Part 1: Beginnings
Introduction
The Waterfront Dispute which erupted in 1998 has been the
subject of a book, Waterfront: The Battle
that Changed Australia by Helen Trinca and Anne Davies and a mini-series, Bastard Boys. Both the book and the
mini-series dealt in considerable detail with the respective roles of the MUA, the
ACTU, Patrick Stevedores and the Howard Government in the Waterfront Dispute.
However, the role of another significant actor in these events has not been dealt
with in any detailed manner – namely, the involvement of the Australian
Competition and Consumer Commission (ACCC).
The ACCC played a much more active and important role in the
Waterfront Dispute than most people know. The ACCC was heavily involved in the
Waterfront Dispute from the very beginning. In this series of articles, I will
be discussing the role of the ACCC in the Waterfront Dispute based on my own
first hand experience as the ACCC officer in charge of the ACCC’s investigation
and litigation on a day to day basis.
I will also be discussing some of the more misguided if not
downright foolhardy ideas which the ACCC both contemplated and ended up
pursuing during its waterfront investigations. For example, I will outline the foolhardy
(and fortunately aborted) plan to drop a number of ACCC officers, including
myself, onto the Australian Endeavour via helicopter so that the ACCC could
claim that it had safeguarded the passage of the vessel into Port Botany. I will also describe the misguided plan which
the ACCC ultimately did pursue – namely, to “embed” two ACCC officers behind
the picket lines at Botany Bay at the very height of the
dispute.
Setting up the
Waterfront Investigation Team
In late 1997, it was apparent that trouble was brewing on
the Australian waterfront. News stories were appearing regularly in the
newspapers about alleged rorts by the Maritime Union of Australia (MUA). Peter Reith, the then Minister for Workplace
Relations, was making inflammatory speeches about the union movement, with
particular emphasis on the alleged rorts of the MUA. It was against this
background of impending trouble on the waterfront that then CEO of the ACCC
decided to establish the ACCC’s own waterfront investigation team. The CEO knew there was going to be trouble
and he wanted the ACCC to be prepared.
Unfortunately, it was not very easy for the then CEO find an
ACCC staff member to lead this new team.
The first two candidates he asked to take on the role turned down the
assignment, so the CEO was forced to look for somebody else who would
be willing to do the work.
The CEO approached me and my team with a proposal that we become
the new Waterfront Investigation Team. This was a surprising decision given
that, at that time, my team was in fact the Sydney Mergers and Assets Sales
Branch – we were not even part of the enforcement branch.
Our proposed brief was to investigate any conduct in breach
of the TPA by any of the major participants on the waterfront, including the
various unions, stevedores, towage companies and port authorities.
After considering the CEO’s request and discussing it with
my team, we agreed to accept the assignment to head up the new ACCC Waterfront
investigation team. At the initial
stages, my team was not required to work on waterfront matters exclusively –
rather we continued to operate as the Sydney Mergers and Asset Sales Branch
whilst also conducting our waterfront investigations. Our part time waterfront investigation role
ended in April 1998 when Chris Corrigan sacked his entire MUA workforce.
The main reasons why I believe the ACCC’s Sydney Mergers and
Asset Sales team were well placed to head up the ACCC’s waterfront
investigations was because of our particular skill set.
First, it became apparent that unions often engaged in
quick, strategic and opportunistic boycotts of various businesses to achieve
their goals. Accordingly, any
investigation team charged with investigating such conduct would have to be
able to prepare a case very rapidly. Indeed, in most instances, the ACCC would
be seeking urgent interlocutory injunctions to try to stop a particular union from
engaging in such conduct in the short term.
The ACCC’s mergers branch had more experience than the enforcement
branch in terms of being able to both conduct investigations rapidly and to prepare
litigation in very short time frames. The mergers branch also had more
experience than enforcement in preparing urgent interlocutory proceedings.
Second, it was likely that any illegal conduct by non-union
industry players, such as the stevedoring companies, towage operators or port
authorities, would raise issues under the competition provisions of the TPA.
Therefore, the team tasked with investigating such conduct needed to have the
skills to be able to analyse and define relevant markets and obtain market
evidence.
