct that we consider to be unconscionable and conduct undertaken, at least in one instance, by a large corporation.

We, perhaps more under the radar, do quite a bit of outreach work. Our Queensland and Northern Territory officers commit to attending a number of Indigenous communities and have undertaken important work, most notably with respect to the Takata airbag recall and, before that, the Samsung washing machine recall. Both campaigns were very successful and much more successful than the more traditional recall processes that we undertake more generally. We also run a Facebook page called 'your rights mob' which engages with Indigenous Australians with respect to consumer rights. I think we've got quite a large membership of that page. We've also run Do Not Knock inform campaigns in a number of Indigenous communities jointly with the communities themselves and a number of the relevant state fair trading agencies. The ACCC also leads the National Indigenous Consumer Strategy network. That is a joint effort between the states, territories and the Commonwealth which aims to improve outcomes for Indigenous consumers, particularly in relation to trading practices, scams and product safety issues.

I'll just finish by noting that the Australian Consumer Law operates under a one-law-multi-regulator model. It is jointly administered by the ACCC and the state and territory fair trading agencies. I'll leave my opening remarks there, so there is time for questions.

Senator MARIELLE SMITH: Thank you for attending and providing your evidence. I appreciate that you've just outlined some of the different things you do relating to the exploitation of Indigenous cultural expressions. Can you step us through what would be a trigger, under current arrangements, for you to pursue an action against a body for unethical practices relating to Indigenous cultural expressions.

Mr Greiss : When we receive any complaint, we look towards the impact and the nature of the conduct as well as the breadth of the impact. We consider if the impact is egregious—for example, investigation shows that it is truly unconscionable and we consider that it is directed towards operating to take money away from Indigenous consumers—and then we look at how widespread the conduct is and who the perpetrators are. We consider the ultimate impact of any action we might take. We would look at more isolated cases and individual cases and perhaps not take those on or perhaps refer them to state fair trading bodies. As an example, in the Birubi case, because it was a wholesaler that had quite a reasonable distribution, we considered it appropriate to take that as a case, whereas had it been a market, a smaller retailer or even a smaller importer we may not have taken it. All these matters are decisions that are filtered through a number of processes and, ultimately, decided on by the commission, but, hopefully, that gives you a sense of the types of factors that apply.

Mr Heys : The only additional point I would make is that where something fits within our enduring priorities, such as issues impacting Indigenous Australians, that escalates it internally as an important issue for us. But I would also add that, where we have taken enforcement action in a particular sector, one of the reasons we take enforcement action is to achieve widespread market change. If we get further evidence, for example, of other participants or businesses engaging in misconduct, that goes to part of our consideration as to why we should pursue an investigation.

Senator MARIELLE SMITH: Can you step us through what have been the hallmark components of the successful prosecutions you've had around misleading, inauthentic and unethical practice. The case you mention might be one of them, but could you talk about the hallmark components of those prosecutions.

Mr Greiss : I think it's fair to say that there probably haven't been enough cases taken to draw too much from across a range of matters, but, probably consistent with all successful prosecutions, what is at the heart of it is the evidence. You need witnesses who are able to give clear testimony, and documentary evidence is also important. It really does depend, but if we're thinking more about misleading and deceptive conduct, often it's represented through text or audio, so you need copies of that. You need, to be frank, a trader or perpetrator who you can find, because you can't always locate the businesses at the shady end of the spectrum. So there are a number of factors.

To achieve success, the more express a representation is when it comes to alleging that it's misleading and deceptive the more likely you are to achieve success. We've had many instances where the ACCC considers that the express representation is clear but on the face of whatever media it was transmitted on, judges have often taken a completely diametrically opposed view. Those are the factors that lead to success, but nothing is ever assured in litigation.

Senator MARIELLE SMITH: I appreciate that your submission stepped through some of your concerns about the current framework of the bill. Is there anything outside your submission that you want to put on record in terms of concerns about this bill as it stands, or is that a sufficient representation of the breadth of your concerns?

Mr Greiss : I think it is, from a high level. I'll elaborate a little: the primary issue is the expectation it would create in relation to the extent of the enforcement and compliance that we could do. Given our wide remit, we're unable to focus too heavily on any one sector as if we were that sector's regulator. That's something that comes up in so many sectors and industries. There's that expectation: consumers expect us to do something and we're constantly balancing our priorities. So that's the first issue.

