Review into Anti-Dumping Arrangements Page 0...Anti-dumping and countervailing measures are a vital...

Review into Anti-Dumping Arrangements Page 0


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Contents

Foreword .............................................................................................................................. 4

Terms of Reference ............................................................................................................... 6

Executive Summary .............................................................................................................. 8

Findings .............................................................................................................................. 10

Primary recommendations .................................................................................................. 11

Other relevant recommendations ....................................................................................... 11

Abbreviations ..................................................................................................................... 14

1. Introduction................................................................................................................... 15

1.1 What are anti-dumping and countervailing measures? ................................................... 15

1.2 A brief history of anti-dumping and countervailing in Australia ...................................... 16

1.3 The current Australian Government policy on anti-dumping and countervailing ........... 19

2. Global and domestic drivers: A growing need for the anti-dumping and countervailing

system? .............................................................................................................................. 21

2.1 Surplus product around the world ................................................................................... 21

2.2 Anti-Dumping trends within Australia ............................................................................. 23

2.3 Competition in Australian markets .................................................................................. 24

2.4 Factors impacting competition in Australian markets ..................................................... 26

2.5 Variances in interpretation of WTO obligations .............................................................. 32

2.6 Industry awareness and access ........................................................................................ 35

2.7 Outlook ............................................................................................................................. 36

3. Functions and powers in the anti-dumping and countervailing system ............................ 38

3.1 Components of the current administration ..................................................................... 38

3.2 Legislative functions and powers ..................................................................................... 41

3.3 The anti-dumping and countervailing process ................................................................. 43

4. Possible models for administering the system ................................................................. 48

4.1 A global glance: international comparison ...................................................................... 48

4.2 Options for Australia ........................................................................................................ 51

5. Consultation findings: a new Commonwealth agency? .................................................... 56

5.1 Status quo or new Commonwealth agency ..................................................................... 56

5.2 Possible models for new Commonwealth agency ........................................................... 60

6. Consultation findings: underlying issues ......................................................................... 63

6.1 Skills and experience ........................................................................................................ 65

6.2 Transparency .................................................................................................................... 72

6.3 Investigative rigour ........................................................................................................... 79

6.4 Access to the system ........................................................................................................ 83

6.5 Administrative culture ...................................................................................................... 86


7. Other relevant matters: compliance assurance and anti-circumvention ........................... 92

8. Addressing the underlying issues and other relevant matters .......................................... 96

8.1 Recent progress ................................................................................................................ 96

8.2 Profile, status and priority ................................................................................................ 97

8.3 Leadership ........................................................................................................................ 98

8.4 Location ............................................................................................................................ 99

8.5 Other necessary enhancements ..................................................................................... 101

9. Costs and benefits of options ........................................................................................ 109

9.1 Costs of status quo ......................................................................................................... 109

9.2 Benefits of status quo .................................................................................................... 111

9.3 Costs of a new Commonwealth agency ......................................................................... 112

9.4 Benefits of a new Commonwealth agency ..................................................................... 122

9.5 Costs and benefits of other necessary enhancements .................................................. 123

10. The case for resources ................................................................................................... 126

11. Relationship with existing appeals processes ................................................................. 131

12. Summary and conclusions ............................................................................................. 134

12.1 Summary of findings....................................................................................................... 134

12.2 Which model best addresses the underlying issues at the least cost? .......................... 135

APPENDICES ...................................................................................................................... 140

Appendix 1: Review Consultation and Communication ........................................................ 140

Appendix 2: Australian Government policy on independent authorities .............................. 148

Appendix 3: Matters outside the Terms of Reference .......................................................... 151


Foreword

The administration of Australia’s anti-dumping and countervailing

system is a relatively small but by no means insignificant function,

frequently attracting high levels of public interest and debate.

Anti-dumping and countervailing measures are a vital part of the

international trade system. The WTO agreements on the measures

signify global recognition that dumping and subsidisation can constitute unfair trade

practices and that, where they do, nations are entitled to respond. The measures are

remedies for such unfair practices; levellers, critical to a fair and balanced open market,

and can be a final lifeline to affected businesses or whole industries.

The WTO agreements on anti-dumping and countervailing are intended to achieve a

level playing field. However, interpretation of the agreements differs between

countries. There is ongoing debate about whether there are ‘free trade leaning’

interpretations and legitimate ‘protection leaning’ interpretations. The reality is each

country must grapple with competing interests in its own market; balancing the

interests of manufacturers or primary producers with those of importers or

downstream producers. And this has always been a difficult balance to strike.

Nevertheless, the result of disparate interpretations has seen global variations in

remedies and hence the emergence of perceived ‘soft touch’ countries, exposed to the

risk of becoming dumping targets.

This tension is compounded by the current global economic climate. The global

economy remains weak, surplus commodities are on the rise and so dumping and

subsidy activity is likely to increase. All the while globalisation, two-way trade and

reliance on foreign trade continue to grow. The pressure is particularly acute in the

Australian context, when Australia remains an attractive export destination and the

Australian dollar remains high.

In this environment a strong, effective and impartial anti-dumping and countervailing

administration is crucial. It is particularly crucial as these pressures mount, but it is also

crucial because the function, by its very nature, carries a high public profile and

reputational significance. The decisions and actions taken by the administration impact

the market share, profit margins and, ultimately, the viability of Australian businesses.

They in turn impact upon jobs, lives and livelihoods. They go on to impact upon the

national economy, relationships with international trading partners and, ultimately,

public confidence in international trade.

During the course of this Review, I consulted widely and often with stakeholders from

all interest groups. I identified and notified over 400 stakeholders, including from

industry, unions, consultancy firms and representative bodies, the ITRF, State, Territory


and Federal governments, Federal Senators and Members of Parliament and embassies

of trade partner countries. I conducted two rounds of consultations, which comprised

one-on-one meetings, initial submissions, an online survey, stakeholder forums and a

second call for submissions in response to a targeted Discussion Paper, which I released

in September. I met or spoke with approximately 70 individuals or entities from

Melbourne, Sydney, Brisbane, Canberra, Adelaide, Newcastle, Wollongong and Perth. I

received 42 submissions representing about 87 entities.

While there is widespread support for the range of reforms put in place by the

Australian Government over recent years, the reforms needs to continue and more

needs to be done. Further changes to Australia’s anti-dumping arrangements are vital if

Australia is to achieve an effective, highly regarded and world-class anti-dumping and

countervailing system.

In undertaking this Review, I was supported by a small but dedicated secretariat from

the Attorney-General’s Department. I thank its members for their commitment and

responsiveness.

I also thank Customs and Border Protection and those other Australian Government

departments and agencies that participated in consultations—I am grateful for their

cooperation and assistance.

Lastly, I wish to thank the Minister for Home Affairs and Justice, the Hon Jason Clare

MP, for the opportunity to contribute to this important area of administrative policy. I

trust that this Report will assist the Minister in his deliberations in this area.

The Hon John Brumby

November 2012


Terms of Reference

Over the last two decades, a number of reviews of Australia’s anti-dumping and

countervailing system have been completed. The most recent review was that of the

Productivity Commission in December 2009, which considered both anti-dumping and

countervailing policy and the administrative efficiency of the system. Since then,

improvements to the administration have been effected as part of the June 2011 reform

package, Streamlining Australia’s anti-dumping system: an effective anti-dumping and

countervailing system for Australia.

The reforms have been welcomed by government and non-government stakeholders

alike; however, key industry stakeholders have highlighted the need for further

consideration to be given to the potential advantages of establishing a new anti-

dumping agency.

In response, the Minister for Home Affairs and Justice, the Hon Jason Clare MP,

commissioned this Review and, on 4 July 2012, announced its Terms of Reference as

follows:

1. Purpose

The Review will examine the current arrangements for assessing and investigating anti-

dumping matters and consider the feasibility of a Commonwealth Anti-Dumping

Agency.

2. Objectives

The Review will examine and report on:

(a) the current arrangements for considering anti-dumping cases and policy;

(b) the benefits and costs of retaining this function within the Australian Customs and

Border Protection Service;

(c) the benefits and costs of establishing an agency to conduct anti-dumping

assessments and investigations;

(d) the functions, including assessments, investigations and compliance, and powers

that would be necessary for an agency to conduct effective anti-dumping

assessments and investigations;

(e) the relationship between such an agency and existing appeals processes;

(f) the organisational structure that would be required for such an agency; and

(g) any other relevant matters.


3. Methodology

The Review will be undertaken by the Hon John Brumby, supported by a Secretariat

situated in the Attorney-General’s Department.

4. Consultation

Relevant stakeholders will be directly consulted and submissions may be sought.

In carrying out the Review, Mr Brumby is to consult in particular with the ITRF, as well

as with relevant Government departments.

5. Reporting

The Review will be presented to the Government by 30 November 2012.


Executive Summary

For almost two decades the Australian anti-dumping system has been administered

with limited resources and a low organisational profile. The inability to meet key

performance indicators as well as extensions of time sought demonstrate pressure on

our system. The workload of the administration has near tripled in the last 12 months

and a number of relevant drivers indicate a high likelihood that more anti-dumping

applications are on the way. The low profile and limited resources at a time of intense

international competition has undermined public confidence in the system, especially

from a manufacturer perspective.

In the process of addressing the Terms of Reference, Review participants stressed that

the real concern is ‘how’ the anti-dumping and countervailing function is administered,

rather than where it resides organisationally. In that regard, they acknowledged and

applauded the Government’s recent reforms, but identified a number of key underlying

issues that continue to exist. Namely:

the skills and experience of officers

the transparency of process

investigative rigour

access to the system

the ‘culture’ of the administration

monitoring compliance, and

the resources required to address these issues.

Analysis of these underlying issues has clearly demonstrated that, despite progress

through recent reforms, the administration of anti-dumping and countervailing

activities in Australia is under-resourced and underperforming and requires further

reform.

A significant majority of those who addressed the question of where the function

should reside expressed the view that a new Commonwealth agency is required. Many

of those participants went on to explain that it is required because it is the appropriate

solution to these underlying issues. Many also emphasised the need for physical

relocation as a complementary remedy. Others stressed the need for certain additional

enhancements to the system, be they in conjunction with the establishment of a new

agency or not.

It is evident to me that those currently administering the system are endeavouring to

achieve objective, timely results within their limited means. However, to address the

issues identified, a more robust administration with a defined identity, elevated profile,

better skills, stronger leadership and sufficient resources are clearly required.


Having considered a number of options, it is clear that a new Commonwealth agency

established under legislation and based in a major capital city is required. This is

the administrative structure which best addresses the underlying issues. The agency

would have the functions and powers of the current administration and, to maintain

impartiality, continue to report to the Minister for Home Affairs and Justice. To

minimise cost and maintain critical links with Customs and Border Protection, the new

agency would be housed within and supported by Customs, and agency staff would

continue to work closely with other Customs officers when implementing measures and

monitoring compliance.

Only a modest injection of funds is required to address the issues and realise the

benefits of this option. In my view, the benefits outweigh the cost of establishing such

an agency and surpass by far the benefits of maintaining the status quo.


Findings

1. Anti-dumping arrangements are critical to confidence in open international trade…

An efficient, effective and impartial system for administering the anti-dumping and countervailing function is critical to achieving a level playing field and retaining public confidence in an open trade environment.

2. Dumping into Australia is highly likely to increase…

There are a range of factors which make Australia an attractive exporting destination, including for products that are dumped or subsidised. These factors will likely result in an increase in anti-dumping and countervailing activity.

3. Despite the success of recent Government reforms, more needs to be done to restore public confidence…

Despite existing efforts and reform initiatives introduced over recent years, Australia’s anti-dumping system is struggling to perform under the weight of an increased workload and outmoded organisational arrangements. A significant ongoing reform program is required to enable the administration to discharge its mandate efficiently and effectively.

4. The reform program must address a number of sub-optimal facets of the current administration…

The current arrangements for the administration are sub-optimal in a number of respects, including a lack of resources, a low public profile and a shortage of staff with appropriate skill sets.

5. A significant increase in resources is required to lift performance…

As a first step in lifting performance, it is critical that the administration secure a significant and immediate increase in resources to meet existing and future operational demands as well as community and industry expectations.

6. The current organisational and administrative arrangements are not best practice and also require change…

The current structure and organisational arrangements of the administration also need to be improved to ensure it is best placed to enhance performance and meet existing and future activity demands.

7. The current geographical location of the administration is not ideal…

The current geographical location of the administration is not optimal and makes it difficult to engage with industry and attract the necessary skills and experience to perform its functions effectively.


Primary recommendations

It is recommended that a new International Trade Remedies Authority, Agency or Commission

be established under legislation. To fully realise its benefits, the agency must be:

separately and adequately resourced, and

headed by a legislated CEO or Commissioner who reports directly to the Minister

for Home Affairs and Justice.

The agency should be established within Customs and Border Protection to preserve the links

and synergies with Customs that are critical to the effectiveness of the system.

It is recommended that the new agency be principally located in a major capital city where

there is a high concentration of Australian industry.

It is recommended that an immediate increase in resources be made available to facilitate

establishment of the new agency and ensure timely resolution of the underlying issues.

Other relevant recommendations

Recommendation 1:

It is recommended that an additional National Manager position be established to

manage the operational functions of the agency.

Recommendation 2:

It is recommended that a Consultation and Communication Strategy be developed at

the earliest opportunity.

The Strategy should include a new website and branding.

Recommendation 3:

It is recommended that the client support function within the agency be enhanced

substantially.


Recommendation 4:

It is recommended that a sustainable and viable model be developed for the

International Trade Remedies Adviser.

Recommendation 5:

It is recommended that the International Trade Remedies Forum ensure a more

balanced and inclusive membership.

Recommendation 6:

It is recommended that a Workforce Plan be developed. The Plan should:

a) be based on a full skills gap analysis, and b) include a targeted training and development program.

Recommendation 7:

It is recommended that a dedicated budget be established to increase the ability to

access specialist skills and to recruit Special Advisers.

Recommendation 8:

It is recommended that a role of Transparency Officer be established to ensure optimal

transparency, particularly with respect to the public record.

Recommendation 9:

It is recommended that duty assessments and accelerated reviews be made subject to

open and transparent processes similar to those of investigations.

Recommendation 10:

It is recommended that the agency include dedicated resources for compliance

assurance and anti-circumvention, and that it work in partnership with Customs and

Border Protection to ensure the ongoing effectiveness of anti-dumping and

countervailing measures.


Minister

Independent agency head

National Manager – Operations

SES 1

National Manager – Support

SES 1 Assistant

External

experts

Operations 1 Special

Advisers Operations 2 Operations 3 Business

Support

Implementation

of measures Compliance

assurance Systems

management Quality

assurance Workforce

capability Policy support

Assistant

Anti-dumping and countervailing

investigations, reviews, continuation

inquiries, duty assessments and

reinvestigations

Anti-circumvention

Client Support

Communication Consultation Transparency

Officer role

Strategic

Review

Implementation of reforms

This organisational structure presents a

suitable model for implementing the

recommendations.


Abbreviations

ADA Anti-Dumping Authority

Ai Group Australian Industry Group

Amcor Amcor Packaging Australasia (Cartonboard Division)

AMWU Australian Manufacturing Workers’ Union

Arrowcrest Arrowcrest Group Pty Ltd

AWU The Australian Workers’ Union

BlueScope Steel BlueScope Steel Limited

Capral Capral Limited

CFMEU Construction, Forestry, Mining and Energy Union

CIF Cement Industry Federation

CSR CSR Limited

Customs or Customs and Border Protection

The Australian Customs and Border Protection Service

Gross & Becroft Gross & Becroft Lawyers on behalf Tilling Timber Pty Ltd

Heslop Consulting Heslop Consulting Pty Ltd

ITRA International Trade Remedies Adviser

ITRB The International Trade Remedies Branch in the Australian Customs and Border Protection Service

ITRF ITRF

JELD-WEN JELD-WEN of Australia Pty Ltd

Joint Study The Joint Study of the Administration of Australia’s Anti-Dumping System (2006)

OECD Organisation for Economic Co-operation and Development

OneSteel OneSteel Limited

Orica Orica Pty Ltd

PC Inquiry Report Productivity Commission, (2009) Inquiry Report No. 48: Australia’s Anti-Dumping and Countervailing System

Penrice Penrice Soda Products Pty Ltd

Qenos Qenos Pty Ltd

Streamlining Streamlining Australia’s anti-dumping system: an effective anti-dumping and countervailing system for Australia (June 2011)

TMRO Trade Measures Review Officer

WTO World Trade Organization


1. Introduction

1.1 What are anti-dumping and countervailing measures?

Anti-dumping and countervailing measures are globally accepted remedies for material

injury to a domestic industry caused by dumped or subsidised imports. For members of

the WTO, the remedies are broadly governed by agreement under WTO arrangements.

What is dumping?

Dumping occurs when an overseas supplier exports goods at a price (export price) that

is below the normal value of those goods. The export price is usually the amount paid

or payable to the exporter for the goods, excluding any post exportation charges such

as ocean freight. The normal value is usually based on the price paid or payable for like

goods sold in the domestic market that is adjusted to ensure fair comparison with the

export price.

The dumping margin is the amount by which the normal value exceeds the export price,

usually expressed as a percentage of export price. Dumping margins are usually

calculated by comparing the weighted average of export prices with the weighted

average of corresponding normal values over a one year investigation period.

What is a countervailable subsidy

A countervailable subsidy exists in a country where a contribution, or income or price

support:

is provided by that country’s government

to a specific enterprise or industry, or group of enterprises or industries, in that

country, and

confers a benefit to the goods exported by the enterprise or industry in that

country.

In these circumstances, the amount of the subsidy attributable to the benefit is

calculated to determine the countervailable subsidy, which is usually expressed as a

percentage of export price.

The purpose of an anti-dumping and countervailing system

There is nothing illegal about the practices of dumping or subsidisation per se. Dumping

is a form of price differentiation that can, in some circumstances, be beneficial to both

the exporting and importing countries. The provision of government subsidies is also

not uncommon, and such subsidies can provide a benefit to a producer or exporter of

the goods.


However, there is global recognition that these practices can constitute unfair trade

practices and that nations are entitled to take action to counter such practices where

they cause material injury to a domestic industry in that country. Where it is

established that dumped and/or subsidised goods have caused, or threaten to cause,

material injury to a domestic industry producing like goods, governments may apply

remedial action in the form of anti-dumping and/or countervailing measures. The use

of such remedies is designed to create a level playing field for both the domestic

manufacturers and the downstream industries, which can source products from

international and domestic markets.

WTO Agreements

For governments that are members of the WTO, such remedial action is governed by

the WTO Anti-Dumping Agreement1 and Agreement on Subsidies and Countervailing

Measures.

The WTO’s mandate is to improve global trade through promoting non-discrimination,

lowering trade barriers and discouraging unfair practice. While the WTO and its

member nations are generally committed to eliminating trade barriers, there is global

recognition that nations require flexibility to respond to products being dumped into a

country at prices below those of the exporting country’s market. However, to uphold

the integrity of international trade and maintain a level playing field, it is generally

accepted that such flexibility must be subject to certain agreed principles; hence the

WTO Agreements on anti-dumping and countervailing measures.2

The WTO anti-dumping and countervailing agreements are largely principles-based.

Member countries have considerable flexibility in interpreting certain aspects of the

agreements and their implementation. Interpretation of the WTO agreements has

resulted in different approaches being taken to the remedies and to the models for

their administration. The consequence of this is discussed at Chapter 4, which considers

the global and domestic drivers of anti-dumping and countervailing actions.

1.2 A brief history of anti-dumping and countervailing in Australia

Anti-dumping legislation in Australia has been in place for over 100 years, commencing

with the Australian Industries Preservation Act 1906. International rules on dumping

were not established until the formation of the General Agreement on Tariffs and Trade

1 Full title: Agreement on the implementation of Article VI of the General Agreement on Tariffs and Trade

1994. Further information on the anti-dumping agreement can be found at: http://www.wto.org/english/tratop_e/adp_e/antidum2_e.htm 2 This report does not explore the contents of the relevant WTO agreements as they are not relevant to

the Terms of Reference of this Review.

http://www.wto.org/english/tratop_e/adp_e/antidum2_e.htm


(GATT) in the late 1940s. This agreement did not specify procedures for imposing anti-

dumping duties, which led to differences in the policies adopted by GATT members.

The Kennedy round of GATT trade negotiations (1964-1967) produced an Anti-Dumping

Code that set out the rules for the application of anti-dumping duties. An essential

feature of the Kennedy round was the obligation that national legislation be aligned

with the requirements of the Code. Australia became a signatory to that Code in 1975.

The Tokyo round of GATT negotiations (1973-1979) revised the Anti-Dumping Code and

introduced a Subsidies and Countervailing Duties Code. Australia became a signatory to

the revised Anti-Dumping Code and the new Subsidies Code in 1979 and legislation was

amended to reflect the provisions of those Codes.

Customs administered anti-dumping legislation in Australia at this time. Upon request,

the Tariff Board (and later the Industries Assistance Commission) would review

Customs' anti-dumping or countervailing findings.

The Uruguay round of GATT negotiations (1986-1994) led to the creation of the WTO to

replace the GATT in April 1994. On 1 January 1995, the Uruguay Round of WTO changes

to anti-dumping and countervailing procedures were incorporated into Australian law

and administration.

In 1988, following the Gruen Review (1986), legislation was passed to establish the Anti-

Dumping Authority (ADA). This created a two-tier administrative system3 with Customs

conducting investigations up to a preliminary findings stage, and the ADA reviewing the

preliminary findings and making final findings. This replaced the role of the Industries

Assistance Commission.

Between 1988 and 1996, there were a number of Australian Government reviews that

led to significant changes to legislation. The 1996 Willett Review in particular resulted in

a new legislative framework and new administrative arrangements. The most notable

administrative change was the rationalisation of the two-stage investigation system

with the abolition of the ADA in 1998 such that Customs resumed sole responsibility for

investigating and reporting on dumping matters.

Other key changes during this period included the introduction of statutory timeframes

for investigations (245 to 265 days) and a later reduction in those timeframes (to 155

days), a sunset clause limiting the duration of the measures, a new system for the

collection of anti-dumping and countervailing duties, and the establishment of the

position of Trade Remedies Review Officer (initially located within the Attorney-

General’s Department) for an independent administrative appeals.

3 PC Inquiry Report, p. 174


In 2006, a Joint Study into the administration of Australia’s anti-dumping system was

undertaken. The Joint Study was carried out by Customs and Border Protection, the

then Department of Industry, Tourism and Resources, the Department of Foreign Affairs

and Trade and the Trade Remedies Review Officer. The study was initiated to ensure

that Australia's anti-dumping administration reflects best practice and to respond to

concerns of Australian manufacturers about the effectiveness of the system. The Terms

of Reference specifically excluded examination of anti-dumping policy or the legislative

basis for the system. (The relevant findings of the Joint Study are discussed at various

points in this Report.)

In 2009, the Australian Government requested the Productivity Commission to inquire

into Australia’s anti-dumping system, including both policy and administrative aspects.

The Commission was asked to:

assess the policy rationale for, and objectives of, the system and the

effectiveness of the current arrangements in meeting those objectives

examine the economy-wide benefits and costs of the system

make recommendations on the future role of an anti-dumping system with the

aim of improving the performance of the economy, having regard to the

interests of industry, importers and consumers, and

assess the administration of the system, giving consideration to the key decision-

making steps in the investigation process and advising on ways to improve

administrative efficiency, reduce compliance costs and increase certainty for

business.4

After taking account of the Productivity Commission recommendations, the views of

State and Territory Governments, certain reports of the Senate Economics Legislation

Committee and stakeholder submissions, the Government announced a range of

reforms that were documented in the policy statement Streamlining Australia’s anti-

dumping system: an effective anti-dumping and countervailing system for Australia

(June 2011). The reforms aimed at achieving the following improvements:

Better access to the anti-dumping system

improved timeliness

improved decision-making

greater consistency with other countries, and

stronger compliance.

Implementing the Streamlining package of reforms has involved a number of elements

such as:

establishing of the ITRF

4 ibid, p. 2


piloting the role of ITRA

increasing staffing of the ITRB

increasing compliance activity, and

improving transparency.

The Minister for Home Affairs and Justice, the Hon Jason Clare MP, has introduced

legislative amendments to give effect to key elements of the Streamlining reforms. The

large amount of legislative change involved in these reforms has necessitated four

tranches of legislative amendments. The first tranche has been operative since late

2011. The other three tranches were introduced into the Parliament in late 2011 and

early 2012. These legislative packages have passed the House of Representatives and

are currently before the Senate.

1.3 The current Australian Government policy on anti-dumping and

countervailing

In its June 2011 announcement of the Streamlining reforms, the Australian Government

emphasised the significance of an efficient and effective anti-dumping administration.

The policy statement, which remains current, recognises the fact that “Australia is an

export-oriented economy” and reiterates the benefits of an open trade environment,

while noting that anti-dumping is now a “standard feature of the international trade

policy landscape”.

The statement highlights the principle underpinning the international framework

governing multilateral trade; namely, that a level-playing field enables business and the

community to retain confidence in the benefits of a global economy. It goes on to

situate anti-dumping and countervailing within this framework:

As there is no international competition law regime, an anti-dumping system is the

only means by which unfair market behaviour can be deterred at the global level.5

This recognises anti-dumping as a defined, globally accepted levelling force. As such, an

anti-dumping and countervailing system emerges as a necessary component of a

competitive market economy, and hence a well-administered anti-dumping system is

essential to a healthy Australian economy.

The statement also notes the wider benefits of a well-administered system:

A well-administered anti-dumping system has several welcome efficiency effects.

These include avoiding the depreciation of the skills and capabilities of the labour

5 Streamlining, p. 3


force and of industry, and encouraging capital investment by providing greater

certainty in the competitive environment.6

Overall, it concludes that a “rigorous and well-resourced anti-dumping regime will

better secure our industries and our workforce from unfair trade practices”.

6 ibid


2. Global and domestic drivers: A growing need for the anti-

dumping and countervailing system?

Determining the most appropriate structure for administering the anti-dumping and

countervailing system requires an appreciation of the significance of the function. This

chapter briefly considers the current and future context for anti-dumping and

countervailing activities in Australia, including the factors that make Australia an

attractive destination for surplus product and the global and domestic drivers impacting

anti-dumping and countervailing activity levels in Australia.

2.1 Surplus product around the world

In the PC Inquiry Report, the Productivity Commission noted that in industries which are

“dominated by capital intensive, large scale manufacturing facilities, and where demand

fluctuates considerably across the economic cycle, price discounting in export markets

can occur quite regularly.”7 The Productivity Commission’s position was supported by a

participant who noted that dumping is economically rational in most cases as

“(m)anufacturers throughout the world seeking to fill excess factory capacity (especially

newly-installed capacity) can do so at prices reflecting ‘marginal cost plus a margin’ as

long as they don’t damage the local pricing structure.”8

When economic growth is strong and when demand exceeds supply, the likelihood of

surplus production is low and so the incidences of dumping tend to be low. However,

when economic growth slows, and production does not scale back to account for

reduced demand, surplus product becomes available on the market and is more likely to

be sold at prices sufficient to recover marginal costs with the potential to cause harm to

the importing market.

In its submission to the Review, BlueScope Steel noted that weak global demand and

overcapacity in the steel industry has led to large volumes of steel being offloaded at

injurious prices. It noted that some producers have taken economically responsible

action in closing down unprofitable production capacity, but many other producers

have not and this has resulted in the surplus supply of steel around the world.

For instance, the overproduction of steel in China is apparent in the World Steel

Association chart below. In this example, the combined production of long and flat

steel products has exceeded apparent steel use (ASU) consistently.


8 ibid


Source: ISSB; World Steel Association; CRU

Anti-dumping and countervailing activities fluctuate over time as demonstrated by the

chart below. It is well acknowledged that it is difficult to establish strong relationships

between economic cycles and the rise and fall of anti-dumping activities.9 However, it is

logical to conclude that when there is global oversupply of product, exporters will look

for a market to sell this product at prices that recover marginal costs. An oversupply of

product to the Australian market necessarily prompts some form of response from local

manufacturers. An anti-dumping application is one such option.

A number of factors make the Australian market attractive to foreign exporters:

the strong exchange rate for the Australian dollar

Australia’s support for free and open systems of international trade (in contrast

to some economies who adopt a more protectionist approach to trade)

Australia’s strong economy in the global context, and

Australia’s proximity to the emerging Asian economies.

As such, and in view of the weakness in the global economy, the arrival of dumped

goods into Australia is likely to increase, thereby increasing the likelihood of a rise in

anti-dumping applications to be received by the current administration.

