ACCC enforcement slows with resources spread thin

Carbon Market Institute’s John Connor. Illustration: Sturt Krygsman

The ACCC maintains a commitment to enforcement, but the reality is its own figures show below average litigation and enforcement cases in the past three years.

To be fair, running any regulator is a work in progress, making mid-term judgment hard.

The landmark Mastercard case alleging abuse of market power was launched by present boss Gina Cass-Gottlieb in 2022, but the work was done be her predecessor, Rod Sims.

It will finally be heard late next month.

In the next fortnight the ACCC will hand its report on supermarkets to Jim Chalmers that has already sparked litigation over alleged dodgy discounts by Coles and Woolworths.

But the highly political case study is evidence of an established change in its operations, which some say has diverted resources and attention away from the main game.

It is in the government’s best interests for the ACCC to be seen as credible and independent least it lose the advantage of being an easy answer to political issues.

Supermarkets is a case in point and, amid the coming cost-of-living federal election, its final report is bound to be used for political purposes.

In October last year, the day the dodgy discount litigation was launched, the federal court action was followed by press conferences from the Treasurer and Anthony Albanese.

Just whether the ACCC can find a politically convenient example to show how the big supermarkets are ripping us off, complete with an easy fix, remains to be seen.

As suggested previously, perishable fruits and vegetables present the most convenient case.

A spokesman for the ACCC told The Weekend Australian: “There has been no change in the ACCC’s commitment to competition enforcement under Ms Cass-Gottlieb’s leadership.”

Indeed, practitioners report a step-up in investigations from the competition team led by Melinda McDonald and enforcement commissioner Liza Carver.

Data supplied by the ACCC shows enforcement interventions including enforceable undertakings have totalled 504 over the last decade, or 50 matters a year, with 75 being competition matters.

In the past three years under Cass-Gottlieb this has fallen to 30 a year, but the percentage of competition matters has increased from 14 per cent to 22 per cent.

Actual litigation has totalled 181 cases over the decade, or 18 cases a year, with competition matters totalling 35, or 20 per cent.

In the last three years the number of cases launched totalled 24, or eight a year, with six competition cases, or 25 per cent of all cases.

In the 2024 financial year there were zero competition cases.

The ACCC in the next few weeks is due to launch a major competition case against Google that has attracted some criticism against the backdrop of proposed new ex ante rules featuring individual codes of conduct for the big platforms.

The argument is: why take on the behemoth now, but comment should await the litigation ­promised in the first quarter of the year.

The ACCC has proved to be a successful reform campaigner for changes to the law, but change is only justified if the rules are actually implemented.

The abuse of market power pro visions are one example of new powers rarely used.

A major shake-up in merger administration will test its resources even with a more than doubling of merger staff.

Clean energy facts

Amid intermittent campaigns questioning the integrity of the carbon offsets scheme, the Clean Energy Regulator has finally laid down the facts.

These show there have been expected changes along the way to the 10-year-old scheme, but the system is working as promised and actual credits are a small percentage of the registered project claims.

The CER also noted its controversial human-induced regeneration method has been subject to three independent reviews, including by the Australian National Audit Office, and given the green tick.

The figures show that, while there was an early land grab, actual reporting projects number just over half of those first registered.

Some land was deemed inappropriate, and changes to the claims were forced along the way, as you would expect.

The regulator also noted that the HIR method has now expired after 10 years, but the projects have a 25-year life span audited annually.

It said measuring regeneration was more difficult than long-distance sensors might suggest.

The regulator noted that the method awards credits to farms that remove impediments to plant growth, with one credit for each tonne of CO2 removed from the atmosphere or avoided.

There were 467 applications for credits covering 42 million hectares of land.

So far, only 244, or 52 per cent, of the applications are covered with the original carbon abatement potential of 123 million tonnes, but just 43.2 carbon credits were issued so far.

Reporting projects covered 13.6 million hectares, of which 4.9 million hectares were deemed suitable.

A further 223 projects are yet to report.

This is all a long way from an out-of-control scheme some of the press reports have wrongly suggested.

Still, the ideological objection to carbon offsets has some merit – why allow coal mining to continue because the miners buy a few offsets in tree-planting projects somewhere else?

It is better if the big companies, from BHP to Telstra, are cutting their own emissions.

Some, like Telstra, have dropped out of government schemes such as Climate Active for fear of being labelled greenwashers.

The Senate report on greenwashing under Greens senator Sarah Hanson-Young has been delayed yet again. It now has a March deadline.

The issue was referred in March 2023, with the report due in December 23, so it is 14 months overdue, suggesting some difficulties in reaching any conclusion.

The delay, according to Hanson-Young, is “there is just so much greenwashing”.

But from BHP and Rio Tinto to Qantas and Virgin, the reality is that some offsets are necessary to achieve the last mile to net zero.

The big project developers clearly need to increase their own transparency to counter any misconceptions, and this should happen to redirect the arguments.

The Australian Institute’s Richard Dennis argues the institute’s role has been constructive criticism, some of which has been adopted.

The developers are responding, with Climate Friendly saying in a statement this week the projects it serviced “have been accurately credited based on verified, independently audited results following land management practice changes, and have success­fully met original financial forecasts.

Climate Friendly’s Skye Glenday noted in a statement: “Our partners retain full ownership and control of their properties and their carbon projects, including determining how they use or sell any ACCUs generated. The projects don’t generate ACCUs unless they achieve verified results, and we don’t get paid unless our partners get paid.”

The government is considering a new method, integrated farm and land management, ­ effectively a backdoor extension for the HIR method by allowing it and other projects on the same block of land to earn credits for, say, soil carbon and or environmental planting among others.

Carbon Market Institute boss John Connor on Friday released the Carbon for Nature report, noting “there is significant potential for carbon farming to deliver greater, more widespread benefits for ecosystems across the country – if we commit to actions to drive and enable outcomes for nature from carbon farming investment.”

Report author Karen Andrews from NRM Regional Australia ­argued “there aren’t clear regulatory or commercial reasons for ACCU buyers to invest in nature”.

Separately, Australian project developer Carbon Neutral is running a project in the Mau forest in Kenya, planting indigenous trees and restoring degraded habitats in tea-growing parts of the Nandi region.

The project is for Save the Children’s Global Ventures, is backed by several global law firms, and aims both to improve resilience to climate change and boost local wildlife.

The objective, according to Green Collar’s James Schultz, is “financing large-scale conservation, cutting down species loss and stopping land clearing.”