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• Commerce Act Pts 4/4A/5 Review

• Authorisation and Clearance

• Cabinet Paper
• RIS/BCCS
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• Discussion Document
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Background

28. The Act does not require the Commission to provide reasons for its clearance decisions. However, the Commission has an administrative policy of publishing reasons at some point after every decision has been made. The Commission's policy addresses issues of natural justice by informing the applicant and other interested parties how their interests have been considered. The active policy by the Commission to release written reasons also obviates the need to respond to Official Information Act requests. Written reasons also inform the wider business community and their professional advisors about the application of the Act and the Commission's approach to merger review. This provides valuable guidance on whether to apply for a clearance in relation to other specific merger plans or proposals.

29. Table Two shows that the average time between making decisions and publishing reasons has been 35 days in the 33 months to 31 March 2007. It also shows a significant upward trend.

* The Commission advises that the figures for the first nine months of 2006/07 include estimates for five clearance decisions where reasons are yet to be published.

The issue

30. Concern has been expressed that the Commission's approach of releasing its reasons some time after the decision is made does not fit well with the statutory appeal provisions. Section 91(2) states that the notice of appeal must be made within 20 working days of the determination or within such further time as the Court may allow. The issue from the potential appellant's perspective is that it can be difficult to judge whether an appeal should be lodged without having the written decision.

Options

31. Options for change would be:

1. To require the Commission to give written reasons within a certain number of days of making decisions (e.g. 10 days); or
2. Amending section 91(2) to state that a notice of appeal must be made within 20 working days of the time the written decision is published.

Analysis

Timeliness

32. A possible consequence of Option (a) is that it will encourage the Commission to delay making decisions until the written reasons have been completed or nearly completed. We do not see how anyone would benefit from such a change. Applicants could be worse off because delay in obtaining advice about the decision could also delay implementation of the merger. Therefore, we consider that Option (a) should not be adopted.

Transparency and predictability

33. An overly short mandatory timeframe under Option (a) may encourage the Commission to release more abbreviated written reasons. Interested parties could use the Official Information Act to obtain further information, but the guidance provided to the business community and their professional advisors would be reduced.

Clear and consistent legislation

34. Option (b) would codify existing practice. The Commission has a policy of not objecting to appeals that are lodged outside the 20 working days providing notice is given within 20 working days of the Commission releasing its written determination. Even if the Commission were to change its policy, it is difficult to imagine that the Court would decline to allow further time in such circumstances.

Conclusion

35. Both options for change would have the effect of changing the Commission's practice of producing written decisions into a legal requirement. Therefore, it would be more than just a technical change. In addition, the existing provisions work satisfactorily because the Court has the discretion to extend the time limit. Our preliminary view is that the status quo should be retained because there would only be a problem if one assumed that both the Commission and the Court lacked pragmatism.