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Economics Legislation Committee
04/05/2015

SEBASTIAN, Ms Melanie, Acting Director, Legal and International, Anti-Dumping Commission

SEYMOUR, Mr Dale, Anti-Dumping Commissioner, Anti-Dumping Commission

[11:12]

ACTING CHAIR: Welcome. Thank you, both, for appearing before us today. I do not believe we have received a submission from you, but I invite you to make a short opening statement.

Mr Trotman : I appreciate the opportunity to be able to address the committee today as part of the committee's inquiry into the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015 and the Customs Tariff (Anti-Dumping) Amendment Bill 2015. Since I was appointed as the commissioner of the Anti-Dumping Commission, in August 2013, I have successfully implemented a number of the previous government's reforms to Australia's antidumping system. I have travelled extensively throughout Australia and met key stakeholders of the antidumping system and listened to their views on the operation of the system.

I acknowledge that the previous reforms do not go far enough in my view and that there is further work to be done to provide better support to Australian industries that are being injured by dumped and subsidised goods. I have said repeatedly that I am after a stronger and more robust antidumping system. That is why I am pleased that the government is delivering on its commitments to strengthen the antidumping system, which is evidenced by the reform package being committed by the committee today. I would like to give the committee a brief update on the implementation of the government's reform package that the Anti-Dumping Commission has been involved with, including the Anti-Dumping Information Service and the new anticircumvention regulation on the slight modification of goods.

The Anti-Dumping Information Service will provide the commission with economic analysis and insight into trends and training behaviours across market sectors. Better information earlier in the investigation process is critical, in my view, to improve antidumping investigations and ensure that earlier, more effective relief can be provided to Australian businesses to address harmful dumping practices. The Anti-Dumping Information Service is up and running and currently consists of a market intelligence unit and a client engagement team, but will expand over the coming months.

The reform package also addresses emerging circumvention activities with the introduction of a new anticircumvention regulation. This is particularly pleasing to see. On 2 April, amendments to the Customs Regulations were introduced, which provide for a further circumvention activity to be prescribed by regulation, specifically the slight modification of goods to Australia. This will address a concern that our manufacturers have expressed to me regarding the behaviour of overseas exporters in slightly modifying goods to circumvent antidumping measures.

I spoke before the House of Representatives Standing Committee on Agriculture and Industry as part of this inquiry into the effectiveness of Australia's anticircumvention framework. I am very interested to see the outcomes from this inquiry so that the commission can more effectively target and address circumvention activities. I believe this to be a very significant issue for Australian manufacturers. The commission has developed application forms, which are available on the commission's website with accompanying guidelines to assist applicants preparing applications for circumvention inquiries into the slight modification of goods.

I believe that the range of reforms introduced by the bills will strengthen Australia's antidumping system. While there is still some work to do for the commission in implementing the reforms—the reforms that are already law, and the ones that may become law—the implementation process will not impact directly on any ongoing investigations or cause any unnecessary delays to investigation time frames. I look forward to receiving questions.

ACTING CHAIR: Thank you very much, Mr Seymour. I will go to Senator Xenophon for questions.

Senator XENOPHON: Just a housekeeping matter: I wonder whether Mr Seymour could have that opening statement tabled for the committee?

Mr Seymour : Sure.

Senator XENOPHON: I seek guidance from the Secretary as to whether we need a formal motion ensuring that all the opening statements are tabled.

ACTING CHAIR: I believe we do, Senator Xenophon. I move a motion that we do accept the opening statements from the union—

Senator XENOPHON: It could be a motion to accept statements from all the witnesses this morning.

ACTING CHAIR: Yes, from all the witnesses—CFMEU, Manufacturers Trade Alliance, Mr Seymour and the department. I move that motion. Is everyone agreed?

Senator XENOPHON: I support that motion.

ACTING CHAIR: Carried. Senator Xenophon.

Senator XENOPHON: Mr Seymour, thank you very much for your submission. I just want to go to a couple of preliminary issues. The Manufacturers Trade Alliance expressed concern about the whole issue of the fees that would be applied—that you could have a large exporter from overseas using smaller local importers to circumvent the whole issue of fees. Do you have a particular view on that?

