Japanese Shipping giant Nippon Yusen Pleads Guilty to Cartel Conduct
Tuesday 19 July 2016 @ 9.42 a.m. | Legal Research | Trade & Commerce
Following an investigation by the Australian Competition and Consumer Commission (ACCC), Nippon Yusen Kabushiki Kaisha (NYK), a global shipping company based in Japan, has recently pleaded guilty to criminal cartel conduct in the Federal Court.
Nippon Yusen was one of 14 shipping companies that earlier in July 2016, offered to change their pricing practices in Europe to stave off possible fines after European Union antitrust regulators launched a probe in 2013.
About NYK
NYK is one of the world’s largest shipping companies, with offices in Europe, Africa, East Asia, South Asia, China, Oceania (including Australia) and North and South America. It has over 33,000 employees and its headquarters are in Tokyo. It also operates an Australian subsidiary, NYK Line (Australia) Pty Ltd.
Background to the Prosecution Process for Cartel Offences
The ACCC investigates cartel conduct, manages the immunity process, takes proceedings in the Federal Court in respect of civil cartel contraventions, and refers serious cartel conduct to the Commonwealth Director of Public Prosecutions (CDPP) for consideration for prosecution.
The CDPP is responsible for prosecuting criminal cartel offences, in accordance with the Prosecution Policy of the Commonwealth.
The Prosecution Policy provides a two-stage test that must be satisfied before a prosecution is commenced:
- there must be sufficient evidence to prosecute the case; and
- it must be evident from the facts of the case, and all the surrounding circumstances, that the prosecution would be in the public interest.
In determining whether there is sufficient evidence to prosecute a case, the CDPP must be satisfied that there is prima facie evidence of the elements of the offence and a reasonable prospect of obtaining a conviction. The existence of a prima facie case alone is not sufficient.
Comment from the Consumer Watchdog
The charge was laid by the CDPP under s 44ZZRG of the Competition and Consumer Act 2010 (Cth) (the Act) on 14 July 2016 and is the first criminal charge laid against a corporation under the Act following a law change in 2009 that made cartel conduct a criminal act.
Rod Sims, the ACCC Chairman said:
“This is the first criminal charge laid against a corporation under the criminal cartel provisions of the Competition and Consumer Act. This matter relates to alleged cartel conduct in connection with the transportation of vehicles, including cars, trucks, and buses, to Australia between July 2009 and September 2012.”
Response from NYK
Jason Glynn, the general manager of corporate affairs for Nippon Yusen's Australian subsidiary, NYK Line (Australia) Pty Ltd, confirmed the guilty plea:
"NYK has co-operated fully with the ACCC during the course of this investigation. NYK will not make any further comment while this matter is before the courts."
Potential Penalties for Cartel Conduct
The penalty for cartel conduct under Australian competition law is the greater of $10 million, triple the benefit attributed to the offence, or 10% of the corporation's annual turnover in Australia.
The ACCC’s investigation into other alleged cartel participants is continuing and the matter is next scheduled for a directions hearing in the Federal Court on 12 September 2016.
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Sources:
Australia’s first criminal cartel charge laid against NYK – ACCC Release MR 125/16
ACCC says Japanese shipping giant Nippon Yusen pleads guilty to cartel conduct – smh.com.au