And this is not the only driver. In his 1993 article on the topic, Gary Banks AO noted

that, “(t)he increased demand for anti-dumping action can similarly be explained as a

reaction not only to the possible increase in dumping…but also to the increased

9 Bown, C & Crowley, M (2012), Import Protection, Business Cycles, and Exchange Rates – Evidence from

the Great Recession, www.econ.worldbank.org

http://www.econ.worldbank.org/


competitive pressures placed on Australian industries”,10 especially whenever

Australia’s international competitiveness is declining.

2.2 Anti-Dumping trends within Australia

The chart below demonstrates the levels of anti-dumping activities performed by

Customs and Border Protection from 1980 through to 2012. The activities are broken

into measures in force, new investigations initiated and new measures being imposed.

Source: Data from Customs and Border Protection

The key indicator which influences future work levels is new investigations initiated. The

other two indicators are also relevant because greater numbers of measures imposed

or in force are likely to generate a higher number of reviews, continuation inquiries, and

duty assessments to be handled by Customs and Border Protection.

As can be seen from the above chart, the trend in anti-dumping and countervailing

activity depicted by ‘New investigations initiated’ shows considerable fluctuation in the

1980s and 1990s, until a steady decline in activity is apparent from 1998 to a low-point

in 2007. Subsequently, a steady increase in activity has emerged and continues through

2012.

While, overall, the data shows a downward trend, the recent upward trend in Australia

is significant and measurable.

10 Banks, G (1993), “The Antidumping Experience of a GATT-Fearing Country”, in Finger, J (1993)

Antidumping - How It Works and Who Gets Hurt, p.193


It is difficult to identify exactly what influenced the downward trend in the above chart

from 1998-2008. However, the Productivity Commission noted in its PC Inquiry Report

that:

There was widespread agreement among inquiry participants that a key factor

affecting the cyclical pattern in anti-dumping activity over the past 30 years has

been the changes in the strength of the global economy. Past periods of heightened

anti-dumping activity in Australia have generally coincided with below average

world economic growth, such as in the early 1980s and early 1990s. This suggests

that the diminished usage of Australia’s anti-dumping system over the past decade

can, to an extent, be attributed to a generally strong domestic and global

economy.11

In this context, it is possible that the relatively low level of anti-dumping and

countervailing activity in Australia since 2000 is due in part to the strong economic

growth in China and East Asia (some of Australia’s major trading partners) prior to the

global financial crisis, and reasonably consistent domestic economic growth in the same

period. Similarly, the growth in anti-dumping and countervailing activity since 2007

may be linked to the effects of the global financial crisis and subsequent uncertainty in

global economies.

2.3 Competition in Australian markets

It was well recognised by stakeholders during the consultation process that the

Australian manufacturing sector is contracting. Manufacturing’s share of gross

domestic product (GDP) has been declining for some time and, in line with poor trading

conditions and a loss of competitiveness, manufacturing investment has fallen relative

to GDP since the global financial crises.12 The difference in the balance of trade in the

manufacturing sector is highlighted in the chart below.

11 PC Inquiry Report, p.27

12 Insight Economics (2012), Investment, Productivity and the Competitiveness of Manufacture – Final

Report to the Prime Minister’s Taskforce on Manufacturing, and Future Manufacturing Industry Innovation Council (2011), ‘Trends in Manufacturing to 2020’ – A foresighting discussion paper.


Source: Department of Foreign Affairs and Trade

During the Review, participants noted that there is a broad range of factors making the Australian market attractive and impacting on the ability of some companies to maintain a sustainable competitive advantage in the current environment.

While Australian markets remain attractive to foreign exporters of goods at dumped prices, local manufacturers will be faced with the challenge of competing to retain their market share and/or profitability.

Broadly, three options have been identified for local manufacturers to remain competitive in a tight market:

1. Re-invest capital into manufacturing processes and research and development with the aim of achieving greater economies of scale and developing products supplying high-value niche markets.13

2. Seek Government assistance in the form of subsidies, for example subsidies provided to the automotive industry, in order to reduce costs and ride out a down turn in business.14

3. Utilise measures such as anti-dumping and countervailing to retain a level playing field.15

The majority of Review participants noted they are able, to a large extent, to refine their

business processes to remain viable in a market defined by greater global competition.

However, they emphasised that they simply cannot compete with dumped goods at

13 Insight Economics (2012) ‘Investment, Productivity and the Competitiveness of Manufacture’ – Final

Report to the Prime Minister’s Taskforce on Manufacturing 14

ibid 15

Consultation with industry stakeholders.


times, especially where the prices of the dumped goods in Australia are lower than the

Australian manufacturer’s unit costs.

2.4 Factors impacting competition in Australian markets

The appreciation of the Australian Dollar

The appreciation of the Australian dollar (AUD) against the United States dollar (USD) and the European Union Euro since January 1999 is illustrated in the charts below.

Source: WM/Reuters

Apart from a dip in late 2008 to early 2009 the value of the AUD against the USD has

steadily increased to the point where it has traded around or above parity since 2011.

Similarly, since the European banking crises started in 2009, and the continuing financial

instability in Europe, the AUD has appreciated considerably against the Euro to

previously unrecorded highs of 0.86 Euro.


Source: Reserve Bank of Australia

The high value of the AUD against key currencies, such as the USD and the Euro, can

increase foreign competition making it difficult for Australian manufacturers to compete

in both domestic and international markets. The high exchange rate for the AUD makes

exports less attractive to foreign markets due to the higher prices. Conversely, for

value-add manufacturers in Australia, imports become cheaper and potentially more

attractive than local products. The impact of the exchange rate on the competitiveness

and profitability of trade-exposed industries, particularly manufacturing industries, was

recognised as a significant barrier in publications flowing from the Prime Minister’s

Manufacturing Taskforce.16

The Treasury expects demand for the AUD, and thus exchange rates, to remain at a high

level while a number of structural drivers remain in place:

The high profitability of local resource companies attracting capital investments

that appreciate the AUD.

Higher interest rates attract foreign investment and appreciate the AUD. The

strong economic performance Australia has experienced since the global

financial crisis has resulted in a wide differential in local interest rates when

compared to international interest rates.

Australia’s strong public finances reduce the perceived risks on Australian

investments relative to other advanced economies with high government debt.

16 See the following publications:

Insight Economics (2012), Investment, Productivity and the Competitiveness of Manufacture: Final Report to the Prime Minister’s Taskforce on Manufacturing. Prime Minister’s Manufacturing Taskforce – Report of the Non-Government Members (2012) Future Manufacturing Industry Innovation Council (2011), ‘Trends in Manufacturing to 2020’ – A foresighting discussion paper


The AUD continues to be traded as a proxy for China (and Asia more generally)

due to Australia’s strong economic links to the Asian region and more developed

and liquid financial markets.17

In recent years, the Australian balance of trade has been in a positive position, due in

part to the resources boom (see chart below). When the resource boom will peak is

heavily dependent on the continued growth of developing countries and thus difficult to

predict accurately. In trying to predict the value of the AUD, Insight Economics

concluded, “While the AUD can be expected to fall somewhat in the future, the best

assumption for policy planning is that it will still remain high relative to the past.”18

Source: Department of Foreign Affairs and Trade - Country and Commodity Pivot Table CY2011

Challenge from developing economies

Australian manufacturing faces continued challenges from developing countries which

derive benefits from competitive advantages such as lower labour costs and economies

of scale not readily available to Australian producers.

Throughout the consultation process, a number of industry participants noted that they

are now sourcing their primary inputs through Asia. Some have shifted their production

facilities to Asia to benefit from local competitive advantages. The growth of industry in

Asia and Australia’s preference for purchasing from Asia was noted in the PC Inquiry

Report, “Between 1998-99 and 2007-08, the average annual growth in Australia’s

17 www.treasury.gov.au

18 Insight Economics (2012), Investment, Productivity and the Competitiveness of Manufacture: Final

Report to the Prime Minister’s Taskforce on Manufacturing, p 41.

http://www.treasury.gov.au/


merchandise imports from Asia was nearly double that of non-Asian countries (11%

compared with 6%).”19

As the trade between Australia and Asia has grown, there has been a similar increase in

anti-dumping measures being applied to exports from Asia, and specifically China.

Between June 1999 and June 2012, the number of measures applied against Asian

imports has nearly doubled from 36% of total measures (17 measures) to 67% of total

measures (16 measures). In the same time period, the number of measures applied

against imports from China has increased from 6% of total measures (6 measures) to

29% of total measures (7 measures). A comparison of measures by region is in the table

below.

Country or region 30-Jun-89 30-Jun-99 30-Jun-09 30-Jun-10 30-Jun-11 30-Jun-12

No. % No. % No. % No. % No. % No. %

Asia 11 48 17 36 20 77 15 68 14 61 16 67

China 3 13 3 6 8 31 6 27 7 30 7 29

other Asia 8 35 14 30 12 46 9 41 7 30 9 38

Europe 7 30 16 34 4 15 4 18 4 17 3 13

Nth America 2 9 7 15 2 8 3 14 5 22 5 21

Other regions 3 13 7 15 0 0 0 0 0 0 0 0

Total 23 100 47 100 26 100 22 100 23 100 24 100

Source: 1989-2009 PC Inquiry Report; 2010-2012 Customs and Border Protection

Market economy status

In April 2005, Australia granted China market economy status.20 This means that

Australia conducts its anti-dumping investigations in the same manner for China as

other market economy members of the WTO. Accordingly, domestic selling prices for

goods sold in China may be used as a basis for normal value. China is not considered a

market economy by many countries internationally and is arguing on the international

stage for market economy status to be more broadly accepted.21

Being accepted as a market economy may have impacts on the assessment of anti-

dumping applications by the importing country. When a country does not have market-

economy status it is easier to construct the normal value of the exported goods when

investigating and analysing an anti-dumping application. The country importing the

goods can adjust or disregard the domestic exporter prices and costs when determining

whether the imported goods are being dumping on their markets. The constructed

normal value will be based on the costs and prices from outside the exporting country

and thus are likely to be higher. This means that when the comparison is made

between the normal value and the export price, the level of dumping is likely to be

19 PC Inquiry Report, p.31

20 www.dfat.gov.au

21 O’Connor, Bernard (2011) ‘Market-economy status for China is not automatic, Vox,

www.voxeu.org/article/china-market-economy.

http://www.dfat.gov.au/


higher. If dumping and a causal link to material injury are found then the resulting

duties, again, are likely to be higher.22

Some Review participants noted that Australia is a more attractive market to export

products because of its recognition of China as a market economy. This was highlighted

in the submission to the Review by the Australian Steel Institute, which in noting trade

remedies being imposed in both the United States and Canada stated “… successes

overseas threaten to cause further increases in the volume of steel being redirected to

Australia by major exporters such as China, which currently has significant excess steel

production capacity.” 23

Some commentators consider that there is no deadline or natural progression which

would see China recognised as a market economy universally. Whilst China has been

pushing to be recognised as a market economy, it has been noted that “there is nothing

in the WTO rules, or elsewhere, to provide that China automatically gets market

economy status in 2016” and “there is no provision setting any date in the WTO

agreements themselves and there is no deadline in the protocol signed by China when it

acceded to the WTO.”24 So long as countries such as the United States and Canada fail

to recognise China as a market economy, Australia is likely to be a more attractive

export destination for dumped products from of China.

Challenge to Australia’s competitiveness

During the consultation process, a number of issues were raised in the context of

competition in the global economy. It was widely noted that the costs of doing business

within Australia were a significant issue. The costs of domestic inputs, such as utilities

and employees, were identified as a significant barrier in reducing the costs of

production.

The boom experienced by the mining sector has created what has commonly been

referred to as a two paced economy within Australia. It is quite possible that the

resource boom has resulted in an increase in the price of production inputs for

Australian manufacturers. A number of the manufacturers noted that Australia should

have a distinct competitive advantage in energy prices, especially with the abundance of

natural gas within the country. However, participants noted that this is not the case.

While the world price for gas is decreasing, Australian prices are rising at a similar rate.

The ‘Henry-Hub’ gas price in the USD has fallen from USD7 to USD2.30/Gj. In

comparison, prices in Western Australia have increased from AUD2.50 to AUD9/Gj.

Insight Economics has noted that “(t)his is threatening the viability of major resource

22 ibid

23 Australian Steel Institute Submission, p.2

24 O’Connor, Bernard (2011) ‘Market-economy status for China is not automatic, Vox,

www.voxeu.org/article/china-market-economy.


processing industries, such as alumina and ammonium nitrate, as well as low emissions,

gas fired power generation.”25

Whilst domestic input costs remain high, local manufacturers will have less opportunity

available to reduce their costs of production. Without the ability to reduce production

costs, manufacturers will be more likely to look towards anti-dumping as a remedy to

enable them to compete with products being imported into the domestic market.

Australia’s approach to open and free international trade

Successive Australian Governments have supported policies which promote free and

open systems of international trade. In its Streamlining policy, the Australian

Government noted that Australia is an export-oriented economy and that for more than

“30 years, Australia has had bipartisan support for some of the lowest barriers to trade

in the world”.26

The Government’s trade policy statement, Trading our way to more jobs and prosperity,

sets out five guiding principles:

unilateralism – a commitment to the pursuit of ongoing, trade-related economic

reform without waiting for other countries to reform their own economies;

non-discrimination – Australia will not seek exclusive or entrenched preferential

access to other countries' markets;

separation – foreign policy considerations will not override trade policy

assessments in determining the choice of negotiating partners and consideration

of proposed trade deals;

transparency – the public will be kept well informed about the progress of trade

negotiations and will have the opportunity to provide input; and

the indivisibility of trade policy and wider economic reform – domestic economic

reform, improved international competitiveness and increased market access

work together to create jobs and prosperity.27

For two decades until the mid-1980s, Australia and New Zealand had the most

protected manufacturing sectors among OECD countries. However, following a series of

unilateral tariff reductions between the 1970s and 1990s, Australia's effective rate of

assistance to manufacturing fell from 36% in 1970 to under 5% in 2007–08.28

Low tariff rates in Australia make it an attractive destination for exporters, especially

when compared with countries which have higher tariff rates on like products.

25 Insight Economics (2012) ‘Investment, Productivity and the Competitiveness of Manufacture’ – Final

Report to the Prime Minister’s Taskforce on Manufacturing, p. 3 26

Streamlining, p. 3 27

Policy released by the Minister for Trade, the Hon Dr Craig Emerson MP, on 12 April 2011 28

www.treasury.gov.au


Source: The Treasury

2.5 Variances in interpretation of WTO obligations

In an open and free trading environment, the use of trade remedies is designed to

create a level playing field for both the domestic manufacturers and the downstream

industries which can source products from international and domestic markets.

However, the WTO anti-dumping agreement is largely principles based, and member

countries have considerable flexibility in interpreting certain aspects of the agreement

and its implementation, which can impact on the ‘levelness’ of each playing field.

Interpretation of the WTO Anti-Dumping Agreement has resulted in different

approaches to administering anti-dumping, and a perception, especially held by

manufacturers during the consultation process, that some countries interpret this

agreement in a much more conservative manner than in Australia. Many

manufacturers who contributed to the Review were of the opinion that the Australian

approach to anti-dumping was ‘whiter than white’ and ultimately the implementation

of the WTO framework was in a manner which provided little assistance to domestic

manufacturers against dumping and subsidisation.

Some participants held the view that a conservative approach to interpreting the WTO

agreement can lead exporters to avoiding some countries and shipping their goods to

countries with a more open approach. This was said to be especially so when the global

economy is struggling and countries seek to insulate their industrial sectors and markets

from aggressively priced imports.

There are a number of areas where anti-dumping administrations can differ, including

the use of a lesser duty rule, the use of a public interest test and the recognition or lack

of recognition of an exporting country as a market economy.


Under a lesser duty rule, authorities impose duties at a level lower than the margin of

dumping but adequate to remove injury to the domestic manufacturer. A consistent

implementation of the lesser duty rule results in outcomes that are less favourable to

domestic manufacturers. For example, if a company were to export to two different

countries, and one country had a lesser duty rule in place whilst the other country did

not, all things being equal, the imported goods would be more expensive in the country

which did not apply the lesser duty rule.

Essentially, a public interest test enables the decision maker to take account of a wider

range of interests in determining whether anti-dumping measures should be imposed.

Where the application of a public interest test results in a decision not to impose

measures this generally works to the benefit of importers and leaves manufacturers

without a remedy for injurious dumping.

As discussed above, the recognition of an exporting country as a market economy, or

not, can have a significant impact on determination of the normal value of the exported

goods. Recognising an exporting country as a market economy where other countries

do not provide a similar recognition can result in investigations finding a lower level of

dumping, a reduction in the number of instances where duties are imposed, and a

reduction in the level of those duties.

The PC Inquiry Report provides a succinct summary of a number of countries approach

to these three issues in the table below:


Comparison of anti-dumping and countervailing systems

Australia New Zealand USA Canada European Union

India

Bifurcated administration

No No Yes Yes Yes No

Investigating Authority: Dumping and subsidisation

Australian Customs and Border Protection Service

Ministry of Economic Dev elopement

United States Department of Commerce

Canada Border Services Agency

European Commission

Ministry of Commerce

Investigating Authority: Injury and causal link

Australian Customs and Border Protection Service

Ministry of Economic Dev elopement

United States International Trade Commission

Canadian International Trade Tribunal

European Commission

Ministry of Commerce

Target investigation timeframe (days)

155 180 280 210 365 365

Treatment of China

Market economy

Market economy

Non-market economy

Starting presumption of market economy

Economy in transition

Economy in transition

Public interest test

No No No Yes Yes No

Decision maker or imposition of measures

Minister Minister United States Trade Commission

Canadian Trade Tribunal

Council of Ministers

Ministry of Finance

Merit and judicial reviews

Merit (TMRO) Judicial review

Judicial review

Judicial review

Judicial review

Judicial review

Judicial review

Lesser duty rule

Yes Yes No Yes (as part of public interest test)

Yes Yes

Source: PC Inquiry Report


The use of anti-dumping and other trade remedies is significant to Australia given its

strong policy stance on reducing trade barriers and opening Australian markets to

international competition.

2.6 Industry awareness and access

Improving access to the anti-dumping system

Review participants indicated that understanding how the regime worked, accessing

appropriate market data and the financial costs involved in the preparation of an anti-

dumping application are barriers to accessing the regime. The majority of anti-dumping

applications discussed were lodged with Customs with the assistance of consultants.

Participants noted that this is a very expensive exercise, costing in the hundreds of

thousands of dollars. Only one company acknowledged that they had completed their

own application. This is discussed further in Chapter 6.

On 22 June 2011, the Australian Government announced a package of improvements to

the anti-dumping system. One of the expected benefits from the package of

improvements is better access to the anti-dumping system. This benefit would be

achieved through:

supporting small and medium businesses and downstream manufacturers and

producers to actively participate in anti-dumping investigations with a new

Support Officer resource within the Ai Group

improving access to import data by more clearly defining categories of goods

improving access to subsidies data through an online register of subsidies

previously investigated by Customs and Border Protection

providing greater clarity on data requirements for making an application

clarifying the parties permitted to participate in investigations to include

relevant industry associations, trade unions and downstream industry, and

providing a more flexible basis for parties wishing to seek a review of existing

measures.

These enhancements, should they achieve their aim of improving access to the regime,

could thereby generate a greater number of anti-dumping and countervailing

applications and in turn, investigations.

International Trade Remedies Advisory Service

As mentioned in the first point above, the Government has funded a position within the

Australian Industry Group to assist small to medium enterprises with anti-dumping and

countervailing investigations. Following an establishment phase, the ITRA was formally

appointed on 1 July 2012. The ITRA provides assistance with respect to all aspects of

the anti-dumping system including:


providing advice on the preparation of an application for dumping and/or

countervailing duties

preparing (where appropriate) an application for dumping and/or countervailing

duties

providing support and advice during the screening/consideration process

providing advice and support during the financial verification process following

initiation of an investigation, and

assisting small to medium enterprises apply for a continuation of measures.29

As at 31 August 2012, the ITRA had identified seven potential anti-dumping

applications. Should all of the seven potential applications be pursued, this will

constitute a significant rise in the total number of applications received by Customs and

potentially a substantial increase in the number of investigations.

The ITRA has noted that none of these potential applications would have come to light

without third party assistance as the companies neither had the internal expertise to

develop the application independently nor the financial resources to retain a consultant

to develop the application. To date, assistance has been provided to clients by the ITRA

through a targeted engagement program. Wider awareness-raising has been limited,

extending to the Ai Group industry newsletters, website and word of mouth. However,

the ITRA has noted that a national awareness-raising campaign has been planned with

forums to be held in capital cities of all States and Territories. The ITRA expects that,

once the awareness-raising forums have been completed and the ‘word is out there’,

work levels will only be restricted by the amount of resources available.

In addition to the likely increase in anti-dumping applications submitted with the

support of the ITRA, there is potential for importers and downstream users to become

more active in seeking advice on investigation processes, review options, duty

assessments and duty exemptions. Any increase in the levels of these anti-dumping

administrative activities will impact on the existing services provided by Customs and

Border Protection.

2.7 Outlook

Forecasting the level of anti-dumping and countervailing activities in Australia is

difficult. However, it is clear that the factors identified in this chapter contribute to the

increased uptake of the anti-dumping and countervailing system in Australia.

As noted by the Productivity Commission, the usage of the anti-dumping system is

influenced by the strength of the domestic and global economy. And there clearly exists

a range of other contributing factors: certain relevant industries ceasing local

29 www.aigroup.com.au

http://www.aigroup.com.au/


production; a more self-reliant attitude among manufacturers, supported by a generally

more open trading environment; increasing globalisation resulting in local producers

relying on imported products to complement their manufacturing; and obstacles in the

Australian anti-dumping and countervailing regime.

Analysis of the trends in the contributing factors, combined with greater industry

assistance provided through the ITRA located within the Ai Group, demonstrates a likely

increased uptake of the anti-dumping and countervailing system. While a direct

correlation between these factors and usage of the system may be subtle, there is a

sound basis for forecasting steady to strong growth of uptake of the system.

Finding:

An efficient, effective and impartial system for administering the anti-dumping and countervailing function is critical to achieving a level playing field and retaining public confidence in an open trade environment.

There are a range of factors which make Australia an attractive exporting destination, including for products that are dumped or subsidised. These factors will likely result in an increase in anti-dumping and countervailing activity.


3. Functions and powers in the anti-dumping and countervailing

system

In examining the current arrangements for assessing and investigating anti-dumping

matters and considering the feasibility of a Commonwealth Anti-Dumping Agency, it is

necessary to have a clear understanding of the functions, powers, roles and

responsibilities required of an effective system. It is also useful to have a clear

understanding of the organisational structure of the current administration (ITRB) and

the investigation processes.

This understanding provides a comparative basis for discussion later in this Report.

More importantly, however, it is critical to ensuring appropriate and realistic

consideration is given to the requirements of an effective system and to the

implications of possible changes to the system. This will enable better understanding of:

financial requirements

personnel requirements

authority to perform functions

roles and responsibilities

requirement for access to information, and

relationships between parts of the system (both within and outside of ITRB).

3.1 Components of the current administration

Given the nature, scope and complexity of the work, an anti-dumping and

countervailing system comprises a number of functional components. The diagram

below shows key functions and their interrelationships. The descriptions following the

diagram provide some detail on each of the functions.

The diagram and descriptions are not intended to be fully exhaustive but indicative of

the range of functions undertaken. The diagram is based around the current system but

is not intended to represent an organisational structure. However, names do reflect

existing organisational structures to some extent to facilitate comparison and

description later. Also, some functions could be performed by the same individual or

multiple individuals.

The green outline shows the functions undertaken within the ITRB and the blue outline

shows the functions (relevant to anti-dumping and countervailing) undertaken within

Customs and Border Protection.


1. Decision Making – is undertaken by the Minister for Home Affairs and Justice, or

the CEO of Customs and Border Protection (or delegates). Consideration of this

function is outside the scope of this Review.

2. Leadership / Management – is performed currently by Senior Executive Service

officials within Customs and Border Protection. Some decision making (in terms of

anti-dumping and countervailing activities) takes place here. Leadership and

management are not distinguished here but it is recognised that they comprise

different but often overlapping functions.

3. Operations – includes the key function of conducting investigations, verification,

analysis and reporting relating to new investigations, reviews, continuation

inquiries and duty assessments. Decision making is generally delegated to the

Operations Managers for the administration of some aspects of anti-dumping and

countervailing activities.

4. Policy and Capability – includes corporate support, policy development, capability

improvement, legislation, international engagement and stakeholder relations.

Some of these functions are also supported by other areas of Customs and Border

Protection, eg the Legal Services Branch.


5. Quality Assurance and Operational Support – includes liaison, implementation of

measures, system and operational support, quality assurance, compliance,

communication and administrative support. Some of these functions are also

supported by other areas of Customs and Border Protection eg IT system support

that underpins the case management system.

6. Strategic Review – includes implementation of strategic reforms such as the

Streamlining initiatives, ITRF support and stakeholder relations.

7. Legal Services – includes provision of legal services to ITRB in addition to other

functions within Customs and Border Protection. Support to ITRB includes legal

advice and litigation. Costs are borne by the broader agency. Staff in this area draw

upon a range of skills and experience from having dealt with other duty and tariff-

related issues.

8. Compliance – includes a range of compliance activities undertaken by Customs and

Border Protection of which anti-dumping or countervailing duties are one.

Compliance is critical to the effectiveness of measures. Costs are generally borne by

the broader agency, not ITRB. However, there is one person within ITRB who works

on implementation of measures, and compliance activities, out of Sydney. This is

shown in the diagram as Implementation and Compliance.

9. Corporate Support – includes a range of corporate functions undertaken by

Customs and Border Protection. This comprises management of personnel, finance

and security activities, departmental training, reporting, management of FOI

requests, coordination of media and public liaison, contract management and

procurement, building services, etc. Some corporate functions are undertaken

within ITRB.

10. IT Systems and Applications – are provided by the broader agency. This comprises

maintenance of personnel and financial systems, IT security, help functions and IT

call out, system administration, data backup and business continuity planning. It

includes purchase, installation and maintenance of hardware (such as servers, cool

room, storage devices etc.) and software (such as system software, cyber security,

application software, databases, etc.). It also includes management of IT projects in

general, application development and rollout of new IT systems. IT also includes

printers and telephone systems which are network connected and usually IP-based.

The Case Management System is under development but will reside on the

Customs network and be owned and managed by ITRB. The Electronic Public

Record resides on the Customs network but is owned and managed by ITRB. The

Import Database resides on the Customs network and is owned corporately but

utilised by ITRB.


11. Policy – A number of agencies are involved in Australia’s trade-related policy (which

includes international trade relations, negotiation of international agreements,

domestic trade relations and policy initiatives). These include the Department of

Foreign Affairs and Trade, the Department of Industry, Innovation, Science,

Research and Tertiary Education and Customs and Border Protection. Consideration

of these functions is outside the scope of this Review.

12. Review – is currently undertaken by the TMRO. An outline of the role of the TMRO

is provided in Chapter 11.

13. Contractors and Consultants – provides a functional method of accessing

knowledge, skills and experience from outside ITRB to support its work. ITRB is able

to draw upon existing procurement panels in Customs and Border Protection for

general consultancy and audit support.

Understanding the key administrative functions and their relationships is critical to

understanding the implications of changes to the current system including the

following:

the functions performed and funded by the current administration

the functions that need to be performed and funded for an effective system, eg

that may need to be transferred, duplicated or funded

the flow on effects of changes to parts of the system eg synergies between

functions, corporate knowledge, critical components

the qualitative changes to relationships, like the need to ensure system

connectivity or access to information, or establish a memorandum of

understanding for activities that may be performed outside ITRB, and

the requirement for specialist skills and experience and for which continuity is a

critical consideration.

3.2 Legislative functions and powers

Australia’s dumping and subsidy legislation reflects the WTO Anti-Dumping Agreement

and the WTO Agreement on Subsidies and Countervailing Measures.

The anti-dumping and countervailing system is dependent on two key pieces of

legislation in Australia. These define the specific functions required for administration of

the anti-dumping and countervailing system, and the powers necessary for their

execution.

The Customs Act 1901 (particularly Part XVB) and associated regulations: These

deal with all preliminary and procedural matters relating to the taking of anti-

dumping measures in respect of goods whose importation into Australia involves

a dumping or countervailable subsidisation that injures or threatens to injure.


They provide the key legislative basis for conducting anti-dumping and

countervailing activities and define the powers exercised by the CEO of Customs

and the Minister (in relation to anti-dumping and countervailing).

The Customs Tariff (Anti-Dumping) Act 1975: This is read in conjunction with the

Customs Act 1901 and deals with the imposition, collection and calculation of

dumping duties.