Mr Seymour : It is a policy issue, as far as I can see, and I assume that the department has dealt with that. From the commissioner's perspective, I guess, there is a very regular flight to review in this area—and it is not surprising, given the contested nature of antidumping laws. It is the same the world over. The reality is that antidumping laws are extremely complicated—

Senator XENOPHON: I think there is unanimity on that one.

Mr Seymour : and there is not only domestic policy and law to deal with but also international jurisprudence that comes into play constantly. So, if you provide a very fair and transparent system—which Australia absolutely does provide; it is a very fair and transparent system—then you can expect to see parties to a particular matter exercise their rights for review, and that is certainly the case in the antidumping system.

I think the policy approach is fine, insofar as it is seeking to make it clearer that that review process should be for genuine matters of review. Having said that, I think you need to look more closely into the amendments to see where the real quality in the review process is, in terms of the policy considerations. I am particularly pleased, having proposed this, that the bill proposes for conference at the start of the review process, because I think that is a very good thing.

Senator XENOPHON: Sure. I just want to go through some questions and, because of the time constraints, we need to get through them fairly quickly. Can I go to the Tindo Solar case. I understand that that is still subject to review, and you may be constrained in what you can say about that, but—

Mr Seymour : I will just correct you—and I do so respectfully, of course: it is not subject to review; it is an ongoing investigation; it has not been completed as yet.

Senator XENOPHON: But the initial findings, the preliminary findings, were that there was dumping but that the amount was insignificant in terms of material injury—it was about 3.9 per cent, or in that order—

Mr Seymour : As you understand, without specifically mentioning it, I literally do not wish to talk about the detail of the Tindo Solar matter—

Senator XENOPHON: I will not press you on it.

Mr Seymour : and I am not going to.

Senator XENOPHON: Could I ask you about one issue which does not go to the merits or otherwise of the matter? What can you tell us about the operational experience of the case manager responsible for that investigation? How many other cases had this case manager managed before the Tindo Solar matter?

Mr Seymour : That is a very specific question, Senator.

Senator XENOPHON: That is what I do: I ask specific questions.

Mr Seymour : In general—

Senator XENOPHON: It is a relevant question. You are not saying it is an irrelevant question, are you?

Mr Seymour : I did not say that; I just said it was a very specific question. The case director in charge of this matter is one of our most experienced investigators. I have the utmost respect for her capability and her integrity. She is one of my most experienced investigators.

Senator XENOPHON: Is this the same as a case manager?

Mr Seymour : The case director sits above the case manager and is ultimately the person who—

Senator XENOPHON: I was asking about the case manager, not the case director.

Mr Seymour : The case manager is also an officer of very strong capability and is developing very nicely in that role.

Senator XENOPHON: Because it does not go to the merits of this, how many other cases has the case manager handled before that?

Mr Seymour : The simple answer is: I do not know. I do not have that in front of me.

Senator XENOPHON: If you could take that on notice, that would be useful.

Mr Seymour : Yes, okay, I will take that on notice.

Senator XENOPHON: You may want to take this on notice because we have a fairly tight time line. At page 23 of the submission by various unions, they make reference to determining normal value when costs are unreliable. It is fairer, perhaps, if you do take this on notice. There is a discussion that goes for two or three pages of their submission. The AIG makes reference to why it thought the legislative amendment was unnecessary. It makes reference to evidence you gave at supplementary budget estimates of 23 October—a technically different interpretation. I appreciate that it is incredibly complex. The unions' conclusion said:

The ongoing confusion around the ADC’s interpretation—

that is their view—

of the act is not a simple theoretical distinction; it also could well be costing jobs.

It makes reference to the Maryvale paper mill issue. Would you mind considering what was said? To be fair to you, there ought to be a robust examination of that by you and a response to that. There seems to be a different interpretation as to how the normal value is determined.

Mr Seymour : What exactly are you asking me to do?

Senator XENOPHON: What I am asking for is a response to the unions' submission on pages 23 to 25—it actually goes on a bit further than that—about the issue of normal value. They have criticised the interpretation. I just want to understand what you would say about that, because it would be helpful to me in terms of the technical aspect. The main concern of Tindo Solar—and obviously you cannot comment on the specifics of the case—is that they do not understand how the finding by the commission was arrived at, because much higher antidumping duties are applied by other countries. Perhaps we could try to distinguish the particular case and talk about whether there is a lack of understanding or confusion about a particular finding. How do you engage with stakeholders and say, 'This is how we did it'? Again, I am trying to walk away from the actual finding.

