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Iron Ore Supply and Demand (Commission of Inquiry) Bill 2015

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2015

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

Iron Ore Supply and Demand (Commission of Inquiry) Bill 2015

 

 

 

 

EXPLANATORY MEMORANDUM

and

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

 

 

 

 

Circulated by the authority of

Bob Katter MP



Iron Ore Supply and Demand (Commission of Inquiry) Bill 2015

 

OUTLINE

The object of this Bill is to establish a full judicial Commission of Inquiry into Iron Ore supply and demand, specifically the increases in production by certain iron ore producing companies at a time when the world-wide demand for iron ore is steadily decreasing.

 

Australia is the world’s largest supplier of iron-ore and produces approximately a third of the world’s iron ore.   Iron ore has been a key driver of Australia’s economic growth and national income during the past decade.

 

Public concern about the oversupply of iron ore onto the world market has been apparent in recent times, as t he price of iron ore has steadily decreased to half of its value over the past year.

 

The oversupply of iron ore has several potential areas of concern:

 

1.        The concentration of market power in two very large companies raises questions over the ability of smaller companies to withstand a flooded market and decreased pricing.  Larger companies can often cross-subsidise the loss until smaller competitors are eliminated. 

2.        Australia’s resources must be considered in the context of the wastefulness of producing iron ore at a time when demand is low.  If current supply levels continue to outstrip demand, a significant portion of Australia’s iron ore resources will have diminished for virtually no economic return.

3.        Falling iron ore prices have directly affected the Australian budget through falling taxation revenue from iron ore.  

Historically, efforts have been made in various industries around the world to scale back production of commodities at times when supply outstripped demand.  For example, Brazil led the way in restrictions on production of coffee; Australia and Cuba cut back production of sugar; the United States cut back in production of aluminium. 

 

The Commission is therefore tasked to look at whether the increases in production of iron ore by certain companies:

1.        have been a conscious effort to eliminate their competitors; or

2.        are simply a callous disregard for the interests of their shareholders and the countries in which they operate.

 

The Commission is to look at the effect of production quotas upon pricing and consequentially taxation revenue to the Australian Treasury.  

 

The Commission is further tasked to enquire into to the effects, if any, of any Government initiatives, along with those of other iron ore producing companies, to scale back production.

 

The Commission is to report within three months.

 

 

 

 



 

FINANCIAL IMPACT

The Bill will have no financial impact.  The inquiry is to be funded from the ordinary annual services of government provided for in the annual appropriation bills.

 

STATEMENT ON COMPATIBILITY WITH HUMAN RIGHTS

 

The Statement of Compatibility with Human Rights appears at the end of this Explanatory Memorandum.

 

NOTES ON CLAUSES

Part 1 - Preliminary

Clause 1 - Short title

This clause provides for the Act, when enacted, to be cited as the Iron Ore Supply and Demand (Commission of Inquiry) Act 2015.

 

Clause 2 - Commencement

This clause provides for the Act to commence on the day after it receives Royal Assent.

 

Clause 3 - Act binds Crown

This clause states that the Act binds the Crown.

 

Clause 4 - provides for definitions

 

Clause 5 - Ministerial responsibility for this act

This clause states the Act is to be administered by the Attorney-General.

 

Part 2 - Commission of Inquiry into Iron Ore Supply and Demand

Division 1 - Establishment and functions of the Commission

Clause 6 - provides for the establishment of the Commission.

Clause 7   - Terms of reference

This clause provides for the terms of reference for the Commission, which is to inquire and advise the Parliament on the following:

1.        whether the increases in production of iron ore by certain companies:

a.        have been a conscious effort to eliminate their competitors; or

b.       are simply a callous disregard for the interests of their shareholders and the countries in which they operate; and

2.        the likely effect of any Government init iatives, along with those of other iron ore producing companies, to scale back production.

 

Clause 8 - Report to the Parliament

This clause provides that the Commission must submit to the president and the Speaker within three months .

Division 2 - Powers of the Commission

Clauses 9 - 14 outline the powers of the Commission with respect to hearings, counsel assisting the Commission, power to summon witnesses and take evidence, arrest of witness failing to appear, search warrants, and in relation to documents and other things.

Division 3 -Offences

Clauses 15-25   outline offences, including unauthorised presence at hearing or publication of evidence, failure of witnesses to attend or produce documents, refusal to be sworn or give evidence, acts or omissions on different days to constitute separate offences, false or misleading evidence, destroying documents or other things, intimidation or dismissal of witnesses, preventing witnesses from attending, bribery of witness, fraud on witness, and contempt of commission.

Part 4—Operation of the Commission

Clauses 26-29 of this division provides for matters relating to the operation of the commission, including in the event of death or incapacity of the commissioner, for remuneration and allowances of the Commissioner, staff of the Commission and protection of the Commissioner and others .

 

Clauses 30- 31 provide for Legal and financial assistance for persons appearing before the Commission, and reimbursement of witness expenses.

 

Clause 32 - provides for where, in the course of its inquiry, the Commission obtains information that relates, or may relate, to the commission of an offence, or evidence of the commission of an offence against a law of the Commonwealth, of a State or of a Territory, the Commission may, if in the opinion of the Commission it is appropriate to do so, communicate the information or give the evidence to the authority or person responsible for the administration or enforcement of that law.

 

Clause 33 - provides that t he Governor-General may make regulations, not inconsistent with the Act

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Iron Ore Supply and Demand (Commission of Inquiry) Bill 2015

 

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Bill

 

The object of this Bill is establish a judicial Commission of Inquiry into Iron Ore supply and demand, specifically the increases in production by certain companies in the face of decreasing demand for iron ore product, the effect upon other companies as well as Australian taxation revenue.   The Commission is further tasked to enquire into to the effects, if any, of any Government initiatives, along with those of other iron ore producing companies, to scale back production.

 

Human rights implications

 

This Bill does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This Bill is compatible with human rights as it does not raise any human rights issues.

 

 

Hon Bob Katter MP