I think that the second issue is that it's a slight departure from the types of provisions that we're normally—currently—tasked with. There are concepts there that go beyond our expertise in relation to the nature of the prohibitions on the types of products and the exceptions in relation to what is allowed and what isn't allowed. Personally, as a lawyer, I see a lot of room for argument with respect to what constitutes a ceremonial or sacred object or what constitutes an Indigenous cultural expression. I see and commend the efforts to make it as clear and objective as possible, but lawyers have a way of muddying the clearest waters.

Personally, I don't profess to have thought through all of the detail of how it could play out. I do see that there is scope for a lot of regulation to underpin some of the defences and possibly to give clarity over some of the definitions, but how that plays out will also impact on the enforceability and its operation. But primarily it's in relation to our expertise and the expectations it could create.

Senator MARIELLE SMITH: Do you think that some of the issues this bill is trying to address would be better addressed by standalone legislation?

Mr Greiss : As I think our submission indicated, we do think so. We think that standalone legislation and authority tasked with oversight would probably be the gold standard with respect to this issue. There would certainly be scope then to round out some of the issues that might arise. I expect there's a lot more to this, from some of the submissions I read. What constitutes an Indigenous expression—and I listened to the copyright agency earlier as to the intersection between copyright law, licensing and Indigenous artwork—is probably a more complex question than the bill gives credit for.

Senator MARIELLE SMITH: On the issue of strict liability offences, do you believe that they are appropriate or typical in this context?

Mr Greiss : Can I just be clear, do you mean in relation to the sacred and ceremonial objects prohibition?

Senator MARIELLE SMITH: I mean with respect to offences that apply regardless of the intent of the committing parties.

Mr Greiss : I am aware that there are some strict liability offences in the Competition and Consumer Act generally, so I don't feel like I can hazard a view more generally about whether or not it is appropriate.

Senator MARIELLE SMITH: Mr Heys, did you have anything to add there?

Mr H ey s : No, I have nothing further on that point.

Senator HANSON-YOUNG: Picking up on that last point, my understanding is those offences have being mirrored from existing legislation in relation to other issues that you oversee. It is probably why it hasn't raised any issues. Thank you so much for coming. I assume you guys have flown from Canberra today?

Mr Greiss : Yes.

Senator HANSON-YOUNG: Thank you for that; we appreciate it. It is nice to have you here in person. Thank you for your submission. I understand the point you make. There is some very deep-seated exploitation and misuse of Aboriginal art, artists and conditions, even if licences have been agreed to in some form. I think what we have heard today from a broad range of people is that there is a problem in the sector. What this bill is trying to do is deal with is the face of that—the public market place. Some figures collected suggest 80 per cent of products available for sale in Australia are not real, are inauthentic, are fake, even when they purport or not purport to be made here or be genuine. Do you have any comments to make around those statistics? Have you thought about that? Do they surprise you? Do they feel pretty right? There are very few people who have done the actual work to come up with this figure.

Mr Greiss : That's right. We probably don't have the capacity or remit to do that but, personally, it doesn't surprise me in the sense that what I saw in the Birubi case suggests that there is quite a large proportion of that segment of the market that falls into that inauthentic category—I think probably uncontroversially, if you take the evidence that was put on by the defendants in that case. So that doesn't surprise me but I don't know for certain.

Senator HANSON-YOUNG: Let's take it at face value that it is 80 per cent in absence of any other evidence and the fact that it kind of feels like it's about right. It strikes me then that this is not just an issue of Aboriginal artists being paid appropriately for their work or being given the opportunity to expand their operations; this is a consumer rights issue, from my perspective. If consumers are going into a store or walking down to the Queen Victoria markets here in Melbourne and are buying a boomerang, they are expecting, are they not, that, when they hand their money over, that what they are getting it is an Australian-made authentic product?

Mr Greiss : Perhaps I can add some slight nuance to that. Ordinarily, under the Australian Consumer Law as it currently stands, if that boomerang is properly attributed as being made overseas and not handpainted or not necessarily representing true Indigenous culture then it wouldn't breach the Australian Consumer Law and nor would we be concerned about that. That really ties into why our submission says that this is legislation that goes beyond the scope of what our act has previously allowed, which is that it is a protection for cultural heritage and cultural expression rather than a set of provisions that are meant to avoid consumers being misled.

Senator HANSON-YOUNG: Don't you think the consumer is being misled?

