Recommendations
42. It is recommended that Cabinet Economic Development Committee:
- Note that in the private sector, many companies derive their strength from being subsidiaries of larger conglomerates and from having committed and supportive owners, who will ensure that competition between subsidiaries of the same group is avoided and cooperation maximised;
- Note that the Commerce Act states that no body corporate shall be regarded as a subsidiary of the Crown and therefore that SOEs and CRIs cannot enter into arrangements with each other that may substantially lessen competition in a market unless the benefits to the public outweigh the detriments from the reduction in competition;
- Note ministers’ concerns about their inability to carry out the role of supportive owners and, in some cases, issue directions to SOEs and CRIs regarding cooperative behaviours without risking a breach of the Commerce Act or without having to seek an authorisation from the Commerce Commission;
- Agree that the Commerce Act should be amended so that SOEs and CRIs (other than Meridian Energy, Mighty River Power and Genesis Energy) are treated as interconnected bodies -
- to the extent they are acting in accordance with the requirements of a ministerial direction, and
- where the direction states that shareholding ministers (in consultation with the Minister of Commerce) consider this to be in the public interest.
- Invite the Minister of Commerce to issue drafting instructions to Parliamentary Counsel;
- Note that the ministers of Finance, Research, Science and Technology, SOEs and Commerce propose that the changes be included in the next Commerce Act Amendment Bill relating to Part 5 of the Commerce Act (likely in late 2008 or 2009);
- Note that the ministers of Finance, Research, Science and Technology, SOEs and Commerce intend to announce the above decision.
Back to Top