These functions involve several different types of inquiries including:

investigations of new applications for anti-dumping and/or countervailing

measures

reviews of the level of existing measures

revocation reviews in relation to existing measures

accelerated reviews of existing measures for new exporters

continuation inquiries to determine whether existing measures should expire, or

be extended for a further five years

duty assessments to determine whether the duty paid by an importer exceeds

the final duty payable, to determine whether a duty refund is due, and

reinvestigations, and resumptions of investigations, following TMRO review.

The Minister’s power to delegate his functions under these Acts, which include the Anti-

Dumping Act, are set out in section 9 of the Customs Act. The Minister’s powers can

only be delegated to a Custom’s officer. The principle statutory powers in Part XVB are

given to the Minister or the CEO. All the statutory powers in the Anti-Dumping Act are

given to the Minister. No other office holder is mentioned in that Act.

The system also relies extensively upon other sections of the Customs Act that support

other core Customs functions (not only anti-dumping and countervailing functions).

Subsection 42(1) provides for the taking of securities to ensure compliance with

the Act and generally for the protection of the revenue. Customs may refuse to

deliver imported goods into home consumption unless satisfactory security is

given.

Section 45 provides for the expiration of securities taken to secure dumping

duty, reflecting international treaty requirements regarding provisional

measures.

Section 214B provides specific monitoring powers “for the purposes of the

Customs Tariff (Anti-Dumping) Act 1975”, authorised officers (ie officers

authorised by the CEO in writing section 4) may:

o enter premises, inspect records, take and retain copies, and

o require a person to attend and answer questions and produce records.

The Customs Regulations 1926 include a few specific trade measures regulations

which provide for:


o determination of cost of production or manufacture; administrative,

selling and general costs; and profit

o disapplication of the ‘economy in transition’ provisions of 269TAC(5J) to

specified countries, and

o refund circumstance to enable payment of a refund as a result of a

Ministerial declaration after a review of measures or accelerated review.

Additionally, section 16 of the Customs Administration Act 1985 prohibits the

unauthorised disclosure of information held by Customs and Border Protection. This

section is a statutory information protection regime which underpins the confidentiality

essential for handling sensitive commercial and foreign government information in the

trade measures environment.

Understanding legislative powers makes it easier to consider implications of changes to

the current system including:

the need for new legislation or changes to existing legislation, eg to transfer,

extend or give powers to a new entity,

the possibility for powers to be delegated, eg to an entity within Customs, and

the need for powers to stay with areas of Customs and to make use of

cooperative arrangements or a memorandum of understanding for functions to

be performed.

3.3 The anti-dumping and countervailing process

Applications for anti-dumping or countervailing measures are lodged with Customs and

Border Protection. Applicants are required to provide a range of information and

supporting evidence. The key information requirements include a description of the

imported goods and like goods produced in Australia, as well as details of the basis for

the claims around dumping or subsidy, injury and causation.

Where Customs and Border Protection is satisfied that there appear to be reasonable

grounds for the publication of a dumping duty notice, and/or a countervailing duty

notice, an investigation is initiated. Public notification is made in a national newspaper

and in the Commonwealth of Australia Gazette. Customs and Border Protection will

also make direct contact with known interested parties.

Customs and Border Protection investigates the claims that goods have been exported

to Australia at dumped and/or subsidised prices, and claims that the dumping and/or

subsidisation have caused material injury to an Australian industry producing like goods.

Investigations include assessments of:

what are like goods, in relation to imported goods the subject of the application

who comprises the Australian industry producing like goods


the Australian market structure and size for the imported goods and like goods

dumping margins (including export price and normal value determinations)

countervailability of subsidy programs, and subsidy margins

whether dumping and/or subsidisation has caused material injury to the

Australian industry producing like goods, and

non-injurious price, for the purpose of applying the lesser duty rule.

Interested parties are invited to participate in the investigation and opportunities to

lodge submissions are provided. Customs and Border Protection visits certain

interested parties to verify data relevant to dumping, subsidy, injury and causation

assessments. Non-confidential copies of submissions and verification visit reports are

placed on the electronic public record. Stakeholder participation, verification and

transparency are all important features of the present system.

Based on its assessment of whether dumped and/or subsidised goods exported to

Australia have caused material injury to an Australian industry, Customs and Border

Protection makes recommendations to the Minister for Home Affairs and Justice as to

whether, and to what extent, anti-dumping and/or countervailing measures should be

imposed to remedy the injurious effects. In doing so, Customs and Border Protection

provides the Minister with the information necessary to impose duties either at the full

margin amount or at an amount less than the full margins of dumping and/or

subsidisation where appropriate, thereby giving effect to the lesser duty rule.

Customs and Border Protection can terminate investigations before reporting to the

Minister in certain circumstances including when:

dumping margins are negligible

countervailable subsidisation is negligible

dumping causes negligible injury, and

countervailable subsidisation causes negligible injury.

Where measures are imposed, they remain in place for up to five years, and can be

subject to various types of review during that period. Also during that period, importers

may apply for a duty assessment (of final duty liability) to determine whether the duties

paid for a past ‘importation period’ exceed the duties payable, which can result in a

refund. Towards the end of the five year period, an inquiry into whether continuation

of a measure is justified (continuation inquiry) may be undertaken. This may result in

expiry of the measure or an extension of the measure for another five years.

Certain parties (as defined) may request a review by the TMRO of certain decisions

made by the Minister or the CEO of Customs and Border Protection. Legal challenges

on a point of law may also be made by way of application to the Federal Court of

Australia. In addition, a WTO member country may seek a ruling from the WTO Dispute

Settlement Body where it believes another member country has violated an agreement.


A flowchart depicting the process, including TMRO review steps, is shown below.30

Customs investigation.

Preliminary affirmative determination and securities available.

(60+ days) ss. 42 & 269TD

Statement of essential facts. (maximum 110 days*) s. 269TDAA

Recommendation to Minister. (maximum 155 days*) s. 269TEA

TMRO review. Rejection affirmed or

case initiated. (60 days) s. 269ZZR

TMRO review. Termination affirmed

or revoked. (60 days) s. 269ZZS

TMRO review. Recommendation to Minister to affirm original decision or remit matter to Customs.

(60 days) s. 269ZZJ

Customs further investigation and report to Minister. (Within period specified by Minister) ss. 269ZZK(3) & (4)

Terminate

CEO’s assessmen

t oms

assessment 20 days

(269TC

Initiate

Reject

Application for dumping or countervailing duty notice. s. 269TB

Revoke

Interested party can apply to TMRO for review. (30 days) s. 269ZZB

Minister decides whether to remit. ss. 269ZZK(1) & (2)

Minister decides whether to affirm original decision, vary the notice or revoke original notice and substitute a new notice.

s. 269ZZL

Minister's decision to impose duties or not. ss. 269TG - 269TL

* Minister may extend these timeframes where it is reasonable to do so. s. 269ZHI

Minister affirms original decision.

s. 269ZZK(1)

Recommend Affirmation Recommend Remission

Not Remit Remit

Minister may accept undertaking. The investigation is suspended in relation to that exporter or country.

ss. 269TG(6) & 269TJ(3C)

Undertaking Offered

Source: Customs and Border Protection Practice Statement PS 2009/25

30 Customs and Border Protection Practice Statement PS 2009/25 – Administration of Australia’s anti-

dumping and countervailing system (July 2009), p. 5


An outline of the anti-dumping and countervailing investigations timeframes, including descriptions of the investigation activities is provided below.31

Scre

enin

g -20 Application received by Customs - analysis of the application to be satisfied that a prima facie case has been

established

Inve

stig

atio

n

0 Initiation of investigation where the application meets the necessary legislative requirements

- further analysis of the applicant’s claims - industry verification visits - commence material injury analysis - verificiation visits to importers to assist determination of export prices

40 Submissions in response to application due - verificiation visits to exporters to determine normal values and assist in

determination of export prices - determine dumping margins, material injury and causal link for the purpose

of determining whether provisional measures are warranted 60+ Provisional measures (securities) are available from this point forward

- further examination of export prices and normal values to ensure correct methodology and calculation

- recalculation of dumping margins - further analysis of material injury and causal link to ensure correct

assessment made - preparation of statement of essential facts

Minister may extend time for the following stages 110 Statement of Essential Facts issued

- commence drafting of final finding report - prepare for recommended final measures, if any

130 Submissions in response to Statement of Essential Facts - review of facts and reasoning in light of issues raised in the submissions - prepare final finding report for publication - calculate recommended final measures, if any

155 Final finding to the Minister In cases where there is an appeal

Ap

pea

l

0 Public notice of Minister’s Final Finding * 30 Deadline for lodgement of appeal with the TMRO 0 If accepted, notification of review by TMRO

- consideration and analysis of appelant’s claims 30 Submissions by interested parties due

- Consideration of issues raised in the submissions 60 TMRO report to Minister due

* Certain decisions by Customs are also subject to TMRO review. Refer to Dumping

Liaison Unit contacts for further detials.

31 Customs and Border Protection Fact Sheet – Anti-dumping and countervailing investigation process

(August 2007) p. 2


Further information on all aspects of the anti-dumping and countervailing system as

administered by ITRB is available on the Anti-Dumping page of the Customs and Border

Protection website for further information.32

32 www.customs.gov.au/site/page4227.asp

http://www.customs.gov.au/site/page4227.asp


4. Possible models for administering the system

4.1 A global glance: international comparison

As briefly discussed in part 2.4 above, the WTO anti-dumping and countervailing

agreements are principles-based agreements providing flexibility in administration, both

in terms of the structure of the anti-dumping administration and the way the

administration implements its anti-dumping system. Given this flexibility, international

practices towards anti-dumping systems vary and it is likely that no two national

systems are identical.

While there is no set international benchmark, there are a number of fundamental

institutional choices made by countries when establishing their systems. The aggregate

of these choices forms an anti-dumping administration. In its 2012 study, the European

Commission identified a range of questions which assist a jurisdiction to make these

fundamental choices when designing or reforming an anti-dumping administration:33

Should the investigating authority be an independent body or not?

In theory, an independent investigating and decision making body would

typically be subject to less political pressure, strengthening the technical

character of the anti-dumping investigation.

Should the different analyses, which are part of the investigation, be undertaken

by the same authority (unitary system) or separate authorities (bifurcated

system)?

A bifurcated system is designed to lead to greater objectivity of investigations

through a more independent inquiry and deeper analysis of both dumping and

injury. A bifurcated system also potentially allows for greater specialisation.

These benefits, however, come with an increase in the resources and

timeframes required, and can also lead to disparate interpretations of key

elements of the investigation, such as the assessment of like goods.

Is the imposition of duties automatic or subject to discretion?

This will impact on who the ultimate decision-maker is: either Ministerial or

independent body or administrator. Discretionary power is normally invested at

the Ministerial level with the decision-maker having the power to consider

issues which may not be part of the actual investigation. For example,

33 European Commission (2012), Evaluation of the European Union’s Trade Defence Instruments, Volume

1: Main Report. http://trade.ec.europa.eu/doclib/docs/2012/march/tradoc_149237.pdf

http://trade.ec.europa.eu/doclib/docs/2012/march/tradoc_149237.pdf


considerations of a public interest test. Non-discretionary power normally

resides with an independent body.

The European Commission’s study assessed how peer countries (Australia, Canada,

China, India, New Zealand, South Africa and the United States) responded to the above

questions and how this impacted on the structure of each countries administration. The

results of the comparison exercise are contained in the table below.

Source: European Commission (2012)

* Australia has a unitary system for anti-dumping. The text in the European Commission study correctly identified Australia as having a unitary system. However, it would appear as though an error had been made in compiling the above table.

As described earlier in this Report, Australia’s anti-dumping administration is located

within Customs and Border Protection and is therefore not independent from an

existing government agency. The administration is a unitary one with both the

investigations into dumping and assessment of injury carried out within Customs and

Border Protection. The ultimate decision-maker on anti-dumping measures is the

Minister for Justice and Home Affairs. While Australia does not have a public interest

test, the Minister does have discretionary power with respect to whether or not a duty

is applied and the extent to which a duty is applied.

In the European Commission comparison study, only South Africa, Canada and the

United States have independent investigative authorities. In the case of Canada and the

United States, however, the independent authority assesses only the injury and causal

component of the anti-dumping investigation, not the dumping side of the

investigation.

As noted earlier, the use of an independent authority is often used to remove decision-

making from immediate political influence. This is evident in both the Canadian and

*


United States models where the independent body has decision-making responsibility

rather than a government minister. A number of countries which have the investigating

body located within an existing government agency (China, the European Union, India,

New Zealand) retain final decision-making at a ministerial level, but this is not a fixed

combination. South Africa, for instance, has an independent authority, but the

authority provides recommendations to two Ministers for final decision-making.

Removing political influence from decision-making places a significant responsibility on

the independent agency to achieve consistent outcomes. To ensure such consistency,

the ability for broad discretion is often removed. This is demonstrated in both the

Canadian and United States models. While consistency in decision-making is, of course,

beneficial, the lack of discretion that accompanies this model can mean that it lacks the

flexibility that may be required to address appropriately the range of different

circumstances constituting an anti-dumping or countervailing application.

Ministerial decision-making within the Australian system was broadly supported

through the consultation process. This indicates that stakeholders view the decision-

making process in Australia as fair and balanced, while it maintains flexibility.

Canada and the USA are also the only countries in the above comparison which have

fully bifurcated systems whereby two different entities undertake the dumping and

injury aspects of the investigation respectively. Both the European Union and China

have ‘semi-bifurcated’ systems whereby the one government agency undertakes the

entire investigation but splits the investigation into two teams, one investigating

dumping and the other investigation the injury component. India, New Zealand and

South Africa have unitary systems similar to that in Australia.

Whilst the bifurcated approach to anti-dumping may lead to greater objectivity in

investigations, it does come at considerable cost due to the need for two separate

authorities or agencies to complete one investigation. The additional costs required by

a bifurcated system would not be justified unless the number of anti-dumping

applications provided a reasonable economy of scale.

The European Union questions can help to guide the structure of Australia’s anti-

dumping administration. The question as to whether or not the administration should

be re-established as an independent authority is the primary question for this Review.

The question as to whether the administration should be unitary or bifurcated is also

relevant to this Review. This issue will be considered in view of consultation findings

later in the Report, although it is important to note that a bifurcated model has, to

some degree, been attempted in Australia with the Anti-Dumping Authority. However,

the Anti-Dumping Authority was more closely aligned to a ‘sequenced’ bifurcated

system rather than a truly bifurcated system. The third question, regarding who makes

final decisions, falls beyond the Terms of Reference for this Review. Notwithstanding


that, however, the majority of participants supported the current model of ministerial

decision-making. These views also are relayed in the next chapter of this Report.

4.2 Options for Australia

As discussed above, the investigating authority (or anti-dumping function) may be

independent or part of a government department or agency. At present, the function in

Australia resides within a government agency; namely, Customs and Border Protection.

The alternative being considered in this Review is a new Commonwealth agency.

Commonwealth agencies can take a range of different forms and may or may not

involve administrative interdependence with, or reliance on, other agencies. (A

summary of the Australian Government policy for establishing a new agency is at

Appendix 2.)

At a high level, there are four administrative models that could be suited to the

administration of anti-dumping and countervailing functions:

A Pure stand-alone agency

B Separate but supported agency

C Agency within a department or larger agency

D A line area within a much larger department or agency (status quo)

This part of the Report outlines these options for Australia.34

The status quo: a line area within a much larger department or agency

The current arrangements give effect to model D above. The ITRB is part of the Cargo

and Trade Division of Customs and Border Protection. ITRB is headed up by one

National Manager, in a Senior Executive Service (Band 1) position, who in turn reports

to the National Director Cargo and Trade Division; the Deputy CEO Border

Management; and the CEO of Customs and Border Protection.

The legislative functions and powers relating to the anti-dumping system are vested in

the CEO of Customs and Border Protection. The National Manager and directors in ITRB

make preliminary decisions under delegation from the CEO.

ITRB presently comprises six sections, each with a Director at Customs Level 5

(Executive Level 2), and varying numbers of Customs Level 4 (Executive Level 1);

34 The following is based on the general administrative models for an agency established with obligations

under the Financial Management and Accountability Act 1997. It does not contemplate the administrative models for an agency established pursuant to the Commonwealth Authorities and Companies Act 1997 as such an agency does not seem appropriate for the administration of the functions being discussed.


Customs Level 3 (Australian Public Service Level 6); and Customs Level 2 (Australian

Public Service Level 5) positions.

The organisational chart below is the typical structure with numbers varying from

month to month depending on staff absences, departures and recruitment.

The six sections, and their respective core responsibilities, can be broadly described as

follows:

Policy and capability: Policy development and support, capability improvement,

international engagement, and stakeholder relations.

Quality assurance and operational support: Quality assurance programs, liaison

activities, implementation of measures, compliance and support to Operations

Sections.

Strategic review: Design and implementation of strategic reforms such as the

Streamlining initiatives, ITRF support, and stakeholder relations.

Operations 1: Investigation, verification, analysis, and reporting relating to new

investigations, reviews, continuation inquiries, duty assessments.






Options for a new Commonwealth agency


A pure stand-alone agency is a completely separate agency established under

legislation that is not interdependent with, or reliant on, any other agency. As a

self-contained entity, it is responsible for its own:

governance, in accordance with Commonwealth agency obligations, including

reporting, auditing, etc

corporate support, including human resources, information and communication

technologies, strategic communications, accommodation management, asset

management, etc, and

business-specific infrastructure, including information and communication

technologies infrastructure.

The head of the agency may be a statutory office holder or a chief executive officer

as determined by the establishing legislation.35

An example of a pure stand-alone agency is the Australian Crime Commission (the

ACC). The ACC is established under the Australian Crime Commission Act 2002 as a

statutory authority to combat serious and organised crime. The ACC is headed by a

Chief Executive Officer, who is a statutory appointment, and receives direction from

the ACC Board. The ACC reports directly to the Minister for Home Affairs and is

part of the Attorney-General's portfolio.

Another example is the National Blood Authority (the NBA) which is established

under the National Blood Authority Act 2003 to improve and enhance the

management of the Australian blood and plasma product sector at a national level.

The NBA is headed by a General Manager, who is a statutory appointment, and

receives directions from the NBA Board. The NBA is a smaller stand-alone agency,

with total staffing of 56 people, which reports directly to the Minister for Health

and Ageing and sits within the Health and Ageing portfolio.


A separate but supported agency is similar to model A in that it is a separate agency

established under legislation; however, it relies on another agency or agencies for

operational support, on a user pays basis. Such an agency would typically share

human resources and ICT services with its portfolio department or a larger related

agency.

For example, the Office of the Australian Information Commissioner (OAIC), which

is an agency of around 80 people, is a statutory agency established by the

35 The option of a ‘Principal Executive Office’ is not contemplated here.


Australian Information Commissioner Act 2010 to serve as Australia's federal

regulatory agency for freedom of information and privacy. The OAIC is currently

supported by the Australian Human Rights Commission, which provides a significant

proportion of the OAICs financial, administrative, ICT and human resources

services.

A smaller example of this agency model is the Australian Law Enforcement Integrity

Commission (ACLEI). ACLEI is a separate statutory authority (of 26 people)

established under the Law Enforcement Integrity Commissioner Act 2006 and sitting

within the Attorney-General’s Portfolio. While it is responsible for its own

governance and reporting requirements, ACLEI shares services, under contracting

arrangements, with the Attorney-General’s Department, including information and

communication technologies and human resources services.

C Agency (or office) within a department or larger agency

An agency or office within a department or larger agency could be established

under legislation and can have a statutory office holder or legislated CEO as its

head. That statutory office holder or CEO can report directly to the responsible

Minister, rather than through the CEO of the head department or larger agency.

The other notable difference between this and the other models is that the agency

is a separately branded organisation with a clear, distinguishable identity and

profile, but sits within, and is fully supported by, a department or larger agency.

Under this model, agency or office staff are usually employed by the department or

larger agency, but work at the direction of the statutory office holder.

Also under this model is the flexibility to assign responsibility for governance of the

agency to the CEO of the head department of larger agency. This allows the head

of the agency to dedicate his or her attention to core functions.

An example of an agency or office within a larger department or agency is the Tax

Practitioner’s Board. The Tax Practitioners Board (Board) is a national Board

responsible for the registration and regulation of tax practitioners and for ensuring

compliance with the Tax Agent Services Act 2009 (TASA), including the Code of

Professional Conduct (Code). The Office of the Secretary supports the Board, with

the right people and capabilities to enable the Board to achieve its outcomes.

The Secretary, along with the Tax Practitioner’s Board staff, is an employee of the

Australian Taxation Office (ATO). Staff members are made available to the Board by

the ATO to assist in performing its functions.

http://www.comlaw.gov.au/Details/C2010C00852

http://www.tpb.gov.au/TPB/Subsidiary_content/Reg_info_sheets/0296_Code_of_professional_conduct_information_sheet.aspx

http://www.tpb.gov.au/TPB/Subsidiary_content/Reg_info_sheets/0296_Code_of_professional_conduct_information_sheet.aspx


A further example of an agency or office within a larger department or agency is

the proposed Australian Charities and Not-for-Profit Commission (ACN).36 The ACN

will reside within the Australian Tax Office (ATO). While the ACN will be authorised

in legislation, it will consist of the ACN Commissioner—a position established under

legislation—and staff provided by the Commissioner of Taxation (ie ATO staff). It

will be a part of the ATO for financial and employment framework purposes, but

will possess its own distinguishable identity.

The four models described above possess different levels of autonomy and

independence, both organisationally and with respect to decision-making. The diagram

above compares and contrasts the respective levels.

36 Legislation establishing the ACN is currently before Parliament.

D C B A Least autonomy

and independence

Greatest autonomy

and independence

0 5 10

Level of autonomy and independence associated with possible models


5. Consultation findings: a new Commonwealth agency?

The key purpose of this Review was to examine the current arrangements for assessing

and investigating anti-dumping matters and consider the feasibility of a Commonwealth

Anti-Dumping Agency. In particular, the Review was to consider the benefits and costs

of retaining administration of this system within Customs and Border Protection

compared to the benefits and costs of establishing an agency dedicated to

administration of this system.

Consultation was undertaken in an open and inclusive manner in accordance with the

Terms of Reference. Stakeholders were identified by their membership of the ITRF, by

having an anti-dumping or trade-related role in Government, or recent involvement or

interest in anti-dumping activities or reviews. Media releases and a public website were

used to communicate broadly and provide an opportunity for other interested parties

to involve themselves in the Review.

A number of methods and mechanisms were used to facilitate stakeholder input and

gather detailed, specific information relevant to the Review. These included significant

face-to-face meetings, stakeholder forums, written and online submission processes, a

survey and responses to a Discussion Paper over two rounds of consultation. Meetings,

submissions and responses to the Discussion Paper provided useful qualitative input

while responses to the survey (including as part of the online submission process)

provided useful quantitative input. Submissions and responses were made publicly

available on the website to encourage stakeholder engagement and awareness. Full

details of the Review consultation and communication process are available at

Appendix 1.

Consultation focused on stakeholder views about the benefits and costs of different

‘business models’ or potential changes to the current anti-dumping and countervailing

system as well as their views about the underlying factors and issues that impact upon

its effectiveness. Findings are based on the views of participants (those who attended

meetings, provided submissions or responses and/or completed the survey).

5.1 Status quo or new Commonwealth agency

A number of participants expressed views about the benefits and costs of different

‘business models’ or potential changes to the current system. However, a majority of

participants expressed ambivalence or neutrality regarding this point, believing it was

more important ‘how’ the agency performed its functions rather than where it is placed

organisationally. All participants raised a number of underlying issues that impact upon

the effectiveness of the system and that may be addressed to varying degrees by

changes to the current system.


The table below shows participant views expressed in submissions about the benefits

and costs of different ‘business models’ or potential changes to the current anti-

dumping and countervailing system. This shows that 65% of participants were

ambivalent about the structure.

Separate Agency 25 30%

Ambivalent 53 65%

Remain in Customs (status quo) 4 5%

Australian Paper stated that:

Establishing a separate agency would be disruptive to the smooth functioning of a

system which is not broken, but which requires some fine tuning and

empowerment. …It also will need to build its own culture and runs the not

inconsiderable risk of a dysfunctional culture developing which does not serve the

interests of Australian industry.37

A group of 43 business entities chose not to focus on questions of a separate agency but

were:

…concerned to ensure Australia’s anti-dumping and countervailing system:

is robust enough to provide protection to industry where such protection

against import competition is due; and

is realistic enough to recognise cases in which dumping or subsidisation is

not present, or where the poor financial health of an industry is unrelated to

those practices.38

BlueScope Steel raised a number of issues with the current administration in its

submission and supported establishment of a new agency under the Department of

Industry. However, it also stated that if this were not possible:

the most viable alternative would be to establish a separate statutory authority

wholly focused on anti-dumping but within the Customs and Border Protection

agency.39

Senator Nick Xenophon stated in regard to establishing a separate agency or one

operating under different Departmental arrangements:

37 Australian Paper submission (September 2012), p. 4

38 Groups of 43 Concerned Parties submission (11 September 2012), p. 1

39 BlueScope Steel submission (14 September 2012), p. 4-5


I believe a separate agency is the best outcome, as this could draw on experience

and knowledge from all sectors and prevent any bias in dealing with anti-dumping

and countervailing issues. This would be an excellent opportunity to restructure our

system to ensure it is fair and robust, and that it makes decisions based on a holistic

approach and with a full appreciation of the intricacies involved.40

Participants in face-to-face meetings demonstrated a similar spread of opinions and

identified a consistent range of issues with the current administration. There was

general recognition that considerable work has been undertaken already but there

were strong views that more remained to be done in order to increase effectiveness

and build confidence.

Participants were aware of the focus of the Terms of Reference but a majority were not

greatly concerned about the organisational structure of the administration. Rather, they

were interested in addressing the broader range of issues affecting performance. Of the

remaining participants, a small group thought that the current administration performs

its functions effectively and that it is well placed in Customs. A larger group thought that

a separate agency was necessary in order to affect significant change in the organisation

to address systemic issues. When questioned further, these participants indicated they

thought that this was necessary to address the same range of the issues identified by

other participants.

Overall, the need for a separate agency was often explained as a way of addressing a

number of underlying issues that diminish the effectiveness of the system. This

sometimes meant a completely new, standalone agency but also as an agency under

different departmental arrangements, ie one that does not remain in Customs in its

current form.

Although participants recognised that a separate agency would result in additional

expense, the underlying issues were seen as significant enough to warrant such action.

Some participants indicated that the Department of Industry, Innovation, Science,

Research and Tertiary Education would be an appropriate lead department and many

explicitly stated that it should not come under the Department of Finance and

Deregulation, the Treasury or the Department of Foreign Affairs and Trade. Most

participants were of the view that it would be necessary to maintain some continuity

and corporate knowledge while a small minority suggested that this was an opportunity

for a complete change.

Views were also expressed that the current administration needs to maintain strong

linkages with Customs for compliance activities and for access to the Import Database.

It was further noted that staff members have knowledge and experience of the system

40 Senator Nick Xenophon submission (14 September 2012), p.2


and it is important to maintain this continuity and corporate knowledge. Some

participants expressed the view that there was no guarantee that a separate agency

would necessarily result in improvements.

Survey responses indicate that there is stronger support for establishing a separate

agency (56%) over one under different Departmental arrangements (48%) or having it

remain in Customs and Border Protection (32%). However, these results demonstrate a

range of views and require some explanation.

Agree 8 32%

Neutral 6 24%

Disagree 11 44%

Agree 12 48%

Neutral 8 32%

Disagree 5 20%


Results are quite nuanced since there was a range of views about each model and no

model received consistent or overwhelming support amongst respondents. Further,

there was a significant number of ‘neutral’ responses, which is taken to mean that the

respondents were ambivalent about the model. This may reflect the views (like those

mentioned in meetings and submissions) that respondents believe it is more important

to address ‘how’ the function is performed rather than where it is placed

organisationally.

Overall, all participants identified a number of very similar underlying issues that

diminish effectiveness of the system. A majority of these participants were more

concerned about ‘how’ the function is performed rather than where it is placed

organisationally. Of the remaining participants, there was considerable support for a

separate agency of some form. However, this was often explained as a vehicle for

addressing the underlying issues - as a solution and not as an issue per se.

Observation

All participants were interested in addressing issues that are diminishing the effectiveness of

the system. Participants who supported a separate agency of some form saw organisational

change as a ‘cut-through’ way to address the underlying issues.