Mr Seymour : That is a fair point. I was due in Adelaide today to talk to the South Australian government about this matter and I was advised on Friday that I was required here.

Senator XENOPHON: We are in the same boat. I was meant to be in Adelaide today for a whole stack of appointments. There is some irony that, is there?

Mr Seymour : This was about the matter you were raising. I was due to speak to them, at their request, on this matter. The broad answer to your question is that the statement of essential facts sets out our preliminary view. Typically, interested parties to the matter have 20 calendar days to provide their responses. I have given an extension to a party in that regard to that response so that they can properly furnish me with their views, and I will take those views into consideration before I decide my next step.

Senator XENOPHON: When will you see the South Australian government about this matter?

Mr Seymour : I have not been able to. My office is probably trying to reorganise my itinerary.

Senator XENOPHON: There is some irony that we are both in Canberra when we could have been in Adelaide.

Mr Seymour : We try hard to accommodate everyone, don't we?

Senator XENOPHON: The unions' submission on page 52 makes reference to this, and I think that one has still expressed concern about this as well. In terms of article 25, there used to be notifications more regularly, and now there will be less regular notification provided in the bill. What do you say about that in terms of providing information? As a general principle, is providing information more regularly preferable to providing it less regularly?

Mr Seymour : Notification of subsidies in the broader sense is problematic. There are all sorts of incentives at the national government level to comply with the terms of the WTO agreements on subsidies and countervailing measures. Having gone regularly to the WTO SCM and antidumping committees, I have seen firsthand how that behaviour unfolds. I am not going to speculate as to what the drivers for that are. This is designed to try and strengthen Australia's ability domestically in that circumstance to be able to move forward expeditiously.

Senator KIM CARR: You think it is an improvement?

Mr Seymour : Yes, for that reason. It is hard to think of a word to describe how the various motivations and incentives of the various players around the table interact in relation to what drives them notifying or not notifying, providing information on request through investigations and the like. There is a sentence built in the legislation that helps an investigating authority get to those outcomes. To the extent that these amendments strengthen that incentive for information coming our way, so much the better.

Senator XENOPHON: But it means that the information will not be as regular though, will it?

Mr Seymour : It could be. It just depends on how we go about implementing it. The best thing for me to do on this is to take it on notice and give you a note.

Senator XENOPHON: Could you take it on notice, because it seems to be quite different from the evidence we heard from the Manufacturers’ Trade Alliance and from the unions in respect to this issue. Finally, when it comes to countervailing duties, in my home state of South Australia there is a big issue about wine grape growers who are doing it particularly tough.

Mr Seymour : It does not fall to me.

Senator XENOPHON: They are getting below the cost of production, and it is a big national issue for a whole range of factors that are not within your jurisdiction. You hear of the European Union or the United States offering subsidies for their industries. We heard from the unions, from Mr Wacey, about China providing, I think in 2010, $30-plus billion worth of low-interest loans to their solar panel industry. How on earth do you try and establish that? Trying to dig deep into who gets what subsidies in other countries for the purpose of countervailing duties is an almost impossible task. You would need to have the resources of half a dozen departments to dig into those sorts of issues, wouldn't you?

Mr Seymour : That is a good point. One of the pleasing initiatives that the government has adopted is the creation of the Anti-Dumping Information Service. I am very clear on what the purpose of the Anti-Dumping Information Service is as the commissioner. It is to establish a market intelligence unit to be able to more effectively analyse market behaviours in key markets, where these dumping behaviours originate, and to be better informed at a technical level, which is mainly macro-economic analysis but also some very specific micro-economic analysis, in terms of how those behaviours play out in investigations. What I mean by that is establishing with very senior, very capable economic and legal capability inside the commission that it constantly researching those behaviours. I use the word 'behaviours' deliberately because I do not know how else you could describe what else is going on in relation to the incentives that governments provide to their manufacturers which may then provide them with an ability to dump in another market. So being able to get in there and being far more sophisticated and informed about what is going on to me is absolutely crucial to an effective anti-dumping system. So the Anti-Dumping Information Service—and I have already appointed a number of very highly credentialed economists to the roles—is for that purpose.