It became apparent to the Waterfront Team almost immediately
that the entire competitive structure of the waterfront had major problems. The
ports, which were generally owned and operated by state governments, were in
most cases natural monopolies. Add to this the fact that there were only two
major stevedores (Patrick Stevedores and P&O), a monopoly supplier of
towage services in most ports (Adsteam), a monopoly supplier of labour (MUA)
and state sanctioned cartels for liner shipping companies (Part X of the TPA),
and it was quite clear to us that the whole industry needed a complete overhaul.
Almost immediately after my team became the Waterfront
Investigation Team, it was inundated with complaints about the MUA. The vast majority of these complaints were given
to the ACCC by representatives of Peter Reith’s Department – the Department of
Workplace Relations. Later on in our role we received complaints about other
industry players, such as port corporations and the two major stevedores, which
we also investigated.
The complaints we received from Workplace Relations about
the MUA, related to such varied issues as:
·
the MUA’s conduct in relation to off shore oil
rigs;
·
the MUA’s alleged actions in seeking to prevent the granting of
coastal vessel permits;
·
the conduct of cruise line baggage handlers, and
·
concerns about the way that seaman’s engagement system
operated.
The main provisions that we had reference to in assessing
these complaints were sections 45D and 45DB, which provided:
Section 45D
(1) In the circumstances specified in
subsection (3) or (4), a person must not, in concert with a second person, engage in conduct:
(a)
that hinders or prevents:
(i) a third person supplying goods or services to a fourth person (who is not an employer of the first person or the second person); or
(ii) a third person acquiring goods or services from a fourth person (who is not an employer of the first person or the second person); and
(b)
that is engaged in for the purpose, and would have or be likely to have the effect, of causing
substantial loss or damage to the business of the fourth person.
Section 45DB
(1) A person must not, in concert with
another person, engage in conduct for the
purpose, and having or likely to have the effect, of
preventing or substantially hindering a third person (who is not an employer of the
first person) from engaging in trade
or commerce involving the movement of goods between Australia and places
outside Australia.
Section 45D was the traditional provision used to combat
secondary boycotts. This section was designed to prevent unions from engaging
in sympathy strikes – ie one union taking action against a business to assist
another union in an employment related dispute with that business.
We quickly discovered that section 45D was very complicated
and very difficult to apply in practice. Accordingly, we decided to focus our
attention on section 45DB. This provision only required two persons to act in
concert for the purpose or with the effect of preventing or hindering a third
person from engaging in international trade.
Therefore, any act by two persons to prevent the loading or unloading of
a vessel which had come from overseas or was headed overseas would constitute a
breach of section 45DB, subject to the ACCC being able to prove purpose or
effect.
Most of the complaints which we received from Workplace
Relations did not raise any issues under the TPA. Indeed, the issues were simply industrial
disputes between the MUA and their employers which involved no boycotts at all.
The ACCC also declined to pursue some of the other matters referred
to it by Workplace Relations because we believed that there were strong public
interest arguments in support of the MUA’s conduct. For example, the MUA had
been involved in a long running campaign against “flag of convenience” vessels. The MUA would often boycott these vessels because
the owners were paying their employees very low wages
and requiring them to work in appalling conditions.
While the MUA’s conduct against such vessels (which usually
involved picketing the vessel so that it was unable to sail until the shipowner
agreed to pay their workers higher wages, including back wages) was likely to
constitute a breach of section 45DB of the TPA, we were very reluctant to take
enforcement action. The ACCC did not
want to be effectively protecting businesses which appeared to be engaging in
exploitative labour practices in relation to workers from developing countries.
Unfortunately, Workplace Relations did not take very kindly
to our decision to decline to pursue a large number of their complaints.
However, amongst all the complaints received by the ACCC
from various sources, there was one particular complaint which stood out from all
the rest. This conduct appeared to the team to constitute not only a clear
breach of the TPA but highly reprehensible conduct – namely, the practice of demanding
money from ship owners for hold cleaning.
Accordingly, the Waterfront Team decided to make the practice of hold
cleaning the focus of its first major waterfront investigation.
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