5.2 Possible models for new Commonwealth agency

In addition to putting forth views on the option of remaining in Customs or establishing

a new agency, some participants also provided comment on possible structural models

for administering the function. The possible models discussion covered a range of high

level issues such as whether the administration should be a single agency or bifurcated,

whether decision-making responsibility should reside at the ministerial level or at an

officer level, and whether the structure should include a Chief Executive Officer and any

chain of command between that person and the Minister. The discussions also

Agree 14 56%

Neutral 6 24%

Disagree 5 20%


addressed specific detail of lower level structures with a small number of participants

raising this in one-on-one meetings, stakeholder forums or written submissions.41

There was a general consensus from participants that a single agency for administration

was the preferred system rather than returning to a two-tiered administration, such as

that which existed through the early 1990s with the Anti-Dumping Authority and

Customs and Border Protection sharing responsibility. Having a single agency

administering the anti-dumping system was seen to “ensure a consistency in approach

and outcomes, as well as policy formulation”.42 Further, it was noted that with a single

agency the “applicant industry did not have to interface with two agencies”.43 No

respondent suggested a preference for a return to a two-tiered model of

administration.

The majority of respondents also suggested a preference for the final decision-making

responsibility residing at the ministerial level. It was noted that decision-making by “a

government minister would ensure that the Parliament’s intent is enacted by the

agency”.44 There was very minor support for an independent agency having the

authority to make final decisions and this was on the premise of taking decision-making

out of the political sphere.

There was a further slight variation on the decision-making responsibility proposed by a

small number of respondents. Rather than recommendations going directly from an

agency to the Minister, it was proposed that findings of the investigations be provided

to a panel of experts, who in turn would provide recommendations to the ministerial

decision-maker where there is a case for measures to be imposed, or terminate the

investigation where there is no case for measures to be imposed. The use of the

independent panel of experts was seen as a measure that would remove the need for

the TMRO, while the Federal Court would remain as an avenue for appeal where

required.

There was a range of suggestions for the organisational structure of the administration.

The ability to attract appropriately skilled staff underpinned much of the commentary

on this issue. Some participants argued for a flatter structure, outside of the traditional

public service hierarchy, that would allow for flexible remuneration packages

commensurate with relevant experience and skills.

Others argued that strong leadership in the form of a statutory head or chief executive

officer is needed to lead the administration and report directly to the Minister. It was

suggested that a new leader be sourced from outside of the public service to maximise

41 The online survey did not cover this issue.

42 Qenos submission (September 2012), p. 2

43 OneSteel submission (September 2012), p. 3

44 Orica submission (7 September 2012), p. 4


opportunity to recruit a person with practical industry and/or international trade

experience and with a strong customer or client focus.

A small number of respondents provided further detail on suggested organisational

structures calling for the agency head to be supported by two deputies with

responsibility for operations, and policy and liaison, respectively. This proposed

structure raises the level of seniority by introducing an agency head and establishing a

level of middle management between the agency head and the existing six operational

and policy directors.

It is clear that the majority of respondents were in favour of retaining the unitary

system of anti-dumping administration with no support for a two-tiered or bifurcated

system. Further, there was strong support for retaining final decision making at the

ministerial level. Finally there was support for strengthening the leadership of the

administration through the inclusion of a chief executive officer position which would

report directly to the Minister. The costs and benefits of these options are considered

in Chapter 9.


6. Consultation findings: underlying issues

As mentioned above, the majority of participants addressed the Review’s Terms of

Reference by focussing on underlying issues which diminish the effectiveness of the

system. Many indicated that a new administration is required to address the underlying

issues and thereby improve the anti-dumping system’s overall effectiveness. There were

differences of opinion on some issues and in regard to specific suggestions but several

key themes or elements emerged.

Overall, views expressed in meetings and submissions identified the following key

issues:

1. Skills and experience

2. Transparency

3. Investigative rigour

4. Culture

5. Access

These issues correspond closely with survey results. The chart below shows the

averaged responses of all participants in the survey against each ‘feature’ of the system

in terms of the level of importance (shown in blue) and agreement about the relative

effectiveness of current administration (shown in red). The method of calculating

averaged values is explained in Appendix 1.

Blue and red columns are shown together where importance and effectiveness can be

compared directly, eg ‘Transparency is important’ and ‘The current system is

transparent’. Responses are sorted in order of importance.

Overall, survey results identified the following issues:

1. Transparency

2. Use of industry and professional services for advice

3. Knowledge, skill and experience

4. Qualifications

5. Timeliness

In addition, the two red columns on the right indicate that participants lack confidence

that the overall system is effective in assessing dumping/subsidies and injury/causation.


Legend

1. Decisions are made objectively 2. The appeals process is independent 3. Investigations are conducted rigorously 4. Processes and outcomes are

transparent 5. Stakeholders have adequate

opportunity for making submissions 6. The responsible agency engages

industry and professional experts for advice

7. Processes and outcomes are consistent 8. Processes and outcomes are timely 9. The responsible agency has access to

the Import Database 10. The responsible agency works closely

with Customs and Border Protection on ensuring compliance with measures

11. Agency staff have relevant knowledge, skill and experience (including of manufacturing, trading, markets)

12. Agency staff have relevant qualifications (including law, accounting, economics)

13. Stakeholders have easy access to public records

14. Stakeholders have high awareness of the system

15. The responsible agency is independent from Government

16. A single agency conducts assessments of both dumping/subsidies and injury/causation

17. Agency staff are located in a major capital city other than Canberra

18. Customs and Border Protection has been effective in assessing dumping/subsidies

19. Customs and Border Protection has been effective in assessing injury/causation

The following sections of the Report explore each of the key issues in more detail.


6.1 Skills and experience

Participants’ views

Many participants acknowledged the professionalism exhibited by the staff of the ITRB.

However, a significant proportion of participants expressed concerns about the mix and

depth of skills and experience of ITRB staff given the complexity and importance of its

functions. The Ai Group contended that a weakness in the current system is:

underqualified staff; staff lacking private sector experience; staff inexperienced in

industry, manufacturing or commerce despite their qualifications in accounting,

economics and law…45

In describing the strengths and weaknesses of the current administration, Senator Nick

Xenophon stated:

Regardless of where Australia's anti-dumping and countervailing system is based, it

is imperative that it relies on a vast range of knowledge and experience, across all

relevant sectors. There are some concerns that Customs may not have the

appropriate knowledge and experience in trade and manufacturing and, as a result,

may not be able to properly account for arguments supporting these sectors. I

acknowledge that the Government is taking some steps to address this and to

require further consultation takes place; however, I do not believe Customs is the

best agency to be in control of this area.46

More specifically, a range of participants considered it was important for the staff to

have, or have access to, skills and experience in particular areas, including:

forensic accounting

cost accounting

corporate law and company structure

transfer pricing

business practices

financial modelling

market operations and responses

manufacturing

international accounting and taxation

tax avoidance, and

investigation.

Survey respondents confirmed these views by indicating that they generally disagreed

that staff have relevant knowledge, skills and experience and somewhat disagreed that

45 Ai Group submission (13 September 2012), p. 2

46 Senator Nick Xenophon submission (14 September 2012), p.2


they have relevant qualifications. There was also a significant ‘neutral’ rating against

‘qualifications’ which perhaps reflects a lack of awareness by respondents about staff

qualifications.

It was generally accepted by participants that the administration, no matter the form,

would be unable to possess skills at a high level across all relevant fields, at all times.

Ideally, the administration should be able to supplement its own skills base with that of

subject matter experts, as appropriate.

CSR raised the issues of professional skills and access to expert advice, along with the

relevance of agency location:

There is now a case to establish an unfair trade commission based in Sydney or

Melbourne. The commission should have its own budget, independent of Public

Service pay structures to attract a high level of professional skills in accounting,

business analysis, product costing, international trade specialists and where

necessary forensic accounting. The budget should provide for access to subject


matter experts. Location within a major manufacturing state should result in a

deeper understanding of manufacturing’s role in the economy.47

This view was reinforced by survey respondents who indicated fairly strong

disagreement that ITRB engages industry and professional experts for advice.

Again on agency location, Orica recommended:

…that the new agency be relocated to Melbourne, Victoria so that the agency

can have direct access to a resource pool of suitably qualified and experienced

personnel that would be available in a large capital city.48

Some participants have submitted that the staff skills and experience are not ideal for

the purposes of verifying exporter information in particular. Penrice expressed the view

that:

Customs and Border Protection’s investigations with exporters lack the rigor

necessary to challenge exporter’s claims that domestic sales are ‘relevant’ sales (i.e.

in the ordinary course of trade). Penrice attributes the less than adequate

outcomes to an absence of the necessary skills and experience to assess related

party transactions.49

Further, Amcor submitted that:

The exporter verification process requires experienced and skilled investigators that

are willing to question the validity of information provided by the exporter.50

Some participants also raised the importance of particular skills required in investigating

claims of countervailable subsidies, and claims of dumping that involve an alleged

‘market situation’51. Hunt and Hunt Lawyers argued that:

47 CSR submission (September 2012), p. 2

48 Orica submission (7 September 2012), p. 3

49 Penrice submission (September 2012), p. 2

50 Amcor submission (September 2012), p. 2


…specific attention should be paid to the expertise required in determining whether

certain programs and subsidies support countervailing duties and such attention

should also be paid to skills required to determine whether a ‘particular market

situation’ exists…52

In addition, Heslop Consulting contended that:

…the meteoric rise of dumped and subsidized imports from PRC since the late 1990s

has changed the game and highlighted serious skills deficiencies within the Trade

Measures Department.53

Participants often linked their points around skills and experience to points around

resources generally. While these factors clearly overlap, or are interdependent to some

degree, discussion and analysis has been undertaken separately to ensure thorough

examination of the issues. Discussion of resources more generally is contained in

Chapter 10 of this Report.

Observations and considerations

Skills and experience generally

An efficient and effective anti-dumping and countervailing administration needs to

strike a balance in terms of the skills and experience of its ongoing employees and the

skills and experience it engages as required.

Approximately 75% of ITRB staff hold a bachelor degree and around 44% hold post-

graduate qualifications. The staff comes from a variety of public and private sector

backgrounds.

Consistent with the expectations of participants, ITRB staff is reasonably well

represented in terms of the proportion of staff with qualifications and experience in the

disciplines of law and economics. However, the number and types of accounting

qualifications do not appear to be ideal for effective administration of the function.

A high degree of accounting acumen is critical to the investigative functions.

Investigators need to be able to evaluate and challenge the veracity of financial data

relevant to dumping, subsidy and injury assessments. For example, during on-site

51 In relation to market situation, the Customs and Border Protection Dumping and Subsidy Manual states (at p. 31): “…situations in the market can arise making the sales not suitable for use in determining a normal value under s. 269TAC(1) of the Act. Sales that would otherwise be relevant for determination of normal value may be unsuitable because the price does not reflect a fair price in normal market conditions. The legislation does not define market situations that would render domestic sales as unsuitable. The investigation and analysis of each case must fully set out the reasons for the unsuitability of sales before determining normal value under succeeding provisions of section 269TAC of the Act.” 52

Hunt and Hunt Lawyers submission (5 September 2012), p. 2 53

Heslop Consulting submission (10 September 2012), p. 3


verification visits, investigators need to make such challenges in the presence of the

company’s own subject matter experts and consultants. It is not presently possible for

ITRB to ensure all teams that visit stakeholders’ premises to verify financial data have an

accountant, or someone with significant accounting experience, in attendance.

It is also notable that forensic accounting experience, and cost accounting experience, is

confined to relatively few ITRB staff. Similarly, there are few certified practicing

accountants (CPAs) in ITRB.

It is likely that any strengthening of accounting and investigatory skills and experience in

ITRB, particularly that which is deployed in planning for and conducting on-site

verification exercises, will improve the robustness of findings made with respect to

dumping, subsidies, injury and causation. This will help to address the general views of

survey respondents that ITRB has not been very effective in assessing

dumping/subsidies and injury/causation as shown in the charts below.

A recurring theme in participants’ submissions is around recognition that greater skills

in specialised areas comes at a cost. This point has been made with reference to the

need for appropriate remuneration for specialised skills employed on an ongoing basis.

Attracting specialised skills, which will often require drawing from the private sector,


necessitates consideration of an agency structure and budget that can offer flexibility in

remuneration packages that accord with the requisite skills and expertise.

Furthermore, engaging independent subject matter experts can also incur significant

cost, but this is a very important means for the administration to access highly technical

and specialized advice as required.

Observation

The ability for the administration to engage subject matter experts for advice, in a

timely manner, is imperative for efficient and effective decision making.

Different skills for subsidy and ‘market situation’ assessments

In recent years there have been a few cases that require investigation of alleged

countervailable subsidies, and alleged dumping where a market situation claim is

involved. These allegations, and investigation of these allegations, involve complex and

sensitive issues that are subject to high degrees of scrutiny by stakeholders in Australia,

and in the countries of export.

Recent reports of Customs and Border Protection demonstrate that the amount of

research, investigation and verification required to substantiate findings of

countervailable subsidies, and to substantiate market situation findings, is significant.

Indeed, in Customs and Border Protection (ITRB) Report Number 177, and Report

Number 181, the appendices dealing with these issues take up the majority of the

contents of these reports.

The added workload and complexity associated with subsidy and market situation

assessments contribute to the need for the ITRB to seek Ministerial approval for

extensions to the investigation timeframes. Indeed the investigations subject of Report

Numbers 177 and 181 involved extensions to the original investigation timeframes of

105 days, and 60 days, respectively.

The skills and experience required to investigate subsidy and market situation

allegations is also different in nature and degree. For example, ITRB needs to be

proactive in research and evaluation of certain foreign government laws, policies, and

practices, as they pertain to a particular industry sector in the country of export. The

Branch needs to be able to assess the relationships between these factors and the

market operations in that sector, including any potential for government policy to affect

the price of goods.

Any improvements to ITRB’s level of skills and experience that increases capability for

dealing with subsidy and ‘market situation’ assessments, will be useful for shaping the

workforce in order to cope with the growing trends. The breadth and depth of skills and

experience in law, economics, accounting and international trade are increasingly


important in the context of investigations involving these complex matters. Increased

capacity will require a combination of appropriate recruitment strategies, use of subject

matter experts, and a targeted training and development program coordinated from

within the administration.

Recruiting the right skills

It would be useful for the administration to conduct a formal and comprehensive skills

gap analysis, which can be taken into account in future recruitment strategies.

Recruitment strategies will also need to establish and maintain a balance between

ongoing employment of staff and ad hoc engagement of contractors and consultants as

required. This will include advice from subject matter experts, but may also include

engagement of general professional skills (eg accounting and auditing skills) to provide

surge capacity for verification programs.

As discussed earlier, remuneration is a relevant factor for attracting specialised skills.

The agency location should also be a consideration in relation to developing the optimal

recruitment strategies.

Observation

Agency structure (including staff remuneration) and location are important

considerations for achieving and retaining the right balance of skills and experience.

Training and development programs

The present suite of training programs that the ITRB offers its staff involves:

an introduction to anti-dumping (through an on-line course that should be

updated to run on recently upgraded software platforms),

an intermediate training course that comprises various modules that focus on

key elements of an anti-dumping investigation, and

on the job training – where key learning outcomes arise from participation in

planning and conducting verification visits to importers, Australian

manufacturers, and exporters.

Training on subsidies and countervailing measures is not as comprehensive as that

already developed and available for anti-dumping.

At its own initiative, the ITRB has undertaken several technical exchange programs with

the anti-dumping and countervailing administrations in Canada, the European

Commission, and the USA. Customs and Border Protection, and the foreign agencies,

have found these to be invaluable forums for comparing approaches to common issues.


Customs and Border Protection also arranged for the Canada Border Services Agency to

run a ‘one-off’ training course for the ITRB in relation to subsidies and countervailing.

Exchanges with other reputable anti-dumping and countervailing administrations

should remain a high priority in any training and development program. There may be

merit in arranging with one or more of those administrations some periodic technical

exchanges. There may also be value in exploring options for secondments to or from

these administrations, and/or the attendance of Australian staff on training courses

conducted by these agencies.

The Australian anti-dumping and countervailing administration may also benefit from

working with other Australian agencies. For example, links with the Australian Taxation

Office and the Australian Securities and Investment Commission, could contribute to

greater understanding of transfer pricing issues and corporate structures.

Staff skills and experience are likely to improve as a result of greater degrees of

stakeholder engagement which, in turn, may be assisted by a presence in a major

capital city. This will lead to improved staff understanding of business practices and

market operations, including the everyday challenges faced by Australian

manufacturers and importers. A formal exchange program of some sort between

industry stakeholders and the anti-dumping and countervailing administration may

derive benefits of understanding for both.

Observation:

The level of staff skills and experience can be improved through identification of priority

and contemporary skills/experience requirements, targeted recruitment to address

gaps, and enhanced training and development programs.

Conclusions

Review participants considered that the present staff are under-equipped in terms of

the skills and experience essential for effective administration of the anti-dumping and

countervailing system.

The ITRB has embarked upon several initiatives designed to improve capability relevant

to its functions. These initiatives have worked well in many respects, and they should

be continued and expanded.

6.2 Transparency


Many participants emphasised the importance of transparency as a feature of the

Australian anti-dumping and countervailing system. Survey respondents indicated quite


clearly that they disagreed that processes and outcomes were transparent. Indeed,

according to survey results, ‘transparency’ was one of the most significant issues.

Many participants acknowledged that significant improvements in relation to

transparency have been made by Customs and Border Protection in recent years,

particularly with respect to the functionality of the electronic public record. However,

despite the recent advances, participants considered that further improvements are

required. CSR stated:

Improved transparency is always good as it leads to more robust outcomes and

builds trust and confidence…54

Participants considered there was room for improvement in relation to several

particular aspects of transparency, discussed in the following paragraphs.

Some participants considered that improvements can be made in relation to the

process, and reasons for decisions, by ensuring that submissions and reports placed on

the public record provide a greater degree of disclosure. An example of this view was

provided by Amcor where it argued that:

…in some instances the exporter is able to claim commercial confidentiality

surrounding information that is central to the verification process. The Australian

industry is unable to address these matters due to a lack of transparency.55

Some participants expressed the view that an increased level of consultation with

stakeholders will assist the administration in improving transparency. Proactive

consultation with the Australian manufacturers (prior to exporter verification visits), in

relation to complex product costing issues, was provided as an example.

54 CSR submission (24 September 2012), p. 3

55 Amcor submission (September 2012), p. 2


Several participants expressed the view that improvements in transparency could be

achieved by allowing for disclosure of confidential data, in certain circumstances. Gross

& Becroft Lawyers contended that there may be a:

…need for improved access to confidential information so that the complainant’s

claims and any counterclaims can be contested so far as may be possible whilst

preserving commercial confidentiality.56

JELD-WEN believed that:

…early access to confidential information in a controlled and confidential fashion

would lead to lower (relative) costs as it may facilitate more informed decision

making by both parties at an early stage in the process.57

Some participants also considered that the absence of transparency in the areas of the

appeals process, and in relation to duty assessments, should be addressed.


Transparency is a highly important aspect of the anti-dumping and countervailing

system, particularly in relation to the investigation process. An investigation that

provides for a high degree of transparency allows stakeholders to submit, review and

rebut evidence and argument as the investigation progresses. This provides visibility of

the issues as they are raised and subsequently developed. It also allows for similar

scrutiny and response to reports, such as verification reports, published progressively by

the administration. This provides for timely, open and comprehensive debate and

analysis of the issues, which better informs the decision makers.

The importance of transparency in providing for an effective anti-dumping and

countervailing system was recognised by the Productivity Commission in its Inquiry

Report where it stated:

While having due regard to the protection of commercially sensitive information, a

well-functioning anti-dumping system should give adequate opportunity for parties

involved in investigations to respond to contentions made by others. And more

general access to such information can have broader transparency benefits by

facilitating scrutiny of the quality of the assessment process and its outcomes.58

While there are substantial benefits attached to greater transparency, it is also

important that the system preserves the confidentiality of commercially sensitive

information. Without stakeholder confidence and trust in the system in this regard, the

administration is likely to encounter problems gathering the necessary information.

56 Gross & Becroft Lawyers submission on behalf of Tilling Timber Pty Ltd (13 September 2012), p. 2

57 JELD-WEN submission (24 September 2012), p. 2

58 PC Inquiry Report (December 2009), p. 150


Inadvertent release of sensitive commercial data may be damaging to the party

concerned.

The ideal degree of transparency requires a balance that allows sufficient disclosure, in

a timely manner, without compromising commercial confidentiality. Disclosure must

also occur in a manner that does not give rise to unreasonable costs for the

stakeholders or the administration.

The present system exhibits some strong transparency features. The electronic public

record has been subject of recent improvements and has drawn positive feedback from

stakeholders, though a few have suggested further improvements can be made. The

ITRB is also expanding the public availability of policy and practice statements,

guidelines and activity reporting.

While the present level of transparency and accountability within the Australian anti-

dumping and countervailing system is already quite good, participants point to areas

where improvement can be achieved.

Greater disclosure on the public record

The value that transparency provides can be undermined by submissions, reports and

other documents placed on the public record that do not adequately disclose relevant

information, analyses and findings. The ITRB has provided guidelines to stakeholders as

to the expectations around appropriate disclosure, but the content and quality of

disclosure still varies considerably among stakeholder submissions, and even among

reports prepared by ITRB (for example exporter visit reports). Efforts to improve and

make consistent the nature and degree of disclosure will improve transparency.

Establishing and maintaining quality, consistency and timeliness in disclosure could

become the focus of a dedicated role within the administration, perhaps called the

Transparency officer. The role would include responsibility for ensuring that all

documents placed on the public record, including applications, submissions, responses

to questionnaires, and reports by the administration contain adequate disclosure in the

non-confidential versions of that information.

More specifically, the Transparency Officer could ensure the legislative aim of providing

sufficient detail to allow a reasonable understanding of the substance of the

information, such that it does not breach the confidentiality or adversely affect the

business or commercial interests of the person giving that information.59

The Transparency Officer could be proactive by examining the non-confidential versions

of information submitted and the non-confidential reports of the administration, and

promptly pursuing shortcomings in disclosure. This need not hold up the placement of

59 Section 269ZJ(2)(b) of the Customs Act 1901


the non-confidential versions on the electronic public record, as these could be flagged

to indicate that improved disclosure is being pursued. The Transparency Officer could

work with interested parties to strike a balance that achieves adequate disclosure

without revealing commercially sensitive information. The Transparency Officer could

also work closely with investigation teams to ensure reports exhibit the optimal level of

disclosure. In addition, the Transparency Officer could respond to interested parties’

concerns about disclosure raised in relation to submissions or reports placed on the

public record.

A dedicated resource for this function could be housed within the Policy Section of the

administration. This provides for some degree of separation from the investigations

function and, importantly, it allows for the role to be undertaken alongside the other

quality assurance initiatives.

Observation

A Transparency Officer role could improve the quality and consistency of disclosure with

respect to documents appearing on the public record.

Disclosure of confidential data

Disclosure of confidential data, within controlled settings, would be likely to yield some

greater degree of transparency. However, the stakeholder costs associated with

participating in such a system are likely to be significant. The system would almost

certainly necessitate stakeholders obtaining professional representation, subject to

confidentiality undertakings. Professional representation may need to involve legal,

accounting and other expertise.

In its Streamlining publication, the Government stated that it:

…considered whether to allow lawyers and accountants to access commercial-in-

confidence information under an ‘administrative protection order’ or similar

confidentiality agreement. However, it has been decided that this would add

substantially to the costs for parties to anti-dumping actions, without

commensurate benefits.60

This followed the Productivity Commission comments in its Inquiry Report that:

…the Commission is still not attracted to an APO [Administrative Protection Order]

approach. While allowing for greater contesting of facts and thereby somewhat

improving the information available to decision makers, these benefits would come

at a cost of a more adversarial, longer and potentially more expensive process —



especially if access to confidential information under these orders were limited to

lawyers. And decisions could still rely heavily on the judgment of Customs, the

TMRO and the Minister, given that the APO approach would not necessarily resolve

competing claims.61

Additionally, the administrative cost associated with facilitating the data exchange

under such arrangements is also likely to be significant. This would include costs

associated with making arrangements to address the increased risk of an inadvertent

release of commercially sensitive data.

While some expressed the view that disclosure of confidential data might lead to

reduced investigation timeframes, this is not at all certain. Indeed, time would be

required to facilitate the exchange of confidential data, and further significant time

would be required for the stakeholder representatives to essentially re-evaluate all of

the assessments made by other stakeholders (and by the administration) and lodge

further argument.

A system that provides disclosure of confidential data, in certain circumstances and

subject to confidentiality agreements, is unlikely to deliver sufficient benefits in order to

justify the costs.

Observation

Consistent with the views of the Productivity Commission and the Streamlining

initiatives, the costs involved with an ‘administrative protection order’ system are

significant and unlikely to deliver commensurate benefits.

Increased consultation

Gains in transparency of process and outcomes will be achieved if the degree of

stakeholder consultation can be improved. In the context of an investigation, for

example, interested parties can present facts and arguments and they can challenge the

facts and arguments of others, including the administration. Timely consultation within

an investigation helps in teasing out and resolving issues as early as possible, leading to

stronger and well-informed decisions and recommendations.

Several participants indicated that they would have benefited from a greater degree of

engagement with the administration. The examples of inadequate consultation

provided pertained to instances before, during and after an investigation. Participants

also indicated that they find anti-dumping and countervailing issues are complex, and

that they may encounter the issues only periodically.



In this context, close and regular engagement of the investigating authorities with the

key stakeholders is justified, providing it is conducted in an objective and transparent

manner. Clearly this already happens to some degree but it is apparent from

participants’ views that improvements can be made. Initiatives designed to increase

the nature and degree of stakeholder consultation should be included within a holistic

stakeholder engagement strategy.

Observation

A greater degree of stakeholder engagement would contribute to increased

transparency.

Transparency in duty assessments and accelerated reviews

Given the widespread acceptance of the benefits of transparency in the context of

investigations, it is clear that there is potential for similar benefits in relation to duty

assessments and accelerated reviews. Presently, duty assessments are not conducted

and recorded with the same degree of openness and inclusion that applies to

investigations, reviews and continuation inquiries. While accelerated reviews are

generally afforded an open and transparent process, there is no such legislative

requirement.

Duty assessment applications are lodged with Customs and Border Protection by

importers that are claiming (in relation to a past ‘importation period’, as defined) that

the anti-dumping or countervailing duties it paid were in excess of that which was

payable. The assessment of this claim requires that the variable factors (export price,

normal value and non-injurious price) be ascertained for the relevant period, which is

similar to a review of the variable factors for a particular exporter.

As the duty assessment is directly related to the calculation of the final duty collection,

and therefore the magnitude and effectiveness of the remedy, it is clear that a range of

stakeholders may have an interest in the process and the outcome. Noting also that the

legislation provides 155 days for the duty assessment, which accords with the

timeframe for an investigation, review and continuation inquiry, it is clear that greater

transparency is possible and justified.

Accelerated reviews allow for new exporters (as defined) to apply for a review of the

anti-dumping or countervailing measures so far as they affect that exporter. Customs

and Border Protection will not collect anti-dumping and countervailing duties on goods

imported from that new exporter until the accelerated review is completed. The

possible outcomes of an accelerated review in relation to the applicant are that the

measures remain unaltered, the measures are changed so as not apply, or the level of

the variable factors (and therefore the measures) is altered. This means that the


effectiveness of the remedy imposed through anti-dumping and countervailing

measures may be changed and a more open and transparent process is justified.

Observation

Duty assessments and accelerated reviews would benefit from more open and

transparent processes.

Conclusions

Transparency remains a key feature of an efficient and effective anti-dumping and

countervailing administration.

Review participants acknowledged that ITRB has made advances in terms of the level of

transparency, but some believed that further improvements are possible.

After considering participants’ views, it is apparent that there are some additional

means available to improve transparency.

6.3 Investigative rigour


Participants acknowledged that the administration’s role in verifying financial and other

data is a very challenging one, often involving highly technical and complex issues. The

challenge is exacerbated in verification visits to foreign countries with different

accounting systems, language barriers and tight timeframes. Participants recognised

that the analysis and interpretation of verified data also requires a high level of relevant

skills and experience.

Some participants perceived that the current administration demonstrated less than

optimal approaches to verification and analysis of relevant data, which indicated

shortcomings in the relevant skills and experience. The most common example was the

perception that exporters’ responses to questionnaires (which include detailed financial

data) are not subject to sufficient verification rigour.

Arrowcrest contended that:

The current administration’s exporter verification process lacks investigative and

forensic scrutiny that is evident in investigations by other administrations (i.e.