Senator XENOPHON: Given the resource issue, it seems to me it makes much more attractive or strengthens the case for the coalition's earlier pre-election promise of having a reverse onus of proof, which is no longer part of the policy, as I understand it.

ACTING CHAIR: Thank you, Senator Xenophon. Senator Carr?

Senator KIM CARR: Can I come back to the issue about market intelligence. Did the commission take the view that the forum was a valuable exercise?

Mr Seymour : I did not attend any of the forum meetings. About the time I commenced we went into caretaker mode, as I recall, and the arrangement was to hold those meetings over. Then obviously it is a matter for government to determine whether it wishes to hold those meetings going forward.

Senator KIM CARR: You have been in the job now for quite some time. Is that your assessment that the forum, on the advice you have been given from players and industry, performed a useful role?

Mr Seymour : I think if you look at the work the forum was doing and the subcommittees, the content was absolutely relevant to the work of the antidumping system and that is not surprising because the people who were around the table talking about it were all invested in a stronger, more robust, antidumping system. Obviously, that process can take place in many different structures and arrangements.

Senator KIM CARR: In June 2014, the commission advised the estimates committee that, 'Antidumping and subsidies and countervailing measures of the WTR are expressed domestically within its own act.' In the case of the Customs act, they are quite complex. There are only a certain number of people globally, and I hazard a guess that it would not be many, probably about 1,000, who can actually say that they understand it in detail. So it is very important that we build close to capacity and understanding within the department. That is quite self-evident, I would have thought. Has that happened?

Mr Seymour : I am pleased to say that I have contributed substantial financial support to the department to build an antidumping policy capability.

Senator KIM CARR: So we have a better understanding of the department now?

Mr Seymour : That is a question to the department.

Senator KIM CARR: Yes, I know, but you are an objective observer, are you not?

Mr Seymour : I think the department has shepherded through the antidumping amendment bill through the cabinet process.

Senator KIM CARR: That is your measure, is it?

Mr Seymour : That is their role.

Senator KIM CARR: Fair enough. I should not be facetious.

Mr Seymour : I enjoy a very strong and productive relationship—

Senator KIM CARR: That is very good. Do you think any of the 1,000 people would be members of the International Trade Remedies Forum?

Mr Seymour : I was not referring to members of the International Trade Remedies Forum when I made that comment; I was referring to the technical experts who sit in investigating authorities.

Senator KIM CARR: So the technical expertise that existed within the International Trade Remedies Forum, would it be of sufficient regard to you as to add to our policy capacity and understanding of these issues?

Mr Seymour : Anybody with a technical capacity to understand antidumping is welcome in my world. The answer to your question is, if they did exist then yes, but I did not attend any meetings of the ITRS, so I do not know. I have subsequently spoken to many members of the ITRF in what I call my 'bilateral consultations', which was the commitment I made at one of the estimates meetings—that I would conclude a lot of that work. I have done that, and I am pleased with the level of understanding that they display.

Senator KIM CARR: That is the reason I ask these questions. Given how complex these issues are, given how serious these issues are for Australian manufacturing, how can we afford to get rid of expertise of this level within the Australian system?

Mr Seymour : It is really not my place to comment on government policy. I support effective consultative processes. I support having all the relevant players around the table, however you define the table. The table can be an amoeba-like cell structure that constantly changes to meet the conditions of the time and the needs of the time so it is agile and flexible, or it can be more institutional. To be quite frank, I am less interested in the form than I am in the substance of the conversations that take place. Given that there are only about 1,000 technical experts around the globe, most of whom are living outside of Australia, it would be nice to have a few of those available to work with me. To the extent that they exist in Australia, I already have great access to them, and I enjoy very good working relationships with all of them—in industry, union and within the bureaucracy.

Senator KIM CARR: I understand there was an import data report being prepared for the forum. According to the submission from the unions on page 41, at the last meeting of the forum in March it was agreed action was:

Customs and Border Protection and the Australian Bureau of Statistics report to the forum on restrictions to accessing import data and the approach taken by other border agencies.

Do you know if anything actually happened about that particular matter since the forum last met?

Mr Seymour : I may have to take that on notice. I do not have the specifics in front of me. I have a recollection that most of the work was completed and the reports finalised, but I am not quite sure about that.

Senator KIM CARR: And if the report was finalised, can you advise who has got it.

Mr Seymour : Can I come back to you on that.