Mr Greiss : I think in certain instances they are. It's a question of circumstance. If, for example, a product was clearly labelled as being a reproduction made overseas then it's possible that you would not be breaching the existing legislation. Frankly, we would probably not take a case under the current law where it was alleged that just by reason of the nature of the artefact, even if it had all the qualifications, it was still misleading.

Senator HANSON-YOUNG: I understand that that's the current situation. What we are trying to do, though, is address the fact that the bulk of products available for sale and being bought in Australia are not real Aboriginal pieces; they are, indeed, fake. Let's take a souvenir shop at the airport. If I go in and buy a boomerang and it's got what looks to be dot painting, I as a consumer am expecting, surely, that that is actually a dot painting and a piece of work that is somehow representative of an Aboriginal product, aren't I?

Mr Greiss : You would hope, though—

Senator HANSON-YOUNG: As a consumer, that's what I'm expecting. I'm not expecting to buy something that's been made in Bali. I'm at the Melbourne Airport buying what is purporting to be an Australian Aboriginal painted boomerang. So I as the consumer am being duped.

Mr Greiss : I would say, absent any other information, that that's probably right. But I think people do know that a lot of cheap souvenirs, wherever they are in the world, even if they embody Indigenous art forms, such as your $5 boomerang or your $5 totem stick in the US, are unlikely to be handcrafted pieces of local art. I'm just giving you the perspective that the court would probably bring to a case where someone alleged that these cheap souvenirs, even if they were labelled correctly, conveyed a misleading impression. They might not necessarily convey a misleading impression, despite the arguments you would make.

Senator HANSON-YOUNG: Yes, but that's why we are wanting to introduce new laws to say, 'Actually, if you are going to sell these products, they need to be either real or licensed.' If it were licensed, it would then have a genuine element to it anyway.

Mr Greiss : I agree.

Senator HANSON-YOUNG: I note the point you make in your submission that the Consumer Law is 'not designed for sectorial or subject matter specific regulation'. You weren't here earlier, when one of the witnesses picked up on this point, but I'd like to put it to you that a lot of the work that you do is often subject specific, whether that's in relation to energy policy or agricultural practices. Surely there are specific areas where you as the ACCC do have to go: 'Well, this is a specific problem. It's a consumer issue and a competition issue, but this is specific to this sector.'

Mr Greiss : That's right. In those instances the government has resourced that sector-specific function and given us budget to be able to focus on a particular area. Ultimately—

Senator HANSON-YOUNG: You would need a specific budget if you were to fulfil this role, in a way?

Mr Greiss : I think that would be a minimum if we were tasked to have a role in a subject-specific sector. These roles are quite resource-intensive. So as not to take away from all the other important work, it does need to be made a priority and funded as a priority if it is to happen.

Senator HANSON-YOUNG: If indeed the government of the day thought it was.

Mr Greiss : Indeed. I should also say that even then it doesn't cover the field with respect to all the things that one might do. A lot of aspects of our energy work is done by other bodies. In agriculture there are still licensing and other oversight bodies that still need to exist to fulfil functions that are not fit for purpose for us to do.

Mr Heys : I would also add that one of the points we were making in relation to some of that particular work is that it is still a general law under the Competition and Consumer Act that we use to deal with issues in the agriculture sector. Notwithstanding there might be consideration by the government on something like a dairy code, the bulk of the work that we do in looking at issues in the ag sector relate to the general consumer and competition law.

ACTING CHAIR: If you would offer your thoughts: in any of your enforcement activities these days, how much does the court still apply the 'buyer beware' principle as a benchmark or something to get over first?

Mr Greiss : The written law takes primacy. Rather than focus on that particular principle, the court takes the view of the reasonable consumer or the class of purchaser. I think it is probably the better standard.

ACTING CHAIR: It's a better way to frame it.

Mr Greiss : It is, and, I think, a much more enlightened approach.

Senator HANSON-YOUNG: Can I go to the primary concern that you raised, which was in relation to the level of expectation. I think it would be right to say that every agency that is tasked with dealing with issues that relate to Indigenous affairs or trying to deal with some of the more complicated issues in Aboriginal policy-making would say the same. There's a huge expectation that when there's some kind of positive arrangement or change of regulation, somehow this is going to make everything better. I think most government departments would feel that every time there's government announcement they are seen as the silver bullet; they'd be concerned that the expectation would be that they'd be seen as the silver bullet. I'm not convinced that that's a reason not to act. I think there are ways by which surely we could manage those expectations. And just because people have expectations that things should be improved doesn't mean we shouldn't try and improve some of it.