Canada, USA & Europe).62

The CIF argued that:

62 Arrowcrest submission (21 August 2012), p. 2


The conduct of investigations with cooperating exporters lack investigative

robustness and do not provide confidence that anything exceeding a checklist audit

of the exporter’s records have occurred.63

Some participants also suggested that the administration does not seek the applicant’s

views on claims made by exporters or foreign governments. Arrowcrest expressed the

view that:

There is inadequate consultation with Australian industry to test the claims made

by exporters or governments in the country of export.64

Survey respondents’ views on whether investigations are conducted rigorously were

mixed. This situation may reflect different respondent experiences of dealing with the

administration.

Another concern expressed by participants in relation to verification of exporters’ data

was that related party transactions, which can affect export price and normal value

assessments, are not investigated thoroughly. Penrice stated:

It is Penrice’s view that Customs and Border Protection’s investigations with

exporters lack the appropriate rigor necessary to challenge exporter’s claims that

domestic sales are ‘relevant’ sales (i.e. in the ordinary course of trade). Penrice

attributes the less than adequate outcomes to an absence of the necessary skills

and experience to assess related party transactions.65

Participants often linked perceptions of shortcomings in investigative rigour with a view

about inadequate skills and experience generally.

63 CIF submission (September 2012), p. 3

64 Arrowcrest submission (21 August 2012), p. 2

65 Penrice submission (September 2012), p. 2



Like transparency, investigative rigour is a key attribute of the Australian anti-dumping

and countervailing system. A central part of investigative rigour, and the one most

commonly cited by participants as requiring improvement, is the verification of financial

and other data. Verified data pertaining to dumping, subsidies, injury or causation,

provides the administration with factual bases upon which to place weight in making

decisions. It is therefore important that verification is undertaken efficiently and

effectively, and any improvements to verification procedures have the potential to yield

significant results in terms of making well-informed and objective decisions.

Improvements to skills and experience, which are discussed earlier in this Report, will

assist in improving the capability of the administration to conduct more efficient and

effective verifications.

ITRB presently conducts verification visits in accordance with its ‘Verification

Guidelines’, which were developed in 2008. This document comprises substantive

practical guidance for the investigators around the objectives of verification, planning

for verification, and undertaking verification.

It would be useful to revise these guidelines with a view to improving the rigour and

assuring the approach to verification is optimal, and to do so with the assistance of

stakeholders and relevant independent experts including cost accountants, corporate

structure experts, and auditors. The revised guidelines should take account of

stakeholder concerns around verification methods generally, and in relation to more

specific areas such as related party transactions, and cost allocations. This may be a

project that is suitable for an ITRF Working Group to steer. Indeed, ITRF members may

be able to work closely with the administration to design and test the improved

verification guidelines.

Observation

Verification techniques could be improved with assistance in design from industry

stakeholders and subject matter experts.

It would also be useful to publish the verification guidelines to make stakeholders fully

aware of the intended depth and breadth of coverage. This will not only prepare

stakeholders for verification, but it will help to ensure stakeholder expectations around

verification are more closely aligned with the verification planned and undertaken by

the administration. It also provides an opportunity for stakeholders to suggest, prior to

verification planning and visits, some alternative or additional verification processes

where considered necessary in a particular case.


Observation

Publication of the verification guidelines will add to transparency and it provides

opportunity for stakeholder input to verification aims and processes.

Another means for making verification more efficient and effective would be to ensure

that verification of exporter questionnaire responses takes place only after the

administration is satisfied that the data submitted is a substantive response that is

absent of critical deficiencies. If not so satisfied (after a reasonable period), serious

consideration should be given to not undertaking exporter verification visits, and

rejection of the data as unreliable. While this approach may require additional time

before verification visits, and therefore additional time before verification outcomes are

known, the potential for uncertainty can be mitigated by making preliminary

assessments of dumping based on the exporter questionnaire responses submitted –

that is, before verification. These preliminary assessments can be used, where

appropriate, for the purposes of preliminary affirmative determinations. This means

that provisional measures can be imposed before verification of the exporter

submissions. Importantly, it also means that time is being taken to prepare thoroughly

for exporter verification, while continuing injury to the Australian industry is prevented

by the provisional measures. Indeed, ITRB has been taking this approach in recent

investigations.

Observation

Time taken to carefully prepare for verification will lead to greater efficiency and

effectiveness in achieving verification objectives.

Allowing for stakeholder input to verification design (whether systemic or case-specific),

and taking more time in preparing for verification, allows for stakeholder concerns in

relation to verification issues to be addressed proactively. It also serves to minimise the

number of verification issues raised after the verification visits, at which time it is

difficult for the administration to revisit verification issues and resolve them

satisfactorily. Improvements to verification could also be achieved from better

stakeholder communication, particularly with respect to conveying a practical message

about the objectives and process of verification, including details around which

company personnel and types of evidence are required. This can be achieved with

more thorough communications in the lead up to verification visits.

Observation

Improvements to stakeholder communication around verification issues will facilitate

more efficient and effective verification exercises.


The administration also stands to benefit from engaging with its international

counterparts in relation to verification issues. Verification standards could become one

of the central themes for future technical exchanges, and lessons learnt can be

implemented through the review of the verification guidelines. In addition, Australian

administrators could seek permission from Australian exporters to attend verification

exercises undertaken by foreign administrations in Australia, to monitor their

verification techniques first hand.

Observation

Engaging with international anti-dumping and countervailing authorities on verification

issues and techniques would assist in improving the Australian approach to verification.

Conclusions

Efficient and effective verification is a key characteristic of the Australian anti-dumping

and countervailing system.

While the administration’s current approach to verification is underpinned by some

solid practical guidelines, the techniques and degree of verification rigour can be

improved.

6.4 Access to the system


Many participants recognised the benefits of improved access and awareness arising

from establishing the ITRA position within the Ai Group. However, some participants

still expressed concerns about the costly and burdensome nature of preparing for, and

participating in, an anti-dumping or countervailing investigation, especially for small and

medium enterprises. BlueScope Steel stated:

We are also concerned that barriers still exist that prevent BlueScope’s customers –

many of whom are small and medium enterprises (SMEs) – from fully accessing the

anti-dumping system. These barriers include the significant time and cost normally

associated with preparing an anti-dumping application, including the need to

engage external consultants with expertise in anti-dumping. While we welcome the

funding by government of an International Trade Remedies Adviser within the

Australian Industry Group (Ai Group), we think more should be done by government

to ensure SMEs have access to relief from injurious dumping.66

The Australian Steel Association argued that:

66 BlueScope Steel submission (September 2012), p. 2


In its present form, the costs of an anti-dumping investigation, (as either applicant

or respondent), is extensive. Whilst applicants are able to conduct a cost/benefit

analysis prior to initiating an application, respondents to an anti-dumping

allegation are not afforded this choice.67

Survey respondents somewhat disagreed that stakeholders have high awareness of the

system. These results indicate that more could be done to raise stakeholder awareness

of the system.


It is widely recognised that dumping and subsidy issues can be complex, and that a

significant investment is required by stakeholders to present their case, and to defend

their interests in an investigation. In this context, any information and guidance

provided by the administration will better inform and empower stakeholders. This will

lower the costs incurred, and burden experienced, by stakeholders. Efforts in this

regard will also improve awareness of, and access to, the system for potential applicants

and respondents.

Observation

Information and guidance provided by the administration helps to better inform and

empower stakeholders. In turn, this helps to lower the costs incurred, and burden

experienced, by stakeholders and helps to improve awareness of, and access to, the

system.

The issue of effective guidance being provided from the administration, known as the

‘Liaison’ function, emerged in the Joint Study, which includes the following assessment:

The concerns that stakeholders have expressed in relation to the effectiveness of

advice provided to parties involved with the anti-dumping process appear justified

67 Australian Steel Association submission (September 2012), p. 2


and legitimate. The balance of stakeholder interests is clearly in favour of ensuring

that authoritative advice on the entire range of issues relevant to an application

should be available from official sources. However, stakeholders who have argued

that Customs should provide appropriate advice to all interested parties (not restrict

its advisory role to potential applicants) also make a legitimate point.

Customs is in a better position than any other agency to provide advice to all

interested parties. Customs officers who have daily involvement with anti-dumping

practices are best placed to provide advice on these issues. Re-locating the advice

function to another area of Customs, to another government agency or to a private

industry body may reduce perceptions of conflict to some extent but would be likely

to lead to deterioration in the quality and relevance of advice given. Anti-dumping

legislation and practice is complex. Consequently, the quality of advice to all parties

is likely to be best maintained if those providing advice remain closely connected

with the investigation and policy functions. Investigation and advisory functions

reside in the same body in many of the major anti-dumping administrations around

the world. 68

Following the Joint Study, a ‘Liaison Statement’ was issued to clarify the role of the then

Trade Measures Branch in providing “…liaison services and guidance to clients regarding

anti-dumping and countervailing matters.” While many of the services were substantial

and articulated thoroughly, the nature and degree of client service envisaged for

applicants and respondents is not detailed. The ‘Liaison Statement’ could be revisited,

with the aim of designing and implementing a new mission statement that provides

further guidance to a range of stakeholders, on a proactive and equitable basis. This

can include details of ‘Liaison’ services available, and pointers to relevant information

sources. The function is a very important one and deserves significant attention in

terms of resource allocation.

The activities of the ITRA have been perceived by many participants as a useful

stakeholder assistance program, especially for small to medium enterprises. To a

certain extent, these activities demonstrate the information and guidance that the

administration can also be providing to stakeholders, and can be included in a revised

‘Liaison Statement’. However, the administration should be careful not to generate

potential for a conflict of interests, for example, it would be inappropriate for the

administration to help prepare an application or submission.

The participants’ views to date are that the role of the ITRA will be a success in terms of

enabling small to medium enterprises to bring forward applications for anti-dumping

measures. At first glance, the apparent success of the ITRA seems to run contrary to the

expectations of the Joint Study in terms of advice being provided by a private industry

68 Joint Study, p. 11, http://www.customs.gov.au/webdata/resources/files/JointStudyReport2006.pdf

http://www.customs.gov.au/webdata/resources/files/JointStudyReport2006.pdf


body. However, it is important to recognise the position was filled by an experienced

member of ITRB. Sustainability of the position will depend heavily on the skills and

experience of the person in the position and the relationship between that position and

the administration.

Consideration should be given to which ITRA model will provide sustainability for the

role. One model could involve capacity building for the ITRA function so it can be less

reliant upon administration staff, although a relationship with the administration must

continue to maintain currency in the relevant skills and experience, and with

developments in policy and practice. Another model could involve the rotation of

administration staff through the position, with careful consideration given to avoidance

of conflict and perceptions of bias when those personnel return to the administration.

In either of these cases, and to assist with the increasing workload for the ITRA,

moderate additional resources for the ITRA function would be beneficial.

Observation

Additional resources for expansion of the ITRA services would be beneficial, but steps

should be taken to build a sustainable ITRA model.

There is room and demand for the administration and the ITRA to provide assistance

and guidance to stakeholders, and the two functions can continue to co-exist.

Enhancements to the ‘Liaison’ function conducted by the administration, and

enhancements of the services provided by the ITRA, should yield results in terms of

improved access and awareness, including tangibly lower costs for stakeholders.

Conclusions

There is room for improvement in the nature and degree of the information and

guidance provided to stakeholders by the administration. Together with expanded

services from the ITRA that could stem from additional resources, a formidable range of

services will become available to inform, guide and advise stakeholders, especially small

to medium enterprises.

6.5 Administrative culture


Many participants acknowledged the professional manner in which staff of ITRB

conducted its core anti-dumping and countervailing activities. However, a significant

proportion of participants suggested that the present administrative culture of ITRB

could be improved. Three trade unions jointly submitted that an imperative for a new

agency includes:


…renovating the administrative ‘culture’ within the domestic anti-dumping system

based on a strong and independent assessment of the merits of complaints.69

Organisational or administrative culture can cover many concepts. Accordingly, a range

of views were put forward in this regard, with varying degrees of emphasis. Concerns

arising in relation to administrative culture are outlined below.

Two of the most common observations made around concerns for the administrative

culture were that:

Customs and Border Protection is more focused on border security matters and

the relatively low priority of the anti-dumping and countervailing functions leads

to inadequate resourcing.

the anti-dumping and countervailing function has lacked strong leadership and

direction, and this has contributed to a passive administration. These

participants believed that the current administration often exhibited a

defensive, reactive and ‘zero-risk’ attitude.

An example of the submissions that contributed to the views outlined above was

provided by OneSteel:

…it could be argued that the current administration fails to deliver the intent of the

legislation. This apparent weakness can be linked to the nature of the current

culture of the Trade Measures Branch, which has developed as a direct result of

Trade Measures becoming ‘lost’ within the broader Customs and Border Protection

portfolio. Poor resourcing – both capacity and capability, coupled with benign

leadership at a policy and operational level, are key contributors to a culture of

passive administration.70

In addition, the joint submission from three unions argued that:

Anti-dumping responsibilities in the Customs and Border Protection Agency

(Customs) are under-resourced reflecting a service delivery culture focused on

urgent border protection priorities rather than the thoughtful consideration and

review of dumping and subsidy complaints…71

Some participants also expressed views around a perceived predisposition of the

current administration, suggesting some degree of favour or bias was apparent. These

participants suggested that where discretions could be exercised by the administration,

they were being exercised in a manner that favored certain parties or outcomes.

69 AMWU, AWU, CFMEU joint submission (September 2012), p. 6

70 OneSteel submission (September 2012), p. 4



However, the more common observations were that the administration was objective

and neutral. Australian Paper stated:

Customs has developed a generally objective and neutral culture in their Trade

Measures Branch, in keeping with their overall trade enforcement role.72

Although, that participant also noted that the administration “will need to build its own

culture and runs the not inconsiderable risk of a dysfunctional culture developing”.73

The robustness of investigations was also raised by participants as an area that can be

improved. This was at times mentioned in the context of ensuring thoroughness was

applied to investigating specific issues such as related party transactions, and

assessments of the ‘market situation’ in China for particular goods. Additionally, in

what might be described as broader aspirations for a balanced administrative culture, a

group of 43 business entities were:

…concerned to ensure Australia’s anti-dumping and countervailing system:

is robust enough to provide protection to industry where such protection

against import competition is due; and

is realistic enough to recognise cases in which dumping or subsidisation is

not present, or where the poor financial health of an industry is unrelated to

those practices.74

Overall, survey respondents reflected a range of views about whether decisions are

made objectively. The chart below shows a slight weighting towards ‘disagreement’ but

there was a spread of views on this point.

72 Australian Paper submission (September 2012), p. 2

73 ibid, p. 4

74 Group of 43 Concerned Parties, submission (14 September 2012), p. 1



As part of its Streamlining reforms, the Government mandated an increase in ITRB staff

numbers. The aim was to increase staff in ITRB to 45 (from 31) by June 2012. The

Branch is still in the process of reaching this level, and has operated through much of

2012 with a staff of 43.

However, some of the staff recruited in the past year have been utilised in a strategic

review capacity, to assist in implementing Streamlining and other reforms. While this is

clearly important, it compounds the fact that the operational functions have not yielded

the staffing increases envisaged “…to ensure cases are not delayed by a lack of

resources”.75

These factors indicate that Customs and Border Protection is encountering challenges in

achieving the priority and profile that the Streamlining initiatives envisaged for the anti-

dumping and countervailing administration. In light of its very small presence within a

large organisation that has a range of competing responsibilities, the anti-dumping and

countervailing function is not achieving appropriate levels of recognition, direction and

resources.

In terms of leadership, it is clear that a typical public service hierarchy exists. However,

the degree of senior executive involvement in anti-dumping and countervailing matters

seems to vary considerably according to the circumstances. For example, it appears

that core investigation functions presently attract relatively little senior management

involvement, whereas the workings and meetings of the ITRF involve all levels of senior

management, from ITRB Head to the CEO. The recent focus on the reform agenda and

continuous improvement is important, but there is a risk that the senior executive

oversight of the core investigative processes and outcomes is inadequate.

One Senior Executive (Band 1) position provides a level of senior leadership that is not

commensurate with the importance and complexities of the function, especially during

times of substantive reform. Indeed, ITRB had two Senior Executive Band 1 positions

occupied (one acting) for a significant period to ensure operational activities and

Streamlining reforms could both proceed effectively and without compromise. There is

merit in the suggestion that a more senior leadership model is required, and that it

needs to include relevant industry experience.

Observation

The culture, or perceived culture, of the administration would benefit from a stronger

identity and profile, a clearer mandate and a bolstered leadership structure.



In relation to the perceptions of bias or favor, views were often polarised, reflecting

concerns that the system was either following a purist approach to free trade principles

or, on the other hand, it was leaning towards protectionism. These disparate

perceptions are consistent with the fact that investigation outcomes often cause certain

parties to feel aggrieved, while other parties feel vindicated. In this environment, it is

important that the administration remain impartial and it is reassuring that most

participants considered ITRB exhibited an objective and neutral culture.

Of the participants expressing concerns about favor or bias, this was usually linked to

circumstances where Customs and Border Protection is required to exercise discretions.

It is fair to say that various decision points in anti-dumping and countervailing

investigations require a judgment to be made by the authorities, and the ‘right’ answer

is not always a matter of black and white. For example, decisions related to like goods,

appropriate costing methodologies and materiality of injury are all critical elements of

an investigation that cannot be determined with reference to a prescriptive set of rules

that cover all circumstances. Rather, they all involve interpretations of fact and degree,

and they require judgments to be made.

In this context, it is important for the administration to supplement the legislation by

articulating the relevant policy and practice. Customs and Border Protection does this

primarily by maintaining the following reference material:

Australian Customs and Border Protection Service Practice Statement PS2009/25: Administration of Australia’s Anti-Dumping and Countervailing System, 27 July 2009, and

Australian Customs and Border Protection Service Dumping and Subsidy Manual, August 2012.

In the case of material injury, the Minister for Home Affairs has also issued a Ministerial

Direction to provide guidance on what should be considered when assessing claims of

injury caused by dumped and/or subsidised imports.76

The instructions and guidelines cannot purport to set down practices and procedures

for all circumstances that arise in anti-dumping and countervailing investigations.

However, they represent an extremely useful supplement to the legislation, which

provides for transparency of process and consistency in outcomes.

The robustness of anti-dumping and countervailing system investigations is, in one

respect, likely to be driven by the strengths of the agency in a range of factors, including

skills and experience, resourcing, transparency, and investigative rigour. These

elements are discussed in other sections of this Report. However, from another

76 Ministerial direction on material injury 2012, subsection 269TA(1) of the Customs Act, Commonwealth

of Australia, 27 April 2012.


perspective, it is also important that decisions in relation to anti-dumping and

countervailing matters are made objectively, after an open, transparent and rigorous

process that includes thorough stakeholder consultation.

Observation

The culture, or perceived culture, of the administration would benefit from any

improvements made in terms of skills and experience, transparency, investigative rigour

and stakeholder consultation.

Conclusion

Review participants identified administrative culture as a key issue that diminishes the

effectiveness of the anti-dumping and countervailing system and has resulted in less

than optimal outcomes. There were divergent views on some aspects of culture and

general agreement on others.

The term ‘culture’ was used by Review participants as a general way to identify issues

about the attitudes of the administration or the way in which the anti-dumping and

countervailing system is administered. It also related to a number of other specific

factors like skills, experience, access and transparency that are addressed elsewhere in

this chapter.

Findings

Despite existing efforts and reform initiatives introduced over recent years, Australia’s anti-dumping system is struggling to perform under the weight of an increased workload and outmoded organisational arrangements. A significant ongoing reform program is required to enable the administration to discharge its mandate efficiently and effectively.

The current arrangements for the administration are sub-optimal in a number of respects, including a lack of resources, a low public profile and a shortage of staff with appropriate skill sets.

The current structure and organisational arrangements of the administration also need to be improved to ensure it is best placed to enhance performance and meet existing and future activity demands.

The current geographical location of the administration is not optimal and makes it difficult to engage with industry and attract the necessary skills and experience to perform its functions effectively.


7. Other relevant matters: compliance assurance and anti-

circumvention


In describing their understanding of compliance assurance activities undertaken by

Customs and Border Protection in relation to anti-dumping and countervailing

measures, some participants acknowledged recent initiatives that involve substantive

and targeted compliance campaigns have been a positive step. Similarly, some

participants have welcomed legislative amendments recently proposed to strengthen

anti-circumvention measures.

Notwithstanding the views about positive developments, some participants believed

that the effectiveness of anti-dumping and countervailing measures is still being

undermined because inadequate attention is given to the monitoring and enforcing of

compliance with those measures. Further, some participants raised concerns around

the capacity of the administration to identify and address instances of circumvention of

the measures.

Three trade unions jointly submitted that:

Further justification for a standalone agency dedicated to the consideration of anti-

dumping includes oversight for compliance and enforcement of decisions (including

serving as an effective deterrence from circumvention) made by anti-dumping

authorities which currently appears to be ‘falling between the cracks’ .77

More specifically, in relation to the anti-dumping and countervailing measures

applicable to aluminium extrusions, Capral contended that:

…the entire Australian aluminium extrusions industry has seen virtually no benefit

from the measures. This has cost the Australian industry tens of millions of dollars

in lost revenue. The Australian government is also potentially failing to collect

many millions of dollars in dumping and countervailing duties.78

The Australian Steel Institute considered that change is necessary to:

Ensure foreign manufacturers and importers cannot circumvent anti-dumping

measures by modifying goods so that the goods are no longer considered “alike”.79

Survey respondents were almost neutral about whether Customs and Border Protection

has been effective in ensuring compliance with measures. There was a fairly even


78 Capral submission (28 September 2012), p. 1

79 Australian Steel Institute submission (September 2012), p. 9


spread of views on this point perhaps reflecting different respondent experiences.

There is also a significant ‘neutral’ rating perhaps reflecting a lack of awareness of

compliance activities which some participants saw as an issue in itself.


Anti-dumping and countervailing measures are imposed as a remedy for material injury

that has been caused, or is threatened, by dumping and subsidies respectively. Where

there is non-compliance with the measures, or where there is circumvention of the

measures, the remedy is diluted.

The ITRB presently has relatively few resources dedicated to undertaking compliance

activities. However, ITRB can and does engage the considerable resources of the

Compliance Assurance Branch of Customs and Border Protection to identify and address

compliance risks associated with anti-dumping and countervailing measures. In its

annual report, Customs and Border Protection stated:

During 2011–12, we made several enhancements to our compliance approach that

delivered a range of positive results, including:

Creating an expert compliance monitoring position specifically focused on

international trade remedies issues. To the end of June 2012, this activity led

to checks on 111 different importers and nearly 670 declaration lines and

identified a shortfall in customs duty and GST of approximately $1.34

million.

Establishing Operation Bluenet, which involved an intensive assessment of

imports of commodities of a similar kind to those subject to anti-dumping or

countervailing measures, including imports from third countries. To the end

of June 2012, the Operation Bluenet team had assessed nearly 920 import

declarations with a total customs value of more than $55.7 million. There


were 275 detections relating to incorrect payment of customs duty and GST.

We have recovered in excess of $700 000.80

Given the importance of ensuring the anti-dumping or countervailing remedy is and

remains effective, any new administrative arrangements should include a strong

compliance focus, including resources to implement the intention of the new anti-

circumvention initiatives (discussed below). The compliance function should be

proactive in identifying and addressing compliance risks and it should also encourage

and be able to respond to market intelligence provided by stakeholders. It should also

include engagement with industry stakeholders on compliance issues.

Observation

The system would benefit from a greater focus on resourcing and arrangements for

monitoring and enforcement of compliance and for identifying and addressing

circumvention.

Customs and Border Protection is well placed to provide, or assist with, compliance

assurance with respect to anti-dumping and countervailing measures. There are

synergies associated with the present arrangements where one agency can undertake

compliance activities in relation to a range of economic risks at the border, including

those related to compliance with anti-dumping and countervailing measures. While it

would be possible to make arrangements for a separate anti-dumping agency to take

responsibility for compliance assurance, with or without the engagement of Customs

and Border Protection, this would not be ideal. Rather, a compliance function in any

new administration is likely to yield the best results by maintaining a strong relationship

with the Compliance Assurance Branch of Customs and Border Protection.

In terms of anti-circumvention, it should be noted that legislative amendments have

already been proposed under which Customs and Border Protection will, if required,

conduct inquiries to address the circumvention of anti-dumping and countervailing

measures by exporters or importers of goods which are subject to measures.81 The

amendments are designed to address certain circumvention activities, as prescribed,

and it will allow the Minister to extend the dumping duty notice or countervailing duty

notice where appropriate. Implementing these anti-circumvention provisions will

require resources.

Conclusions

The effectiveness of remedies intended to address injurious dumping and subsidisation

is undermined by non-compliance with the measures and circumvention of the

80 Customs and Border Protection Annual Report (2011-12), p. 85

81 Customs Amendment (Anti-Dumping Improvements) Bill (No. 3) (2012)


measures. Compliance assurance and anti-circumvention activities are therefore

important functions that deserve suitable resources and arrangements in any new

administration.


8. Addressing the underlying issues and other relevant matters

The underlying issues identified by participants are not insignificant. While elements of

some issues may be perceived problems, they are clearly undermining public

confidence in Australia’s anti-dumping system and in international trade more

generally.

Significant progress has been and continues to be made through the Streamlining

reforms. This was recognised by the majority of participants. Staff members of the

existing administration are no doubt dedicated to executing their functions in an

objective and timely fashion. It is clear, however, that more can be done to strengthen

the system, to secure its effectiveness and to improve public confidence.

The question therefore becomes: What more needs to be done to address the recurring

concerns and other underlying issues identified by this Review? In commissioning this

Review, the Australian Government has recognised that the structure and position of

the anti-dumping administration may bear some relevance to this question. The

outcomes of the Review have confirmed that. The findings arising from analysis of the

underlying issues signal room for greater robustness and rigour, and further

improvements to transparency, liaison and collaboration. Most notably, however, they

underscore sharply the need to elevate the profile of this highly significant function and

for increased, quarantined resourcing. And this leads back to consideration of the

structure and position of the administration.

This chapter draws together the themes arising from this Review and proposes an

answer to the question of ‘what more needs to be done’. This is followed by a

comparison of the relative costs and benefits of retaining the function in Customs and

Border Protection and of models for a new Commonwealth agency.

8.1 Recent progress

From time to time, successive Australian Governments have reviewed the performance

of the anti-dumping administration and taken steps towards its improvement. In recent

years, two particular reviews gave rise to initiatives addressing some of the issues

identified under this Review.

The Joint Study into the administration identified as issues access to the system,

transparency, investigative rigour and compliance. The PC Inquiry Report identified

resourcing and timeliness issues, transparency and skills and experience, particularly in

the investigation context. A number of enhancements to the system were instituted

following the Joint Study, but the most recent and notable progress was and continues

to be made as part of the Streamlining reforms.


The Streamlining reforms are at least partially addressing a number of the issues

identified in this Review. The reform package has, among other things, aimed to:

improve access to the system, eg by piloting the ITRA position in the Ai Group

improve timeliness, eg by increasing the resources of the administration by 45

per cent and by setting timeframes around certain steps in the process

improve administrative decision-making, eg through greater use of external

expertise during investigations and clarifying certain criteria used in the

process

improve transparency, eg by making available certain reports and the criteria

and methodologies used to evaluate applications

achieve greater consistency with other countries, eg strengthening and

clarifying the approach to determining non-cooperation, and

strengthen compliance, eg by introducing a framework for prevention of unfair

circumvention of measures.

These reforms are already achieving benefits. The majority of participants

acknowledged the progress on a number of initiatives, including the ITRA,

improvements made to Customs’ electronic public record and the establishment of the

ITRF.

However, it is clear from both consultation results and analysis of other relevant factors

that the following aspects of anti-dumping administration require attention.

8.2 Profile, status and priority

As demonstrated earlier in this Report, anti-dumping and countervailing are significant

trade remedies that reduce the impact of unfair trade practices on Australian

businesses. The level of public confidence in the administration of the anti-dumping

system influences the level of confidence in Australia’s approach to international trade.

Moreover, the administration of anti-dumping and countervailing functions represents

a specialist area, the performance of which relies heavily on its ability to attract and

retain a large complement of high calibre staff with the right skills and experience. As

such, this is a significant function for Government that requires appropriate profile,

status and priority.

Profile, status and priority are important considerations in ensuring that an

administration is able to fulfil its roles and responsibilities as effectively and efficiently

as possible. They influence an agency’s level of independence and its identity. They

influence the authority of its leader to shape culture and make decisions. They can


impact how it performs its functions and its relationships with, and level of dependence

on, other areas of government. They heavily influence the ability of the agency to

attract quality staff and how it is perceived by its stakeholders and the public generally.