Senator KIM CARR: The supplementary question to that is: what action has been taken?

Mr Seymour : On the specifics that sit behind the question in relation to import data, the anti-dumping information service and the access provided by the Australian Customs and Border Protection Service through their various databases—most particularly the import database, under section 16 we are authorised officers for accessing that information now. We have a very good working relationship with Customs, as you would expect, given that we came from Customs to the Industry portfolio. There are no barriers to our ability to interrogate that data. The anti-dumping service market intelligence unit in particular, from an anti-circumvention perspective, is particularly exercised in my direction to look into that, because that is where the trend analysis exists that we need to be able to undertake that. That tells us whether there are changes in the way that goods are being presented into Australia through third countries or recharacterised in certain ways.

Senator KIM CARR: So you can verify information?

Mr Seymour : We are able, in very close cooperation with the Australian Customs and Border Protection Service, to resolve any inquiry that we might have, be that of a research or an investigative nature, in that regard. Of course there are many other things that the Australian Customs and Border Protection Service would do in that respect that do not relate to us. For example—and I think it is public knowledge—they are already pursuing a number of entities in Australia that, in their view, have already circumvented existing duties. That is publicly available information. In other words, they do not need the Anti-Dumping Commission to tell them that; they are already doing it through other complaint mechanisms.

Senator XENOPHON: Supplementary to Senator Carr's line of questioning: insofar as there may be a draft report or a report provided in respect to the questions asked by Senator Carr, we could we have a copy of that report by close of business tomorrow.

Mr Seymour : I will take that on notice and will make every attempt to try and resolve it.

Senator KIM CARR: You should put that question on notice to the department as well.

Senator XENOPHON: Yes, can I put that question on notice to the department, requesting a copy of that report, or of any draft.

Mr Seymour : It may not reside with me any longer.

Senator XENOPHON: Everything resides with the department, ultimately.

Senator KIM CARR: I trust that you have had a chance to read the submissions.

Mr Seymour : I cannot say that I have read them in detail; I have glanced at them.

Senator KIM CARR: Your officers would have had a look at those submissions, and there have been a number of submissions that have raised technical concerns. For instance, the lesser duty rule, amendments to the definition of 'subsidy', length of investigation period and a number of other matters have been canvassed in those submissions. Based on your direct experience of the operations of these measures, would you be prepared to advise the committee as to whether or not you believe any amendments are required to this legislation?

Mr Seymour : I have looked into that specifically in relation to the amendment bill, and I fully support the amendments to strengthen the antidumping system in the areas that you have outlined.

Senator KIM CARR: These are submissions that are suggesting to us that there need to be further amendments. I just want to be clear on your evidence. Are you suggesting that further action would be beneficial in those areas?

Mr Seymour : I think the answer to the question is that the antidumping laws in Australia are constantly under review. We are only now implementing the last part of the previous reforms from the most recent Labor government. We are doing our best to get our minds across the technical requirements of those reforms and implement them properly, in consultation with stakeholders and affected parties, and we are lining ourselves up and readying ourselves to implement whatever reforms come from the current bill, whatever shape that finally takes. No doubt, the lessons from that will inform us, and no doubt the department will have its own view about whether further reforms need to take place to the antidumping system in Australia.

Senator KIM CARR: I appreciate the point you are making, and I have used this analogy before, but it is a bit like tax avoidance: authority has to constantly adapt to new measures being taken by people that want to take advantage of the current laws.

Mr Seymour : Senator, my comment was not a complaint.

Senator KIM CARR: No, no.

Mr Seymour : It is just that we are constantly doing that.

Senator KIM CARR: But I am asking you a more specific question, and it may not be within your province. We are looking for your expert advice. If you could have a look at the proposed amendments that are being put to us in the various submissions, and if there is anything in those submissions that you think requires further action, would you be prepared to advise the committee by close of business tomorrow?

Mr Seymour : I will take that question on notice and will respond by close of business tomorrow.

Senator KIM CARR: Thank you very much.

ACTING CHAIR: Thank you, Mr Seymour. As you are clear, we require answers to those questions on notice by close of business tomorrow. I thank you and your colleague again for your evidence. We will see you in a couple of weeks at estimates hearings. I thank all those who have attended the hearing and assisted the committee with its inquiry.

Committee adjourned at 11:43