Oil company raids

Last week officers of the Australian Competition and Consumer Commission 
(ACCC) carried out a surprise raid of the offices of three major oil 
companies, Caltex, Shell and Mobil. They were acting on information 
provided by an anonymous source alleging that the companies were colluding 
to fix the price of their products.

Consumer organisations have long pointed to evidence of "patterns" in 
petrol price rises. During Christmas and Easter, petrol prices have a 
tendency to simultaneously rise by up to 11 cents per litre, particularly 
by the periodic removal of discount prices.

The manager of NSW's motorists' organisation, the NRMA, recently described 
the rises as "ambushing the motorist at the pump".

The whistleblower's first contact with the ACCC last December and contained 
serious allegations about the companies.

The whistleblower again contacted the ACCC in early March to complain about 
their apparent lack of action. The ACCC appealed (publicly) for further 
assistance from the whistleblower, from whom nothing further has since been 
heard.

Then last week a confident ACCC carried out the raid, much to the horror of 
the powerful oil corporations.

Interestingly, John Howard's first reaction was to leap to the defence of 
the companies, pointing to their right to the presumption of innocence. 
(There is a certain irony here. The right to presumption of innocence, and 
the legislative protection of whistleblowers would both disappear under 
"terrorist" legislation that the Howard Government is pursuing.)

The case illustrates that there is a legitimate role for the ACCC in 
investigating collusion between powerful monopolies. This case will be a 
big test of its powers and also of its resources and the government's 
sincerity about the need for competition.

The Howard Government is currently reviewing the Trade Practices Act under 
which the ACCC operates.

The ACCC has mounted a case for increasing its powers. However, the Prime 
Minister has made clear that he does not agree.

Referring to the Commission's Chairman, Alan Fels, he observed (with barely 
concealed contempt), that "there's no evidence before me that he doesn't 
have enough powers".

Federal Labor has called for a strengthening of the Commission's powers, 
but (naturally) the oil companies are demanding that its existing powers be 
reduced.

The ACCC's actions yet again raise the question of protection for 
whistleblowers. It would take a very brave person to take on some of the 
most powerful corporations in the world, by providing inside information on 
their activities. This is particularly the case in the oil industry — just 
look what happened to the Ogoni people in Nigeria who stood in Shell's way.

In the event that the ACCC fails to prove its case, the government will use 
this to discredit the body and as an excuse to reduce its powers. The 
government would like to replace the current legislative restrictions on 
monopoly practices (such as price-fixing collusion) by a code of conduct.

It would better serve workers and small businesses by repealing the 
sections of the Trades Practices Act that restrict trade union rights 
(outlawing secondary boycotts and certain actions against employers) and by 
strengthening the sections on private sector monopolies.