And they can also ensure that sufficient resources are allocated to a function.

Ultimately, ensuring there is appropriate profile, status and priority for an

administration will affect the level of confidence of the Australian public and lead to

international recognition that Australia has in place a rigorous and effective system

which addresses unfair dumping and subsidisation while meeting international trade

obligations.

Profile, status and priority are underpinned by a number of underlying factors including

agency structure, leadership model and geographic location, which are the subject of

this and subsequent chapters. No matter the administrative model, however, it is clear

that the function requires and merits an elevated profile and clearly defined and

distinguishable identity.

A number of stakeholders suggested that improved profile, status and priority would be

achieved by a separate agency of some form. It is clear that establishment of a separate

agency would create a new identity that is separate from the broader Customs and

Border Protection. Defining and distinguishing the function in this way would reinforce

its independence, increase its profile and ensure a dedicated and high level focus on

anti-dumping and countervailing activities. However, decisions about an appropriate

agency structure require a balanced view about the roles and responsibilities of the

agency, the respective benefits and costs and long term viability. As such, the

conclusions and final recommendation on agency structure are arrived at after the cost-

benefit analysis of the agency options in Chapter 9.

8.3 Leadership

Leadership and management are critical to setting the direction and culture of an

organisation. Changes in leadership and management can signal a culture change and

help foster a new identity. High level leadership and management increases profile of

the organisation and demonstrates increased, dedicated focus to a function. Providing

clear definition of roles and responsibility gives clear purpose and helps to promote

independence and transparency. Stronger leadership and management are required to

reflect the significance of the anti-dumping and countervailing system in Australia. The

leadership and management models complement agency structure.

The following leadership and management options would enhance effectiveness of the

system:

1. Independent Chief Executive Officer – This position would provide the required

level of leadership for the administration. It would demonstrate the high priority


and a dedicated focus on the function. It would ensure a high level of decision-

making and independence, and the ability to achieve rigorous and objective

investigations. The position would require a sufficient remuneration package to

attract a suitable level of industry, commercial, legal and/or government

knowledge, skills and experience, and could potentially be filled from outside

government. There would need to be a clear definition of roles and

responsibilities to ensure independence. Within the current model, delegated

decision-making resides predominantly at the level of National Manager and

Directors—this would be elevated to the level of Independent Chief Executive

Officer.

2. National Manager of Operations – This position would provide increased focus

on high level management of the operations function within the administration.

This is critical to achieving rigorous, objective and effective investigations and

recommendations. Within the current system, all management functions reside

with a single National Manager. The additional role of National Manager of

Operations reflects the increased priority of the function and the need to

enhance effective operational span of control. This position would require a

suitable level of industry, commercial, government and investigation knowledge,

skills and experience. Within the current model, operational management

resides predominantly at the level of Director—this would be elevated to the

level of National Manager of Operations.

Recommendation It is recommended that an additional National Manager position be established to manage the operational functions of the administration.

8.4 Location

The geographic location of the agency is an important consideration because it can

affect the capacity and capability of the administration to discharge its functions

efficiently and effectively. Location can influence the types and levels of skills and

experience that are accessible, and those that are recruited and retained. It can be an

important factor in allowing the administration to engage meaningfully with

stakeholders before, during and after investigations, which in turn contributes to the

further development of administrators. Location can also be important when the

administration needs to engage with the Government, including the relevant Minister

and the relevant policy departments.

Locating the administration in a major capital city would provide improved access to

relevant skills and experience, including access to subject matter experts. Improved

access to skills and experience would enable a greater degree of investigative rigour.


Proximity to industry stakeholders will facilitate more extensive consultation and

communication in relation to all aspects of the system, which will improve the quality of

processes and outcomes. These factors lead to a more efficient and effective anti-

dumping and countervailing system and greatly improved public confidence in that

system.

There are also benefits attached to the administration being located in Canberra, which

include co-location with relevant government policy departments such as the

Department of Foreign Affairs and Trade, and the Department of Industry, Innovation,

Science, Research and Tertiary Education. It is also very useful to have ready access to

the Minister for Home Affairs, the final decision maker.

These factors indicate there is strong case for moving the key functions of the

administration to a major capital city, while maintaining a presence in Canberra.

Moving the key functions of the administration from Canberra to a major capital city

carries risks in terms of continuity of service, especially if the administration also loses

its links and synergies with Customs and Border Protection. To mitigate the risks of a

sudden relocation of the key functions, a capital city office could be established while

retaining capacity in Canberra. While this approach may present some other risks, such

as consistency of process and outcomes between offices, these should be manageable.

After establishing a critical mass in the capital city, transition could be hastened to some

degree providing care is taken to maintain the continuity of service.

The particular administrative functions that could be initially placed in the capital city

include prime responsibility for stakeholder engagement initiatives. However, some

roles and responsibilities in relation to core operational activities should also begin

transition at an early stage to ensure the capital city office quickly establishes full

operational functionality.

Transition of the functions to more than one major capital city is likely to splinter the

administration to a degree where capability in one or more of the offices would be sub-

optimal, and the risks of inconsistency would be increased.

In relation to the most appropriate capital city, participants suggested Sydney and

Melbourne as suitable locations, with the majority favouring Melbourne.

The Premier of Victoria, the Hon Ted Baillieu MP, noted that:

Victoria has the largest manufacturing industry in Australia with approximately 30

per cent of the country’s manufacturing workers employed in Victoria. Victoria also

contributes a similar proportion of the industry’s sales and service income.


Melbourne is also home to Australia’s largest port, and handles 36 per cent of the

nation’s export/import containers.82

Recommendation

It is recommended that the administration be principally located in a major capital city where

there is a high concentration of Australian industry.

In view of its high concentration of industry and level of import activity, Melbourne

emerges as the most suitable location for the function.

8.5 Other necessary enhancements

Consultation and communication

Effective consultation and communication are critical to engaging with stakeholders and

ensuring open and transparent processes and flow of information. They make it easier

for stakeholders to know where to find information or get support. They help avoid

confusion or misunderstanding by improving access to the anti-dumping system. They

also influence how an organisation interacts with its customers, fostering a stronger

service culture within an organisation, and informing decision making and improving

skills and experience.

The following initiatives would enhance consultation and communication:

1. A Consultation and Communication Strategy – This provides a means of

identifying and clarifying the initiatives necessary for effective stakeholder

engagement and open and transparent communication and provision of

information. It helps to ensure timelines, priorities and resources are defined

and realistic to deliver work programs and manage expectations.

2. ‘Client’ Support – An increased and enhanced client support and liaison function

would facilitate stakeholder awareness of and access to the system before,

during and after investigations. It is recognised that there is the potential for

conflicts of interest to arise. However, potential conflicts would be avoided if

information and guidance about the system and how to engage with it could be

provide without commenting on specific applications and submissions.

Increasing the capability of the support function within the agency would enable

the ITRA to focus increasingly on providing stakeholder advice. Separating this

support function from the operational functions in the agency would improve

the ability of the agency to provide support at arm’s length. Client support could

82 Premier of Victoria submission (9 October 2012), p 2


also comprise a feedback process, and client engagement and awareness raising

activities around Australia.

3. ITRA – The ITRA is playing an extremely useful role amongst SMEs (through the

Ai Group) in improving awareness of and access to the anti-dumping and

countervailing system. Importantly, it enables advice to be given since it

operates at arm’s length from the administration. There is scope for this

function to continue and possibly expand in the future following a review of its

effectiveness with regard to an increased liaison function in ITRB. However, it is

necessary that roles and responsibilities be clearly defined and that its

sustainability and viability be considered with regard to the detailed knowledge

of the system required for it to continue.

4. Website and Branding – The website needs to facilitate clear and easy access to

relevant information. Branding needs to demonstrate the professional focus of

the agency and independence from Customs and Border Protection.

5. The ITRF – The ITRF would benefit from a more balanced and inclusive

membership to represent the broad range of interests. Use could be made of

emerging technologies and approaches (Gov 2.0) to achieve more effective and

efficient consultation. The Forum could be held on a rotational basis in different

capital cities to improve the opportunity for occasional participation by senior

managers who may be otherwise too busy to attend the Forum in Canberra.

Recommendation

It is recommended that a Consultation and Communication Strategy be developed at the earliest opportunity.

The Strategy should include a new website and branding.

Recommendation

It is recommended that the client support function within the agency be enhanced substantially.

Recommendation

It is recommended that a sustainable and viable model be developed for the ITRA.

Recommendation

It is recommended that the ITRF ensure a more balanced and inclusive membership.


Ideas for implementation

The agency could work with stakeholders on general improvements to the verification guidelines.

The agency could engage more proactively with stakeholders on real time verification issues.

An open feedback process could be conducted annually to gain an understanding of stakeholder views about the administration and various initiatives (so that issues could be identified and addressed early).

A targeted feedback process could be conducted after investigations to judge stakeholder views about service, access, transparency etc.

An annual road show could be undertaken in major centres around Australia to explain the system and address questions. This could incorporate client training on specific aspects of the system which would foster better communication and assist staff in learning about clients.

A more comprehensive and accessible range of Fact Sheets, reference material and guidelines could be made available on the website.

Consultation could incorporate identification of a community of interest beyond ITRF membership and more effective use of discussions papers and an online feedback process to enable a more efficient means of understanding of stakeholder views.

Workforce planning

Workforce planning is critical for an organisation to develop a capable and flexible

workforce. It enables an organisation to identify the type, level and combination of

knowledge, skills and experience it requires, to develop strategies to gain access to the

knowledge, skills and experience, and to identify funding requirements and budgetary

constraints. Effective workforce planning will address participant concerns about skills

and experience and insufficient qualifications. It will also improve rigour and overall

effectiveness of the system.

The following initiatives underpin workforce planning:

1. A Workforce Strategy – A workforce strategy provides a critical means for the

administration to clearly define how it plans to develop a capable and flexible

workforce that is able to fulfil its functions. It is useful for defining the

knowledge, skills, experience and qualifications that are required now and in the

future (given evolving trade issues and increased numbers of market situations

and countervailing investigations). It is useful for considering the appropriate

mix of general, core and specialist skills given the technical nature of much of

the work and the unpredictability about the type of investigations that may

arise. It is useful for considering the appropriate mix of permanent and


contracted staff given the variability in number, type, scale and complexity of

investigations. It can include strategies to attract and retain staff and to reassign

staff members who prove unsuitable. The strategy would need to be informed

by clear recognition of funding requirements and budgetary constraints.

2. Skills Gap Analysis – This would assist the administration to compare the

knowledge, skills, experience and qualifications currently in ITRB with what it

requires to fulfil its functions. Results would feed directly into a workforce

strategy by identifying gaps or insufficiencies. Once completed, it would not be

difficult to maintain this over time. It is understood from consultation with

Customs and Border Protection that some analysis of this type has been

undertaken already but a more comprehensive and contemporary analysis could

be conducted.

3. Recruitment Strategy – This would be a component of the workforce strategy

and would support the organisation to conduct targeted recruitment. It would

need to clarify the knowledge, skills, experience and qualifications being sought,

the roles and responsibilities, level of remuneration and approach to market.

This provides an opportunity to emphasise the value of investigative rigour and

commercial experience to the role.

4. Access to Specialist Skills – Access to specialist skills would help support ITRB

during specific investigations or during periods of increased workload. As

mentioned earlier, investigations can vary in number, scale and complexity. They

also vary in regard to the specific industry product or process. These factors can

result in a requirement for more and/or specialist skills including industry or

market segment knowledge, commercial experience and certain professional

skills and qualifications. Access to specialist skills could be available through

contractors or consultants on shorter ad hoc bases. This could be managed

flexibly through an open procurement panel and would require a dedicated

budget. This would require some resources to manage. The Branch is able to use

existing procurement panels within Customs and Border Protection already but

skills are not necessarily relevant to anti-dumping and countervailing.

5. Recruitment of Special Advisers – Special Advisers would provide an additional

source of specialist skills to the agency on a medium or longer term basis. This is

similar to the initiative above but it is intended as a longer term, structural

enhancement to workforce capability. Special Advisers could support projected

increases in workload and provide access to skills that may not be required

permanently in the agency and may not otherwise be recruited. They could work

across operational sections and participate in verification visits. This could be

managed through a recruitment process and would require a dedicated budget.


6. Cooperative Interagency Arrangements – Cooperative interagency arrangements

could provide a way to access special skills to address specific issues or support

investigations. This could be done through secondments, informal working

groups or technical exchange. Most Government agencies are under increased

funding pressure so this would most likely be possible only in limited situations.

Recommendation It is recommended that a dedicated budget be established to increase the ability to access specialist skills and to recruit Special Advisers.

Training and development

Training and development is important for developing the knowledge and skills of

existing staff. It can help increase staff skill levels across a number of key subject areas

and ensure consistency of approach across an organisation. It can be used to shape

thinking and culture by identifying the personal qualities and attributes required to

perform a role. Training and development activities could be made a prerequisite for

advancement in an organisation.

It is recognised that training and development is undertaken in ITRB already but it is

thought that more resources could be put towards it. The following initiatives would

support training and development:

1. Training and Development Plan - A training and development plan would

identify the specific knowledge and skills required of staff, various means of

delivery, sources for either delivery or development and costs. Results of a skills

gap analysis would feed directly into this plan.

2. Training Modules - A number of training modules exist in ITRB already but more

could be developed, especially given evolving trade issues and increased

numbers of market situations and countervailing investigations. It may be

possible for contractors with specialist skills to develop modules and/or provide

training to staff, particularly when they have been contracted for one purpose

but have additional capacity.

3. Exporter Visits - More staff members could be sent selectively on overseas

exporter visits due to the scale, complex or nature of a particular investigation.

This would result in a direct increase in monetary and personnel costs but would

provide staff with valuable practical experience and knowledge and more

rigorous investigations in the longer term.


Recommendation

It is recommended that a Workforce Plan be developed. The Plan should:

a) be based on a full skills gap analysis, and b) include a targeted training and development program.

Ideas for implementation

Technical engagements with industries in Australia would increase staff knowledge and understanding of different industries. This would place some burden on the respective industry and staff are unlikely to be very productive so ITRB would be required to continue to pay staff wages.

Increased technical exchanges between ITRB and overseas counterpart organisations (including secondments) would increase staff knowledge and understanding of different approaches to investigations.

Specific training could include: o Negotiation skills and techniques o Investigative skills and techniques o Intercultural training including language skills (for familiarity, not

to a level to conduct negotiations)

Australian administrators could seek permission from Australian exporters to attend verification exercises undertaken by foreign administrations in Australia, to monitor their verification techniques first hand.

Improve verification guidelines with the assistance of stakeholders and relevant independent experts including cost accountants, corporate structure experts, and auditors.

Transparency

Transparency is a critical element of anti-dumping and countervailing investigations

because it enables interested parties to examine the substance of the applications and

submissions of others in order for them to defend their interests. However, it is

acknowledged that the confidentiality of commercially-sensitive information must be

preserved.

Effective transparency, provided in a timely manner, facilitates open debate about

arguments and evidence, which better informs the decision makers. It also allows

stakeholders to understand investigation developments and outcomes, which provides

for greater business and market certainty.

The following initiatives will enhance transparency:


1. Transparency Officer – this role could be established to ensure optimal

transparency with a focus on the quality, consistency and timeliness of

disclosure of arguments and evidence placed on the public record.

2. Transparency in the duty assessment process and in the accelerated review

process – with legislative amendment, and certain administrative changes,

transparency in duty assessments and in accelerated reviews can be provided in

the same manner as for investigations, reviews and continuation inquiries. Duty

assessments involve final calculations of duty payable and therefore relate

directly to the level and effectiveness of the remedy for injurious dumping or

subsidisation. Accelerated reviews can result in levels of measures for new

exporters that are different to the measures applying to other exporters, which

can also impact upon the effectiveness of measures. Interested parties should

therefore be afforded openness and transparency to enable them to engage

with the administration throughout these processes.

Recommendation It is recommended that a role of Transparency Officer be established to ensure optimal transparency, particularly with respect to the public record.

Recommendation It is recommended that duty assessments and accelerated reviews be made subject to open and transparent processes similar to those of investigations.

Compliance assurance and anti-circumvention

The effectiveness of the remedy for injurious dumping or subsidisation is undermined if

exporters and importers do not comply with, or circumvent, the measures. It is

therefore important that the anti-dumping and countervailing system include capacity

and capability for monitoring compliance, enforcing compliance, and identifying and

addressing circumvention.

The anti-dumping and countervailing administration is well placed to monitor

compliance and to identify and address circumvention. However, Customs and Border

Protection is also well placed to monitor compliance and it is in the best position to

enforce compliance. These complementary functions are discussed further below.

The anti-dumping and countervailing administration, in the course of its normal

investigations, reviews, and other operational activities, necessarily gains a high degree

of familiarity with the products, the parties involved, and the issues particular to each


case. Accordingly, it should assume a significant part of the responsibility for

monitoring compliance, and in identifying and addressing anti-circumvention.

The anti-dumping and countervailing administration can, providing it has access to the

Customs and Border Protection import database, determine compliance and

circumvention risks. The import database contains a comprehensive range of real time

data that is essential to monitoring import activity. The administration can take

proactive and reactive approaches to identifying non-compliance and circumvention. In

the case of anti-circumvention activity, it is logical for the administration to conduct the

anti-circumvention inquiries envisaged by new legislation, and for recommending any

consequent revisions to measures.

Customs and Border Protection maintains an important role in compliance assurance

and a strong relationship between it and the anti-dumping and countervailing

administration is essential. The collection and enforcement of anti-dumping and

countervailing duties relies upon legislative powers that are used by Customs and

Border Protection in relation to ordinary customs duty. In addition, a wider

appreciation of related Customs functions (such as tariff classification, tariff concessions

and valuation) provides a more holistic approach to compliance assurance.

Ideally, Customs and Border Protection would continue to treat anti-dumping and

countervailing measures as one of the economic risks subject to its compliance

assurance programs and campaigns. The anti-dumping and countervailing

administration can work with Customs and Border Protection on such initiatives. A

partnership arrangement of this nature will ensure the significant benefits stemming

from existing links and synergies are maintained. This should ensure a strong approach

to ensuring the effectiveness of measures.

In arranging and implementing such a partnership, it will be important to consider

exactly which powers are required by the anti-dumping and countervailing

administration to enable it to fulfil its agreed partnership functions.

Recommendation

It is recommended that the administration include dedicated resources for compliance

assurance and anti-circumvention, and that it work in partnership with Customs and Border

Protection to ensure the ongoing effectiveness of anti-dumping and countervailing measures.


9. Costs and benefits of options

A crucial component of this Review is consideration of the costs and benefits of

retaining anti-dumping functions in Customs and Border Protection and the costs and

benefits of establishing a new Commonwealth agency for the functions. This Chapter

discusses those costs and benefits. It does so by considering the financial costs and

benefits of the options, but also with respect to the extent to which each option

addresses the underlying issues identified during this Review. This approach is taken in

view of the heavy participant focus on underlying issues and to ensure that the

structure of the administration serves the ultimate purpose of achieving an efficient and

effective anti-dumping system.

As outlined in part 4.2, there are four possible administrative models being considered

in this Report:




D Line area within a much larger department or agency (status quo)

The costs and benefits of each are outlined below. Model D, which represents the

status quo, is considered first for ease of reference to the current cost of administering

the function.

9.1 Costs of status quo

Should the anti-dumping and countervailing administration remain as it is in Customs

and Border Protection, a number of underlying issues may remain unresolved.

As Customs and Border Protection is, out of necessity, increasingly focusing on its

border protection functions, the administrative priority and profile of the anti-dumping

function is inevitably diminishing. Senior management attention is necessarily divided,

especially at this time when the movement of people between borders is such a

pressing issue in our region.

As discussed in previous chapters, this low profile is affecting awareness, access and

public confidence. It runs the risk of giving the impression that Australia is a ‘soft touch’

country and potential dumping target. It also creates obstacles to attracting and

retaining the required number of staff with high-level industry expertise and relevant

specialist skills.


There is also a risk that the cultural issues identified during this Review may remain

unaddressed if the function is not refreshed and revived with a new identity, bolstered

leadership and elevated profile.

It may be said that, with an injection of funds, Customs and Border Protection could be

in a position to address some underlying issues. However, as previously noted, many of

these underlying issues have been raised in the recent past and, while progress in those

areas has been achieved with an increase in resources, it is clear that the issues remain

unresolved to some degree. The outstanding action required must include alterations

to the structure of the administration.

Financial cost

Retaining the status quo would, of course, avoid any additional cost insofar as the

administrative structure is concerned. However, to consider the relative cost of the

options, it is necessary to establish the current cost of the administration of the

function.

The table below contains the actual costs of ITRB in financial year 2011-2012 and the

budgeted expenditure of ITRB in the current financial year (2012-2013). Each item is

described in the corresponding paragraph to follow.

Current costs of International Trade Remedies Branch (dollars per annum)

Item

Actual 2011-12

Budgeted 2012-13

1 Staff 4,294,245 4,476,086

2 Corporate overheads 1,017,736 1,060,832

3 Supplier 1,439,296 1,115,652

Total excl. accommodation 6,751,277 6,652,570

4 Accommodation 240,240 252,560

TOTAL 6,991,517 6,905,130

Source: Customs and Border Protection

1. The actual average staffing level for 2011-12 was 39 and the actual average staffing

level for 2012-13 was 41 as at September 2012, based on a month-to-month

capture. However, as part of its Streamlining reforms, the Australian Government

committed to increasing the staffing level of ITRB to 45. ITRB is in the process of

achieving that target.

Staff costs include superannuation, long service leave, recreational leave, overtime

and allowances.


2. Corporate overheads have been calculated using the Department of Finance and

Deregulation costing template. Overheads include information and communication

technologies services, human resources support including payroll, training and

development and other organisational services such as strategic communications

and in-house legal support services.

The calculation of corporate overheads is based on the actual staffing numbers for

2011-12 and 2012-13; however, the Australian Government’s existing commitment

to increase staff to 45 results in an increase of overheads to around $1.17m.

3. Supplier costs include expenditure on travel, publications, contractors and

consultants.

4. The current accommodation costs are based on a calculation of $385 per square

metre and 16 square metres per staff member. $385 per square metre is the

current expenditure of Customs and Border Protection for accommodation at

Customs House, Canberra. 16 square metres per head is the standard quota under

Department of Finance and Deregulation costings.

In view of the June 2011 commitment to increase staffing, the table below extrapolates

ITRB costs for a staffing complement of 45. The estimates are based on an average of

the 2011-2012 and 2012-2013 costs outlined above.

Estimated costs of International Trade Remedies Branch based on 45 staff (million dollars per annum)

Item Estimated cost

Staff (45) 4.93

Corporate overheads 1.17

Supplier 1.44

TOTAL excl. accommodation 7.54

Accommodation 0.28

TOTAL 7.82

Assuming full implementation of the June 2011 commitment towards staffing, the cost

of the existing administration is therefore estimated at $7.54m per annum excluding

accommodation, and $7.82m per annum including accommodation.

9.2 Benefits of status quo

There a number of typical benefits associated with maintaining the status quo.

Retaining the function in Customs would, for instance, minimise disruption. It would


alleviate risks to business continuity and avoid the risk of attrition that arises from

institutional change. It maintains the stability associated with established working

relationships, certainty of process and availability of corporate knowledge.

The status quo also secures the existing links and synergies with Customs and Border

Protection. As discussed in previous chapters, there are a number of connections with

Customs that are critical to the effective administration of the anti-dumping system.

These relate to access to import data, implementation of duties, compliance assurance,

legal services and policy responsibility (which Customs shares with the Department of

Foreign Affairs and Trade and the Department of Innovation, Industry, Science,

Research and Tertiary Education).

The financial benefit of maintaining the status quo is, of course, that there is no new

cost associated with the structure or model of the administration.

9.3 Costs of a new Commonwealth agency

The following is an assessment of the costs of the three models for a new

Commonwealth agency described in part 4.2 of this Report. All three models are

considered in order to identify the most efficient and effective option. The assessment

assumes that the establishment of a new Commonwealth agency would, as a minimum,

adopt the abovementioned recommendations relating to leadership and location.


A pure stand-alone agency attracts a number of additional costs. For instance, such an

agency could compromise flexibility in a range of areas, including budget flexibility and

the opportunities to draw on the human resources of the wider agency or to reallocate

human resources to other priorities where required.

A pure stand-alone agency also attracts corporate governance and accountability

obligations. This could see the head of the agency encumbered with such

responsibilities, rather than dedicating full attention to the core functions of the agency.

Establishing such an agency is likely to generate the highest level of disruption of all of

the options for a new agency. Separate ICT, human resources, financial and other

infrastructure and personnel would be required. This would necessitate a considerable

amount of carefully executed change management.

A stand-alone agency also runs the risk of weakening the necessary links with Customs.

Maintaining strong working relationships with Customs is critical to the effectiveness of

the system in relation to certain specialised areas such as compliance assurance, duty

collection, tariff classification, tariff concessions, valuation, etc. These functions are

unique to Customs and are important considerations in anti-dumping and


countervailing activities. The majority of these functions currently reside with other

areas of Customs and Border Protection, and would need to continue to be performed

by Customs as they involve the use of powers unique to Customs officers under the

Customs legislation. The risk of weakening such links would be increased if the agency

staff are not accommodated in proximity to relevant Customs staff or, for reasons such

as resource restrictions, are not in regular contact with Customs.

The establishment of a stand-alone agency would also necessitate efforts to ensure

business continuity, including continuity of corporate knowledge, about anti-dumping

as well as those functions specific to Customs. Customs training would no longer be

readily available to the agency, although such training could be arranged at a cost.

Financial costs—ongoing costs

A pure stand-alone agency comes at a high financial cost. The table below itemises the

estimated costs of operating a new, stand-alone agency and provides an indication of

the new funds that would be required per annum. Items requiring commentary are

described in the corresponding paragraphs to follow.

Estimated costs of pure stand-alone agency (million dollars per annum; ex- accommodation)

1 Staff (45) 4.93

2 New leadership (full time agency head) 0.33

3 New leadership (additional branch head) 0.22

4 New administrative support (APS 4) 0.08

5 New in-house lawyer (EL2) 0.16

6 Corporate support (including 10 new corporate staff) 1.90

7 Job specific ICT support 0.10

8 Supplier 1.57

TOTAL 9.29

(Current cost of function based on 45 staff) (7.54)

New funds 1.75

2 and 3. As noted above, this assessment assumes that the establishment of a new

agency would, as a minimum, adopt the abovementioned recommendation relating

to leadership.

4. The new leadership structure would necessitate additional administrative support.

5. As a stand-alone agency, this administration would require in-house legal services.

The estimated need for one in-house lawyer at the Executive Level 2 is based on


consultation regarding time dedicated by the Customs Legal Services Branch to the

work of ITRB.

6. The estimate of corporate support costs is based on an analysis of agencies of a

similar size and with statutory heads. The analysis involved averaging the

percentages of total agency expenditure on corporate activities; namely, 22%. This

includes governance, such as auditing and annual reporting, human resources and

other support. The number of additional staff included in this estimate is also

based on analysis of like agencies.

7. Job specific ICT support includes ongoing support of the ITRB’s Case Management

System, should the use of the System be continued in a new agency. This estimate

is based on an assessment of the requirements undertaken by the relevant officer

in Customs.

8. As this assessment is focused on the costs of a pure stand-alone agency as an

option for a new administrative structure, supplier costs remain unaltered for the

purpose of this estimate.

As such, the new funds required for operation of a pure stand-alone agency are around

$1.75m per annum.

Transition costs

Transition to a pure stand-alone agency would involve a number of steps.

Amendments to legislation would be required to move the relevant functions and

powers to a new agency and new agency head. It would also be necessary to develop

or adopt governance policies and support arrangements for various administrative

functions, including an enterprise agreement and other human resources policies.

The new identity of the agency would necessitate a branding change. This would

involve the development of a new website, new publication design, etc.

Separate ICT infrastructure and corporate support, including human resources, financial

and governance services, would need to be established.

The table below estimates the one-off costs of transitioning to a pure stand-alone

agency.


Estimated transition costs of pure stand-alone agency (million dollars; ex-accommodation)

1 Transition operations 0.13

2 ICT and other job specific requirements 0.80

3 New branding 0.02

TOTAL 0.95

New funds 0.95

1. Transition operations comprises the tasks required to establish the agency at first

instance, including legislative amendments, development or adoption of corporate

and governance policies, recruitment, etc. This estimate covers the staffing costs

and corporate overheads for one Executive Level 2 officer and one APS 6 officer for

6 months. This assessment of resources required is based on consultation with

staff previously involved in the establishment of a new agency.

