Context
In May 2006, the Minister of Commerce announced a review of the regulatory control provisions and the authorisation and clearance provisions of the Commerce Act 1986, to ensure that the provisions in these Parts are working efficiently and effectively. This terms of reference outlines the scope and timeframes for the stream relating to the review of regulatory control provisions. A separate terms of reference has been prepared for the stream relating to authorisations and clearances.
The Review will be led by the Ministry of Economic Development, which is responsible for monitoring New Zealand's competition policy framework and operation of the Commerce Act 1986, with a view to ensuring that it supports effective and competitive markets for the long-term benefits of consumers within New Zealand.
Parts 4 and 4A and sections 70-74 of Part 5 relate to regulatory control provisions within the Commerce Act. Part 4 of the Commerce Act allows for goods or services to be placed under price, revenue, or quality control (regulatory control) subject to specific tests being met. Part 4A of the Commerce Act allows for individual electricity lines businesses to be placed under regulatory control if they breach thresholds set by the Commerce Commission. Once a decision has been made to impose control under Part 4 or 4A, the controlled good or service may not be supplied unless an authorisation to supply has been made under Part 5.
Since 2001 there have been inquiries into whether regulatory control should be declared in respect of airport activities and gas pipeline services. Thresholds for the control of electricity lines businesses have been set under Part 4A and the Commission has conducted inquiries into several businesses that have breached the thresholds. Regulatory control has been declared over some gas pipeline services.
The Ministry, in undertaking its ongoing role of monitoring the effectiveness of the Commerce Act, has identified some potential issues with these Parts that may need to be addressed.
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