The newly privatised Port of Newcastle has launched a federal court appeal in Australia against the mining giant Glencore to maintain control over port access fees that is likely to focus further attention on the privatisation of government assets across Australia.
The appeal coincides with stinging criticism of successive Australian governments’ privatisation of government assets by the chairman of the Australian Competition and Consumer Commission, Rod Sims.
Sims, who has long been publicly supportive of privatisation in general, warned on Wednesday that privatisation was “severely damaging” the Australian economy and he singled out ports and vocational education .
The Port of Newcastle was privatised by the New South Wales government in 2014 as part of a joint venture between Hastings Fund Management and China Merchants.
The venture quickly increased port fees by between 40% and 60% for vessels to access the shipping channel, sparking an approach to the federal government from Glencore to seek to have the monopoly access of the port more heavily regulated.
When that approach was rejected, it appealed to the Australian Competition Tribunal, which ruled in its favour. The Port of Newcastle has now lodged an appeal to that decision in the federal court.
A spokeswoman for the Port of Newcastle said the matter raised “important issues for infrastructure operators and their customers” that should be clarified by the federal court.
“Port of Newcastle is seeking judicial review via the full federal court of the decision of the Australian Competition Tribunal to declare the service provided by the shipping channel in the Port of Newcastle,” she said.
“The tribunal’s decision was that, for the purpose of the test for declaration, access to the service can only mean a legal right of access. Port of Newcastle is of the view that this is not the correct interpretation and this should be reviewed by the court.”
She said that the port’s pricing remained competitive.
“Port of Newcastle has an obvious commercial imperative to maximise trade volumes through the port and to ensure continuing access for customers. The success of its business depends on it.”
Glencore Coal had previously argued before the Australian Competition Tribunal that increased fees to enter the privatised Newcastle port, which produces more than 170m tonnes of saleable coal a year, would “materially impact on the profit margins of coal producers”.
The appeal to the Australian Competition Tribunal concerns a decision by the then acting treasurer, Mathias Cormann, in 2015 when he ruled out “declaring” the port’s fees.
Had Cormann ruled in Glencore’s favour, this would have allowed it to refer the access dispute to the Australian Competition and Consumer Commission for arbitration and potentially allow Glencore to push for the port fees to be lowered.
The Australian Competition Tribunal ruled that the port should have been considered a declared service, because it would impact the future state of competition for the mining company.
A spokeswoman for Glencore declined to comment on the court application.