2. As mentioned above, a job specific Case Management System is currently in use by

ITRB. Continuity would involve the establishment of the related ICT platform and

other requirements, including ICT infrastructure, hardware, software, licences and

setup. In addition, general ICT infrastructure and systems would need to be

established or leased. This estimate is based on an assessment of the Case

Management System transition requirements undertaken by the relevant officer in

Customs and ICT officer estimates of other requirements.

3. New branding would include a new agency website, design, including a new logo

and some initial publication printing costs. The estimate of new branding costs is

based on consultation with strategic communications personnel in an Australian

Government department.

As such, the one-off funds required for transition to a pure stand-alone agency are

around $0.95m required in the first year.


The costs of a separate but supported agency are, to some extent, comparable to those

of a pure stand-alone agency. Establishing such an agency could involve foregoing

resource flexibility, attracting corporate governance obligations, generating a level of

disruption and potentially affecting critical links with Customs. However, under this

model, these costs, and the associated transition costs, could be mitigated to some

extent.

Under this model, the new agency would obtain its corporate support from another,

well established agency. This could include ICT, financial and human resources support.

Governance support could also be provided by another agency, eg through the sharing

of governance staff and reporting systems or by virtue of legislative provision declaring


the head of the new agency to be the CEO of the other agency for the purposes of

discharging obligations under the Financial Management and Accountability Act 1997.

However, some cost may still be incurred and level of internal corporate support may

still be required, depending on the extent of support provided to the new agency and

the financial arrangements struck between the two agencies.

Financial cost—ongoing costs

The financial cost of a supported agency, particularly one supported by Customs and

Border Protection, is therefore also lower. The table below itemises the estimated costs

of operating a new supported agency and provides an indication of the new funds that

would be required per annum.

Estimated costs of separate but supported agency (million dollars per annum; ex- accommodation)

Staff (45) 4.93

New leadership (full time agency head) 0.33

New leadership (additional branch head) 0.22

New administrative support (APS 4) 0.08

New in-house lawyer (EL2) 0.16

Corporate support 1.45

Supplier 1.57

TOTAL 8.74

(7.54)

New funds 1.20

In this instance, the estimate of corporate support costs is based on an analysis of

comparable supported agencies.

As such, the new funds required for operation of a separate but supported agency are

around $1.2m per annum.

Financial cost—transition costs

The creation of a separate agency supported by Customs would involve some transition,

but transition costs could be minimal depending on the extent of support provided.

Similarly to model A, legislative amendments would be required in order to delegate the

relevant functions and powers to a new agency head.

The branding change associated with a new identity would still be required. This would



Estimated transition costs of separate but supported agency (million dollars; ex- accommodation)

Transition operations 0.10

New branding 0.02

TOTAL 0.12

New funds 0.12

In this instance, the estimated transitional operations cost is lower than that of model

A. This is because, unlike model A, corporate functions would not require

establishment in full.

As such, the one-off funds required for transition to a separate but supported agency

are around $0.12m, required in the first year.


Depending on the type of agency established under this model, additional costs may be

minimal. If a new agency is established but remains within Customs, for instance, the

costs relating to the structure of the agency would be modest. The great majority of

additional costs would be associated with the bolstered leadership.

Under this model, the risks associated with models A and B do not arise.

If such an agency and/or its head is or are established under legislation, legislative

amendments would still be required to establish the agency and/or transfer the

relevant functions and powers to the new agency head.

Financial cost—ongoing costs

The table below itemises the estimated costs of operating a new supported agency and

provides an indication of the new funds that would be required per annum.


Estimated costs of agency within larger agency (million dollars per annum; ex- accommodation)

Original staff positions (45) 4.93

New leadership (full time statutory office holder) 0.33

New leadership (additional branch head) 0.22

New administrative support (APS 4) 0.08

Corporate overheads 1.33

Supplier 1.57

TOTAL 8.46

(7.54)

New funds 0.92

As such, the new funds required for operation of an agency within a larger agency are

around $0.92m per annum.

Financial cost—transition

Depending on the type of agency established under this model, little transition may be

required. If the agency and/or the position of the head of the agency is or are to be

established under legislation, legislative amendments would be required in a similar

fashion to models A and B. If the agency is established in form only, ie not under

legislation, legislative amendments would not be required and delegations may not

need to be revised.

The branding change associated with a new identity would still be required. This would


Estimated transition costs of agency within larger agency (million dollars; ex- accommodation)

Transition operations 0.09

New branding 0.02

TOTAL 0.11

New funds 0.11

Once again, the estimated transitional operations cost is lower under this model. This is

because model C would involve the least transition of the three models for a new

agency.

As such, the one-off funds required for transition to an agency within a larger agency

are around $0.11m, required in the first year.


Relocation

The discussion in Chapters 6 and 8 highlighted the need for greater proximity to

industry centres and major port facilities. Those chapters demonstrated the need for

the new Commonwealth agency to be located principally in a major capital city with

high level of industry concentration and import activity. As noted above, this

assessment assumes that the establishment of a new agency would, as a minimum,

adopt the abovementioned recommendation relating to location. The assessment uses

Melbourne as the principal location for the agency, as it is considered the most suitable

location.

Relocation of the administration can run the risk of eroding the synergies and critical

working relationships with Customs and Border Protection. However, this risk can be

mitigated. Anti-dumping staff could continue to be co-located with Customs, eg in

Customs House (Melbourne).

Alternatively, staff could be relocated to an outer suburb of Melbourne that is in close

proximity to the airport, eg Essendon Fields or Tullamarine. This would minimise

accommodation costs and significantly reduce travel costs for the agency due to the

direct international connections from Melbourne airport.

Financial costs—accommodation

The table below provides estimates of costs for accommodation in Customs House at

Docklands in Melbourne and Essendon Fields or Tullamarine. Estimates for Customs

House, Docklands, are based on consultation with Customs officers at that location.

Estimates for Essendon Airport or Tullamarine are based on an average of market rates

in those suburbs as at October 2012.

Estimated accommodation costs for Customs House, Melbourne (million dollars per annum; based on 16 square metres per head)

Customs House, Docklands ($300 per sqm per head) 0.24

TOTAL 0.24

(Current cost of accommodation based on 45 staff) (0.28)

New funds -0.04

Estimated accommodation costs for Essendon Airport or Tullamarine (million dollars per annum; based on 16 square metres per head)

Melbourne outer suburbs ($300 per sqm per head) 0.24

TOTAL 0.24

(Current cost of accommodation based on 45 staff) (0.28)

New funds -0.04


The table demonstrates that accommodation in Melbourne could, in fact, provide small

savings for the administration.

Location related transition costs

A potential transition cost of relocation is staff attrition. While it is unquantifiable, it is

generally expected that some staff will choose not to relocate. This may result in some

loss of corporate knowledge. However, staff attrition can be minimised through careful

transition planning. A number of key positions, including the agency head position, will

need to be filled during the establishment of the agency. Such recruitment would be

undertaken in Melbourne to commence the relocation. Concurrently, key personnel

would be relocated, either on a transitional or permanent basis, to establish the

operation of core functions in Melbourne. A proposed transition plan is provided at the

end of this chapter.

Moreover, the natural attrition rate of the administration is 10-15% per annum (based

on ITRB and Customs and Border Protection averages). This equates to up to 7 of 45

core staff or 6 of the current 41 staff. Positions arising as a result of natural attrition

could be filled in Melbourne to further minimise relocation costs and mitigate the

abovementioned risks.

These costs and risks could be reduced even further—if not totally eliminated—by

retaining a small agency office in Canberra.83

Financial costs—transition

The overall costs of staff transfer are not easily estimated. This is partly due to the

element of negotiation involved. It is also due to the fact that the costs are heavily

dependent on the circumstances of each individual staff member, eg the size of a

person’s family, and that it is impossible to predict who will accept the offer of

relocation. Moreover, there may be incidental attractions to relocation, eg positions

advertised in Melbourne may offer existing experienced staff an opportunity for

promotion.

Nevertheless, relocation of a position in Customs gives rise to certain transfer

entitlements. The entitlements attaching to relocation from Customs to a separate

agency would be comparable. Those entitlements can serve as a basis for a broad

estimate.

83 If the abovementioned transition and mitigation strategies are adopted, there should be no need for

redundancies (voluntary or otherwise). However, should the questions of redundancies arise, the average cost of a redundancy in Customs and Border Protection is currently $75,000 per person. This includes salary only (as per Clause 25.0.15 of the Customs Enterprise Agreement) as there is other provision in the budget covering leave liability.


Entitlements for relocation include all removal costs, disturbance allowance and a 3-

week settling in allowance. Entitlements for temporary transfer include rental

assistance for accommodation commensurate to the person’s lifestyle at home, for the

period of the transfer. However, those entitlements are only available to those who

own a home in their home base.

The other relocation related transitional cost is fit-out. Accommodation in either

Customs House, Docklands or in a convenient outer suburb of Melbourne would require

some degree of fit-out, although the former option may be less demanding.

The table below provides estimates of the transition costs, with a description of the

basis for the estimates to follow.

Estimated transition costs of agency within larger agency (million dollars; ex- accommodation)

1 Staff relocation 0.46

2 Fit-out (Melbourne; standard quality; staff of 49) 0.55

TOTAL 1.01

New funds 1.01

1. The average transfer cost under Customs arrangements is $13,000 per person. This

includes all removal costs, disturbance allowance and the 3-week settling in

allowance for a family of two adults and two children, in accordance with Clause

20.4 of the Enterprise Agreement.84 The estimate provided is based on the

assumption that the positions would be relocated and does not take account of

possible temporary transfers. It is calculated on the basis of relocation of 35 people

in the first year, ie the number of staff taking account of an attrition rate of 15%

applied to the current staffing complement of 41.

2. The calculation of fit-out is based on average fit-out costs in Melbourne as provided

by the Department of Finance and Deregulation.

As such, the one-off funds required for transition to Melbourne are around $1.01m,

required in the first year.

84 The average cost will vary depending on the number of dependents.


9.4 Benefits of a new Commonwealth agency


The benefits of a pure stand-alone agency generally pertain to independence, profile

and identity. As such, this model would address a number of the underlying issues

discussed in Chapter 6 of this Report.

A fundamental attribute of a stand-alone agency is its independence. Its functions are

administered without interference from other agencies. It bears its own governance

responsibilities and therefore manages its own business operations and, subject to

allocation from Government, controls its budget.

A stand-alone agency also carries a more prominent and elevated profile. Coupled with

the necessary stakeholder liaison, such profile is likely to address the issues identified

around awareness and access by establishing a presence and a clearly defined identity.

Moreover, it is likely to send an international message that the anti-dumping function is

a priority in Australia.

The profile and the dedicated, specialised nature of the agency would also assist in

addressing the identified skills and experience issues, particularly if the agency is

principally based in Melbourne where there is a high concentration of industry. It is

more likely that specialist accountants and those with manufacturing and business

experience will be attracted to an agency dedicated to their areas of expertise than a

broader, government agency. Such a specialised agency would present an opportunity

to reinforce and enhance such a specialist’s career.

A stand-alone agency also derives stronger leadership and leader engagement with

stakeholders. The head of a stand-alone agency occupies a position of authority,

autonomy and responsibility for the function. This would address the current issue of

divided senior management attention and empower the leadership to shape the culture

and interface of the agency. This strength of leadership could also provide certainty and

consistency in direction and decisions, and could form a source of expertise and

bargaining power for operational staff.

Most importantly, however, the likely aggregate result of the abovementioned benefits

is increased public confidence and trust in the anti-dumping system and, consequently,

in Australia’s approach to international trade.


The benefits of a separate but supported agency would be almost identical to those

attaching to a pure stand-alone agency. The distinction is that a supported agency may

possess a little less control over its corporate functions.



An agency or office within a department or larger agency is unique in that it has the

potential to attract the benefits of a stand-alone or supported agency, while avoiding

many of the costs of associated with those models. This would be particularly so if such

an agency is established as a separate entity under legislation, but housed under

legislation, within Customs and Border Protection.

As it involves minimal organisational movement and maximum support, this model does

not attract the costs associated with establishing a separate agency and avoids the

abovementioned impacts on attrition, corporate knowledge and business continuity. It

also avoids the financial costs of establishing and operating a separate agency.

Moreover, with a statutory head or legislated CEO and a new and distinguishable

identity, an agency under this model can attract the majority of benefits attached to

models A and B.

If the statutory head or CEO is vested with the anti-dumping related functions and

powers, the benefits relating to autonomy and independence will be realised,

particularly with respect to operational decision-making. Coupled with a separate or

quarantined budget, this agency would also secure a control of resourcing and

expenditure (subject to Government allocation). Under this model too, the statutory

head or CEO would be empowered to provide strong leadership, direction and focus.

With a clear, defined and distinguishable identity, this model would also attract all of

the benefits arising from an elevated profile and leadership and thereby address the

underlying issues relating to skills and experience, access and awareness and culture, as

discussed with respect to model A above.

9.5 Costs and benefits of other necessary enhancements

The assessment of the costs and benefits of other enhancements does not form part of

the Terms of Reference of this Review. However, the benefits are apparent from the

discussion in Chapters 6 and 7—in that these enhancements address the underlying

issues.

The cost of implementing many of those enhancements should be small and, to some

extent, capable of being absorbed. Those are enhancements to functions already

undertaken by the current administration, and existing administrative and corporate

policies, such as consultation and communication, training and development, workforce

planning and recruitment and the use of experts.

Some of those enhancements have the potential for incurring noteworthy costs;

however, the costs will be commensurate to the scale and method of implementation

of the abovementioned recommendations. That scale and method is likely be


determined by the new agency head, with a view to achieving the required outcomes in

an efficient and collaborative manner.

Transition Plan

Ideally, the functions would reside principally in Melbourne. Moving key functions to

Melbourne would enable better access to, and attract, people with specialist

knowledge, skills and experience (including of industry and commerce) and facilitate

stronger relationships with a significant proportion of Australia’s industry

(notwithstanding industry is also based on other locations in Australia).

Moving key functions would help to establish a new identity and avoid fragmentation, it

would consolidate most functions under a new leadership model, help achieve

consistency of processes and outcomes and support better skill transfer, knowledge

sharing, resourcing flexibility and staff movement between sections.

Ideally, this would also occur within a short time period in order to realise the benefits

of improvements to the system sooner rather than later. Recruitment should

commence as quickly as possible given that this is a crucial function that is under

resourced and action is required soon to alleviate pressures on industries that may be

caused through unfair trade practices.

However, there are some practical limitations that suggest a more measured,

incremental approach is required. These include the need to:

maintain some functions in Canberra to facilitate contact and communication

with key areas of government including the Minister

continue to provide the best possible service to clients given the existing

workload and number of investigations, the probability of several more

applications being made in the coming months, and the need to maintain

corporate knowledge of Customs and anti-dumping and countervailing

processes

avoid the potential loss of key staff members if insufficient time is given for plans

to be made and for staff to consider their options, and

recognise that it would take some time to coordinate a move to Melbourne and

for any newly recruited staff to become sufficiently proficient and experienced in

the role to impact on administrative functions.

Therefore, transition of key functions to Melbourne could be achieved incrementally

and supported by the following:

Transition Project Team – to manage the transition process

Transition Plan – to identify which functions to move initially as well as transition

activities, timelines, roles and responsibilities, facility and IT requirements,

funding requirements, allowances and relocation costs


Funding – identify possible funding sources and secure initial funding (whether

through additional funding or an advance from government, or possibly

unallocated funding in Customs), and

Staff Planning – to identify positions that would be required in the new location,

staff preferences, the potential for reassignment, potential redundancy costs (if

applicable) and the need to maintain continuity of service in Canberra

This would be supported by the Workforce Plan and Skills Gap Analysis in order to help

identify requirements for staff, knowledge, skills, experience and qualifications, and

relevant remuneration levels to inform a recruitment strategy.

The following key activities would need to be implemented against the timelines shown

below.

Timeline Key Activities

0-3 months 1. Draft legislation 2. Form Transition Project Team 3. Develop Transition Plan 4. Commence Staff Planning 5. Commence recruitment of agency head to be based in Melbourne 6. Commence recruitment of National Manager – Operations to be based

in Melbourne 7. Commence recruitment of initial group of additional staff to be based

in Melbourne (investigators, special advisers and support staff)85

3-6 months 1. Introduce and debate legislation in Parliament 2. Commence Transition Project 3. Finalise recruitment of agency head 4. Finalise recruitment of National Manager – Operations 5. Finalise recruitment of initial group of additional staff 6. Identify suitable facility and commence fit out 7. Move initial group of staff to Melbourne

6-18 months 1. Continue Transition Project 2. Complete facility fit out 3. Commence recruitment of second group of additional staff

(investigators and support staff) 4. Move second group of staff to Melbourne

18-30 months 1. Continue Transition Project 2. Finalise recruitment of second group of additional staff 3. Move final group of staff to Melbourne

85 If additional budget resources for staff were made available then number of new staff recruited in

Melbourne could be increased.


10. The case for resources

Establishing and maintaining a separate agency will incur costs in excess of the current

administrative arrangements. Some aspects of the other necessary enhancements for

the system will also incur additional costs. However, it is imperative, particularly for the

manufacturing industries of Australia, that the resources dedicated to the anti-dumping

and countervailing administration are commensurate with the importance of the

function in contemporary settings.

In an environment of increasing globalisation, the challenges to the Australian

manufacturing sector are amplified, and the need to maintain fair international trade

practices is becoming increasingly important. Australia can be an attractive market for

foreign exporters, especially when the Australian dollar is strong. The growth in unit

labour costs and strong rises in energy costs also provide challenges for the Australian

manufacturers in terms of sustaining competitiveness. With the exception of a period

within the global financial crisis, imports of manufactured goods to Australia have

grown steadily for more than two decades. This contrasts with the level of resources

assigned to the Australian anti-dumping and countervailing administration, as depicted

in the chart below.

Source: DFAT STARS Database, based on ABS Cat No 5368.0 July 2012 data

Now, at a time when global economic growth is uncertain and it is likely that growing

numbers of foreign exporters are seeking out new markets, it is apparent that the

number of anti-dumping and countervailing cases in Australia is on the rise. The

number of new investigations initiated since the abolition of the ADA followed a

downward trend until 2007, before commencing an increase to a point in 2012 that is

the highest for more than a decade. This can be observed in the chart below.


Source: Data for financial year ending 30 June 1998 to 30 June 2008 from PC Inquiry Report; data for

remainder from Customs and Border Protection

When considering the number of investigations, reviews and continuation inquiries in

combination, the workload of ITRB increased 173% (from 11 to 30) from 2010-11 to

2011-12.86

Furthermore, the improvements made in relation to awareness of, and access to, the

anti-dumping and countervailing system, particularly the activities of the ITRA, are likely

to result in additional growth in the numbers of applications from small to medium

enterprises.

In June 2011, the Government endorsed an increase in staffing numbers from 31 to 45

for ITRB87. This endorsement followed the PC Inquiry Report, a year where anti-

dumping and countervailing workload indicators (demonstrated by the number of new

investigations initiated) were increasing from a low point of 2007, and staffing numbers

were at their lowest level in two decades. This suggests the target staffing number of

45 is out-dated and underestimated.

It is evident that the administration is truly stretched when considering the trend in the

proportion of anti-dumping and countervailing investigations, reviews, continuations

and duty assessments completed within the statutory timeframe of 155 days. The data

depicted in the chart below is taken from Annual Reports available on the Customs and

Border Protection website. The target of 100% has not been reached in the past six

years, and the downward trend indicates that the anti-dumping and countervailing

administration is finding it increasingly difficult to complete its core investigative work

86 Customs and Border Protection Annual Report (2011-12), p. 39



within 155 days. It should be noted, however, that the Minister can approve an

extension to the time in which an investigation, review or continuation must be

completed (there is no such provision for extension of time to duty assessments).

Taking into account approved extensions of time, all investigations, reviews,

continuations and duty assessments are completed within the statutory timeframes.

Source: Customs and Border Protection Annual Reports

Notes: Proportion represents anti-dumping/countervailing investigations, reviews, continuations and

duty assessments completed within 155 days. Years prior to 2005-06 did not include duty assessments

The composition of skills and experience of the ITRB staff is unlikely to be optimal for

dealing with the volume and complexity of the issues, which has involved somewhat of

a transformation in recent years. Specifically, cases that involve assessments of multiple

subsidy programs, and ‘market situation’ claims, add significantly to the volume and

complexity of the administration’s work. In three such cases in recent years, the

timeframes have been extended significantly:

aluminium extrusions from China – 295 days (155 days plus 140 days extension)

hollow structural sections of steel from five countries – 260 days (155 days plus

105 days extension, and

aluminium road wheels from China – 215 days (155 days plus 60 days extension).

There is also a growing and justified call for use of subject matter experts to advise the

administration on a range of specialist and technical matters.

A significant proportion of participants called for greater rigour and thoroughness in

investigations, but relatively few want increased investigation timeframes to


accommodate. Participants considered the potential impact of delays are significant,

including uncertainty for interested parties and delayed remedies.

The present administration is not sufficiently well-equipped to cope with the growth in

anti-dumping and countervailing activity, and the increased demands and expectations

of the function.

Review participants provided broad support for a properly resourced administration.

The three trade unions jointly stated:

Our unions strongly support the establishment of a properly resourced and

independent, anti-dumping agency which undertakes comprehensive investigations

which not only aims to ensure compliance with Australia’s anti-dumping and

countervailing system, but which is seen to be delivering compliance with the

regime.88

Having regard to all of the above, it is evident that further investment in the

administration is justified to ensure an efficient and effective anti-dumping and

countervailing system for the future. This will require a more appropriate profile for the

function, achieved through the increased identity and focus that comes with

establishing a separate and dedicated agency. It will also require resources to address

the underlying issues discussed in Chapter 6 above.

The proposed investment is consistent with the expectations of the Prime Minister’s

Manufacturing Taskforce which recommended that:

…the Commonwealth’s proposed inquiry into establishing an anti-dumping

authority ensure that any new entity is properly resourced…89

The proposed investment is also consistent with several of the more specific areas that

the Non-Government Members Report identified for further reform such as:

administrative practices including ongoing improvement of the culture

within agencies tasked to detect and discipline dumping

agencies are adequately resourced and mandated to cooperate with one

another in anti-dumping investigations

there is increased transparency in anti-dumping processes, and

there is a change in the use of subject matter experts.90


89 Prime Minister’s Manufacturing Taskforce: Report of the Non-Government Members of the Prime

Minister’s Manufacturing Taskforce (2012), p. 89


This investment should commence as a matter of urgency. There is strong case for

priority funding in advance of the next financial year allocations. This will enable early

action to commence the initiatives contained in this report so that Australia’s anti-

dumping and countervailing system is significantly reinforced in the earliest possible

timeframe. The benefits of a free and open approach to international trade will

continue, with an increased level of assurance that efficient and effective remedies are

available to address injurious dumping and subsidisation. This will provide for a level

playing field in international trade and restore public confidence in the anti-dumping

and countervailing system.

Finding

As a first step in lifting performance, it is critical that the administration secure a significant and immediate increase in resources to meet existing and future operational demands as well as community and industry expectations.

90 Prime Minister’s Manufacturing Taskforce: Report of the Non-Government Members, August 2012,

Appendix One, p. ii.


11. Relationship with existing appeals processes

The Terms of Reference for this Review require that the relationship between such an

agency and existing appeals processes be explored.

The TMRO provides an important step between the decision-maker (Minister, CEO or

delegate) and the judicial system as a low cost and timely independent reviewer of anti-

dumping and countervailing investigations. There are no fees for lodging an appeal

application with the TMRO and the TRMO is required to make a decision within 60 days

of receiving an application.

If the anti-dumping and countervailing functions were to move outside of Customs and

Border Protection, it is important to assess whether there would be implications for the

TMRO and its ability to continue with business as usual. In order to understand how the

TMRO and Customs and Border Protection currently interrelate, it is important to

review where the power of the TMRO is established, how the function is currently

administered and where overall policy responsibility for the function sits.

The founding legislation

The TMRO function is established under the Customs Act. Division 8, Part XVB of the

Customs Act establishes the TMRO position, sets out the powers and functions,

provides for the appointment of an acting TMRO, provides for the provision of

resources and regulates the disclosure of information by the TMRO. The TMRO position

is a statutory appointment made under 269ZL of the Customs Act; the Minister for

Home Affairs maintains responsibility for the appointment under the Customs Act.

Division 9, Part XVB of the Customs Act establishes the scope of work for the TMRO.

This includes reviewing certain decisions made by the Minister, currently the Minister

for Home Affairs, and ‘the CEO’, which is defined as the CEO of Customs and Border

Protection.

Should a new anti-dumping agency be established but remain within Customs or the

same portfolio, ie with the same Minister retaining responsibility for the function, only

minor changes to legislation would be required to ensure continuity of the TMRO

review role. Assuming the CEO of Customs and Border Protection would no longer be

the preliminary decision-maker, the legislation enunciating those decisions that are

reviewable by the TMRO would require amendment to reflect a new preliminary

decision-maker.

If the anti-dumping and countervailing function were to move outside of the portfolio,

which would necessitate the conferral of decision-making upon a new Minister,

significant legislative changes would be required, including moving the TMRO authority

out of the Customs Act.


Resourcing

The TMRO is currently a part time position with a small support staff operating on a

case-by-case basis.91 Support staff for the TMRO resides within the Australian

Government Solicitor. In accordance with s269ZT of the Customs Act, the Minister must

make available sufficient resources for the TMRO to carry out its role. Resources for the

TMRO are currently administered by Customs and Border Protection.

Customs and Border Protection manage the following aspects in support of the TMRO:

contract for services, including payment for services and incidentals

contract with support staff agency, including payment for services, and

website, including hosting the web domain as well as updating content.92

Should the anti-dumping and countervailing functions move outside of Customs and

Border Protection, the ongoing management of the TMRO’s resources may need to be

considered. Retaining management of the resources within Customs and Border

Protection would provide separation between the decision-making authority and the

TMRO, and would not require changes to the existing contracting and financing

arrangements. If resource management were to be moved out of Customs and Border

Protection, it is likely that new contracts with both the TMRO and TMRO support staff’s

agency would need to be established, and negotiations with Customs and Border

Protection would need to occur to recognise and secure funding for the TMRO service

and the management of the TMRO contracts.

Policy role

The Minister for Home Affairs has policy responsibility for the TMRO and Customs and

Border Protection implements policy on behalf of the Minister. Policy responsibility

would logically fall to a new agency should anti-dumping and countervailing functions

move out of Customs and Border Protection but remain in the same portfolio. The

policy function within the new agency would need to work closely with Customs and

Border Protection, as the agency responsible for managing the Customs Act. If

responsibility were to move outside of the portfolio, policy responsibility would reside

with a different Minister. Similar to the above example, the agency taking on policy

responsibility would need to work closely with Customs and Border Protection in

transitioning the policy responsibility.

91 The Review acknowledges the Government is moving towards the introduction of a TMRO panel

arrangement whereby responsibility will be divided amongst a number of independent officers. This will likely result in changes to the TMRO support staff arrangements. 92

s269ZZX of the Customs Act requires that the TMRO must maintain a public record of each application for review.


Summary

The TMRO is an important function that provides an independent, administrative review

mechanism, separate from the judiciary, for stakeholders with an interest in anti-

dumping and countervailing decision. The TMRO function is a statutory appointment

operating with a small support staff, all of which is funded by Customs and Border

Protection. Continuity of service for the TMRO is an important consideration in

determining whether responsibility for anti-dumping and countervailing is moved to an

agency outside of Customs and Border Protection.

If the anti-dumping and countervailing function is moved to a new agency within the

Attorney-General’s Portfolio, some administrative amendments would need to be made

to the legislation and possibly existing contracting arrangements. However, overall, the

amendments would be relatively minor in nature and unlikely to impact on the

continued operation of the TMRO.

If the anti-dumping and countervailing function was moved to an agency outside of the

Attorney-General’s Portfolio, it is likely that the enabling legislation would move from

the Customs Act, requiring significant amendments. While the legislative amendments

would take some resources, if managed efficiently there would likely be little impact on

the operation of the TMRO. Changing the existing contracting arrangements would be

relatively straight-forward and minor in nature.


12. Summary and conclusions

12.1 Summary of findings

The primary purpose of this Review was to consider the feasibility of a new

Commonwealth anti-dumping agency. As noted throughout this Report, the costs and

benefits of establishing such an agency could not be assessed fully without a clear

understanding of the existing administration, the environment within which it operates

and the concerns about its structure or performance.

This understanding was acquired through broad and comprehensive consultation with

people who have a real interest in the operation of the anti-dumping system. I

dedicated three months to consultation activities and met with individual stakeholders,

either face-to-face or by teleconference, and facilitated wider discussion of the issues

through stakeholder forums.

