Secondary Boycotts Law- Possible Extension to Consumer and Environmental Action
Thursday 26 September 2013 @ 10.53 a.m. | Corporate & Regulatory | Trade & Commerce
The Guardian (Australia) amongst other media has reported this week that the new Coalition government is considering changes to the Australian Consumer Law (ACL) to extend "secondary boycott" laws to boycotts of companies by environmental and consumer groups.
As the Guardian says: "this would significantly impede such groups trying to highlight bad business practice" or "in other words . . . keep Australian consumers in the dark" about the existence or effect of such bad business practices.
The Current Legislation
The key legislation currently dealing with restrictive trade practises is the Competition and Consumer Act 2010 (No 51 of 1974) (the Act) which in sections 45D and 45DA prohibits "secondary boycotts for the purpose of causing substantial loss or damage" and "secondary boycotts for the purpose of causing substantial lessening of competition" unless such boycotts have been authorised under section 88 of the Act by the Australian Competition and Consumer Commission (ACCC).
To date the focus of the legislation has been to prevent false and misleading campaigns against businesses by competitors to prevent such businesses from being damaged financially or in terms of reputation.
Changes Proposed
The proposals now being advocated are to extend the scope of the legislation so that environmental and consumer groups are required to comply with the the requirements in the same way as business and industry. The argument to support such change is largely economic in that it will allow businesses more freedom to grow and develop.
Traditionally in Australia, commercial boycotts have included some sort of agreement to abstain from dealings with a business to achieve some end and the Australian Consumer Law (ACL) has not prohibited such “primary boycotts” in most circumstances, for example, people are free to agree to not acquire products from companies that source products from environmentally harmful or ethically questionable suppliers. Primary boycotts relating to a business that is engaging in international trade are banned.
Secondary boycotts are when two or more people act together to hinder or prevent a business from acquiring products from or selling products to another business. Such boycotts are not illegal if the ACCC gives an authorisation to conduct one.
Boycotts (secondary and primary boycotts affecting international trade) are lawful when the “dominant purpose” of the boycott is for environmental protection or for consumer protection.
It is the possibility that the exception to the prohibition on secondary boycotts might be removed that is causing the public debate about the coalition’s review of the ACL. These environmental and consumer protections were made part of the original ACL in 1996 as a compromise by the then Howard Government for support from the Democrats in the Senate to pass the work place laws.
Reaction
The blog site NewMatilda points out that these mooted changes would have "far reaching implications for both environmental activism and the functioning of political debate in Australia".
While the Guardian (Australia) says: "There should be no doubt that a reform of this nature would reward harmful corporate activities and disempower consumers."
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