Mr Greiss : Perhaps I can clarify where that sentiment comes from. It's definitely not designed to be a bureaucratic stock answer. Rather, it's just from experience that whenever the ACCC has been given a task or there's some announcement, even about an action or an investigation, we receive a flood of complaints and calls to action that are, in their own right, often very worthy actions. We often can't take but a small number of them just because of the trade-offs we have to make. In the context of legislation that isn't economic, in the sense of much of our other prohibitions and contraventions, the example that came to mind was someone attempting to supply an alleged ceremonial sacred object—a very isolated incident but from a cultural perspective it seemed to be very serious, not a mass action. One possibility is we would look at that and say, 'Because that's so isolated, and there are factors that are arguable around it, we might not take it despite the fact that it causes a great deal of concern to the complainant or to the community.' Please don't take that as anything definitive but I'm just posing that as an example. As I say, the commission considers all maTters in their context. But it's a real possibility that something like that could arise. Normally isolated cases of detriment are generally prioritised and we'll take the more serious cases, but, as I said, at the beginning it's usually to do with the scale and scope.

Senator HANSON-YOUNG: One of the suggestions to us throughout the course of the day would be to amend this legislation to remove that ceremonial and sacred artefacts section to try and alleviate that—serious but outside the scope of the broad market—which may go some way to dealing with your concerns there. The other issue or suggestion, of course, is that there would need to be some form of guidelines in relation to this anyway. In those you could clearly set the parameters about what you take on and what you don't, which I think would be a reasonable way forward. As you would with dealing with franchises. You can't go into every individual concern but across the board there are things that fit within the guidelines and that's what you operate in.

Mr Greiss : That's right. We do release guidelines in relation to legislative responsibility. I guess the difference here is we lack the expertise around some of those issues. Turning my mind to the drafting of guidelines that would inform our actions here, I think we would struggle to find the right skills sets in the organisation as they are to be able to give a sense of how we would approach allegations of exploitation of cultural expressions. Again, the examples that come to mind include modern abstract art where the claim is that it draws on Indigenous cultural expression. There are grey areas about that how that would be approached or dealt with. That's just one example of the nuance. So that does go to the inherent skill set. Unlike franchising, which deals with small business and economic harms and on which we have a base of expertise, this takes us into a new area, which is, I suppose, why I said that we would need the resourcing to take something like this on.

Senator HANSON-YOUNG: Yes, I understand.

Mr Heys : Just to clarify, we're talking about guidelines in relation to the proposed legislation, as distinct from—

Senator HANSON-YOUNG: The existing?

Mr Heys : Yes. Just so it's clear, I think we said post the Birubi decision that we would try to provide additional guidance on what that decision means as well.

Senator HANSON-YOUNG: Okay. Just to remind us, what is the time frame on that case? When are we expecting—

Mr Greiss : We've had the outcome.

Senator HANSON-YOUNG: So in terms of a response—

Mr Greiss : In terms of the follow-up work?

Senator HANSON-YOUNG: Yes.

Mr Greiss : We're working on it internally. I expect the response will involve an industry survey or an industry-wide assessment.

Senator HANSON-YOUNG: Is that something that you've just committed to independently as the ACCC, or has the minister requested this?

Mr Greiss : No, it's reasonably standard. If we identify a problem and we have an outcome that is emblematic of a problem, we will look to leverage off that. That's what that is.

Mr Heys : Yes. I think that, in this particular case, we had envisaged that we would use whatever decision the court made to try to leverage further change, so that was always part of our intention in running this matter.

Mr Greiss : I should say that the teams that ran that case have many other immediate cases, including the one I said was quite a serious impost on Indigenous consumers. So they're having to prioritise that. Again, it's one of the many decisions that we have to make about what we do and when we do it.

Senator HANSON-YOUNG: Thank you.

ACTING CHAIR: Thank you very much for coming in today and speaking with us. I don't believe any questions were given to you on notice, but, if senators have any, they'll provide them in writing within a week. Thank you for attending.

That concludes today's proceedings. I thank all witnesses who have given evidence to the committee today. I'd also, personally and on behalf of the committee, like to thank Broadcasting, Hansard and the secretariat. Thank you, everyone, for your attendance today.

Committee adjourned at 16:37