At the conclusion of the process, it was clear to me that a well administered anti-

dumping system is critical to retaining confidence in the open trade environment that

underpins Australia’s growing economy.

Consideration of the global and domestic trends and economic drivers demonstrated

that Australia is a highly attractive exporting destination, including for products that are

dumped or subsidised. It established that Australia has recently seen an increase in

anti-dumping and countervailing activities and is likely to see a continued increase in

the short to medium term. Overall, it underscored the importance of the anti-dumping

function to a healthy, competitive economy.

The consultation process revealed that the current administrative arrangements are

sub-optimal in a number of respects. Resources are limited, the function has a low

public profile, the leadership is stretched and there is a shortage of staff with

appropriate skill and expertise. It established that compliance assurance and anti-

circumvention require more attention. It also highlighted that rigour, transparency and

access to the system remain problematic.

As such, and despite the success of recent Government reforms in this area, it is evident

that more needs to be done to enable the administration to meet existing and future

operational demands and restore public confidence in the anti-dumping system.

A significant ongoing reform program is required to address the issues identified and

place the administration in a position where it can discharge its mandate efficiently and

effectively. As a first step, it is critical that the administration secure a significant and

immediate increase in resources to meet the demands. A delay in securing appropriate

resources will negatively impact on the ability of the administration to meet the pipeline

of increasing workloads and further undermine stakeholder confidence.


An increase in resources will help to address current organisational and administrative

arrangements, which are not best practice and need to be enhanced. A key issue for

the administration is the recruitment of additional staff with the skill and experience

required for this complex area. The current geographical location of the administration

makes it difficult to attract and retain the necessary expertise. Being located in major

capital city with industry concentration will better place the administration to recruit

skilled staff and facilitate closer links with industry. Ultimately, this will enhance the

rigour and timeliness of investigations and the performance of the administration as a

whole.

Increased resources will also enable the administration to address the issues around

transparency and access to the system. It will allow for enhanced consultation and

communication, a skills gap analysis and targeted workforce planning, greater use of

specialist advisers and external experts and increased training and development. It will

facilitate the introduction of a Transparency Officer role and provide greater scope for

achieving consistency and timeliness in the disclosure information.

Most importantly, however, the issues identified demonstrate the need for changes to

the organisational structure of the administration.

Organisational structure is a key consideration in ensuring that an administration is able

to fulfil its role as efficiently and effectively as possible. Structure dictates the level of

independence of an administration, as well as its identity and profile. It defines the

authority of its leader to shape culture and make decisions. It can influence

performance of its functions and engagement and cooperation with stakeholders, as

well as relationships with a level dependence on other areas of government. Depending

on the size of an administration, structure can also influence the potential for career

opportunities and retention of staff, and its ability to adjust to variable skill

requirements and workloads. However, structure will of course impact upon the cost of

operation. The key question for this review has, therefore, been: Which administrative

model best addresses the underlying issues at the least cost?

12.2 Which model best addresses the underlying issues at the least cost?

Which model best address the underlying issues…

Having analysed the outcomes of consultation and assessed the costs and benefits of

the options, it is clear that a new Commonwealth agency, established under legislation,

is required to address the underlying issues and assign to the function the profile and

status it merits. A range of names are possible for the new agency with the two

preferred options being International Trade Remedies Authority, Agency or Commission.

A new agency would provide a defined identity, distinguishable from the wider Customs

and Border Protection identity and increase the profile of the function. It would secure


the independence of the administration, elevate the priority of the function and ensure

a dedicated, high-level focus on anti-dumping and countervailing activities. The agency

would need to maintain the functions and powers of the current administration, but

also increase its efforts towards assuring compliance, and implement other necessary

enhancements to improve the effectiveness of the system.

As discussed above, the agency must be separately and adequately resourced. Without

sufficient resourcing, the agency will not be in a position to meet the increasing

demands and fulfil its mandate.

The new agency must have a stronger leadership structure. Stronger leadership and

management are necessary to reflect the significance of the anti-dumping and

countervailing system in Australia. Leadership and management are also critical to

setting the direction and culture of an organisation. With bolstered leadership, the

agency will have greater authority, direction and purpose, and help to promote

independence, transparency and a client focus. High-level leadership and management

will also increase the profile of the agency and demonstrate the priority of the function.

Ultimately, reinforced leadership will instil public confidence in the anti-dumping and

countervailing system. As such, the agency must have a legislated head, with the anti-

dumping functions and decision-making powers that are currently vested in the CEO of

Customs and Border Protection. The agency head would therefore report directly to

the Minister on anti-dumping and countervailing matters.

The relevant Minister should continue to be the Minister for Home Affairs and Justice.

While other portfolio Ministers were suggested during this Review, it is clear that the

current ministerial arrangement secures the greatest level of impartiality and fairness.

The new agency should be principally located in a major capital city with high industry

concentration and which is close to trading activity. The Review process has

demonstrated that the geographic location of the agency is an important consideration.

Location can influence the types and levels of skills and experience accessible to the

administration, including access to subject matter experts. Improved access to skills

and experience would in turn enable a greater degree of investigative rigour and

potentially generate more timely outcomes. Proximity to industry stakeholders will

facilitate more extensive and meaningful consultation and communication in relation to

all aspects of the system. Such exchanges could also contribute to the development

and experience of staff. Overall, a more appropriate geographical location can increase

the efficiency and effectiveness of the system and, again, enhance public confidence in

the administration.

As an industry hub and the home of Australia’s largest port, Melbourne appears to be

the most appropriate primary location for the agency. However, as geographical

location is also pertinent to engagement with the Minister, other Government agencies


and the Parliament, it may be appropriate to retain a small policy and coordination

presence in Canberra.

…at the least cost?

The costs of each model have been itemised in Chapter 9 of this Report. The table

below summarises and compares those costs.

Maintaining the status quo is, of course, the lowest cost option. However, it has been

established that the status quo does not address the issues identified. The three

possible models for a new agency are models A, B and C.

A Pure stand-

alone

B Separate but

supported

C Agency within

larger agency

D Status quo

Total first year costs 10.95 9.87 9.58 7.82

Ongoing costs per year

thereafter

9.25 8.70 8.42 7.82

New funds required

first year

3.43 2.05 1.76 0

New funds required per

year thereafter

1.43 0.88 0.60 0

Of those three, model C presents the most economic option for addressing the issues.

A new agency with bolstered leadership and located in Melbourne—established

through legislation and housed within a larger agency—would require a modest

injection of around $1.76m in the first year and an additional $0.6m per annum to

operate.

Which larger agency?

The consultation process and an assessment of the functions and powers clearly

demonstrated that Customs and Border Protection performs a critical role in the wider

anti-dumping and countervailing system. Customs possesses the functions and powers

to impose duties, monitor compliance with those duties and take action where

enforcement is required. Customs is also the source of the import and other data vital

to the effectiveness of the anti-dumping and countervailing function.

In order to maintain these critical links and continue to benefit from these synergies,

the larger agency within which the International Trade Remedies Authority, Agency or

Commission should be established is Customs and Border Protection. The

distinctiveness and independence of the International Trade Remedies Authority,


Agency or Commission would not be compromised under such a model as both the

agency and its head would be established under legislation, with a clear identity and

defined roles and a reporting line that leads from the agency head directly to the

Minister.

I therefore recommend the following primary recommendations:

It is recommended that a new International Trade Remedies Authority, Agency or Commission

be established under legislation. To fully realise its benefits, the agency must be:

separately and adequately resourced, and

headed by a legislated CEO or Commissioner who reports directly to the Minister

for Home Affairs and Justice.

The agency should be established within Customs and Border Protection to preserve the links

and synergies with Customs that are critical to the effectiveness of the system.

It is recommended that an immediate increase in resources be made available to facilitate

establishment of the new agency and ensure timely resolution of the underlying issues.

The implementation of this recommendation would be supported and enhanced by the

actions proposed in the other relevant recommendations in this Report.

Proposed organisational structure

The structure of the International Trade Remedies Authority, Agency or Commission

should include the bolstered leadership model discussed above and the other necessary

enhancements as follows:


Minister

Independent agency head

National Manager – Operations

SES 1

National Manager – Support

SES 1 Assistant

External

experts

Operations 1 Special

Advisers Operations 2 Operations 3 Business

Support

Implementation

of measures Compliance

assurance Systems

management Quality

assurance Workforce

capability Policy support

Assistant

Anti-dumping and countervailing

investigations, reviews, continuation

inquiries, duty assessments and

reinvestigations

Anti-circumvention

Client Support

Communication Consultation Transparency

Officer role

Strategic

Review

Implementation of reforms

This organisational structure presents a

suitable model for implementing the

recommendations.


APPENDICES

Appendix 1: Review Consultation and Communication

The Brumby Anti-Dumping Review conducted communication and consultation in accordance with its Terms of Reference. These state that relevant stakeholders will be directly consulted and submissions may be sought. Consultation will occur in particular with the ITRF, as well as with relevant Government Departments. Consultation will also extend to other interested groups and individuals. The key purpose of the Review was to examine the current arrangements for assessing and investigating anti-dumping matters and consider the feasibility of a Commonwealth Anti-Dumping Agency. In particular, it was important to identify the relative benefits and costs of retaining administration of this system within Customs and Border Protection compared to the benefits and costs of establishing an agency dedicated to administration of this system. A broad stakeholder group was established to facilitate effective engagement and strong understanding of the range of views and experiences. A number of communication methods were used to ensure there was broad awareness of the Review and a number of consultation methods were used to provide flexible ways for stakeholder to provide input and to focus and enhance the information received. Face-to-face meetings, including stakeholder forums, were organised in a number of capital cities in Australia during August and September.

Stakeholders

During the Review period, over 400 hundred people had been notified about the Review and over 200 had been contacted directly. Stakeholders were identified initially on the basis of:

1. Membership of the International Trade Remedies Forum (ITRF) 2. Government officers with anti-dumping or trade-related roles 3. Companies or groups who provided responses to the Productivity Commission

Inquiry into Australia's Anti-Dumping and Countervailing System in 2009, and 4. Companies or groups which had been involved in anti-dumping or countervailing

activities in the last two years. Further, Federal Ministers and Senators, relevant Ministers in State and Territory Governments and 13 embassies were notified about the Review. People were given opportunities to self-identify their interest in the Review. Additional stakeholders were identified by referral throughout the Review period. In a number of cases, existing contacts could not be reached and considerable effort was made to update contact details or find an alternative contact.

http://brumbyreview.govspace.gov.au/terms-of-reference/

http://www.customs.gov.au/site/InternationalTradeRemediesForum.asp


The graph above depicts the proportion of stakeholders by the type of entity or interest in anti-dumping and countervailing measures. It should be noted that industry associations and unions represent numbers of companies or members interests. Legal firms which represent companies in anti-dumping or countervailing applications or matters have been counted as ‘consultants’.

Communication

A public website was established to provide easy access to detailed information about the Review including guidance information and links to the Submission Process. It also contained a mechanism for people to register their interest in participating in the Review. A Brumby Anti-Dumping Review Secretariat phone number and mailbox were established to facilitate easy and direct communication. A number of email messages were sent to stakeholders throughout the Review period to keep them informed about key activities and opportunities for consultation. Three media releases were made to ensure there was broad awareness of the Review. The media releases provided information on key dates and activities and explained where further information could be found. Analysis of the website usage shows consistent usage over the Review period with a peak on its launch date. There have been:

815 unique visitors

1497 visits

4746 pages views


The clear majority of users were from Australia (93%) followed in order by the United States, an undisclosed country, Malaysia and Canada and then a number of other countries. The undisclosed country was probably China and/or Taiwan based on analysis of language settings of browsers accessing the website. The table and map below show the locations of users of the website from within Australia. The high usage in Canberra probably reflects interest by Government Departments and routine management of the website by the Review Secretariat. Usage in other locations probably reflects the general, relative level of businesses activity and interest in anti-dumping and countervailing activities.

Location Number Percentage

Canberra 748 54%

Melbourne 297 21%

Sydney 169 12%

Brisbane 47 3%

Perth 36 3%

Newcastle 31 2%

Adelaide 18 1%

undefined 16 1%

Wollongong 14 1%

Hobart 10 1%

Consultation

A number of methods and mechanisms were used to facilitate stakeholder input, and gather detailed, specific information relevant to the Review. These included:

Face-to-face meetings, including stakeholder forums. Meetings were held in Melbourne, Sydney, Brisbane and Canberra. Stakeholders were able to register their interest in meeting through the website and by responding to email communication. All effort was made to accommodate requests but it was not always possible due to timing, availability and geographic location. Some meetings were conducted by teleconference.

An Online Submissions process. This comprised open-ended questions based around the Terms of Reference and an online survey where respondents could assign ratings (eg agree, disagree, somewhat important, very important) against statements about the anti-dumping and countervailing system. This provided an indication of the extent and range of views of the group as a whole.

A Written Submissions process. This comprised the same open-ended questions as above to provide an alternate method for sending responses and to enable freeform input.


An Online Survey. This was the same survey as that above but was continued for a longer period.

A Discussion Paper. The Discussion Paper included discussion of stakeholder views and a number of specific questions about the impact of possible changes to the system. Stakeholders were invited to provide responses.

Consultation was conducted in two general phases. The first phase comprised face-to-face meetings and the submission processes to gain an initial understanding of stakeholder views. This was completed in August. The second phase comprised face-to-face meetings and stakeholder forums, the online survey and a request for responses to the Discussion Paper to confirm or clarify stakeholder views. This was completed in September. Discussions in meetings, submissions on open-ended questions and responses to the Discussion Paper provided useful qualitative input while responses to the survey (including as part of the online submission process) provided useful quantitative input. These forms of information enabled clear understanding and supported effective analysis through comparison and confirmation of input.

Meetings

In total, 47 separate meeting were conducted with 54 different entities as listed below.

Agency/Organisation

Advance Wires & Cables Pty Ltd

Arrium Limited (OneSteel Limited)

Arrowcrest Group Pty Ltd

Australian Industry Group

Australian Food and Grocery Council

Australian Manufacturing Workers’ Union

Australian Pork Ltd

Australian Steel Association

Australian Vinyls Corporation

Australian Workers’ Union

AusVeg

Blackburn Croft & Co

BlueScope Steel Limited

Cantelo

Capral Limited

Casselle Commercial Services Pty Ltd

Cement Industry Federation

CMC Australia

Corrs Chambers Westgarth and Law Council of Australia

Crowe Horwath

CSR Limited


Department of Agriculture, Fisheries and Forestry

Department of Foreign Affairs and Trade

Department of Industry, Innovation, Science, Research and Tertiary

Education

Dow Chemical (Australia) Ltd

Flame Hardening Services Pty Ltd

Geofabrics Australasia Pty Ltd

GM Holden Ltd

Gross & Becroft Lawyers

Heslop Consulting Pty Ltd

Hunt & Hunt Lawyers

International Trade Remedies Advisor

ISS International

JELD-WEN Australia Pty Limited

John O'Connor and Associates Pty Ltd

Moulis Legal

Nufarm Australia Limited

Plastics and Chemicals Industry Association

Press Metal Aluminium (Australia) Pty Ltd

Prysmian Power & Telecom Cables & Systems Australia Pty Ltd

Qenos Pty Ltd

RPG Australia

SCA Hygiene Australasia Pty Ltd

SPC Ardmona

Steelforce Australia Ltd

Stoddart Group

Stora Enso Timber Australia Pty Ltd

The Shell Company of Australia Limited

The Treasury

Townsend Chemicals Pty Ltd and PolyPacific Pty Ltd

Trade Measures Review Officer

Tradedata International Pty Ltd

Wickes and Associates Pty Ltd

* Meeting was conducted as a teleconference.

Submissions

Submissions were made publicly available on the website to encourage stakeholder engagement and awareness of respondent views, and to ensure transparency of the process. In making submission publicly available, it was necessary that the Review comply with accessibility requirements and provide material in two formats. Submissions that were available as PDF only or were provided in hardcopy form only could not be made publicly available.


In total, 43 unique submissions were received representing about 89 distinct entities. It is difficult to be exact on the latter figure given the membership of some industry associations and joint signatories to submissions (as well as two different submissions being made by one stakeholder). The list below is the best attempt to identify distinct entities whose views were represented in submissions.

Agency/Organisation


Amcor Limited



Australia Industry Group


Australian Forest Products Association

Australian Paper


Australian Steel Institute

Australian Workers’ Union

AusVeg

BlueScope Steel Limited

Carter Holt Harvey Woodproducts Australia Pty Ltd

Cement Industry Federation

Corrs Chambers Westgarth and Law Council of Australia

CSR Limited

Food & Beverage Importers Association

Ford Motor Company of Australia Pty Ltd

Geofabrics Australasia Pty Ltd

Gross & Becroft Lawyers


Hunt & Hunt Lawyers

Kimberly-Clark Australia Pty Ltd

Law Council of Australia

Manufacturing Australia

National Biodiesel Limited

National Farmers' Federation

New South Wales Government

Orica Australia Pty Ltd

Penrice Soda Holdings Limited

Qenos Pty Ltd

Rio Tinto Australia

Sanwa Pty Ltd


Senator Nick Xenophon

Simplot Australia Pty Ltd


South Australia Government

Steelforce Australia Ltd

Tasmanian Government

Victorian Government

Western Australian Government

Wickes and Associates Pty Ltd

Survey Responses

In total, there were 26 (valid) responses to the online survey. Responses were invalid where the person did not indicate who they were (2 responses), provided multiple responses (6 responses) or else provided no response (1 response). Some graphs use averaged values which were calculated as follow:

1. Ratings were given a numeric value (neutral = 0, criteria to the left were -1, -2 and -3 respectively, criteria to the right were 1, 2 and 3 respectively.

2. The number of responses for each rating was multiplied by the numeric value of that rating to give a weighted value.

3. The sum of all weighted values was divided by the total number of responses to each statement.

4. This provides a single numeric average value for the group against each statement.

A list of respondents is shown below but only aggregated results have been used in this report.

Agency/Organisation

4Farmers Pty Ltd


Agrichem Manufacturing Industries Pty Ltd T/A AGRONOMIQ




Australian Forest Products Association

Australian Paper


Carter Holt Harvey Woodproducts Australia Pty Ltd

Downer EDI Mining – Blasting Services Pty Ltd

Food & Beverage Importers Association

Ford Motor Company of Australia Pty Ltd



Kimberly-Clark Australia Pty Ltd

Nexans Olex Australia Pty Ltd

Nufarm Australia Limited

Press Metal Aluminium (Australia) Pty Ltd

Prysmian Power & Telecom Cables & Systems Australia Pty Ltd


Sanwa Pty Ltd


Senator Nick Xenophon

Simplot Australia Pty Ltd

Stoddart Group

Townsend Chemicals Pty Ltd and PolyPacific Pty Ltd

Responses

Responses were made publicly available on the website to encourage stakeholder engagement and awareness of respondent views, and to ensure transparency of the process. In total, 7 responses were received as shown below.

Agency/Organisation

Capral Limited

Casselle Commercial Services Pty Ltd

CSR Limited


Hunt & Hunt Lawyers


Qenos Pty Ltd

Summary

Consultation and communication were undertaken in a transparent, inclusive and rigorous manner. The identification of a large number of stakeholders ensured the Review was able to consider a broad range of views. It also means that findings are evidence-based and credible to support effective analysis and recommendations.


Appendix 2: Australian Government policy on independent authorities

Implementing an appropriate governance structure is a key building block to the success

of any agency. A good governance framework helps to implement government policies,

deliver services well, meet organisational goals and achieve sustainable outcomes.

However, identifying the most appropriate governance structure needs to be

considered in the broader budget context and it may well be that the preferred

structure is not feasible due to financial constraints.

The principles for helping to determine the most appropriate structure and governance

arrangements for Australian Government bodies are contained within the Department

of Finance and Deregulation’s publication Governance Arrangements for Australian

Government Bodies – August 2005 (GAAGB).

The Skehill Strategic Review of Small and Medium Agencies in the Attorney-General’s

Portfolio – January 2012 acknowledged that policy advice contained in the GAAGB

provides for broad and flexible parameters however, there is limited detailed reasoning

which could contribute to a case for the establishment of an independent statutory

agency outside of portfolio departments of state.93 Seeking to fill the existing void, the

Skehill Review made a number of recommendations to provide greater clarity on times

when it would be appropriate to establish a separate agency.94

The Government is yet to respond in full to the recommendations contained in the

Skehill Review and it is likely that the recommendation to provide greater clarity will be

addressed in the Commonwealth Financial Accountability Review (CFAR) being

conducted by the Department of Finance and Deregulation. It is expected the results of

the CFAR will be presented in the first half of 2013. Until the CFAR results are

presented, Government policy on establishing new Government bodies is limited to the

GAAGB.

Whilst the GAAGB provides a range of options to create a new government body, there

is a “policy preference to curb unnecessary proliferation of Government bodies”95. The

preferred position for a function, activity, or power should, if possible, be conferred on

an existing department, or another existing Australian Government body, rather than

on a new body. There are numerous reasons for this policy position including increased

costs to establish a new agency as well as ongoing administrative costs, and additional

93 Stephen Skehill (2012) Strategic Review of Small and Medium Agencies in the Attorney-General’s

Portfolio – January 2012 94

ibid, p.14 95

Department of Finance and Administration (2005) Governance Arrangements for Australian Government Bodies – August 2005, Executive Summary


burdens to central coordination agencies such as the Department of Finance and

Deregulation and the Department of Prime Minister and Cabinet.

Notwithstanding the comments made in the Skehill Review, there is some guidance

within the GAAGB to assist with structuring a case in support of establishing a new

agency. The GAAGB lists reasons for establishing a statutory body as:

The need to recognise a person as a statutory office-holder, whose role is set out

in primary legislation

The need to develop some degree of independence from a normal department

structure (the level of ministerial oversight/direction typically also being set out

in the enabling legislation)

The need to establish a regulator or statutory decision-maker; including as a

commission that is a body corporate

The desire to provide for a more substantial ongoing status for the function by

describing it within legislation, and

Greater transparency in describing a body’s functions and powers in

legislation.96

From the consultation process undertaken with stakeholders, it is clear that there is

support for a number of the considerations above, most notably establishing a degree

of independence and providing a more substantial ongoing status.

To assist with determining which agency structure should be pursued the GAAGB

includes a flowchart for placing Australian Government Agencies:97

96 Department of Finance and Administration (2005) “Governance Arrangements for Australian

Government Bodies – August 2005”, p.16 97

Department of Finance and Administration (2005) “Governance Arrangements for Australian Government Bodies – August 2005”, p.xi


A case to establish a separate agency will need to be presented to Cabinet for

endorsement. Whilst the GAAGB does not establish a set of rules for making a decision

to introduce a new agency, external factors such as budget pressures will likely have a

significant influence over any decision the Cabinet makes.

The Government has made clear its intention to return the federal budget to surplus in

2012-13. In a media release on 25 September 2012, the Minister for Finance, the Hon

Senator Penny Wong announced that “Savings of $550 million over the forward

estimates will be found through pursuing further efficiencies in the way the public

service operates. From this financial year, departments will be required to find savings

through a new targeted savings arrangement that reduces expenditure in non-staffing

areas”.98

In addition to the announced future savings, the Government continues to apply an

efficiency dividend to all Government agencies. Further, the Budget Operation Rules

provide that any New Policy Proposal for a new activity/policy is to be offset or

absorbed, generally within the sponsoring agency or portfolio, and more broadly but in

limited circumstances, offset outside of the portfolio.

Essentially there is little money available within Government in which to support the

establishment of a new stand-alone statutory agency and any case bringing forward

such an option would need to be extremely strong.

98 http://www.pennywong.com.au/media-releases/making-the-public-service-more-efficient/

http://www.pennywong.com.au/media-releases/making-the-public-service-more-efficient/


Appendix 3: Matters outside the Terms of Reference

Some participants identified issues or proposed enhancements to the system that

clearly fell outside the Terms of Reference for the Review. While the Terms of

Reference preclude consideration of such matters, they are listed here to facilitate

consideration by the administration of the anti-dumping and countervailing system or

by the relevant policy departments where appropriate.

1. Minister as decision-maker—of the participants who raised this matter, most

indicated that the Minister’s role was essential to providing the appropriate level

of scrutiny and accountability, while a small number suggested there was an

opportunity to institute a new decision-making structure that removed any

potential politicisation from the process.

2. Lesser duty rule—some participants suggested that the legislation should be

amended to eliminate the lesser duty rule so that duties can be applied at the

level of the full dumping margin, rather than some reduced level which reflects

the level of injury calculated by Customs. Some of these participants noted that

other administrations, such as that of the USA, do not apply the lesser duty rule.

3. Timeframes for investigations—some participants argued that the legislative

timeframes, particularly where investigations are extended, are too long; and

that the delays cause uncertainty in the market and further injury to the relevant

industry before a remedy is implemented. Others contended that the legislative

timeframes are too short, particularly for large and complex cases, noting that

thorough investigations take time.

4. ITRF —views on the value of the ITRF were mixed. Some participants considered

the ITRF was a valuable forum for the purposes of developing continuous

improvement initiatives. However, some were concerned that the ITRF was a

body with a membership weighted towards anti-dumping users and their key

supporters, whose views are likely to be ‘protectionist in nature’. One

participant expressed the view that the ITRF was oversubscribed, cumbersome

and becoming ineffective. Another participant’s view about ineffectiveness

stemmed from a concern that specialist anti-dumping consultants were excluded

from the ITRF.

5. Public interest test—some participants were in favour of introducing a public

interest test, and submissions of this nature included discussion of the bounded

public interest test proposed in the PC Inquiry Report. One participant (Law

Council of Australia, submission of 20 September 2012) also noted that a

Ministerial direction regarding public interest matters to be discussed in

investigation reports (as envisaged by the Australian Government’s Streamlining

publication, June 2011, section 6.2) has not yet been issued.


6. Appeals process—some participants expressed the view that the process could

be further refined (noting that significant change is already proposed in

legislation arising from the Streamlining initiatives). This included views that the

TMRO could be replaced by the Administrative Appeals Tribunal (including

provisions for greater disclosure), that the TMRO is under-resourced, and that

the TMRO should be able to substitute a decision for that of Customs and Border

Protection.

7. Australian Bureau of Statistics import data disclosure—this is regarded as

outside the Terms of Reference because it is an issue that does not fall within

the control of the anti-dumping and countervailing administration. Some

participants raised the issue of access to import data, expressing concerns that

the Australian Bureau of Statistics does not provide adequate disclosure. These

participants considered that the inability to access import data in a meaningful

form constrains their capacity to identify dumping and to build an application for

anti-dumping measures.

8. Price undertakings as a form of measures—some participants expressed the

view that a price undertaking is an ineffective form of anti-dumping measures,

especially in markets that experience rapid changes in price and exchange rates.

9. Compliance assurance and anti-circumvention—while recognising some

positive steps taken by Customs and Border Protection recently, including

targeted compliance campaigns and proposed anti-circumvention legislation,

some participants believed that the effectiveness of anti-dumping and

countervailing measures is still being undermined. These participants raised

concerns about inadequate attention given to the monitoring and enforcing of

compliance with the measures, and around the capacity of the administration to

identify and address instances of circumvention of the measures.

10. Onus of proof—some suggested that the onus of proof should be reversed in

certain circumstances. For example, where dumping and material injury are

both established, there should be a presumption the two are linked.

11. Other suggestions for significant technical matters including (a) application of

retrospective measures in cases where exporters and importers knew, or ought

to have known, that imports were dumped; (b) accelerating the time taken to

conduct an investigation and apply measures where ‘country hopping’ is

evident; (c) a requirement for a ‘sufficient margin of profit’ to be included when

constructing normal values; (b) a requirement for cost data to be rejected as a

basis for normal value when there is a ‘market situation’ finding due to

government influence; and (c) a requirement to find export sales between

related parties to be non-arm’s length transactions.


12. Forming an anti-dumping agency with a range of other responsibilities—some

participants argued that an optimal agency would have responsibility for anti-

dumping as well as managing other economic risks at the border, and product

quality issues at the border, including conformity with standards, tax avoidance,

and intellectual property rights. The three trade unions jointly stated (AMWU,

AWU, CFMEU, submission of September 2012, p. 6) that it “supported the

recommendation of the non-Government members to the Prime Minister’s

Manufacturing Taskforce that an Anti-Dumping Agency should have a ‘broad

remit of powers and cross Government scope for the purposes of dealing with

breaches of trade.’”

The twelve issues above cover a wide range of topics and some of these issues may

warrant further consideration by the Government.

Review into Anti-Dumping Arrangements Page 0...Anti-dumping and countervailing measures are a vital...

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