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Wednesday, 7 February 2001
Page: 24207


Mr Andren asked the Minister representing the Minister for Industry, Science and Resources, upon notice, on 27 November 2000:

(1) What was the original intent of Division 1AACountry of Origin Representations of Part V of the Trade Practices Act, in force since 13 August 1998

(2) Why is it that if a qualified claim such as `Made in Australia from imported goods' is made then the Australian Competition and Consumer Commissioner does not require the producer of the good to meet the substantial transformation or 50% safe harbour test.

(3) Does the ACCC's treatment of qualified claims effectively allow products made anywhere in the world, but packed, bottled or assembled in Australia, to be labelled as “Made in Australia”; if not, (a) on what basis is this treatment justified and (b) how is it consistent with the original intent of the legislation.


Mr Moore —The Minister for Industry, Science and Resources has provided the following answer to the honourable member's question:

(1) The 1998 amendments to the Trade Practices Act 1974, as contained in the Trade Practices Amendment (Country of Origin Representations) Act 1998, came after a period of significant uncertainty as to the application of s52 and s53eb of the Trade Practices Act 1974 to country of origin claims. The judiciary, in a series of decisions, had resisted establishing general compliance guidelines for country of origin labelling, preferring, as is their right, to consider each matter on its own merits. Firms found assured compliance with the Trade Practices Act 1974 difficult, as there were no guidelines as to how country of origin labels were to be interpreted. Such guidance was only obtainable through court decisions on specific goods and specific claims.

As a consequence, many firms were reluctant to provide country of origin information on their goods, denying themselves an important marketing tool and not providing information which a number of consumers were seeking. In addition uncertainty was preventing industry-led initiatives to re-launch the `Australian Made' logo (the well known green triangle with a gold kangaroo).

The 1998 amendments sought to provide some certainty on this issue, by establishing `safe harbour' defences which, if met, protected firms from prosecution under s52 and s53eb of the Trade Practices Act 1974. In effect, the amendments provided a minimum legal certainty, which, if met, avoided the risk of adverse judicial interpretation of country of origin representations.

(2) As noted above, the offence provisions of the Trade Practices Act 1974 which most directly impact on country of origin labelling are s52 (misleading and deceptive conduct) and s53eb (false and misleading representations). In assessing whether a firm should seek to avail itself of the `safe harbour' defences offered by Division 1AA, consideration needs to be given as to whether the representation is potentially misleading and deceptive.

Qualified claims, such as “made in Australia from imported materials” provide more information than an unqualified `made in Australia” claim. In some circumstances, this additional qualification is sufficient to ensure that the representation is not misleading and hence unlikely to breach either s52 or s53eb. In other circumstances, such as where little or no substantial economic activity has been undertaken on the good in Australia (ie. where the good has simply been packaged in this country) the representation is still likely to be misleading, in respect to that part of the representation that purports that the good is “made in Australia”. In the latter circumstances, the firm making the representation would not meet the requirements of the Division 1AA `safe harbour' defences, and would remain at risk of legal action under s52 or s53eb.

(3) The ACCC's treatment of qualified claims does not allow goods that are simply packaged, bottled or assembled in Australia to be labelled with an unqualified “Made in Australia” label. As noted above, qualified claims are subject to all the requirements of s52 and s53eb, without recourse to the `safe harbour' defences of Division 1AA. It is unlikely that a court would find that a good that is only packaged, bottled or assembled in Australia from imported components could satisfy a `made in Australia from imported components' representation with respect to s52 or s53eb.

The ACCC's treatment of qualified claims is entirely consistent with the original intent of the 1998 amendments. In determining whether the provisions of Division 1AA are applicable, consideration first has to be given as to whether the representation potentially breaches either s52 or s53eb. Qualifying a country of origin claim can reduce the risk of potential breach. If, however, the qualification does not remove the risk of a representation being misleading or deceptive, and the goods do not meet the requirements of the `safe harbour' defence established in Division 1AA, then the firm making the representation remains at risk under s52 or s53eb.