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Process and consultation after a decision to prescribe an industry code

If there is agreement that an industry code of conduct should be prescribed, a process can be commenced that may lead to a code being prescribed. That process can be divided into five steps. It is anticipated that the prescription of an industry code would take at least six months. The stages in the process of prescribing an industry code are:

Stage 1: Notification of industry participants and the ACCC

Key stakeholders, including the relevant industry association, will be notified by the responsible Department that the Minister is considering prescribing an industry code.

The Minister will also consult with States and Territories, initially through the Standing Committee of Officials of Consumer Affairs, to ensure that the proposal does not duplicate any industry regulation applying in States or Territories.

Advice will be sought from the ACCC on any competition impacts of a code proposed for prescription.

The ACCC and industry participants will be invited, at this stage to make any submissions related to whether an industry code should, or should not, be prescribed. Such submissions would most likely be based on the criteria outlined earlier in this document.

Depending on the outcome of this consultation process, the Minister may decide, at this stage of the process, that an industry code should not be prescribed.

Stage 2: Development of a draft Regulation Impact Statement

The responsible Department will prepare a draft Regulation Impact Statement. This analysis will necessarily outline:

  • the relevant problems or issues giving rise to the proposal to prescribe a code;
  • the desired objectives of a prescribed code;
  • options for achieving the objectives, including but not confined to prescription of the code under the CCA;
  • an evaluation of each different option in terms of costs and benefits for consumers, businesses, government and the community generally;
    • such an analysis should not be confined to direct financial costs and benefits such as administration and compliance costs, but should also look at broad social and economic costs such as the likely impact on competition;
  • a preliminary conclusion as to why a prescribed code is the preferred option; and
  • a draft implementation strategy.

The responsible Department will release the Draft Regulation Impact Statement for public comment.

Stage 3: Final Regulation Impact Statement

At the conclusion of consultation with industry, the responsible Department will revise the draft Regulation Impact Statement in the light of information and views put forward in the consultation process. In addition, the responsible Department will prepare a consultation statement, outlining the opportunities that have been provided for stakeholders to comment on the code, together with a summary of the main issues raised. The final assessment will be submitted to the Office of Best Practice Regulation for approval (OBPR).

In the light of analysis of the Regulation Impact Statement by OBPR, the responsible Minister and the Minister will consider the Regulation Impact Statement and any comments arising from consultation on the Draft Regulation Impact Statement, and may decide, at this stage of the process, that an industry code should not be prescribed if it is not possible to demonstrate that the benefits of the proposal exceed its costs.

Stage 4: Making Regulations

The Minister, or, subject to the agreement of the Minister, the responsible Minister, will submit the relevant industry code to the Federal Executive Council for approval.

If the Executive Council approves prescription of the industry code, the Governor–General will be asked to make Regulations to this effect. The Regulations will be gazetted. The prescribed industry code will be a Schedule to the Regulations, rather than merely being referred to in the Regulations, so that it will have the greatest possible public exposure by forming part of databases of Commonwealth regulations.

The Minister, or, subject to the agreement of the Minister, the responsible Minister, will lay the Regulations before both Houses of the Parliament. Parliament may disallow prescription of the industry code. The Parliament may also ask the Minister to amend the Regulations to overcome any deficiencies that it identifies.

Stage 5: Reviewing the Code

Codes of conduct that are prescribed under the CCA will be reviewed at least every five years in consultation with industry, consumers and business. It is expected that the responsible Department would be responsible for the conduct of this review. Some industry codes will be reviewed after a shorter period of operation, depending on the circumstances. For example, the Franchising Code was reviewed a relatively short time after it commenced.